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525 N.W.2d 1 (1994) In re the MARRIAGE OF Carrie RYKHOEK and Irvin Rykhoek, Upon the Petition of Carrie Genest f/k/a Carrie Rykhoek, Appellant, And Concerning Irvin Ryhoek, Appellee. No. 93-949. Court of Appeals of Iowa. September 16, 1994. *2 Eric Borseth of Borseth & Genest, Pleasant Hill, for appellant. Chris Shepperd of Kreykes & Shepperd Law Office, Pella, for appellee. Considered by DONIELSON, C.J., and SACKETT and HUITINK, JJ. HUITINK, Judge. Carrie and Irvin Rykhoek were previously married and were divorced in February 1990. They were awarded joint legal custody of the minor children: Mitchell, born December 20, 1984; Carissa, born October 28, 1986; and Tyler, born September 4, 1987. Carrie was awarded primary physical care, and Irvin was given visitation rights. After the dissolution, Carrie lived in a trailer home on her parents' land near Pella. Carrie's mother took care of the children while Carrie was at work. Eventually, Carrie and her mother had a falling out and quit communicating with each other. In June 1991 Carrie moved with the children to Des Moines, where she had a job as a word processor. Carrie remarried in June 1992 and is now known as Carrie Genest. After Carrie moved to Des Moines, she and the children had little contact with her parents. Irvin still lives in the Pella area and would have the children there during visitation. Carrie's parents contacted Irvin and sought to see the children during Irvin's visitation time. Irvin allowed the maternal grandparents to visit the children. When she became aware of her parents' contact with the children, Carrie asked Irvin to stop this practice, or to at least notify her in advance. In an affidavit she stated she was concerned about the children's contact with her parents because of the negative statements her mother made about her, which she felt would undermine her authority with the children. Irvin refused to comply with her wishes on this matter. Carrie filed a petition for modification of the dissolution decree. She sought to modify the decree to provide that Irvin may not give the children to any member of her family, any person picking up the children for her family, or any other person unless the person seeking visitation had contacted her and received her permission in writing to have the children for visitation. She also requested that Irvin not be allowed to visit any member of her family while the children are in his custody, have any member of her family at his home while the children are in his custody, or allow her family to have unauthorized contact with the children. Carrie filed a motion for summary judgment in which she alleged she should be allowed to determine who could visit the children. Irvin also filed a motion for summary judgment, claiming Carrie has not shown a sufficient change in circumstances to modify the decree. The district court granted Irvin's motion for summary judgment and denied Carrie's motion. The court found there were no undisputed material facts in this case. The court determined there was a legal question as to whether Carrie, as the primary physical caretaker, could dictate to Irvin, as a joint custodian, who he can allow the children to visit. The court found Carrie's position was not supported by legal authority. The court also determined Carrie had not sufficiently shown a modification of the visitation provision of the decree would be in the children's best interests. The court dismissed Carrie's application for modification. Carrie appealed. *3 We review the district court's ruling granting summary judgment for errors at law. Iowa R.App. P. 4. Summary judgment is proper only when there is no genuine issue of fact and the moving party is entitled to judgment as a matter of law. Iowa R.Civ.P. 237(c); Brown v. Monticello State Bank, 360 N.W.2d 81, 83-84 (Iowa 1984). On review we determine whether a genuine issue of fact exists and whether the law was applied correctly. Id. at 84. To justify a change in visitation, a party must show there has been a change of circumstances since the dissolution decree. In re Marriage of Fortelka, 425 N.W.2d 671, 672 (Iowa App.1988). The burden in a modification of visitation rights is different than the burden in a child custody case. Id. Generally, a much less extensive change in circumstances need be shown in visitation rights cases. Id. We first consider the parties' rights as joint legal custodians and Carrie's rights as the children's primary physical caretaker. In pertinent part, Iowa Code section 598.41(5) provides: If one joint custodial parent is awarded physical care, the court shall hold that parent responsible for providing for the best interest of the child. However, physical care given to one parent does not affect the other parent's rights and responsibilities as a legal custodian of the child. Rights and responsibilities as legal custodian of the child include, but are not limited to, equal participation in decisions affecting the child's legal status, medical care, education, extracurricular activities, and religious instruction. Iowa Code § 598.41(5) (1993). Thus, joint custody gives both parents rights and responsibilities. In re Marriage of Westcott, 471 N.W.2d 73, 75 (Iowa App. 1991). Even though a parent does not receive primary physical care of his or her child, that parent continues to be the child's parent and retain all of those parental rights not granted exclusively to others in the decree or otherwise surrendered by the parent. Leaf v. Iowa Methodist Medical Ctr., 460 N.W.2d 892, 894 (Iowa App.1990). The parent who is granted primary physical care has the right and responsibility to maintain the principal home of the minor child and provide for the routine care of the child. In re Marriage of Will, 489 N.W.2d 394, 397 (Iowa 1992). The parent having physical care must, as between the parties, have the final say concerning where the children's home will be. In re Marriage of Frederici, 338 N.W.2d 156, 159 (Iowa 1983). Additionally, in the recent cases of In re Petition of Ash, 507 N.W.2d 400, 402 (Iowa 1993) and Lihs v. Lihs, 504 N.W.2d 890, 892 (Iowa 1993), the supreme court upheld the right of a custodial parent to exercise a common-law veto power over visitation between the child and all other third parties, except the parent who is granted visitation rights. We note that in Lihs the mother is described as the custodial parent, but the facts of the case show the mother was the primary physical caretaker.[1] 504 N.W.2d at 891. Lihs involved a request by half-siblings for court-ordered visitation rights. Id. Ash involved a request by the mother's former boyfriend, who was not the biological father, for court-ordered visitation rights. 507 N.W.2d at 401. Both of these supreme court cases rely upon Olds v. Olds, 356 N.W.2d 571 (Iowa 1984). Olds involved a request by grandparents for court-ordered visitation. 356 N.W.2d at 572. Section 598.35, the Iowa grandparent visitation statute, provides for such court-ordered visitation. Iowa Code § 598.35 (1993). However, this statute does not apply when the grandparents seeking court-ordered visitation are the parents of the custodial parent. Olds, 356 N.W.2d at 574; In re Marriage of Woodley, 474 N.W.2d 815, 816 (Iowa App.1991). Section 598.35 applies only to those situations specified in the statute. Lihs, 504 N.W.2d at 892. Thus, where section 598.35 does not apply, the common-law rule applies. In re Marriage of Freel, 448 N.W.2d 26, 27-28 (Iowa 1989). *4 In Olds, the court stated a custodial parent's veto power over visitation with people other than the noncustodial parent, and as provided for in section 598.35, is granted on the ground that judicial enforcement of visitation would divide and thereby hamper proper parental authority, force the child into the midst of a conflict of authority and ill feelings between parent and grandparent, and coerce what should remain a moral rather than a legal obligation. 356 N.W.2d at 573. The common-law rule against coercing grandparent visitation over parental objections demonstrates a respect for family privacy and parental autonomy. Id. at 574. We determine Olds dealt with a slightly different issue than the one presented to us. In Olds, the grandparents sought court-ordered visitation rights. Id. at 572. In the present case, Carrie's parents are not a party to the suit, and they are not seeking specific visitation rights of their own. Under the cases discussed above, Carrie's parents would not be entitled to court-ordered visitation under section 598.35 because their child is the physical caretaker of the children. Thus, legally Carrie could veto a request by her parents for visitation with the children. However, Carrie's veto power does not extend to Irvin, who is a joint custodial parent and who was granted visitation privileges under the dissolution decree. The question then in this case is whether Carrie's common-law veto can be used to dictate to Irvin who the children might see while they are in his care during visitation. Generally, we have considered liberal visitation rights to be in a child's best interest. In re Marriage of Stepp, 485 N.W.2d 846, 850 (Iowa App.1992). Section 598.41(1) provides: The court, insofar as is reasonable and in the best interest of the child, shall order the custody award, including liberal visitation rights where appropriate, which will assure the child the opportunity for the maximum continuing physical and emotional contact with both parents after the parents have separated or dissolved the marriage, unless direct physical harm or significant emotional harm to the child, other children, or a parent is likely to result from such contact with one parent.... Iowa Code § 598.41(1) (1993). Thus, we will not restrict a parent's visitation unless direct physical harm or significant emotional harm to the child, other children, or a parent is likely to result from such contact. In re Marriage of Gillilland, 487 N.W.2d 363, 366 (Iowa App.1992). Here, Carrie does not seek to restrict the amount of Irvin's visitation, but seeks to place conditions upon Irvin's activities with the children when he has visitation. Generally, we have not imposed conditions on a parent's visitation. In the case of In re Marriage of Fite, 485 N.W.2d 662, 664 (Iowa 1992), the supreme court deleted conditions which the district court had placed on the father's visitation, which included abstinence from use of alcohol and use of profane, obscene, or abusive language during visitation. In the case of In re Marriage of Walsh, 451 N.W.2d 492, 493 (Iowa 1990), the supreme court deleted a condition that the father could only have visitation when no unrelated adult was present. Similarly, in In re Marriage of Ullerich, 367 N.W.2d 297, 299-300 (Iowa App.1985), we eliminated a condition which restricted the mother from having any adult males present in her living quarters to whom she was not married or related within the third degree of affinity or consanguinity. We conclude these cases show the custodial parent can not generally exercise his or her common-law veto to dictate which persons the noncustodial parent can come in contact with during visitation. As the supreme court has pointed out, conditions on visitation may be considered demeaning. Fite, 485 N.W.2d at 664. Furthermore, the imposition of conditions may be used as a means to improperly restrict visitation. Id. Even without formal conditions in the decree, if a parent behaves irresponsibly during visitation, his or her conduct may be grounds for reduction or elimination of visitation. Id. However, in some situations conditions are justified. Where a father had once failed to return the children after visitation, we approved a condition which prohibited him from removing the children from the state of their *5 residence during visitation. In re Marriage of Smith, 471 N.W.2d 70, 73 (Iowa App.1991). Also, where a father admitted he had previously engaged in acts of exhibitionism, the supreme court agreed conditions could be placed on his visitation rights. Lamansky v. Lamansky, 207 N.W.2d 768, 772 (Iowa 1973). Additionally, a parent may agree to a condition on his or her visitation, such as paying all travel expenses. See In re Marriage of Hatzievgenakis, 434 N.W.2d 914, 916 (Iowa App.1988). From these cases, we conclude a court should place conditions on a parent's visitation rights only when visitation without the placement of conditions is likely to result in direct physical harm or significant emotional harm to the child, other children, or a parent. See Iowa Code § 598.41(1) (1993). Any conditions which are so imposed must be in the best interests of the child. In the present case, the district court found Carrie had no legal grounds for requesting the placement of conditions on Irvin's visitation rights. Based on this view, the court granted Irvin's motion for summary judgment. We conclude summary judgment was not appropriate in this case. We reverse the decision of the district court and remand for further proceedings using the standard for conditions on visitation rights which we have set forth. Irvin seeks attorney fees for this appeal. An award of attorney fees is not a matter of right, but rests within the court's discretion and the parties' financial positions. In re Marriage of Hunt, 476 N.W.2d 99, 103 (Iowa App.1991). We determine each party should pay his or her own attorney fees for this appeal. Costs of this appeal are assessed to Irvin. REVERSED AND REMANDED. DONIELSON, C.J., concurs. SACKETT, J., concurs in part and dissents in part. SACKETT, Judge (concurring in part; dissenting in part). I concur in part and dissent in part. I would affirm the trial court. Carrie and Irvin were divorced and the dissolution decree made the parties joint custodians of their children and awarded Carrie physical care. Carrie filed for modification of the decree to restrict Irvin's visitations and requested the following relief: [That the trial court] modify the Decree to prohibit the Respondent [Irvin] from allowing any of the Petitioner's [Carrie's] family to visit with the children or place them in their care for any period of time and further requesting that the Respondent [Irvin] be prohibited from allowing any contact whatsoever between the Petitioner's [Carrie's] family and the minor children. The issue is whether Carrie has shown facts which, if believed, would show a change of circumstances and grounds to justify modification of the dissolution decree. To justify a modification, Carrie must show changed circumstances. In re Marriage Frederici, 338 N.W.2d 156, 158 (Iowa 1983). The circumstances to show a change of visitation are not as great as those to modify custody. See In re Marriage of Jerome, 378 N.W.2d 302, 305 (Iowa App.1985). The trial court found the record showed Carrie's position was that: Her relationship with her own family has deteriorated so that her family refuses contact with her; That her family has sought to circumvent her by obtaining visitation from Irvin; That Carrie is in a position of not knowing where her children are during their visitations with Irvin and that places Irvin in the center of a conflict between Carrie and her family; and Irvin has assisted Carrie's family in the matter even though he knows Carrie disapproves. Carrie claims she should control not only her time with the children but, also, the time Irvin spends with the children. There are two questions:
*6 The first is, can a custodial parent restrict the visitation of a noncustodial joint custodian? And, did Carrie show that there was a factual issue concerning the interest of the children? The evolution of our statutory law on joint custody has evidenced the legislature's strong voice that children deserve the attention and support of both parents even when a marriage is dissolved. Apparently, the majority has determined Carrie does not have veto power over Irvin's visitation; a position with which I agree. I depart, though, from the majority's conclusion Lihs v. Lihs, 504 N.W.2d 890 (Iowa 1993), and Olds v. Olds, 356 N.W.2d 571 (Iowa 1984), may be applicable, in whole or in part, to the issue before us. In Lihs, the natural father was deceased. In Olds, the grandparents were seeking visitation. Neither case is instructive. Irvin is a natural parent and a joint custodian. His status in regard to visitation is clearly defined by Iowa Code section 598.1(3) which provides: "Joint custody" or "joint legal custody" means an award of custody of a minor child to both parents under which both parents have rights and responsibilities toward the child and under which neither parent has rights superior to those of the other parent. The court may award physical care to one parent only. (Emphasis supplied). The second issue is whether there is evidence from which a fact finder could find there is a change of circumstances and the interest of the children require modification. The only evidence of changed circumstances is Carrie at the time of the dissolution decree had a relationship with her parents and her brothers and today she does not. I do not find this to be evidence such as would support a finding for a modification. Particularly where, as here, there is no evidence the relief Carrie seeks is in the children's best interests. There is no evidence visitation between Carrie's children and Carrie's parents and brothers poses any threat to the children. In fact, the following portions of Carrie's affidavit illustrate that point: While my mother has done nothing to this point to harm my relationship with my children that I know of, I think there is the very real potential for her to do so. She has a history of causing poor family relations. My mother has been involved in long-standing disputes with my father's family, specifically his two brothers for separate reasons, and is not welcome in their home. My father's family wants nothing to do with her. I think it is completely possible that at some point in the future my mother may attempt to alienate the children from me or otherwise undermine my authority with my children. (Emphasis supplied). The trial court made the observation Carrie is attempting to keep her children from her mother to force her mother to reestablish communications. The court went on to reason, "In this way, Carrie is using the children as a lever to force her mother to mend their broken relationship." The observation is clearly evident from Carrie's affidavit where she states, in part, "I fail to see why he [Irvin] should be drawn into it. I fail to see why he [Irvin] does not understand that if it were not for his allowing visitation with my family they would have to go through me and he would not be in this situation at all." There is nothing in this record from which a fact finder could determine Irvin's recognition of a need for the children to be in contact with their mother's extended family with whom they have had substantial bonding is harmful to the children. Absent such a showing, there is no basis to put restrictions on Irvin's visitation. The trial court should be affirmed. While I feel summary judgment in a modification case is unusual, the trial court should be affirmed in this case. Additionally, I would order Carrie pay $1000 toward Irvin's attorney fees. NOTES [1] We note that both appellate courts have often referred to the primary physical caretaker as the custodial parent and the other parent as the noncustodial parent, even though both parents have joint legal custody. | 10-30-2013 | [
"525 N.W.2d 1 (1994) In re the MARRIAGE OF Carrie RYKHOEK and Irvin Rykhoek, Upon the Petition of Carrie Genest f/k/a Carrie Rykhoek, Appellant, And Concerning Irvin Ryhoek, Appellee. No. 93-949. Court of Appeals of Iowa. September 16, 1994. *2 Eric Borseth of Borseth & Genest, Pleasant Hill, for appellant. Chris Shepperd of Kreykes & Shepperd Law Office, Pella, for appellee. Considered by DONIELSON, C.J., and SACKETT and HUITINK, JJ. HUITINK, Judge. Carrie and Irvin Rykhoek were previously married and were divorced in February 1990.",
"They were awarded joint legal custody of the minor children: Mitchell, born December 20, 1984; Carissa, born October 28, 1986; and Tyler, born September 4, 1987. Carrie was awarded primary physical care, and Irvin was given visitation rights. After the dissolution, Carrie lived in a trailer home on her parents' land near Pella. Carrie's mother took care of the children while Carrie was at work. Eventually, Carrie and her mother had a falling out and quit communicating with each other. In June 1991 Carrie moved with the children to Des Moines, where she had a job as a word processor.",
"Carrie remarried in June 1992 and is now known as Carrie Genest. After Carrie moved to Des Moines, she and the children had little contact with her parents. Irvin still lives in the Pella area and would have the children there during visitation. Carrie's parents contacted Irvin and sought to see the children during Irvin's visitation time. Irvin allowed the maternal grandparents to visit the children. When she became aware of her parents' contact with the children, Carrie asked Irvin to stop this practice, or to at least notify her in advance. In an affidavit she stated she was concerned about the children's contact with her parents because of the negative statements her mother made about her, which she felt would undermine her authority with the children. Irvin refused to comply with her wishes on this matter.",
"Carrie filed a petition for modification of the dissolution decree. She sought to modify the decree to provide that Irvin may not give the children to any member of her family, any person picking up the children for her family, or any other person unless the person seeking visitation had contacted her and received her permission in writing to have the children for visitation. She also requested that Irvin not be allowed to visit any member of her family while the children are in his custody, have any member of her family at his home while the children are in his custody, or allow her family to have unauthorized contact with the children.",
"Carrie filed a motion for summary judgment in which she alleged she should be allowed to determine who could visit the children. Irvin also filed a motion for summary judgment, claiming Carrie has not shown a sufficient change in circumstances to modify the decree. The district court granted Irvin's motion for summary judgment and denied Carrie's motion. The court found there were no undisputed material facts in this case. The court determined there was a legal question as to whether Carrie, as the primary physical caretaker, could dictate to Irvin, as a joint custodian, who he can allow the children to visit.",
"The court found Carrie's position was not supported by legal authority. The court also determined Carrie had not sufficiently shown a modification of the visitation provision of the decree would be in the children's best interests. The court dismissed Carrie's application for modification. Carrie appealed. *3 We review the district court's ruling granting summary judgment for errors at law. Iowa R.App. P. 4. Summary judgment is proper only when there is no genuine issue of fact and the moving party is entitled to judgment as a matter of law. Iowa R.Civ.P. 237(c); Brown v. Monticello State Bank, 360 N.W.2d 81, 83-84 (Iowa 1984). On review we determine whether a genuine issue of fact exists and whether the law was applied correctly. Id. at 84. To justify a change in visitation, a party must show there has been a change of circumstances since the dissolution decree.",
"In re Marriage of Fortelka, 425 N.W.2d 671, 672 (Iowa App.1988). The burden in a modification of visitation rights is different than the burden in a child custody case. Id. Generally, a much less extensive change in circumstances need be shown in visitation rights cases. Id. We first consider the parties' rights as joint legal custodians and Carrie's rights as the children's primary physical caretaker.",
"In pertinent part, Iowa Code section 598.41(5) provides: If one joint custodial parent is awarded physical care, the court shall hold that parent responsible for providing for the best interest of the child. However, physical care given to one parent does not affect the other parent's rights and responsibilities as a legal custodian of the child. Rights and responsibilities as legal custodian of the child include, but are not limited to, equal participation in decisions affecting the child's legal status, medical care, education, extracurricular activities, and religious instruction. Iowa Code § 598.41(5) (1993). Thus, joint custody gives both parents rights and responsibilities. In re Marriage of Westcott, 471 N.W.2d 73, 75 (Iowa App. 1991). Even though a parent does not receive primary physical care of his or her child, that parent continues to be the child's parent and retain all of those parental rights not granted exclusively to others in the decree or otherwise surrendered by the parent. Leaf v. Iowa Methodist Medical Ctr., 460 N.W.2d 892, 894 (Iowa App.1990). The parent who is granted primary physical care has the right and responsibility to maintain the principal home of the minor child and provide for the routine care of the child.",
"In re Marriage of Will, 489 N.W.2d 394, 397 (Iowa 1992). The parent having physical care must, as between the parties, have the final say concerning where the children's home will be. In re Marriage of Frederici, 338 N.W.2d 156, 159 (Iowa 1983). Additionally, in the recent cases of In re Petition of Ash, 507 N.W.2d 400, 402 (Iowa 1993) and Lihs v. Lihs, 504 N.W.2d 890, 892 (Iowa 1993), the supreme court upheld the right of a custodial parent to exercise a common-law veto power over visitation between the child and all other third parties, except the parent who is granted visitation rights. We note that in Lihs the mother is described as the custodial parent, but the facts of the case show the mother was the primary physical caretaker.",
"[1] 504 N.W.2d at 891. Lihs involved a request by half-siblings for court-ordered visitation rights. Id. Ash involved a request by the mother's former boyfriend, who was not the biological father, for court-ordered visitation rights. 507 N.W.2d at 401. Both of these supreme court cases rely upon Olds v. Olds, 356 N.W.2d 571 (Iowa 1984). Olds involved a request by grandparents for court-ordered visitation. 356 N.W.2d at 572.",
"Section 598.35, the Iowa grandparent visitation statute, provides for such court-ordered visitation. Iowa Code § 598.35 (1993). However, this statute does not apply when the grandparents seeking court-ordered visitation are the parents of the custodial parent. Olds, 356 N.W.2d at 574; In re Marriage of Woodley, 474 N.W.2d 815, 816 (Iowa App.1991). Section 598.35 applies only to those situations specified in the statute. Lihs, 504 N.W.2d at 892. Thus, where section 598.35 does not apply, the common-law rule applies.",
"In re Marriage of Freel, 448 N.W.2d 26, 27-28 (Iowa 1989). *4 In Olds, the court stated a custodial parent's veto power over visitation with people other than the noncustodial parent, and as provided for in section 598.35, is granted on the ground that judicial enforcement of visitation would divide and thereby hamper proper parental authority, force the child into the midst of a conflict of authority and ill feelings between parent and grandparent, and coerce what should remain a moral rather than a legal obligation. 356 N.W.2d at 573. The common-law rule against coercing grandparent visitation over parental objections demonstrates a respect for family privacy and parental autonomy.",
"Id. at 574. We determine Olds dealt with a slightly different issue than the one presented to us. In Olds, the grandparents sought court-ordered visitation rights. Id. at 572. In the present case, Carrie's parents are not a party to the suit, and they are not seeking specific visitation rights of their own. Under the cases discussed above, Carrie's parents would not be entitled to court-ordered visitation under section 598.35 because their child is the physical caretaker of the children. Thus, legally Carrie could veto a request by her parents for visitation with the children.",
"However, Carrie's veto power does not extend to Irvin, who is a joint custodial parent and who was granted visitation privileges under the dissolution decree. The question then in this case is whether Carrie's common-law veto can be used to dictate to Irvin who the children might see while they are in his care during visitation. Generally, we have considered liberal visitation rights to be in a child's best interest. In re Marriage of Stepp, 485 N.W.2d 846, 850 (Iowa App.1992). Section 598.41(1) provides: The court, insofar as is reasonable and in the best interest of the child, shall order the custody award, including liberal visitation rights where appropriate, which will assure the child the opportunity for the maximum continuing physical and emotional contact with both parents after the parents have separated or dissolved the marriage, unless direct physical harm or significant emotional harm to the child, other children, or a parent is likely to result from such contact with one parent.... Iowa Code § 598.41(1) (1993).",
"Thus, we will not restrict a parent's visitation unless direct physical harm or significant emotional harm to the child, other children, or a parent is likely to result from such contact. In re Marriage of Gillilland, 487 N.W.2d 363, 366 (Iowa App.1992). Here, Carrie does not seek to restrict the amount of Irvin's visitation, but seeks to place conditions upon Irvin's activities with the children when he has visitation. Generally, we have not imposed conditions on a parent's visitation. In the case of In re Marriage of Fite, 485 N.W.2d 662, 664 (Iowa 1992), the supreme court deleted conditions which the district court had placed on the father's visitation, which included abstinence from use of alcohol and use of profane, obscene, or abusive language during visitation. In the case of In re Marriage of Walsh, 451 N.W.2d 492, 493 (Iowa 1990), the supreme court deleted a condition that the father could only have visitation when no unrelated adult was present.",
"Similarly, in In re Marriage of Ullerich, 367 N.W.2d 297, 299-300 (Iowa App.1985), we eliminated a condition which restricted the mother from having any adult males present in her living quarters to whom she was not married or related within the third degree of affinity or consanguinity. We conclude these cases show the custodial parent can not generally exercise his or her common-law veto to dictate which persons the noncustodial parent can come in contact with during visitation. As the supreme court has pointed out, conditions on visitation may be considered demeaning. Fite, 485 N.W.2d at 664. Furthermore, the imposition of conditions may be used as a means to improperly restrict visitation. Id. Even without formal conditions in the decree, if a parent behaves irresponsibly during visitation, his or her conduct may be grounds for reduction or elimination of visitation.",
"Id. However, in some situations conditions are justified. Where a father had once failed to return the children after visitation, we approved a condition which prohibited him from removing the children from the state of their *5 residence during visitation. In re Marriage of Smith, 471 N.W.2d 70, 73 (Iowa App.1991). Also, where a father admitted he had previously engaged in acts of exhibitionism, the supreme court agreed conditions could be placed on his visitation rights. Lamansky v. Lamansky, 207 N.W.2d 768, 772 (Iowa 1973). Additionally, a parent may agree to a condition on his or her visitation, such as paying all travel expenses.",
"See In re Marriage of Hatzievgenakis, 434 N.W.2d 914, 916 (Iowa App.1988). From these cases, we conclude a court should place conditions on a parent's visitation rights only when visitation without the placement of conditions is likely to result in direct physical harm or significant emotional harm to the child, other children, or a parent. See Iowa Code § 598.41(1) (1993). Any conditions which are so imposed must be in the best interests of the child. In the present case, the district court found Carrie had no legal grounds for requesting the placement of conditions on Irvin's visitation rights. Based on this view, the court granted Irvin's motion for summary judgment.",
"We conclude summary judgment was not appropriate in this case. We reverse the decision of the district court and remand for further proceedings using the standard for conditions on visitation rights which we have set forth. Irvin seeks attorney fees for this appeal. An award of attorney fees is not a matter of right, but rests within the court's discretion and the parties' financial positions. In re Marriage of Hunt, 476 N.W.2d 99, 103 (Iowa App.1991). We determine each party should pay his or her own attorney fees for this appeal. Costs of this appeal are assessed to Irvin. REVERSED AND REMANDED. DONIELSON, C.J., concurs. SACKETT, J., concurs in part and dissents in part.",
"SACKETT, Judge (concurring in part; dissenting in part). I concur in part and dissent in part. I would affirm the trial court. Carrie and Irvin were divorced and the dissolution decree made the parties joint custodians of their children and awarded Carrie physical care. Carrie filed for modification of the decree to restrict Irvin's visitations and requested the following relief: [That the trial court] modify the Decree to prohibit the Respondent [Irvin] from allowing any of the Petitioner's [Carrie's] family to visit with the children or place them in their care for any period of time and further requesting that the Respondent [Irvin] be prohibited from allowing any contact whatsoever between the Petitioner's [Carrie's] family and the minor children. The issue is whether Carrie has shown facts which, if believed, would show a change of circumstances and grounds to justify modification of the dissolution decree. To justify a modification, Carrie must show changed circumstances.",
"In re Marriage Frederici, 338 N.W.2d 156, 158 (Iowa 1983). The circumstances to show a change of visitation are not as great as those to modify custody. See In re Marriage of Jerome, 378 N.W.2d 302, 305 (Iowa App.1985). The trial court found the record showed Carrie's position was that: Her relationship with her own family has deteriorated so that her family refuses contact with her; That her family has sought to circumvent her by obtaining visitation from Irvin; That Carrie is in a position of not knowing where her children are during their visitations with Irvin and that places Irvin in the center of a conflict between Carrie and her family; and Irvin has assisted Carrie's family in the matter even though he knows Carrie disapproves. Carrie claims she should control not only her time with the children but, also, the time Irvin spends with the children.",
"There are two questions: *6 The first is, can a custodial parent restrict the visitation of a noncustodial joint custodian? And, did Carrie show that there was a factual issue concerning the interest of the children? The evolution of our statutory law on joint custody has evidenced the legislature's strong voice that children deserve the attention and support of both parents even when a marriage is dissolved. Apparently, the majority has determined Carrie does not have veto power over Irvin's visitation; a position with which I agree.",
"I depart, though, from the majority's conclusion Lihs v. Lihs, 504 N.W.2d 890 (Iowa 1993), and Olds v. Olds, 356 N.W.2d 571 (Iowa 1984), may be applicable, in whole or in part, to the issue before us. In Lihs, the natural father was deceased. In Olds, the grandparents were seeking visitation. Neither case is instructive. Irvin is a natural parent and a joint custodian.",
"His status in regard to visitation is clearly defined by Iowa Code section 598.1(3) which provides: \"Joint custody\" or \"joint legal custody\" means an award of custody of a minor child to both parents under which both parents have rights and responsibilities toward the child and under which neither parent has rights superior to those of the other parent. The court may award physical care to one parent only. (Emphasis supplied). The second issue is whether there is evidence from which a fact finder could find there is a change of circumstances and the interest of the children require modification. The only evidence of changed circumstances is Carrie at the time of the dissolution decree had a relationship with her parents and her brothers and today she does not. I do not find this to be evidence such as would support a finding for a modification.",
"Particularly where, as here, there is no evidence the relief Carrie seeks is in the children's best interests. There is no evidence visitation between Carrie's children and Carrie's parents and brothers poses any threat to the children. In fact, the following portions of Carrie's affidavit illustrate that point: While my mother has done nothing to this point to harm my relationship with my children that I know of, I think there is the very real potential for her to do so. She has a history of causing poor family relations. My mother has been involved in long-standing disputes with my father's family, specifically his two brothers for separate reasons, and is not welcome in their home.",
"My father's family wants nothing to do with her. I think it is completely possible that at some point in the future my mother may attempt to alienate the children from me or otherwise undermine my authority with my children. (Emphasis supplied). The trial court made the observation Carrie is attempting to keep her children from her mother to force her mother to reestablish communications. The court went on to reason, \"In this way, Carrie is using the children as a lever to force her mother to mend their broken relationship.\" The observation is clearly evident from Carrie's affidavit where she states, in part, \"I fail to see why he [Irvin] should be drawn into it.",
"I fail to see why he [Irvin] does not understand that if it were not for his allowing visitation with my family they would have to go through me and he would not be in this situation at all.\" There is nothing in this record from which a fact finder could determine Irvin's recognition of a need for the children to be in contact with their mother's extended family with whom they have had substantial bonding is harmful to the children. Absent such a showing, there is no basis to put restrictions on Irvin's visitation. The trial court should be affirmed.",
"While I feel summary judgment in a modification case is unusual, the trial court should be affirmed in this case. Additionally, I would order Carrie pay $1000 toward Irvin's attorney fees. NOTES [1] We note that both appellate courts have often referred to the primary physical caretaker as the custodial parent and the other parent as the noncustodial parent, even though both parents have joint legal custody."
] | https://www.courtlistener.com/api/rest/v3/opinions/1998837/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Pecora, J. This is an application for an order directing the fire commissioner to restore the petitioner to his former position of lieutenant in the fire department. The petition was dismissed at Special Term, upon motion of respondents, on the ground that it failed to state a good cause of action. This decision was affirmed by the Appellate Division (257 App. Div. 808), but the Court *841of Appeals reversed (282 N. Y. 182), pointing out that in view of the failure of the respondents to answer, the allegations of the petition were to be deemed admitted, including the allegation that the report of the board of medical officers to the fire commissioner was not founded on fact and was arbitrary and capricious Since that time respondents have served an answer denying various material allegations of the petition, and setting up an affirmative defense, to the effect that the findings of the medical board and the determination of the fire commissioner were based on evidence which amply supported the conclusions reached by them. Petitioner asks for a jury trial of the issues raised, while respondents contend that the answer and the documents made part thereof require the denial of the application without any trial on the ground that they establish that there is at most an honest difference of medical opinion as to the nature and cause of petitioner’s disability. It is well settled that “ a mere difference in medical opinion of physicians produced by petitioner on the one hand and physicians of the medical board on the other, as to the nature and cause of petitioner’s disability, does not justify a conclusion ” that the decision of the fire commissioner, acting on the advice of the medical board of the fire department, was arbitrary, capricious or unreasonable. (See Matter of Nilsson v. LaGuardia, 259 App. Div. 145, 148.) On the other hand, it is equally well established that petitioner is not “ necessarily bound by the findings of the medical board,” and that he may obtain relief on a showing “ that its findings were not amply sustained by competent evidence or that they were, or must have been, due to fraud, bad faith, accident or mistake.” (See Matter of Nilsson v. LaGuardia, supra, p. 148.) It is well nigh impossible; on the papers now before the court, to determine whether the conclusions reached by those members of the medical board who found adversely to the petitioner were amply supported by competent evidence, as respondents maintain, or were merely arbitrary, whimsical and capricious, without adequate factual basis. The very documents incorporated by reference in the answer reveal that a number of members of the medical board of the fire department believed that some or all of the petitioner's injuries and disabilities were, or might have been, caused or induced by the active performance of his duties; and this appears to be a fair inference from the record submitted to the court. It does not clearly and satisfactorily appear that the contrary conclusion reached by other members of the board rests upon a reasonable basis. In any event, petitioner should be given an opportunity, by means of cross-examination, to probe *842into the reasoning which led to the opinions arrived at by the majority of the members of the medical board; only thus may he adequately show, if it be the fact, that said opinions were without sufficient factual or medical foundation. The court’s attention has been directed to a number of cases in which our appellate courts have dismissed similar petitions, on the ground that petitioner had failed to establish that the opinion of the medical board was arbitrary, capricious or unreasonable, but had merely shown that there was a difference in medical opinion. All these determinations, however, were made subsequent to trial, and after petitioner had been afforded an opportunity to establish by cross-examination or otherwise that there was insufficient factual basis for the adverse findings of the medical board. (Matter of Nilsson v. LaGuardia, supra; Matter of Eichler v McElligott, 259 App. Div. 151: affd , 283 N. Y. 716; Strauss v. Hannig, 281 id 612. See, also, Maxwell v McElligott, [Hofstadter, J.j IN Y L. J March 26, 1940, p. 1359, Siefring v. McElligott, [Schmuck, J.| Id. April 19, 1940, p. 1781: Matter of Phillips v. McElligott, 279 N. Y. 792.) The motion is accordingly granted to the extent of directing a trial of the issues as to the nature of petitioner’s disability, and as to whether the same was caused or induced by the active performance of his duties. The cross-motion to strike out various paragraphs of the reply and of an affidavit submitted in support thereof is denied. Settle order. | 01-08-2022 | [
"Pecora, J. This is an application for an order directing the fire commissioner to restore the petitioner to his former position of lieutenant in the fire department. The petition was dismissed at Special Term, upon motion of respondents, on the ground that it failed to state a good cause of action. This decision was affirmed by the Appellate Division (257 App. Div. 808), but the Court *841of Appeals reversed (282 N. Y. 182), pointing out that in view of the failure of the respondents to answer, the allegations of the petition were to be deemed admitted, including the allegation that the report of the board of medical officers to the fire commissioner was not founded on fact and was arbitrary and capricious Since that time respondents have served an answer denying various material allegations of the petition, and setting up an affirmative defense, to the effect that the findings of the medical board and the determination of the fire commissioner were based on evidence which amply supported the conclusions reached by them. Petitioner asks for a jury trial of the issues raised, while respondents contend that the answer and the documents made part thereof require the denial of the application without any trial on the ground that they establish that there is at most an honest difference of medical opinion as to the nature and cause of petitioner’s disability.",
"It is well settled that “ a mere difference in medical opinion of physicians produced by petitioner on the one hand and physicians of the medical board on the other, as to the nature and cause of petitioner’s disability, does not justify a conclusion ” that the decision of the fire commissioner, acting on the advice of the medical board of the fire department, was arbitrary, capricious or unreasonable.",
"(See Matter of Nilsson v. LaGuardia, 259 App. Div. 145, 148.) On the other hand, it is equally well established that petitioner is not “ necessarily bound by the findings of the medical board,” and that he may obtain relief on a showing “ that its findings were not amply sustained by competent evidence or that they were, or must have been, due to fraud, bad faith, accident or mistake.” (See Matter of Nilsson v. LaGuardia, supra, p. 148.) It is well nigh impossible; on the papers now before the court, to determine whether the conclusions reached by those members of the medical board who found adversely to the petitioner were amply supported by competent evidence, as respondents maintain, or were merely arbitrary, whimsical and capricious, without adequate factual basis. The very documents incorporated by reference in the answer reveal that a number of members of the medical board of the fire department believed that some or all of the petitioner's injuries and disabilities were, or might have been, caused or induced by the active performance of his duties; and this appears to be a fair inference from the record submitted to the court.",
"It does not clearly and satisfactorily appear that the contrary conclusion reached by other members of the board rests upon a reasonable basis. In any event, petitioner should be given an opportunity, by means of cross-examination, to probe *842into the reasoning which led to the opinions arrived at by the majority of the members of the medical board; only thus may he adequately show, if it be the fact, that said opinions were without sufficient factual or medical foundation. The court’s attention has been directed to a number of cases in which our appellate courts have dismissed similar petitions, on the ground that petitioner had failed to establish that the opinion of the medical board was arbitrary, capricious or unreasonable, but had merely shown that there was a difference in medical opinion. All these determinations, however, were made subsequent to trial, and after petitioner had been afforded an opportunity to establish by cross-examination or otherwise that there was insufficient factual basis for the adverse findings of the medical board.",
"(Matter of Nilsson v. LaGuardia, supra; Matter of Eichler v McElligott, 259 App. Div. 151: affd , 283 N. Y. 716; Strauss v. Hannig, 281 id 612. See, also, Maxwell v McElligott, [Hofstadter, J.j IN Y L. J March 26, 1940, p. 1359, Siefring v. McElligott, [Schmuck, J.| Id. April 19, 1940, p. 1781: Matter of Phillips v. McElligott, 279 N. Y.",
"792.) The motion is accordingly granted to the extent of directing a trial of the issues as to the nature of petitioner’s disability, and as to whether the same was caused or induced by the active performance of his duties. The cross-motion to strike out various paragraphs of the reply and of an affidavit submitted in support thereof is denied. Settle order."
] | https://www.courtlistener.com/api/rest/v3/opinions/5426094/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
RESPONSE TO AMENDMENT Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
Request for Continued Examination A request for continued examination under 37 CFR 1.114, including the fee set forth in 37 CFR 1.17(e), was filed in this application after final rejection. Since this application is eligible for continued examination under 37 CFR 1.114, and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114. Applicant's submission filed on 07 February 2022 has been entered. Amendments to claims 1, 2, 3, and 7, filed on 07 February 2022, have been entered in the above-identified application. Claims 11-18 have been added and claims 4 and 8 have been cancelled by applicant. Claims 1-3, 5-7, and 9-18 are pending.
NEW AND REPEATED REJECTIONS The text of those sections of Title 35, U.S. Code not included in this action can be found in a prior Office action.
Claim Rejections - 35 USC § 112 The following is a quotation of 35 U.S.C. 112(b): (b) CONCLUSION.—The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.
Claims 1-3, 5-7, and 9-18 are rejected under 35 U.S.C. 112(b) as being indefinite for failing to particularly point out and distinctly claim the subject matter which the inventor or a joint inventor regards as the invention. Regarding claims 1 and 2, line 5 of the claims refers to “the unstretched layer”, and this layer has a mass occupancy of 0.55 to 0.95 as determined by dividing a basis weight of the uniaxially stretched layer by a basis weight of all film layers. Later in the claim, options (i) notes that the film includes two uniaxially stretched layers. It is impossible for each uniaxially stretched layer to have a mass occupancy within the claimed range, as this would result in a total mass occupancy of more than 1. That is, if the first laminated layer has the lowest mass occupancy of 0.55, the core layer is thin to have a minimal mass occupancy, and the second laminate layer also has the lost mass occupancy of 0.55, the total mass occupancy of the laminate would be at least 1.10 which is not possible. The Examiner suggests amending the claims to note “a film comprising at least one uniaxially stretched layer”, and that a total mass occupancy of the uniaxially stretched layer(s) is 0.55 to 0.95. This allows for multiple uniaxially stretched layers as in option (i) while maintaining the intent of the mass occupancy limitation. Regarding claims 1 and 2, line 7 of the claims recites the basis weight of “all film layers”, however no other layers have been recited in the film up to this point in the claim. Thus the reference to “all film layers” lacks sufficient antecedent basis. See MPEP § 2173.05(e). The Examiner suggests reciting “all layers of the film”, and moving the mass occupancy clause to the end of the claims, to ensure proper antecedent basis for this limitation. Regarding claims 3, 5, 6, 7, and 9-18, these claims depend on one or more of the above claims and thus incorporate the above-described indefinite subject matter.
Claim Rejections - 35 USC § 102 Claims 1-3, 5-7, 9 and 10 are rejected under 35 U.S.C. 102(a)(1) and (2) as being anticipated by Iwase (WO 2016/133012 A1) as evidenced by EP 3,778,032 A1 and by Breton (U.S. Pat. 6,649,682). U.S. Pat. 10,717,223 was relied upon as the translation of Iwase. The applied reference has a common inventor and assignee with the instant application. Based upon the earlier effectively filed date of the reference, it constitutes prior art under 35 U.S.C. 102(a)(2). This rejection under 35 U.S.C. 102(a)(2) might be overcome by: (1) a showing under 37 CFR 1.130(a) that the subject matter disclosed in the reference was obtained directly or indirectly from the inventor or a joint inventor of this application and is thus not prior art in accordance with 35 U.S.C. 102(b)(2)(A); (2) a showing under 37 CFR 1.130(b) of a prior public disclosure under 35 U.S.C. 102(b)(2)(B); or (3) a statement pursuant to 35 U.S.C. 102(b)(2)(C) establishing that, not later than the effective filing date of the claimed invention, the subject matter disclosed and the claimed invention were either owned by the same person or subject to an obligation of assignment to the same person or subject to a joint research agreement. Regarding claims 1-3 and 7, Iwase describes a film laminate including at least a base layer and a heat seal layer each containing a thermoplastic resin, see col. 6, lines 26-32. Table 1 teaches “PP1” which is homopolypropylene with trade name NOVATEC PP MA4, and “CA1” which is calcium carbonate with trade name SOFTON #1800 and “TIO” which is rutile titanium dioxide with trade name TIPAQUE CR-60, see col. 34-35. These materials are used in the examples shown in Table 2 in col. 35-36. This is the same polypropylene and calcium carbonate and titanium dioxide used in the examples of the present specification, see Tables 1-2 on pp. 54-55 of the instant specification. Accordingly, films made from these same materials will necessarily have a tensile strength in one direction and tensile strength in an orthogonal direction within the range specified in Claim 1, and have a tensile strain at strength in one direction and a tensile strain at strength in an orthogonal direction within the range specified in claim 2. The Examiner notes that the claimed tensile strength and tensile strain at strength properties are a property of the film structure and composition. Where the claimed and prior art products are identical or substantially identical in structure or composition, a prima facie case of either anticipation or obviousness has been established. “Products of identical chemical composition can not have mutually exclusive properties." A chemical composition and its properties are inseparable. Therefore, if the prior art teaches the identical chemical structure, the properties applicant discloses and/or claims are necessarily present. In re Spada, 911 F.2d 705, 709, 15 USPQ2d 1655, 1658 (Fed. Cir. 1990). See MPEP § 2112.01. Iwase teaches that the laminate includes a base layer, intermediate layer, and heat seal layer, see col. 18, lines 7-18. These layers may be uniaxially stretched or biaxially stretched resulting in examples of base layer / intermediate layer / heat seal layer being biaxial / uniaxial / uniaxial oriented or uniaxial / biaxial / biaxial oriented. The disclosure of layers being biaxially oriented / uniaxially oriented / uniaxially oriented reads on the structure of option (ii) as recited in claims 1 and 2 in which the core layer is uniaxially oriented and the first laminated layer is biaxially stretched. Iwase also teaches including a fine filler in the base or intermediate layers, see description at col. 19, lines 53-62, col. 11 line 35 through col. 12 line 29, and examples in Table 2. In particular, Examples 12 and 15 each use a base layer of 73 wt. % PP1, 22 wt. % of CA1, and 5 wt. % of TIO (shown as “TIC” in the table heading). The density of the thermoplastic resin film is disclosed to be most preferably in the range of 0.7 to 0.85 g/cm3, see col. 29, lines 20-39. Examples 12 and 15 have densities of 0.86 and 0.85 g/cm3, respectively, see Table 2 at col. 37-38. EP ‘032 provides evidence that the density of SOFTON 1800 calcium carbonate (used as CA1 in Iwase) is 2.7 g/cm3, see p. 17, [0143]. Breton provides evidence that the density of titanium dioxide is 4.3 g/cm3, see col. 6, lines 30-37. Thus, a film containing 73 wt. % PP1, 22 wt. % CA1, and 5 wt. % TIO will have a density of about 1.05 g/cm3.1 Assuming equally thick layers, the mass of the base layer in Examples 12 and 15 will be higher than that of the intermediate layer due to the presence of the 22% calcium carbonate and 5% titanium dioxide additives which are minimally present (only 1% calcium carbonate) in the intermediate layer. A filled base layer with a density of 1.05 g/cm3 is heavier than an equally thick relatively unfilled intermediate layer with a density of about 0.85 g/cm3 resulting in a mass occupancy of the base layer being about 0.553.2 Thus the mass occupancy of the base layer is within the claimed range of 0.55 to 0.95 based on the weight of all film layers as claimed. If the base layer is thicker than the intermediate layer, then the mass occupancy of the base layer is correspondingly larger. Regarding claims 5 and 9, Iwase teaches that the laminate is taken up by a winder, see Example 1 at col. 39, lines 10-15. Thus the film is wound into a roll. The direction of tensile strength and tensile strain at strength property measurements is necessarily a longitudinal direction. Regarding claims 6 and 10, Iwase also teaches that the heat seal layer is an adhesive layer, see col. 14, lines 25-30. The adhesive layer may be adhered to a plastic container, see col. 15, lines 52-62. This reads on a pressure-sensitive adhesive layer as claimed.
Claim Rejections - 35 USC § 103 The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
The factual inquiries for establishing a background for determining obviousness under 35 U.S.C. 103 are summarized as follows: 1. Determining the scope and contents of the prior art. 2. Ascertaining the differences between the prior art and the claims at issue. 3. Resolving the level of ordinary skill in the pertinent art. 4. Considering objective evidence present in the application indicating obviousness or nonobviousness.
Claims 13, 14, 17, and 18 are rejected under 35 U.S.C. 103(a) as being unpatentable over Iwase (WO 2016/133012 A1) as evidenced by EP 3,778,032 A1 and by Breton (U.S. Pat. 6,649,682). U.S. Pat. 10,717,223 was relied upon as the translation of Iwase.
Regarding claims 13, 14, 17, and 18, Iwase and EP ‘032 and Breton are relied upon as described above to teach a film laminate having the configuration of option (ii) as in claims 1 and 2. Iwase does not specify the thickness of the individual layers of the laminate. However, the examples shown in Table 2 at col. 37-38 have total laminate thicknesses of from 75 microns to 200 microns. It would have been obvious to have formulated the core layer and first and second laminated layers with thicknesses within the claimed range of 15-40 microns for the core layer and 5-30 microns for the first and second laminated layers to result in an overall laminate thickness of from 75 to 200 microns as taught in the examples of Iwase to arrive at the claimed invention. A laminate with first and second laminated layers of from 5-30 microns and a core layer of from 15-40 microns has an overall thickness of from (5+15+5) to (30+40+30) microns, or from 25 to 100 microns. This overlaps the example layer thicknesses taught in Iwase. As set forth in MPEP § 2144.05, in the case where the claimed ranges "overlap or lie inside ranges disclosed by the prior art", a prima facie case of obviousness exists. See In re Wertheim, 541 F.2d 257, 191 USPQ 90 (CCPA 1976); In re Woodruff, 919 F.2d 1575, 16 USPQ2d 1934 (Fed. Cir. 1990).
RESPONSE TO APPLICANT’S ARGUMENTS
Applicant’s arguments in the response filed 07 February 2022 regarding the 35 U.S.C. § 102 rejection of claims 1-10 of record over Iwase (WO 2016/133012 A1) as evidenced by EP 3,778,032 A1 and by Breton (U.S. Pat. 6,649,682) have been carefully considered but are deemed unpersuasive. Applicant argues that the Examiner assumed the thicknesses of the base layer and intermediate layers of Iwase to be 10 microns, and that such an assumption is unfounded and the calculation of the purported density is not supported by the disclosure of Iwase. Furthermore, applicant argues that the Examiner’s calculations are incorrect as the presence of calcium carbonate in the layers will result in pores during the stretching process which will affect the density of the porous layer. The Examiner disagrees. The Examiner notes that claims 1 and 2 do not specify the thickness of the individual layers. The Examiner’s assumption was merely for a basis of calculating the mass occupancy of the layers of Iwase. As for the presence of calcium carbonate, the Examiner agrees that stretching the layer will affect various properties but this will not affect the mass of the resulting stretched layer. Thus comparing the mass of a stretched layer or unstretched layer does not affect the resulting mass occupancy value. Applicant also argues that the claimed invention has advantages such as improved linear cutability and preventing of breakage due to a tensile force applied in one direction. See p. 12 of the remarks. In response to applicant's argument that the references fail to show certain features of applicant’s invention, it is noted that the features upon which applicant relies (i.e., easier cuttability, improved linear cuttability) are not recited in the rejected claims. Although the claims are interpreted in light of the specification, limitations from the specification are not read into the claims. See In re Van Geuns, 988 F.2d 1181, 26 USPQ2d 1057 (Fed. Cir. 1993). Accordingly, this 35 U.S.C. § 102 rejection is maintained.
Conclusion All claims are rejected.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to SCOTT R WALSHON whose telephone number is (571)270-5592. The examiner can normally be reached on Monday to Friday from 9am - 6pm. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, D Lawrence Tarazano can be reached on (571) 272-1515. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see http://pair-direct.uspto.gov. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.
/Scott R. Walshon/ Primary Examiner, Art Unit 1759
1 Sample calculation: 100 grams of film contains 73 g of PP1 with a density of about 0.85 g/cm3 and thus the resin takes up 73 g / 0.85 g/cm3 = 85.9 cm3 of volume. 22 g of calcium carbonate with a density of 2.7 g/cm3 takes up 22g / 2.7 g/cm3 = 8.1 cm3 of volume. 5 g of titanium dioxide with a density of 4.3 g/cm3 takes up 5 g / 4.3 g/cm3 = 1.2 cm3 of volume. The total volume is about 85.9 + 8.1 + 1.2 = 95.2 cm3 for an average density of 100g / 95.2 cm3 = 1.05 g/cm3. 2 Sample calculation: A 10 micron thick film with a density of 1.05 g/cm3 has a basis weight of 1.05 mg/cm2. A 10 micron thick film with a density of 0.85 g/cm3 has a basis weight of 0.85 mg/cm2. The total weight is thus 1.90 mg per square centimeter of film, and the base layer comprises 1.05 / 1.90 = .553 weight fraction of the laminate. | 2022-05-15T20:33:00 | [
"RESPONSE TO AMENDMENT Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Request for Continued Examination A request for continued examination under 37 CFR 1.114, including the fee set forth in 37 CFR 1.17(e), was filed in this application after final rejection. Since this application is eligible for continued examination under 37 CFR 1.114, and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114. Applicant's submission filed on 07 February 2022 has been entered. Amendments to claims 1, 2, 3, and 7, filed on 07 February 2022, have been entered in the above-identified application.",
"Claims 11-18 have been added and claims 4 and 8 have been cancelled by applicant. Claims 1-3, 5-7, and 9-18 are pending. NEW AND REPEATED REJECTIONS The text of those sections of Title 35, U.S. Code not included in this action can be found in a prior Office action. Claim Rejections - 35 USC § 112 The following is a quotation of 35 U.S.C. 112(b): (b) CONCLUSION.—The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention. Claims 1-3, 5-7, and 9-18 are rejected under 35 U.S.C. 112(b) as being indefinite for failing to particularly point out and distinctly claim the subject matter which the inventor or a joint inventor regards as the invention. Regarding claims 1 and 2, line 5 of the claims refers to “the unstretched layer”, and this layer has a mass occupancy of 0.55 to 0.95 as determined by dividing a basis weight of the uniaxially stretched layer by a basis weight of all film layers.",
"Later in the claim, options (i) notes that the film includes two uniaxially stretched layers. It is impossible for each uniaxially stretched layer to have a mass occupancy within the claimed range, as this would result in a total mass occupancy of more than 1. That is, if the first laminated layer has the lowest mass occupancy of 0.55, the core layer is thin to have a minimal mass occupancy, and the second laminate layer also has the lost mass occupancy of 0.55, the total mass occupancy of the laminate would be at least 1.10 which is not possible. The Examiner suggests amending the claims to note “a film comprising at least one uniaxially stretched layer”, and that a total mass occupancy of the uniaxially stretched layer(s) is 0.55 to 0.95. This allows for multiple uniaxially stretched layers as in option (i) while maintaining the intent of the mass occupancy limitation.",
"Regarding claims 1 and 2, line 7 of the claims recites the basis weight of “all film layers”, however no other layers have been recited in the film up to this point in the claim. Thus the reference to “all film layers” lacks sufficient antecedent basis. See MPEP § 2173.05(e). The Examiner suggests reciting “all layers of the film”, and moving the mass occupancy clause to the end of the claims, to ensure proper antecedent basis for this limitation.",
"Regarding claims 3, 5, 6, 7, and 9-18, these claims depend on one or more of the above claims and thus incorporate the above-described indefinite subject matter. Claim Rejections - 35 USC § 102 Claims 1-3, 5-7, 9 and 10 are rejected under 35 U.S.C. 102(a)(1) and (2) as being anticipated by Iwase (WO 2016/133012 A1) as evidenced by EP 3,778,032 A1 and by Breton (U.S. Pat. 6,649,682). U.S. Pat. 10,717,223 was relied upon as the translation of Iwase. The applied reference has a common inventor and assignee with the instant application. Based upon the earlier effectively filed date of the reference, it constitutes prior art under 35 U.S.C. 102(a)(2). This rejection under 35 U.S.C. 102(a)(2) might be overcome by: (1) a showing under 37 CFR 1.130(a) that the subject matter disclosed in the reference was obtained directly or indirectly from the inventor or a joint inventor of this application and is thus not prior art in accordance with 35 U.S.C. 102(b)(2)(A); (2) a showing under 37 CFR 1.130(b) of a prior public disclosure under 35 U.S.C. 102(b)(2)(B); or (3) a statement pursuant to 35 U.S.C. 102(b)(2)(C) establishing that, not later than the effective filing date of the claimed invention, the subject matter disclosed and the claimed invention were either owned by the same person or subject to an obligation of assignment to the same person or subject to a joint research agreement.",
"Regarding claims 1-3 and 7, Iwase describes a film laminate including at least a base layer and a heat seal layer each containing a thermoplastic resin, see col. 6, lines 26-32. Table 1 teaches “PP1” which is homopolypropylene with trade name NOVATEC PP MA4, and “CA1” which is calcium carbonate with trade name SOFTON #1800 and “TIO” which is rutile titanium dioxide with trade name TIPAQUE CR-60, see col. 34-35. These materials are used in the examples shown in Table 2 in col. 35-36. This is the same polypropylene and calcium carbonate and titanium dioxide used in the examples of the present specification, see Tables 1-2 on pp. 54-55 of the instant specification. Accordingly, films made from these same materials will necessarily have a tensile strength in one direction and tensile strength in an orthogonal direction within the range specified in Claim 1, and have a tensile strain at strength in one direction and a tensile strain at strength in an orthogonal direction within the range specified in claim 2. The Examiner notes that the claimed tensile strength and tensile strain at strength properties are a property of the film structure and composition. Where the claimed and prior art products are identical or substantially identical in structure or composition, a prima facie case of either anticipation or obviousness has been established.",
"“Products of identical chemical composition can not have mutually exclusive properties.\" A chemical composition and its properties are inseparable. Therefore, if the prior art teaches the identical chemical structure, the properties applicant discloses and/or claims are necessarily present. In re Spada, 911 F.2d 705, 709, 15 USPQ2d 1655, 1658 (Fed. Cir. 1990). See MPEP § 2112.01. Iwase teaches that the laminate includes a base layer, intermediate layer, and heat seal layer, see col. 18, lines 7-18. These layers may be uniaxially stretched or biaxially stretched resulting in examples of base layer / intermediate layer / heat seal layer being biaxial / uniaxial / uniaxial oriented or uniaxial / biaxial / biaxial oriented. The disclosure of layers being biaxially oriented / uniaxially oriented / uniaxially oriented reads on the structure of option (ii) as recited in claims 1 and 2 in which the core layer is uniaxially oriented and the first laminated layer is biaxially stretched. Iwase also teaches including a fine filler in the base or intermediate layers, see description at col. 19, lines 53-62, col. 11 line 35 through col. 12 line 29, and examples in Table 2. In particular, Examples 12 and 15 each use a base layer of 73 wt.",
"% PP1, 22 wt. % of CA1, and 5 wt. % of TIO (shown as “TIC” in the table heading). The density of the thermoplastic resin film is disclosed to be most preferably in the range of 0.7 to 0.85 g/cm3, see col. 29, lines 20-39. Examples 12 and 15 have densities of 0.86 and 0.85 g/cm3, respectively, see Table 2 at col. 37-38. EP ‘032 provides evidence that the density of SOFTON 1800 calcium carbonate (used as CA1 in Iwase) is 2.7 g/cm3, see p. 17, [0143].",
"Breton provides evidence that the density of titanium dioxide is 4.3 g/cm3, see col. 6, lines 30-37. Thus, a film containing 73 wt. % PP1, 22 wt. % CA1, and 5 wt. % TIO will have a density of about 1.05 g/cm3.1 Assuming equally thick layers, the mass of the base layer in Examples 12 and 15 will be higher than that of the intermediate layer due to the presence of the 22% calcium carbonate and 5% titanium dioxide additives which are minimally present (only 1% calcium carbonate) in the intermediate layer. A filled base layer with a density of 1.05 g/cm3 is heavier than an equally thick relatively unfilled intermediate layer with a density of about 0.85 g/cm3 resulting in a mass occupancy of the base layer being about 0.553.2 Thus the mass occupancy of the base layer is within the claimed range of 0.55 to 0.95 based on the weight of all film layers as claimed. If the base layer is thicker than the intermediate layer, then the mass occupancy of the base layer is correspondingly larger. Regarding claims 5 and 9, Iwase teaches that the laminate is taken up by a winder, see Example 1 at col. 39, lines 10-15. Thus the film is wound into a roll.",
"The direction of tensile strength and tensile strain at strength property measurements is necessarily a longitudinal direction. Regarding claims 6 and 10, Iwase also teaches that the heat seal layer is an adhesive layer, see col. 14, lines 25-30. The adhesive layer may be adhered to a plastic container, see col. 15, lines 52-62. This reads on a pressure-sensitive adhesive layer as claimed. Claim Rejections - 35 USC § 103 The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.",
"Patentability shall not be negated by the manner in which the invention was made. The factual inquiries for establishing a background for determining obviousness under 35 U.S.C. 103 are summarized as follows: 1. Determining the scope and contents of the prior art. 2. Ascertaining the differences between the prior art and the claims at issue. 3. Resolving the level of ordinary skill in the pertinent art. 4. Considering objective evidence present in the application indicating obviousness or nonobviousness. Claims 13, 14, 17, and 18 are rejected under 35 U.S.C. 103(a) as being unpatentable over Iwase (WO 2016/133012 A1) as evidenced by EP 3,778,032 A1 and by Breton (U.S. Pat.",
"6,649,682). U.S. Pat. 10,717,223 was relied upon as the translation of Iwase. Regarding claims 13, 14, 17, and 18, Iwase and EP ‘032 and Breton are relied upon as described above to teach a film laminate having the configuration of option (ii) as in claims 1 and 2. Iwase does not specify the thickness of the individual layers of the laminate. However, the examples shown in Table 2 at col. 37-38 have total laminate thicknesses of from 75 microns to 200 microns. It would have been obvious to have formulated the core layer and first and second laminated layers with thicknesses within the claimed range of 15-40 microns for the core layer and 5-30 microns for the first and second laminated layers to result in an overall laminate thickness of from 75 to 200 microns as taught in the examples of Iwase to arrive at the claimed invention.",
"A laminate with first and second laminated layers of from 5-30 microns and a core layer of from 15-40 microns has an overall thickness of from (5+15+5) to (30+40+30) microns, or from 25 to 100 microns. This overlaps the example layer thicknesses taught in Iwase. As set forth in MPEP § 2144.05, in the case where the claimed ranges \"overlap or lie inside ranges disclosed by the prior art\", a prima facie case of obviousness exists.",
"See In re Wertheim, 541 F.2d 257, 191 USPQ 90 (CCPA 1976); In re Woodruff, 919 F.2d 1575, 16 USPQ2d 1934 (Fed. Cir. 1990). RESPONSE TO APPLICANT’S ARGUMENTS Applicant’s arguments in the response filed 07 February 2022 regarding the 35 U.S.C. § 102 rejection of claims 1-10 of record over Iwase (WO 2016/133012 A1) as evidenced by EP 3,778,032 A1 and by Breton (U.S. Pat. 6,649,682) have been carefully considered but are deemed unpersuasive. Applicant argues that the Examiner assumed the thicknesses of the base layer and intermediate layers of Iwase to be 10 microns, and that such an assumption is unfounded and the calculation of the purported density is not supported by the disclosure of Iwase. Furthermore, applicant argues that the Examiner’s calculations are incorrect as the presence of calcium carbonate in the layers will result in pores during the stretching process which will affect the density of the porous layer. The Examiner disagrees. The Examiner notes that claims 1 and 2 do not specify the thickness of the individual layers. The Examiner’s assumption was merely for a basis of calculating the mass occupancy of the layers of Iwase.",
"As for the presence of calcium carbonate, the Examiner agrees that stretching the layer will affect various properties but this will not affect the mass of the resulting stretched layer. Thus comparing the mass of a stretched layer or unstretched layer does not affect the resulting mass occupancy value. Applicant also argues that the claimed invention has advantages such as improved linear cutability and preventing of breakage due to a tensile force applied in one direction. See p. 12 of the remarks. In response to applicant's argument that the references fail to show certain features of applicant’s invention, it is noted that the features upon which applicant relies (i.e., easier cuttability, improved linear cuttability) are not recited in the rejected claims. Although the claims are interpreted in light of the specification, limitations from the specification are not read into the claims. See In re Van Geuns, 988 F.2d 1181, 26 USPQ2d 1057 (Fed.",
"Cir. 1993). Accordingly, this 35 U.S.C. § 102 rejection is maintained. Conclusion All claims are rejected. Any inquiry concerning this communication or earlier communications from the examiner should be directed to SCOTT R WALSHON whose telephone number is (571)270-5592. The examiner can normally be reached on Monday to Friday from 9am - 6pm. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, D Lawrence Tarazano can be reached on (571) 272-1515. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR.",
"Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see http://pair-direct.uspto.gov. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.",
"/Scott R. Walshon/ Primary Examiner, Art Unit 1759 1 Sample calculation: 100 grams of film contains 73 g of PP1 with a density of about 0.85 g/cm3 and thus the resin takes up 73 g / 0.85 g/cm3 = 85.9 cm3 of volume. 22 g of calcium carbonate with a density of 2.7 g/cm3 takes up 22g / 2.7 g/cm3 = 8.1 cm3 of volume. 5 g of titanium dioxide with a density of 4.3 g/cm3 takes up 5 g / 4.3 g/cm3 = 1.2 cm3 of volume. The total volume is about 85.9 + 8.1 + 1.2 = 95.2 cm3 for an average density of 100g / 95.2 cm3 = 1.05 g/cm3. 2 Sample calculation: A 10 micron thick film with a density of 1.05 g/cm3 has a basis weight of 1.05 mg/cm2. A 10 micron thick film with a density of 0.85 g/cm3 has a basis weight of 0.85 mg/cm2. The total weight is thus 1.90 mg per square centimeter of film, and the base layer comprises 1.05 / 1.90 = .553 weight fraction of the laminate."
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2022-05-15.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
"Walker, J. Tbis case was before us at a former term, under tbe title of Stone Co. v. McLamb & Co., A. D. Rich, and others, 153 N. C., 378. "We tben beld tbat Mrs. M. M. Yann, a feme covert, was liable for tbe debts of tbe firm of McLamb & Go., under tbe statute, Eevisal, sec. 2118, and tbat tbe order appointing a receiver of tbe partnership effects was erroneous and should be vacated, and tbe property, which was under mortgagee to A. D. Eicb, should be restored to him. Tbe ease was remanded for tbe settlement of tbe other matters involved. Tbe parties thereupon agreed tbat an issue be submitted to a jury to ascertain if a paymnet of $333, made by McLamb & Go. to Eicb, should be applied to tbe debt' of tbe firm, amounting to $1,650, which is secured by bis mortgage, or to an unsecured debt of $300 beld by him against McLamb & Go. Tbe jury returned tbe following verdict: “Should tbe $333-credited to A. D. Eicb on page 453 of tbe ledger be appliéd to the mortgage debt of McLamb & Co. to A. D. Eicb? Answer: Yes.” Tbe court adjudged, upon tbe verdict, tbat tbe payment be so applied. Tbe defendant’s exception raises tbe question whether there was any evidence to show tbat be bad been instructed by tbe" firm to so apply tbe payment, be having requested tbe court to charge substantially tbat there was none. We have examined tbe testimony carefully, and have failed to find any evidence to sustain tbe charge of tbe court or tbe verdict of tbe jury. Tbe most tbat can be made of it, when considered favorably to McLamb & Go. and tbe other interested.parties, is tbat tbe firm made some payments, at different times, aggregating $333 and entered them upon its books as credits on the mortgage notes, but did not direct Eicb bow to apply them, and Eicb did not know of tbe entries until some time after they were made, when be promptly objected to them. It was tben agreed tbat they should be applied to tbe unsecured debt. It is admitted tbat Eicb did not apply tbe payments to either of tbe debts. There is no rule in tbe law better settled than tbe one in regard to tbe application of payments: 1. A debtor owing two or more debts to tbe same creditor, and making a payment, may, at tbe time, direct its application *164to any one o£ the debts. The right is lost if the particular application is not directed- at the time of the payment. 2. If the debtor fails to make the application at the time of the payment, the right to apply it belongs to the creditor. 3. If neither debtor nor creditor makes it, the law will apply it to the unsecured debt or the one for which the creditor’s security is most precarious, or, as sometimes expressed, according to its own view of the intrinsic justice and equity of the case. Sprinkle v. Martin, 72 N. C., 92, and cases cited; Vick v. Smith, 83 N. C., 80; Moss v. Adams, 39 N. C., 42 (Anno. Ed.); Jenkins v. Beal, 70 N. C., 440; Ramsour v. Thomas, 32 N. C., 165; Wittkowski v. Reid, 84 N. C., 21; Long v. Miller, 93 N. C., 233; Lester v. Houston, 101 N. C., 605; Pearce v. Walker, 103 Ala., 250. The weight of authority is that the debtor must direct the application at or before the time of his payment, and that he cannot do so afterwards. 30 Oye., p. 1230, and cases in note. A direction by the debtor as to the application of payments may be shown by an express agreement with the creditor, by the declaration of the debtor, or it may be implied from circumstances showing the debtor’s intention at the time of payment. 30 Cyc., p. 1230. Again: The communication need not be expressed in writing, nor in any technical‘or formal words, nor the instruction delivered in any particular manner., It will be sufficient if the intention is manifest, and that it comes to the knowledge of the other party at the proper time. 2 Am. and Eng. Ene. of Law (2d Ed.), 448. “It is certainly too late for either party to claim a right to make an appropriation after the controversy has arisen, and a fortiori at the time of the trial.” U. S. v. Kirkpatrick, 9 Wheaton (U. S.), 721, 737. When a party, indebted to another on more than one account, makes a partial payment, the burden of proving that at or before the time of such payment he directed its application to a particular debt, as pleaded by him, and that this direction was made known to his creditor, is upon the debtor. Pearce v. Walker, supra. Coming to the special facts of this case, it is said in Parsons on Contracts (6 Ed.), sec. 630: “It is not necessary that the *165appropriation of the payment should be.made by an express declaration of the debtor; for if his intention and purpose can be clearly gathered from the circumstances of the case, the. creditor is bound by it. If the debtor, at the time of making a payment, makes also an entry in his own book, stating the payment to be on a particular account, and shows the entry to the creditor, this is sufficient appropriation by the debtor. But the right of election of appropriation is not conclusively exercised by entries in the books of either party until those entries are communicated to the other party.” But the cases nearest to the present in matters of fact are the following: Manning v. Westerne, 2 Vernon, Ch., 606 (23 Eng. Reprint, 996), where it appeared that defendant, being indebted to plaintiff on specialty and also by simple contract, or a running account, made several payments of sums in gross, and entered them in his own book as paid upon the specialty. It was be.tter for the debtor that the payment should go to the simple contract, which did not bear interest. The Lord Chancellor said: “Although the rule of law is that quicquid1 solvitur, solvitur secundum, modum solventis; yet that is to be understood, when at the time of payment he that pays the money declares upon what account he pays it; but if the payment is general, the application is in the party who receives the money, and the entries in the defendant’s books are not sufficient to make the application.” So in Frazer v. Bunn, 8 Carr, and P., 704 (34 E. C. L., 592), where a performer at a theater had arrears of salary due to him, and a payment was made to him without any direction at the time as to its application, it was held that an entry by the debtor in his books was not a sufficient direction unless brought to the creditor’s knowledge at the time; otherwise, if he had stated for what specific portion of the indebtedness it was intended, or had the entry been made known to the creditor, in which case it would have been evidence of such an appropriation as would be binding on the creditor. Lord Abinger said: “If Mr. Jones had expressly paid this for what was due to the plaintiff between February and June, the plaintiff would have been out of court; but so far from that, he states that he did not tell the plaintiff on what account he paid it, neither did he show him *166tbe book. If be bad. shown tbe plaintiff tbe book in wbicb be bad entered it as for a particular period, that would be evidence of appropriation; but tbat was not so, and I tbink tbat tbe plaintiff is at liberty to apply those payments to tbe other parts of what bad been due to him, and tbat, therefore, be may recover for tbe rest of bis claim, wbicb is within tbe dates stated in tbe particulars.” In a case with substantially tbe same facts, Terhune v. Colton, 12 N. J. Eq. (1 Beasley), 232, tbe Court, after stating tbe general rule as to tbe appropriation of payments, held tbat while tbe intention of tbe debtor to apply tbe payment to a particular debt or part of a debt may be shown by circumstances attending tbe act of payment, they must be known to the creditor, or tbe intention to do so must be signified to him in some way, and tbat an entry in bis own books of account by tbe debtor is insufficient to determine tbe application in bis favor, as be bad not, by showing tbe entry to tbe creditor, or otherwise, indicated bis intention as to bow tbe money should be applied. Tbe result of tbe cases ■ is tbat an undisclosed intention to apply tbe payment will not do. Tbe right of tbe creditor to apply tbe payment, when tbe debtor by bis silence has lost control of it, is stated more in detail by Justice Rodman in Jenkins v. Beal, supra: “Tbe rule is tbat where a debtor owes several debts to a creditor and makes payments, be may appropriate the payments to any of the debts be may please; but if be fails to do so at tbe time, tbe creditor may appropriate them as be pleases (subject to some exceptions not material here) at any time before be brings suit for tbe balance.” And in another case tbe Court held: “Although as between tbe immediate parties tbe creditor has a right to appropriate when the debtor has failed to do so, yet this right must be exercised within, at tbe furthest, a reasonable time after the payment, and by tbe performance of some act wbicb indicates an intention to appropriate. It is too late to attempt it at tbe trial.” Harker v. Conrad, 12 S. and R. (Pa.), 301; Reiss v. Scherner, 87 Ill. App., 84. Where neither party has exercised bis right of appropriation, and a dispute subsequently arises, tbe court will make tbe appli*167cation, as we have seen, and in doing so will, as a general rule, apply the payment to the debt which is unsecured or the least secured, upon the assumption that the debtor would desire to pay all his debts, and this disposition of the credit most nearly accomplishes that result, or, in other words, the law pursues this course, as it intends that all men shall be honest and fully perform their just obligations, and adopts this method as the one which an honest man would unselfishly choose, if left to himself to act in the premises. It simply does what the debtor should have done if prompted by just motives. Leeds v. Gifford, 41 N. Y. Eq., 464; Turner v. Hill, 56 N. J. Eq., 293; Terhune v. Cotton, 1 Beasley (12 N. J.), 238, in which cases the law upon this subject is clearly stated with peculiar reference to the same state of facts as are presented in this case. As the burden was upon McLamb & Co. to show that they had directed how the "payment should be applied at the time it was made, and as the mere entries, without the knowledge of A. D. Eieh, were, in law, insufficient to show such an appropriation of the money, the court should have instructed the jury that there was no evidence of an ’appropriation by the debtor, McLamb & Co., and to answer the issue “No,” as the law applied the payment to the unsecured debt or open account. For this error, the verdict and judgment thereon are set aside. It appears that while the issue was found against the defendant A. D. Rich, and judgment entered thereon that the .payment, $333, be applied to the mortgage debt, the Court has given á final judgment in favor of A. D. Rich, by dismissing the action as to him and taxing the plaintiff with the costs of said defendant. As our decision disposes of the principal question in the case and is given upon facts virtually admitted, or at least uncontroverted — that is, the book of McLamb & Co., and the oral testimony, which the parties agreed should be decisive of their rights, so far as the application of the payment is concerned — the defendant A. D. Rich would seem to be entitled to the final judgment. It will, therefore, be allowed to stand, and the action is dismissed as to him. The plaintiffs have called our attention to the anomaly presented in this case, of a verdict against Rich and judgment on *168tbe same, and tben a, final judgment in bis favor. Witb tbis before bim, be expresses a doubt as to Bicb’s right of appeal and some wonder at tbe course of tbe proceeding. We bave decided tbe question, as to tbe payment, to prevent any prejudice to the defendant A. D. Rich likely to grow out of the verdict and judgment thereon, which be should bave tbe right to review by appeal, and by bolding that our decision disposes of tbe merits of tbe case in so far as Rich is affected. We thus sustain tbe final judgment, as consistent witb our decision upon tbe payment, and thus reconcile what was done witb orderly procedure. Appellees will pay tbe costs of tbis Court. Action dismissed. | 07-20-2022 | [
"\"Walker, J. Tbis case was before us at a former term, under tbe title of Stone Co. v. McLamb & Co., A. D. Rich, and others, 153 N. C., 378. \"We tben beld tbat Mrs. M. M. Yann, a feme covert, was liable for tbe debts of tbe firm of McLamb & Go., under tbe statute, Eevisal, sec. 2118, and tbat tbe order appointing a receiver of tbe partnership effects was erroneous and should be vacated, and tbe property, which was under mortgagee to A. D. Eicb, should be restored to him. Tbe ease was remanded for tbe settlement of tbe other matters involved. Tbe parties thereupon agreed tbat an issue be submitted to a jury to ascertain if a paymnet of $333, made by McLamb & Go. to Eicb, should be applied to tbe debt' of tbe firm, amounting to $1,650, which is secured by bis mortgage, or to an unsecured debt of $300 beld by him against McLamb & Go.",
"Tbe jury returned tbe following verdict: “Should tbe $333-credited to A. D. Eicb on page 453 of tbe ledger be appliéd to the mortgage debt of McLamb & Co. to A. D. Eicb? Answer: Yes.” Tbe court adjudged, upon tbe verdict, tbat tbe payment be so applied. Tbe defendant’s exception raises tbe question whether there was any evidence to show tbat be bad been instructed by tbe\" firm to so apply tbe payment, be having requested tbe court to charge substantially tbat there was none. We have examined tbe testimony carefully, and have failed to find any evidence to sustain tbe charge of tbe court or tbe verdict of tbe jury.",
"Tbe most tbat can be made of it, when considered favorably to McLamb & Go. and tbe other interested.parties, is tbat tbe firm made some payments, at different times, aggregating $333 and entered them upon its books as credits on the mortgage notes, but did not direct Eicb bow to apply them, and Eicb did not know of tbe entries until some time after they were made, when be promptly objected to them. It was tben agreed tbat they should be applied to tbe unsecured debt. It is admitted tbat Eicb did not apply tbe payments to either of tbe debts. There is no rule in tbe law better settled than tbe one in regard to tbe application of payments: 1. A debtor owing two or more debts to tbe same creditor, and making a payment, may, at tbe time, direct its application *164to any one o£ the debts. The right is lost if the particular application is not directed- at the time of the payment. 2. If the debtor fails to make the application at the time of the payment, the right to apply it belongs to the creditor. 3. If neither debtor nor creditor makes it, the law will apply it to the unsecured debt or the one for which the creditor’s security is most precarious, or, as sometimes expressed, according to its own view of the intrinsic justice and equity of the case.",
"Sprinkle v. Martin, 72 N. C., 92, and cases cited; Vick v. Smith, 83 N. C., 80; Moss v. Adams, 39 N. C., 42 (Anno. Ed. ); Jenkins v. Beal, 70 N. C., 440; Ramsour v. Thomas, 32 N. C., 165; Wittkowski v. Reid, 84 N. C., 21; Long v. Miller, 93 N. C., 233; Lester v. Houston, 101 N. C., 605; Pearce v. Walker, 103 Ala., 250. The weight of authority is that the debtor must direct the application at or before the time of his payment, and that he cannot do so afterwards. 30 Oye., p. 1230, and cases in note. A direction by the debtor as to the application of payments may be shown by an express agreement with the creditor, by the declaration of the debtor, or it may be implied from circumstances showing the debtor’s intention at the time of payment.",
"30 Cyc., p. 1230. Again: The communication need not be expressed in writing, nor in any technical‘or formal words, nor the instruction delivered in any particular manner., It will be sufficient if the intention is manifest, and that it comes to the knowledge of the other party at the proper time. 2 Am. and Eng. Ene. of Law (2d Ed. ), 448. “It is certainly too late for either party to claim a right to make an appropriation after the controversy has arisen, and a fortiori at the time of the trial.” U. S. v. Kirkpatrick, 9 Wheaton (U. S.), 721, 737. When a party, indebted to another on more than one account, makes a partial payment, the burden of proving that at or before the time of such payment he directed its application to a particular debt, as pleaded by him, and that this direction was made known to his creditor, is upon the debtor.",
"Pearce v. Walker, supra. Coming to the special facts of this case, it is said in Parsons on Contracts (6 Ed. ), sec. 630: “It is not necessary that the *165appropriation of the payment should be.made by an express declaration of the debtor; for if his intention and purpose can be clearly gathered from the circumstances of the case, the. creditor is bound by it. If the debtor, at the time of making a payment, makes also an entry in his own book, stating the payment to be on a particular account, and shows the entry to the creditor, this is sufficient appropriation by the debtor.",
"But the right of election of appropriation is not conclusively exercised by entries in the books of either party until those entries are communicated to the other party.” But the cases nearest to the present in matters of fact are the following: Manning v. Westerne, 2 Vernon, Ch., 606 (23 Eng. Reprint, 996), where it appeared that defendant, being indebted to plaintiff on specialty and also by simple contract, or a running account, made several payments of sums in gross, and entered them in his own book as paid upon the specialty. It was be.tter for the debtor that the payment should go to the simple contract, which did not bear interest. The Lord Chancellor said: “Although the rule of law is that quicquid1 solvitur, solvitur secundum, modum solventis; yet that is to be understood, when at the time of payment he that pays the money declares upon what account he pays it; but if the payment is general, the application is in the party who receives the money, and the entries in the defendant’s books are not sufficient to make the application.” So in Frazer v. Bunn, 8 Carr, and P., 704 (34 E. C. L., 592), where a performer at a theater had arrears of salary due to him, and a payment was made to him without any direction at the time as to its application, it was held that an entry by the debtor in his books was not a sufficient direction unless brought to the creditor’s knowledge at the time; otherwise, if he had stated for what specific portion of the indebtedness it was intended, or had the entry been made known to the creditor, in which case it would have been evidence of such an appropriation as would be binding on the creditor.",
"Lord Abinger said: “If Mr. Jones had expressly paid this for what was due to the plaintiff between February and June, the plaintiff would have been out of court; but so far from that, he states that he did not tell the plaintiff on what account he paid it, neither did he show him *166tbe book. If be bad. shown tbe plaintiff tbe book in wbicb be bad entered it as for a particular period, that would be evidence of appropriation; but tbat was not so, and I tbink tbat tbe plaintiff is at liberty to apply those payments to tbe other parts of what bad been due to him, and tbat, therefore, be may recover for tbe rest of bis claim, wbicb is within tbe dates stated in tbe particulars.” In a case with substantially tbe same facts, Terhune v. Colton, 12 N. J. Eq. (1 Beasley), 232, tbe Court, after stating tbe general rule as to tbe appropriation of payments, held tbat while tbe intention of tbe debtor to apply tbe payment to a particular debt or part of a debt may be shown by circumstances attending tbe act of payment, they must be known to the creditor, or tbe intention to do so must be signified to him in some way, and tbat an entry in bis own books of account by tbe debtor is insufficient to determine tbe application in bis favor, as be bad not, by showing tbe entry to tbe creditor, or otherwise, indicated bis intention as to bow tbe money should be applied.",
"Tbe result of tbe cases ■ is tbat an undisclosed intention to apply tbe payment will not do. Tbe right of tbe creditor to apply tbe payment, when tbe debtor by bis silence has lost control of it, is stated more in detail by Justice Rodman in Jenkins v. Beal, supra: “Tbe rule is tbat where a debtor owes several debts to a creditor and makes payments, be may appropriate the payments to any of the debts be may please; but if be fails to do so at tbe time, tbe creditor may appropriate them as be pleases (subject to some exceptions not material here) at any time before be brings suit for tbe balance.” And in another case tbe Court held: “Although as between tbe immediate parties tbe creditor has a right to appropriate when the debtor has failed to do so, yet this right must be exercised within, at tbe furthest, a reasonable time after the payment, and by tbe performance of some act wbicb indicates an intention to appropriate.",
"It is too late to attempt it at tbe trial.” Harker v. Conrad, 12 S. and R. (Pa.), 301; Reiss v. Scherner, 87 Ill. App., 84. Where neither party has exercised bis right of appropriation, and a dispute subsequently arises, tbe court will make tbe appli*167cation, as we have seen, and in doing so will, as a general rule, apply the payment to the debt which is unsecured or the least secured, upon the assumption that the debtor would desire to pay all his debts, and this disposition of the credit most nearly accomplishes that result, or, in other words, the law pursues this course, as it intends that all men shall be honest and fully perform their just obligations, and adopts this method as the one which an honest man would unselfishly choose, if left to himself to act in the premises.",
"It simply does what the debtor should have done if prompted by just motives. Leeds v. Gifford, 41 N. Y. Eq., 464; Turner v. Hill, 56 N. J. Eq., 293; Terhune v. Cotton, 1 Beasley (12 N. J. ), 238, in which cases the law upon this subject is clearly stated with peculiar reference to the same state of facts as are presented in this case. As the burden was upon McLamb & Co. to show that they had directed how the \"payment should be applied at the time it was made, and as the mere entries, without the knowledge of A. D. Eieh, were, in law, insufficient to show such an appropriation of the money, the court should have instructed the jury that there was no evidence of an ’appropriation by the debtor, McLamb & Co., and to answer the issue “No,” as the law applied the payment to the unsecured debt or open account. For this error, the verdict and judgment thereon are set aside. It appears that while the issue was found against the defendant A. D. Rich, and judgment entered thereon that the .payment, $333, be applied to the mortgage debt, the Court has given á final judgment in favor of A. D. Rich, by dismissing the action as to him and taxing the plaintiff with the costs of said defendant.",
"As our decision disposes of the principal question in the case and is given upon facts virtually admitted, or at least uncontroverted — that is, the book of McLamb & Co., and the oral testimony, which the parties agreed should be decisive of their rights, so far as the application of the payment is concerned — the defendant A. D. Rich would seem to be entitled to the final judgment. It will, therefore, be allowed to stand, and the action is dismissed as to him. The plaintiffs have called our attention to the anomaly presented in this case, of a verdict against Rich and judgment on *168tbe same, and tben a, final judgment in bis favor.",
"Witb tbis before bim, be expresses a doubt as to Bicb’s right of appeal and some wonder at tbe course of tbe proceeding. We bave decided tbe question, as to tbe payment, to prevent any prejudice to the defendant A. D. Rich likely to grow out of the verdict and judgment thereon, which be should bave tbe right to review by appeal, and by bolding that our decision disposes of tbe merits of tbe case in so far as Rich is affected. We thus sustain tbe final judgment, as consistent witb our decision upon tbe payment, and thus reconcile what was done witb orderly procedure.",
"Appellees will pay tbe costs of tbis Court. Action dismissed."
] | https://www.courtlistener.com/api/rest/v3/opinions/6695673/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Exhibit 10.18
IMAX CORPORATION
EMPLOYMENT AGREEMENT
This Employment Agreement dated and effective as of March 1, 2006 (the “Agreement”), is made between
IMAX CORPORATION
a corporation organized
under the laws of Canada
(hereinafter referred to the “Company”; the Company and its subsidiaries and affiliates collectively referred to as “Imax”)
OF THE FIRST PART And
GREG FOSTER
of the City of Los Angeles in the
State of California
(hereinafter referred to as the “Employee”)
OF THE SECOND PART
WHEREAS, the Company wishes to enter into this Agreement to engage the Employee to provide services to the Company, and the Employee wishes to be so engaged, pursuant to the terms and conditions hereinafter set forth;
AND WHEREAS the Employee is engaged to provide services to the Company as Chairman and President, Filmed Entertainment,
NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT AND DUTIES
1.1 Employment. The Company hereby agrees to employ the Employee, and the Employee hereby agrees to serve, as Chairman and President, Filmed Entertainment of the Company, upon the terms and conditions herein contained. The Employee agrees to serve the Company faithfully and to the best of his ability under the direction of the co-CEO’s of the Company. The Executive’s responsibilities shall include film distribution, in addition to film development, film production, film marketing and sponsorship. The Employee shall be a spokesperson for film announcements that are made by the Company. There shall be no more senior executive in the Filmed Entertainment department and the Executive shall report only to the co-CEOs of the Company on all of his activities. No executive shall be engage between the Employee the co-CEOs.
1.2 Exclusive Services. Except as may otherwise be approved in advance by the co-CEO’s, the Employee shall devote his full working time throughout the Employment Term (as defined in Section 1.3) to the services required of him hereunder. The Employee’s primary responsibilities shall be the development, production and acquisition of films, film operations (e.g. administrative and business affairs) and such other duties commensurate with his position with the Company as are reasonably designated by the Co-CEO’s of the Company. The Employee’s main duties are expected to include, but shall not be limited to: (i) running and administering IMAX Filmed Entertainment in a manner consistent with the direction of the Co-CEO’s (ii) helping to make available to IMAX certain Hollywood films for re-purposing into IMAX’s format; and (iii) responsibility for film development and film production with such responsibilities discharged in a fashion
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(A) consistent with annual departmental and per film budgets, (B) in which all films receive a G or PG or PG-13rating by the MPAA, (C) in which all films have running times of 60 minutes or less, and made specifically for IMAX and (D) in which all films are consistent with the IMAX Brand which stands for high quality entertainment. The Employee shall be entitled to a discretionary fund (the “Fund”) of US$ 100,000 for use in the Employee’s discretion for reasonable administrative, marketing or development matters. All expenditures from the Fund will be reported in advance to the co-CEOs and the CFO and all expenditures will be appropriate and necessary for the optimal functioning of the Filmed Entertainment division as the Employee determines and will be consistent with the Company’s internal control and audit functions. The Employee shall render his services exclusively to the Company and its subsidiaries and affiliates during the Employment Term, and shall use his best efforts, judgment and energy to improve and advance the business and interests of the Company in a manner consistent with the duties of his position.
1.3 Term of Employment. The Employee’s employment commenced on March 19, 2001 (the “Commencement Date”) and shall terminate on the earlier of (i) June 30, 2008, or (ii) termination of the Employee’s employment pursuant to this Agreement. The period commencing as of the Commencement Date and ending on June 30, 2008 or such later date to which the term of the Employee’s employment under this Agreement shall have been extended is hereinafter referred to as the “Employment Term”.
1.4 Place of Employment. During the Employment Term the Employee will, subject to work-related travel but no permanent or semi-permanent relocation from Los Angeles without mutual agreement, principally work at the Company’s offices in Los Angeles and, as requested or as required by circumstance, at the offices of the Company in Mississauga, Canada and New York. The Employee shall spend the balance of his working time in such location or locations as are necessary and appropriate for the performance of the duties of the Employee, subject to the direction of the Co-CEO’s of the Company.
1.5 Reimbursement of Expenses. The Company shall reimburse the Employee for reasonable travel and other business expenses incurred by him in the fulfilment of his duties hereunder in accordance with Company practices consistently applied.
2. COMPENSATION
2.1 Base Salary. Effective March 1, 2006, the Employee shall be paid an annual base salary (“Base Salary”) of no less than US$ 700,000 subject to annual review. The Employee shall be paid no less frequently than monthly in accordance with the Company’s payroll practices.
2.2 Bonus. In addition to the Base Salary, effective commencing the 2006 fiscal year, the Employee shall continue to be entitled to participate in the management bonus plan of the Company which applies to senior executives of the Company. The Employee will be eligible, subject to the terms of the plan, to receive a bonus (the “Management Bonus”) of up to 100% of the Base Salary for the applicable year, which is normally paid in March of each year. Notwithstanding the foregoing, the Employee shall receive a minimum bonus (the “Minimum Bonus”) of 50% of his Base Salary for the 2006 and 2007 fiscal years and a pro-rated amount for fiscal 2008.
2.3.1 Incentive Compensation. As soon as practicable after the signing of this Agreement the Employee shall be granted non-qualified options (the “Options”) to purchase 225,000 shares of common stock of IMAX Corporation (the “Common Shares”), subject to approval by the Company’s Board of Directors and vested according to the following schedule: 112,500 Options shall vest on the first anniversary date of the grant date and 112,500 Options shall vest on the second anniversary date of the grant date. The Options granted hereunder shall be subject to the terms and conditions of the Option Plan and the stock option agreement (the “Option Agreement”) to be entered into between the Company and the Employee as of the Commencement Date pursuant to, and in accordance with, the terms of the Option Plan. In addition, if there is a Change of Control of the Company (as defined below) on or before March 10, 2008, the Employee shall be paid an incentive bonus equal to the difference between the price of the Common Shares upon such Change of Control and the price of the
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Common Shares on March 10, 2006, multiplied by 75,000. Such incentive bonus shall be paid: (i) in a lump sum in the event Employee is terminated Without Cause following such Change of Control, or (ii) in three equal instalments on the third, fourth and fifth anniversaries of the grant date of the Options.
2.3.2 Notwithstanding anything provided herein (or in the Option Plan) to the contrary, all of the Employee’s Options, together with any additional options granted to the Employee under the Option Plan, including those which are not yet exercisable, shall become immediately exercisable in the event of both (a) a change of control of the Company (a “Change of Control”) (i.e. any person, or group of persons acting in concert, other than Bradley J. Wechsler and Richard L. Gelfond, acquiring greater than fifty percent (50%) of the outstanding common shares of Imax Corporation, whether by direct or indirect acquisition or as a result of a merger, reorganization or sale of substantially all of the assets of Imax Corporation) and (b) the occurrence of one or more of the following: (i) Bradley J. Wechsler and Richard L. Gelfond cease to be Co-Chief Executive Officers of the Company; (ii) the Employee’s termination from the Company Without Cause; (iii) the diminution of the Employee’s title and/or responsibilities; (iv) the Employee is asked to relocate more than twenty-five (25) miles from his existing Los Angeles offices; or (v) any other material breach of this Agreement. The Options shall in all other respects be governed pursuant to, and in accordance with, the term of the Option Plan.
2.3.3 Life Insurance. As soon as practicable, and for the duration of the Employment Term, the Company shall take out a term life insurance policy in the amount of $5,000,000 for the benefit of a beneficiary designated by the Executive.
3. EMPLOYEE BENEFITS
3.1 General. The Employee shall, during the Employment Term, receive Employee benefits including vacation time, medical benefits, disability and life insurance, all at least consistent with those established by the Company for its other key Employees at a level commensurate with that of the Employee. Without limitation, however, the Employee shall be entitled to the following benefits:
(i) four (4) weeks’ paid vacation in each year of the Employment Term;
(ii) car allowance of $850 per month; and
(iii) standard medical benefits available to US employees of the Company.
4. TERMINATION OF EMPLOYMENT
Definitions. As used in this Article 4, the following terms have the following meanings:
(a) “Termination Payment” means each of the following amounts to the extent that such amounts are due to be paid to and including the date upon which the Employee’s employment is terminated (i) Base Salary, (ii) unreimbursed business expenses as outlined in Section 1.5, (iii) any amounts to be paid pursuant to the terms of any benefit plans of the Company in which the Employee participates or pursuant to any policies of the Company applicable to the Employee; (iv) a pro-rated portion of the Minimum Bonus and (v) any outstanding vacation pay calculated up to and including such date.
(b) “Without Cause” means termination of the Employee’s employment by the Company other than for Cause (as defined in Section 4.3), death or disability (as set forth in Section 5).
4.1 Termination Without Cause
4.1.1 General. Subject to the provisions of Sections 4.1.2, 4.1.3 and 6, if, after the Commencement Date and prior to the expiration of the Employment Term, the Employee’s employment is terminated by the Company Without Cause, the Company shall pay the Termination Payment then due to be paid within 30 days of the date of termination and shall continue to pay the Employee the Base Salary and Minimum Bonus for the remainder of
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the Employment Term (such period being referred to hereinafter as the “Severance Period”), and in no event for less than six (6) months, either at such intervals as the same would have been paid had the Employee remained in the active service of the Company, or, at the option of the Company, by immediate payment to the Employee of the remaining Base Salary and Minimum Bonus which would be payable during the Severance Period. Upon such termination (if after the Commencement Date and prior to the expiration of the Employment Term), the Employee shall also be entitled to continue to receive his employment benefits referred to in Section 3.1 at the Company’s expense (to the extent paid for by the Company as at the date of termination) and subject to the consent of the applicable insurers.
The Employee agrees that the Company may deduct from any payment of Base Salary and Minimum Bonus to be made during the Severance Period the benefit plan contributions which are to be made by the Employee during the Severance Period in accordance with the terms of all benefit plans for the minimum period prescribed by law. The Employee shall have no further right to receive any other compensation or benefits after such termination of employment except as are necessary under the terms of the employee benefit plans or programs of the Company or as required by applicable law. Payment of Base Salary and Minimum Bonus and the continuation of the aforementioned Employee benefits during the Severance Period as outlined above shall be deemed to include all termination and severance pay to which the Employee is entitled pursuant to applicable statute law and common law. The date of termination of employment Without Cause shall be the date specified in a written notice of termination to the Employee and does not include the Severance Period.
4.1.2 Fair and Reasonable The parties confirm that notice and pay in lieu of notice provisions contained in Subsection 4.1.1 are fair and reasonable and the parties agree that upon any termination of this Agreement Without Cause, the Employee shall have no action, cause of action, claim or demand against the Company or Imax or any other person as a consequence of such termination other than to enforce Section 4.1.1.
4.1.3 Conditions Applicable to the Severance Period. If, during the Severance Period, the Employee breaches his obligations under Article 7 of this Agreement, the Company may, upon written notice to the Employee, terminate the Severance Period and cease to make any further payments or provide further benefits as described in Section 4.1.1.
4.2 Termination for Cause; Resignation. At any time prior to the expiration of the Employment Term the Employee’s employment may be terminated by the Company immediately upon notice for Cause. If, prior to the expiration of the Employment Term, the Employee’s employment is terminated by the Company for Cause, or the Employee resigns from his employment hereunder, the Employee shall only be paid, within 15 days of the date of such termination or resignation, the Termination Payment then due to be paid. The Employee shall have no further right to receive any other compensation or benefits after such termination or resignation of employment, except as determined in accordance with the terms of the Employee benefit plans or programs of the Company. The date of termination for Cause shall be the date specified in a written notice of termination to the Employee, which notice shall set forth the basis for the termination. The date of resignation shall be thirty (30) days following the date or receipt of notice of resignation from the Employee to the Company.
4.3 Cause. Termination for “Cause” shall mean termination of the Employee’s employment because of:
(i) the cessation of the Employee’s ability to work legally in the United States other than for reasons not within the Employee’s reasonable control;
(ii) any act or omission that constitutes a material breach by the Employee of any of his obligations under this Agreement; provided, however, that if such act or omission is related to the Employee’s performance of his duties within the scope of his employment, then he shall have thirty (30) days after written notice is provided to Employee of such material breach, to cure such breach;
(iii) the continued failure or refusal of the Employee to perform the duties reasonably required of him as Chairman and President, Filmed Entertainment which is not cured within thirty (30) days after written notice is provided to Employee of such failure or refusal;
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(iv) any material violation by the Employee of any United States federal, state or local law or regulation applicable to the business of the Company or Imax, which violation is injurious to the financial condition or business reputation of the Company or Imax, or the Employee’s conviction of a felony or commission of an indictable offense for which he is not pardoned, or any perpetration by the Employee of a common law fraud;
(v) any other action by the Employee which is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company or Imax, or which results in a violation by the Company or Imax of any United States federal, state or local law or regulation applicable to the business of the Company or Imax, which violation is injurious to the financial condition or business reputation of the Company or Imax.
5. DEATH OR DISABILITY
In the event of termination of employment by reason of death or Permanent Disability (as hereinafter defined), the Employee (or his estate, as applicable) shall be paid the Termination Payment then due to be paid within 30 days of the date of such termination of employment. Both the employment of the Employee and the entitlement of the Employee to be paid amounts under Section 4.1.1, in respect of the Severance Period, shall terminate immediately and without notice upon his death or upon his Permanent Disability (as hereinafter defined). Any benefits thereafter shall be determined in accordance with the benefit plans maintained by the Company, and the Company shall have no further obligation hereunder. For purposes of this Agreement, “Permanent Disability” means a physical or mental disability or infirmity of the Employee that prevents the normal performance of substantially all his duties under this Agreement as an Employee of the Company, which disability or infirmity shall exist for any continuous period of 180 days. The parties agree that such Permanent Disability cannot be accommodated short of undue hardship.
6. MITIGATION
Subject to Section 7.2, the Employee shall not be required to mitigate the amount of any payment provided for in Section 4.1.1 (other than the Termination Payment) by seeking other employment or remunerative activity reasonably comparable to his duties hereunder and if and when the Employee does obtain other employment or remunerative activity (subject to Section 7.2), then any Base Pay and Minimum Bonus payable under Section 4.1.1 upon the date he begins such other employment or remunerative activity will be reduced by fifty percent (50%) for the remainder of the Severance Period. The Employee shall be required as a condition of any paymen tunder Section 4.1.1 (other than the Termination Payment) promptly to disclose to the Company any such mitigation compensation.
7. NON-SOLICITATION, CONFIDENTIALITY, NON-COMPETITION
7.1 Non-solicitation. For so long as the Employee is employed by the Company or receiving payment hereunder and continuing for two years thereafter, notwithstanding whether the Employee’s employment is terminated with or Without Cause or whether the Employee resigns, the Employee shall not, without the prior written consent of the Company and Imax, directly or indirectly, for the Employee’s own benefit or the benefit of any other person, whether as a sole proprietor, member of a partnership, stockholder or investor (other than a stockholder or investor owning not more than a 5% interest), officer or director of a corporation, or as a trustee, employee, associate, consultant, principal or agent of any person, partnership, corporation or other business organization or entity other than the Company or Imax: (x) solicit or endeavour to entice away from Imax, any person or entity who is, or, during the then most recent 12-month period, was employed by, or had served as an agent or consultant of, the Company and/or Imax; or (y) solicit, endeavour to entice away or gain the custom of, canvass or interfere in the Company’s and/or Imax’s relationship with any person or entity who is, or was within the then most recent 12-month period, a supplier, customer or client (or reasonably anticipated to become a supplier, customer or client) of the Company and/or Imax and with whom the Employee had dealings during his
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employment with the Company. The Employee confirms that all restrictions in this Section are reasonable and valid and waives all defences to the strict enforcement thereof.
7.2 Non-Competition For so long as the Employee is employed by the Company or receiving payment hereunder and continuing for a period of two years after the date of the termination of the employment of the Employee with the Company, notwithstanding whether the Employee’s employment is terminated with or without Cause or whether the Employee resigns, the Employee shall not, without the prior written consent of the Company and Imax, directly or indirectly anywhere within Canada, the United States, Europe or Asia, as a sole proprietor, member of a partnership, stockholder or investor (other than a stockholder or investor owning not more than a 5% interest), officer or director of a corporation, or as a trustee, employee, associate, consultant, principal or agent of any person, partnership, corporation or other business organization or entity other than Imax: (x) solicit, endeavour to entice away or gain the custom of, canvass or interfere in the Company’s and/or Imax’s relationship with any person or entity who is, or was within the then most recent 12-month period, a supplier, customer or client (or, at the time of termination of Employee’s employment, reasonably anticipated to become a supplier, customer or client) of the Company and/or Imax and with whom the Employee had dealings during his employment with the Company; or (y) render any service to or in any way be affiliated with a Competitor of Imax. A “Competitor” of Imax shall be defined for these purposes as any person or entity which is either: (i) primarily engaged or reasonably anticipated to become primarily engaged in the Business, or (ii) engaged in, or reasonably anticipated to become engaged in the Business, though not primarily,—but then only if the Employee would be directly and materially involved in the Business. “Business” shall be defined for these purposes as designing or supplying large format theatres, designing or distributing projection or sound systems for large format theatres, designing or supplying motion simulation attractions, producing, developing, making, formatting, re-formatting or distributing films for large format theatres or motion simulation attractions or designing, supplying, marketing, manufacturing or otherwise offering for sale or purchase image capture, post capture image processing or projection display systems, including but not limited to, in connection with the “electronic cinema” projector or “digital cinema” projector business or films for such systems. The Employee confirms that all restrictions in this Section are reasonable and valid and waives all defences to the strict enforcement thereof.
7.3 Confidentiality. The Employee covenants and agrees with Imax that he will not at any
time during employment hereunder or thereafter, except in performance of his obligations to the Company hereunder or with the prior written consent of the senior operation officer of the Company, directly or indirectly, disclose or use any secret or confidential information that he may learn or has learned by reason of his association with IMAX. The term “confidential information” includes information not previously disclosed to the public or to the trade by IMAX’s management, or otherwise in the public domain, with respect to IMAX’s products, facilities, applications and methods, trade secrets and other intellectual property, systems, procedures, manuals, confidential reports, product price lists, customer lists, technical information, financial information, business plans, prospects or opportunities, but shall exclude any information which (i) is or becomes available to the public or is generally known in the industry or industries in which IMAX operates other than as a result of disclosure by the Employee in violation of his agreements under this Section 7.3, or (ii) the Employee is required to disclose under any applicable laws, regulations or directives of any government agency, tribunal or authority having jurisdiction in the matter or under subpoena or other process of law. The Employee confirms that all restrictions in this Section are reasonable and valid and waives all defences to the strict enforcement thereof.
7.4 Grant of Rights. The Employee hereby: (i) grants to the Company all copyrights, patent rights and other rights in all work furnished or created by the Employee pursuant to this Agreement; (ii) agrees to sign all documents which may be required to confirm the Company’s absolute ownership of such work; and (iii) waives the moral rights associated with such work. Without limiting the generality of the foregoing, all rights of whatsoever nature and kind (nor or hereafter known) in any and all film projects developed or contributed by the Employee pursuant to this Agreement shall be, from the inception of the creation thereof, the exclusive property of the Company and for the purposes of the United States Copyright Act shall be deemed to constitute “works made for hire.”
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7.5 Exclusive Property. The Employee confirms that all confidential information is and shall remain the exclusive property of Imax. All business records, papers and documents, other than the Employee’s personal files and a copy of his Rolodex, regardless of the form of their records kept or made by Employee relating to the business of Imax shall be and remain the property of Imax, and shall be promptly returned by the Employee to Imax upon any termination of employment.
7.6 Injunctive Relief. Without intending to limit the remedies available to Imax, the Employee acknowledges that a material breach of any of the covenants contained in Article 7 will result in material and irreparable injury to Imax for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, Imax shall be entitled to seek a temporary restraining order and/or a preliminary, interim or permanent injunction restraining the Employee from engaging in activities prohibited by Article 7 or such other relief as may be required specifically to enforce any of the covenants in Article 7. If for any reason it is held that the restrictions under Article 7 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted or modified to include as much of the duration and scope identified in Article 7 as will render such restrictions valid and enforceable.
7.7 Representation. The Employee represents and warrants that he is not subject to any non-competition covenant or any other agreement with any party which would in any manner restrict or limit his ability to render the services required of him hereunder.
8. MISCELLANEOUS
8.1 Notices. All notices or communications hereunder shall be in writing, addressed as follows:
To the Company:
Imax Corporation
2525 Speakman Drive
Mississauga, Ontario
L5K 1B1
Telecopier No: (905) 403-6468 Attention: Legal Department To the Employee:
Mr. Greg Foster
228 North Layton Drive
Los Angeles, California 00049
With a copy to:
Mr. Tom Hansen
450 North Roxbury
Eighth Floor
Beverly Hills, California
90210
All such notices shall be conclusively deemed to be received and shall be effective, (i) if sent by hand delivery, upon receipt or (ii) if sent by registered or certified mail, on the fifth day after the day on which such notice is mailed.
8.2 Severability. Each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. The parties agree that Sections 4, 5, 6 and 7 shall survive the termination of this Agreement.
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8.3 Assignment. This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of the Employee and the assigns and successors of the Company and Imax, if any are permitted by law and provided that the Company and Imax and its assignee shall each remain liable to the Employee in the event of any assignment, but neither this Agreement nor any rights hereunder shall be assignable or otherwise subject to hypothecation by the Employee. The Employee expressly agrees that each of Imax and the Company my assign any of its rights, interest or obligations hereunder to any affiliate of either of them without the consent of the Employee; provided, however, that no such assignment shall relieve the assignor of any of its obligations hereunder.
8.4 Entire Agreement: Amendment. This Agreement represents the entire agreement of the parties and shall supersede any and all previous contracts, arrangements or understandings between the Company and the Employee. This Agreement may only be amended at any time by mutual written agreement of the parties hereto.
8.5 Withholding. The payment of any amount pursuant to this Agreement shall be subject to any applicable withholding and payroll taxes, and such other deductions as may be required under applicable law or the Company’s Employee benefit plans, if any.
8.6 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein without regard to principles of conflicts of laws.
-8-
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, the Company and the Employee have duly executed and delivered this Agreement as of the 9th day of March, 2006.
IMAX CORPORATION: By: /s/ Mary Sullivan Name: Mary Sullivan Title: Senior Vice President, Human Resources & Administration By: /s/ G. Mary Ruby Name: G. Mary Ruby Title: Senior Vice President, Legal Affairs
SIGNED, SEALED AND DELIVERED
in the presence of:
EMPLOYEE: /s/ Jill Ferguson /s/ Greg Foster Witness Greg Foster
-9- | [
"Exhibit 10.18 IMAX CORPORATION EMPLOYMENT AGREEMENT This Employment Agreement dated and effective as of March 1, 2006 (the “Agreement”), is made between IMAX CORPORATION a corporation organized under the laws of Canada (hereinafter referred to the “Company”; the Company and its subsidiaries and affiliates collectively referred to as “Imax”) OF THE FIRST PART And GREG FOSTER of the City of Los Angeles in the State of California (hereinafter referred to as the “Employee”) OF THE SECOND PART WHEREAS, the Company wishes to enter into this Agreement to engage the Employee to provide services to the Company, and the Employee wishes to be so engaged, pursuant to the terms and conditions hereinafter set forth; AND WHEREAS the Employee is engaged to provide services to the Company as Chairman and President, Filmed Entertainment, NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the parties hereto agree as follows: 1. EMPLOYMENT AND DUTIES 1.1 Employment. The Company hereby agrees to employ the Employee, and the Employee hereby agrees to serve, as Chairman and President, Filmed Entertainment of the Company, upon the terms and conditions herein contained. The Employee agrees to serve the Company faithfully and to the best of his ability under the direction of the co-CEO’s of the Company. The Executive’s responsibilities shall include film distribution, in addition to film development, film production, film marketing and sponsorship.",
"The Employee shall be a spokesperson for film announcements that are made by the Company. There shall be no more senior executive in the Filmed Entertainment department and the Executive shall report only to the co-CEOs of the Company on all of his activities. No executive shall be engage between the Employee the co-CEOs. 1.2 Exclusive Services. Except as may otherwise be approved in advance by the co-CEO’s, the Employee shall devote his full working time throughout the Employment Term (as defined in Section 1.3) to the services required of him hereunder. The Employee’s primary responsibilities shall be the development, production and acquisition of films, film operations (e.g. administrative and business affairs) and such other duties commensurate with his position with the Company as are reasonably designated by the Co-CEO’s of the Company. The Employee’s main duties are expected to include, but shall not be limited to: (i) running and administering IMAX Filmed Entertainment in a manner consistent with the direction of the Co-CEO’s (ii) helping to make available to IMAX certain Hollywood films for re-purposing into IMAX’s format; and (iii) responsibility for film development and film production with such responsibilities discharged in a fashion -------------------------------------------------------------------------------- (A) consistent with annual departmental and per film budgets, (B) in which all films receive a G or PG or PG-13rating by the MPAA, (C) in which all films have running times of 60 minutes or less, and made specifically for IMAX and (D) in which all films are consistent with the IMAX Brand which stands for high quality entertainment.",
"The Employee shall be entitled to a discretionary fund (the “Fund”) of US$ 100,000 for use in the Employee’s discretion for reasonable administrative, marketing or development matters. All expenditures from the Fund will be reported in advance to the co-CEOs and the CFO and all expenditures will be appropriate and necessary for the optimal functioning of the Filmed Entertainment division as the Employee determines and will be consistent with the Company’s internal control and audit functions. The Employee shall render his services exclusively to the Company and its subsidiaries and affiliates during the Employment Term, and shall use his best efforts, judgment and energy to improve and advance the business and interests of the Company in a manner consistent with the duties of his position.",
"1.3 Term of Employment. The Employee’s employment commenced on March 19, 2001 (the “Commencement Date”) and shall terminate on the earlier of (i) June 30, 2008, or (ii) termination of the Employee’s employment pursuant to this Agreement. The period commencing as of the Commencement Date and ending on June 30, 2008 or such later date to which the term of the Employee’s employment under this Agreement shall have been extended is hereinafter referred to as the “Employment Term”. 1.4 Place of Employment. During the Employment Term the Employee will, subject to work-related travel but no permanent or semi-permanent relocation from Los Angeles without mutual agreement, principally work at the Company’s offices in Los Angeles and, as requested or as required by circumstance, at the offices of the Company in Mississauga, Canada and New York.",
"The Employee shall spend the balance of his working time in such location or locations as are necessary and appropriate for the performance of the duties of the Employee, subject to the direction of the Co-CEO’s of the Company. 1.5 Reimbursement of Expenses. The Company shall reimburse the Employee for reasonable travel and other business expenses incurred by him in the fulfilment of his duties hereunder in accordance with Company practices consistently applied. 2. COMPENSATION 2.1 Base Salary. Effective March 1, 2006, the Employee shall be paid an annual base salary (“Base Salary”) of no less than US$ 700,000 subject to annual review.",
"The Employee shall be paid no less frequently than monthly in accordance with the Company’s payroll practices. 2.2 Bonus. In addition to the Base Salary, effective commencing the 2006 fiscal year, the Employee shall continue to be entitled to participate in the management bonus plan of the Company which applies to senior executives of the Company. The Employee will be eligible, subject to the terms of the plan, to receive a bonus (the “Management Bonus”) of up to 100% of the Base Salary for the applicable year, which is normally paid in March of each year. Notwithstanding the foregoing, the Employee shall receive a minimum bonus (the “Minimum Bonus”) of 50% of his Base Salary for the 2006 and 2007 fiscal years and a pro-rated amount for fiscal 2008. 2.3.1 Incentive Compensation.",
"As soon as practicable after the signing of this Agreement the Employee shall be granted non-qualified options (the “Options”) to purchase 225,000 shares of common stock of IMAX Corporation (the “Common Shares”), subject to approval by the Company’s Board of Directors and vested according to the following schedule: 112,500 Options shall vest on the first anniversary date of the grant date and 112,500 Options shall vest on the second anniversary date of the grant date. The Options granted hereunder shall be subject to the terms and conditions of the Option Plan and the stock option agreement (the “Option Agreement”) to be entered into between the Company and the Employee as of the Commencement Date pursuant to, and in accordance with, the terms of the Option Plan. In addition, if there is a Change of Control of the Company (as defined below) on or before March 10, 2008, the Employee shall be paid an incentive bonus equal to the difference between the price of the Common Shares upon such Change of Control and the price of the -2- -------------------------------------------------------------------------------- Common Shares on March 10, 2006, multiplied by 75,000.",
"Such incentive bonus shall be paid: (i) in a lump sum in the event Employee is terminated Without Cause following such Change of Control, or (ii) in three equal instalments on the third, fourth and fifth anniversaries of the grant date of the Options. 2.3.2 Notwithstanding anything provided herein (or in the Option Plan) to the contrary, all of the Employee’s Options, together with any additional options granted to the Employee under the Option Plan, including those which are not yet exercisable, shall become immediately exercisable in the event of both (a) a change of control of the Company (a “Change of Control”) (i.e. any person, or group of persons acting in concert, other than Bradley J. Wechsler and Richard L. Gelfond, acquiring greater than fifty percent (50%) of the outstanding common shares of Imax Corporation, whether by direct or indirect acquisition or as a result of a merger, reorganization or sale of substantially all of the assets of Imax Corporation) and (b) the occurrence of one or more of the following: (i) Bradley J. Wechsler and Richard L. Gelfond cease to be Co-Chief Executive Officers of the Company; (ii) the Employee’s termination from the Company Without Cause; (iii) the diminution of the Employee’s title and/or responsibilities; (iv) the Employee is asked to relocate more than twenty-five (25) miles from his existing Los Angeles offices; or (v) any other material breach of this Agreement.",
"The Options shall in all other respects be governed pursuant to, and in accordance with, the term of the Option Plan. 2.3.3 Life Insurance. As soon as practicable, and for the duration of the Employment Term, the Company shall take out a term life insurance policy in the amount of $5,000,000 for the benefit of a beneficiary designated by the Executive. 3. EMPLOYEE BENEFITS 3.1 General. The Employee shall, during the Employment Term, receive Employee benefits including vacation time, medical benefits, disability and life insurance, all at least consistent with those established by the Company for its other key Employees at a level commensurate with that of the Employee.",
"Without limitation, however, the Employee shall be entitled to the following benefits: (i) four (4) weeks’ paid vacation in each year of the Employment Term; (ii) car allowance of $850 per month; and (iii) standard medical benefits available to US employees of the Company. 4. TERMINATION OF EMPLOYMENT Definitions. As used in this Article 4, the following terms have the following meanings: (a) “Termination Payment” means each of the following amounts to the extent that such amounts are due to be paid to and including the date upon which the Employee’s employment is terminated (i) Base Salary, (ii) unreimbursed business expenses as outlined in Section 1.5, (iii) any amounts to be paid pursuant to the terms of any benefit plans of the Company in which the Employee participates or pursuant to any policies of the Company applicable to the Employee; (iv) a pro-rated portion of the Minimum Bonus and (v) any outstanding vacation pay calculated up to and including such date. (b) “Without Cause” means termination of the Employee’s employment by the Company other than for Cause (as defined in Section 4.3), death or disability (as set forth in Section 5).",
"4.1 Termination Without Cause 4.1.1 General. Subject to the provisions of Sections 4.1.2, 4.1.3 and 6, if, after the Commencement Date and prior to the expiration of the Employment Term, the Employee’s employment is terminated by the Company Without Cause, the Company shall pay the Termination Payment then due to be paid within 30 days of the date of termination and shall continue to pay the Employee the Base Salary and Minimum Bonus for the remainder of -3- -------------------------------------------------------------------------------- the Employment Term (such period being referred to hereinafter as the “Severance Period”), and in no event for less than six (6) months, either at such intervals as the same would have been paid had the Employee remained in the active service of the Company, or, at the option of the Company, by immediate payment to the Employee of the remaining Base Salary and Minimum Bonus which would be payable during the Severance Period.",
"Upon such termination (if after the Commencement Date and prior to the expiration of the Employment Term), the Employee shall also be entitled to continue to receive his employment benefits referred to in Section 3.1 at the Company’s expense (to the extent paid for by the Company as at the date of termination) and subject to the consent of the applicable insurers. The Employee agrees that the Company may deduct from any payment of Base Salary and Minimum Bonus to be made during the Severance Period the benefit plan contributions which are to be made by the Employee during the Severance Period in accordance with the terms of all benefit plans for the minimum period prescribed by law.",
"The Employee shall have no further right to receive any other compensation or benefits after such termination of employment except as are necessary under the terms of the employee benefit plans or programs of the Company or as required by applicable law. Payment of Base Salary and Minimum Bonus and the continuation of the aforementioned Employee benefits during the Severance Period as outlined above shall be deemed to include all termination and severance pay to which the Employee is entitled pursuant to applicable statute law and common law.",
"The date of termination of employment Without Cause shall be the date specified in a written notice of termination to the Employee and does not include the Severance Period. 4.1.2 Fair and Reasonable The parties confirm that notice and pay in lieu of notice provisions contained in Subsection 4.1.1 are fair and reasonable and the parties agree that upon any termination of this Agreement Without Cause, the Employee shall have no action, cause of action, claim or demand against the Company or Imax or any other person as a consequence of such termination other than to enforce Section 4.1.1.",
"4.1.3 Conditions Applicable to the Severance Period. If, during the Severance Period, the Employee breaches his obligations under Article 7 of this Agreement, the Company may, upon written notice to the Employee, terminate the Severance Period and cease to make any further payments or provide further benefits as described in Section 4.1.1. 4.2 Termination for Cause; Resignation. At any time prior to the expiration of the Employment Term the Employee’s employment may be terminated by the Company immediately upon notice for Cause. If, prior to the expiration of the Employment Term, the Employee’s employment is terminated by the Company for Cause, or the Employee resigns from his employment hereunder, the Employee shall only be paid, within 15 days of the date of such termination or resignation, the Termination Payment then due to be paid. The Employee shall have no further right to receive any other compensation or benefits after such termination or resignation of employment, except as determined in accordance with the terms of the Employee benefit plans or programs of the Company.",
"The date of termination for Cause shall be the date specified in a written notice of termination to the Employee, which notice shall set forth the basis for the termination. The date of resignation shall be thirty (30) days following the date or receipt of notice of resignation from the Employee to the Company. 4.3 Cause. Termination for “Cause” shall mean termination of the Employee’s employment because of: (i) the cessation of the Employee’s ability to work legally in the United States other than for reasons not within the Employee’s reasonable control; (ii) any act or omission that constitutes a material breach by the Employee of any of his obligations under this Agreement; provided, however, that if such act or omission is related to the Employee’s performance of his duties within the scope of his employment, then he shall have thirty (30) days after written notice is provided to Employee of such material breach, to cure such breach; (iii) the continued failure or refusal of the Employee to perform the duties reasonably required of him as Chairman and President, Filmed Entertainment which is not cured within thirty (30) days after written notice is provided to Employee of such failure or refusal; -4- -------------------------------------------------------------------------------- (iv) any material violation by the Employee of any United States federal, state or local law or regulation applicable to the business of the Company or Imax, which violation is injurious to the financial condition or business reputation of the Company or Imax, or the Employee’s conviction of a felony or commission of an indictable offense for which he is not pardoned, or any perpetration by the Employee of a common law fraud; (v) any other action by the Employee which is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company or Imax, or which results in a violation by the Company or Imax of any United States federal, state or local law or regulation applicable to the business of the Company or Imax, which violation is injurious to the financial condition or business reputation of the Company or Imax.",
"5. DEATH OR DISABILITY In the event of termination of employment by reason of death or Permanent Disability (as hereinafter defined), the Employee (or his estate, as applicable) shall be paid the Termination Payment then due to be paid within 30 days of the date of such termination of employment. Both the employment of the Employee and the entitlement of the Employee to be paid amounts under Section 4.1.1, in respect of the Severance Period, shall terminate immediately and without notice upon his death or upon his Permanent Disability (as hereinafter defined). Any benefits thereafter shall be determined in accordance with the benefit plans maintained by the Company, and the Company shall have no further obligation hereunder. For purposes of this Agreement, “Permanent Disability” means a physical or mental disability or infirmity of the Employee that prevents the normal performance of substantially all his duties under this Agreement as an Employee of the Company, which disability or infirmity shall exist for any continuous period of 180 days.",
"The parties agree that such Permanent Disability cannot be accommodated short of undue hardship. 6. MITIGATION Subject to Section 7.2, the Employee shall not be required to mitigate the amount of any payment provided for in Section 4.1.1 (other than the Termination Payment) by seeking other employment or remunerative activity reasonably comparable to his duties hereunder and if and when the Employee does obtain other employment or remunerative activity (subject to Section 7.2), then any Base Pay and Minimum Bonus payable under Section 4.1.1 upon the date he begins such other employment or remunerative activity will be reduced by fifty percent (50%) for the remainder of the Severance Period. The Employee shall be required as a condition of any paymen tunder Section 4.1.1 (other than the Termination Payment) promptly to disclose to the Company any such mitigation compensation.",
"7. NON-SOLICITATION, CONFIDENTIALITY, NON-COMPETITION 7.1 Non-solicitation. For so long as the Employee is employed by the Company or receiving payment hereunder and continuing for two years thereafter, notwithstanding whether the Employee’s employment is terminated with or Without Cause or whether the Employee resigns, the Employee shall not, without the prior written consent of the Company and Imax, directly or indirectly, for the Employee’s own benefit or the benefit of any other person, whether as a sole proprietor, member of a partnership, stockholder or investor (other than a stockholder or investor owning not more than a 5% interest), officer or director of a corporation, or as a trustee, employee, associate, consultant, principal or agent of any person, partnership, corporation or other business organization or entity other than the Company or Imax: (x) solicit or endeavour to entice away from Imax, any person or entity who is, or, during the then most recent 12-month period, was employed by, or had served as an agent or consultant of, the Company and/or Imax; or (y) solicit, endeavour to entice away or gain the custom of, canvass or interfere in the Company’s and/or Imax’s relationship with any person or entity who is, or was within the then most recent 12-month period, a supplier, customer or client (or reasonably anticipated to become a supplier, customer or client) of the Company and/or Imax and with whom the Employee had dealings during his -5- -------------------------------------------------------------------------------- employment with the Company.",
"The Employee confirms that all restrictions in this Section are reasonable and valid and waives all defences to the strict enforcement thereof. 7.2 Non-Competition For so long as the Employee is employed by the Company or receiving payment hereunder and continuing for a period of two years after the date of the termination of the employment of the Employee with the Company, notwithstanding whether the Employee’s employment is terminated with or without Cause or whether the Employee resigns, the Employee shall not, without the prior written consent of the Company and Imax, directly or indirectly anywhere within Canada, the United States, Europe or Asia, as a sole proprietor, member of a partnership, stockholder or investor (other than a stockholder or investor owning not more than a 5% interest), officer or director of a corporation, or as a trustee, employee, associate, consultant, principal or agent of any person, partnership, corporation or other business organization or entity other than Imax: (x) solicit, endeavour to entice away or gain the custom of, canvass or interfere in the Company’s and/or Imax’s relationship with any person or entity who is, or was within the then most recent 12-month period, a supplier, customer or client (or, at the time of termination of Employee’s employment, reasonably anticipated to become a supplier, customer or client) of the Company and/or Imax and with whom the Employee had dealings during his employment with the Company; or (y) render any service to or in any way be affiliated with a Competitor of Imax.",
"A “Competitor” of Imax shall be defined for these purposes as any person or entity which is either: (i) primarily engaged or reasonably anticipated to become primarily engaged in the Business, or (ii) engaged in, or reasonably anticipated to become engaged in the Business, though not primarily,—but then only if the Employee would be directly and materially involved in the Business. “Business” shall be defined for these purposes as designing or supplying large format theatres, designing or distributing projection or sound systems for large format theatres, designing or supplying motion simulation attractions, producing, developing, making, formatting, re-formatting or distributing films for large format theatres or motion simulation attractions or designing, supplying, marketing, manufacturing or otherwise offering for sale or purchase image capture, post capture image processing or projection display systems, including but not limited to, in connection with the “electronic cinema” projector or “digital cinema” projector business or films for such systems.",
"The Employee confirms that all restrictions in this Section are reasonable and valid and waives all defences to the strict enforcement thereof. 7.3 Confidentiality. The Employee covenants and agrees with Imax that he will not at any time during employment hereunder or thereafter, except in performance of his obligations to the Company hereunder or with the prior written consent of the senior operation officer of the Company, directly or indirectly, disclose or use any secret or confidential information that he may learn or has learned by reason of his association with IMAX. The term “confidential information” includes information not previously disclosed to the public or to the trade by IMAX’s management, or otherwise in the public domain, with respect to IMAX’s products, facilities, applications and methods, trade secrets and other intellectual property, systems, procedures, manuals, confidential reports, product price lists, customer lists, technical information, financial information, business plans, prospects or opportunities, but shall exclude any information which (i) is or becomes available to the public or is generally known in the industry or industries in which IMAX operates other than as a result of disclosure by the Employee in violation of his agreements under this Section 7.3, or (ii) the Employee is required to disclose under any applicable laws, regulations or directives of any government agency, tribunal or authority having jurisdiction in the matter or under subpoena or other process of law.",
"The Employee confirms that all restrictions in this Section are reasonable and valid and waives all defences to the strict enforcement thereof. 7.4 Grant of Rights. The Employee hereby: (i) grants to the Company all copyrights, patent rights and other rights in all work furnished or created by the Employee pursuant to this Agreement; (ii) agrees to sign all documents which may be required to confirm the Company’s absolute ownership of such work; and (iii) waives the moral rights associated with such work. Without limiting the generality of the foregoing, all rights of whatsoever nature and kind (nor or hereafter known) in any and all film projects developed or contributed by the Employee pursuant to this Agreement shall be, from the inception of the creation thereof, the exclusive property of the Company and for the purposes of the United States Copyright Act shall be deemed to constitute “works made for hire.” -6- -------------------------------------------------------------------------------- 7.5 Exclusive Property.",
"The Employee confirms that all confidential information is and shall remain the exclusive property of Imax. All business records, papers and documents, other than the Employee’s personal files and a copy of his Rolodex, regardless of the form of their records kept or made by Employee relating to the business of Imax shall be and remain the property of Imax, and shall be promptly returned by the Employee to Imax upon any termination of employment. 7.6 Injunctive Relief. Without intending to limit the remedies available to Imax, the Employee acknowledges that a material breach of any of the covenants contained in Article 7 will result in material and irreparable injury to Imax for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, Imax shall be entitled to seek a temporary restraining order and/or a preliminary, interim or permanent injunction restraining the Employee from engaging in activities prohibited by Article 7 or such other relief as may be required specifically to enforce any of the covenants in Article 7.",
"If for any reason it is held that the restrictions under Article 7 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted or modified to include as much of the duration and scope identified in Article 7 as will render such restrictions valid and enforceable. 7.7 Representation. The Employee represents and warrants that he is not subject to any non-competition covenant or any other agreement with any party which would in any manner restrict or limit his ability to render the services required of him hereunder. 8. MISCELLANEOUS 8.1 Notices. All notices or communications hereunder shall be in writing, addressed as follows: To the Company: Imax Corporation 2525 Speakman Drive Mississauga, Ontario L5K 1B1 Telecopier No: (905) 403-6468 Attention: Legal Department To the Employee: Mr. Greg Foster 228 North Layton Drive Los Angeles, California 00049 With a copy to: Mr. Tom Hansen 450 North Roxbury Eighth Floor Beverly Hills, California 90210 All such notices shall be conclusively deemed to be received and shall be effective, (i) if sent by hand delivery, upon receipt or (ii) if sent by registered or certified mail, on the fifth day after the day on which such notice is mailed.",
"8.2 Severability. Each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. The parties agree that Sections 4, 5, 6 and 7 shall survive the termination of this Agreement. -7- -------------------------------------------------------------------------------- 8.3 Assignment. This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of the Employee and the assigns and successors of the Company and Imax, if any are permitted by law and provided that the Company and Imax and its assignee shall each remain liable to the Employee in the event of any assignment, but neither this Agreement nor any rights hereunder shall be assignable or otherwise subject to hypothecation by the Employee. The Employee expressly agrees that each of Imax and the Company my assign any of its rights, interest or obligations hereunder to any affiliate of either of them without the consent of the Employee; provided, however, that no such assignment shall relieve the assignor of any of its obligations hereunder. 8.4 Entire Agreement: Amendment.",
"This Agreement represents the entire agreement of the parties and shall supersede any and all previous contracts, arrangements or understandings between the Company and the Employee. This Agreement may only be amended at any time by mutual written agreement of the parties hereto. 8.5 Withholding. The payment of any amount pursuant to this Agreement shall be subject to any applicable withholding and payroll taxes, and such other deductions as may be required under applicable law or the Company’s Employee benefit plans, if any. 8.6 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein without regard to principles of conflicts of laws. -8- -------------------------------------------------------------------------------- IN WITNESS WHEREOF, the Company and the Employee have duly executed and delivered this Agreement as of the 9th day of March, 2006. IMAX CORPORATION: By: /s/ Mary Sullivan Name: Mary Sullivan Title: Senior Vice President, Human Resources & Administration By: /s/ G. Mary Ruby Name: G. Mary Ruby Title: Senior Vice President, Legal Affairs SIGNED, SEALED AND DELIVERED in the presence of: EMPLOYEE: /s/ Jill Ferguson /s/ Greg Foster Witness Greg Foster -9-"
] | https://github.com/TheAtticusProject/cuad | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
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ÿþC i t a t i o n N r : 1 8 1 1 9 2 9 8
D e c i s i o n D a t e : 0 7 / 1 8 / 1 8 A r c h i v e D a t e : 0 7 / 1 8 / 1 8
D O C K E T N O . 1 7 - 2 8 0 3 6
D A T E : J u l y 1 8 , 2 0 1 8
O R D E R
T h e c l a i m o f e n t i t l e m e n t t o s e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n ' s d e a t h i s r e o p e n e d .
S e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n s d e a t h i s g r a n t e d .
T h e a p p e a l f o r D e a t h a n d I n d e m n i t y C o m p e n s a t i o n ( D I C ) b e n e f i t s u n d e r 3 8 U . S . C . § 1 3 1 8 i s d i s m i s s e d .
F I N D I N G S O F F A C T
1 . S e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n s d e a t h w a s i n i t i a l l y d e n i e d i n a M a y 2 0 0 4 r a t i n g d e c i s i o n o n t h e b a s i s t h a t t h e r e w a s n o n e x u s b e t w e e n t h e d i s a b i l i t y t h a t c a u s e d h i s d e a t h a n d h i s s e r v i c e - c o n n e c t e d h e p a t i t i s C o r h i s a c t i v e m i l i t a r y s e r v i c e . T h e a p p e l l a n t d i d n o t a p p e a l t h i s d e c i s i o n .
2 . E v i d e n c e r e c e i v e d s i n c e t h e M a y 2 0 0 4 d e n i a l w a s n o t p r e v i o u s l y c o n s i d e r e d b y a g e n c y d e c i s i o n m a k e r s ; i s n o t c u m u l a t i v e a n d r e d u n d a n t o f e v i d e n c e a l r e a d y o f r e c o r d ; r e l a t e s t o u n e s t a b l i s h e d f a c t s ; a n d r a i s e s a r e a s o n a b l e p o s s i b i l i t y o f s u b s t a n t i a t i n g t h e c l a i m o f e n t i t l e m e n t t o s e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n s d e a t h .
3 . T h e p r i m a r y c a u s e o f t h e V e t e r a n s d e a t h w a s c h o l a n g i o c a r c i n o m a .
4 . T h e r e i s a c a u s a l l i n k b e t w e e n t h e V e t e r a n s s e r v i c e - c o n n e c t e d h e p a t i t i s C a n d c i r r h o s i s o f t h e l i v e r a n d h i s c h o l a n g i o c a r c i n o m a .
5 . T h e g r a n t o f s e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n s d e a t h i s a f u l l g r a n t o f t h e b e n e f i t s s o u g h t o n a p p e a l , r e q u i r i n g d i s m i s s a l o f t h e c l a i m f o r b e n e f i t s u n d e r 3 8 U . S . C . § 1 3 1 8 .
C O N C L U S I O N S O F L A W
1 . T h e c r i t e r i a f o r r e o p e n i n g t h e c l a i m o f e n t i t l e m e n t t o s e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n s d e a t h h a v e b e e n m e t . 3 8 U . S . C . § 5 1 0 8 ; 3 8 C . F . R . § 3 . 1 5 6 .
2 . T h e c r i t e r i a f o r s e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n s d e a t h h a v e b e e n m e t . 3 8 U . S . C . § § 1 0 1 , 1 1 1 0 , 1 3 1 0 , 5 1 0 7 ; 3 8 C . F . R . § § 3 . 1 , 3 . 5 , 3 . 5 0 , 3 . 1 0 2 , 3 . 3 0 3 , 3 . 3 1 0 .
3 . T h e a p p e a l f o r D e a t h a n d I n d e m n i t y C o m p e n s a t i o n b e n e f i t s u n d e r 3 8 U . S . C . § 1 3 1 8 i s d i s m i s s e d a s m o o t . 3 8 U . S . C . § § 1 3 1 8 , 7 1 0 4 ; 3 8 C . F . R . § § 3 . 2 2 , 2 0 . 1 0 1 .
R E A S O N S A N D B A S E S F O R F I N D I N G S A N D C O N C L U S I O N S
T h e V e t e r a n s e r v e d o n a c t i v e d u t y i n t h e U . S . f r o m J u l y 1 9 6 8 t o A p r i l 1 9 7 1 a n d f r o m F e b r u a r y 1 9 7 6 t o M a r c h 1 9 7 9 . H e d i e d o n D e c e m b e r [ r e d a c t e d ] , 2 0 0 2 , a n d t h e a p p e l l a n t i s h i s s u r v i v i n g s p o u s e .
T h i s m a t t e r c o m e s b e f o r e t h e B o a r d o f V e t e r a n s A p p e a l s ( B o a r d ) o n a p p e a l f r o m a J a n u a r y 2 0 1 5 d e c i s i o n i s s u e d b y t h e D e p a r t m e n t o f V e t e r a n s A f f a i r s ( V A ) .
I n t h e M a y 2 0 1 7 s u b s t a n t i v e a p p e a l ( v i a V A F o r m 9 ) , t h e a p p e l l a n t r e q u e s t e d a h e a r i n g b e f o r e a V e t e r a n s L a w J u d g e ( V L J ) . I n J a n u a r y 2 0 1 8 , t h e a p p e l l a n t w i t h d r e w t h e h e a r i n g r e q u e s t . 3 8 C . F . R . § 2 0 . 7 0 4 ( e ) .
T h e a p p e a l w a s l a s t a d j u d i c a t e d i n a n A p r i l 2 0 1 7 s t a t e m e n t o f t h e c a s e ( S O C ) . T h e a p p e l l a n t s u b m i t t e d n e w a n d p e r t i n e n t m e d i c a l e v i d e n c e i n J a n u a r y 2 0 1 8 . A w a i v e r o f i n i t i a l c o n s i d e r a t i o n o f t h i s e v i d e n c e b y t h e a g e n c y o f o r i g i n a l j u r i s d i c t i o n ( A O J ) w a s i n c l u d e d w i t h t h e s u b m i s s i o n . 3 8 U . S . C . § 7 1 0 5 ( e ) ; 3 8 C . F . R . § 2 0 . 1 3 0 4 ( c ) .
1 . W h e t h e r n e w a n d m a t e r i a l e v i d e n c e h a s b e e n p r e s e n t e d t o r e o p e n t h e c l a i m o f e n t i t l e m e n t t o s e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n ' s d e a t h .
T h e S e c r e t a r y m u s t r e o p e n a f i n a l l y d i s a l l o w e d c l a i m w h e n n e w a n d m a t e r i a l e v i d e n c e i s p r e s e n t e d o r s e c u r e d w i t h r e s p e c t t o t h a t c l a i m . 3 8 U . S . C . § 5 1 0 8 ; 3 8 C . F . R . § 3 . 1 5 6 . N e w e v i d e n c e m e a n s e x i s t i n g e v i d e n c e n o t p r e v i o u s l y s u b m i t t e d t o a g e n c y d e c i s i o n m a k e r s . 3 8 C . F . R . § 3 . 1 5 6 ( a ) . M a t e r i a l e v i d e n c e m e a n s e x i s t i n g e v i d e n c e t h a t , b y i t s e l f o r w h e n c o n s i d e r e d w i t h p r e v i o u s e v i d e n c e o f r e c o r d , r e l a t e s t o a n u n e s t a b l i s h e d f a c t n e c e s s a r y t o s u b s t a n t i a t e t h e c l a i m . I d . N e w a n d m a t e r i a l e v i d e n c e c a n b e n e i t h e r c u m u l a t i v e n o r r e d u n d a n t o f t h e e v i d e n c e o f r e c o r d a t t h e t i m e o f t h e l a s t p r i o r f i n a l d e n i a l o f t h e c l a i m s o u g h t t o b e r e o p e n e d a n d m u s t r a i s e a r e a s o n a b l e p o s s i b i l i t y o f s u b s t a n t i a t i n g t h e c l a i m . I d .
S e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n s d e a t h w a s d e n i e d i n a M a y 2 0 0 4 r a t i n g d e c i s i o n o n t h e b a s i s t h a t t h e r e w a s n o n e x u s b e t w e e n t h e d i s a b i l i t y t h a t c a u s e d h i s d e a t h a n d h i s s e r v i c e - c o n n e c t e d h e p a t i t i s C o r h i s a c t i v e m i l i t a r y s e r v i c e . N e w a n d m a t e r i a l e v i d e n c e w a s n o t r e c e i v e d w i t h i n a y e a r o f n o t i c e o f t h e d e c i s i o n . 3 8 C . F . R . § 3 . 1 5 6 ( b ) . T h e a p p e l l a n t d i d n o t i n i t i a t e a n a p p e a l o f t h i s d e c i s i o n a n d i t b e c a m e f i n a l . 3 8 U . S . C . § 7 1 0 5 ; 3 8 C . F . R . § § 2 0 . 3 0 2 , 2 0 . 1 1 0 3 .
I n J a n u a r y 2 0 1 8 , t h e a p p e l l a n t s u b m i t t e d a p r i v a t e m e d i c a l n e x u s o p i n i o n t h a t f o u n d a c a u s a l c o n n e c t i o n b e t w e e n h i s s e r v i c e - c o n n e c t e d h e p a t i t i s C a n d c i r r h o s i s o f t h e l i v e r a n d t h e d i s a b i l i t y t h a t c a u s e d h i s d e a t h . A s t h i s e v i d e n c e w a s n o t b e f o r e V A o r c o n s i d e r e d i n t h e p r i o r d e n i a l , i t i s n e w . A s t h i s e v i d e n c e r e l a t e s t o a n e x u s b e t w e e n t h e V e t e r a n s s e r v i c e - c o n n e c t e d d i s a b i l i t i e s a n d t h e d i s a b i l i t y t h a t c a u s e d h i s d e a t h , i t d i r e c t l y a d d r e s s e s a n u n e s t a b l i s h e d f a c t n e c e s s a r y t o e s t a b l i s h t h e c l a i m a n d , t h e r e f o r e , i t i s m a t e r i a l . A c c o r d i n g l y , n e w a n d m a t e r i a l e v i d e n c e h a s b e e n r e c e i v e d . T h e c l a i m o f e n t i t l e m e n t t o s e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n s d e a t h i s r e o p e n e d . 3 8 U . S . C . § 5 1 0 8 ; 3 8 C . F . R . § 3 . 1 5 6 ( b ) .
T h e B o a r d w i l l p r o c e e d b y a d j u d i c a t i n g t h e r e o p e n e d c l a i m o n t h e m e r i t s . A s i t i s a w a r d i n g t h e f u l l b e n e f i t s o u g h t o n a p p e a l , t h e a p p e l l a n t i s n o t p r e j u d i c e d b y t h i s a c t i o n .
2 . E n t i t l e m e n t t o s e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n s d e a t h .
T h e a p p e l l a n t s e e k s D e a t h a n d I n d e m n i t y C o m p e n s a t i o n ( D I C ) b e n e f i t s b a s e d o n s e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n s d e a t h . S h e a s s e r t s t h a t t h e c h o l a n g i o c a r c i n o m a t h a t c a u s e d h i s d e a t h i s s e c o n d a r y t o h i s s e r v i c e - c o n n e c t e d h e p a t i t i c C a n d / o r c i r r h o s i s o f t h e l i v e r o r , a l t e r n a t i v e l y , t h a t i t i s r e l a t e d t o e x p o s u r e t o A g e n t O r a n g e f r o m s e r v i c e i n t h e R e p u b l i c o f V i e t n a m . F o r t h e r e a s o n s t h a t f o l l o w , t h e B o a r d f i n d s t h a t s e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n s d e a t h i s w a r r a n t e d .
D I C b e n e f i t s a r e p a y a b l e t o t h e s u r v i v i n g s p o u s e o f a v e t e r a n i f t h e v e t e r a n d i e d f r o m a s e r v i c e - c o n n e c t e d d i s a b i l i t y . 3 8 U . S . C . § 1 3 1 0 ; 3 8 C . F . R . § 3 . 5 . T h e d e a t h o f a v e t e r a n w i l l b e c o n s i d e r e d a s h a v i n g b e e n d u e t o a s e r v i c e - c o n n e c t e d d i s a b i l i t y w h e n t h e e v i d e n c e e s t a b l i s h e s t h a t s u c h d i s a b i l i t y w a s e i t h e r t h e p r i n c i p a l o r a c o n t r i b u t o r y c a u s e o f d e a t h . 3 8 C . F . R . § 3 . 3 1 2 . A s e r v i c e - c o n n e c t e d d i s a b i l i t y w i l l b e c o n s i d e r e d a s t h e p r i n c i p a l c a u s e o f d e a t h w h e n s u c h d i s a b i l i t y , s i n g l y o r j o i n t l y w i t h s o m e o t h e r c o n d i t i o n , w a s t h e i m m e d i a t e o r u n d e r l y i n g c a u s e o f d e a t h o r w a s e t i o l o g i c a l l y r e l a t e d t h e r e t o . I d . § 3 . 3 1 2 ( b ) . A s e r v i c e - c o n n e c t e d d i s a b i l i t y w i l l b e c o n s i d e r e d a c o n t r i b u t o r y c a u s e o f d e a t h w h e r e i t c o n t r i b u t e d s u b s t a n t i a l l y o r m a t e r i a l l y t o c a u s e d e a t h ; i t c o m b i n e d t o c a u s e d e a t h ; o r i t a i d e d o r l e n t a s s i s t a n c e t o t h e p r o d u c t i o n o f d e a t h . I d . § 3 . 3 1 2 ( c ) .
S e r v i c e c o n n e c t i o n m a y b e g r a n t e d f o r a d i s a b i l i t y r e s u l t i n g f r o m a d i s e a s e o r i n j u r y i n c u r r e d i n o r a g g r a v a t e d b y a c t i v e s e r v i c e . 3 8 U . S . C . § 1 1 1 0 ; 3 8 C . F . R . § 3 . 3 0 3 . S e r v i c e c o n n e c t i o n m a y a l s o b e g r a n t e d f o r a d i s a b i l i t y t h a t i s p r o x i m a t e l y d u e t o o r a g g r a v a t e d b y a s e r v i c e - c o n n e c t e d d i s e a s e o r i n j u r y . 3 8 C . F . R . § 3 . 3 1 0 . V A s r e g u l a t o r y f r a m e w o r k c o n t a i n s p r o v i s i o n s r e l a t i n g t o e x p o s u r e t o A g e n t O r a n g e , s e e 3 8 C . F . R . § § 3 . 3 0 7 ( a ) ( 6 ) , 3 . 3 0 9 ( e ) ; h o w e v e r , t h e B o a r d i s g r a n t i n g t h i s b e n e f i t b a s e d o n a s e c o n d a r y t h e o r y o f e n t i t l e m e n t , a n d f u r t h e r d i s c u s s i o n o f t h o s e r e g u l a t i o n s i s n o t n e e d e d .
P r e l i m i n a r i l y , t h e B o a r d n o t e s t h a t t h e e v i d e n c e s h o w s t h e a p p e l l a n t i s t h e s u r v i v i n g s p o u s e o f t h e V e t e r a n a s d e f i n e d b y V A l a w a n d r e g u l a t i o n s . 3 8 U . S . C . § 1 0 1 ( 3 ) ; 3 8 C . F . R . § § 3 . 1 ( j ) , 3 . 5 0 , 3 . 5 2 - 3 . 5 5 . T h i s f a c t i s n o t i n d i s p u t e a n d r e q u i r e s n o f u r t h e r d i s c u s s i o n . T h e a p p e l l a n t i s e l i g i b l e t o r e c e i v e t h e D I C b e n e f i t s s h e s e e k s . 3 8 U . S . C . § 1 3 1 0 .
T h e V e t e r a n s d e a t h c e r t i f i c a t e i d e n t i f i e s h i s i m m e d i a t e c a u s e o f d e a t h a s c h o l a n g i o c a r c i n o m a . V A t r e a t m e n t r e c o r d s s h o w h e u n d e r w e n t a p e r c u t a n e o u s l i v e r b i o p s y i n F e b r u a r y 2 0 0 1 . A n a l y s i s o f t h e s p e c i m e n p r o d u c e d a d i a g n o s i s o f w e l l d i f f e r e n t i a t e d c h o l a n g i o c a r c i n o m a . T h e d i s e a s e w a s t r e a t e d w i t h c h e m o t h e r a p y ; h o w e v e r , t h e e f f o r t s w e r e n o t s u c c e s s f u l . V A c o n t i n u e d t o f o l l o w h i m a n d t r e a t t h e d i s e a s e t h r o u g h h i s d e a t h .
A r e v i e w o f t h e V e t e r a n s V A C o m p e n s a t i o n a n d P e n s i o n r e c o r d s c o n f i r m s t h a t h e w a s s e r v i c e - c o n n e c t e d f o r h e p a t i t i s C a n d c i r r h o s i s o f t h e l i v e r . A s n o t e d a b o v e , t h e a p p e l l a n t c o n t e n d s t h a t t h e c h o l a n g i o c a r c i n o m a w h i c h p r o d u c e d h i s d e a t h w a s s e c o n d a r y t o h i s h e p a t i t i s C a n d c i r r h o s i s o f t h e l i v e r . T h e a p p e l l a n t s a s s e r t i o n s i n t h i s r e g a r d a r e a t t r i b u t e d n o w e i g h t a s s h e i s n o t c o m p e t e n t t o r e n d e r a n e t i o l o g i c a l o p i n i o n b e c a u s e s h e l a c k s t h e r e q u i s i t e m e d i c a l t r a i n i n g a n d e x p e r t i s e . 3 8 C . F . R . § 3 . 1 5 9 ( a ) ( 1 ) , ( 2 ) ; J a n d r e a u v . N i c h o l s o n , 4 9 2 F . 3 d 1 3 7 2 n . 4 ( F e d . C i r . 2 0 0 7 ) . T h e c o m p e t e n t n e x u s e v i d e n c e o f r e c o r d c o n s i s t s o f a n O c t o b e r 2 0 0 2 l e t t e r f r o m t h e V e t e r a n s t r e a t i n g V A p h y s i c i a n , a N o v e m b e r 2 0 0 2 m e d i c a l o p i n i o n b y a R a t i n g B o a r d S p e c i a l i s t , a n d a J a n u a r y 2 0 1 8 o p i n i o n b y a p r i v a t e p h y s i c i a n .
I n O c t o b e r 2 0 0 2 , t h e V e t e r a n s t r e a t i n g V A p h y s i c i a n , D r . S . B . , w r o t e t h a t t h e d e v e l o p m e n t o f c h o l a n g i o c a r c i n o m a h a s b e e n r e l a t e d t o c h r o n i c i n f l a m m a t i o n o f t h e g a l l b l a d d e r o r b i l i a r y t r a c t , i . e . , c h r o n i c g a l l s t o n e , c h o l e c y s t i t i s , a n d s c l e r o s i n g c h o l a n g i t i s . S h e n o t e d t h a t n o r e p o r t s i n d i c a t e t h a t h e p a t i t i s i s a r i s k f a c t o r f o r t h e d e v e l o p m e n t o f c h o l a n g i o c a r c i n o m a .
I n N o v e m b e r 2 0 0 2 , t h e R a t i n g B o a r d S p e c i a l i s t , D r . M . K . , w r o t e t h a t t h e r e i s a s t r o n g a s s o c i a t i o n b e t w e e n h e p a t i t i s C a n d h e p a t o c e l l u l a r c a r c i n o m a ; h o w e v e r , t h e V e t e r a n s c h o l a n g i o c a r c i n o m a i s a n e x t r e m e l y r a r e f o r m o f l i v e r c a n c e r w i t h a l e s s c l e a r a s s o c i a t i o n . I n t h e U . S . , t h e s t r o n g e s t r i s k f a c t o r s f o r c h o l a n g i o c a r c i n o m a a r e p r i m a r y s c l e r o s i n g c h o l a n g i t i s , u l c e r a t i v e c o l i t i s , c h o l e d o c h a l c y s t s , a n d t h o r o t r a s t . I n r e v i e w i n g m e d i c a l l i t e r a t u r e , D r . M . K . o n l y f o u n d o n e s t u d y r e p o r t i n g a n a s s o c i a t i o n b e t w e e n h e p a t i t i s C a n d c h o l a n g i o c a r c i n o m a . I n t h e c a s e - c o n t r o l l e d s t u d y b y D o n a t o , e t . a l . , t h e a u t h o r s f o u n d a 1 0 - f o l d i n c r e a s e d l i k e l i h o o d o f h e p a t i t i c C i n f e c t i o n a m o n g p a t i e n t s w i t h i n t r a h e p a t i c c h o l a n g i o c a r c i n o m a c o m p a r e d t o c o n t r o l s . D r . M . K . a l s o n o t e d t h a t s i n c e t h e a b i l i t y t o t e s t f o r h e p a t i t i s C h a s o n l y b e e n a v a i l a b l e f o r t h e p r i o r 1 0 y e a r s o r s o , e s t a b l i s h i n g o r r e f u t i n g h e p a t i t i s C a s a r i s k f a c t o r i s p r o b l e m a t i c . D r . M . K . c o n c l u d e d t h a t a l t h o u g h i t i s p o s s i b l e t h a t t h e V e t e r a n s t u m o r c o u l d b e r e l a t e d t o h e p a t i t i s C , h e p o s s e s s e d n o n e o f t h e o t h e r r i s k f a c t o r s f o r c h o l a n g i o c a r c i n o m a a n d g i v e n t h e l i m i t e d d a t a i t i s i m p o s s i b l e t o s a y w h e t h e r t h e y a r e a t l e a s t a s l i k e l y a s n o t r e l a t e d .
I n J a n u a r y 2 0 1 8 , D r . J . B . w r o t e t h a t c h o l a n g i o c a r c i n o m a i s t h e m o s t c o m m o n c a n c e r o f t h e b i l i a r y t r a c t ; h o w e v e r , i t i s e x t r e m e l y r a r e . T h e r e s u l t s o f a n u m b e r o f s t u d i e s h a v e s h o w n a c l e a r c o r r e l a t i o n b e t w e e n t h e h e p a t i t i s C v i r u s ( H C V ) a n d t h e f u t u r e d e v e l o p m e n t o f c h o l a n g i o c a r c i n o m a . T h i s d i r e c t i n v o l v e m e n t i s r e f l e c t e d b y t h e f a c t t h a t c o m p o n e n t s o f t h e H C V v i r u s i t s e l f h a v e b e e n d e m o n s t r a t e d i n c h o l a n g i o c a r c i n o m a t u m o r s . I n g e n e r a l , D r . J . B . e x p l a i n e d t h e e f f e c t s o f H C V a s f o l l o w s : T h e H C V i n d u c e d l i v e r i n f e c t i o n a n d i n f l a m m a t i o n t h a t s l o w e d b i l e f l o w . T h e b o d y d e f e n s e m e c h a n i s m s f a i l e d t o h e a l t h e s e l i v e r i n j u r i e s . T h e h e a l i n g p r o c e s s i t s e l f c a u s e d s c a r r i n g o f t h e l i v e r w h i c h r e s u l t e d i n c i r r h o s i s a n d i t a l s o p r o d u c e d b i o a c t i v e s u b s t a n c e s t h a t w e r e c a n c e r p r o m o t i n g . D r . J . B . a l s o r e l a t e d t h a t t h e V e t e r a n s e x p o s u r e t o T C D D a c h e m i c a l h e r b i c i d e a g e n t a n d o b e s i t y w e r e a l s o c o n t r i b u t o r y r i s k f a c t o r s . D r . J . B . c o n c l u d e d t h a t t h e V e t e r a n s d e v e l o p i n g c h o l a n g i o c a r c i n o m a w a s d i r e c t l y r e l a t e d t o h i s c o n t r a c t i n g t h e H C V i n f e c t i o n d u r i n g m i l i t a r y s e r v i c e a n d t h e s u b s e q u e n t c i r r h o s i s . D r . J . B . n o t e d t h a t t h e p r o g r e s s i o n o f t h e s e l i v e r d i s e a s e s w a s a l s o f a c i l i t a t e d b y e x p o s u r e t o t h e T C D D t o x i n a n d o b e s i t y .
B a s e d o n a r e v i e w o f t h e e v i d e n c e , t h e B o a r d f i n d s t h e r e i s a r e a s o n a b l e b a s i s t o c o n c l u d e t h e V e t e r a n s c h o l a n g i o c a r c i n o m a w a s c a u s e d b y h i s s e r v i c e - c o n n e c t e d h e p a t i t i s C a n d c i r r h o s i s o f t h e l i v e r .
T h e c o m p e t e n t n e x u s e v i d e n c e s h o w s t h a t t h e m e d i c a l c o m m u n i t y s k n o w l e d g e o f a c o n n e c t i o n b e t w e e n h e p a t i t i s C , c i r r h o s i s o f t h e l i v e r , a n d c h o l a n g i o c a r c i n o m a h a s e v o l v e d o v e r t i m e . A s s u g g e s t e d b y D r . M . K . i n h e r N o v e m b e r 2 0 0 2 o p i n i o n , t h i s i s l i k e l y b e c a u s e o f t h e r e l a t i v e r e c e n c y o f b e i n g a b l e t o t e s t f o r h e p a t i t i s C , i t s e l f .
T h e V e t e r a n s t r e a t i n g p h y s i c i a n , D r . S . B . , w r o t e i n O c t o b e r 2 0 0 2 t h a t h e p a t i t i c C w a s n o t c o n s i d e r e d a r i s k f a c t o r ; h o w e v e r , i n N o v e m b e r 2 0 0 2 , D r . M . K . , w r o t e t h a t t h e r e w a s o n e m e d i c a l s t u d y t h a t m a d e a c o n n e c t i o n . N o n e t h e l e s s , i t a p p e a r s D r . M . K . w a s u n c o m f o r t a b l e c o n c l u d i n g t h a t n e x u s w a s a t l e a s t a s l i k e l y a s n o t b a s e d o n l y o n a s i n g l e s t u d y a n d n o o t h e r r i s k f a c t o r s . S i x t e e n y e a r s l a t e r i n 2 0 1 8 , D r . J . B . h a s e x p l a i n e d t h a t t h e r e a r e n o w n u m e r o u s m e d i c a l s t u d i e s t h a t p r o v i d e a c a u s a t i v e l i n k b e t w e e n H C V a n d c h o l a n g i o c a r c i n o m a ; w h i l e n o t n o t e d a b o v e , h e d i d p r o v i d e c i t a t i o n s t o s u p p o r t t h i s a s s e r t i o n . F u r t h e r m o r e , D r . J . B . d e s c r i b e d t h e g e n e r a l p r o c e s s f o r h o w H C V p r o d u c e s c i r r h o s i s o f t h e l i v e r a n d u l t i m a t e l y i s a r i s k f a c t o r f o r c h o l a n g i o c a r c i n o m a . T h e B o a r d a c k n o w l e d g e s t h a t D r . J . B . a l s o i d e n t i f i e d t h e V e t e r a n s e x p o s u r e t o T C D D a n d h i s o b e s i t y a s c o n t r i b u t o r y f a c t o r s ; h o w e v e r , h i s o p i n i o n w a s n o t p r e d i c a t e d o n t h o s e f a c t o r s . G i v e n t h e f o r g o i n g , t h e B o a r d f i n d s t h a t t h e o p i n i o n o f D r . J . B . o u t w e i g h s t h e o p i n i o n s o f D r s . S . B . a n d M . K . b e c a u s e o f t h e d e p t h o f h i s r a t i o n a l e a n d h i s k n o w l e d g e o f m o r e r e c e n t m e d i c a l l i t e r a t u r e .
I n s u m , t h e V e t e r a n s d e a t h c e r t i f i c a t e s h o w s t h e p r i m a r y c a u s e o f d e a t h w a s c h o l a n g i o c a r c i n o m a . H i s m e d i c a l r e c o r d s c o n f i r m a d i a g n o s i s o f t h i s d i s e a s e a n d t h e c o m p e t e n t e v i d e n c e o f r e c o r d w e i g h s i n f a v o r o f a n e x u s b e t w e e n t h e d i s e a s e a n d h i s s e r v i c e - c o n n e c t e d h e p a t i t i s C a n d c i r r h o s i s o f t h e l i v e r . A c c o r d i n g l y , s e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n s d e a t h i s w a r r a n t e d .
3 . E n t i t l e m e n t t o D e p e n d e n c y a n d I n d e m n i t y C o m p e n s a t i o n b e n e f i t s p u r s u a n t t o 3 8 U . S . C . § 1 3 1 8
3 8 U . S . C . § 1 3 1 8 p r o v i d e s f o r D I C b e n e f i t s i n t h e s a m e m a n n e r a s i f t h e V e t e r a n s d e a t h w a s s e r v i c e - c o n n e c t e d . I t i s c o n s i d e r e d a l e s s e r b e n e f i t t h a n t h a t a v a i l a b l e u n d e r 3 8 U . S . C . § 1 3 1 0 . A b o v e , t h e B o a r d g r a n t e d D I C b e n e f i t s u n d e r § 1 3 1 0 . A c c o r d i n g l y , t h e g r e a t e r b e n e f i t h a s b e e n a w a r d e d , a n d n o a d d i t i o n a l b e n e f i t , m o n e t a r y o r o t h e r w i s e , c a n b e g a i n e d u n d e r § 1 3 1 8 . S e e T i m b e r l a k e v . G o b e r , 1 4 V e t . A p p . 1 2 2 ( 2 0 0 0 ) ( o n l y i f a n a p p e l l a n t s c l a i m f o r s e r v i c e c o n n e c t i o n f o r t h e c a u s e o f t h e V e t e r a n s d e a t h u n d e r § 1 3 1 0 i s d e n i e d d o e s V A h a v e t o c o n s i d e r a n a p p e l l a n t s D I C c l a i m u n d e r § 1 3 1 8 ) . T h e c l a i m o f e n t i t l e m e n t t o D I C b e n e f i t s p u r s u a n t t o 3 8 U . S . C . § 1 3 1 8 h a s b e e n r e n d e r e d m o o t a n d , t h e r e f o r e , t h e c l a i m m u s t b e d i s m i s s e d .
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] | https://drive.google.com/drive/folders/12lAd8Os7VFeqbTKi4wcqJqODjHIn0-yQ?usp=sharing | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
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O’BRIEN, J., I. FINDINGS OF FACT I. Margaret Garrison and Brent C. Garrison were married on March 3, 1968. *1912. In an effort to resolve marital differences, the parties participated in four different episodes of marriage counseling, the most recent being in the fall of 1983. 3. The parties have not engaged in marital relations since January 1985 and plaintiff wife filed a complaint for divorce on August 22, 1986. 4. The parties have four children, Heather Marie Garrison born August 25, 1973; Theresa Anne Garrison born September 12, 1975; Mary Elizabeth Garrison bom May 1, 1978; and Andrew Coleman Garrison born April 20, 1981. 5. For a continuous period commencing as early as February 1985 and continuing as recently as April 25, 1987, defendant husband has purchased under various names, and used, illegal drugs, including but not limited to marijuana, cocaine, LSD, peyote and methamphetamines. 6. The marital premises, which is jointly owned by the parties, is presently subject to a lien by the Internal Revenue Service because defendant husband has not filed a tax return since 1975 because he believes the federal tax laws are unconstitutional. 7. The marital premises is a four-bedroom farmhouse in Effort, Monroe County, Pa. which is subject to a mortgage in favor of East Stroudsburg Savings Association requiring a monthly amortization of $139. 8. Plaintiff wife has been the primary caretaker for the children of the marriage and is primarily responsible for the purchase of groceries, clothing and other household needs. 9. Defendant husband does not agree with the types of food purchased by plaintiff wife and in protest thereof nailed a sandwich prepared by plaintiff *192wife to the wall with a note complaining about her choice of bread. 10. Since plaintiff wife is primarily responsible for the caretaking of the children, her only employment is part time as a substitute teacher at a per diem rate of $52.50. 11. Defendant husband, a college graduate, is employed during the summer seasons by the National Park Service at the rate of $8.73 per hour and expects to be recalled to that position shortly. During the winter months he receives unemployment compensation. 12. The communications between the parties is very poor and the presence of both parties in the marital residence has created an atmosphere of tension and conflict for the children of the marriage. II. DISCUSSION The Pennsylvania Divorce Code provides in pertinent part as follows: “§102. Legislative findings and intent (a) The family is the basic unit in society and the protection and preservation of the family is of paramount public concern. Therefore, it is hereby declared to be the policy of the Commonwealth of Pennsylvania to: (1) Make the law for legal dissolution of marriage effective for dealing with the realities of matrimonial experience. (2) Encourage and effect reconciliation and settlement of differences between spouses, especially where children are involved. (3) Give primary consideration to the welfare of the family rather than the vindication of private rights or the punishment of matrimonial wrongs. *193(4) Mitigate the harm to the spouses and their children caused by the legal dissolution of the marriage. (5) Seek causes rather than symptoms of family disintegration and cooperate with and utilize the resources available to deal with family problems.” (23 P.S. §102) In the implementation of the foregoing legislative findings and intent, the Divorce Code further provides: “The court may award to one, each or both of the' parties the right to live in the family home for reasonable periods of time.” 23 P.S. §401(h) In Laczkowski v. Laczkowski, 344 Pa. Super. 154, 496 A.2d 56 (1985), a case of first impression, our Superior Court held that a court of common pleas has authority to temporarily award a marital residence, pending equitable distribution of marital property, to the spouse having physical custody of the minor children and to order the other spouse to vacate the premises. In its decision, the Superior Court emphasized that such an issue is pendente lite and that the common law doctrine of parens patriae should be the paramount consideration of a-court in resolving such issues. It is hard to envision a more suitable case for invoking section 401(h) of the Divorce Code than the case at bar. Although defendant husband refused to admit at hearing that he is a “habitual” drug user, his continued usé of various illegal substances over a period in excess of two years is undoubtedly a major contributor to the atmosphere of tension and conflict existing in the marital home. The children of this marriage should not be subject to this influence of resulting tension particularly where, as in this case, defendant husband has summer employment available which will provide him a means for other accommodations. . *194III. CONCLUSIONS OF LAW 1. Section 401(h) of the Divorce Code authorizes this court to grant a spouse having physical custody of the children of the marriage, the exclusive use of the marital premises. 2. Plaintiff wife has physical custody of the children of the marriage who reside in the marital premises. 3. The welfare of the family requires the temporary exclusion of defendant husband from the marital premises. ORDER And now, this May 14, 1987, it is ordered as follows: 1. Pending adjudication of Count II of the complaint in divorce seeking equitable distribution of marital property, the exclusive possession of the marital premises situate in Effort, Monroe County, Pa. is granted to plaintiff Margaret Garrison, and defendant Brent C. Garrison is excluded therefrom effective June 1, 1987; 2. Defendant shall pay the costs of these proceedings. | 12-02-2022 | [
"O’BRIEN, J., I. FINDINGS OF FACT I. Margaret Garrison and Brent C. Garrison were married on March 3, 1968. *1912. In an effort to resolve marital differences, the parties participated in four different episodes of marriage counseling, the most recent being in the fall of 1983. 3. The parties have not engaged in marital relations since January 1985 and plaintiff wife filed a complaint for divorce on August 22, 1986.",
"4. The parties have four children, Heather Marie Garrison born August 25, 1973; Theresa Anne Garrison born September 12, 1975; Mary Elizabeth Garrison bom May 1, 1978; and Andrew Coleman Garrison born April 20, 1981. 5. For a continuous period commencing as early as February 1985 and continuing as recently as April 25, 1987, defendant husband has purchased under various names, and used, illegal drugs, including but not limited to marijuana, cocaine, LSD, peyote and methamphetamines. 6.",
"The marital premises, which is jointly owned by the parties, is presently subject to a lien by the Internal Revenue Service because defendant husband has not filed a tax return since 1975 because he believes the federal tax laws are unconstitutional. 7. The marital premises is a four-bedroom farmhouse in Effort, Monroe County, Pa. which is subject to a mortgage in favor of East Stroudsburg Savings Association requiring a monthly amortization of $139. 8. Plaintiff wife has been the primary caretaker for the children of the marriage and is primarily responsible for the purchase of groceries, clothing and other household needs. 9. Defendant husband does not agree with the types of food purchased by plaintiff wife and in protest thereof nailed a sandwich prepared by plaintiff *192wife to the wall with a note complaining about her choice of bread. 10. Since plaintiff wife is primarily responsible for the caretaking of the children, her only employment is part time as a substitute teacher at a per diem rate of $52.50.",
"11. Defendant husband, a college graduate, is employed during the summer seasons by the National Park Service at the rate of $8.73 per hour and expects to be recalled to that position shortly. During the winter months he receives unemployment compensation. 12. The communications between the parties is very poor and the presence of both parties in the marital residence has created an atmosphere of tension and conflict for the children of the marriage. II. DISCUSSION The Pennsylvania Divorce Code provides in pertinent part as follows: Ҥ102. Legislative findings and intent (a) The family is the basic unit in society and the protection and preservation of the family is of paramount public concern.",
"Therefore, it is hereby declared to be the policy of the Commonwealth of Pennsylvania to: (1) Make the law for legal dissolution of marriage effective for dealing with the realities of matrimonial experience. (2) Encourage and effect reconciliation and settlement of differences between spouses, especially where children are involved. (3) Give primary consideration to the welfare of the family rather than the vindication of private rights or the punishment of matrimonial wrongs. *193(4) Mitigate the harm to the spouses and their children caused by the legal dissolution of the marriage. (5) Seek causes rather than symptoms of family disintegration and cooperate with and utilize the resources available to deal with family problems.” (23 P.S.",
"§102) In the implementation of the foregoing legislative findings and intent, the Divorce Code further provides: “The court may award to one, each or both of the' parties the right to live in the family home for reasonable periods of time.” 23 P.S. §401(h) In Laczkowski v. Laczkowski, 344 Pa. Super. 154, 496 A.2d 56 (1985), a case of first impression, our Superior Court held that a court of common pleas has authority to temporarily award a marital residence, pending equitable distribution of marital property, to the spouse having physical custody of the minor children and to order the other spouse to vacate the premises. In its decision, the Superior Court emphasized that such an issue is pendente lite and that the common law doctrine of parens patriae should be the paramount consideration of a-court in resolving such issues. It is hard to envision a more suitable case for invoking section 401(h) of the Divorce Code than the case at bar.",
"Although defendant husband refused to admit at hearing that he is a “habitual” drug user, his continued usé of various illegal substances over a period in excess of two years is undoubtedly a major contributor to the atmosphere of tension and conflict existing in the marital home. The children of this marriage should not be subject to this influence of resulting tension particularly where, as in this case, defendant husband has summer employment available which will provide him a means for other accommodations. . *194III. CONCLUSIONS OF LAW 1. Section 401(h) of the Divorce Code authorizes this court to grant a spouse having physical custody of the children of the marriage, the exclusive use of the marital premises. 2. Plaintiff wife has physical custody of the children of the marriage who reside in the marital premises. 3.",
"The welfare of the family requires the temporary exclusion of defendant husband from the marital premises. ORDER And now, this May 14, 1987, it is ordered as follows: 1. Pending adjudication of Count II of the complaint in divorce seeking equitable distribution of marital property, the exclusive possession of the marital premises situate in Effort, Monroe County, Pa. is granted to plaintiff Margaret Garrison, and defendant Brent C. Garrison is excluded therefrom effective June 1, 1987; 2. Defendant shall pay the costs of these proceedings."
] | https://www.courtlistener.com/api/rest/v3/opinions/9317546/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
In an action to recover damages for the destruction of certain real and personal property through the alleged negligence of the defendants in managing a fire which consumed rubbish upon defendant Yates’ premises, adjoining those of plaintiff Arnold, which fire spread to the latter’s premises, the issues were submitted to the jury, which returned a verdict in favor of the plaintiffs. From the judgment thereon entered and *841from an order entered in the clerk’s minutes denying their motion for a new trial, defendants appeal. Judgment unanimously affirmed, with costs. Appeal from order entered on the clerk’s minutes dismissed. No appeal lies from an order denying a motion for a new trial entered in the clerk’s minutes. The defendants rested upon plaintiffs’ proofs. These presented a prima fade case (Hays v. Miller, 6 Hun, 320; affd., 70 N. Y. 112; Webb v. R., W. & O. R. R. Co., 49 id. 420; O’Neill v. N. Y., O. & W. R. Co., 115 id. 579; Hoffman v. King, 160 id. 618, 621, 622, 628; Warner v. New York, Ontario & Western Railway Co., 209 App. Div. 211), from which the jury was entitled to draw the inference of defendants’ liability. The defendants question the verdict upon the ground that legal proof of damage was not presented. The verdict in this respect is amply supported by the evidence, including the testimony of the expert witness Duryea as to the “ sound value ” of the building as of the date of the fire. Further, competent evidence on this subject was offered in the testimony of the witness Rogers as to the then value of the building, and was erroneously excluded upon defendants’ objection. The building was of considerable age. Proof of its original cost was unnecessary. (See Sebring v. Firemen’s Ins. Co. of Newark, N. J., 227 App. Div. 103, 104.) No suggestion that such proof was essential was made by the defendants at the trial. They may not urge it now. The defendants’ like objection here asserted that there was no legal proof of the damage alleged in the second cause, involving hedges, trees, other vegetation and certain personal property, is likewise unavailing. It was not made upon the trial. Without objection the court charged that the jury might award plaintiff Arnold “ such sum as would reasonably compensate her for their destruction.” The case was tried on a theory in wtoeh defendants acquiesced and it became the law of the case. (Saulsbury v. Braun, 223 App. Div. 555, 558; affd., 249 N. Y. 618.) Particularly is this true when competent evidence of value was excluded on the objection of defendants; and the appellants are not now entitled to complain that the evidence thereby became insufficient-in certain respects. Present — Hagarty, Carswell, Davis, Johnston and Taylor, JJ. | 01-08-2022 | [
"In an action to recover damages for the destruction of certain real and personal property through the alleged negligence of the defendants in managing a fire which consumed rubbish upon defendant Yates’ premises, adjoining those of plaintiff Arnold, which fire spread to the latter’s premises, the issues were submitted to the jury, which returned a verdict in favor of the plaintiffs. From the judgment thereon entered and *841from an order entered in the clerk’s minutes denying their motion for a new trial, defendants appeal. Judgment unanimously affirmed, with costs. Appeal from order entered on the clerk’s minutes dismissed.",
"No appeal lies from an order denying a motion for a new trial entered in the clerk’s minutes. The defendants rested upon plaintiffs’ proofs. These presented a prima fade case (Hays v. Miller, 6 Hun, 320; affd., 70 N. Y. 112; Webb v. R., W. & O. R. R. Co., 49 id. 420; O’Neill v. N. Y., O. & W. R. Co., 115 id. 579; Hoffman v. King, 160 id.",
"618, 621, 622, 628; Warner v. New York, Ontario & Western Railway Co., 209 App. Div. 211), from which the jury was entitled to draw the inference of defendants’ liability. The defendants question the verdict upon the ground that legal proof of damage was not presented. The verdict in this respect is amply supported by the evidence, including the testimony of the expert witness Duryea as to the “ sound value ” of the building as of the date of the fire. Further, competent evidence on this subject was offered in the testimony of the witness Rogers as to the then value of the building, and was erroneously excluded upon defendants’ objection. The building was of considerable age. Proof of its original cost was unnecessary. (See Sebring v. Firemen’s Ins. Co. of Newark, N. J., 227 App. Div.",
"103, 104.) No suggestion that such proof was essential was made by the defendants at the trial. They may not urge it now. The defendants’ like objection here asserted that there was no legal proof of the damage alleged in the second cause, involving hedges, trees, other vegetation and certain personal property, is likewise unavailing. It was not made upon the trial. Without objection the court charged that the jury might award plaintiff Arnold “ such sum as would reasonably compensate her for their destruction.” The case was tried on a theory in wtoeh defendants acquiesced and it became the law of the case. (Saulsbury v. Braun, 223 App.",
"Div. 555, 558; affd., 249 N. Y. 618.) Particularly is this true when competent evidence of value was excluded on the objection of defendants; and the appellants are not now entitled to complain that the evidence thereby became insufficient-in certain respects. Present — Hagarty, Carswell, Davis, Johnston and Taylor, JJ."
] | https://www.courtlistener.com/api/rest/v3/opinions/5353297/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Judgment and order affirmed, with costs. No opinion. Jenks, Hooker, Gaynor, Rich and Miller, JJ., concurred. | 01-06-2022 | [
"Judgment and order affirmed, with costs. No opinion. Jenks, Hooker, Gaynor, Rich and Miller, JJ., concurred."
] | https://www.courtlistener.com/api/rest/v3/opinions/5205097/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
2022 WI 47
SUPREME COURT OF WISCONSIN CASE NO.: 2020AP878-CR
COMPLETE TITLE: State of Wisconsin, Plaintiff-Respondent-Petitioner, v. Avan Rondell Nimmer, Defendant-Appellant.
REVIEW OF DECISION OF THE COURT OF APPEALS Reported at 395 Wis. 2d 769, 954 N.W.2d 753 (2021 – unpublished)
OPINION FILED: June 23, 2022 SUBMITTED ON BRIEFS: ORAL ARGUMENT: October 25, 2022
SOURCE OF APPEAL: COURT: Circuit COUNTY: Milwaukee JUDGE: Glenn H. Yamahiro
JUSTICES: REBECCA GRASSL BRADLEY, J., delivered the majority opinion of the Court with respect to all parts except ¶¶28, 29 n.12, and 39–58, in which ZIEGLER, C.J., ROGGENSACK, and HAGEDORN, JJ., joined, and an opinion with respect to ¶¶28, 29 n.12, and 39–58, in which ZIEGLER, C.J., and ROGGENSACK, J., joined. DALLET, J., filed a concurring opinion, in which ANN WALSH BRADLEY and KAROFSKY, JJ., joined. HAGEDORN, J., filed a concurring opinion. NOT PARTICIPATING:
ATTORNEYS:
For the plaintiff-respondent-petitioner, there were briefs filed by Sarah L. Burgundy, assistant attorney general, with whom on the briefs was Joshua L. Kaul, attorney general. There was an oral argument by Sarah L. Burgundy. For the defendant-appellant, there was a brief filed by Mark S. Rosen and Rosen and Holzman, Waukesha. There was an oral argument by Mark S. Rosen.
2 2022 WI 47 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2020AP878-CR (L.C. No. 2019CF2611)
STATE OF WISCONSIN : IN SUPREME COURT
State of Wisconsin,
Plaintiff-Respondent-Petitioner, FILED v. JUN 23, 2022 Avan Rondell Nimmer, Sheila T. Reiff Clerk of Supreme Court Defendant-Appellant.
REBECCA GRASSL BRADLEY, J., delivered the majority opinion of the Court with respect to all parts except ¶¶28, 29 n.12, and 39–58, in which ZIEGLER, C.J., ROGGENSACK, and HAGEDORN, JJ., joined, and an opinion with respect to ¶¶28, 29 n.12, and 39–58, in which ZIEGLER, C.J., and ROGGENSACK, J., joined. DALLET, J., filed a concurring opinion, in which ANN WALSH BRADLEY and KAROFSKY, JJ., joined. HAGEDORN, J., filed a concurring opinion.
REVIEW of a decision of the Court of Appeals. Reversed.
¶1 REBECCA GRASSL BRADLEY, J. This case concerns police
officers' ability to respond to concededly reliable reports of
gunfire generated in near real-time. Two Milwaukee officers
received such a report via a technology known as ShotSpotter. The officers arrived on scene no more than one minute after No. 2020AP878-CR
receiving the report, seeing only one person there: Avan R.
Nimmer. After noticing the squad car, Nimmer accelerated his
pace away from it. He also dug around his left side with his
left hand. Officer Anthony Milone stepped out of the squad car
and walked toward Nimmer, who "bladed" his left side away from
Milone while continuing to dig around his left side.1 The
officers considered these movements suspicious because they were
consistent with actions a person may take in attempting to
conceal a weapon. The officers stopped Nimmer to investigate
whether he was involved in the shooting. Concerned for their
safety, Milone frisked Nimmer and found a handgun.
¶2 Because Nimmer was a felon, the State charged him with
being a felon in possession, in violation of Wis. Stat.
§ 941.29(1m)(a) (2019–20).2 Nimmer moved to suppress any
evidence obtained as a result of the investigative stop,
including the handgun, arguing the stop violated his Fourth
Amendment right against unreasonable seizure. The circuit court
denied Nimmer's motion.3 The court of appeals reversed in an unpublished per curiam decision. State v. Nimmer,
1 "Blading" is a technique used to conceal a weapon. "[A] person carrying a gun . . . turn[s] 90 degrees away from the person observing or approaching, placing his body between the gun and the other person." Nathan C. Meehan & Christopher Strange, Behavioral Indicators of Legal and Illegal Gun Carrying 7 (2015). 2 All subsequent references to the Wisconsin Statutes are to the 2019–20 version. 3 The Honorable Glenn H. Yamahiro, Milwaukee County Circuit Court, presided.
2 No. 2020AP878-CR
No. 2020AP878-CR, unpublished slip op. (Wis. Ct. App. Dec. 15,
2020) (per curiam).
¶3 We hold the officers had reasonable suspicion, based
on the totality of the circumstances, to believe Nimmer was
involved in criminal activity. Accordingly, we reverse the
decision of the court of appeals.
I. BACKGROUND
A. ShotSpotter
¶4 This case involves a relatively new technology,
ShotSpotter. At the suppression hearing, Officer Milone
testified ShotSpotter is a "gunshot location system." He
explained it uses "acoustic sensors" to "record sounds to try to
locate . . . gunfire." More specifically, "when the acoustic
sensors pick-up the sounds of gunfire, [they] send[] an alert to
an office in California. There is somebody standing by in the
office who listens to the audio and . . . if it sounds like
actual gunshots, they will send the alert[.]"4 Nimmer has not
argued the time that elapses between ShotSpotter detecting gunfire and notifying officers is sufficiently long to be a
material fact.
¶5 Nimmer does not dispute ShotSpotter's reliability.
Officer Milone testified at the suppression hearing, "I [have]
responded to . . . over a thousand [ShotSpotter reports]. . . .
4 Officer Milone indicated Milwaukee employs ShotSpotter at several locations: "There is ShotSpotters in multiple cities. So we get dealings for all of Milwaukee including not just District Five, but all of Milwaukee."
3 No. 2020AP878-CR
In my experience, [ShotSpotter] is pretty accurate." During
oral argument before this court, when asked whether Nimmer was
"challenging the reliability of ShotSpotter," Nimmer's attorney
responded:
No, . . . we are not. . . . [T]he thing is I think it's pretty clear about ShotSpotter technology, is I think it can say when and where. I think now it's gotten to the point where it can say what. It can distinguish between firecrackers. I think that's pretty clear. I'm not disputing that. Despite ShotSpotter's reliability, Nimmer argues the officers
lacked reasonable suspicion to believe he was involved in
criminal activity.
B. The Shooting Investigation
¶6 In the summer of 2019, Officer Milone and his partner
were on patrol when, at approximately 10:06 p.m., they received
a computerized ShotSpotter report in their squad car. It stated
four shots had been fired about three blocks away from the
officers' location. Nimmer described the reported location as
"highly residential." The officers drove there without
activating their squad car's siren or flashing red and blue
lights.
¶7 Officer Milone had responded to many similar reports
in the past. He was a nine-year police veteran assigned to the
Violent Crimes Saturation Unit, and his "typical[]" duties
included "respond[ing] to calls like ShotSpotter, shots fired,
subject with gun, armed robbery, calls of that nature involving
gun and gun violence." He testified when he responds to a ShotSpotter report, he looks for "[a]nybody who is shot, any
4 No. 2020AP878-CR
people who are shot, any potential suspects, anybody walking
around still shooting, [and] any witnesses[.]" When he sees
individuals near the reported location, he explained he "tr[ies]
to see what their response is upon sight of police, see if they
are shot, see if they take off running, see if they start
grabbing any part of their clothing, any part of their body."
Effectively, he watches for evasive or nervous behavior.
¶8 The officers arrived on scene no more than one minute
after receiving the ShotSpotter report and encountered Nimmer.
Officer Milone testified Nimmer was at "basically the exact
location where the ShotSpotter came in." He further testified
the officers did not see anyone else——only Nimmer.
¶9 Nimmer observed the squad car and immediately
accelerated his pace away from it——in fact, he doubled his pace,
according to Officer Milone. Milone worried Nimmer was trying
to distance himself from the squad car because he was
considering fleeing. Milone testified, "I have observed many
times somebody begins to accelerate their walking pace right before going into a run from police." He also testified Nimmer
"began digging around his left side with his left hand."
¶10 Officer Milone then stepped out of the squad car and
approached Nimmer. Milone testified:
As I was approaching him behind him, he began turning his left side away from me. So at that point his left side was more forward and I could only really see his right side. I could observe his left arm was still digging around. I was directly behind him on the sidewalk and his right hand was within view, but his left hand was not.
5 No. 2020AP878-CR
Milone used "blading" as shorthand for Nimmer's turning motion
at other points in his testimony. When asked to define blading,
he said, "[b]lading [i]s the term I use when I talk about
[Nimmer] moving his left side away from me where I could only
see his right side. That would have been the part where he was
blading his body." From Nimmer's blading, Milone inferred,
based on his training and experience, "[Nimmer] did not want me
to be able to see his left side."
¶11 The officers then stopped Nimmer to investigate
whether he had been involved in the shooting. Officer Milone
testified he "conducted a pat-down of [Nimmer] for officer
safety for any weapons." As Milone began, Nimmer said, "[t]he
gun is in my waistband[.]" Milone then felt Nimmer's waistband,
and on Nimmer's left side, concealed under his shirt, was a .40
caliber Smith & Wesson semiautomatic pistol.5
¶12 The State charged Nimmer with being a felon in
possession. He had been previously convicted of possession with
intent to deliver THC, in violation of Wis. Stat. § 961.41(1m)(h)1.
C. Nimmer's Suppression Motion
¶13 Nimmer moved to suppress any evidence obtained as a
result of the investigative stop, including the handgun, arguing
the stop was unsupported by reasonable suspicion that he was
involved in criminal activity. He asserted the officers stopped
5The officers later found a .40 caliber casing nearby; however, because they located it after stopping Nimmer, the casing cannot enter into the reasonable suspicion analysis.
6 No. 2020AP878-CR
him because of his "mere presence" in the same "neighborhood" as
the gunfire's reported location. Offering an alternative
explanation for his presence at the scene, Nimmer argued he
could have been an innocent "pedestrian" out for a walk "on the
street." Emphasizing the limits of ShotSpotter, Nimmer noted
ShotSpotter does not provide a description of the shooter. It
tells officers what, when, and where, but not who. Nimmer also
asserted "even if" he made furtive movements, "standing alone"
his acceleration away from the officers and his blading and
digging could not give rise to reasonable suspicion. He also
suggested these movements were not suspicious because "Nimmer
couldn't have known necessarily that the squad car was a police
car. It didn't have its red and blue lights on or the siren
going. It was dark outside. The lights would
prevent . . . Nimmer from being able to identify the squad as a
squad car[.]"
¶14 The State countered the officers had reasonable
suspicion because: (1) the officers arrived on scene almost immediately following the ShotSpotter report; (2) Nimmer was "in
the close proximity of this call;" (3) the officers did not see
anyone else near the reported location; and (4) Nimmer acted
suspiciously once he noticed the officers.
¶15 The circuit court denied Nimmer's motion, agreeing
with the State's argument. The court explained the "key" was
"the timing" of events. It indicated its decision would be
different if ShotSpotter did not work in near real-time and the officers arrived "10 or 15 minutes" after the reported shooting; 7 No. 2020AP878-CR
however, because only a nominal amount of time had passed, the
court reasoned the officers could be suspicious of people at the
scene. It found Nimmer was "very close" to the gunfire's
reported location, and Nimmer was the only person the officers
saw. Additionally, the court found Nimmer made furtive
movements upon noticing the officers, which were "consistent
with . . . trying to conceal a weapon." Viewing all of these
facts together, the court concluded the officers reasonably
suspected Nimmer of criminal activity.
D. The Appeal
¶16 Nimmer entered into a plea agreement, pled guilty, and
was sentenced to two years of initial confinement followed by
two years of extended supervision. Nimmer appealed.6 The court
of appeals reversed the judgment of conviction and remanded the
case to the circuit court, directing it to enter an order
granting Nimmer's motion to suppress. Nimmer, No. 2020AP878-CR,
¶30.
¶17 The court of appeals reasoned Nimmer's "mere presence" near "an area where criminal activity [was] suspected" was
insufficient to give rise to reasonable suspicion that he was
involved in criminal activity. Id., ¶27 (citations omitted).
The court reached this conclusion by analogizing to four cases,
only one of which involved a police response to reported
Generally, a criminal defendant waives his right to appeal 6
by pleading guilty; however, a narrow exception exists under Wis. Stat. § 971.31(10) for appeals challenging "[a]n order denying a motion to suppress evidence[.]"
8 No. 2020AP878-CR
gunfire. Those cases generally concern the weight a court may
give to a person's presence at a location associated with
criminal activity. State v. Gordon is illustrative. Id., ¶17
(quoting State v. Gordon, 2014 WI App 44, ¶¶3–4, 353
Wis. 2d 468, 846 N.W.2d 483). Officers stopped a suspect
because he was walking in "one of the more dangerous areas of
the district" and had been observed making a "security
adjustment," i.e., a movement indicating he was carrying a
weapon. Id. (quoting Gordon, 353 Wis. 2d 468, ¶¶3–4). The
court of appeals concluded the officers lacked reasonable
suspicion because a person's presence in a "high crime area"
cannot be the primary fact supporting an investigative stop.7
Id., ¶18 (quoting Gordon, 353 Wis. 2d 468, ¶18). By relying on
Gordon and other like cases, the court of appeals ignored the
timing of the officers' response to the report of gunfire,
treating this case as if the officers merely noticed Nimmer in
an area where they knew shootings often occurred instead of an
area where a shooting reportedly just occurred. ¶18 Next, the court of appeals characterized Officer
Milone's testimony about Nimmer's furtive movements as of an
"indeterminate nature" seeming to question whether Milone's
testimony was even truthful. Id., ¶28. Specifically, the court
The other three cases cited by the court of appeals were: 7
(1) State v. Pugh, 2013 WI App 12, 345 Wis. 2d 832, 826 N.W.2d 418; (2) State v. Washington, 2005 WI App 123, 284 Wis. 2d 456, 700 N.W.2d 305; and (3) State v. Lewis, No. 2017AP234-CR, unpublished slip op. (Wis. Ct. App. July 25, 2017).
9 No. 2020AP878-CR
speculated: "[W]e cannot help but wonder——even while
recognizing that police officers must make split-second
decisions under circumstances where all factors may not be
known——whether . . . officers have sought to find 'magic'
language for their articulated facts to describe a person's
behavior to [justify an investigative stop]." Id., ¶26.
¶19 The court of appeals concluded Nimmer's presence near
the gunfire's reported location, "even taken together" with
Officer Milone's testimony regarding Nimmer's furtive movements,
was insufficient to give rise to reasonable suspicion. Id.,
¶30. While the court stated it considered the facts "together,"
it never analyzed the totality of the circumstances, instead
addressing each fact in isolation.8 The State filed a petition
for review, which we granted.
II. STANDARD OF REVIEW
¶20 This case presents a question of constitutional fact.
See State v. Brown, 2020 WI 63, ¶8, 392 Wis. 2d 454, 945
N.W.2d 584 (citing State v. Smith, 2018 WI 2, ¶9, 379 Wis. 2d 86, 905 N.W.2d 353). We review the circuit court's
findings of historical fact for clear error. Id. (quoting
Smith, 379 Wis. 2d 86, ¶9). We independently apply the Fourth
Amendment to the historical facts to determine whether the
At oral argument, Nimmer's attorney acknowledged, while 8
the court of appeals purported to consider the facts together, it "didn't explain anything further," i.e., it did not analyze the totality of the circumstances.
10 No. 2020AP878-CR
investigative stop was constitutional.9 Id. (quoting Smith, 379
Wis. 2d 86, ¶9).
III. DISCUSSION
A. Fourth Amendment Principles & Terry Stops
¶21 "The Fourth Amendment is 'indispensable to the full
enjoyment of the rights of personal security, personal liberty,
and private property.'" Id., ¶9 (quoting 3 J. Story,
Commentaries on the Constitution of the United States § 1895
(1833)). It states:
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. U.S. Const. amend. IV. "As the text makes clear, 'the Fourth
Amendment does not proscribe all state-initiated searches and
seizures; it merely proscribes those which are unreasonable.'"
State v. Coffee, 2020 WI 53, ¶22, 391 Wis. 2d 831, 943
N.W.2d 845 (lead opinion) (quoting State v. Tullberg, 2014 WI
134, ¶29, 359 Wis. 2d 421, 857 N.W.2d 120); see also Brown, 392
9The circuit court made a sweeping statement toward the end of its remarks: "Really, anyone that [the officers] encountered within a minute or two of receiving the alert should have been investigated if they were within a couple of blocks of the alleged shots being fired." The court of appeals concluded this statement was "simply too broad to fit within the confines of Fourth Amendment law regarding stop and frisk procedures." State v. Nimmer, No. 2020AP878-CR, unpublished slip op., ¶30 (Wis. Ct. App. Dec. 15, 2020) (per curiam). We agree; however, notwithstanding this single stray comment, the circuit court gave a thorough and well-reasoned explanation for its ruling.
11 No. 2020AP878-CR
Wis. 2d 454, ¶9 (quoting Riley v. California, 573 U.S. 373, 381
(2014)) ("[T]he [United States] Supreme Court repeatedly
characterizes the reasonableness of searches and seizures as
[the Fourth Amendment's] 'ultimate touchstone.'").
¶22 Generally, a search or seizure conducted without a
warrant is "per se unreasonable[.]" Brown, 392 Wis. 2d 454, ¶10
(quoting Arizona v. Gant, 556 U.S. 332, 338 (2009)); State v.
Matejka, 2001 WI 5, ¶17, 241 Wis. 2d 52, 621 N.W.2d 891
(citations omitted). However, ever since this nation's
founding, there have been exceptions. Akhil Reed Amar, Terry
and Fourth Amendment First Principles, 72 St. John's L.
Rev. 1097, 1106 (1998) ("[A] large number of historical examples
give the lie to the idea that warrants were always required at
the Founding——warrantless arrests, searches incident to
warrantless arrest, searches of ships, searches of liquor store-
houses, border searches, successful seizures of contraband and
stolen goods, and on and on.").
¶23 An officer may briefly stop an individual, without a warrant, if the officer has reasonable suspicion to believe the
individual is involved in criminal activity. State v. Genous,
2021 WI 50, ¶7, 397 Wis. 2d 293, 961 N.W.2d 41 (quoting State v.
Young, 2006 WI 98, ¶20, 294 Wis. 2d 1, 717 N.W.2d 729); State v.
Anderson (Anderson I), 2019 WI 97, ¶32, 389 Wis. 2d 106, 935
N.W.2d 285. A short investigative stop is often called a "Terry
12 No. 2020AP878-CR
stop" based upon the United States Supreme Court decision Terry
v. Ohio, 392 U.S. 1 (1968), which sanctioned them.10
¶24 Reasonable suspicion depends on the "totality of the
circumstances." Genous, 397 Wis. 2d 293, ¶9 (citing State v.
Post, 2007 WI 60, ¶18, 301 Wis. 2d 1, 733 N.W.2d 634). Just
last term, we emphasized that "[w]e focus not on isolated,
independent facts, but on 'the whole picture' viewed together."
Id. (quoting United States v. Cortez, 449 U.S. 411, 417–18
(1981)). "Indeed, Terry itself involved a series of acts, each
of them perhaps innocent if viewed separately, but which taken
together warranted further investigation." Id. (quoting United
States v. Sokolow, 490 U.S. 1, 9–10 (1989)). In this case, the
court of appeals erred by utilizing a "divide-and-conquer
analysis." See District of Columbia v. Wesby, 583 U.S. __, 138
S. Ct. 577, 588 (2018) (quoting United States v. Arvizu, 534
U.S. 266, 274 (2002)).
¶25 Reasonable suspicion is "a low bar[.]" Genous, 397
Wis. 2d 293, ¶8 (citing Young, 294 Wis. 2d 1, ¶21; State v. Eason, 2001 WI 98, ¶19, 245 Wis. 2d 206, 629 N.W.2d 625); see
also Anderson I, 389 Wis. 2d 106, ¶33 ("Reasonable suspicion is
a fairly low standard to meet." (citing Eason, 245 Wis. 2d 206,
An officer may frisk a person during a Terry stop if the 10
officer "reasonably believes" the individual is armed and poses a safety risk. State v. Young, 2006 WI 98, ¶55, 294 Wis. 2d 1, 717 N.W.2d 729 (citations omitted). Nimmer argues the officers lacked reasonable suspicion to believe he was involved in criminal activity, but does not challenge the legality of the search following the stop.
13 No. 2020AP878-CR
¶19)). "Although a mere hunch does not create reasonable
suspicion, the level of suspicion the standard requires is
considerably less than proof of wrongdoing by a preponderance of
the evidence, and obviously less than is necessary for probable
cause[.]" Navarette v. California, 572 U.S. 393, 397 (2014)
(internal citations and quotation marks removed). "[O]fficers
are not required to rule out the possibility of innocent
behavior before initiating a [Terry] stop." Genous, 397
Wis. 2d 293, ¶8 (quoting State v. Anderson (Anderson II), 155
Wis. 2d 77, 84, 454 N.W.2d 763 (1990)).
¶26 We must "consider everything observed by and known to
the officer[s.]" Id., ¶10. Taking all of that information
into account, we then determine whether the officers had "a
particularized and objective basis" to reasonably suspect Nimmer
of criminal activity. Brown, 392 Wis. 2d 454, ¶10 (quoting
Navarette, 572 U.S. at 396). In other words, we must determine
whether the officers had more than a "mere hunch" that Nimmer
was involved in the shooting. Navarette, 572 U.S. at 397 (internal quotation removed).
B. Application
¶27 Several facts known to the officers and accepted by
the circuit court collectively give rise to reasonable suspicion
that Nimmer was involved in criminal activity: (1) ShotSpotter
generates reliable reports of gunfire in near real-time; (2)
within a minute of receiving the ShotSpotter report, the
officers arrived on scene; (3) Nimmer was at nearly the exact location where ShotSpotter reported gunfire; (4) Nimmer was the 14 No. 2020AP878-CR
only person the officers saw; and (5) Nimmer made furtive
movements upon noticing the officers.
¶28 In addition, the criminal activity being investigated—
—a shooting in a highly residential area——supplemented the
reasonableness of the officers' actions. See State v.
Rutzinski, 2001 WI 22, ¶26, 241 Wis. 2d 729, 623 N.W.2d 516
("[E]xigency can in some circumstances supplement the
reliability of an informant's tip in order to form the basis for
an investigative stop." (emphasis added) (citation omitted));
id., ¶35 ("In light of the potential for imminent danger that
drunk drivers present, the informant's allegations suggesting
that Rutzinski may have been intoxicated supplemented the
reliability of the tip, and further justified Officer Sardina's
investigative stop." (emphasis added)).
¶29 As the circuit court noted, the timing of events is
key. The officers arrived shortly after receiving a reliable
report of gunfire that was generated in near real-time, from
which they could infer the shooter was likely nearby. Other courts have also concluded a relatively short period of time
between officers receiving a ShotSpotter report and their
arrival at the scene supports reasonable suspicion to stop and
question those present. In United States v. Jones, officers
arrived on scene within a minute and a half of receiving a
dispatch that ShotSpotter had reported gunfire. 1 F.4th 50, 53
(D.C. Cir. 2021). After observing Jones walking quickly on an
otherwise deserted block, the officers stopped him. The D.C. Circuit concluded reasonable suspicion to do so existed in large 15 No. 2020AP878-CR
part because the officers' rapid response significantly reduced
the probability that the shooter had fled.11 Id. In another
analogous case, the Seventh Circuit concluded even five-and-a-
half minutes was not "[a]s both a matter of fact and
law . . . unduly long." United States v. Rickmon, 952 F.3d 876,
883 (7th Cir. 2020), cert. denied, 141 S. Ct. 2505 (2021). The
Seventh Circuit determined reasonable suspicion exists to stop
those present in the area within this timeframe because
"[c]ommon sense counsels that a person may take minutes rather
than seconds to flee for any number of reasons, including the
destruction of evidence, an injury sustained in the shooting, or
a need to hide in place."12 Id. Relying on Rickmon, the Ohio
The ShotSpotter report in United States v. Jones was not 11
sent directly to the officers. The D.C. Circuit noted the record did not indicate how much time elapsed between the generation of the ShotSpotter report and its relay to officers. 1 F.4th 50, 53 n.2 (D.C. Cir. 2021). Contrary to Justice Dallet's assertion, the period of time necessary to generate a ShotSpotter report has not played a significant role in most cases discussing ShotSpotter. See Justice Dallet's Concurrence, ¶66 & n.6.
In United States v. Rickmon, officers received two 12
ShotSpotter reports and two dispatches reporting gunfire, which were based on 911 calls. 952 F.3d 876, 882 (7th Cir. 2020), cert. denied, 141 S. Ct. 2505 (2021). The Seventh Circuit reasoned a ShotSpotter report is at least as reliable as an anonymous tip. See id. at 879 n.2, 882. It then noted the "anonymous tip from ShotSpotter" was "independently confirmed" by the 911 calls relayed through the dispatches. Id. at 882. Analogizing a ShotSpotter report to an anonymous tip is part of the analysis, not a "sidetrack" from it. See Justice Dallet's Concurrence, ¶71 ("The majority/lead opinion gets similarly sidetracked by focusing on cases that have relaxed the usual corroboration requirements for anonymous tips when the police are responding to a potential emergency.").
16 No. 2020AP878-CR
Court of Appeals recently concluded reasonable suspicion existed
in an analogous case involving approximately a four-minute
police response time. State v. Carter, 183 N.E.3d 611, 629
(Ohio Ct. App. 2022).
¶30 The reasoning of Jones and Rickmon applies to this
case. Given the officers' quick response and in light of their
observations upon arrival, they could reasonably suspect Nimmer
was the shooter and that he had not left the scene for any
In this case, the lack of a 911 call is of little importance, for multiple reasons. See State v. Carter, 183 N.E.3d 611, 629 (Ohio Ct. App. 2022) ("While there were no separate 911 calls reporting gunfire or any additional information in terms of a suspect, [Officers] Erwin and Gallagher were responding to an alert of shots fired, an inherently dangerous circumstance beyond general criminality. In their experience, they had recovered weapons in response to ShotSpotter alerts."). First, Nimmer concedes the reliability of ShotSpotter. Second, the officers arrived on scene no more than a minute after receiving the ShotSpotter report, which presumably issued shortly after the shots were detected. Whether a 911 call can be placed and relayed to officers within such a short period of time is questionable. See Marc L. Miller et al., Criminal Procedures: Cases, Statutes, and Executive Materials 428 (6th ed. 2019). Lastly, people do not always call 911 after hearing gunfire such that the lack of a 911 call discredits the ShotSpotter report. See Alexandra S. Gecas, Note, Gunfire Game Changer or Big Brother's Hidden Ears?: Fourth Amendment and Admissibility Quandaries Relating to ShotSpotter Technology, 2016 U. Ill. L. Rev. 1073, 1084 ("ShotSpotter enables the police to catch perpetrators without people fearing they are 'snitching' on their neighbors. . . . ShotSpotter highlights just how prevalent unreported gunfire is on city streets. . . . [C]ommunities that frequently experience gunfire are the least likely to report gunshots to the police."); Amanda Busljeta, Comment, How an Acoustic Sensor Can Catch a Gunman, 32 J. Marshall J. Info. Tech. & Privacy L. 211, 218 (2015) (explaining people who live in high crime areas are sometimes so desensitized to gun violence that they decline to call 911 when they hear gunfire).
17 No. 2020AP878-CR
number of reasons. See Rickmon, 952 F.3d at 883. While Nimmer
could have been a random pedestrian out for a walk, the officers
were not required to rule out any alternative explanation for
his presence at the scene. Genous, 397 Wis. 2d 293, ¶8 (quoting
Anderson II, 155 Wis. 2d at 84); see also Jones, 1 F.4th at 54.
Additionally, common sense counsels that innocent pedestrians do
not normally gather immediately near the location of gunfire,
particularly late at night. See Rickmon, 952 F.3d at 884
(noting few vehicles are out at 4:45 a.m.).
¶31 The timing of the stop is particularly persuasive in
light of Nimmer's close proximity to the exact location reported
by ShotSpotter. Contrary to the court of appeals' analysis,
this case is not about the extent to which a person's presence
in a "high crime area" can contribute to reasonable suspicion.
See Nimmer, No. 2020AP878-CR, ¶18 (quoting Gordon, 353
Wis. 2d 468, ¶18). For Fourth Amendment purposes, there is a
difference between a person's presence at a location generally
known for criminal activity and his presence at a location precisely pinpointed for gunfire by a reliable report in near
real-time. See generally United States v. Holloway, No. 20-CR-
00381, slip op., 2021 WL 5882147 *5 (N.D. Ill. Dec. 13, 2021)
(explaining a suspect's presence in a high crime area is less
valuable in a reasonable suspicion analysis than a suspect's
presence near a location reported by ShotSpotter).
¶32 Officer Milone testified Nimmer was at "basically the
exact location where the ShotSpotter came in." Consistent with this testimony, the circuit court found Nimmer was "very close" 18 No. 2020AP878-CR
to the reported location. Nimmer's "close proximity," both
"temporally" and "spatially," to that location of gunfire weighs
heavily in favor of reasonable suspicion. Commonwealth v.
Raglin, 178 A.3d 868, 873 (Pa. Sup. Ct. 2018); see also
Commonwealth v. Ford, 182 N.E.3d 1013, 1018 (Mass. Ct. App.
2022) ("The seizure of a suspect in geographical and temporal
proximity to the scene of the crime appropriately may be
considered as a factor in the reasonable suspicion analysis. It
is particularly relevant where, as here, the officer encountered
the defendant less than a minute after the last reported
ShotSpotter alert, at the location where the trail of
ShotSpotter alerts ended." (quotation marks and quoted source
omitted)); Carter, 183 N.E.3d at 629 ("Carter was observed
within four minutes of the officers receiving the alert within
the specific area of the alert. In other words, as in Rickmon,
the stop had temporal and physical proximity to the gunfire.");
Funderburk v. United States, 260 A.3d 652, 660 (D.C. 2021)
(noting "spatial and temporal proximity" to the location reported by ShotSpotter contributed to reasonable suspicion);
Rickmon, 952 F.3d at 884 (concluding "the [Terry] stop's
temporal and physical proximity to the shots" supported
reasonable suspicion); Commonwealth v. Holness, 101 N.E.3d 310,
315 (Mass. Ct. App. 2018) ("The physical appearance of the
Jaguar, and its proximity to the location of the ShotSpotter
activation and broken glass, as well as the temporal proximity
between the activation and recent motor vehicle accident, occurring in or around 4:00 A.M. on Christmas morning, when few 19 No. 2020AP878-CR
other vehicles were likely on the road, provided a sufficient
nexus between the incriminating evidence in plain view and the
accident scene.").
¶33 Nimmer was also the only person the officers observed
temporally and spatially proximate to the scene. The absence of
anyone else nearby strongly particularized the officers'
suspicion. See Funderburk, 260 A.3d at 660–61; see also Ford,
182 N.E.3d at 1018; Carter, 183 N.E.3d at 629. The officers
knew what (gunfire), when (a minute or two ago), and where (the
reported address). While they did not know who fired the gun,
they knew the shooter was likely near the reported location.
Accordingly, "[t]he officers . . . limited the universe of
potential suspects to those at a particular location" shortly
after a serious crime occurred there. See Funderburk, 260
A.3d at 657. Because no one else was in the vicinity, this
"universe" was "small enough that no description at all [was]
required to justify [the Terry stop]." Id. (quoting In re
T.L.L., 729 A.2d 334, 341 (D.C. 1999)); see also State v. Hairston, 126 N.E.3d 1132, 1137 (Ohio 2019) ("[T]he officers did
exactly what one would expect reasonable and prudent police
officers to do in their situation. Upon hearing gunshots, they
proceeded immediately to the location they believed the shots to
be coming from to investigate. Finding only Hairston in the
area[,] . . . the officers were not required to ignore
Hairston's presence[.]"); Rickmon, 952 F.3d at 884 (explaining
the lack of a description of a suspect vehicle made little difference because officers observed only one vehicle temporally 20 No. 2020AP878-CR
and spatially proximate to the location reported by
ShotSpotter).
¶34 Contributing to the totality of the circumstances
supporting reasonable suspicion, Nimmer made furtive movements.
Officer Milone testified, upon noticing the officers, Nimmer:
(1) doubled his pace away from the officers; (2) dug around his
left side with his left hand; and (3) bladed the left side of
his body away from them. Notably, Nimmer's blading did not
occur until Milone began approaching Nimmer on foot, and the
closer the officers got to Nimmer, the more evasive his behavior
became. Milone further testified, based on his training and
experience, Nimmer's movements indicated he was considering
fleeing and did not want the officers to see his left side. See
Cortez, 449 U.S. at 418 ("[A] trained officer draws inferences
and makes deductions . . . that might well elude an untrained
person.").
¶35 Contrary to the court of appeals' characterization of
Officer Milone's testimony, it was not "indeterminate" nor did he use "magic" words. The court of appeals erred by suggesting
otherwise. See Nimmer, No. 2020AP878-CR, ¶¶26, 28. In fact,
Milone's testimony was exacting.13 He did not merely say Nimmer
began walking faster——he said Nimmer doubled his pace. He did
not simply say Nimmer began digging in a pocket——he said Nimmer
dug around his left side with his left hand. He did not just
We do not opine on the extent to which less exacting 13
testimony from Officer Milone would have been sufficient.
21 No. 2020AP878-CR
say Nimmer bladed——he said, "[Nimmer] began turning his left
side away from me. So at that point his left side was more
forward and I could only really see his right side. . . . I was
directly behind him on the sidewalk and his right hand was
within view, but his left hand was not." Milone even mentioned
Nimmer continued digging with his left arm as he bladed,
although he could not see Nimmer's left hand. Milone further
described when each of these movements occurred, and the
particular inferences he drew from them. This case is not about
conclusory or jargon-ridden testimony by an officer. The
circuit court found Milone credible and had no trouble
understanding what Milone meant. Nothing in the record
indicates the circuit court erred——let alone clearly erred——by
crediting Milone's testimony. See Brown, 392 Wis. 2d 454, ¶8
(quoting Smith, 379 Wis. 2d 86, ¶9); see also Carter, 183
N.E.3d at 629 ("We do not agree, as Carter suggests, that the
officers used 'magic' words or language in testifying to
establish reasonable suspicion. The court clearly found the officers' testimony to be credible, and we defer to the court's
credibility assessment.").
¶36 Contrary to his argument, Nimmer's furtive movements
were not "standing alone;" these movements combined with other
facts to solidify the officers' particularized suspicion of
Nimmer. See Anderson I, 389 Wis. 2d 106, ¶50 ("When combined
with the information known to Officer Seeger about Anderson's
history, Anderson's behavior creates reasonable suspicion that criminal activity was afoot. Anderson's movements after he 22 No. 2020AP878-CR
noticed Officer Seeger give rise to a reasonable inference that
Anderson was trying to conceal something from the officer.");
United States v. Diaz, No. 20-cr-176 (LAK), slip op., 2020 WL
6083404 *6 (S.D.N.Y. Oct. 15, 2020), appeal filed ("The
defendants argue that a ShotSpotter report, 'standing on its
own,' cannot be the basis of 'individualized suspicion.' But
the ShotSpotter reports are only two pieces of the
calculus. . . . [B]oth officers testified that they observed
the defendants engage in 'nervous, evasive' behavior as they
exited: the officers saw Diaz turn his body slightly and
Hawkins pivot and hurry as their police car passed.
Subsequently, Officer Bonczyk observed Diaz, whom Officer Lopez
recognized from a prior arrest for assaulting an officer,
creating tension with his sweatshirt that revealed a bulge that
Officer Bonczyk thought was a gun. These observations provided
the officers with reasonable suspicion that, of all the people
coming and going from the area that night, Diaz and Hawkins were
particularly suspect."). ¶37 In the course of responding within one minute after
receiving a ShotSpotter report of gunfire in a residential
neighborhood, the officers saw a single suspect near the scene
make furtive movements suggesting concealment of a handgun.
Looking at "the whole picture," as the officers were required to
do, they made a well-informed and reasonable inference that
Nimmer might be the shooter. See Genous, 397 Wis. 2d 293, ¶9
(quoting Cortez, 449 U.S. at 417–18). They did not act on a
23 No. 2020AP878-CR
"mere hunch[.]" See Navarette, 572 U.S. at 397 (internal
quotation marks removed).
¶38 Although this is the first occasion for this court to
evaluate reasonable suspicion in the context of a ShotSpotter
report, our court of appeals has considered whether the
proximity of a person's presence shortly after shots were fired
satisfies reasonable suspicion. For example, in State v.
Norton, No. 2019AP1796-CR, unpublished slip op., ¶¶14, 17 (Wis.
Ct. App. Apr. 14, 2020), the court of appeals concluded the
totality of analogous circumstances constituted reasonable
suspicion to stop and investigate the defendant:
The officers were investigating a report of shots fired, for which they had very little information besides the general vicinity of the incident. . . .
Norton's presence in that area was not "standing alone"——it was accompanied by the information that there had been shots fired in the area, which the officers here were investigating. Furthermore, when they illuminated the vehicle with their squad spotlight, they saw Norton make "furtive movements[,]" . . . which caused the officers to become concerned that he may have been trying to conceal a firearm, due to the nature of the call they were investigating. (Quoted source omitted). The court of appeals in that case
persuasively emphasized the nature of the crime the officers
were investigating——shots fired, which obviously is linked to
criminal activity. Id., ¶20.
¶39 As part of the reasonable suspicion analysis, multiple
courts have emphasized the nature of the criminal activity the officers were investigating. E.g., Trott v. State, 249
24 No. 2020AP878-CR
A.3d 833, 848 (Md. 2021), cert. denied sub nom., Trott v.
Maryland, 142 S. Ct. 240 ("Additionally, in determining that the
investigatory stop was reasonable under the circumstances, we
also consider the gravity of the risk of public
harm. . . . Balancing the public's interest in safety against
the minimal intrusion occasioned by the brief investigatory stop
here, and considering the totality of the facts presented to
Officer Cooper in this case, we conclude that the scales of
justice tilt in favor of the stop."). This court has recognized
that when officers are aware of "an imminent threat to the
public safety" the Fourth Amendment "do[es] not require the
police to idly stand by in hopes that their observations reveal
suspicious behavior before the imminent threat comes to its
fruition." Rutzinski, 241 Wis. 2d 729, ¶26. "[T]he Fourth
Amendment . . . appreciates the distinction between officers who
illegitimately invoke Terry to stop someone who ran a red light
six[] months ago and legitimately use it to stop someone who
assaulted a spouse in the past half hour." United States v. Jones, 953 F.3d 433, 437 (6th Cir. 2020).
¶40 "[T]he amount of permissible intrusion is a function
not only of the likelihood of turning up contraband or evidence
of crime but also of the gravity of the crime being
investigated." United States v. Goodwin, 449 F.3d 766, 769 (7th
Cir. 2006) (citation omitted). Applying this common sense
principle, the Seventh Circuit uses a "'sliding scale' approach"
to determine the requisite quantum of suspicion: "if the crime being investigated is grave enough, the police can stop and 25 No. 2020AP878-CR
frisk without as much suspicion as would be required in a less
serious criminal case." Id. The Seventh Circuit employed this
approach in Rickmon, twice emphasizing "the dangerousness of the
crime," 952 F.3d at 881–82, 884, and noting, "[w]e have
repeatedly emphasized in our decisions that the inherent danger
of gun violence sets shootings apart from other criminal
activity." Id. at 883 (citing United States v. Burgess, 759
F.3d 708, 710–11 (7th Cir. 2014)). Similarly, in Burgess, the
Seventh Circuit stated:
At the outset we observe the dangerousness of the situation facing the officers and the public. . . . Multiple callers reported shots fired in the same general area, creating heightened suspicion of a serious crime, and for all the officers knew as they approached the area just minutes later, more than one shooting location was involved. The threat to public safety was serious, and the officers had to assume that it was continuing in process.
Against the background of this ongoing threat, a number of considerations supported stopping Burgess's car in particular. . . .
All told, the circumstances here——the dangerousness of the crime, the short lapse of time between the dispatches and the stop, the stop's proximity to the reported shots, the car's color, and the light traffic late at night——provided ample justification for stopping Burgess's car. 759 F.3d at 710–11; see also Commonwealth v. Meneus, 66
N.E.3d 1019, 1026 (Mass. 2017) (holding "the fact that the crime
under investigation was a shooting, with implications for public
safety" is relevant to determining the reasonableness of a Terry
stop).
26 No. 2020AP878-CR
¶41 As Rickmon and Burgess illustrate, in Terry stop cases
involving reported unlawful firearm use, "[t]here is a
consistent theme[:] . . . if the police reasonably perceive
danger to themselves or to members of the public, they have a
duty to investigate[.]" Commonwealth v. Campbell, 867
N.E.2d 759, 763 (Mass. Ct. App. 2007) (quoted source omitted);
see also Carter, 183 N.E.3d at 629 ("[Officers] Erwin and
Gallagher were responding to an alert of shots fired, an
inherently dangerous circumstance beyond general criminality.").
"The unique dangers presented to law officers and law-abiding
citizens by firearms are well chronicled." United States v.
Bold, 19 F.3d 99, 104 (2d Cir. 1994) (citation omitted). The
unlawful use of a firearm presents an "imminent danger," see
United States v. Harrell, 268 F.3d 141, 151 (2d Cir. 2001)
(Meskill, J., concurring), which may be considered in "the
totality-of-the-circumstances test for determining reasonable
suspicion" because of "the government's need for a prompt
investigation." See Bold, 19 F.3d at 104 (citation omitted). ¶42 In this case, ShotSpotter reported four gunshots in a
highly residential neighborhood. Officer Milone testified he
was looking for "[a]nybody who is shot, any people who are shot,
any potential suspects, anybody walking around still shooting,
[and] any witnesses[.]" His testimony confirms the obvious:
the officers had reason to believe lives were in danger.
¶43 The court of appeals erred in this case by relying too
heavily on cases involving investigations of substantially less serious criminal activity——specifically, drug crimes——rather 27 No. 2020AP878-CR
than cases involving shots fired. See State v. Pugh, 2013 WI
App 12, 345 Wis. 2d 832, 826 N.W.2d 418 (investigating a
suspected drug crime); State v. Washington, 2005 WI App 123, 284
Wis. 2d 456, 700 N.W.2d 305 (investigating a complaint of
loitering and drug sales).14 "Th[e] element of imminent danger
distinguishes a gun tip from one involving possession of drugs."
United States v. Serrano, 598 F. App'x 72, 78 (3d Cir. 2015)
(quoting United States v. Roberson, 90 F.3d 75, 81 n.4 (3d Cir.
1996)) (modification in the original).
¶44 ShotSpotter's detection of gunfire is comparable to an
officer hearing it himself. See Amanda Busljeta, Comment, How
an Acoustic Sensor Can Catch a Gunman, 32 J. Marshall J. Info.
Tech. & Privacy L. 211, 219 (2015) ("With the acoustic sensors
implemented in cities, police can feel a sense of reassurance
that there is always a second pair of ears acting as backup.").
When an officer hears gunfire, he has a duty to the public to
react. If he arrives at the scene almost immediately after
gunfire and sees only a few people——or in this case, one person— —the officer may reasonably suspect criminal activity if any of
them make furtive movements.
¶45 The only case the court of appeals considered
involving reported gunfire was State v. Lewis, No. 2017AP234-CR,
unpublished slip op. (Wis. Ct. App. July 25, 2017). In that
The error rests in relying on four cases, supra ¶17 & 14
n.7, none of which were analogous, none of which were Wisconsin Supreme Court decisions, one of which was an unpublished court of appeals decision, and only one of which (the unpublished court of appeals decision) even involved shots fired.
28 No. 2020AP878-CR
case, officers were dispatched to investigate shots fired in a
high crime area. Id., ¶¶2, 8. They were looking for three
fleeing suspects, but they had a description of only one. Id.,
¶2. The officers observed Travail L. Lewis in an alley "a few
blocks from where the complaint was made" but Lewis did not
match the description. Id., ¶1. Positioned behind Lewis, the
officers noticed him holding the waistband of his pants. Id.,
¶2. The officers conducted a Terry stop, and Lewis admitted he
was carrying a concealed weapon. Id. The State "concede[d]"
the "officers stopped Lewis simply based on the fact that he was
walking in a high crime area shortly after [they] receiv[ed] an
alert of 'shots fired'" and was "touch[ing] his waistband."
Id., ¶8. The court of appeals accepted the State's concession
and concluded the officers lacked reasonable suspicion. Id.
¶46 We do not consider whether the court of appeals
correctly decided Lewis. Regardless, it is inapposite for
multiple reasons. First, Lewis does not disclose the officers'
response time——just that they arrived "shortly" after receiving the report. Id. The decision says Lewis was "a few blocks from
where the complaint was made," id., ¶1, leaving Lewis' temporal
and spatial proximity to the gunfire indeterminate. Finally,
Lewis did not react to the officers, who saw him from behind and
noticed him "holding the waistband of his pants." Id., ¶2.
Whether Lewis even saw the officers before they ordered him to
stop is unclear.15
15The court of appeals in this case could have considered another factually analogous opinion from its own court, State v. 29 No. 2020AP878-CR
¶47 In this case, the officers expeditiously responded to
a reliable report of gunfire, generated in near real-time. Upon
arrival, they saw one person, Nimmer, who made furtive movements
that, based on the officers' training and experience, indicated
he was concealing a handgun. The officers reasonably suspected
Nimmer was involved in criminal activity, specifically, the
shooting. The officers' seizure of Nimmer accordingly complied
with the Fourth Amendment.
IV. JUSTICE DALLET'S CONCURRENCE
¶48 "The straw man was easily enough knocked over by the critic who set him up." L.T. Hobhouse, The Theory of Knowledge 59 (New & Chapter Issue
1905).
¶49 Justice Dallet's concurrence mischaracterizes the
court's opinion and the precedent it applies, creating a cloud
of obfuscation over the opinion so that it will be read to mean
something it doesn't actually say. In common parlance, Justice
Dallet creates a "straw man," meaning "a weak or imaginary opposition (such as an argument or adversary)," who is "set up
Tally-Clayborne, No. 2016AP1912-CR, unpublished slip op., ¶10 (Wis. Ct. App. Oct. 17, 2017) ("[Officer] Dillman traveled in the direction of the gunshots and within twenty to twenty-five seconds, Dillman saw Tally-Clayborne and two other individuals. Dillman did not see anyone else. Given the potential safety risk, . . . the fact that Tally-Clayborne and his companions were the only individuals visibly present in the area of the shooting, and the fact that Tally-Clayborne attempted to walk away from the officers patting down his companions while reaching for his waistband, Dillman could reasonably suspect that Tally-Clayborne was involved in some sort of criminal activity."). 30 No. 2020AP878-CR
only to be easily confuted." Straw man, Merriam-Webster's
Collegiate Dictionary (11th ed. 2014). By creating this straw
man, Justice Dallet handily knocks down a weak argument of her
own creation rather than address the legal principles actually
propounded by the court. For this reason, judges and parties
should exercise caution when citing statements in separate
writings that purport to summarize or paraphrase the majority
opinion, particularly when the author of the writing has not
joined the majority opinion.
¶50 For starters, Justice Dallet attempts to distort the
holding in this case, suggesting this court sanctions
ShotSpotter being "used as a dragnet to justify warrantless
searches of everyone the police find near a recently reported
gunshot."16 Nothing in this opinion suggests anything of the
kind. As exhaustively explained, the totality of the
circumstances obviously matters and it is the totality of the
facts in this case which supports reasonable suspicion. See,
e.g., supra ¶¶3, 24-30, 34, 36-37, 44, 47. The officers' arrival on the scene no more than one minute after the
ShotSpotter report, where they found only Nimmer, was but one of
multiple facts supporting reasonable suspicion.
Justice Dallet's Concurrence, ¶67. 16 In misstating the holding in this case, Justice Dallet analogizes it to the circuit court's conclusion that the police should investigate anyone in the vicinity within a minute or two of the ShotSpotter alert. Id., ¶67 n.7. Contrary to Justice Dallet's insinuation, we agreed with the court of appeals' conclusion that this statement exceeds the boundaries of the Fourth Amendment. See supra ¶20 n.9.
31 No. 2020AP878-CR
¶51 Justice Dallet further misrepresents the majority
opinion as advancing "the novel suggestion 'that the quantum of
suspicion necessary to conduct an investigatory stop is lower
for the type of criminal investigation that occurred here.'"17
The majority opinion does not say this; Justice Brian Hagedorn’s
concurrence does. Citing Rutzinski, the State argued "[o]ne
additional factor supports reasonable suspicion here: police
were investigating a shots-fired report, which implicated
immediate public-safety concerns." Although the State
thoroughly briefed the issue, the defendant did not respond.
Like the defendant, Justice Dallet never analyzes Rutzinski,
even though it debunks her classification of the analysis as
novel.
¶52 Justice Dallet lapses into the same error made by the
court of appeals in this case: evaluating the facts in
isolation rather than as part of the "whole picture." For
example, she says "there is nothing especially suspicious about
finding someone alone on a residential street just after 10:00 PM on a Saturday night in the summertime."18 This is true, but
no one suggests otherwise. Justice Dallet also says, "the
possibility that a crime has been committed in a certain
neighborhood doesn't cast suspicion over everyone there."19
Again, no one claims it does. Next, Justice Dallet says the
17 Justice Dallet's Concurrence, ¶61 n.1. 18 Id., ¶64. 19 Id.
32 No. 2020AP878-CR
police "could not assume that Nimmer was responsible for the
reported gunshots simply because he was the only person they saw
when they showed up in his neighborhood."20 They didn't; it was
his solitary presence at the location of recent gunfire,
combined with his furtive movements, which gave rise to
reasonable suspicion, as Justice Dallet ultimately concedes.21
¶53 Justice Dallet, however, does not seem to think the
nature of the criminal activity being investigated matters much
when determining the reasonableness of a stop, characterizing
the consideration of gun violence as going beyond "a standard
Terry analysis."22 She similarly dismisses the seriousness of
20 Id.
Justice Dallet also says, "Nimmer's case is unlike many 21
of those cited by the majority/lead opinion, where courts held that the police had reasonable suspicion to stop the only people they found at the scene of reported gunfire late at night, in an alleyway or dead-end street where shots were heard recently, or both." Id. (emphasis added). She then cites three cases on which we have relied: Jones, Rickmon, and Funderburk. Justice Dallet draws a distinction bearing no difference under the Fourth Amendment.
In Jones, officers stopped the suspect "in a residential neighborhood in Washington D.C." 1 F.4th at 51. In Rickmon, officers stopped a suspect in a residential area of Peoria, Illinois, which, while not as urbanized as Washington, D.C., is hardly a rural community. 952 F.3d at 879; see also id. at 886 (Wood, J., dissenting) (describing the residential nature of the area). Indeed, the court noted when one officer arrived on scene, he "observed a crowd of about 15-20 people at the street's dead end, approximately 300 feet from him." Id. at 879 (majority op.). In Funderburk, "two police officers heard gunshots and commotion coming from a nearby alley in a residential neighborhood." Funderburk v. United States, 260 A.3d 652, 654 (D.C. 2021). 22 Justice Dallet's Concurrence, ¶¶70, 72.
33 No. 2020AP878-CR
the crime as a factor in the analysis of a tip's reliability.
This is not the law; the Court in Florida v. J.L., 529 U.S. 266
(2000) and this court as well as other courts applying its
holding have already rejected the premise of Justice Dallet's
concurrence.
¶54 In J.L., police received an anonymous tip that a
person at a bus stop was concealing——not shooting——a firearm.
Id. at 268, 273 n.*. The tip had little to no indicia of
reliability and "[a]part from the tip, the officers had no
reason to suspect . . . illegal conduct. The officers did not
see a firearm, and J.L. made no threatening or otherwise unusual
movements." Id. at 268 (emphasis added). Under these facts,
the Court concluded the officers unlawfully executed a Terry
stop, expressly disavowing "an automatic firearm exception to
our established reliability analysis"23 because it would "enable
any person seeking to harass another to set in motion an
intrusive, embarrassing police search of the targeted person
simply by placing an anonymous call falsely reporting the target's unlawful carriage of a gun." Id. at 272 (emphasis
added). The Court's holding was limited to an uncorroborated
tip of someone carrying a gun:
The facts of this case do not require us to speculate about the circumstances under which the danger alleged in an anonymous tip might be so great as to justify a search even without a showing of reliability. We do
While the nature of the criminal activity is relevant 23
under our analysis, it is not dispositive. See Commonwealth v. Meneus, 66 N.E.3d 1019, 1026 (Mass. 2017).
34 No. 2020AP878-CR
not say, for example, that a report of a person carrying a bomb need bear the indicia of reliability we demand for a report of a person carrying a firearm before the police can constitutionally conduct a frisk. Id. at 273–74. Relying on this limitation, this court and lower
courts have factored the nature of the suspected criminal
activity into their reasonable suspicion analyses in exactly the
same manner we do in this case.
¶55 In Rutzinski, this court held:
[W]hen assessing whether a stop is constitutionally reasonable, a reviewing court must balance the interests of the individual being stopped against the interests of the State to effectively root out crime. Hensley, 469 U.S. at 228, 105 S.Ct. 675; McGill, 2000 WI 38, at ¶ 18, 234 Wis.2d 560, 609 N.W.2d 795; Waldner, 206 Wis.2d at 56, 556 N.W.2d 681. . . . [W]here the allegations in the tip suggest an imminent threat to the public safety or other exigency that warrants immediate police investigation. . . . the Fourth Amendment and Article I, Section 11 do not require the police to idly stand by in hopes that their observations reveal suspicious behavior before the imminent threat comes to its fruition. Rather, it may be reasonable for an officer in such a situation to conclude that the potential for danger caused by a delay in immediate action justifies stopping the suspect without any further observation. Thus, exigency can in some circumstances supplement the reliability of an informant's tip in order to form the basis for an investigative stop. Cf. City of Indianapolis v. Edmond, 531 U.S. 32, ––––, 121 S.Ct. 447, 455, 148 L.Ed.2d 333 (2000) (noting that exigencies of some scenarios likely would outweigh the individual's right to be free from an investigative traffic stop). 241 Wis. 2d 729, ¶26 (emphasis added). This court noted the
limited reach of J.L., explaining "the Court implicitly affirmed that there are circumstances in which exigency can supplement——
35 No. 2020AP878-CR
or, in very extreme circumstances, possibly supplant——
the . . . reliability analysis." Id., ¶29 n.6.
¶56 Throughout our opinion in Rutzinski, this court
repeatedly emphasized that imminent danger is a factor to be
considered in determining the reasonableness of a Terry stop.
Id., ¶26 ("[E]xigency can in some circumstances supplement the
reliability of an informant's tip in order to form the basis for
an investigative stop." (citing City of Indianapolis v. Edmond,
531 U.S. 32, 42–43, 121 S. Ct. 447, 455 (2000))); id., ¶34
("[U]nlike the tip in J.L., the tip in the present case
suggested that Rutzinski posed an imminent threat to the
public's safety."); id., ¶35 ("In light of the potential for
imminent danger that drunk drivers present, the informant's
allegations suggesting that Rutzinski may have been intoxicated
supplemented the reliability of the tip, and further justified
Officer Sardina's investigative stop."); id., ¶36 ("Because
drunk driving is an extraordinary danger, we cannot adopt
Rutzinski's position that the police must dismiss allegations of possible drunk driving when assessing whether an informant's tip
justifies a traffic stop. While such allegations cannot form
the sole basis for an investigative stop, they certainly must be
considered when examining the totality of the circumstances
surrounding particular police conduct." (emphasis added)); id.,
¶37 ("Unlike the tip in J.L., the informant's tip in this case
contained sufficient indicia of reliability and alleged a
potential imminent danger to public safety." (emphasis
36 No. 2020AP878-CR
added)).24 Far from being "unnecessary" digressions, a report of
serious criminal activity "must be considered" as part of the
reasonable suspicion analysis.
¶57 Notwithstanding this precedent, Justice Dallet fails
to acknowledge the seriousness of gunfire in a residential area,
asserting this court's "analysis places too much weight on some
of these facts, including the residential setting" and "puts too
much emphasis on the officers' reliance on ShotSpotter."25
Although Justice Dallet does not quantify the weight she would
give to these facts (if any), to suggest a shooting in a highly
24 Consideration of the nature of a reported crime is not restricted to tips involving guns; as Chief Justice John Roberts has noted, "the especially grave and imminent dangers posed by drunk driving" have prompted "[t]he majority of courts examining the question" to uphold "investigative stops of allegedly drunk or erratic drivers, even when the police did not personally witness any traffic violations before conducting the stops." Virginia v. Harris, 130 S. Ct. 10, 11 (2009) (Roberts, C.J., dissenting from denial of certiorari). In doing so, "[t]hese courts have typically distinguished J.L.'s general rule" in part based on the "grave and imminent dangers" drunk driving presents. Id. Notably, one of the cases Chief Justice Roberts cited for the proposition was Rutzinski. See also Trott v. State, 249 A.3d 833, 848 (Md. 2021), cert. denied sub nom., Trott v. Maryland, 142 S. Ct. 240 ("Unlike crimes involving possessory offenses, such as carrying an illegal gun or possessing drugs, the crime of drunk driving poses a significant and potentially imminent public danger."); Andrew J. Sheehan, Comment, Getting Drunk Drivers off Illinois Roadways: Addressing the Split of Authority Regarding 911 Tips & Investigatory Traffic Stops, 39 S. Ill. U. L.J. 537, 551 (2015) ("Arguably the most widely-accepted justification for adopting a drunk driving exception is the very unique and imminent danger an intoxicated person behind the wheel poses to the general public.").
Justice Dallet's Concurrence, ¶¶64, 65. Doubling down on 25
the misguided notion that gunfire in a residential area is not a reliable indicator of criminal activity, Justice Dallet maintains a ShotSpotter report could not affect the reasonable suspicion analysis because even "[a] reliable tip will justify an investigative stop only if it creates reasonable suspicion that 'criminal activity may be afoot.'" Id., ¶71 (citing Navarette v. California, 572 U.S. 393, 401 (2014) (quoting Terry v. Ohio, 392 U.S. 1, 30 (1968))).
37 No. 2020AP878-CR
residential area should not be considered as part of the
totality of circumstances supporting reasonable suspicion is an
extraordinary misjudgment of the risk to the community. A
shooter is not entitled to "one free shot," (at least when that
shot signals gun violence is afoot) Justice Dallet's theory
notwithstanding. Cf. Virginia v. Harris, 130 S. Ct. 10, 12
(2009) (Roberts, C.J., dissenting from denial of certiorari)
("The effect of the rule below will be to grant drunk drivers
'one free swerve' before they can legally be pulled over by
police. It will be difficult for an officer to explain to the
family of a motorist killed by that swerve that the police had a
tip that the driver of the other car was drunk, but that they
were powerless to pull him over, even for a quick check.").
While believing a report of shots fired in a residential
neighborhood deserves less "emphasis" in the analysis, Justice
Dallet seems to give greater weight to Nimmer's furtive
movements, but she does not explain why. If Justice Dallet's
focus on Nimmer's "digging around his left side" and "turning and walking away after seeing the police" were all the Fourth
Amendment requires for reasonable suspicion to stop a suspect,
her conception of the law could ensnare many more people in the
"dragnet" she ostensibly rejects.26
¶58 While she may deem unreasonable the decisions of the
United States Supreme Court, federal appellate courts, and this
Justice Dallet's Concurrence, ¶¶67-69. We do not mean to 26
suggest that furtive movements cannot, in some circumstances, be highly indicative of criminal activity.
38 No. 2020AP878-CR
court regarding what is reasonable under the Fourth Amendment,
our opinion is in line with precedent and Justice Dallet's
analysis is an outlier. In Goodwin, Judge Richard Posner,
writing for a unanimous Seventh Circuit panel, explained:
[I]n Florida v. J.L., 529 U.S. 266, 273–74, 120 S.Ct. 1375, 146 L.Ed.2d 254 (2000), [the Court] said that "we do not say, for example, that a report of a person carrying a bomb need bear the indicia of reliability we demand for a report of a person carrying a firearm before the police can constitutionally conduct a frisk." In other words, if the crime being investigated is grave enough, the police can stop and frisk without as much suspicion as would be required in a less serious criminal case. 449 F.3d at 769 (emphasis added). Judge Posner interpreted J.L.
to permit a "'sliding scale' approach[.]" See id. Post-J.L.,
the Seventh Circuit, aligned with many other courts, has relied
on the inherent danger of gun violence as a factor supporting
the constitutionality of a Terry stop, including in ShotSpotter
cases. E.g., Rickmon, 952 F.3d at 883 ("We have repeatedly
emphasized in our decisions that the inherent danger of gun
violence sets shootings apart from other criminal activity."
(citation omitted)). Gun violence, obviously, is not the same
thing as mere "carriage of a gun," which is all that was
reported in J.L. 529 U.S. at 272. Although the concurrence
disregards this stark difference, it matters for purposes of the
reasonable suspicion analysis.
V. CONCLUSION
¶59 The Fourth Amendment guarantees the inherent right of the people to be secure against unreasonable searches and
39 No. 2020AP878-CR
seizures. We recognize "the police are not infallible[.]"
Smith, 379 Wis. 2d 86, ¶36. In exercising their duty to
investigate crime, officers sometimes violate people's
constitutional rights. Id. When that happens, "it is the duty
of this court to impose consequences[.]" Id. (citation
omitted). "Likewise, when the police abide by the rules and act
reasonably, the Fourth Amendment is not violated and we must
uphold convictions." Id.
¶60 This case represents a reasonable seizure. The
officers did not violate Nimmer's Fourth Amendment right. Based
on the totality of the circumstances, they reasonably suspected
Nimmer was involved in criminal activity presenting an imminent
threat to public safety. Nimmer's conviction stands.
By the Court.——The decision of the court of appeals is
reversed.
40 No. 2020AP878-CR.rfd
¶61 REBECCA FRANK DALLET, J. (concurring). I agree with
the majority/lead opinion's1 holding that the police had
particularized reasonable suspicion to stop and frisk Nimmer. I
write separately, however, because I am concerned that the
majority/lead opinion's analysis of certain facts may cause
lower courts to read our decision too broadly. I also worry
that the majority/lead opinion over-complicates its analysis by
importing Fourth Amendment principles from other contexts, even
though this case requires only a straightforward application of
Terry.2 Therefore, I respectfully concur.
¶62 In order to justify a Terry stop, the police must have
"reasonable, articulable suspicion that criminal activity is
afoot." Illinois v. Wardlow, 528 U.S. 119, 123 (2000).
Reasonable suspicion must be founded on concrete, particularized
facts warranting suspicion of a certain individual, not
"'inchoate and unparticularized suspicion[s] or hunch[es].'"
Id. at 124 (quoting Terry, 392 U.S. at 27). We assess
reasonable suspicion in light of the totality of the circumstances; that is, the facts officers knew at the time of
1I refer to Justice Rebecca Grassl Bradley's opinion as the "majority/lead opinion" because a majority of the court has not joined the opinion in its entirety. Specifically, a majority did not join the portions of the opinion that respond to this concurrence (majority/lead op., ¶¶48-58 & 29 n.12), and those that contain the novel suggestion "that the quantum of suspicion necessary to conduct an investigatory stop is lower for the type of criminal investigation that occurred here" (majority/lead op., ¶¶28 and 39-47). See Justice Hagedorn's concurrence, ¶74. 2 Terry v. Ohio, 392 U.S. 1 (1968).
1 No. 2020AP878-CR.rfd
the stop. See United States v. Cortez, 449 U.S. 411, 417-18
(1981).
¶63 This is what the police knew when they stopped Nimmer:
On Saturday, June 15, 2019, they received a
ShotSpotter report at 10:06 PM indicating that four
shots may have been fired near the intersection of
21st and Townsend Streets on the North Side of
Milwaukee.
They reached that location about one minute after they
received the ShotSpotter report.
Nimmer was walking on the sidewalk "in very close
proximity" to that location and no one else was
present.
After noticing their arrival, Nimmer accelerated his
pace and turned his left side away from the
approaching officer ("blading," in one officer's
words) while "digging around his left side with his
left hand."3
3 These facts, with the exception of Nimmer digging around his left side, are taken from the circuit court's findings of fact after a suppression hearing, and were not challenged on appeal. The circuit court did not make a finding that Nimmer was digging around his left side. Nonetheless, it was a part of one of the officers' uncontroverted testimony at the suppression hearing, and is therefore appropriate to consider in the reasonable-suspicion analysis. See State v. McGill, 2000 WI 38, ¶24, 234 Wis. 2d 560, 609 N.W.2d 795.
It appears from testimony at the suppression hearing that there is body-camera footage of the officers' encounter with Nimmer. Although this footage might have been useful in determining what happened, it was not introduced at the suppression hearing or otherwise made a part of the record.
2 No. 2020AP878-CR.rfd
Relying on these facts, officers stopped Nimmer, searched him,
and found a handgun in his left waistband.
¶64 Although the majority/lead opinion correctly concludes
that officers had particularized reasonable suspicion to stop
Nimmer, its analysis places too much weight on some of these
facts, including the residential setting. To be sure, the
residential setting is part of the totality of the circumstances
informing our reasonable-suspicion analysis. But the
possibility that a crime has been committed in a certain
neighborhood doesn't cast suspicion over everyone there. See
United States v. Bohman, 683 F.3d 861, 864 (7th Cir. 2012) (the
"mere suspicion of illegal activity at a particular place is not
enough to transfer that suspicion to anyone" nearby). Moreover,
there is nothing especially suspicious about finding someone
alone on a residential street just after 10:00 PM on a Saturday
night in the summertime.4 See id. In this respect, Nimmer's
case is unlike many of those cited by the majority/lead opinion,
where courts held that the police had reasonable suspicion to stop the only people they found at the scene of reported gunfire
late at night, in an alleyway or dead-end street where shots
were heard recently, or both. See, e.g., United States v.
Jones, 1 F.4th 50, 51 (D.C. Cir. 2021) (reasonable suspicion to
stop the only person on the street walking quickly away from the
location of a late-night ShotSpotter alert and reaching for his
waistband); United States v. Rickmon, 952 F.3d 876, 882-84 (7th
Indeed, although the officers didn't know it at the time, 4
Nimmer was walking near his house when the officers arrived.
3 No. 2020AP878-CR.rfd
Cir. 2020) (reasonable suspicion to stop the only car driving
down a two-block dead-end street away from the location of two
ShotSpotter reports and two 9-1-1 calls at 4:45 AM); Funderburk
v. United States, 260 A.3d 652, 660-61 (D.C. 2021) (reasonable
suspicion to stop four people in an alleyway at 2:20 AM on a
weeknight after officers heard gunshots). Thus, even though the
officers didn't have to rule out all innocent explanations
before stopping Nimmer, they also could not assume that Nimmer
was responsible for the reported gunshots simply because he was
the only person they saw when they showed up in his
neighborhood. See State v. Genous, 2021 WI 50, ¶8, 397
Wis. 2d 293, 961 N.W.2d 41.
¶65 The majority/lead opinion similarly puts too much
emphasis on the officers' reliance on ShotSpotter, stressing
both Nimmer's counsel's concession that it is reliable and the
officers' quick response to the system's report. Majority/lead
op., ¶¶4, 29-30. But when it comes to assessing whether the
police had reasonable suspicion that a particular person may
4 No. 2020AP878-CR.rfd
have fired the shots, ShotSpotter has limitations.5 A
ShotSpotter report doesn't tell the police whether there is one
shooter or several, what those individuals look like, what they
are wearing, whether they remained on the scene or fled
immediately, whether they got into a car or left on foot, or
even if they were indoors or outdoors. All a ShotSpotter report
tells the police is that shots may have been fired near a
particular place; it doesn't provide reasonable suspicion that
any particular person fired them. See Wardlow, 528 U.S. at 124.
Obviously, this is not to say that the police shouldn't swiftly
investigate a ShotSpotter alert in a residential neighborhood;
only that they do so with full knowledge of the system's
limitations.
Despite counsel's concession that ShotSpotter is reliable, 5
there are good reasons to doubt its reliability and to be concerned about the other Fourth Amendment issues raised by the technology. For example, an exhaustive review of the Chicago Police Department's use of ShotSpotter revealed that in more than 90% of cases where the police responded to a ShotSpotter report, they found no evidence of a gun-related crime. See City of Chicago Office of Inspector General, The Chicago Police Department's Use of ShotSpotter Technology, at 2-3 (Aug. 2021), available at https://igchicago.org/wp-content/uploads/2021/08/Ch icago-Police-Departments-Use-of-ShotSpotter-Technology.pdf. Additionally, the report found that officers were, in some cases, using the total number of ShotSpotter reports in a given area as a reason to conduct more investigatory stops and pat- downs. See id. at 19. Another study found that ShotSpotter has no significant impact in reducing gun crimes. See generally Mitchell L. Doucette, et al., Impact of ShotSpotter Technology on Firearm Homicides and Arrests Among Large Metropolitan Counties: A Longitudinal Analysis, 1999–2016, 98 J. Urban Health 609 (2021). Nevertheless, because Nimmer's counsel did not challenge ShotSpotter's reliability or raise any of these other issues, I leave them for another day.
5 No. 2020AP878-CR.rfd
¶66 The majority/lead opinion's analysis of the officers'
response time also rests on a consequential assumption. The
record doesn't reveal how much time passed between the time
shots were fired and when the officers arrived on the scene;
only how quickly the officers responded after receiving the
ShotSpotter alert from dispatch. Before a ShotSpotter report
reaches the officers, a person at ShotSpotter's offices in
California listens to a recording flagged by the system and
decides if it sounds like gunshots. Once that person confirms
the sound is likely gunfire, then police dispatch is alerted,
which in turn alerts nearby officers. Thus, even though
officers arrived at 21st and Townsend one minute after receiving
the report from a dispatcher, that does not mean they arrived
within one minute of shots being fired. This is not a trivial
issue; it may be the difference between whether or not an
officer's suspicion of a person on the scene is particularized
and reasonable.6
¶67 No matter how accurate ShotSpotter is or how quickly officers respond to a ShotSpotter alert, it cannot be used as a
dragnet to justify warrantless searches of everyone the police
This timing difference is what distinguishes Nimmer's case 6
from those relied on by the majority/lead opinion in which officers responded within seconds to the sound of gunshots they heard. See, e.g., State v. Hairston, 126 N.E.3d 1132, 1136-37 (Ohio 2019) (reasonable suspicion to stop the only person officers saw near a school after hearing shots 30 to 60 seconds before); State v. Tally-Clayborne, No. 2016AP1912-CR, unpublished slip op., ¶10 (Wis. Ct. App. Oct. 17, 2017) (reasonable suspicion to stop a person reaching for his waistband and walking away from an area where officers heard shooting less than thirty seconds before).
6 No. 2020AP878-CR.rfd
find near a recently reported gunshot.7 See Bohman, 683 F.3d
at 864 (explaining that suspecting a crime occurred in a
particular place does not mean that everyone leaving that place
is suspicious). At its best, ShotSpotter gives officers only a
reason to go to a particular place, but it's what they find
there that is most relevant to the analysis of whether they had
particularized, reasonable suspicion. See Genous, 397
Wis. 2d 293, ¶8 ("Reasonable suspicion must be supported by
specific and articulable facts.").
¶68 Collectively, the facts the officers observed,
together with the ShotSpotter alert, are sufficient to establish
reasonable suspicion——even though each fact alone would not
clear that bar. See id., ¶9. When the officers arrived at the
location of the ShotSpotter alert, Nimmer saw their marked squad
car and started walking faster. When one of the officers got
out of the car and started to walk toward him, Nimmer turned the
left side of his body away and started digging around his left
7 This is why the circuit court was wrong to suggest that "anyone that [the police] encountered within a minute or two of receiving the [ShotSpotter] alert should have been investigated if they were within a couple of blocks of the alleged shots being fired." The U.S. Supreme Court has emphasized, however, that simply being present "in an area of expected criminal activity, standing alone, is not enough to support a reasonable, particularized suspicion that the person is committing a crime." Wardlow, 528 U.S. at 124. The reason for that is simple: Knowledge that someone committed a crime in a particular place is not a particularized reason to suspect that everyone at or near that place committed a crime. To conclude otherwise would undermine the central purpose of the Fourth Amendment, which is prohibiting general warrants that grant the police the "unchecked power" to search anywhere for anyone or any thing. See State ex rel. Two Unnamed Petitioners v. Peterson, 2015 WI 85, ¶90, 363 Wis. 2d 1, 866 N.W.2d 165.
7 No. 2020AP878-CR.rfd
side with his left hand. As the court of appeals rightly
explained, turning and walking away after seeing the police is
not enough to give rise to reasonable suspicion. See State v.
Nimmer, No. 2020AP878-CR, unpublished slip op., ¶¶16-17, 19-20
(Wis. Ct. App. Dec. 15, 2020). Absent reasonable suspicion or a
lawful order to the contrary, people are free to walk (even
quickly) away from the police officers. See State v.
Young, 2006 WI 98, ¶73, 294 Wis. 2d 1, 717 N.W.2d 729. And law-
abiding citizens may not want to interact with the police for
all kinds of reasons. The fact that Nimmer turned his body away
from the officers does not make his walking away suspicious.
After all, "how does a person walk away from another (as
[Nimmer] had the right to do) without turning his . . . body to
some degree?" See State v. Pugh, 2013 WI App 12, ¶12, 345
Wis. 2d 832, 826 N.W.2d 418. Calling Nimmer's turn "blading,"
as an officer did in this case, "adds nothing to the calculus
except a false patina of objectivity." Id.
¶69 The totality of the circumstances also includes the fact, undisputed yet unaddressed by the court of appeals, that
while Nimmer was walking away from the police and turning his
body, he was also "digging" around his left side. Of course,
"many folks, most innocent of any nefarious
purpose, . . . occasionally pat the outside of their clothing to
ensure that they have not lost their possessions." State v.
Gordon, 2014 WI App 44, ¶17, 353 Wis. 2d 468, 846 N.W.2d 483.
But an isolated pat of the pants pocket or touch of the waistband is not the same thing as "digging around" one's left
8 No. 2020AP878-CR.rfd
side while walking quickly away from the police in a place where
officers had reason to believe shots were recently fired. Cf.
State v. Lewis, No. 2017AP234-CR, unpublished slip op., ¶¶7-8
(Wis. Ct. App. July 25, 2017) (concluding that there was no
reasonable suspicion to stop someone who "was not looking over
his shoulder for police" and did not match the description of a
suspect just because he was "walking in a high crime area"
shortly after a report of shots fired and "touched his
waistband"). Thus, despite my differences with parts of the
majority/lead opinion's analysis, I agree that the totality of
these circumstances meets the Terry threshold.
¶70 That straightforward application of Terry is all
that's needed to resolve this case. The majority/lead opinion,
however, unnecessarily goes further, discussing how the type of
crime being investigated may affect the Terry analysis. At
times, that discussion seems to endorse a "sliding-scale
approach" to reasonable suspicion that the Seventh Circuit
cobbled together from Fourth Amendment principles in dissimilar contexts, such as traffic stops, dog-sniff drug searches, and
highway roadblocks. See, e.g., United States v. Goodwin, 449
F.3d 766, 769-70 (7th Cir. 2006). The U.S. Supreme Court has
admonished courts against taking such a mix-and-match approach,
even when applying general Fourth Amendment principles. See
Illinois v. Lidster, 540 U.S. 419, 424 (2004). And we have
never adopted the Seventh Circuit's approach, likely because it
is an awkward fit with Terry. After all, Terry already "responds to" the dangers of firearms and "the serious threat
9 No. 2020AP878-CR.rfd
that armed criminals pose to public safety" by authorizing
limited searches and seizures upon less than probable cause.
See Florida v. J.L., 529 U.S. 266, 272 (2000).
¶71 The majority/lead opinion gets similarly sidetracked
by focusing on cases that have relaxed the usual corroboration
requirements for anonymous tips when the police are responding
to a potential emergency. See majority/lead op., ¶¶39, 53-58 &
n.24-25. But corroboration is not an issue here, and even if it
were, the same Terry reasonable-suspicion standard would apply.
See Navarette v. California, 572 U.S. 393, 401 (2014) ("[A]
reliable tip will justify an investigative stop only if it
creates reasonable suspicion that 'criminal activity may be
afoot.'" (quoting Terry, 392 U.S. at 30)).
¶72 Because a standard Terry analysis resolves this case,
I would stop there. Accordingly, I concur with the
majority/lead opinion's ultimate conclusion that the officers
had reasonable suspicion to stop Nimmer. I emphasize, though,
that the totality of the circumstances in every case will be unique and that lower courts should not give too much weight to
any individual fact.
¶73 I am authorized to state that Justices ANN WALSH
BRADLEY and JILL J. KAROFSKY join this concurrence.
10 No. 2020AP878-CR.bh
¶74 BRIAN HAGEDORN, J. (concurring). I agree with the
court's determination that reasonable suspicion supported the
stop. However, portions of the court's opinion go farther than
necessary. In particular, the opinion suggests——for what
appears to be the first time in the Wisconsin reports——that the
quantum of suspicion necessary to conduct an investigatory stop
is lower for the type of criminal investigation that occurred
here. I do not believe this issue was developed in a
sufficiently meaningful way for me to opine on it, and resolving
it is unnecessary to decide this case. Therefore, I concur and
join the court's opinion only in part.1
1 I join the opinion except for ¶28, ¶29 n.12, and ¶¶39-58.
1 No. 2020AP878-CR.bh
1 | 06-23-2022 | [
"2022 WI 47 SUPREME COURT OF WISCONSIN CASE NO. : 2020AP878-CR COMPLETE TITLE: State of Wisconsin, Plaintiff-Respondent-Petitioner, v. Avan Rondell Nimmer, Defendant-Appellant. REVIEW OF DECISION OF THE COURT OF APPEALS Reported at 395 Wis. 2d 769, 954 N.W.2d 753 (2021 – unpublished) OPINION FILED: June 23, 2022 SUBMITTED ON BRIEFS: ORAL ARGUMENT: October 25, 2022 SOURCE OF APPEAL: COURT: Circuit COUNTY: Milwaukee JUDGE: Glenn H. Yamahiro JUSTICES: REBECCA GRASSL BRADLEY, J., delivered the majority opinion of the Court with respect to all parts except ¶¶28, 29 n.12, and 39–58, in which ZIEGLER, C.J., ROGGENSACK, and HAGEDORN, JJ., joined, and an opinion with respect to ¶¶28, 29 n.12, and 39–58, in which ZIEGLER, C.J., and ROGGENSACK, J., joined. DALLET, J., filed a concurring opinion, in which ANN WALSH BRADLEY and KAROFSKY, JJ., joined. HAGEDORN, J., filed a concurring opinion. NOT PARTICIPATING: ATTORNEYS: For the plaintiff-respondent-petitioner, there were briefs filed by Sarah L. Burgundy, assistant attorney general, with whom on the briefs was Joshua L. Kaul, attorney general.",
"There was an oral argument by Sarah L. Burgundy. For the defendant-appellant, there was a brief filed by Mark S. Rosen and Rosen and Holzman, Waukesha. There was an oral argument by Mark S. Rosen. 2 2022 WI 47 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2020AP878-CR (L.C. No. 2019CF2611) STATE OF WISCONSIN : IN SUPREME COURT State of Wisconsin, Plaintiff-Respondent-Petitioner, FILED v. JUN 23, 2022 Avan Rondell Nimmer, Sheila T. Reiff Clerk of Supreme Court Defendant-Appellant. REBECCA GRASSL BRADLEY, J., delivered the majority opinion of the Court with respect to all parts except ¶¶28, 29 n.12, and 39–58, in which ZIEGLER, C.J., ROGGENSACK, and HAGEDORN, JJ., joined, and an opinion with respect to ¶¶28, 29 n.12, and 39–58, in which ZIEGLER, C.J., and ROGGENSACK, J., joined.",
"DALLET, J., filed a concurring opinion, in which ANN WALSH BRADLEY and KAROFSKY, JJ., joined. HAGEDORN, J., filed a concurring opinion. REVIEW of a decision of the Court of Appeals. Reversed. ¶1 REBECCA GRASSL BRADLEY, J. This case concerns police officers' ability to respond to concededly reliable reports of gunfire generated in near real-time. Two Milwaukee officers received such a report via a technology known as ShotSpotter. The officers arrived on scene no more than one minute after No. 2020AP878-CR receiving the report, seeing only one person there: Avan R. Nimmer. After noticing the squad car, Nimmer accelerated his pace away from it. He also dug around his left side with his left hand. Officer Anthony Milone stepped out of the squad car and walked toward Nimmer, who \"bladed\" his left side away from Milone while continuing to dig around his left side.1 The officers considered these movements suspicious because they were consistent with actions a person may take in attempting to conceal a weapon. The officers stopped Nimmer to investigate whether he was involved in the shooting.",
"Concerned for their safety, Milone frisked Nimmer and found a handgun. ¶2 Because Nimmer was a felon, the State charged him with being a felon in possession, in violation of Wis. Stat. § 941.29(1m)(a) (2019–20).2 Nimmer moved to suppress any evidence obtained as a result of the investigative stop, including the handgun, arguing the stop violated his Fourth Amendment right against unreasonable seizure. The circuit court denied Nimmer's motion.3 The court of appeals reversed in an unpublished per curiam decision. State v. Nimmer, 1 \"Blading\" is a technique used to conceal a weapon.",
"\"[A] person carrying a gun . . . turn[s] 90 degrees away from the person observing or approaching, placing his body between the gun and the other person.\" Nathan C. Meehan & Christopher Strange, Behavioral Indicators of Legal and Illegal Gun Carrying 7 (2015). 2 All subsequent references to the Wisconsin Statutes are to the 2019–20 version. 3 The Honorable Glenn H. Yamahiro, Milwaukee County Circuit Court, presided. 2 No. 2020AP878-CR No. 2020AP878-CR, unpublished slip op. (Wis. Ct. App. Dec. 15, 2020) (per curiam). ¶3 We hold the officers had reasonable suspicion, based on the totality of the circumstances, to believe Nimmer was involved in criminal activity. Accordingly, we reverse the decision of the court of appeals. I. BACKGROUND A. ShotSpotter ¶4 This case involves a relatively new technology, ShotSpotter.",
"At the suppression hearing, Officer Milone testified ShotSpotter is a \"gunshot location system.\" He explained it uses \"acoustic sensors\" to \"record sounds to try to locate . . . gunfire.\" More specifically, \"when the acoustic sensors pick-up the sounds of gunfire, [they] send[] an alert to an office in California. There is somebody standing by in the office who listens to the audio and . . . if it sounds like actual gunshots, they will send the alert[. ]\"4 Nimmer has not argued the time that elapses between ShotSpotter detecting gunfire and notifying officers is sufficiently long to be a material fact. ¶5 Nimmer does not dispute ShotSpotter's reliability.",
"Officer Milone testified at the suppression hearing, \"I [have] responded to . . . over a thousand [ShotSpotter reports]. . . . 4 Officer Milone indicated Milwaukee employs ShotSpotter at several locations: \"There is ShotSpotters in multiple cities. So we get dealings for all of Milwaukee including not just District Five, but all of Milwaukee.\" 3 No. 2020AP878-CR In my experience, [ShotSpotter] is pretty accurate.\" During oral argument before this court, when asked whether Nimmer was \"challenging the reliability of ShotSpotter,\" Nimmer's attorney responded: No, . . . we are not. . . . [T]he thing is I think it's pretty clear about ShotSpotter technology, is I think it can say when and where. I think now it's gotten to the point where it can say what. It can distinguish between firecrackers. I think that's pretty clear. I'm not disputing that. Despite ShotSpotter's reliability, Nimmer argues the officers lacked reasonable suspicion to believe he was involved in criminal activity.",
"B. The Shooting Investigation ¶6 In the summer of 2019, Officer Milone and his partner were on patrol when, at approximately 10:06 p.m., they received a computerized ShotSpotter report in their squad car. It stated four shots had been fired about three blocks away from the officers' location. Nimmer described the reported location as \"highly residential.\" The officers drove there without activating their squad car's siren or flashing red and blue lights. ¶7 Officer Milone had responded to many similar reports in the past. He was a nine-year police veteran assigned to the Violent Crimes Saturation Unit, and his \"typical[]\" duties included \"respond[ing] to calls like ShotSpotter, shots fired, subject with gun, armed robbery, calls of that nature involving gun and gun violence.\" He testified when he responds to a ShotSpotter report, he looks for \"[a]nybody who is shot, any 4 No. 2020AP878-CR people who are shot, any potential suspects, anybody walking around still shooting, [and] any witnesses[.]\" When he sees individuals near the reported location, he explained he \"tr[ies] to see what their response is upon sight of police, see if they are shot, see if they take off running, see if they start grabbing any part of their clothing, any part of their body.\"",
"Effectively, he watches for evasive or nervous behavior. ¶8 The officers arrived on scene no more than one minute after receiving the ShotSpotter report and encountered Nimmer. Officer Milone testified Nimmer was at \"basically the exact location where the ShotSpotter came in.\" He further testified the officers did not see anyone else——only Nimmer. ¶9 Nimmer observed the squad car and immediately accelerated his pace away from it——in fact, he doubled his pace, according to Officer Milone. Milone worried Nimmer was trying to distance himself from the squad car because he was considering fleeing. Milone testified, \"I have observed many times somebody begins to accelerate their walking pace right before going into a run from police.\" He also testified Nimmer \"began digging around his left side with his left hand.\" ¶10 Officer Milone then stepped out of the squad car and approached Nimmer. Milone testified: As I was approaching him behind him, he began turning his left side away from me.",
"So at that point his left side was more forward and I could only really see his right side. I could observe his left arm was still digging around. I was directly behind him on the sidewalk and his right hand was within view, but his left hand was not. 5 No. 2020AP878-CR Milone used \"blading\" as shorthand for Nimmer's turning motion at other points in his testimony. When asked to define blading, he said, \"[b]lading [i]s the term I use when I talk about [Nimmer] moving his left side away from me where I could only see his right side. That would have been the part where he was blading his body.\" From Nimmer's blading, Milone inferred, based on his training and experience, \"[Nimmer] did not want me to be able to see his left side.\" ¶11 The officers then stopped Nimmer to investigate whether he had been involved in the shooting. Officer Milone testified he \"conducted a pat-down of [Nimmer] for officer safety for any weapons.\"",
"As Milone began, Nimmer said, \"[t]he gun is in my waistband[.]\" Milone then felt Nimmer's waistband, and on Nimmer's left side, concealed under his shirt, was a .40 caliber Smith & Wesson semiautomatic pistol.5 ¶12 The State charged Nimmer with being a felon in possession. He had been previously convicted of possession with intent to deliver THC, in violation of Wis. Stat. § 961.41(1m)(h)1. C. Nimmer's Suppression Motion ¶13 Nimmer moved to suppress any evidence obtained as a result of the investigative stop, including the handgun, arguing the stop was unsupported by reasonable suspicion that he was involved in criminal activity.",
"He asserted the officers stopped 5The officers later found a .40 caliber casing nearby; however, because they located it after stopping Nimmer, the casing cannot enter into the reasonable suspicion analysis. 6 No. 2020AP878-CR him because of his \"mere presence\" in the same \"neighborhood\" as the gunfire's reported location. Offering an alternative explanation for his presence at the scene, Nimmer argued he could have been an innocent \"pedestrian\" out for a walk \"on the street.\" Emphasizing the limits of ShotSpotter, Nimmer noted ShotSpotter does not provide a description of the shooter. It tells officers what, when, and where, but not who. Nimmer also asserted \"even if\" he made furtive movements, \"standing alone\" his acceleration away from the officers and his blading and digging could not give rise to reasonable suspicion. He also suggested these movements were not suspicious because \"Nimmer couldn't have known necessarily that the squad car was a police car.",
"It didn't have its red and blue lights on or the siren going. It was dark outside. The lights would prevent . . . Nimmer from being able to identify the squad as a squad car[.]\" ¶14 The State countered the officers had reasonable suspicion because: (1) the officers arrived on scene almost immediately following the ShotSpotter report; (2) Nimmer was \"in the close proximity of this call;\" (3) the officers did not see anyone else near the reported location; and (4) Nimmer acted suspiciously once he noticed the officers.",
"¶15 The circuit court denied Nimmer's motion, agreeing with the State's argument. The court explained the \"key\" was \"the timing\" of events. It indicated its decision would be different if ShotSpotter did not work in near real-time and the officers arrived \"10 or 15 minutes\" after the reported shooting; 7 No. 2020AP878-CR however, because only a nominal amount of time had passed, the court reasoned the officers could be suspicious of people at the scene. It found Nimmer was \"very close\" to the gunfire's reported location, and Nimmer was the only person the officers saw. Additionally, the court found Nimmer made furtive movements upon noticing the officers, which were \"consistent with . . . trying to conceal a weapon.\"",
"Viewing all of these facts together, the court concluded the officers reasonably suspected Nimmer of criminal activity. D. The Appeal ¶16 Nimmer entered into a plea agreement, pled guilty, and was sentenced to two years of initial confinement followed by two years of extended supervision. Nimmer appealed.6 The court of appeals reversed the judgment of conviction and remanded the case to the circuit court, directing it to enter an order granting Nimmer's motion to suppress. Nimmer, No. 2020AP878-CR, ¶30. ¶17 The court of appeals reasoned Nimmer's \"mere presence\" near \"an area where criminal activity [was] suspected\" was insufficient to give rise to reasonable suspicion that he was involved in criminal activity.",
"Id., ¶27 (citations omitted). The court reached this conclusion by analogizing to four cases, only one of which involved a police response to reported Generally, a criminal defendant waives his right to appeal 6 by pleading guilty; however, a narrow exception exists under Wis. Stat. § 971.31(10) for appeals challenging \"[a]n order denying a motion to suppress evidence[.]\" 8 No. 2020AP878-CR gunfire. Those cases generally concern the weight a court may give to a person's presence at a location associated with criminal activity. State v. Gordon is illustrative. Id., ¶17 (quoting State v. Gordon, 2014 WI App 44, ¶¶3–4, 353 Wis. 2d 468, 846 N.W.2d 483). Officers stopped a suspect because he was walking in \"one of the more dangerous areas of the district\" and had been observed making a \"security adjustment,\" i.e., a movement indicating he was carrying a weapon.",
"Id. (quoting Gordon, 353 Wis. 2d 468, ¶¶3–4). The court of appeals concluded the officers lacked reasonable suspicion because a person's presence in a \"high crime area\" cannot be the primary fact supporting an investigative stop.7 Id., ¶18 (quoting Gordon, 353 Wis. 2d 468, ¶18). By relying on Gordon and other like cases, the court of appeals ignored the timing of the officers' response to the report of gunfire, treating this case as if the officers merely noticed Nimmer in an area where they knew shootings often occurred instead of an area where a shooting reportedly just occurred. ¶18 Next, the court of appeals characterized Officer Milone's testimony about Nimmer's furtive movements as of an \"indeterminate nature\" seeming to question whether Milone's testimony was even truthful.",
"Id., ¶28. Specifically, the court The other three cases cited by the court of appeals were: 7 (1) State v. Pugh, 2013 WI App 12, 345 Wis. 2d 832, 826 N.W.2d 418; (2) State v. Washington, 2005 WI App 123, 284 Wis. 2d 456, 700 N.W.2d 305; and (3) State v. Lewis, No. 2017AP234-CR, unpublished slip op. (Wis. Ct. App. July 25, 2017). 9 No.",
"2020AP878-CR speculated: \"[W]e cannot help but wonder——even while recognizing that police officers must make split-second decisions under circumstances where all factors may not be known——whether . . . officers have sought to find 'magic' language for their articulated facts to describe a person's behavior to [justify an investigative stop].\" Id., ¶26. ¶19 The court of appeals concluded Nimmer's presence near the gunfire's reported location, \"even taken together\" with Officer Milone's testimony regarding Nimmer's furtive movements, was insufficient to give rise to reasonable suspicion. Id., ¶30. While the court stated it considered the facts \"together,\" it never analyzed the totality of the circumstances, instead addressing each fact in isolation.8 The State filed a petition for review, which we granted. II. STANDARD OF REVIEW ¶20 This case presents a question of constitutional fact.",
"See State v. Brown, 2020 WI 63, ¶8, 392 Wis. 2d 454, 945 N.W.2d 584 (citing State v. Smith, 2018 WI 2, ¶9, 379 Wis. 2d 86, 905 N.W.2d 353). We review the circuit court's findings of historical fact for clear error. Id. (quoting Smith, 379 Wis. 2d 86, ¶9). We independently apply the Fourth Amendment to the historical facts to determine whether the At oral argument, Nimmer's attorney acknowledged, while 8 the court of appeals purported to consider the facts together, it \"didn't explain anything further,\" i.e., it did not analyze the totality of the circumstances. 10 No.",
"2020AP878-CR investigative stop was constitutional.9 Id. (quoting Smith, 379 Wis. 2d 86, ¶9). III. DISCUSSION A. Fourth Amendment Principles & Terry Stops ¶21 \"The Fourth Amendment is 'indispensable to the full enjoyment of the rights of personal security, personal liberty, and private property.'\" Id., ¶9 (quoting 3 J. Story, Commentaries on the Constitution of the United States § 1895 (1833)). It states: The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. U.S. Const. amend.",
"IV. \"As the text makes clear, 'the Fourth Amendment does not proscribe all state-initiated searches and seizures; it merely proscribes those which are unreasonable.'\" State v. Coffee, 2020 WI 53, ¶22, 391 Wis. 2d 831, 943 N.W.2d 845 (lead opinion) (quoting State v. Tullberg, 2014 WI 134, ¶29, 359 Wis. 2d 421, 857 N.W.2d 120); see also Brown, 392 9The circuit court made a sweeping statement toward the end of its remarks: \"Really, anyone that [the officers] encountered within a minute or two of receiving the alert should have been investigated if they were within a couple of blocks of the alleged shots being fired.\"",
"The court of appeals concluded this statement was \"simply too broad to fit within the confines of Fourth Amendment law regarding stop and frisk procedures.\" State v. Nimmer, No. 2020AP878-CR, unpublished slip op., ¶30 (Wis. Ct. App. Dec. 15, 2020) (per curiam). We agree; however, notwithstanding this single stray comment, the circuit court gave a thorough and well-reasoned explanation for its ruling. 11 No. 2020AP878-CR Wis. 2d 454, ¶9 (quoting Riley v. California, 573 U.S. 373, 381 (2014)) (\"[T]he [United States] Supreme Court repeatedly characterizes the reasonableness of searches and seizures as [the Fourth Amendment's] 'ultimate touchstone.'\").",
"¶22 Generally, a search or seizure conducted without a warrant is \"per se unreasonable[.]\" Brown, 392 Wis. 2d 454, ¶10 (quoting Arizona v. Gant, 556 U.S. 332, 338 (2009)); State v. Matejka, 2001 WI 5, ¶17, 241 Wis. 2d 52, 621 N.W.2d 891 (citations omitted). However, ever since this nation's founding, there have been exceptions. Akhil Reed Amar, Terry and Fourth Amendment First Principles, 72 St. John's L. Rev. 1097, 1106 (1998) (\"[A] large number of historical examples give the lie to the idea that warrants were always required at the Founding——warrantless arrests, searches incident to warrantless arrest, searches of ships, searches of liquor store- houses, border searches, successful seizures of contraband and stolen goods, and on and on.\"). ¶23 An officer may briefly stop an individual, without a warrant, if the officer has reasonable suspicion to believe the individual is involved in criminal activity.",
"State v. Genous, 2021 WI 50, ¶7, 397 Wis. 2d 293, 961 N.W.2d 41 (quoting State v. Young, 2006 WI 98, ¶20, 294 Wis. 2d 1, 717 N.W.2d 729); State v. Anderson (Anderson I), 2019 WI 97, ¶32, 389 Wis. 2d 106, 935 N.W.2d 285. A short investigative stop is often called a \"Terry 12 No. 2020AP878-CR stop\" based upon the United States Supreme Court decision Terry v. Ohio, 392 U.S. 1 (1968), which sanctioned them.10 ¶24 Reasonable suspicion depends on the \"totality of the circumstances.\" Genous, 397 Wis. 2d 293, ¶9 (citing State v. Post, 2007 WI 60, ¶18, 301 Wis. 2d 1, 733 N.W.2d 634). Just last term, we emphasized that \"[w]e focus not on isolated, independent facts, but on 'the whole picture' viewed together.\"",
"Id. (quoting United States v. Cortez, 449 U.S. 411, 417–18 (1981)). \"Indeed, Terry itself involved a series of acts, each of them perhaps innocent if viewed separately, but which taken together warranted further investigation.\" Id. (quoting United States v. Sokolow, 490 U.S. 1, 9–10 (1989)). In this case, the court of appeals erred by utilizing a \"divide-and-conquer analysis.\" See District of Columbia v. Wesby, 583 U.S. __, 138 S. Ct. 577, 588 (2018) (quoting United States v. Arvizu, 534 U.S. 266, 274 (2002)). ¶25 Reasonable suspicion is \"a low bar[.]\" Genous, 397 Wis. 2d 293, ¶8 (citing Young, 294 Wis. 2d 1, ¶21; State v. Eason, 2001 WI 98, ¶19, 245 Wis. 2d 206, 629 N.W.2d 625); see also Anderson I, 389 Wis. 2d 106, ¶33 (\"Reasonable suspicion is a fairly low standard to meet.\" (citing Eason, 245 Wis. 2d 206, An officer may frisk a person during a Terry stop if the 10 officer \"reasonably believes\" the individual is armed and poses a safety risk. State v. Young, 2006 WI 98, ¶55, 294 Wis. 2d 1, 717 N.W.2d 729 (citations omitted).",
"Nimmer argues the officers lacked reasonable suspicion to believe he was involved in criminal activity, but does not challenge the legality of the search following the stop. 13 No. 2020AP878-CR ¶19)). \"Although a mere hunch does not create reasonable suspicion, the level of suspicion the standard requires is considerably less than proof of wrongdoing by a preponderance of the evidence, and obviously less than is necessary for probable cause[.]\" Navarette v. California, 572 U.S. 393, 397 (2014) (internal citations and quotation marks removed). \"[O]fficers are not required to rule out the possibility of innocent behavior before initiating a [Terry] stop.\" Genous, 397 Wis. 2d 293, ¶8 (quoting State v. Anderson (Anderson II), 155 Wis. 2d 77, 84, 454 N.W.2d 763 (1990)).",
"¶26 We must \"consider everything observed by and known to the officer[s.]\" Id., ¶10. Taking all of that information into account, we then determine whether the officers had \"a particularized and objective basis\" to reasonably suspect Nimmer of criminal activity. Brown, 392 Wis. 2d 454, ¶10 (quoting Navarette, 572 U.S. at 396). In other words, we must determine whether the officers had more than a \"mere hunch\" that Nimmer was involved in the shooting. Navarette, 572 U.S. at 397 (internal quotation removed). B. Application ¶27 Several facts known to the officers and accepted by the circuit court collectively give rise to reasonable suspicion that Nimmer was involved in criminal activity: (1) ShotSpotter generates reliable reports of gunfire in near real-time; (2) within a minute of receiving the ShotSpotter report, the officers arrived on scene; (3) Nimmer was at nearly the exact location where ShotSpotter reported gunfire; (4) Nimmer was the 14 No.",
"2020AP878-CR only person the officers saw; and (5) Nimmer made furtive movements upon noticing the officers. ¶28 In addition, the criminal activity being investigated— —a shooting in a highly residential area——supplemented the reasonableness of the officers' actions. See State v. Rutzinski, 2001 WI 22, ¶26, 241 Wis. 2d 729, 623 N.W.2d 516 (\"[E]xigency can in some circumstances supplement the reliability of an informant's tip in order to form the basis for an investigative stop.\" (emphasis added) (citation omitted)); id., ¶35 (\"In light of the potential for imminent danger that drunk drivers present, the informant's allegations suggesting that Rutzinski may have been intoxicated supplemented the reliability of the tip, and further justified Officer Sardina's investigative stop.\" (emphasis added)). ¶29 As the circuit court noted, the timing of events is key. The officers arrived shortly after receiving a reliable report of gunfire that was generated in near real-time, from which they could infer the shooter was likely nearby. Other courts have also concluded a relatively short period of time between officers receiving a ShotSpotter report and their arrival at the scene supports reasonable suspicion to stop and question those present.",
"In United States v. Jones, officers arrived on scene within a minute and a half of receiving a dispatch that ShotSpotter had reported gunfire. 1 F.4th 50, 53 (D.C. Cir. 2021). After observing Jones walking quickly on an otherwise deserted block, the officers stopped him. The D.C. Circuit concluded reasonable suspicion to do so existed in large 15 No. 2020AP878-CR part because the officers' rapid response significantly reduced the probability that the shooter had fled.11 Id. In another analogous case, the Seventh Circuit concluded even five-and-a- half minutes was not \"[a]s both a matter of fact and law . . .",
"unduly long.\" United States v. Rickmon, 952 F.3d 876, 883 (7th Cir. 2020), cert. denied, 141 S. Ct. 2505 (2021). The Seventh Circuit determined reasonable suspicion exists to stop those present in the area within this timeframe because \"[c]ommon sense counsels that a person may take minutes rather than seconds to flee for any number of reasons, including the destruction of evidence, an injury sustained in the shooting, or a need to hide in place. \"12 Id. Relying on Rickmon, the Ohio The ShotSpotter report in United States v. Jones was not 11 sent directly to the officers.",
"The D.C. Circuit noted the record did not indicate how much time elapsed between the generation of the ShotSpotter report and its relay to officers. 1 F.4th 50, 53 n.2 (D.C. Cir. 2021). Contrary to Justice Dallet's assertion, the period of time necessary to generate a ShotSpotter report has not played a significant role in most cases discussing ShotSpotter. See Justice Dallet's Concurrence, ¶66 & n.6. In United States v. Rickmon, officers received two 12 ShotSpotter reports and two dispatches reporting gunfire, which were based on 911 calls. 952 F.3d 876, 882 (7th Cir. 2020), cert. denied, 141 S. Ct. 2505 (2021). The Seventh Circuit reasoned a ShotSpotter report is at least as reliable as an anonymous tip.",
"See id. at 879 n.2, 882. It then noted the \"anonymous tip from ShotSpotter\" was \"independently confirmed\" by the 911 calls relayed through the dispatches. Id. at 882. Analogizing a ShotSpotter report to an anonymous tip is part of the analysis, not a \"sidetrack\" from it. See Justice Dallet's Concurrence, ¶71 (\"The majority/lead opinion gets similarly sidetracked by focusing on cases that have relaxed the usual corroboration requirements for anonymous tips when the police are responding to a potential emergency.\"). 16 No. 2020AP878-CR Court of Appeals recently concluded reasonable suspicion existed in an analogous case involving approximately a four-minute police response time. State v. Carter, 183 N.E.3d 611, 629 (Ohio Ct. App. 2022). ¶30 The reasoning of Jones and Rickmon applies to this case. Given the officers' quick response and in light of their observations upon arrival, they could reasonably suspect Nimmer was the shooter and that he had not left the scene for any In this case, the lack of a 911 call is of little importance, for multiple reasons. See State v. Carter, 183 N.E.3d 611, 629 (Ohio Ct. App. 2022) (\"While there were no separate 911 calls reporting gunfire or any additional information in terms of a suspect, [Officers] Erwin and Gallagher were responding to an alert of shots fired, an inherently dangerous circumstance beyond general criminality.",
"In their experience, they had recovered weapons in response to ShotSpotter alerts.\"). First, Nimmer concedes the reliability of ShotSpotter. Second, the officers arrived on scene no more than a minute after receiving the ShotSpotter report, which presumably issued shortly after the shots were detected. Whether a 911 call can be placed and relayed to officers within such a short period of time is questionable. See Marc L. Miller et al., Criminal Procedures: Cases, Statutes, and Executive Materials 428 (6th ed. 2019). Lastly, people do not always call 911 after hearing gunfire such that the lack of a 911 call discredits the ShotSpotter report.",
"See Alexandra S. Gecas, Note, Gunfire Game Changer or Big Brother's Hidden Ears? : Fourth Amendment and Admissibility Quandaries Relating to ShotSpotter Technology, 2016 U. Ill. L. Rev. 1073, 1084 (\"ShotSpotter enables the police to catch perpetrators without people fearing they are 'snitching' on their neighbors. . . . ShotSpotter highlights just how prevalent unreported gunfire is on city streets. . . . [C]ommunities that frequently experience gunfire are the least likely to report gunshots to the police. \"); Amanda Busljeta, Comment, How an Acoustic Sensor Can Catch a Gunman, 32 J. Marshall J. Info. Tech. & Privacy L. 211, 218 (2015) (explaining people who live in high crime areas are sometimes so desensitized to gun violence that they decline to call 911 when they hear gunfire). 17 No. 2020AP878-CR number of reasons.",
"See Rickmon, 952 F.3d at 883. While Nimmer could have been a random pedestrian out for a walk, the officers were not required to rule out any alternative explanation for his presence at the scene. Genous, 397 Wis. 2d 293, ¶8 (quoting Anderson II, 155 Wis. 2d at 84); see also Jones, 1 F.4th at 54. Additionally, common sense counsels that innocent pedestrians do not normally gather immediately near the location of gunfire, particularly late at night. See Rickmon, 952 F.3d at 884 (noting few vehicles are out at 4:45 a.m.). ¶31 The timing of the stop is particularly persuasive in light of Nimmer's close proximity to the exact location reported by ShotSpotter. Contrary to the court of appeals' analysis, this case is not about the extent to which a person's presence in a \"high crime area\" can contribute to reasonable suspicion. See Nimmer, No. 2020AP878-CR, ¶18 (quoting Gordon, 353 Wis. 2d 468, ¶18).",
"For Fourth Amendment purposes, there is a difference between a person's presence at a location generally known for criminal activity and his presence at a location precisely pinpointed for gunfire by a reliable report in near real-time. See generally United States v. Holloway, No. 20-CR- 00381, slip op., 2021 WL 5882147 *5 (N.D. Ill. Dec. 13, 2021) (explaining a suspect's presence in a high crime area is less valuable in a reasonable suspicion analysis than a suspect's presence near a location reported by ShotSpotter). ¶32 Officer Milone testified Nimmer was at \"basically the exact location where the ShotSpotter came in.\"",
"Consistent with this testimony, the circuit court found Nimmer was \"very close\" 18 No. 2020AP878-CR to the reported location. Nimmer's \"close proximity,\" both \"temporally\" and \"spatially,\" to that location of gunfire weighs heavily in favor of reasonable suspicion. Commonwealth v. Raglin, 178 A.3d 868, 873 (Pa. Sup. Ct. 2018); see also Commonwealth v. Ford, 182 N.E.3d 1013, 1018 (Mass. Ct. App. 2022) (\"The seizure of a suspect in geographical and temporal proximity to the scene of the crime appropriately may be considered as a factor in the reasonable suspicion analysis. It is particularly relevant where, as here, the officer encountered the defendant less than a minute after the last reported ShotSpotter alert, at the location where the trail of ShotSpotter alerts ended.\" (quotation marks and quoted source omitted)); Carter, 183 N.E.3d at 629 (\"Carter was observed within four minutes of the officers receiving the alert within the specific area of the alert. In other words, as in Rickmon, the stop had temporal and physical proximity to the gunfire. \"); Funderburk v. United States, 260 A.3d 652, 660 (D.C. 2021) (noting \"spatial and temporal proximity\" to the location reported by ShotSpotter contributed to reasonable suspicion); Rickmon, 952 F.3d at 884 (concluding \"the [Terry] stop's temporal and physical proximity to the shots\" supported reasonable suspicion); Commonwealth v. Holness, 101 N.E.3d 310, 315 (Mass. Ct. App. 2018) (\"The physical appearance of the Jaguar, and its proximity to the location of the ShotSpotter activation and broken glass, as well as the temporal proximity between the activation and recent motor vehicle accident, occurring in or around 4:00 A.M. on Christmas morning, when few 19 No.",
"2020AP878-CR other vehicles were likely on the road, provided a sufficient nexus between the incriminating evidence in plain view and the accident scene.\"). ¶33 Nimmer was also the only person the officers observed temporally and spatially proximate to the scene. The absence of anyone else nearby strongly particularized the officers' suspicion. See Funderburk, 260 A.3d at 660–61; see also Ford, 182 N.E.3d at 1018; Carter, 183 N.E.3d at 629. The officers knew what (gunfire), when (a minute or two ago), and where (the reported address). While they did not know who fired the gun, they knew the shooter was likely near the reported location. Accordingly, \"[t]he officers . . . limited the universe of potential suspects to those at a particular location\" shortly after a serious crime occurred there.",
"See Funderburk, 260 A.3d at 657. Because no one else was in the vicinity, this \"universe\" was \"small enough that no description at all [was] required to justify [the Terry stop].\" Id. (quoting In re T.L.L., 729 A.2d 334, 341 (D.C. 1999)); see also State v. Hairston, 126 N.E.3d 1132, 1137 (Ohio 2019) (\"[T]he officers did exactly what one would expect reasonable and prudent police officers to do in their situation. Upon hearing gunshots, they proceeded immediately to the location they believed the shots to be coming from to investigate. Finding only Hairston in the area[,] . . . the officers were not required to ignore Hairston's presence[. ]\"); Rickmon, 952 F.3d at 884 (explaining the lack of a description of a suspect vehicle made little difference because officers observed only one vehicle temporally 20 No.",
"2020AP878-CR and spatially proximate to the location reported by ShotSpotter). ¶34 Contributing to the totality of the circumstances supporting reasonable suspicion, Nimmer made furtive movements. Officer Milone testified, upon noticing the officers, Nimmer: (1) doubled his pace away from the officers; (2) dug around his left side with his left hand; and (3) bladed the left side of his body away from them.",
"Notably, Nimmer's blading did not occur until Milone began approaching Nimmer on foot, and the closer the officers got to Nimmer, the more evasive his behavior became. Milone further testified, based on his training and experience, Nimmer's movements indicated he was considering fleeing and did not want the officers to see his left side. See Cortez, 449 U.S. at 418 (\"[A] trained officer draws inferences and makes deductions . . . that might well elude an untrained person.\"). ¶35 Contrary to the court of appeals' characterization of Officer Milone's testimony, it was not \"indeterminate\" nor did he use \"magic\" words. The court of appeals erred by suggesting otherwise. See Nimmer, No. 2020AP878-CR, ¶¶26, 28.",
"In fact, Milone's testimony was exacting.13 He did not merely say Nimmer began walking faster——he said Nimmer doubled his pace. He did not simply say Nimmer began digging in a pocket——he said Nimmer dug around his left side with his left hand. He did not just We do not opine on the extent to which less exacting 13 testimony from Officer Milone would have been sufficient. 21 No. 2020AP878-CR say Nimmer bladed——he said, \"[Nimmer] began turning his left side away from me. So at that point his left side was more forward and I could only really see his right side. . . . I was directly behind him on the sidewalk and his right hand was within view, but his left hand was not.\" Milone even mentioned Nimmer continued digging with his left arm as he bladed, although he could not see Nimmer's left hand.",
"Milone further described when each of these movements occurred, and the particular inferences he drew from them. This case is not about conclusory or jargon-ridden testimony by an officer. The circuit court found Milone credible and had no trouble understanding what Milone meant. Nothing in the record indicates the circuit court erred——let alone clearly erred——by crediting Milone's testimony. See Brown, 392 Wis. 2d 454, ¶8 (quoting Smith, 379 Wis. 2d 86, ¶9); see also Carter, 183 N.E.3d at 629 (\"We do not agree, as Carter suggests, that the officers used 'magic' words or language in testifying to establish reasonable suspicion. The court clearly found the officers' testimony to be credible, and we defer to the court's credibility assessment.\"). ¶36 Contrary to his argument, Nimmer's furtive movements were not \"standing alone;\" these movements combined with other facts to solidify the officers' particularized suspicion of Nimmer.",
"See Anderson I, 389 Wis. 2d 106, ¶50 (\"When combined with the information known to Officer Seeger about Anderson's history, Anderson's behavior creates reasonable suspicion that criminal activity was afoot. Anderson's movements after he 22 No. 2020AP878-CR noticed Officer Seeger give rise to a reasonable inference that Anderson was trying to conceal something from the officer. \"); United States v. Diaz, No. 20-cr-176 (LAK), slip op., 2020 WL 6083404 *6 (S.D.N.Y.",
"Oct. 15, 2020), appeal filed (\"The defendants argue that a ShotSpotter report, 'standing on its own,' cannot be the basis of 'individualized suspicion.' But the ShotSpotter reports are only two pieces of the calculus. . . . [B]oth officers testified that they observed the defendants engage in 'nervous, evasive' behavior as they exited: the officers saw Diaz turn his body slightly and Hawkins pivot and hurry as their police car passed. Subsequently, Officer Bonczyk observed Diaz, whom Officer Lopez recognized from a prior arrest for assaulting an officer, creating tension with his sweatshirt that revealed a bulge that Officer Bonczyk thought was a gun. These observations provided the officers with reasonable suspicion that, of all the people coming and going from the area that night, Diaz and Hawkins were particularly suspect.\"). ¶37 In the course of responding within one minute after receiving a ShotSpotter report of gunfire in a residential neighborhood, the officers saw a single suspect near the scene make furtive movements suggesting concealment of a handgun.",
"Looking at \"the whole picture,\" as the officers were required to do, they made a well-informed and reasonable inference that Nimmer might be the shooter. See Genous, 397 Wis. 2d 293, ¶9 (quoting Cortez, 449 U.S. at 417–18). They did not act on a 23 No. 2020AP878-CR \"mere hunch[.]\" See Navarette, 572 U.S. at 397 (internal quotation marks removed). ¶38 Although this is the first occasion for this court to evaluate reasonable suspicion in the context of a ShotSpotter report, our court of appeals has considered whether the proximity of a person's presence shortly after shots were fired satisfies reasonable suspicion. For example, in State v. Norton, No. 2019AP1796-CR, unpublished slip op., ¶¶14, 17 (Wis. Ct. App. Apr. 14, 2020), the court of appeals concluded the totality of analogous circumstances constituted reasonable suspicion to stop and investigate the defendant: The officers were investigating a report of shots fired, for which they had very little information besides the general vicinity of the incident. .",
". . Norton's presence in that area was not \"standing alone\"——it was accompanied by the information that there had been shots fired in the area, which the officers here were investigating. Furthermore, when they illuminated the vehicle with their squad spotlight, they saw Norton make \"furtive movements[,]\" . . . which caused the officers to become concerned that he may have been trying to conceal a firearm, due to the nature of the call they were investigating. (Quoted source omitted). The court of appeals in that case persuasively emphasized the nature of the crime the officers were investigating——shots fired, which obviously is linked to criminal activity.",
"Id., ¶20. ¶39 As part of the reasonable suspicion analysis, multiple courts have emphasized the nature of the criminal activity the officers were investigating. E.g., Trott v. State, 249 24 No. 2020AP878-CR A.3d 833, 848 (Md. 2021), cert. denied sub nom., Trott v. Maryland, 142 S. Ct. 240 (\"Additionally, in determining that the investigatory stop was reasonable under the circumstances, we also consider the gravity of the risk of public harm. . . . Balancing the public's interest in safety against the minimal intrusion occasioned by the brief investigatory stop here, and considering the totality of the facts presented to Officer Cooper in this case, we conclude that the scales of justice tilt in favor of the stop.\"). This court has recognized that when officers are aware of \"an imminent threat to the public safety\" the Fourth Amendment \"do[es] not require the police to idly stand by in hopes that their observations reveal suspicious behavior before the imminent threat comes to its fruition.\"",
"Rutzinski, 241 Wis. 2d 729, ¶26. \"[T]he Fourth Amendment . . . appreciates the distinction between officers who illegitimately invoke Terry to stop someone who ran a red light six[] months ago and legitimately use it to stop someone who assaulted a spouse in the past half hour.\" United States v. Jones, 953 F.3d 433, 437 (6th Cir. 2020). ¶40 \"[T]he amount of permissible intrusion is a function not only of the likelihood of turning up contraband or evidence of crime but also of the gravity of the crime being investigated.\" United States v. Goodwin, 449 F.3d 766, 769 (7th Cir. 2006) (citation omitted). Applying this common sense principle, the Seventh Circuit uses a \"'sliding scale' approach\" to determine the requisite quantum of suspicion: \"if the crime being investigated is grave enough, the police can stop and 25 No.",
"2020AP878-CR frisk without as much suspicion as would be required in a less serious criminal case.\" Id. The Seventh Circuit employed this approach in Rickmon, twice emphasizing \"the dangerousness of the crime,\" 952 F.3d at 881–82, 884, and noting, \"[w]e have repeatedly emphasized in our decisions that the inherent danger of gun violence sets shootings apart from other criminal activity.\" Id. at 883 (citing United States v. Burgess, 759 F.3d 708, 710–11 (7th Cir. 2014)). Similarly, in Burgess, the Seventh Circuit stated: At the outset we observe the dangerousness of the situation facing the officers and the public. . . . Multiple callers reported shots fired in the same general area, creating heightened suspicion of a serious crime, and for all the officers knew as they approached the area just minutes later, more than one shooting location was involved.",
"The threat to public safety was serious, and the officers had to assume that it was continuing in process. Against the background of this ongoing threat, a number of considerations supported stopping Burgess's car in particular. . . . All told, the circumstances here——the dangerousness of the crime, the short lapse of time between the dispatches and the stop, the stop's proximity to the reported shots, the car's color, and the light traffic late at night——provided ample justification for stopping Burgess's car. 759 F.3d at 710–11; see also Commonwealth v. Meneus, 66 N.E.3d 1019, 1026 (Mass. 2017) (holding \"the fact that the crime under investigation was a shooting, with implications for public safety\" is relevant to determining the reasonableness of a Terry stop). 26 No. 2020AP878-CR ¶41 As Rickmon and Burgess illustrate, in Terry stop cases involving reported unlawful firearm use, \"[t]here is a consistent theme[:] . .",
". if the police reasonably perceive danger to themselves or to members of the public, they have a duty to investigate[.]\" Commonwealth v. Campbell, 867 N.E.2d 759, 763 (Mass. Ct. App. 2007) (quoted source omitted); see also Carter, 183 N.E.3d at 629 (\"[Officers] Erwin and Gallagher were responding to an alert of shots fired, an inherently dangerous circumstance beyond general criminality.\"). \"The unique dangers presented to law officers and law-abiding citizens by firearms are well chronicled.\" United States v. Bold, 19 F.3d 99, 104 (2d Cir. 1994) (citation omitted). The unlawful use of a firearm presents an \"imminent danger,\" see United States v. Harrell, 268 F.3d 141, 151 (2d Cir. 2001) (Meskill, J., concurring), which may be considered in \"the totality-of-the-circumstances test for determining reasonable suspicion\" because of \"the government's need for a prompt investigation.\" See Bold, 19 F.3d at 104 (citation omitted).",
"¶42 In this case, ShotSpotter reported four gunshots in a highly residential neighborhood. Officer Milone testified he was looking for \"[a]nybody who is shot, any people who are shot, any potential suspects, anybody walking around still shooting, [and] any witnesses[.]\" His testimony confirms the obvious: the officers had reason to believe lives were in danger. ¶43 The court of appeals erred in this case by relying too heavily on cases involving investigations of substantially less serious criminal activity——specifically, drug crimes——rather 27 No. 2020AP878-CR than cases involving shots fired. See State v. Pugh, 2013 WI App 12, 345 Wis. 2d 832, 826 N.W.2d 418 (investigating a suspected drug crime); State v. Washington, 2005 WI App 123, 284 Wis. 2d 456, 700 N.W.2d 305 (investigating a complaint of loitering and drug sales).14 \"Th[e] element of imminent danger distinguishes a gun tip from one involving possession of drugs.\"",
"United States v. Serrano, 598 F. App'x 72, 78 (3d Cir. 2015) (quoting United States v. Roberson, 90 F.3d 75, 81 n.4 (3d Cir. 1996)) (modification in the original). ¶44 ShotSpotter's detection of gunfire is comparable to an officer hearing it himself. See Amanda Busljeta, Comment, How an Acoustic Sensor Can Catch a Gunman, 32 J. Marshall J. Info. Tech. & Privacy L. 211, 219 (2015) (\"With the acoustic sensors implemented in cities, police can feel a sense of reassurance that there is always a second pair of ears acting as backup.\").",
"When an officer hears gunfire, he has a duty to the public to react. If he arrives at the scene almost immediately after gunfire and sees only a few people——or in this case, one person— —the officer may reasonably suspect criminal activity if any of them make furtive movements. ¶45 The only case the court of appeals considered involving reported gunfire was State v. Lewis, No. 2017AP234-CR, unpublished slip op. (Wis. Ct. App. July 25, 2017).",
"In that The error rests in relying on four cases, supra ¶17 & 14 n.7, none of which were analogous, none of which were Wisconsin Supreme Court decisions, one of which was an unpublished court of appeals decision, and only one of which (the unpublished court of appeals decision) even involved shots fired. 28 No. 2020AP878-CR case, officers were dispatched to investigate shots fired in a high crime area. Id., ¶¶2, 8. They were looking for three fleeing suspects, but they had a description of only one. Id., ¶2. The officers observed Travail L. Lewis in an alley \"a few blocks from where the complaint was made\" but Lewis did not match the description.",
"Id., ¶1. Positioned behind Lewis, the officers noticed him holding the waistband of his pants. Id., ¶2. The officers conducted a Terry stop, and Lewis admitted he was carrying a concealed weapon. Id. The State \"concede[d]\" the \"officers stopped Lewis simply based on the fact that he was walking in a high crime area shortly after [they] receiv[ed] an alert of 'shots fired'\" and was \"touch[ing] his waistband.\" Id., ¶8. The court of appeals accepted the State's concession and concluded the officers lacked reasonable suspicion. Id. ¶46 We do not consider whether the court of appeals correctly decided Lewis. Regardless, it is inapposite for multiple reasons. First, Lewis does not disclose the officers' response time——just that they arrived \"shortly\" after receiving the report. Id. The decision says Lewis was \"a few blocks from where the complaint was made,\" id., ¶1, leaving Lewis' temporal and spatial proximity to the gunfire indeterminate. Finally, Lewis did not react to the officers, who saw him from behind and noticed him \"holding the waistband of his pants.\"",
"Id., ¶2. Whether Lewis even saw the officers before they ordered him to stop is unclear.15 15The court of appeals in this case could have considered another factually analogous opinion from its own court, State v. 29 No. 2020AP878-CR ¶47 In this case, the officers expeditiously responded to a reliable report of gunfire, generated in near real-time. Upon arrival, they saw one person, Nimmer, who made furtive movements that, based on the officers' training and experience, indicated he was concealing a handgun. The officers reasonably suspected Nimmer was involved in criminal activity, specifically, the shooting.",
"The officers' seizure of Nimmer accordingly complied with the Fourth Amendment. IV. JUSTICE DALLET'S CONCURRENCE ¶48 \"The straw man was easily enough knocked over by the critic who set him up.\" L.T. Hobhouse, The Theory of Knowledge 59 (New & Chapter Issue 1905). ¶49 Justice Dallet's concurrence mischaracterizes the court's opinion and the precedent it applies, creating a cloud of obfuscation over the opinion so that it will be read to mean something it doesn't actually say. In common parlance, Justice Dallet creates a \"straw man,\" meaning \"a weak or imaginary opposition (such as an argument or adversary),\" who is \"set up Tally-Clayborne, No. 2016AP1912-CR, unpublished slip op., ¶10 (Wis. Ct. App. Oct. 17, 2017) (\"[Officer] Dillman traveled in the direction of the gunshots and within twenty to twenty-five seconds, Dillman saw Tally-Clayborne and two other individuals. Dillman did not see anyone else. Given the potential safety risk, .",
". . the fact that Tally-Clayborne and his companions were the only individuals visibly present in the area of the shooting, and the fact that Tally-Clayborne attempted to walk away from the officers patting down his companions while reaching for his waistband, Dillman could reasonably suspect that Tally-Clayborne was involved in some sort of criminal activity.\"). 30 No. 2020AP878-CR only to be easily confuted.\" Straw man, Merriam-Webster's Collegiate Dictionary (11th ed. 2014). By creating this straw man, Justice Dallet handily knocks down a weak argument of her own creation rather than address the legal principles actually propounded by the court. For this reason, judges and parties should exercise caution when citing statements in separate writings that purport to summarize or paraphrase the majority opinion, particularly when the author of the writing has not joined the majority opinion.",
"¶50 For starters, Justice Dallet attempts to distort the holding in this case, suggesting this court sanctions ShotSpotter being \"used as a dragnet to justify warrantless searches of everyone the police find near a recently reported gunshot. \"16 Nothing in this opinion suggests anything of the kind. As exhaustively explained, the totality of the circumstances obviously matters and it is the totality of the facts in this case which supports reasonable suspicion.",
"See, e.g., supra ¶¶3, 24-30, 34, 36-37, 44, 47. The officers' arrival on the scene no more than one minute after the ShotSpotter report, where they found only Nimmer, was but one of multiple facts supporting reasonable suspicion. Justice Dallet's Concurrence, ¶67. 16 In misstating the holding in this case, Justice Dallet analogizes it to the circuit court's conclusion that the police should investigate anyone in the vicinity within a minute or two of the ShotSpotter alert. Id., ¶67 n.7. Contrary to Justice Dallet's insinuation, we agreed with the court of appeals' conclusion that this statement exceeds the boundaries of the Fourth Amendment. See supra ¶20 n.9. 31 No. 2020AP878-CR ¶51 Justice Dallet further misrepresents the majority opinion as advancing \"the novel suggestion 'that the quantum of suspicion necessary to conduct an investigatory stop is lower for the type of criminal investigation that occurred here.",
"'\"17 The majority opinion does not say this; Justice Brian Hagedorn’s concurrence does. Citing Rutzinski, the State argued \"[o]ne additional factor supports reasonable suspicion here: police were investigating a shots-fired report, which implicated immediate public-safety concerns.\" Although the State thoroughly briefed the issue, the defendant did not respond. Like the defendant, Justice Dallet never analyzes Rutzinski, even though it debunks her classification of the analysis as novel. ¶52 Justice Dallet lapses into the same error made by the court of appeals in this case: evaluating the facts in isolation rather than as part of the \"whole picture.\" For example, she says \"there is nothing especially suspicious about finding someone alone on a residential street just after 10:00 PM on a Saturday night in the summertime. \"18 This is true, but no one suggests otherwise. Justice Dallet also says, \"the possibility that a crime has been committed in a certain neighborhood doesn't cast suspicion over everyone there.",
"\"19 Again, no one claims it does. Next, Justice Dallet says the 17 Justice Dallet's Concurrence, ¶61 n.1. 18 Id., ¶64. 19 Id. 32 No. 2020AP878-CR police \"could not assume that Nimmer was responsible for the reported gunshots simply because he was the only person they saw when they showed up in his neighborhood. \"20 They didn't; it was his solitary presence at the location of recent gunfire, combined with his furtive movements, which gave rise to reasonable suspicion, as Justice Dallet ultimately concedes.21 ¶53 Justice Dallet, however, does not seem to think the nature of the criminal activity being investigated matters much when determining the reasonableness of a stop, characterizing the consideration of gun violence as going beyond \"a standard Terry analysis. \"22 She similarly dismisses the seriousness of 20 Id. Justice Dallet also says, \"Nimmer's case is unlike many 21 of those cited by the majority/lead opinion, where courts held that the police had reasonable suspicion to stop the only people they found at the scene of reported gunfire late at night, in an alleyway or dead-end street where shots were heard recently, or both.\"",
"Id. (emphasis added). She then cites three cases on which we have relied: Jones, Rickmon, and Funderburk. Justice Dallet draws a distinction bearing no difference under the Fourth Amendment. In Jones, officers stopped the suspect \"in a residential neighborhood in Washington D.C.\" 1 F.4th at 51. In Rickmon, officers stopped a suspect in a residential area of Peoria, Illinois, which, while not as urbanized as Washington, D.C., is hardly a rural community. 952 F.3d at 879; see also id. at 886 (Wood, J., dissenting) (describing the residential nature of the area). Indeed, the court noted when one officer arrived on scene, he \"observed a crowd of about 15-20 people at the street's dead end, approximately 300 feet from him.\" Id. at 879 (majority op.). In Funderburk, \"two police officers heard gunshots and commotion coming from a nearby alley in a residential neighborhood.\" Funderburk v. United States, 260 A.3d 652, 654 (D.C. 2021). 22 Justice Dallet's Concurrence, ¶¶70, 72.",
"33 No. 2020AP878-CR the crime as a factor in the analysis of a tip's reliability. This is not the law; the Court in Florida v. J.L., 529 U.S. 266 (2000) and this court as well as other courts applying its holding have already rejected the premise of Justice Dallet's concurrence. ¶54 In J.L., police received an anonymous tip that a person at a bus stop was concealing——not shooting——a firearm. Id. at 268, 273 n.*. The tip had little to no indicia of reliability and \"[a]part from the tip, the officers had no reason to suspect . . . illegal conduct. The officers did not see a firearm, and J.L. made no threatening or otherwise unusual movements.\" Id. at 268 (emphasis added). Under these facts, the Court concluded the officers unlawfully executed a Terry stop, expressly disavowing \"an automatic firearm exception to our established reliability analysis\"23 because it would \"enable any person seeking to harass another to set in motion an intrusive, embarrassing police search of the targeted person simply by placing an anonymous call falsely reporting the target's unlawful carriage of a gun.\"",
"Id. at 272 (emphasis added). The Court's holding was limited to an uncorroborated tip of someone carrying a gun: The facts of this case do not require us to speculate about the circumstances under which the danger alleged in an anonymous tip might be so great as to justify a search even without a showing of reliability. We do While the nature of the criminal activity is relevant 23 under our analysis, it is not dispositive. See Commonwealth v. Meneus, 66 N.E.3d 1019, 1026 (Mass. 2017).",
"34 No. 2020AP878-CR not say, for example, that a report of a person carrying a bomb need bear the indicia of reliability we demand for a report of a person carrying a firearm before the police can constitutionally conduct a frisk. Id. at 273–74. Relying on this limitation, this court and lower courts have factored the nature of the suspected criminal activity into their reasonable suspicion analyses in exactly the same manner we do in this case. ¶55 In Rutzinski, this court held: [W]hen assessing whether a stop is constitutionally reasonable, a reviewing court must balance the interests of the individual being stopped against the interests of the State to effectively root out crime. Hensley, 469 U.S. at 228, 105 S.Ct.",
"675; McGill, 2000 WI 38, at ¶ 18, 234 Wis.2d 560, 609 N.W.2d 795; Waldner, 206 Wis.2d at 56, 556 N.W.2d 681. . . . [W]here the allegations in the tip suggest an imminent threat to the public safety or other exigency that warrants immediate police investigation. . . . the Fourth Amendment and Article I, Section 11 do not require the police to idly stand by in hopes that their observations reveal suspicious behavior before the imminent threat comes to its fruition. Rather, it may be reasonable for an officer in such a situation to conclude that the potential for danger caused by a delay in immediate action justifies stopping the suspect without any further observation. Thus, exigency can in some circumstances supplement the reliability of an informant's tip in order to form the basis for an investigative stop. Cf. City of Indianapolis v. Edmond, 531 U.S. 32, ––––, 121 S.Ct. 447, 455, 148 L.Ed.2d 333 (2000) (noting that exigencies of some scenarios likely would outweigh the individual's right to be free from an investigative traffic stop).",
"241 Wis. 2d 729, ¶26 (emphasis added). This court noted the limited reach of J.L., explaining \"the Court implicitly affirmed that there are circumstances in which exigency can supplement—— 35 No. 2020AP878-CR or, in very extreme circumstances, possibly supplant—— the . . . reliability analysis.\" Id., ¶29 n.6. ¶56 Throughout our opinion in Rutzinski, this court repeatedly emphasized that imminent danger is a factor to be considered in determining the reasonableness of a Terry stop. Id., ¶26 (\"[E]xigency can in some circumstances supplement the reliability of an informant's tip in order to form the basis for an investigative stop.\" (citing City of Indianapolis v. Edmond, 531 U.S. 32, 42–43, 121 S. Ct. 447, 455 (2000))); id., ¶34 (\"[U]nlike the tip in J.L., the tip in the present case suggested that Rutzinski posed an imminent threat to the public's safety. \"); id., ¶35 (\"In light of the potential for imminent danger that drunk drivers present, the informant's allegations suggesting that Rutzinski may have been intoxicated supplemented the reliability of the tip, and further justified Officer Sardina's investigative stop.",
"\"); id., ¶36 (\"Because drunk driving is an extraordinary danger, we cannot adopt Rutzinski's position that the police must dismiss allegations of possible drunk driving when assessing whether an informant's tip justifies a traffic stop. While such allegations cannot form the sole basis for an investigative stop, they certainly must be considered when examining the totality of the circumstances surrounding particular police conduct.\" (emphasis added)); id., ¶37 (\"Unlike the tip in J.L., the informant's tip in this case contained sufficient indicia of reliability and alleged a potential imminent danger to public safety.\" (emphasis 36 No. 2020AP878-CR added)).24 Far from being \"unnecessary\" digressions, a report of serious criminal activity \"must be considered\" as part of the reasonable suspicion analysis. ¶57 Notwithstanding this precedent, Justice Dallet fails to acknowledge the seriousness of gunfire in a residential area, asserting this court's \"analysis places too much weight on some of these facts, including the residential setting\" and \"puts too much emphasis on the officers' reliance on ShotSpotter. \"25 Although Justice Dallet does not quantify the weight she would give to these facts (if any), to suggest a shooting in a highly 24 Consideration of the nature of a reported crime is not restricted to tips involving guns; as Chief Justice John Roberts has noted, \"the especially grave and imminent dangers posed by drunk driving\" have prompted \"[t]he majority of courts examining the question\" to uphold \"investigative stops of allegedly drunk or erratic drivers, even when the police did not personally witness any traffic violations before conducting the stops.\"",
"Virginia v. Harris, 130 S. Ct. 10, 11 (2009) (Roberts, C.J., dissenting from denial of certiorari). In doing so, \"[t]hese courts have typically distinguished J.L. 's general rule\" in part based on the \"grave and imminent dangers\" drunk driving presents. Id. Notably, one of the cases Chief Justice Roberts cited for the proposition was Rutzinski. See also Trott v. State, 249 A.3d 833, 848 (Md. 2021), cert. denied sub nom., Trott v. Maryland, 142 S. Ct. 240 (\"Unlike crimes involving possessory offenses, such as carrying an illegal gun or possessing drugs, the crime of drunk driving poses a significant and potentially imminent public danger. \"); Andrew J. Sheehan, Comment, Getting Drunk Drivers off Illinois Roadways: Addressing the Split of Authority Regarding 911 Tips & Investigatory Traffic Stops, 39 S. Ill. U. L.J.",
"537, 551 (2015) (\"Arguably the most widely-accepted justification for adopting a drunk driving exception is the very unique and imminent danger an intoxicated person behind the wheel poses to the general public.\"). Justice Dallet's Concurrence, ¶¶64, 65. Doubling down on 25 the misguided notion that gunfire in a residential area is not a reliable indicator of criminal activity, Justice Dallet maintains a ShotSpotter report could not affect the reasonable suspicion analysis because even \"[a] reliable tip will justify an investigative stop only if it creates reasonable suspicion that 'criminal activity may be afoot.'\"",
"Id., ¶71 (citing Navarette v. California, 572 U.S. 393, 401 (2014) (quoting Terry v. Ohio, 392 U.S. 1, 30 (1968))). 37 No. 2020AP878-CR residential area should not be considered as part of the totality of circumstances supporting reasonable suspicion is an extraordinary misjudgment of the risk to the community. A shooter is not entitled to \"one free shot,\" (at least when that shot signals gun violence is afoot) Justice Dallet's theory notwithstanding. Cf. Virginia v. Harris, 130 S. Ct. 10, 12 (2009) (Roberts, C.J., dissenting from denial of certiorari) (\"The effect of the rule below will be to grant drunk drivers 'one free swerve' before they can legally be pulled over by police.",
"It will be difficult for an officer to explain to the family of a motorist killed by that swerve that the police had a tip that the driver of the other car was drunk, but that they were powerless to pull him over, even for a quick check.\"). While believing a report of shots fired in a residential neighborhood deserves less \"emphasis\" in the analysis, Justice Dallet seems to give greater weight to Nimmer's furtive movements, but she does not explain why. If Justice Dallet's focus on Nimmer's \"digging around his left side\" and \"turning and walking away after seeing the police\" were all the Fourth Amendment requires for reasonable suspicion to stop a suspect, her conception of the law could ensnare many more people in the \"dragnet\" she ostensibly rejects.26 ¶58 While she may deem unreasonable the decisions of the United States Supreme Court, federal appellate courts, and this Justice Dallet's Concurrence, ¶¶67-69.",
"We do not mean to 26 suggest that furtive movements cannot, in some circumstances, be highly indicative of criminal activity. 38 No. 2020AP878-CR court regarding what is reasonable under the Fourth Amendment, our opinion is in line with precedent and Justice Dallet's analysis is an outlier. In Goodwin, Judge Richard Posner, writing for a unanimous Seventh Circuit panel, explained: [I]n Florida v. J.L., 529 U.S. 266, 273–74, 120 S.Ct. 1375, 146 L.Ed.2d 254 (2000), [the Court] said that \"we do not say, for example, that a report of a person carrying a bomb need bear the indicia of reliability we demand for a report of a person carrying a firearm before the police can constitutionally conduct a frisk.\" In other words, if the crime being investigated is grave enough, the police can stop and frisk without as much suspicion as would be required in a less serious criminal case. 449 F.3d at 769 (emphasis added). Judge Posner interpreted J.L. to permit a \"'sliding scale' approach[.]\"",
"See id. Post-J.L., the Seventh Circuit, aligned with many other courts, has relied on the inherent danger of gun violence as a factor supporting the constitutionality of a Terry stop, including in ShotSpotter cases. E.g., Rickmon, 952 F.3d at 883 (\"We have repeatedly emphasized in our decisions that the inherent danger of gun violence sets shootings apart from other criminal activity.\" (citation omitted)). Gun violence, obviously, is not the same thing as mere \"carriage of a gun,\" which is all that was reported in J.L. 529 U.S. at 272. Although the concurrence disregards this stark difference, it matters for purposes of the reasonable suspicion analysis. V. CONCLUSION ¶59 The Fourth Amendment guarantees the inherent right of the people to be secure against unreasonable searches and 39 No. 2020AP878-CR seizures.",
"We recognize \"the police are not infallible[.]\" Smith, 379 Wis. 2d 86, ¶36. In exercising their duty to investigate crime, officers sometimes violate people's constitutional rights. Id. When that happens, \"it is the duty of this court to impose consequences[.]\" Id. (citation omitted). \"Likewise, when the police abide by the rules and act reasonably, the Fourth Amendment is not violated and we must uphold convictions.\" Id. ¶60 This case represents a reasonable seizure. The officers did not violate Nimmer's Fourth Amendment right. Based on the totality of the circumstances, they reasonably suspected Nimmer was involved in criminal activity presenting an imminent threat to public safety. Nimmer's conviction stands. By the Court.——The decision of the court of appeals is reversed. 40 No.",
"2020AP878-CR.rfd ¶61 REBECCA FRANK DALLET, J. (concurring). I agree with the majority/lead opinion's1 holding that the police had particularized reasonable suspicion to stop and frisk Nimmer. I write separately, however, because I am concerned that the majority/lead opinion's analysis of certain facts may cause lower courts to read our decision too broadly. I also worry that the majority/lead opinion over-complicates its analysis by importing Fourth Amendment principles from other contexts, even though this case requires only a straightforward application of Terry.2 Therefore, I respectfully concur. ¶62 In order to justify a Terry stop, the police must have \"reasonable, articulable suspicion that criminal activity is afoot.\" Illinois v. Wardlow, 528 U.S. 119, 123 (2000).",
"Reasonable suspicion must be founded on concrete, particularized facts warranting suspicion of a certain individual, not \"'inchoate and unparticularized suspicion[s] or hunch[es].'\" Id. at 124 (quoting Terry, 392 U.S. at 27). We assess reasonable suspicion in light of the totality of the circumstances; that is, the facts officers knew at the time of 1I refer to Justice Rebecca Grassl Bradley's opinion as the \"majority/lead opinion\" because a majority of the court has not joined the opinion in its entirety.",
"Specifically, a majority did not join the portions of the opinion that respond to this concurrence (majority/lead op., ¶¶48-58 & 29 n.12), and those that contain the novel suggestion \"that the quantum of suspicion necessary to conduct an investigatory stop is lower for the type of criminal investigation that occurred here\" (majority/lead op., ¶¶28 and 39-47). See Justice Hagedorn's concurrence, ¶74. 2 Terry v. Ohio, 392 U.S. 1 (1968). 1 No. 2020AP878-CR.rfd the stop. See United States v. Cortez, 449 U.S. 411, 417-18 (1981). ¶63 This is what the police knew when they stopped Nimmer: On Saturday, June 15, 2019, they received a ShotSpotter report at 10:06 PM indicating that four shots may have been fired near the intersection of 21st and Townsend Streets on the North Side of Milwaukee. They reached that location about one minute after they received the ShotSpotter report.",
" Nimmer was walking on the sidewalk \"in very close proximity\" to that location and no one else was present. After noticing their arrival, Nimmer accelerated his pace and turned his left side away from the approaching officer (\"blading,\" in one officer's words) while \"digging around his left side with his left hand. \"3 3 These facts, with the exception of Nimmer digging around his left side, are taken from the circuit court's findings of fact after a suppression hearing, and were not challenged on appeal. The circuit court did not make a finding that Nimmer was digging around his left side. Nonetheless, it was a part of one of the officers' uncontroverted testimony at the suppression hearing, and is therefore appropriate to consider in the reasonable-suspicion analysis. See State v. McGill, 2000 WI 38, ¶24, 234 Wis. 2d 560, 609 N.W.2d 795. It appears from testimony at the suppression hearing that there is body-camera footage of the officers' encounter with Nimmer. Although this footage might have been useful in determining what happened, it was not introduced at the suppression hearing or otherwise made a part of the record. 2 No.",
"2020AP878-CR.rfd Relying on these facts, officers stopped Nimmer, searched him, and found a handgun in his left waistband. ¶64 Although the majority/lead opinion correctly concludes that officers had particularized reasonable suspicion to stop Nimmer, its analysis places too much weight on some of these facts, including the residential setting. To be sure, the residential setting is part of the totality of the circumstances informing our reasonable-suspicion analysis. But the possibility that a crime has been committed in a certain neighborhood doesn't cast suspicion over everyone there. See United States v. Bohman, 683 F.3d 861, 864 (7th Cir. 2012) (the \"mere suspicion of illegal activity at a particular place is not enough to transfer that suspicion to anyone\" nearby). Moreover, there is nothing especially suspicious about finding someone alone on a residential street just after 10:00 PM on a Saturday night in the summertime.4 See id. In this respect, Nimmer's case is unlike many of those cited by the majority/lead opinion, where courts held that the police had reasonable suspicion to stop the only people they found at the scene of reported gunfire late at night, in an alleyway or dead-end street where shots were heard recently, or both. See, e.g., United States v. Jones, 1 F.4th 50, 51 (D.C. Cir.",
"2021) (reasonable suspicion to stop the only person on the street walking quickly away from the location of a late-night ShotSpotter alert and reaching for his waistband); United States v. Rickmon, 952 F.3d 876, 882-84 (7th Indeed, although the officers didn't know it at the time, 4 Nimmer was walking near his house when the officers arrived. 3 No. 2020AP878-CR.rfd Cir. 2020) (reasonable suspicion to stop the only car driving down a two-block dead-end street away from the location of two ShotSpotter reports and two 9-1-1 calls at 4:45 AM); Funderburk v. United States, 260 A.3d 652, 660-61 (D.C. 2021) (reasonable suspicion to stop four people in an alleyway at 2:20 AM on a weeknight after officers heard gunshots). Thus, even though the officers didn't have to rule out all innocent explanations before stopping Nimmer, they also could not assume that Nimmer was responsible for the reported gunshots simply because he was the only person they saw when they showed up in his neighborhood. See State v. Genous, 2021 WI 50, ¶8, 397 Wis. 2d 293, 961 N.W.2d 41.",
"¶65 The majority/lead opinion similarly puts too much emphasis on the officers' reliance on ShotSpotter, stressing both Nimmer's counsel's concession that it is reliable and the officers' quick response to the system's report. Majority/lead op., ¶¶4, 29-30. But when it comes to assessing whether the police had reasonable suspicion that a particular person may 4 No. 2020AP878-CR.rfd have fired the shots, ShotSpotter has limitations.5 A ShotSpotter report doesn't tell the police whether there is one shooter or several, what those individuals look like, what they are wearing, whether they remained on the scene or fled immediately, whether they got into a car or left on foot, or even if they were indoors or outdoors.",
"All a ShotSpotter report tells the police is that shots may have been fired near a particular place; it doesn't provide reasonable suspicion that any particular person fired them. See Wardlow, 528 U.S. at 124. Obviously, this is not to say that the police shouldn't swiftly investigate a ShotSpotter alert in a residential neighborhood; only that they do so with full knowledge of the system's limitations. Despite counsel's concession that ShotSpotter is reliable, 5 there are good reasons to doubt its reliability and to be concerned about the other Fourth Amendment issues raised by the technology.",
"For example, an exhaustive review of the Chicago Police Department's use of ShotSpotter revealed that in more than 90% of cases where the police responded to a ShotSpotter report, they found no evidence of a gun-related crime. See City of Chicago Office of Inspector General, The Chicago Police Department's Use of ShotSpotter Technology, at 2-3 (Aug. 2021), available at https://igchicago.org/wp-content/uploads/2021/08/Ch icago-Police-Departments-Use-of-ShotSpotter-Technology.pdf. Additionally, the report found that officers were, in some cases, using the total number of ShotSpotter reports in a given area as a reason to conduct more investigatory stops and pat- downs.",
"See id. at 19. Another study found that ShotSpotter has no significant impact in reducing gun crimes. See generally Mitchell L. Doucette, et al., Impact of ShotSpotter Technology on Firearm Homicides and Arrests Among Large Metropolitan Counties: A Longitudinal Analysis, 1999–2016, 98 J. Urban Health 609 (2021). Nevertheless, because Nimmer's counsel did not challenge ShotSpotter's reliability or raise any of these other issues, I leave them for another day. 5 No. 2020AP878-CR.rfd ¶66 The majority/lead opinion's analysis of the officers' response time also rests on a consequential assumption. The record doesn't reveal how much time passed between the time shots were fired and when the officers arrived on the scene; only how quickly the officers responded after receiving the ShotSpotter alert from dispatch. Before a ShotSpotter report reaches the officers, a person at ShotSpotter's offices in California listens to a recording flagged by the system and decides if it sounds like gunshots. Once that person confirms the sound is likely gunfire, then police dispatch is alerted, which in turn alerts nearby officers. Thus, even though officers arrived at 21st and Townsend one minute after receiving the report from a dispatcher, that does not mean they arrived within one minute of shots being fired.",
"This is not a trivial issue; it may be the difference between whether or not an officer's suspicion of a person on the scene is particularized and reasonable.6 ¶67 No matter how accurate ShotSpotter is or how quickly officers respond to a ShotSpotter alert, it cannot be used as a dragnet to justify warrantless searches of everyone the police This timing difference is what distinguishes Nimmer's case 6 from those relied on by the majority/lead opinion in which officers responded within seconds to the sound of gunshots they heard. See, e.g., State v. Hairston, 126 N.E.3d 1132, 1136-37 (Ohio 2019) (reasonable suspicion to stop the only person officers saw near a school after hearing shots 30 to 60 seconds before); State v. Tally-Clayborne, No.",
"2016AP1912-CR, unpublished slip op., ¶10 (Wis. Ct. App. Oct. 17, 2017) (reasonable suspicion to stop a person reaching for his waistband and walking away from an area where officers heard shooting less than thirty seconds before). 6 No. 2020AP878-CR.rfd find near a recently reported gunshot.7 See Bohman, 683 F.3d at 864 (explaining that suspecting a crime occurred in a particular place does not mean that everyone leaving that place is suspicious). At its best, ShotSpotter gives officers only a reason to go to a particular place, but it's what they find there that is most relevant to the analysis of whether they had particularized, reasonable suspicion.",
"See Genous, 397 Wis. 2d 293, ¶8 (\"Reasonable suspicion must be supported by specific and articulable facts.\"). ¶68 Collectively, the facts the officers observed, together with the ShotSpotter alert, are sufficient to establish reasonable suspicion——even though each fact alone would not clear that bar. See id., ¶9. When the officers arrived at the location of the ShotSpotter alert, Nimmer saw their marked squad car and started walking faster. When one of the officers got out of the car and started to walk toward him, Nimmer turned the left side of his body away and started digging around his left 7 This is why the circuit court was wrong to suggest that \"anyone that [the police] encountered within a minute or two of receiving the [ShotSpotter] alert should have been investigated if they were within a couple of blocks of the alleged shots being fired.\" The U.S. Supreme Court has emphasized, however, that simply being present \"in an area of expected criminal activity, standing alone, is not enough to support a reasonable, particularized suspicion that the person is committing a crime.\"",
"Wardlow, 528 U.S. at 124. The reason for that is simple: Knowledge that someone committed a crime in a particular place is not a particularized reason to suspect that everyone at or near that place committed a crime. To conclude otherwise would undermine the central purpose of the Fourth Amendment, which is prohibiting general warrants that grant the police the \"unchecked power\" to search anywhere for anyone or any thing. See State ex rel.",
"Two Unnamed Petitioners v. Peterson, 2015 WI 85, ¶90, 363 Wis. 2d 1, 866 N.W.2d 165. 7 No. 2020AP878-CR.rfd side with his left hand. As the court of appeals rightly explained, turning and walking away after seeing the police is not enough to give rise to reasonable suspicion. See State v. Nimmer, No. 2020AP878-CR, unpublished slip op., ¶¶16-17, 19-20 (Wis. Ct. App. Dec. 15, 2020). Absent reasonable suspicion or a lawful order to the contrary, people are free to walk (even quickly) away from the police officers. See State v. Young, 2006 WI 98, ¶73, 294 Wis. 2d 1, 717 N.W.2d 729. And law- abiding citizens may not want to interact with the police for all kinds of reasons. The fact that Nimmer turned his body away from the officers does not make his walking away suspicious. After all, \"how does a person walk away from another (as [Nimmer] had the right to do) without turning his . .",
". body to some degree?\" See State v. Pugh, 2013 WI App 12, ¶12, 345 Wis. 2d 832, 826 N.W.2d 418. Calling Nimmer's turn \"blading,\" as an officer did in this case, \"adds nothing to the calculus except a false patina of objectivity.\" Id. ¶69 The totality of the circumstances also includes the fact, undisputed yet unaddressed by the court of appeals, that while Nimmer was walking away from the police and turning his body, he was also \"digging\" around his left side. Of course, \"many folks, most innocent of any nefarious purpose, . . . occasionally pat the outside of their clothing to ensure that they have not lost their possessions.\" State v. Gordon, 2014 WI App 44, ¶17, 353 Wis. 2d 468, 846 N.W.2d 483. But an isolated pat of the pants pocket or touch of the waistband is not the same thing as \"digging around\" one's left 8 No.",
"2020AP878-CR.rfd side while walking quickly away from the police in a place where officers had reason to believe shots were recently fired. Cf. State v. Lewis, No. 2017AP234-CR, unpublished slip op., ¶¶7-8 (Wis. Ct. App. July 25, 2017) (concluding that there was no reasonable suspicion to stop someone who \"was not looking over his shoulder for police\" and did not match the description of a suspect just because he was \"walking in a high crime area\" shortly after a report of shots fired and \"touched his waistband\"). Thus, despite my differences with parts of the majority/lead opinion's analysis, I agree that the totality of these circumstances meets the Terry threshold. ¶70 That straightforward application of Terry is all that's needed to resolve this case. The majority/lead opinion, however, unnecessarily goes further, discussing how the type of crime being investigated may affect the Terry analysis.",
"At times, that discussion seems to endorse a \"sliding-scale approach\" to reasonable suspicion that the Seventh Circuit cobbled together from Fourth Amendment principles in dissimilar contexts, such as traffic stops, dog-sniff drug searches, and highway roadblocks. See, e.g., United States v. Goodwin, 449 F.3d 766, 769-70 (7th Cir. 2006). The U.S. Supreme Court has admonished courts against taking such a mix-and-match approach, even when applying general Fourth Amendment principles. See Illinois v. Lidster, 540 U.S. 419, 424 (2004). And we have never adopted the Seventh Circuit's approach, likely because it is an awkward fit with Terry. After all, Terry already \"responds to\" the dangers of firearms and \"the serious threat 9 No. 2020AP878-CR.rfd that armed criminals pose to public safety\" by authorizing limited searches and seizures upon less than probable cause. See Florida v.",
"J.L., 529 U.S. 266, 272 (2000). ¶71 The majority/lead opinion gets similarly sidetracked by focusing on cases that have relaxed the usual corroboration requirements for anonymous tips when the police are responding to a potential emergency. See majority/lead op., ¶¶39, 53-58 & n.24-25. But corroboration is not an issue here, and even if it were, the same Terry reasonable-suspicion standard would apply. See Navarette v. California, 572 U.S. 393, 401 (2014) (\"[A] reliable tip will justify an investigative stop only if it creates reasonable suspicion that 'criminal activity may be afoot.'\" (quoting Terry, 392 U.S. at 30)). ¶72 Because a standard Terry analysis resolves this case, I would stop there. Accordingly, I concur with the majority/lead opinion's ultimate conclusion that the officers had reasonable suspicion to stop Nimmer. I emphasize, though, that the totality of the circumstances in every case will be unique and that lower courts should not give too much weight to any individual fact. ¶73 I am authorized to state that Justices ANN WALSH BRADLEY and JILL J. KAROFSKY join this concurrence. 10 No. 2020AP878-CR.bh ¶74 BRIAN HAGEDORN, J. (concurring).",
"I agree with the court's determination that reasonable suspicion supported the stop. However, portions of the court's opinion go farther than necessary. In particular, the opinion suggests——for what appears to be the first time in the Wisconsin reports——that the quantum of suspicion necessary to conduct an investigatory stop is lower for the type of criminal investigation that occurred here. I do not believe this issue was developed in a sufficiently meaningful way for me to opine on it, and resolving it is unnecessary to decide this case. Therefore, I concur and join the court's opinion only in part.1 1 I join the opinion except for ¶28, ¶29 n.12, and ¶¶39-58. 1 No. 2020AP878-CR.bh 1"
] | https://www.courtlistener.com/api/rest/v3/opinions/6352825/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
b"<html>\n<title> - OVERSIGHT OF THE ENVIRONMENTAL PROTECTION AGENCY'S PROGRESS IN IMPLEMENTING INSPECTOR GENERAL AND GOVERNMENT ACCOUNTABILITY OFFICE RECOMMENDATIONS</title>\n<body><pre>[Senate Hearing 114-306]\n[From the U.S. Government Publishing Office]\n\n\n\n\n S. Hrg. 114-306\n \n OVERSIGHT OF THE ENVIRONMENTAL PROTECTION AGENCY'S PROGRESS IN \n IMPLEMENTING INSPECTOR GENERAL AND GOVERNMENT ACCOUNTABILITY OFFICE \n RECOMMENDATIONS\n\n=======================================================================\n\n HEARING\n\n before the\n\n\n SUBCOMMITTEE ON SUPERFUND, WASTE MANAGEMENT, AND REGULATORY OVERSIGHT\n\n of the\n\n COMMITTEE ON\n ENVIRONMENT AND PUBLIC WORKS\n UNITED STATES SENATE\n\n ONE HUNDRED FOURTEENTH CONGRESS\n\n SECOND SESSION\n\n __________\n\n JUNE 14, 2016\n\n __________\n\n Printed for the use of the Committee on Environment and Public Works\n \n \n \n \n \n[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] \n\n\n\n\n\n\n\n Available via the World Wide Web: http://www.gpo.gov/fdsys\n \n \n \n \n _________ \n\n U.S. GOVERNMENT PUBLISHING OFFICE\n \n 20-773 PDF WASHINGTON : 2016 \n____________________________________________________________________\n For sale by the Superintendent of Documents, U.S. Government Publishing Office,\nInternet:bookstore.gpo.gov. Phone:toll free (866)512-1800;DC area (202)512-1800\n Fax:(202) 512-2104 Mail:Stop IDCC,Washington,DC 20402-001 \n \n \n \n \n COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS\n \n\n ONE HUNDRED FOURTEENTH CONGRESS\n SECOND SESSION\n\n JAMES M. INHOFE, Oklahoma, Chairman\nDAVID VITTER, Louisiana BARBARA BOXER, California\nJOHN BARRASSO, Wyoming THOMAS R. CARPER, Delaware\nSHELLEY MOORE CAPITO, West Virginia BENJAMIN L. CARDIN, Maryland\nMIKE CRAPO, Idaho BERNARD SANDERS, Vermont\nJOHN BOOZMAN, Arkansas SHELDON WHITEHOUSE, Rhode Island\nJEFF SESSIONS, Alabama JEFF MERKLEY, Oregon\nROGER WICKER, Mississippi KIRSTEN GILLIBRAND, New York\nDEB FISCHER, Nebraska CORY A. BOOKER, New Jersey\nMIKE ROUNDS, South Dakota EDWARD J. MARKEY, Massachusetts\nDAN SULLIVAN, Alaska\n\n Ryan Jackson, Majority Staff Director\n Bettina Poirier, Democratic Staff Director\n ---------- \n\n Subcommittee on Superfund, Waste Management, and Regulatory Oversight\n\n MIKE ROUNDS, South Dakota Chairman\nDAVID VITTER, Louisiana EDWARD J. MARKEY, Massachusetts\nMIKE CRAPO, Idaho THOMAS R. CARPER, Delaware\nJOHN BOOZMAN, Arkansas JEFF MERKLEY, Oregon\nDAN SULLIVAN, Alaska CORY A. BOOKER, New Jersey\nJAMES M. INHOFE, Oklahoma (ex BARBARA BOXER, California(ex \n officio) officio)\n \n \n \n \n \n C O N T E N T S\n\n ---------- \n Page\n\n JUNE 14, 2016\n OPENING STATEMENTS\n\nRounds, Hon. Mike., U.S. Senator from the State of South Dakota.. 1\nMarkey, Hon. Edward J., U.S. Senator from the State of \n Massachusetts.................................................. 3\nInhofe, James M., U.S. Senator from the State of Oklahoma........ 69\n\n WITNESSES\n\nLarsen, Alan, Counsel to the Inspector General, Office of \n Inspector General, U.S. Environmental Protection Agency and \n U.S. Chemical Safety And Hazard Investigation Safety Board..... 4\n Prepared statement........................................... 6\n Responses to additional questions from Senator Inhofe........ 12\n Response to an additional question from Senator Sullivan..... 19\nGomez, Alfredo, Director, Natural Resources and Environment Team, \n U.S. Government Accountability Office.......................... 20\n Prepared statement........................................... 22\nResponses to additional questions from:\n Inhofe....................................................... 54\n Sullivan..................................................... 60\n\n\n OVERSIGHT OF THE ENVIRONMENTAL PROTECTION AGENCY'S PROGRESS IN \n IMPLEMENTING INSPECTOR GENERAL AND GOVERNMENT ACCOUNTABILITY OFFICE \n RECOMMENDATIONS\n\n ---------- \n\n\n TUESDAY, JUNE 14, 2016\n\n U.S. SENATE\n Committee on Environment and Public Works,\nSubcommittee on Superfund, Waste Management, and Regulatory \n Oversight\n Washington, DC.\n The committee met, pursuant to notice, at 3:05 p.m. in room \n406, Dirksen Senate Office Building, Hon. Mike Rounds (chairman \nof the subcommittee) presiding.\n Present: Senators Rounds, Markey, Crapo, Boozman and \nInhofe.\n\n OPENING STATEMENT OF HON. MIKE ROUNDS, \n U.S. SENATOR FROM THE STATE OF SOUTH DAKOTA\n\n Senator Rounds. The Environment and Public Works \nSubcommittee on Superfund, Waste Management, and Regulatory \nOversight is meeting today to conduct a hearing entitled \nOversight of the Environmental Protection Agency's Progress in \nImplementing Inspector General and Government Accountability \nOffice Recommendations.\n Approximately 1 year ago we held our first subcommittee \nhearing with Inspector General Arthur Elkins of the \nEnvironmental Protection Agency, who testified about his \noffice's work in conducting audits and investigations related \nto EPA agency actions and programs. Since then we have held \nhearings conducting oversight on various aspects of the EPA \nrulemaking process to make certain the regulations the EPA \nimplements are promulgated in an open, transparent process with \nadequate public participation.\n Unfortunately, we have found this is often not the case. \nThe GAO is an independent, non-partisan agency that prepares \nreports that are either mandated by public laws or committee \nreports, or at the request of Congress. They provide \ncomprehensive audits examining the economy and the efficiency \nof government operations.\n The Office of Inspector General reports to both the EPA and \nCongress regarding any problems and deficiencies relating to \nthe administration of the Agency's programs and operations, and \nalso serves as the investigative arm of the EPA, examining \npossible criminal or civil violations by the Agency. These \noffices conduct Agency oversight to determine whether Federal \nfunds are being spent efficiently and effectively, the Agency \nis being managed property, and to make certain that Government \nprograms and policies are meeting their objectives in an open, \ntransparent manner, and are complying with the applicable \nstatutes when promulgating regulations.\n In addition to conducting their own investigations, the GAO \nand OIG make recommendations to the EPA that, when successfully \nimplemented in a timely fashion, can be effective at correcting \nmismanagement and holding the EPA accountable in properly \nfulfilling its mission and responsibly managing taxpayer \ndollars.\n The GAO and the IG prepare regular reports detailing EPA's \nprogress in implementing these recommendations. While both \noffices track the EPA's implementation of these corrective \nactions for several years after the recommendation is made, \ntestimony today reveals that the EPA is slow to implement \nrecommendations and there may be a need for these offices to do \nmore to followup on open recommendations.\n When the EPA does not implement these recommendations or \ndelays their implementation while continuing to conduct \nbusiness as usual, the mismanagement at the Agency continues \nand taxpayer dollars are improperly managed. Most alarmingly, \nthe EPA continues to promulgate regulations that impose huge \ncosts on the U.S. economy and American families, while not \nusing proper safeguards.\n In the past year alone, the EPA has moved forward with its \nfinalizing the Waters of the U.S. Rule, the Clean Power Plan, \nand tightening ozone NAAQS. These regulations will impose \nunprecedented costs on American families and the U.S. economy. \nFurther, two of these regulations are on hold by the courts.\n When the EPA finalizes regulations through an improper \nprocess without implementing recommendations that would make \nthe process better, the result is bad regulations, and that is \nwhat we have seen from the EPA. Additionally, in the past year, \nthe EPA has made headlines with the Gold King Mine spill and \nthe Flint water crisis. Now, more than ever, we need the EPA to \nget back to its core functions rather than pursuing burdensome \nregulations based on shaky legal ground. The GAO and the OIG \nplay an important role in this.\n Our witnesses today will provide us with an update on the \nEPA's progress in implementing recommendations and help us \nconduct oversight over the EPA's process for implementing \ncorrective actions.\n I am happy to have with us today Alan Larsen, the Counsel \nto the Inspector General of the Environmental Protection \nAgency, and Alfredo Gomez, the Director of the Natural \nResources and Environmental Team of the Government \nAccountability Office.\n I would like to thank our witnesses for being with us \ntoday, and I look forward to hearing from your testimony.\n Now I would like to recognize my friend, Senator Markey, \nfor a 5-minute opening statement.\n\n OPENING STATEMENT OF HON. EDWARD J. MARKEY, \n U.S. SENATOR FROM THE STATE OF MASSACHUSETTS\n\n Senator Markey. Thank you, Mr. Chairman, and thank you for \nscheduling today's hearing.\n The Government Accountability Office and the Environmental \nProtection Agency's Office of the Inspector General are a vital \ncomponent of governmental integrity. These watchdogs must be \nindependent, non-partisan, and maintain the highest ethical \nstandards. In addition to fighting fraud, waste, and abuse of \npower, they ensure that Government works the way Congress \nintended, and in a manner that the public deserves.\n From its work uncovering nearly $100 million in wasted \nrefundable airline tickets, to probing weaknesses in aviation \nsecurity, to protecting our water supply from damage caused by \noil and gas production, GAO has provided an invaluable service \nto the American public.\n Inspectors general play an equally important role. The \nSecurities and Exchange Commission inspector general uncovered \nthe mishandling of whistleblower tips in the Madoff Ponzi \nscheme. In response, Congress passed the Dodd-Frank Act, \nbringing the most significant changes in financial regulation \nsince the Great Depression.\n At the EPA, the inspector general has raised concerns \nranging from how the EPA oversees States' implementation and \nenforcement of programs designed to protect the public from \nbacteria-contaminated beaches to how the EPA conducts proper \nlong-term monitoring of Superfund sites and ensuring that they \nare safe for reuse, to how the EPA can improve the review \nprocess for potentially harmful chemicals.\n EPA has implemented 174 GAO recommendations of the 325 made \nduring the last 10 years. When one factors in the 4-year \naverage time it takes to implement a GAO recommendation, the \nAgency has a 77 percent implementation rate. This rate is on \npar with other Federal agencies and with the 80 percent \nimplementation target for recommendations that GAO has set for \nall agencies.\n The EPA has also worked hard to close out recommendations \nfrom the inspector general. Over the past 7 years, the \ninspector general has made over 1,700 recommendations to the \nEPA. At the time of the last annual report, only 158 remained \nunimplemented. The EPA is battling diminished resources, a lack \nof authority, and program updates that are underway but \nincomplete. Those struggles are compounded by a 20 percent \ndecrease in appropriated funds and a 15 percent loss to its \nwork force since 2010.\n If we are going to expect more rapid and complete agency \nresponses to GAO and the inspector general recommendations, \nthen we must ensure that EPA has access to the resources that \nare necessary to achieve its mission. Just look at Flint, \nMichigan and our Nation's failing water infrastructure, or \nhazardous air water pollutants with health risks that have yet \nto be assessed, or even the harmful pesticides that threaten \nbee populations that are vital to our ecosystem.\n We must recognize that our responsibility in creating those \nproblems due to the prevailing dissidence between required \nfunding levels and actions that should be taken by EPA are \nnecessary to keep Americans safe. We must also combat other \nobstacles that hinder agency oversight. Both GAO and the \ninspectors general provide a crucial public service, and it is \nimperative that you are provided with all the tools you need to \ndo your job effectively.\n Now, I have been made aware of the possibility that a \nDepartment of Energy contractor who cooperated with the GAO \ninvestigation that I requested may have been fired in \nretaliation for their cooperation. We should be doing \neverything possible to enhance GAO's ability to obtain the \ninformation it needs to undertake its mission of ensuring ``the \naccountability of the Federal Government for the benefit of the \nAmerican people and protect those who help in such efforts.''\n Inspectors general's investigations can also be slowed \nwithout a review of all the critical materials. Preventing \ninvestigators from timely access to all records, documents, and \nother materials is contrary to the fundamental idea of \ntransparency that Congress intended when establishing the \ninspector general.\n I thank each of you in advance for your testimony and I \nthank you again, Mr. Chairman, for holding this hearing.\n Senator Rounds. Thank you, Senator Markey.\n Our witnesses joining us for today's hearing are Mr. Al \nLarsen, Counsel to the Inspector General, Office of Inspector \nGeneral, U.S. Environmental Protection Agency and U.S. Chemical \nSafety and Hazard Investigation Safety Board; Mr. Alfredo \nGomez, Director, Natural Resources and Environment Team, U.S. \nGovernment Accountability Office.\n Gentlemen, your written statements will be made a part of \nthe record without objection and at this time we will turn to \nboth of you. Mr. Larsen, if you would like to begin, for your \n5-minute opening statements.\n\n STATEMENT OF ALAN LARSEN, COUNSEL TO THE INSPECTOR GENERAL, \n OFFICE OF INSPECTOR GENERAL, U.S. ENVIRONMENTAL PROTECTION \nAGENCY AND U.S. CHEMICAL SAFETY AND HAZARD INVESTIGATION SAFETY \n BOARD\n\n Mr. Larsen. Good afternoon, Chairman Rounds, Ranking Member \nMarkey and members. I am Alan Larsen, counsel to the Inspector \nGeneral for the Environmental Protection Agency and the U.S. \nChemical Safety and Hazard Investigation Board. I would like to \nthank the Subcommittee for shining a spotlight on unimplemented \nOIG recommendations. I will provide an overview of what happens \nafter OIG makes a recommendation and progress to date by both \nagencies with regard to implementation.\n Most of our audit and program evaluation work is performed \nin accordance with generally accepted Government auditing \nstandards. Findings and recommendations for correcting any \ndeficiencies are issued to agency officials as part of the \nfinal report, and that is also made public.\n The impact of a recommendation may be direct cost savings \nor an improvement in program efficiency or effectiveness. A \nrecommendation may ensure the integrity of a program or result \nin other benefits.\n Once OIG issues a report, it is up to the agency to \nimplement recommendations. However, OIG staff tracks each \nrecommendation until it is fully implemented, which is a \nsignificant part of our oversight work.\n OIG lists unimplemented recommendations in our semiannual \nreports to Congress. Our most recent report cited 148 \nrecommendations unimplemented by EPA and 10 recommendations \nunimplemented by CSB. The average number of unimplemented \nrecommendations for the last seven semiannual reporting periods \nwas 144, or 133 for EPA and 11 for CSB. The numbers for the \nfirst and the most recent of those periods were virtually \nidentical: 159 and 158. In other words, overall, the agencies \nhave been implementing recommendations at the same pace that \nnew ones are being added to the list.\n Of the pending unimplemented recommendations reported for \nEPA, the time elapsed since report issuance ranges from less \nthan 1 year to more than 9 years. The age of CSB's \nunimplemented recommendations ranges from nearly 3 years to \nmore than 5 years.\n Government auditing standards require that OIG obtains the \nagency's views regarding proposed recommendations. If the \nagency agrees with the recommendations, it must provide \nintended corrective actions and estimated completion dates. \nOIG's project team assesses the agency's proposal and \ndetermines if it sufficiently meets the intent of our \nrecommendations.\n When the agency does not fully agree with OIG's findings or \nrecommendations, we note that disagreement in our report. OMB \nrequires an audit resolution process; EPA fulfills this \nrequirement via its Manual 2750, which establishes that the \nagency is responsible for ensuring that management decisions on \nOIG recommendations are implemented.\n In most cases, OIG and the agency agree on final report \nrecommendations. When there is a disagreement, we follow an \nescalating resolution process with three tiers as needed. OIG \nwould not remove a recommendation from our unimplemented list \nbased on agency refusal to act or because too much time has \npassed.\n The EPA chief financial officer and OMB managing director \nare responsible for assessing and reporting to OIG on each \nagency's progress. In turn, the OIG monitors, reviews, and \nverifies that progress. In addition, OIG conducts followup \naudits. These assignments are based on size, complexity, and \nsignificance of the issues and recommendations in the original \nreport.\n In conclusion, accomplishing the tasks I have discussed \nrequires sufficient appropriated funds from Congress. During \nthe past year, we have returned $16 for every dollar given to \nus. When OIG is unable to carry out its responsibilities \nbecause of inadequate funding, it is a net loss to the Federal \nGovernment and the American taxpayers. While I am aware that \nthis Subcommittee is not an appropriations committee, I \nrespectfully ask for any help that you can provide us in this \nregard, and we certainly appreciate your support for our work.\n Mr. Chairman, this concludes my prepared statement. I will \nbe pleased to answer any questions you or the members have.\n [The prepared statement of Mr. Larsen follows:]\n \n \n[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] \n \n \n \n \n Senator Rounds. Mr. Larsen, thank you for your testimony.\n We will now hear from Mr. Alfredo Gomez. Mr. Gomez, you may \nbegin.\n\n STATEMENT OF ALFREDO GOMEZ, DIRECTOR, NATURAL RESOURCES AND \n ENVIRONMENT TEAM, U.S. GOVERNMENT ACCOUNTABILITY OFFICE\n\n Mr. Gomez. Chairman Rounds, Ranking Member Markey, and \nmembers of the Subcommittee, good afternoon. I am pleased to be \nhere today to discuss the status of recommendations GAO has \nmade to the U.S. Environmental Protection Agency.\n As you have both noted, the mission of EPA is to protect \nhuman health and the environment. We have conducted reviews \nfocused on various aspects of EPA's programs and operations, \nand through these reviews we have made numerous recommendations \nto improve EPA's performance and the efficiency and \neffectiveness of its programs and operations.\n My statement today focuses on two main areas: first, the \nstatus of EPA's implementation of GAO's recommendations from \nfiscal years 2006 through 2015, and how these recommendations \nrelate to EPA programs and operations; and, No. 2, benefits \nrealized by EPA based on our work.\n As part of our process, we followup on recommendations we \nhave made and report their status to Congress. Agencies have a \nresponsibility to monitor and maintain accurate records on the \nstatus of our recommendations. We then followup with EPA at \nleast once a year to determine the extent to which our \nrecommendations have been implemented and the benefits that \nhave been realized. We consider a recommendation implemented \nwhen EPA has taken actions that address the issue or deficiency \nwe have identified.\n With regard to the first area on the status of GAO \nrecommendations, we found that of the 325 recommendations we \nmade EPA had implemented 174. The remaining 151 recommendations \nremain open or not implemented. For recommendations that we \nmade over a 4-year period, that is, from Fiscal Year 2006 to \n2011, EPA had implemented 77 percent. For recommendations made \nwithin the last 4 years, that is, from Fiscal Year 2012 to \n2015, EPA had implemented 17 percent.\n Experience has shown that it takes time for some \nrecommendations to be implemented. It is for this reason that \nwe actively track unaddressed or open recommendations for 4 \nyears.\n The 325 recommendations fall into six categories, such as \nEPA management and operations, water-related issues, and \nenvironmental contamination and cleanup. With regard to the 151 \nrecommendations that EPA has not yet implemented, 70 percent of \nthese recs we made in the last 4 years and mainly concern EPA \nmanagement and operations and water-related issues.\n For example, in 2014, we reported on EPA's Regulatory \nImpact Analyses, or RIAs, which are analyses of the benefits \nand costs of proposed regulations. We found that the \ninformation that EPA included and presented in the RIAs was not \nalways clear. We recommended that EPA enhance the Agency's \nreview process for RIAs to ensure that information for selected \nelements is transparent and clear, such as when discussing \nregulatory alternatives. While EPA agreed with this \nrecommendation, the recommendation remains open until we see \nevidence that EPA has taken action to enhance its review \nprocess.\n We have also identified many benefits, such as programmatic \nand process improvements based on EPA taking actions on our \nrecommendations. For example, we issued several reports on \ndrinking water and wastewater infrastructure issues. In \nparticular, we reported on the drinking water and wastewater \ninfrastructure needs of rural and small communities.\n We found that these communities face potentially \nduplicative application requirements when applying to multiple \nState and Federal programs, making it more costly and time-\nconsuming to complete the application process. We recommended \nthat EPA work with the U.S. Department of Agriculture to \ndevelop a uniform preliminary engineering report template, a \nkey step in the application process, and they have done so.\n In summary, our recommendations provide a good opportunity \nto improve the Government's fiscal position, better serve the \npublic, and make Government programs more efficient and \neffective. EPA's implementation of our recommendations will \nhelp the Agency continue to improve its performance and the \nefficiency and effectiveness of its operations.\n We will continue to work with Congress to monitor and draw \nattention to this important issue.\n Chairman Rounds, Ranking Member Markey, and members of the \nSubcommittee, that completes my statement. I would be happy to \nanswer any questions.\n [The prepared statement of Mr. Gomez follows:]\n \n \n[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] \n \n \n \n Senator Rounds. Thank you for your testimony, Mr. Gomez.\n Senators will now have 5 minutes each for questions. I will \nbegin.\n Mr. Larsen, the OIG's most recent semiannual report to \nCongress cited 148 unimplemented EPA recommendations. Your \ntestimony mentions annual followup audits, but how else does \nthe OIG work with EPA to ensure these recommendations are \nthoroughly implemented in a timely manner?\n Mr. Larsen. The Agency has the official and ultimate \nresponsibility to track and implement these recommendations, \nand they do that. We keep track, ourselves, of their progress, \nand at the end of each semiannual reporting period we compare \nwith the Agency's tracking and we make sure that we agree on \nwhat are open recommendations and what are unimplemented \nrecommendations. At that point we sometimes check back and say \nyou promised progress as of a certain date and you haven't done \nit; why is that not happening. We also will do followup audits. \nIn addition to tracking the existing recommendations, we may \nlaunch a new project to find out what is going on, why things \naren't progressing.\n Senator Rounds. Do you report your progress back to \nCongress as well, on the implementations and the followup? Is \nthere a followup on a regulation-by-regulation basis that \nCongress receives as well?\n Mr. Larsen. The primary reporting back is in the semiannual \nreport, and in that we have an appendix that report-by-report, \nrecommendation-by-recommendation indicates the status of the \nunimplemented recommendations; how far behind they are and what \nthe Agency's reason for not having made the progress is.\n Senator Rounds. Thank you.\n Mr. Gomez, the EPA has implemented 77 percent of \nrecommendations that the GAO made from 2006 to 2011, as you \nindicated, and only 17 percent of the recommendations were made \nfrom 2012 to 2015. These figures also reveal that for older \nrecommendations, from 2006 to 2011, nearly 30 percent remain \nunimplemented. What is the average amount of time the EPA takes \nto implement GAO's recommendations and why does it take years \nto implement your recommendations?\n Mr. Gomez. So, in most cases, our experience has shown that \nit takes agencies, EPA among them, about 4 years to implement \nour recs. So we make a variety of recommendations. Some of them \ndo require a little bit more time, for example, if the \nrecommendation is where EPA has to work with stakeholders, \nwhether they be other Federal agencies, State agencies, to put \ntogether different memorandums or strategies. In other cases, \nthough, where we make a recommendation, for example, that EPA \nuse existing web tools that it has to provide information to \nthe public to clarify information, in those cases we think that \nthe Agency could actually do those a lot faster than a couple \nof years.\n As I mentioned in my statement, we also track them for 4 \nyears very carefully. We have a website where you can see for \neach report the status of each recommendation, similar to what \nthe IG does. So anyone can see what the status is. We do \nencourage the agency to implement the recommendations as \nquickly as possible.\n Senator Rounds. Thank you, Mr. Gomez.\n Mr. Larsen, you indicated there was a cost-savings for the \namount of money that we spend in OIG activities versus the \nreturn. Can you elaborate on the amount of cost-savings your \noffice finds at the EPA and how you find these cost-savings and \nhow you make the recommendation?\n Mr. Larsen. Yes. What I can't do, and I am sorry to say I \nwon't be able to do, is to take an individual recommendation \nand say that one will end up saving $1 million. So we can't do \nthat. There are any number of recommendations we make that we \ndon't attempt to and are unable to assign a dollar figure to.\n So those $16 per dollar comes from the projects we do where \nthere is an identifiable dollar savings; and, as I say, many of \nthe other projects may have, I don't know, a more intangible \nbenefit, whether it is health benefits or a process savings. So \nwe don't try to establish a cost-savings where it would be a \nfanciful number.\n Senator Rounds. I understand. Thank you. My time has \nexpired.\n Senator Markey.\n Senator Markey. Thank you very much, Mr. Chairman.\n Director Gomez, for the EPA to properly evaluate and \nregulate toxic substances, it is essential that they have the \nmost up-to-date chemical and toxicity data available. One key \nrecommendation you have made is that EPA needs to improve its \nefforts to test and evaluate chemicals. To what extent will the \nrecently passed TSCA reform legislation assist EPA in \naddressing GAO's open chemical safety recommendations?\n Mr. Gomez. So we believe that some of the provisions in the \nnew TSCA law would help EPA address some of the open \nrecommendations that we have. For example, one of the \nrecommendations we made was that EPA should take steps to \nobtain more chemical toxicity and exposure information; and the \nnew TSCA legislation does enhance EPA's authority to obtain \nsuch information from chemical manufacturers and processors. So \nonce EPA takes action on those measures, we will then \nreevaluate to see if we can close those recommendations.\n Senator Markey. Thank you so much, because when we were \nworking together on a bipartisan basis on that legislation, it \nwas important, as we negotiated TSCA, that we remove the catch-\n22 that forced EPA to know a chemical was dangerous before it \ncould require safety testing to be done on that chemical. And I \nam also that EPA's new authority will help with that as well.\n Again, Director Gomez, in your testimony you stated that \nthe EPA has implemented 174 out of 325 recommendations made in \nthe last 10 years. However, GAO recognizes that recommendations \ncannot be implemented overnight and takes an average of 4 years \nto implement.\n When you look at recommendations made four or more years \nago, EPA has an implementation record that is just about equal \nto the 80 percent Government-wide average. Do you agree, \nDirector Gomez, that EPA is putting a concerted effort toward \nimplementing GAO recommendations in a manner that is similar to \nother Federal agencies?\n Mr. Gomez. So, right, EPA's average is similar to the \nagency-wide average. What we have done with EPA most recently \nwas we decided to do outreach and update twice a year because \nwe wanted to get more current information from EPA so that \nperhaps we could close more of the recommendations, or at least \njust work with them in terms of if there are some \nrecommendations where they disagree with us, so we agree to \ndisagree.\n But the recommendations for us is a pretty high bar. I \nmean, it is a recommendation that is made based on having good \nunderstanding of what is happening on the ground, what the \nrequirements are that the Agency is supposed to be doing, what \nthe reasons are as to why they are not doing that or why there \nis a deficiency. So our recommendations are fairly well \nsupported and articulated, so we want the Agency to implement \nour recommendations.\n Senator Markey. Mr. Larsen, let me come over to you. In the \nlast 7 years EPA has received over 1,700 recommendations from \nthe inspector general. Since, in the last annual report, only \n148 of those 1,700 remained unimplemented, would you agree, Mr. \nLarsen, that EPA generally does act on your recommendations in \nabout 4 years, similar to EPA's record in implementing GAO \nrecommendations?\n Mr. Larsen. Yes, Senator Markey. We don't track them \nexactly that way, but in preparation for this hearing I asked \nour staff to try to come up with that number and we came up \nwith 3.7 years on average for implementing the recommendations \nby the Agency.\n Senator Markey. So, in general, what you are saying is that \nGAO and the inspector general at the department at the EPA have \na very similar view of the speed with which EPA does respond.\n Mr. Larsen. That is correct, Senator.\n Senator Markey. And that it is in line with all other \nagencies in the Federal Government.\n Mr. Larsen. That one I can't answer. We don't know where \nthe other agencies stand, but for us it appears we are in line \nwith the GAO.\n Senator Markey. I guess the fact that we were having a \nhearing, had you had to compile that information wouldn't give \nyou enough time to then compare it to the rest of the whole \nGovernment.\n But do you agree with that, Mr. Gomez, that in general it \nis in the ballpark?\n Mr. Gomez. So that has been our experience, that \nGovernment-wide it generally takes agencies a little longer, \nand that is why we track it each year closely.\n Senator Markey. OK, beautiful. Thank you.\n Thank you, Mr. Chairman.\n Senator Rounds. Thank you.\n Chairman Inhofe.\n Senator Inhofe. Mr. Gomez, in response to a request that I \nsubmitted, the GAO issued a legal opinion on December 14th of \n2015 concerning the EPA's use of social media to promote its \nWOTUS rule. Because GAO found EPA had violated the Anti-\nDeficiency Act, the EPA was required to submit a report to the \nPresident and Congress and GAO. Now, the first thing I would \nask is, what is the status of that request?\n Mr. Gomez. So we have not received the Anti-Deficiency Act \nreport from EPA.\n Senator Inhofe. Are they making any statement that they \ndeny that this was a violation of the Anti-Deficiency Act?\n Mr. Gomez. Based on our finding, as you noted, the agencies \nare required to submit a report to Congress, to the President \nthrough OMB, and at the same time submit that report to the \ncomptroller general, who is my boss.\n Senator Inhofe. Now, do you have any idea of any kind of \ndiscussion or response to that particular one that has taken \nplace since 2015?\n Mr. Gomez. I do not, but what we can do is we can inquire \nwith EPA through our general counsel's office and get back to \nyou.\n Senator Inhofe. OK, so it would be in line for me or any \nMember of Congress to request that you get a status report on \nthat and anything that we want to release for public \nconsumption would be acceptable?\n Mr. Gomez. Yes, I can take that back.\n Senator Inhofe. All right.\n Mr. Gomez. Thank you.\n Senator Inhofe. All right, I think we should do that, \nbecause in this case this is a statute that is on the books. It \nis one that we knew this was going on at the time. It is on an \nissue, the WOTUS issue is arguably the most significant issue \nof all the over-regulations that we have, at least in my State \nof Oklahoma, and I think it is really incumbent to do that.\n Mr. Larsen, as you know, I have been a frequent requester \nof the IG investigations reviews. For instance, in response to \na request I submitted in 2011, the IG made several \nrecommendations for EPA to update its conflict of interest \npolicies and peer review process in the 2013 report. This is \nsomething that Senator Boozman has called to our attention in \nthese meetings; it is something that is significant.\n Now, I understand the EPA has reported the recommendations \nare complete, but the OIG has not conducted any formal followup \nreview to assess the adequacy of EPA actions. Does the IG plan \nto followup on EPA's actions per this report?\n Mr. Larsen. As I mentioned, we do followup reports. We are \nentering into, as we head into summer, the work plan planning \nprocess, and out of that comes our discretionary projects. I \ndon't know if that is on tap for next year for followup. I will \ncheck with our entities that do those reports and get back to \nyour staff.\n Senator Inhofe. What concerns me is if it is a case of a \ncorporation, corporations or an individual could own stock in a \ncorporation, the corporation could own two or 300 or many, many \nmore. So that could fall as a conflict of interest. When it is \nan environmentalist group of some kind, you don't have that, \nyou don't have the reams and reams.\n So I assume when you are looking at the reform of a \nconflict of interest, you are taking things like that into \nconsideration, and they are looking at it now, is that correct?\n Mr. Larsen. What I don't know is if we have a new project \nplanned in that area, and I will get back to you on whether we \ndo.\n Senator Inhofe. OK, I appreciate that.\n Mr. Gomez, July 2014, the GAO report found, among other \nthings, that the EPA does not properly consider the impact of \nits regulations on employment. The GAO recommended EPA update \nits approach to estimating employment impacts, but the EPA has \nnot done so. You have heard, if you watch what goes on in this \nCommittee, on three different occasions we have quoted \nAdministrator McCarthy when she said that there is no evidence \nthat EPA regulations have a negative impact on jobs.\n Senator Capito is sitting over here and her eyes started \nrolling around. There are some things that are so obvious it \ndoesn't take that type of a report out there.\n Now, how can McCarthy make such claims when EPA's process \nfor evaluating employment impacts remains broken?\n Mr. Gomez. So that was one of our recommendations in the \nreport also, for EPA to look closely at the information they \nwere using in calculating employment of facts, and to really \nfind more current----\n Senator Inhofe. Let me ask both of you a question. I know \nmy time has expired, but it is significant to me.\n I agree with Senator Markey when he said that both GAO and \nIG have to be independent. Now, GAO, in my eyes, is independent \nbecause there is not a relationship in that line. That isn't \nquite true with the IG because isn't the IG actually a part of \nEPA?\n Mr. Larsen. Senator, we are a part administratively, but \nthe IG and the OIG do not take direction from the \nadministrator; we report results to----\n Senator Inhofe. So you think your level of independence is \nnot impaired by that relationship?\n Mr. Larsen. That is correct.\n Senator Inhofe. Thank you, Mr. Chairman.\n Senator Rounds. Thank you.\n Senator Boozman.\n Senator Boozman. Thank you, Mr. Chairman, and thank you and \nSenator Markey for having this hearing today.\n Mr. Gomez, last year you appeared before this Committee at \na hearing examining S. 543, the Science Advisory Board Reform \nAct, which I introduced with Senator Manchin and Inhofe. At the \ntime you testified that EPA's procedures for processing \ncongressional requests to the Science Advisory Board did not \ncomply with the law. GAO subsequently issued a report with four \nspecific recommendations to ensure EPA compliance.\n Your written testimony for today's hearing indicates that \nEPA has not implemented the recommendations. The question is \nhow can EPA go a year without adopting these common sense \nrecommendations to ensure compliance with the law?\n Mr. Gomez. So, right, we made four recommendations in that \nreport and the recommendations were focused on helping to \nimprove the procedures that EPA has in place for processing \ncongressional committee requests for scientific advice from the \nScience Advisory Board; and as we understand it, as of March of \nthis year, EPA is developing a written process that would \naddress our recommendations.\n We are waiting for that process to be completed so that we \ncan then assess it and look to see if it addresses the intent \nof our recommendations. And our recommendations were very \nspecific about the process that we believe EPA should have in \nplace as it processes requests from Congress for scientific \nadvice.\n Senator Boozman. So is this a budget issue, as to why they \nhave not come forward?\n Mr. Gomez. We have not been told that is a budget issue. \nOur recommendations were about improving the process that they \nhave in place. In some cases it wasn't well documented, so we \ndon't see that it is a resource issue and they haven't said it \nis a resource issue there.\n Senator Boozman. And I guess that is an irritant of mine. \nWe hear a lot about budgets and budgets are tight, but some of \nthese things just don't get done; and, again, a year is a long \ntime.\n On the topic of the EPA Science Advisory Board, I want to \nask you about a requirement of the Fiscal Year 2016 omnibus \nthat EPA develop a policy statement on Science Advisory Board \nmembership that would incorporate the goals of increasing State \nand Tribal representation on the Science Advisory Board, as \nwell as update its conflict of interest policy similar to what \nSenator Inhofe was asking Mr. Larsen.\n Per the omnibus, EPA was to develop the policy and submit \nto the GAO again for review in March. Has EPA submitted the \nstatement to GAO?\n Mr. Gomez. EPA has not submitted that conflict of interest \nstatement to us yet. The last we had heard was that they were \nreviewing it internally and it was due to us the end of April, \nbut we have not received it yet.\n Senator Boozman. OK. So do they say the reason for the \ndelay, then?\n Mr. Gomez. Only that it is currently being reviewed by the \nEPA Office of congressional and Intergovernmental Relations.\n Senator Boozman. And, again, this is another thing that \ndoesn't seem to be driven by budget, but just simply not \ngetting things done.\n Mr. Gomez. Yes, it is not a budget issue, as we understand \nit; it is going through their process. And I know that you had \na timeframe for when it was due to GAO, and it is over that \ntimeframe.\n Senator Boozman. Thank you.\n Mr. Larsen, IG plays an important oversight role in helping \nCongress improve programs by leading efforts to cut waste, \nfraud, and abuse across Washington. In the EPA OIG semiannual \nreport to Congress, more than $6 billion was accounted for as \ninsufficient or not documented as being provided to the EPA \nbecause EPA failed to have complete and accurate data. The \nreport goes on to further describe the negative impact this has \nhad on taxpayers, public health, and natural resources.\n Can you address the findings and explain to us how the EPA \ncould mismanage $6 billion? Again, with us talking about the \nproblem of not having the resources that some of these basic \nfunctions need to get done.\n Mr. Larsen. I understand the question and I am not going to \npretend that I have the answer to each and every of the reports \nwe have. I do have in the room our assistant inspector general \nfor audit, or I can get back to you with a specific answer to \nthat, but I don't have those facts at my fingertips.\n Senator Boozman. My time is up.\n Thank you, Mr. Chairman.\n Senator Rounds. Thank you.\n Senator Boozman. But I would appreciate it if you would get \nback to us.\n Mr. Larsen. Yes, sir.\n Senator Boozman. Thank you.\n Senator Rounds. Just thinking and listening to the \ntestimony here and your responses to the questions, first of \nall, I appreciate the candid way in which you have responded. \nSecond of all, I sense the frustration that members of this \nCommittee have offered, both Senator Markey and also Chairman \nInhofe and Senator Boozman. In each case there has been a \nfrustration suggested, and I am just going to try to paraphrase \nthis and see if there isn't something that we need to do about \nit.\n Three and a half to 4 years seems like an awfully long time \nin which to expect to have these things implemented as an \naverage, regardless of whether it is with the EPA or with any \nother Federal agency. And at the same time, as Senator Inhofe \nhad suggested, there was clearly a wrongdoing, one that you \nhave pointed out and that you have asked for a response on, \nnone of which has been forthcoming at this time.\n If there was one thing that would frustrate anybody who is \nconcerned with appropriate application of law, protections, as \nSenator Markey has shared or as Senator Inhofe has indicated, a \nviolation of a law in terms of how the money was spent, justice \nthat takes that long to come through seems to me to be, as they \nwould suggest, justice denied.\n I am just going to ask this, and, Senator Markey, I \nunderstand that you have another meeting that you have to be \nat, but I would give you, as Ranking Member, the opportunity to \nrespond as well.\n Gentlemen, is there something that we should be doing here \nin order to expedite responses? Is there something we can do to \nactually get a more expedited response from not just EPA, but \nfrom other agencies as well, when those recommendations are \nthere and clearly there is a time delay?\n Mr. Larsen. Senator, this is going to sound more \nbureaucratic than I intend it to be, but the structure that was \ncreated for the IGs allows us to make recommendations. We \ncannot order an agency to do anything. And it is left to them \nto decide what to do. Part of the independence that I was \ndiscussing with Senator Inhofe is that we report to the agency. \nWe also report to the Congress. If the agency chooses not to, \nor is unable to, act, Congress is also aware of the \nrecommendations we have made; and the way the process works, \nthen, if Congress has the ability, if it chooses, to waggle its \nfinger or take more strong action.\n Senator Rounds. Thank you.\n Mr. Gomez.\n Mr. Gomez. So our recommendations are exactly that, \nrecommendations; they are not binding. I think what you are \ndoing now is exactly what we would like, is to bring more \nattention to the recommendations. As I noted also, our reports \nare public. Anyone can go and look at the recommendations and \nlook at the status.\n And I have to tell you that we get a lot of inquiries from \nlots of people asking what is the status of recommendations, so \nEPA is well aware of that; and that is one of the reasons why \nwe have agreed to update the recommendations twice a year, so \nthat we can try and bring closure to them or at least \narticulate why there is disagreement in some cases.\n Senator Rounds. Thank you.\n Gentlemen, once again I want to thank you for your \ntestimony and just for taking the time today to be with us and \nparticipate in this hearing.\n I would also like to thank Senator Markey, my colleague, \nSenator Boozman, Senator Inhofe for being here.\n The record will be open for 2 weeks, which brings us to \nTuesday, June 28th, and, with that, this hearing is adjourned. \nThank you.\n [Whereupon, at 3:50 p.m. the subcommittee was adjourned.]\n [Additional material submitted for the record follows.]\n\n Statement of Hon. James M. Inhofe, U.S. Senator \n from the State of Oklahoma\n\n Thank you Subcommittee Chairman Rounds for convening \ntoday's oversight hearing, and thank you to our witnesses from \nthe Government Accountability Office (GAO) and the \nEnvironmental Protection Agency's (EPA) Office of Inspector \nGeneral (OIG) for being here to testify.\n Today's hearing is important because Members of Congress \nare charged with conducting oversight over executive agencies, \nsuch as the EPA, to ensure compliance with their statutory \nauthority and mission in a manner free of waste, fraud, and \nabuse. EPA watchdogs such as the GAO and the OIG play a \ncritical role in partnership with Congress to fulfill this \noversight function.\n I have long valued this partnership as a frequent requester \nof both GAO and EPA OIG reviews and investigations, which in \nmany cases result in recommendations for the Agency to enhance \nperformance, create efficiencies, and safeguard taxpayer \ndollars. However, as testimony today reveals, EPA has been slow \nto implement OIG and GAO recommendations. For instance, GAO \nwill testify that nearly thirty percent of EPA recommendations \nmade between 2006 and 2011 remain unimplemented, and only 17 \npercent of GAO's recommendations from 2012 to 2015 have been \nimplemented. The EPA OIG's testimony similarly highlights a \nsignificant number of open recommendations; most recently \nreporting 148 unimplemented EPA recommendations, 89 of which \nare more than a year old.\n Among those unimplemented OIG and GAO recommendations, \nseveral are of great interest to the Committee's oversight \nefforts. For example, EPA has yet to implement various GAO \nrecommendations regarding the Agency's procedures for \nprocessing congressional requests for scientific advice by the \nAgency's Science Advisory Board. Further, EPA has yet to \nimplement nearly 2-year-old recommendations from GAO to improve \nits regulatory impact analyses, including updates to the way \nEPA estimates the impact its regulations have on employment. \nFinally, EPA still needs to implement various recommendations \nfrom the OIG to ensure its hiring process is sound in light of \nthe John Beale scandal and the Agency's recent mass hiring.\n These outstanding recommendations are concerning as both \nthe EPA OIG and GAO are in the midst of substantial reviews and \ninvestigations into the Animas River spill at Gold King Mine \nand the drinking water crisis in Flint, Michigan. Subsequent \nGAO and OIG reports will undoubtedly include numerous \nrecommendations for EPA, yet based on testimony today I have \nlittle confidence EPA will fully and swiftly implement these \nrecommendations.\n Indeed, today's hearing raises questions about why EPA has \nbeen late to implementing many common-sense recommendations. I \nhave been concerned the EPA has been deviating from its core \nmission and focusing on pushing new regulatory actions that are \npolitical priorities of President Obama without new authority \nfrom Congress, as is the case with the Clean Power Plan and \nWaters of the U.S. rule, which have both been halted by the \nCourts pending judicial review.\n For these reasons, we need to engage with EPA watchdogs \nlike GAO and the OIG to ensure they are effective and hold EPA \naccountable. Today is another step toward continuing that \nrelationship.\n I look forward to hearing from our witnesses today who will \nshare perspective on EPA's major challenges and how the Agency \nis implementing GAO and OIG recommendations.\n I ask that my full statement be entered into the record. \nThank you.\n\n <all>\n</pre></body></html>\n" | 2016-06-14 | [
"b\"<html>\\n<title> - OVERSIGHT OF THE ENVIRONMENTAL PROTECTION AGENCY'S PROGRESS IN IMPLEMENTING INSPECTOR GENERAL AND GOVERNMENT ACCOUNTABILITY OFFICE RECOMMENDATIONS</title>\\n<body><pre>[Senate Hearing 114-306]\\n[From the U.S. Government Publishing Office]\\n\\n\\n\\n\\n S. Hrg. 114-306\\n \\n OVERSIGHT OF THE ENVIRONMENTAL PROTECTION AGENCY'S PROGRESS IN \\n IMPLEMENTING INSPECTOR GENERAL AND GOVERNMENT ACCOUNTABILITY OFFICE \\n RECOMMENDATIONS\\n\\n=======================================================================\\n\\n HEARING\\n\\n before the\\n\\n\\n SUBCOMMITTEE ON SUPERFUND, WASTE MANAGEMENT, AND REGULATORY OVERSIGHT\\n\\n of the\\n\\n COMMITTEE ON\\n ENVIRONMENT AND PUBLIC WORKS\\n UNITED STATES SENATE\\n\\n ONE HUNDRED FOURTEENTH CONGRESS\\n\\n SECOND SESSION\\n\\n __________\\n\\n JUNE 14, 2016\\n\\n __________\\n\\n Printed for the use of the Committee on Environment and Public Works\\n \\n \\n \\n \\n \\n[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] \\n\\n\\n\\n\\n\\n\\n\\n Available via the World Wide Web: http://www.gpo.gov/fdsys\\n \\n \\n \\n \\n _________ \\n\\n U.S. GOVERNMENT PUBLISHING OFFICE\\n \\n 20-773 PDF WASHINGTON : 2016 \\n____________________________________________________________________\\n For sale by the Superintendent of Documents, U.S. Government Publishing Office,\\nInternet:bookstore.gpo.gov.",
"Phone:toll free (866)512-1800;DC area (202)512-1800\\n Fax:(202) 512-2104 Mail:Stop IDCC,Washington,DC 20402-001 \\n \\n \\n \\n \\n COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS\\n \\n\\n ONE HUNDRED FOURTEENTH CONGRESS\\n SECOND SESSION\\n\\n JAMES M. INHOFE, Oklahoma, Chairman\\nDAVID VITTER, Louisiana BARBARA BOXER, California\\nJOHN BARRASSO, Wyoming THOMAS R. CARPER, Delaware\\nSHELLEY MOORE CAPITO, West Virginia BENJAMIN L. CARDIN, Maryland\\nMIKE CRAPO, Idaho BERNARD SANDERS, Vermont\\nJOHN BOOZMAN, Arkansas SHELDON WHITEHOUSE, Rhode Island\\nJEFF SESSIONS, Alabama JEFF MERKLEY, Oregon\\nROGER WICKER, Mississippi KIRSTEN GILLIBRAND, New York\\nDEB FISCHER, Nebraska CORY A. BOOKER, New Jersey\\nMIKE ROUNDS, South Dakota EDWARD J. MARKEY, Massachusetts\\nDAN SULLIVAN, Alaska\\n\\n Ryan Jackson, Majority Staff Director\\n Bettina Poirier, Democratic Staff Director\\n ---------- \\n\\n Subcommittee on Superfund, Waste Management, and Regulatory Oversight\\n\\n MIKE ROUNDS, South Dakota Chairman\\nDAVID VITTER, Louisiana EDWARD J. MARKEY, Massachusetts\\nMIKE CRAPO, Idaho THOMAS R. CARPER, Delaware\\nJOHN BOOZMAN, Arkansas JEFF MERKLEY, Oregon\\nDAN SULLIVAN, Alaska CORY A. BOOKER, New Jersey\\nJAMES M. INHOFE, Oklahoma (ex BARBARA BOXER, California(ex \\n officio) officio)\\n \\n \\n \\n \\n \\n C O N T E N T S\\n\\n ---------- \\n Page\\n\\n JUNE 14, 2016\\n OPENING STATEMENTS\\n\\nRounds, Hon. Mike., U.S.",
"Senator from the State of South Dakota.. 1\\nMarkey, Hon. Edward J., U.S. Senator from the State of \\n Massachusetts.................................................. 3\\nInhofe, James M., U.S. Senator from the State of Oklahoma........ 69\\n\\n WITNESSES\\n\\nLarsen, Alan, Counsel to the Inspector General, Office of \\n Inspector General, U.S. Environmental Protection Agency and \\n U.S. Chemical Safety And Hazard Investigation Safety Board..... 4\\n Prepared statement........................................... 6\\n Responses to additional questions from Senator Inhofe........ 12\\n Response to an additional question from Senator Sullivan..... 19\\nGomez, Alfredo, Director, Natural Resources and Environment Team, \\n U.S. Government Accountability Office.......................... 20\\n Prepared statement........................................... 22\\nResponses to additional questions from:\\n Inhofe....................................................... 54\\n Sullivan..................................................... 60\\n\\n\\n OVERSIGHT OF THE ENVIRONMENTAL PROTECTION AGENCY'S PROGRESS IN \\n IMPLEMENTING INSPECTOR GENERAL AND GOVERNMENT ACCOUNTABILITY OFFICE \\n RECOMMENDATIONS\\n\\n ---------- \\n\\n\\n TUESDAY, JUNE 14, 2016\\n\\n U.S. SENATE\\n Committee on Environment and Public Works,\\nSubcommittee on Superfund, Waste Management, and Regulatory \\n Oversight\\n Washington, DC.\\n The committee met, pursuant to notice, at 3:05 p.m. in room \\n406, Dirksen Senate Office Building, Hon. Mike Rounds (chairman \\nof the subcommittee) presiding.\\n Present: Senators Rounds, Markey, Crapo, Boozman and \\nInhofe.\\n\\n OPENING STATEMENT OF HON.",
"MIKE ROUNDS, \\n U.S. SENATOR FROM THE STATE OF SOUTH DAKOTA\\n\\n Senator Rounds. The Environment and Public Works \\nSubcommittee on Superfund, Waste Management, and Regulatory \\nOversight is meeting today to conduct a hearing entitled \\nOversight of the Environmental Protection Agency's Progress in \\nImplementing Inspector General and Government Accountability \\nOffice Recommendations.\\n Approximately 1 year ago we held our first subcommittee \\nhearing with Inspector General Arthur Elkins of the \\nEnvironmental Protection Agency, who testified about his \\noffice's work in conducting audits and investigations related \\nto EPA agency actions and programs. Since then we have held \\nhearings conducting oversight on various aspects of the EPA \\nrulemaking process to make certain the regulations the EPA \\nimplements are promulgated in an open, transparent process with \\nadequate public participation.\\n Unfortunately, we have found this is often not the case. \\nThe GAO is an independent, non-partisan agency that prepares \\nreports that are either mandated by public laws or committee \\nreports, or at the request of Congress. They provide \\ncomprehensive audits examining the economy and the efficiency \\nof government operations.\\n The Office of Inspector General reports to both the EPA and \\nCongress regarding any problems and deficiencies relating to \\nthe administration of the Agency's programs and operations, and \\nalso serves as the investigative arm of the EPA, examining \\npossible criminal or civil violations by the Agency. These \\noffices conduct Agency oversight to determine whether Federal \\nfunds are being spent efficiently and effectively, the Agency \\nis being managed property, and to make certain that Government \\nprograms and policies are meeting their objectives in an open, \\ntransparent manner, and are complying with the applicable \\nstatutes when promulgating regulations.\\n In addition to conducting their own investigations, the GAO \\nand OIG make recommendations to the EPA that, when successfully \\nimplemented in a timely fashion, can be effective at correcting \\nmismanagement and holding the EPA accountable in properly \\nfulfilling its mission and responsibly managing taxpayer \\ndollars.\\n The GAO and the IG prepare regular reports detailing EPA's \\nprogress in implementing these recommendations.",
"While both \\noffices track the EPA's implementation of these corrective \\nactions for several years after the recommendation is made, \\ntestimony today reveals that the EPA is slow to implement \\nrecommendations and there may be a need for these offices to do \\nmore to followup on open recommendations.\\n When the EPA does not implement these recommendations or \\ndelays their implementation while continuing to conduct \\nbusiness as usual, the mismanagement at the Agency continues \\nand taxpayer dollars are improperly managed. Most alarmingly, \\nthe EPA continues to promulgate regulations that impose huge \\ncosts on the U.S. economy and American families, while not \\nusing proper safeguards.\\n In the past year alone, the EPA has moved forward with its \\nfinalizing the Waters of the U.S. Rule, the Clean Power Plan, \\nand tightening ozone NAAQS.",
"These regulations will impose \\nunprecedented costs on American families and the U.S. economy. \\nFurther, two of these regulations are on hold by the courts.\\n When the EPA finalizes regulations through an improper \\nprocess without implementing recommendations that would make \\nthe process better, the result is bad regulations, and that is \\nwhat we have seen from the EPA. Additionally, in the past year, \\nthe EPA has made headlines with the Gold King Mine spill and \\nthe Flint water crisis. Now, more than ever, we need the EPA to \\nget back to its core functions rather than pursuing burdensome \\nregulations based on shaky legal ground. The GAO and the OIG \\nplay an important role in this.\\n Our witnesses today will provide us with an update on the \\nEPA's progress in implementing recommendations and help us \\nconduct oversight over the EPA's process for implementing \\ncorrective actions.\\n I am happy to have with us today Alan Larsen, the Counsel \\nto the Inspector General of the Environmental Protection \\nAgency, and Alfredo Gomez, the Director of the Natural \\nResources and Environmental Team of the Government \\nAccountability Office.\\n I would like to thank our witnesses for being with us \\ntoday, and I look forward to hearing from your testimony.\\n Now I would like to recognize my friend, Senator Markey, \\nfor a 5-minute opening statement.\\n\\n OPENING STATEMENT OF HON.",
"EDWARD J. MARKEY, \\n U.S. SENATOR FROM THE STATE OF MASSACHUSETTS\\n\\n Senator Markey. Thank you, Mr. Chairman, and thank you for \\nscheduling today's hearing.\\n The Government Accountability Office and the Environmental \\nProtection Agency's Office of the Inspector General are a vital \\ncomponent of governmental integrity. These watchdogs must be \\nindependent, non-partisan, and maintain the highest ethical \\nstandards. In addition to fighting fraud, waste, and abuse of \\npower, they ensure that Government works the way Congress \\nintended, and in a manner that the public deserves.\\n From its work uncovering nearly $100 million in wasted \\nrefundable airline tickets, to probing weaknesses in aviation \\nsecurity, to protecting our water supply from damage caused by \\noil and gas production, GAO has provided an invaluable service \\nto the American public.\\n Inspectors general play an equally important role. The \\nSecurities and Exchange Commission inspector general uncovered \\nthe mishandling of whistleblower tips in the Madoff Ponzi \\nscheme.",
"In response, Congress passed the Dodd-Frank Act, \\nbringing the most significant changes in financial regulation \\nsince the Great Depression.\\n At the EPA, the inspector general has raised concerns \\nranging from how the EPA oversees States' implementation and \\nenforcement of programs designed to protect the public from \\nbacteria-contaminated beaches to how the EPA conducts proper \\nlong-term monitoring of Superfund sites and ensuring that they \\nare safe for reuse, to how the EPA can improve the review \\nprocess for potentially harmful chemicals.\\n EPA has implemented 174 GAO recommendations of the 325 made \\nduring the last 10 years. When one factors in the 4-year \\naverage time it takes to implement a GAO recommendation, the \\nAgency has a 77 percent implementation rate.",
"This rate is on \\npar with other Federal agencies and with the 80 percent \\nimplementation target for recommendations that GAO has set for \\nall agencies.\\n The EPA has also worked hard to close out recommendations \\nfrom the inspector general. Over the past 7 years, the \\ninspector general has made over 1,700 recommendations to the \\nEPA. At the time of the last annual report, only 158 remained \\nunimplemented. The EPA is battling diminished resources, a lack \\nof authority, and program updates that are underway but \\nincomplete. Those struggles are compounded by a 20 percent \\ndecrease in appropriated funds and a 15 percent loss to its \\nwork force since 2010.\\n If we are going to expect more rapid and complete agency \\nresponses to GAO and the inspector general recommendations, \\nthen we must ensure that EPA has access to the resources that \\nare necessary to achieve its mission. Just look at Flint, \\nMichigan and our Nation's failing water infrastructure, or \\nhazardous air water pollutants with health risks that have yet \\nto be assessed, or even the harmful pesticides that threaten \\nbee populations that are vital to our ecosystem.\\n We must recognize that our responsibility in creating those \\nproblems due to the prevailing dissidence between required \\nfunding levels and actions that should be taken by EPA are \\nnecessary to keep Americans safe.",
"We must also combat other \\nobstacles that hinder agency oversight. Both GAO and the \\ninspectors general provide a crucial public service, and it is \\nimperative that you are provided with all the tools you need to \\ndo your job effectively.\\n Now, I have been made aware of the possibility that a \\nDepartment of Energy contractor who cooperated with the GAO \\ninvestigation that I requested may have been fired in \\nretaliation for their cooperation. We should be doing \\neverything possible to enhance GAO's ability to obtain the \\ninformation it needs to undertake its mission of ensuring ``the \\naccountability of the Federal Government for the benefit of the \\nAmerican people and protect those who help in such efforts. ''\\n Inspectors general's investigations can also be slowed \\nwithout a review of all the critical materials. Preventing \\ninvestigators from timely access to all records, documents, and \\nother materials is contrary to the fundamental idea of \\ntransparency that Congress intended when establishing the \\ninspector general.\\n I thank each of you in advance for your testimony and I \\nthank you again, Mr. Chairman, for holding this hearing.\\n Senator Rounds. Thank you, Senator Markey.\\n Our witnesses joining us for today's hearing are Mr. Al \\nLarsen, Counsel to the Inspector General, Office of Inspector \\nGeneral, U.S. Environmental Protection Agency and U.S. Chemical \\nSafety and Hazard Investigation Safety Board; Mr. Alfredo \\nGomez, Director, Natural Resources and Environment Team, U.S. \\nGovernment Accountability Office.\\n Gentlemen, your written statements will be made a part of \\nthe record without objection and at this time we will turn to \\nboth of you.",
"Mr. Larsen, if you would like to begin, for your \\n5-minute opening statements.\\n\\n STATEMENT OF ALAN LARSEN, COUNSEL TO THE INSPECTOR GENERAL, \\n OFFICE OF INSPECTOR GENERAL, U.S. ENVIRONMENTAL PROTECTION \\nAGENCY AND U.S. CHEMICAL SAFETY AND HAZARD INVESTIGATION SAFETY \\n BOARD\\n\\n Mr. Larsen. Good afternoon, Chairman Rounds, Ranking Member \\nMarkey and members. I am Alan Larsen, counsel to the Inspector \\nGeneral for the Environmental Protection Agency and the U.S. \\nChemical Safety and Hazard Investigation Board. I would like to \\nthank the Subcommittee for shining a spotlight on unimplemented \\nOIG recommendations. I will provide an overview of what happens \\nafter OIG makes a recommendation and progress to date by both \\nagencies with regard to implementation.\\n Most of our audit and program evaluation work is performed \\nin accordance with generally accepted Government auditing \\nstandards. Findings and recommendations for correcting any \\ndeficiencies are issued to agency officials as part of the \\nfinal report, and that is also made public.\\n The impact of a recommendation may be direct cost savings \\nor an improvement in program efficiency or effectiveness.",
"A \\nrecommendation may ensure the integrity of a program or result \\nin other benefits.\\n Once OIG issues a report, it is up to the agency to \\nimplement recommendations. However, OIG staff tracks each \\nrecommendation until it is fully implemented, which is a \\nsignificant part of our oversight work.\\n OIG lists unimplemented recommendations in our semiannual \\nreports to Congress. Our most recent report cited 148 \\nrecommendations unimplemented by EPA and 10 recommendations \\nunimplemented by CSB. The average number of unimplemented \\nrecommendations for the last seven semiannual reporting periods \\nwas 144, or 133 for EPA and 11 for CSB. The numbers for the \\nfirst and the most recent of those periods were virtually \\nidentical: 159 and 158. In other words, overall, the agencies \\nhave been implementing recommendations at the same pace that \\nnew ones are being added to the list.\\n Of the pending unimplemented recommendations reported for \\nEPA, the time elapsed since report issuance ranges from less \\nthan 1 year to more than 9 years. The age of CSB's \\nunimplemented recommendations ranges from nearly 3 years to \\nmore than 5 years.\\n Government auditing standards require that OIG obtains the \\nagency's views regarding proposed recommendations. If the \\nagency agrees with the recommendations, it must provide \\nintended corrective actions and estimated completion dates.",
"\\nOIG's project team assesses the agency's proposal and \\ndetermines if it sufficiently meets the intent of our \\nrecommendations.\\n When the agency does not fully agree with OIG's findings or \\nrecommendations, we note that disagreement in our report. OMB \\nrequires an audit resolution process; EPA fulfills this \\nrequirement via its Manual 2750, which establishes that the \\nagency is responsible for ensuring that management decisions on \\nOIG recommendations are implemented.\\n In most cases, OIG and the agency agree on final report \\nrecommendations. When there is a disagreement, we follow an \\nescalating resolution process with three tiers as needed. OIG \\nwould not remove a recommendation from our unimplemented list \\nbased on agency refusal to act or because too much time has \\npassed.\\n The EPA chief financial officer and OMB managing director \\nare responsible for assessing and reporting to OIG on each \\nagency's progress. In turn, the OIG monitors, reviews, and \\nverifies that progress.",
"In addition, OIG conducts followup \\naudits. These assignments are based on size, complexity, and \\nsignificance of the issues and recommendations in the original \\nreport.\\n In conclusion, accomplishing the tasks I have discussed \\nrequires sufficient appropriated funds from Congress. During \\nthe past year, we have returned $16 for every dollar given to \\nus. When OIG is unable to carry out its responsibilities \\nbecause of inadequate funding, it is a net loss to the Federal \\nGovernment and the American taxpayers. While I am aware that \\nthis Subcommittee is not an appropriations committee, I \\nrespectfully ask for any help that you can provide us in this \\nregard, and we certainly appreciate your support for our work.\\n Mr. Chairman, this concludes my prepared statement. I will \\nbe pleased to answer any questions you or the members have.\\n [The prepared statement of Mr. Larsen follows:]\\n \\n \\n[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] \\n \\n \\n \\n \\n Senator Rounds.",
"Mr. Larsen, thank you for your testimony.\\n We will now hear from Mr. Alfredo Gomez. Mr. Gomez, you may \\nbegin.\\n\\n STATEMENT OF ALFREDO GOMEZ, DIRECTOR, NATURAL RESOURCES AND \\n ENVIRONMENT TEAM, U.S. GOVERNMENT ACCOUNTABILITY OFFICE\\n\\n Mr. Gomez. Chairman Rounds, Ranking Member Markey, and \\nmembers of the Subcommittee, good afternoon. I am pleased to be \\nhere today to discuss the status of recommendations GAO has \\nmade to the U.S. Environmental Protection Agency.\\n As you have both noted, the mission of EPA is to protect \\nhuman health and the environment. We have conducted reviews \\nfocused on various aspects of EPA's programs and operations, \\nand through these reviews we have made numerous recommendations \\nto improve EPA's performance and the efficiency and \\neffectiveness of its programs and operations.\\n My statement today focuses on two main areas: first, the \\nstatus of EPA's implementation of GAO's recommendations from \\nfiscal years 2006 through 2015, and how these recommendations \\nrelate to EPA programs and operations; and, No.",
"2, benefits \\nrealized by EPA based on our work.\\n As part of our process, we followup on recommendations we \\nhave made and report their status to Congress. Agencies have a \\nresponsibility to monitor and maintain accurate records on the \\nstatus of our recommendations. We then followup with EPA at \\nleast once a year to determine the extent to which our \\nrecommendations have been implemented and the benefits that \\nhave been realized. We consider a recommendation implemented \\nwhen EPA has taken actions that address the issue or deficiency \\nwe have identified.\\n With regard to the first area on the status of GAO \\nrecommendations, we found that of the 325 recommendations we \\nmade EPA had implemented 174. The remaining 151 recommendations \\nremain open or not implemented. For recommendations that we \\nmade over a 4-year period, that is, from Fiscal Year 2006 to \\n2011, EPA had implemented 77 percent.",
"For recommendations made \\nwithin the last 4 years, that is, from Fiscal Year 2012 to \\n2015, EPA had implemented 17 percent.\\n Experience has shown that it takes time for some \\nrecommendations to be implemented. It is for this reason that \\nwe actively track unaddressed or open recommendations for 4 \\nyears.\\n The 325 recommendations fall into six categories, such as \\nEPA management and operations, water-related issues, and \\nenvironmental contamination and cleanup.",
"With regard to the 151 \\nrecommendations that EPA has not yet implemented, 70 percent of \\nthese recs we made in the last 4 years and mainly concern EPA \\nmanagement and operations and water-related issues.\\n For example, in 2014, we reported on EPA's Regulatory \\nImpact Analyses, or RIAs, which are analyses of the benefits \\nand costs of proposed regulations. We found that the \\ninformation that EPA included and presented in the RIAs was not \\nalways clear. We recommended that EPA enhance the Agency's \\nreview process for RIAs to ensure that information for selected \\nelements is transparent and clear, such as when discussing \\nregulatory alternatives. While EPA agreed with this \\nrecommendation, the recommendation remains open until we see \\nevidence that EPA has taken action to enhance its review \\nprocess.\\n We have also identified many benefits, such as programmatic \\nand process improvements based on EPA taking actions on our \\nrecommendations.",
"For example, we issued several reports on \\ndrinking water and wastewater infrastructure issues. In \\nparticular, we reported on the drinking water and wastewater \\ninfrastructure needs of rural and small communities.\\n We found that these communities face potentially \\nduplicative application requirements when applying to multiple \\nState and Federal programs, making it more costly and time-\\nconsuming to complete the application process. We recommended \\nthat EPA work with the U.S. Department of Agriculture to \\ndevelop a uniform preliminary engineering report template, a \\nkey step in the application process, and they have done so.\\n In summary, our recommendations provide a good opportunity \\nto improve the Government's fiscal position, better serve the \\npublic, and make Government programs more efficient and \\neffective. EPA's implementation of our recommendations will \\nhelp the Agency continue to improve its performance and the \\nefficiency and effectiveness of its operations.\\n We will continue to work with Congress to monitor and draw \\nattention to this important issue.\\n Chairman Rounds, Ranking Member Markey, and members of the \\nSubcommittee, that completes my statement.",
"I would be happy to \\nanswer any questions.\\n [The prepared statement of Mr. Gomez follows:]\\n \\n \\n[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] \\n \\n \\n \\n Senator Rounds. Thank you for your testimony, Mr. Gomez.\\n Senators will now have 5 minutes each for questions. I will \\nbegin.\\n Mr. Larsen, the OIG's most recent semiannual report to \\nCongress cited 148 unimplemented EPA recommendations. Your \\ntestimony mentions annual followup audits, but how else does \\nthe OIG work with EPA to ensure these recommendations are \\nthoroughly implemented in a timely manner?\\n Mr. Larsen. The Agency has the official and ultimate \\nresponsibility to track and implement these recommendations, \\nand they do that. We keep track, ourselves, of their progress, \\nand at the end of each semiannual reporting period we compare \\nwith the Agency's tracking and we make sure that we agree on \\nwhat are open recommendations and what are unimplemented \\nrecommendations. At that point we sometimes check back and say \\nyou promised progress as of a certain date and you haven't done \\nit; why is that not happening. We also will do followup audits.",
"\\nIn addition to tracking the existing recommendations, we may \\nlaunch a new project to find out what is going on, why things \\naren't progressing.\\n Senator Rounds. Do you report your progress back to \\nCongress as well, on the implementations and the followup? Is \\nthere a followup on a regulation-by-regulation basis that \\nCongress receives as well?\\n Mr. Larsen. The primary reporting back is in the semiannual \\nreport, and in that we have an appendix that report-by-report, \\nrecommendation-by-recommendation indicates the status of the \\nunimplemented recommendations; how far behind they are and what \\nthe Agency's reason for not having made the progress is.\\n Senator Rounds. Thank you.\\n Mr. Gomez, the EPA has implemented 77 percent of \\nrecommendations that the GAO made from 2006 to 2011, as you \\nindicated, and only 17 percent of the recommendations were made \\nfrom 2012 to 2015. These figures also reveal that for older \\nrecommendations, from 2006 to 2011, nearly 30 percent remain \\nunimplemented.",
"What is the average amount of time the EPA takes \\nto implement GAO's recommendations and why does it take years \\nto implement your recommendations?\\n Mr. Gomez. So, in most cases, our experience has shown that \\nit takes agencies, EPA among them, about 4 years to implement \\nour recs. So we make a variety of recommendations. Some of them \\ndo require a little bit more time, for example, if the \\nrecommendation is where EPA has to work with stakeholders, \\nwhether they be other Federal agencies, State agencies, to put \\ntogether different memorandums or strategies. In other cases, \\nthough, where we make a recommendation, for example, that EPA \\nuse existing web tools that it has to provide information to \\nthe public to clarify information, in those cases we think that \\nthe Agency could actually do those a lot faster than a couple \\nof years.\\n As I mentioned in my statement, we also track them for 4 \\nyears very carefully. We have a website where you can see for \\neach report the status of each recommendation, similar to what \\nthe IG does. So anyone can see what the status is. We do \\nencourage the agency to implement the recommendations as \\nquickly as possible.\\n Senator Rounds. Thank you, Mr. Gomez.\\n Mr. Larsen, you indicated there was a cost-savings for the \\namount of money that we spend in OIG activities versus the \\nreturn. Can you elaborate on the amount of cost-savings your \\noffice finds at the EPA and how you find these cost-savings and \\nhow you make the recommendation?\\n Mr. Larsen.",
"Yes. What I can't do, and I am sorry to say I \\nwon't be able to do, is to take an individual recommendation \\nand say that one will end up saving $1 million. So we can't do \\nthat. There are any number of recommendations we make that we \\ndon't attempt to and are unable to assign a dollar figure to.\\n So those $16 per dollar comes from the projects we do where \\nthere is an identifiable dollar savings; and, as I say, many of \\nthe other projects may have, I don't know, a more intangible \\nbenefit, whether it is health benefits or a process savings. So \\nwe don't try to establish a cost-savings where it would be a \\nfanciful number.\\n Senator Rounds. I understand. Thank you.",
"My time has \\nexpired.\\n Senator Markey.\\n Senator Markey. Thank you very much, Mr. Chairman.\\n Director Gomez, for the EPA to properly evaluate and \\nregulate toxic substances, it is essential that they have the \\nmost up-to-date chemical and toxicity data available. One key \\nrecommendation you have made is that EPA needs to improve its \\nefforts to test and evaluate chemicals. To what extent will the \\nrecently passed TSCA reform legislation assist EPA in \\naddressing GAO's open chemical safety recommendations?\\n Mr. Gomez.",
"So we believe that some of the provisions in the \\nnew TSCA law would help EPA address some of the open \\nrecommendations that we have. For example, one of the \\nrecommendations we made was that EPA should take steps to \\nobtain more chemical toxicity and exposure information; and the \\nnew TSCA legislation does enhance EPA's authority to obtain \\nsuch information from chemical manufacturers and processors. So \\nonce EPA takes action on those measures, we will then \\nreevaluate to see if we can close those recommendations.\\n Senator Markey. Thank you so much, because when we were \\nworking together on a bipartisan basis on that legislation, it \\nwas important, as we negotiated TSCA, that we remove the catch-\\n22 that forced EPA to know a chemical was dangerous before it \\ncould require safety testing to be done on that chemical. And I \\nam also that EPA's new authority will help with that as well.\\n Again, Director Gomez, in your testimony you stated that \\nthe EPA has implemented 174 out of 325 recommendations made in \\nthe last 10 years.",
"However, GAO recognizes that recommendations \\ncannot be implemented overnight and takes an average of 4 years \\nto implement.\\n When you look at recommendations made four or more years \\nago, EPA has an implementation record that is just about equal \\nto the 80 percent Government-wide average. Do you agree, \\nDirector Gomez, that EPA is putting a concerted effort toward \\nimplementing GAO recommendations in a manner that is similar to \\nother Federal agencies?\\n Mr. Gomez. So, right, EPA's average is similar to the \\nagency-wide average. What we have done with EPA most recently \\nwas we decided to do outreach and update twice a year because \\nwe wanted to get more current information from EPA so that \\nperhaps we could close more of the recommendations, or at least \\njust work with them in terms of if there are some \\nrecommendations where they disagree with us, so we agree to \\ndisagree.\\n But the recommendations for us is a pretty high bar.",
"I \\nmean, it is a recommendation that is made based on having good \\nunderstanding of what is happening on the ground, what the \\nrequirements are that the Agency is supposed to be doing, what \\nthe reasons are as to why they are not doing that or why there \\nis a deficiency. So our recommendations are fairly well \\nsupported and articulated, so we want the Agency to implement \\nour recommendations.\\n Senator Markey. Mr. Larsen, let me come over to you. In the \\nlast 7 years EPA has received over 1,700 recommendations from \\nthe inspector general. Since, in the last annual report, only \\n148 of those 1,700 remained unimplemented, would you agree, Mr. \\nLarsen, that EPA generally does act on your recommendations in \\nabout 4 years, similar to EPA's record in implementing GAO \\nrecommendations?\\n Mr. Larsen. Yes, Senator Markey.",
"We don't track them \\nexactly that way, but in preparation for this hearing I asked \\nour staff to try to come up with that number and we came up \\nwith 3.7 years on average for implementing the recommendations \\nby the Agency.\\n Senator Markey. So, in general, what you are saying is that \\nGAO and the inspector general at the department at the EPA have \\na very similar view of the speed with which EPA does respond.\\n Mr. Larsen. That is correct, Senator.\\n Senator Markey. And that it is in line with all other \\nagencies in the Federal Government.\\n Mr. Larsen. That one I can't answer. We don't know where \\nthe other agencies stand, but for us it appears we are in line \\nwith the GAO.\\n Senator Markey. I guess the fact that we were having a \\nhearing, had you had to compile that information wouldn't give \\nyou enough time to then compare it to the rest of the whole \\nGovernment.\\n But do you agree with that, Mr. Gomez, that in general it \\nis in the ballpark?\\n Mr. Gomez.",
"So that has been our experience, that \\nGovernment-wide it generally takes agencies a little longer, \\nand that is why we track it each year closely.\\n Senator Markey. OK, beautiful. Thank you.\\n Thank you, Mr. Chairman.\\n Senator Rounds. Thank you.\\n Chairman Inhofe.\\n Senator Inhofe. Mr. Gomez, in response to a request that I \\nsubmitted, the GAO issued a legal opinion on December 14th of \\n2015 concerning the EPA's use of social media to promote its \\nWOTUS rule. Because GAO found EPA had violated the Anti-\\nDeficiency Act, the EPA was required to submit a report to the \\nPresident and Congress and GAO. Now, the first thing I would \\nask is, what is the status of that request?\\n Mr. Gomez. So we have not received the Anti-Deficiency Act \\nreport from EPA.\\n Senator Inhofe.",
"Are they making any statement that they \\ndeny that this was a violation of the Anti-Deficiency Act?\\n Mr. Gomez. Based on our finding, as you noted, the agencies \\nare required to submit a report to Congress, to the President \\nthrough OMB, and at the same time submit that report to the \\ncomptroller general, who is my boss.\\n Senator Inhofe. Now, do you have any idea of any kind of \\ndiscussion or response to that particular one that has taken \\nplace since 2015?\\n Mr. Gomez. I do not, but what we can do is we can inquire \\nwith EPA through our general counsel's office and get back to \\nyou.\\n Senator Inhofe. OK, so it would be in line for me or any \\nMember of Congress to request that you get a status report on \\nthat and anything that we want to release for public \\nconsumption would be acceptable?\\n Mr. Gomez.",
"Yes, I can take that back.\\n Senator Inhofe. All right.\\n Mr. Gomez. Thank you.\\n Senator Inhofe. All right, I think we should do that, \\nbecause in this case this is a statute that is on the books. It \\nis one that we knew this was going on at the time. It is on an \\nissue, the WOTUS issue is arguably the most significant issue \\nof all the over-regulations that we have, at least in my State \\nof Oklahoma, and I think it is really incumbent to do that.\\n Mr. Larsen, as you know, I have been a frequent requester \\nof the IG investigations reviews. For instance, in response to \\na request I submitted in 2011, the IG made several \\nrecommendations for EPA to update its conflict of interest \\npolicies and peer review process in the 2013 report. This is \\nsomething that Senator Boozman has called to our attention in \\nthese meetings; it is something that is significant.\\n Now, I understand the EPA has reported the recommendations \\nare complete, but the OIG has not conducted any formal followup \\nreview to assess the adequacy of EPA actions. Does the IG plan \\nto followup on EPA's actions per this report?\\n Mr. Larsen.",
"As I mentioned, we do followup reports. We are \\nentering into, as we head into summer, the work plan planning \\nprocess, and out of that comes our discretionary projects. I \\ndon't know if that is on tap for next year for followup. I will \\ncheck with our entities that do those reports and get back to \\nyour staff.\\n Senator Inhofe. What concerns me is if it is a case of a \\ncorporation, corporations or an individual could own stock in a \\ncorporation, the corporation could own two or 300 or many, many \\nmore. So that could fall as a conflict of interest.",
"When it is \\nan environmentalist group of some kind, you don't have that, \\nyou don't have the reams and reams.\\n So I assume when you are looking at the reform of a \\nconflict of interest, you are taking things like that into \\nconsideration, and they are looking at it now, is that correct?\\n Mr. Larsen. What I don't know is if we have a new project \\nplanned in that area, and I will get back to you on whether we \\ndo.\\n Senator Inhofe. OK, I appreciate that.\\n Mr. Gomez, July 2014, the GAO report found, among other \\nthings, that the EPA does not properly consider the impact of \\nits regulations on employment. The GAO recommended EPA update \\nits approach to estimating employment impacts, but the EPA has \\nnot done so. You have heard, if you watch what goes on in this \\nCommittee, on three different occasions we have quoted \\nAdministrator McCarthy when she said that there is no evidence \\nthat EPA regulations have a negative impact on jobs.\\n Senator Capito is sitting over here and her eyes started \\nrolling around.",
"There are some things that are so obvious it \\ndoesn't take that type of a report out there.\\n Now, how can McCarthy make such claims when EPA's process \\nfor evaluating employment impacts remains broken?\\n Mr. Gomez. So that was one of our recommendations in the \\nreport also, for EPA to look closely at the information they \\nwere using in calculating employment of facts, and to really \\nfind more current----\\n Senator Inhofe. Let me ask both of you a question. I know \\nmy time has expired, but it is significant to me.\\n I agree with Senator Markey when he said that both GAO and \\nIG have to be independent. Now, GAO, in my eyes, is independent \\nbecause there is not a relationship in that line.",
"That isn't \\nquite true with the IG because isn't the IG actually a part of \\nEPA?\\n Mr. Larsen. Senator, we are a part administratively, but \\nthe IG and the OIG do not take direction from the \\nadministrator; we report results to----\\n Senator Inhofe. So you think your level of independence is \\nnot impaired by that relationship?\\n Mr. Larsen. That is correct.\\n Senator Inhofe. Thank you, Mr. Chairman.\\n Senator Rounds. Thank you.\\n Senator Boozman.\\n Senator Boozman. Thank you, Mr. Chairman, and thank you and \\nSenator Markey for having this hearing today.\\n Mr. Gomez, last year you appeared before this Committee at \\na hearing examining S. 543, the Science Advisory Board Reform \\nAct, which I introduced with Senator Manchin and Inhofe.",
"At the \\ntime you testified that EPA's procedures for processing \\ncongressional requests to the Science Advisory Board did not \\ncomply with the law. GAO subsequently issued a report with four \\nspecific recommendations to ensure EPA compliance.\\n Your written testimony for today's hearing indicates that \\nEPA has not implemented the recommendations. The question is \\nhow can EPA go a year without adopting these common sense \\nrecommendations to ensure compliance with the law?\\n Mr. Gomez. So, right, we made four recommendations in that \\nreport and the recommendations were focused on helping to \\nimprove the procedures that EPA has in place for processing \\ncongressional committee requests for scientific advice from the \\nScience Advisory Board; and as we understand it, as of March of \\nthis year, EPA is developing a written process that would \\naddress our recommendations.\\n We are waiting for that process to be completed so that we \\ncan then assess it and look to see if it addresses the intent \\nof our recommendations. And our recommendations were very \\nspecific about the process that we believe EPA should have in \\nplace as it processes requests from Congress for scientific \\nadvice.\\n Senator Boozman. So is this a budget issue, as to why they \\nhave not come forward?\\n Mr. Gomez. We have not been told that is a budget issue.",
"\\nOur recommendations were about improving the process that they \\nhave in place. In some cases it wasn't well documented, so we \\ndon't see that it is a resource issue and they haven't said it \\nis a resource issue there.\\n Senator Boozman. And I guess that is an irritant of mine. \\nWe hear a lot about budgets and budgets are tight, but some of \\nthese things just don't get done; and, again, a year is a long \\ntime.\\n On the topic of the EPA Science Advisory Board, I want to \\nask you about a requirement of the Fiscal Year 2016 omnibus \\nthat EPA develop a policy statement on Science Advisory Board \\nmembership that would incorporate the goals of increasing State \\nand Tribal representation on the Science Advisory Board, as \\nwell as update its conflict of interest policy similar to what \\nSenator Inhofe was asking Mr. Larsen.\\n Per the omnibus, EPA was to develop the policy and submit \\nto the GAO again for review in March. Has EPA submitted the \\nstatement to GAO?\\n Mr. Gomez.",
"EPA has not submitted that conflict of interest \\nstatement to us yet. The last we had heard was that they were \\nreviewing it internally and it was due to us the end of April, \\nbut we have not received it yet.\\n Senator Boozman. OK. So do they say the reason for the \\ndelay, then?\\n Mr. Gomez. Only that it is currently being reviewed by the \\nEPA Office of congressional and Intergovernmental Relations.\\n Senator Boozman. And, again, this is another thing that \\ndoesn't seem to be driven by budget, but just simply not \\ngetting things done.\\n Mr. Gomez. Yes, it is not a budget issue, as we understand \\nit; it is going through their process. And I know that you had \\na timeframe for when it was due to GAO, and it is over that \\ntimeframe.\\n Senator Boozman.",
"Thank you.\\n Mr. Larsen, IG plays an important oversight role in helping \\nCongress improve programs by leading efforts to cut waste, \\nfraud, and abuse across Washington. In the EPA OIG semiannual \\nreport to Congress, more than $6 billion was accounted for as \\ninsufficient or not documented as being provided to the EPA \\nbecause EPA failed to have complete and accurate data. The \\nreport goes on to further describe the negative impact this has \\nhad on taxpayers, public health, and natural resources.\\n Can you address the findings and explain to us how the EPA \\ncould mismanage $6 billion? Again, with us talking about the \\nproblem of not having the resources that some of these basic \\nfunctions need to get done.\\n Mr. Larsen.",
"I understand the question and I am not going to \\npretend that I have the answer to each and every of the reports \\nwe have. I do have in the room our assistant inspector general \\nfor audit, or I can get back to you with a specific answer to \\nthat, but I don't have those facts at my fingertips.\\n Senator Boozman. My time is up.\\n Thank you, Mr. Chairman.\\n Senator Rounds. Thank you.\\n Senator Boozman. But I would appreciate it if you would get \\nback to us.\\n Mr. Larsen. Yes, sir.\\n Senator Boozman. Thank you.\\n Senator Rounds. Just thinking and listening to the \\ntestimony here and your responses to the questions, first of \\nall, I appreciate the candid way in which you have responded.",
"\\nSecond of all, I sense the frustration that members of this \\nCommittee have offered, both Senator Markey and also Chairman \\nInhofe and Senator Boozman. In each case there has been a \\nfrustration suggested, and I am just going to try to paraphrase \\nthis and see if there isn't something that we need to do about \\nit.\\n Three and a half to 4 years seems like an awfully long time \\nin which to expect to have these things implemented as an \\naverage, regardless of whether it is with the EPA or with any \\nother Federal agency. And at the same time, as Senator Inhofe \\nhad suggested, there was clearly a wrongdoing, one that you \\nhave pointed out and that you have asked for a response on, \\nnone of which has been forthcoming at this time.\\n If there was one thing that would frustrate anybody who is \\nconcerned with appropriate application of law, protections, as \\nSenator Markey has shared or as Senator Inhofe has indicated, a \\nviolation of a law in terms of how the money was spent, justice \\nthat takes that long to come through seems to me to be, as they \\nwould suggest, justice denied.\\n I am just going to ask this, and, Senator Markey, I \\nunderstand that you have another meeting that you have to be \\nat, but I would give you, as Ranking Member, the opportunity to \\nrespond as well.\\n Gentlemen, is there something that we should be doing here \\nin order to expedite responses?",
"Is there something we can do to \\nactually get a more expedited response from not just EPA, but \\nfrom other agencies as well, when those recommendations are \\nthere and clearly there is a time delay?\\n Mr. Larsen. Senator, this is going to sound more \\nbureaucratic than I intend it to be, but the structure that was \\ncreated for the IGs allows us to make recommendations. We \\ncannot order an agency to do anything. And it is left to them \\nto decide what to do. Part of the independence that I was \\ndiscussing with Senator Inhofe is that we report to the agency. \\nWe also report to the Congress. If the agency chooses not to, \\nor is unable to, act, Congress is also aware of the \\nrecommendations we have made; and the way the process works, \\nthen, if Congress has the ability, if it chooses, to waggle its \\nfinger or take more strong action.\\n Senator Rounds. Thank you.\\n Mr. Gomez.\\n Mr. Gomez. So our recommendations are exactly that, \\nrecommendations; they are not binding. I think what you are \\ndoing now is exactly what we would like, is to bring more \\nattention to the recommendations. As I noted also, our reports \\nare public.",
"Anyone can go and look at the recommendations and \\nlook at the status.\\n And I have to tell you that we get a lot of inquiries from \\nlots of people asking what is the status of recommendations, so \\nEPA is well aware of that; and that is one of the reasons why \\nwe have agreed to update the recommendations twice a year, so \\nthat we can try and bring closure to them or at least \\narticulate why there is disagreement in some cases.\\n Senator Rounds. Thank you.\\n Gentlemen, once again I want to thank you for your \\ntestimony and just for taking the time today to be with us and \\nparticipate in this hearing.\\n I would also like to thank Senator Markey, my colleague, \\nSenator Boozman, Senator Inhofe for being here.\\n The record will be open for 2 weeks, which brings us to \\nTuesday, June 28th, and, with that, this hearing is adjourned.",
"\\nThank you.\\n [Whereupon, at 3:50 p.m. the subcommittee was adjourned. ]\\n [Additional material submitted for the record follows. ]\\n\\n Statement of Hon. James M. Inhofe, U.S. Senator \\n from the State of Oklahoma\\n\\n Thank you Subcommittee Chairman Rounds for convening \\ntoday's oversight hearing, and thank you to our witnesses from \\nthe Government Accountability Office (GAO) and the \\nEnvironmental Protection Agency's (EPA) Office of Inspector \\nGeneral (OIG) for being here to testify.\\n Today's hearing is important because Members of Congress \\nare charged with conducting oversight over executive agencies, \\nsuch as the EPA, to ensure compliance with their statutory \\nauthority and mission in a manner free of waste, fraud, and \\nabuse. EPA watchdogs such as the GAO and the OIG play a \\ncritical role in partnership with Congress to fulfill this \\noversight function.\\n I have long valued this partnership as a frequent requester \\nof both GAO and EPA OIG reviews and investigations, which in \\nmany cases result in recommendations for the Agency to enhance \\nperformance, create efficiencies, and safeguard taxpayer \\ndollars. However, as testimony today reveals, EPA has been slow \\nto implement OIG and GAO recommendations.",
"For instance, GAO \\nwill testify that nearly thirty percent of EPA recommendations \\nmade between 2006 and 2011 remain unimplemented, and only 17 \\npercent of GAO's recommendations from 2012 to 2015 have been \\nimplemented. The EPA OIG's testimony similarly highlights a \\nsignificant number of open recommendations; most recently \\nreporting 148 unimplemented EPA recommendations, 89 of which \\nare more than a year old.\\n Among those unimplemented OIG and GAO recommendations, \\nseveral are of great interest to the Committee's oversight \\nefforts. For example, EPA has yet to implement various GAO \\nrecommendations regarding the Agency's procedures for \\nprocessing congressional requests for scientific advice by the \\nAgency's Science Advisory Board. Further, EPA has yet to \\nimplement nearly 2-year-old recommendations from GAO to improve \\nits regulatory impact analyses, including updates to the way \\nEPA estimates the impact its regulations have on employment.",
"\\nFinally, EPA still needs to implement various recommendations \\nfrom the OIG to ensure its hiring process is sound in light of \\nthe John Beale scandal and the Agency's recent mass hiring.\\n These outstanding recommendations are concerning as both \\nthe EPA OIG and GAO are in the midst of substantial reviews and \\ninvestigations into the Animas River spill at Gold King Mine \\nand the drinking water crisis in Flint, Michigan.",
"Subsequent \\nGAO and OIG reports will undoubtedly include numerous \\nrecommendations for EPA, yet based on testimony today I have \\nlittle confidence EPA will fully and swiftly implement these \\nrecommendations.\\n Indeed, today's hearing raises questions about why EPA has \\nbeen late to implementing many common-sense recommendations. I \\nhave been concerned the EPA has been deviating from its core \\nmission and focusing on pushing new regulatory actions that are \\npolitical priorities of President Obama without new authority \\nfrom Congress, as is the case with the Clean Power Plan and \\nWaters of the U.S. rule, which have both been halted by the \\nCourts pending judicial review.\\n For these reasons, we need to engage with EPA watchdogs \\nlike GAO and the OIG to ensure they are effective and hold EPA \\naccountable. Today is another step toward continuing that \\nrelationship.\\n I look forward to hearing from our witnesses today who will \\nshare perspective on EPA's major challenges and how the Agency \\nis implementing GAO and OIG recommendations.\\n I ask that my full statement be entered into the record. \\nThank you.\\n\\n <all>\\n</pre></body></html>\\n\""
] | https://www.govinfo.gov/content/pkg/CHRG-114shrg20773/html/CHRG-114shrg20773.htm | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
In re David Junior Burgess, applying for writs of certiorari, review and mandamus. *977Parish of Ouachita. Nos. M:47426, T:8176, T:8177, T:8178, and T:8179. Writ granted. The convictions and sentences are set aside. The defendant was entitled to a jury trial on the consolidated cases. | 07-29-2022 | [
"In re David Junior Burgess, applying for writs of certiorari, review and mandamus. *977Parish of Ouachita. Nos. M:47426, T:8176, T:8177, T:8178, and T:8179. Writ granted. The convictions and sentences are set aside. The defendant was entitled to a jury trial on the consolidated cases."
] | https://www.courtlistener.com/api/rest/v3/opinions/7521025/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported):July 26, 2010 SOLUTIA INC. (Exact name of registrant as specified in its charter) DELAWARE (State of Incorporation) 001-13255 43-1781797 (Commission File Number) (IRS Employer Identification No.) 575 Maryville Centre Drive, P.O. Box 66760, St. Louis, Missouri 63166-6760 (Address of principal executive offices) (Zip Code) (314) 674-1000 Registrant's telephone number, including area code Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02.RESULTS OF OPERATIONS AND FINANCIAL CONDITION On July 26, 2010, Solutia issued a press release announcing its financial results for the period ended June 30, 2010.A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and is incorporated herein by reference.The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 (the "Securities Act) or the Exchange Act, except ifthe Companyspecifically incorporates it by reference into a filing under the Securities Actor the Exchange Act. ITEM 9.01.FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits: Exhibit Number Description Press Release dated July 26, 2010 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED. SOLUTIA INC. (Registrant) /s/ Paul J. Berra III Senior Vice President, General Counsel, Legal and Governmental Affairs, Assistant Secretary DATE: July 26, 2010 EXHIBIT INDEX Exhibit Number Description Press Release dated July 26, 2010 | [
"UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported):July 26, 2010 SOLUTIA INC. (Exact name of registrant as specified in its charter) DELAWARE (State of Incorporation) 001-13255 43-1781797 (Commission File Number) (IRS Employer Identification No.) 575 Maryville Centre Drive, P.O. Box 66760, St. Louis, Missouri 63166-6760 (Address of principal executive offices) (Zip Code) (314) 674-1000 Registrant's telephone number, including area code Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02.RESULTS OF OPERATIONS AND FINANCIAL CONDITION On July 26, 2010, Solutia issued a press release announcing its financial results for the period ended June 30, 2010.A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and is incorporated herein by reference.The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 (the \"Securities Act) or the Exchange Act, except ifthe Companyspecifically incorporates it by reference into a filing under the Securities Actor the Exchange Act.",
"ITEM 9.01.FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits: Exhibit Number Description Press Release dated July 26, 2010 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED. SOLUTIA INC. (Registrant) /s/ Paul J. Berra III Senior Vice President, General Counsel, Legal and Governmental Affairs, Assistant Secretary DATE: July 26, 2010 EXHIBIT INDEX Exhibit Number Description Press Release dated July 26, 2010"
] | https://applica-public.s3-eu-west-1.amazonaws.com/contract-discovery/edgar.txt.xz | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
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The facts in the case can be sufficiently gathered from the oral and written instructions which Rodey, Judge, gave to the jury, as follows: The Following Instructions Were Given Orally to the Jury Prior to the Reading of the Written Instructions of the Court: With reference to offers of settlement between the company and this insured, you are instructed that no offers of settlement between people who are endeavoring to compromise a controversy between themselves have any effect when they litigate aft-erwards in a court of justice, save as it may throw light upon the truth or falsity of testimony that is before you. In other words, the offers don’t bind anybody. The court has examined the policy, and that clause of it covering personal property, and is of opinion that the wording of the second clause of the policy would cover cement. It is rather doubtful, but, on the whole, I would rather instruct you that it does. There is a .rule of law that says when one thing is mentioned in with others, then any additional clause is what is called in Latin idem generis, or the same kind, and this clause says clothing, books, and meteorological apparatus. Evidently it was a surveyor that lived in the house. And it also says: Other personal effects that may be in the house. Ordinarily that would be held to be personal effects of the same general character, meaning furniture and household goods, such as one ordinarily has in a dwelling, and would not include cement, but *265tbe amount is so small that ont of an abundance of caution I would rather say that it is included, and tbe jury may so consider it. If you find for tbe plaintiff, you might make allowance for any excess premium that was collected at tbe time of entering into tbe contract of insurance, if you shall find that tbe bouse was not worth $4,000. You do not have to believe uncontradicted testimony if it is not reasonable. That is what a jury is for, to weigh tbe testimony. Another point with reference to tbe conflict of counsel; and for fear tbe jury might get into a discussion over it, I desire to instruct them that confession of a crime is often sufficient to convict in a criminal suit, as where a man pleads guilty to an indictment, but if a man should come up and confess to tbe crime of murder, and no body -was produced, it would not be sufficient, because it might be possible that tbe man was crazy. But where a man confesses to one person that be committed a crime, and then afterwards, when called into court, he denies tbe confession, bis word is put up against that of tbe other man, and that is not sufficient to prove bis guilt beyond a reasonable doubt, while tbe same evidence might justify a jury in finding one way or tbe other by a mere preponderance of tbe evidence in a civil suit. I. desire to say further that this’ is a peculiar case, involving a whole lot of conflicting evidence, and tbe court and tbe jury must be absolutely impartial in the duty that they now have to perform, and neither tbe court nor tbe jury can take sides with these people. Pay no attention to their, desires. Tbe court must instruct you as it believes tbe law to be, and yon *266must pass upon the evidence in the case under these instructions, without reference to any outside influence of any kind or character. Find your verdict as you determine that a cold balancing of the facts justifies it, and it lieth in the mouth of no man to question you for it. The Following Are the Written Instructions Which Were Bead to the Jury by the Court: ■ As you have seen, this is a suit by the plaintiff Jaime Mendez as assignee of Henri Escande & Company against the defendant the North British & Mercantile Insurance Company of London, England, for the sum of $6,000, with interest and costs, for the loss of a house and certain furniture said to have been contained therein, situated at Caguas, in this island, and which it is alleged was destroyed by fire, as shown by the evidence, in the latter part of April,' 1909. The policy is dated the 19th of August, 1907, and ran until the 19th day of August, 1910, and was for the sum of $6,000, $4,000 of which covered the house in question, as per the terms of the policy, and $2,000 of which covered the furniture and other contents of the house. It is in evidence before you, and is shown by the indorsement on the policy, that this insurance policy was assigned to the plaintiff under date of the 22d of February, 1909. And therefore it is conceded that the plaintiff had a right to sue on it, if any liability has been proved before you under it. The insurance policy in question has all of the usual conditions put in such instruments, and you are instructed that it is the law that the plaintiff is not entitled to recover anything under this policy, even though the house and its contents have *267been completely destroyed, if be, by bis own act or procurement, wilfully and fraudulently caused tbe burning and destruction thereof. In other words, if be brought about this fire be cannot recover against this defendant for tbe loss, but if you believe from 'a preponderance of tbe evidence that tbe fire was purely accidental, or even that it was incendiary, but that this plaintiff was in no manner responsible for it, and in no way intentionally caused it, then tbe plaintiff is entitled to recover tbe reasonable value of tbe property destroyed, because that is one of tbe risks under tbe policy. In .this regard, you are instructed that if you believe that' tbe plaintiff in no manner brought about this fire, and is himself in perfect good faith in this suit, then and in such case you cannot ignore bis proofs as to bis actual loss within the amount of tbe policy, but you are instructed that if you believe from a preponderance of tbe evidence that, at tbe time of tbe issuance of this fire insurance policy, tbe former owner'of the premises really placed a too high value upon tbe same, then clauses 12 and 13 of the insurance policy protect the insurance company against having to pay any such excess value on account of tbe premises, by giving it tbe right to rebuild tbe promises. It is in evidence, and uneontradicted, that tbe insurance company has always been, and now is ready and willing to replace tbe building in question, and that the landlord or owner of tbe soil consents that it may do so, but it is also in evidence and admitted by tbe plaintiff that tbe same cannot be done because of the plaintiff having assigned tbe lease of tbe land which be held, and tbe second sublessee will not consent that tbe building shall be put there. Hence you are instructed that that relieves tbe insurance company from paying any unreasonable value for tbe destroyed premises, because this plaintiff *268bad no right in law to pnt it out of bis power to consent that this building should be put back there by the insurance company, and you should, if you find for the plaintiff, give him a verdict for only what you believe from a preponderance of the evidence is the actual and reasonable value of replacing that building. As to the furniture and contents of the house: the plaintiff, if you believe that he is not responsible for this fire, is entitled to recover, up to $2,000, the reasonable value thereof when the same consisted of all kinds of clothing, books, meteorological apparatus, and other personal effects, but he is not entitled to recover for any such thing as a collection of canceled stamps, save to the value of $100, as that is not covered by the policy. But you are instructed that the $2,000 risk is the limit of the liability, and not the measure of the liability, and that you must believe from a preponderance of the evidence that $2,000 worth of property at its cash value, according to the market price at the time it was destroyed, was lost, or you cannot give plaintiff, a verdict for that sum on that account, but will be confined to the reasonable value of the personal property as thus defined, thus lost, and the cost of the property, or the cost of replacing it cannot be substituted for the actual cash market value, which is what you must go by on the evidence. The case is, therefore, simple, even though the testimony is often hard to reconcile, and some of it directly conflicting. You, as sensible, independent, honest, and impartial jurors have the duty, on a preponderance of this evidence, to say whether the plaintiff is in any manner responsible for this fire, and if you find that he is, then the case ends right there, and your verdict should be for the defendant, because it would be but to put a premium on criminality and fraud to give a plaintiff a *269verdict whore lie himself is the author of the destruction of the property. On the other hand, it is equally your duty to give the plaintiff a verdict for the full value of exactly what he lost, if you believe from a preponderance of the evidence that he is in no manner responsible for this fire, and that so far as he is concerned there was no fraud or wrong about it. On the one hand, you must take the facts that cannot be denied, and that have unquestionably been established. These are: first, that the insurance contract was entered into; that it was in full force and effect, at the date of the fire, between the parties that are here suing; that it covered the house and its contents as described, and that the'fire occurred and that a total destruction of the house and its contents took place. Then, as honest men, you must take into consideration all of the testimony in the case to determine the main question of fact as to whether this was an accidental fire, for which this defendant is liable, or whether it was a fratidulent one intended to cheat the defendant out of the insurance money. You have noticed that, owing to the peculiar character of the case, there has been a good deal of useless testimony let in, and the court wants to correct itself before you for letting some of it in; and therefore you are instructed to be careful in considering and weighing the facts in the case, and to not permit these transactions that took place in the insular courts to have any weight with reference to the rights of either of these parties, save where such proofs throw direct light upon the main question at issue here under these instructions. The burden is upon the plaintiff to show the liability of the defendant, and you are instructed that he has shown it prima *270facie by introducing tbe insurance policy, showing its assignment, and proving the destruction of the house and its contents. When a fire insurance company defends in a case like this, on' the ground that the fire is a fraudulent one, the burden is upon it to show that fact to your satisfaction by a preponderance of the evidence. But, as has often been told you, the court does not mean by a preponderance of the evidence that one side or the other must have the most witnesses, or must introduce the greater number of papers, contracts, or exhibits before you, but it is meant that you shall understand that a preponderance of the evidence is intended to mean that side of the case which, on a full, fair, and impartial consideration of all the facts and circumstances surrounding the case, you, as reasonable, honest, and impartial men believe truth and justice to be. You are urged to give the greatest consideration to a weighing of all the surrounding facts and circumstances of this case, because, on the one hand, it would be wrong to permit an insurance company to escape liability if it is liable, and, on the other hand, it would be, as stated, but putting a premium upon wrongdoing, fraud, and crime to permit a plaintiff to recover if he is in fact the author of the wrong himself. Remember that indemnity is the basis of a fire insurance contract, and juries should be careful to not permit any plaintiff to make a profit-gaining transaction out of it. This is a case peculiarly for a jury. It is for twelve good men and true to weigh the evidence, and say who tells the truth and who speaks falsely, and when you have done so, then without fear or favor find for the side that is right. Do not let your acquaintance with the counsel, or your acquaintance with the parties, have any effect in your deliberations. It is cowardly *271for a court or jury to permit sucb things to affect their judgment. Justice becomes a farce when that takes place. Neither the counsel nor the parties have a right to ever question you for what you shall do under your oaths in this case, because your consciences alone are bound by the action you shall take. Neither can any of you jurors inject into the case in your room, when you go to deliberate, any of your personal knowledge, if you should have any, because that would not be fair to the party against whom it might militate, because he has no chance to cross-examine you, and a juror is not a witness in any case. If any juror had any such knowledge, it was his duty to have left the jury hox at the beginning of the trial and have become a witness, where he could be cross-examined like any other witness. Therefore, the court desires to impress upon you the solemn duty you are about to perform, and the impartial mood in which you must approach it, and the fearlessness with which you must determine every fact and the whole case. It is hoped that you will arrive at a verdict. Nobody’s life and nobody’s liberty are involved here. Neither is this a criminal prosecution. It is purely a civil case, and you should not permit the fact to govern you, or to weigh unduly with you,’ that if you find for the defendant it will cast a slur upon the plaintiff, because if the evidence warrants it, you should do that without hesitation. In a civil case like this, sensible men should arrive at a verdict because nobody’s liberty, as stated, is at stake, and any point in the case, and the whole case, can be determined on a mere preponderance of the evidence, and it does not require that any fact shall be proved beyond a reasonable doubt, as is the case in criminal prosecutions, as you have often been instructed. *272It is not intended by tbis statement that any of yon shall be obliged to surrender your convictions to the views of others, but it is only intended to impress you with the fact that you are presumed, as reasonable and honest men, to deliberate together, and if some are of one view and others of an opposite view that you will deliberate with each other, and either become convinced that your opinion is right or, being convinced that it is wrong, agree with your opponent, and when you have done so, return a verdict in accordance with the facts found. In this cause, the same as in all other causes, the jury are .the sole judges of the weight of the evidence, and of the credibility of the witnesses, and if you believe that any witness has wil-fully sworn falsely as to any material fact you are at liberty and it is your privilege, to disregard such portion or even the whole of such witness’s testimony. In considering the weight to be given the evidence of any witness, you may consider the interest, if any, which he has in the result of the cause, and his manner on the stand, and you will, of course, make comparison of what he says with all other facts and circumstances in the case, and also will, as practical and honest men, consider whether or not the story told by any particular witness is reasonable or otherwise. But two forms of verdict will be given you because you must find either for the plaintiff or the defendant absolutely in this case. One form will read: “We, the jury, find for the plaintiff, and assess his damages at the sum of blank dollars;” and the other will read: “We, the jury, find for the defendant.” If you shall find for the plaintiff, you must assess his damages as to the house at such reasonable sum as you may believe the house to have been worth; that is, what it would cost to replace it, as the *273defendant is ready to do but cannot do, and to this yon must add whatever you believe to have been the real reasonable value of the furniture or contents of the house under the second clause of the risk in the policy. If you find for the defendant you will have no calculating of any kind to do. When you have arrived at a verdict, you will select one of your number as foreman to sign it, and then all of you return it into court. You may take to your room the complaint, the answer, the insurance policy, and all the exhibits introduced in the cause. The cause is with you, gentlemen. The jury returned a verdict for the plaintiff in the sum of $2,000. | 07-20-2022 | [
"The facts in the case can be sufficiently gathered from the oral and written instructions which Rodey, Judge, gave to the jury, as follows: The Following Instructions Were Given Orally to the Jury Prior to the Reading of the Written Instructions of the Court: With reference to offers of settlement between the company and this insured, you are instructed that no offers of settlement between people who are endeavoring to compromise a controversy between themselves have any effect when they litigate aft-erwards in a court of justice, save as it may throw light upon the truth or falsity of testimony that is before you. In other words, the offers don’t bind anybody. The court has examined the policy, and that clause of it covering personal property, and is of opinion that the wording of the second clause of the policy would cover cement.",
"It is rather doubtful, but, on the whole, I would rather instruct you that it does. There is a .rule of law that says when one thing is mentioned in with others, then any additional clause is what is called in Latin idem generis, or the same kind, and this clause says clothing, books, and meteorological apparatus. Evidently it was a surveyor that lived in the house. And it also says: Other personal effects that may be in the house. Ordinarily that would be held to be personal effects of the same general character, meaning furniture and household goods, such as one ordinarily has in a dwelling, and would not include cement, but *265tbe amount is so small that ont of an abundance of caution I would rather say that it is included, and tbe jury may so consider it. If you find for tbe plaintiff, you might make allowance for any excess premium that was collected at tbe time of entering into tbe contract of insurance, if you shall find that tbe bouse was not worth $4,000. You do not have to believe uncontradicted testimony if it is not reasonable.",
"That is what a jury is for, to weigh tbe testimony. Another point with reference to tbe conflict of counsel; and for fear tbe jury might get into a discussion over it, I desire to instruct them that confession of a crime is often sufficient to convict in a criminal suit, as where a man pleads guilty to an indictment, but if a man should come up and confess to tbe crime of murder, and no body -was produced, it would not be sufficient, because it might be possible that tbe man was crazy. But where a man confesses to one person that be committed a crime, and then afterwards, when called into court, he denies tbe confession, bis word is put up against that of tbe other man, and that is not sufficient to prove bis guilt beyond a reasonable doubt, while tbe same evidence might justify a jury in finding one way or tbe other by a mere preponderance of tbe evidence in a civil suit.",
"I. desire to say further that this’ is a peculiar case, involving a whole lot of conflicting evidence, and tbe court and tbe jury must be absolutely impartial in the duty that they now have to perform, and neither tbe court nor tbe jury can take sides with these people. Pay no attention to their, desires. Tbe court must instruct you as it believes tbe law to be, and yon *266must pass upon the evidence in the case under these instructions, without reference to any outside influence of any kind or character. Find your verdict as you determine that a cold balancing of the facts justifies it, and it lieth in the mouth of no man to question you for it. The Following Are the Written Instructions Which Were Bead to the Jury by the Court: ■ As you have seen, this is a suit by the plaintiff Jaime Mendez as assignee of Henri Escande & Company against the defendant the North British & Mercantile Insurance Company of London, England, for the sum of $6,000, with interest and costs, for the loss of a house and certain furniture said to have been contained therein, situated at Caguas, in this island, and which it is alleged was destroyed by fire, as shown by the evidence, in the latter part of April,' 1909.",
"The policy is dated the 19th of August, 1907, and ran until the 19th day of August, 1910, and was for the sum of $6,000, $4,000 of which covered the house in question, as per the terms of the policy, and $2,000 of which covered the furniture and other contents of the house. It is in evidence before you, and is shown by the indorsement on the policy, that this insurance policy was assigned to the plaintiff under date of the 22d of February, 1909. And therefore it is conceded that the plaintiff had a right to sue on it, if any liability has been proved before you under it. The insurance policy in question has all of the usual conditions put in such instruments, and you are instructed that it is the law that the plaintiff is not entitled to recover anything under this policy, even though the house and its contents have *267been completely destroyed, if be, by bis own act or procurement, wilfully and fraudulently caused tbe burning and destruction thereof. In other words, if be brought about this fire be cannot recover against this defendant for tbe loss, but if you believe from 'a preponderance of tbe evidence that tbe fire was purely accidental, or even that it was incendiary, but that this plaintiff was in no manner responsible for it, and in no way intentionally caused it, then tbe plaintiff is entitled to recover tbe reasonable value of tbe property destroyed, because that is one of tbe risks under tbe policy. In .this regard, you are instructed that if you believe that' tbe plaintiff in no manner brought about this fire, and is himself in perfect good faith in this suit, then and in such case you cannot ignore bis proofs as to bis actual loss within the amount of tbe policy, but you are instructed that if you believe from a preponderance of tbe evidence that, at tbe time of tbe issuance of this fire insurance policy, tbe former owner'of the premises really placed a too high value upon tbe same, then clauses 12 and 13 of the insurance policy protect the insurance company against having to pay any such excess value on account of tbe premises, by giving it tbe right to rebuild tbe promises.",
"It is in evidence, and uneontradicted, that tbe insurance company has always been, and now is ready and willing to replace tbe building in question, and that the landlord or owner of tbe soil consents that it may do so, but it is also in evidence and admitted by tbe plaintiff that tbe same cannot be done because of the plaintiff having assigned tbe lease of tbe land which be held, and tbe second sublessee will not consent that tbe building shall be put there.",
"Hence you are instructed that that relieves tbe insurance company from paying any unreasonable value for tbe destroyed premises, because this plaintiff *268bad no right in law to pnt it out of bis power to consent that this building should be put back there by the insurance company, and you should, if you find for the plaintiff, give him a verdict for only what you believe from a preponderance of the evidence is the actual and reasonable value of replacing that building. As to the furniture and contents of the house: the plaintiff, if you believe that he is not responsible for this fire, is entitled to recover, up to $2,000, the reasonable value thereof when the same consisted of all kinds of clothing, books, meteorological apparatus, and other personal effects, but he is not entitled to recover for any such thing as a collection of canceled stamps, save to the value of $100, as that is not covered by the policy. But you are instructed that the $2,000 risk is the limit of the liability, and not the measure of the liability, and that you must believe from a preponderance of the evidence that $2,000 worth of property at its cash value, according to the market price at the time it was destroyed, was lost, or you cannot give plaintiff, a verdict for that sum on that account, but will be confined to the reasonable value of the personal property as thus defined, thus lost, and the cost of the property, or the cost of replacing it cannot be substituted for the actual cash market value, which is what you must go by on the evidence.",
"The case is, therefore, simple, even though the testimony is often hard to reconcile, and some of it directly conflicting. You, as sensible, independent, honest, and impartial jurors have the duty, on a preponderance of this evidence, to say whether the plaintiff is in any manner responsible for this fire, and if you find that he is, then the case ends right there, and your verdict should be for the defendant, because it would be but to put a premium on criminality and fraud to give a plaintiff a *269verdict whore lie himself is the author of the destruction of the property. On the other hand, it is equally your duty to give the plaintiff a verdict for the full value of exactly what he lost, if you believe from a preponderance of the evidence that he is in no manner responsible for this fire, and that so far as he is concerned there was no fraud or wrong about it.",
"On the one hand, you must take the facts that cannot be denied, and that have unquestionably been established. These are: first, that the insurance contract was entered into; that it was in full force and effect, at the date of the fire, between the parties that are here suing; that it covered the house and its contents as described, and that the'fire occurred and that a total destruction of the house and its contents took place. Then, as honest men, you must take into consideration all of the testimony in the case to determine the main question of fact as to whether this was an accidental fire, for which this defendant is liable, or whether it was a fratidulent one intended to cheat the defendant out of the insurance money.",
"You have noticed that, owing to the peculiar character of the case, there has been a good deal of useless testimony let in, and the court wants to correct itself before you for letting some of it in; and therefore you are instructed to be careful in considering and weighing the facts in the case, and to not permit these transactions that took place in the insular courts to have any weight with reference to the rights of either of these parties, save where such proofs throw direct light upon the main question at issue here under these instructions. The burden is upon the plaintiff to show the liability of the defendant, and you are instructed that he has shown it prima *270facie by introducing tbe insurance policy, showing its assignment, and proving the destruction of the house and its contents. When a fire insurance company defends in a case like this, on' the ground that the fire is a fraudulent one, the burden is upon it to show that fact to your satisfaction by a preponderance of the evidence. But, as has often been told you, the court does not mean by a preponderance of the evidence that one side or the other must have the most witnesses, or must introduce the greater number of papers, contracts, or exhibits before you, but it is meant that you shall understand that a preponderance of the evidence is intended to mean that side of the case which, on a full, fair, and impartial consideration of all the facts and circumstances surrounding the case, you, as reasonable, honest, and impartial men believe truth and justice to be.",
"You are urged to give the greatest consideration to a weighing of all the surrounding facts and circumstances of this case, because, on the one hand, it would be wrong to permit an insurance company to escape liability if it is liable, and, on the other hand, it would be, as stated, but putting a premium upon wrongdoing, fraud, and crime to permit a plaintiff to recover if he is in fact the author of the wrong himself. Remember that indemnity is the basis of a fire insurance contract, and juries should be careful to not permit any plaintiff to make a profit-gaining transaction out of it.",
"This is a case peculiarly for a jury. It is for twelve good men and true to weigh the evidence, and say who tells the truth and who speaks falsely, and when you have done so, then without fear or favor find for the side that is right. Do not let your acquaintance with the counsel, or your acquaintance with the parties, have any effect in your deliberations. It is cowardly *271for a court or jury to permit sucb things to affect their judgment. Justice becomes a farce when that takes place.",
"Neither the counsel nor the parties have a right to ever question you for what you shall do under your oaths in this case, because your consciences alone are bound by the action you shall take. Neither can any of you jurors inject into the case in your room, when you go to deliberate, any of your personal knowledge, if you should have any, because that would not be fair to the party against whom it might militate, because he has no chance to cross-examine you, and a juror is not a witness in any case. If any juror had any such knowledge, it was his duty to have left the jury hox at the beginning of the trial and have become a witness, where he could be cross-examined like any other witness.",
"Therefore, the court desires to impress upon you the solemn duty you are about to perform, and the impartial mood in which you must approach it, and the fearlessness with which you must determine every fact and the whole case. It is hoped that you will arrive at a verdict. Nobody’s life and nobody’s liberty are involved here. Neither is this a criminal prosecution. It is purely a civil case, and you should not permit the fact to govern you, or to weigh unduly with you,’ that if you find for the defendant it will cast a slur upon the plaintiff, because if the evidence warrants it, you should do that without hesitation. In a civil case like this, sensible men should arrive at a verdict because nobody’s liberty, as stated, is at stake, and any point in the case, and the whole case, can be determined on a mere preponderance of the evidence, and it does not require that any fact shall be proved beyond a reasonable doubt, as is the case in criminal prosecutions, as you have often been instructed. *272It is not intended by tbis statement that any of yon shall be obliged to surrender your convictions to the views of others, but it is only intended to impress you with the fact that you are presumed, as reasonable and honest men, to deliberate together, and if some are of one view and others of an opposite view that you will deliberate with each other, and either become convinced that your opinion is right or, being convinced that it is wrong, agree with your opponent, and when you have done so, return a verdict in accordance with the facts found.",
"In this cause, the same as in all other causes, the jury are .the sole judges of the weight of the evidence, and of the credibility of the witnesses, and if you believe that any witness has wil-fully sworn falsely as to any material fact you are at liberty and it is your privilege, to disregard such portion or even the whole of such witness’s testimony. In considering the weight to be given the evidence of any witness, you may consider the interest, if any, which he has in the result of the cause, and his manner on the stand, and you will, of course, make comparison of what he says with all other facts and circumstances in the case, and also will, as practical and honest men, consider whether or not the story told by any particular witness is reasonable or otherwise. But two forms of verdict will be given you because you must find either for the plaintiff or the defendant absolutely in this case.",
"One form will read: “We, the jury, find for the plaintiff, and assess his damages at the sum of blank dollars;” and the other will read: “We, the jury, find for the defendant.” If you shall find for the plaintiff, you must assess his damages as to the house at such reasonable sum as you may believe the house to have been worth; that is, what it would cost to replace it, as the *273defendant is ready to do but cannot do, and to this yon must add whatever you believe to have been the real reasonable value of the furniture or contents of the house under the second clause of the risk in the policy. If you find for the defendant you will have no calculating of any kind to do. When you have arrived at a verdict, you will select one of your number as foreman to sign it, and then all of you return it into court. You may take to your room the complaint, the answer, the insurance policy, and all the exhibits introduced in the cause.",
"The cause is with you, gentlemen. The jury returned a verdict for the plaintiff in the sum of $2,000."
] | https://www.courtlistener.com/api/rest/v3/opinions/6683760/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Exhibit REEDER & SIMPSON PC ATTORNEYS AT LAW P.O. Box601 RRE Commercial Center Majuro, MH 96960 Telephone: 011-692-625-3602 Facsimile: 011-692-625-3602 Email: dreeder@ntamar.net r.simpson@simpson.gr October 9, 2009 Ladies and Gentlemen: Re: DHT Maritime, Inc. (the “Company”) We are licensed to practice law in the Republic of the Marshall Islands (the “RMI”),and are members in good standing of the Bar of the RMI. We are acting as special RMI counsel for the Company in connection with the registration statement on Form S-8 (the “Registration Statement”),being filed by the Company with the United States Securities and Exchange Commission (the “Commission”),under the Securities Act of 1933, as amended, relating to shares of Common Stock, par value US$0.01 per share of the Company (the “Common Stock”),which will be issued and issuable in respect of equity-based compensation awards granted under the 2005 Incentive Compensation Plan of the Company, as amended on June 19, 2009 (the “Plan”). In connection with this opinion, we have examined originals or electronic versions, certified or otherwise identified to our satisfaction, of the Registration Statement and such other documents, corporate records and other instruments as we have deemed necessary or appropriate for the purposes of this opinion, including, without limitation, a specimen certificate representing the Common Stock and resolutions adopted by the board of directors of the Company on September 20, 2005 and May 14, 2009. We have also made such examinations of matters of law as we deemed necessary in connection with the opinions expressed herein. We express no opinion as to matters governed by, or the effect or applicability of any laws of any jurisdiction other than the laws of the RMI which are in effect as of the date hereof. This opinion speaks as of the date hereof, and it should be recognized that changes may occur after the date of this letter which may effect the opinions set forth herein. We assume no obligation to advise the parties, their counsel, or any other party seeking to rely upon this opinion, of any such changes, whether or not material, or of any other matter which may hereinafter be brought to our attention. Based upon and subject to the assumptions, qualifications and limitations herein, we are of the opinion that the shares of Common Stock covered by the Registration Statement are duly authorized and, when issued pursuant to the terms of the grants of the equity-based compensation awards under the Plan, will be validly issued, fully paid and nonassessable. We hereby consent to the filing of this opinion with the Commission as Exhibit 5.1 to the Registration Statement. We also consent to the reference to our firm under the caption “Interests of Named Experts and Counsel” in the Registration Statement. | [
"Exhibit REEDER & SIMPSON PC ATTORNEYS AT LAW P.O. Box601 RRE Commercial Center Majuro, MH 96960 Telephone: 011-692-625-3602 Facsimile: 011-692-625-3602 Email: dreeder@ntamar.net r.simpson@simpson.gr October 9, 2009 Ladies and Gentlemen: Re: DHT Maritime, Inc. (the “Company”) We are licensed to practice law in the Republic of the Marshall Islands (the “RMI”),and are members in good standing of the Bar of the RMI. We are acting as special RMI counsel for the Company in connection with the registration statement on Form S-8 (the “Registration Statement”),being filed by the Company with the United States Securities and Exchange Commission (the “Commission”),under the Securities Act of 1933, as amended, relating to shares of Common Stock, par value US$0.01 per share of the Company (the “Common Stock”),which will be issued and issuable in respect of equity-based compensation awards granted under the 2005 Incentive Compensation Plan of the Company, as amended on June 19, 2009 (the “Plan”). In connection with this opinion, we have examined originals or electronic versions, certified or otherwise identified to our satisfaction, of the Registration Statement and such other documents, corporate records and other instruments as we have deemed necessary or appropriate for the purposes of this opinion, including, without limitation, a specimen certificate representing the Common Stock and resolutions adopted by the board of directors of the Company on September 20, 2005 and May 14, 2009. We have also made such examinations of matters of law as we deemed necessary in connection with the opinions expressed herein.",
"We express no opinion as to matters governed by, or the effect or applicability of any laws of any jurisdiction other than the laws of the RMI which are in effect as of the date hereof. This opinion speaks as of the date hereof, and it should be recognized that changes may occur after the date of this letter which may effect the opinions set forth herein. We assume no obligation to advise the parties, their counsel, or any other party seeking to rely upon this opinion, of any such changes, whether or not material, or of any other matter which may hereinafter be brought to our attention.",
"Based upon and subject to the assumptions, qualifications and limitations herein, we are of the opinion that the shares of Common Stock covered by the Registration Statement are duly authorized and, when issued pursuant to the terms of the grants of the equity-based compensation awards under the Plan, will be validly issued, fully paid and nonassessable. We hereby consent to the filing of this opinion with the Commission as Exhibit 5.1 to the Registration Statement. We also consent to the reference to our firm under the caption “Interests of Named Experts and Counsel” in the Registration Statement."
] | https://applica-public.s3-eu-west-1.amazonaws.com/contract-discovery/edgar.txt.xz | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
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544 P.2d 1187 (1976) Frank RALPH LaPENA and Rosalie Maxwell, Appellants, v. The STATE of Nevada, Respondent. No. 8063. Supreme Court of Nevada. January 2, 1976. Goodman & Snyder and Douglas G. Crosby, Las Vegas, for appellants. Robert List, Atty. Gen., Carson City, George E. Holt, Dist. Atty., and Dan M. Seaton, Deputy, Dist. Atty., Clark County, Las Vegas, for respondent.
OPINION ZENOFF, Justice: Frank LaPena and Rosalie Maxwell were charged as principals in the robbery of Marvin and Hilda Krause and in the murder of Hilda Krause on January 14, 1974. That the robbery and murder occurred is not in issue. Maxwell and LaPena appeal from orders denying their petition for habeas corpus. They contend *1188 that for lack of sufficient corroborating evidence to the testimony of accomplice Gerald Weakland who admitted the commission of the crime, they should not be bound over for trial. LaPena and Rosalie Maxwell apparently believed that Marvin Krause was a man who possessed substantial wealth. Evidently, Rosalie and Krause had been meeting surreptitiously for a period of time prior to the robbery and killing. Weakland testified at the preliminary hearing that he was hired by LaPena to kill Hilda Krause so that Rosalie would be in a position to enjoy Krause without interference from his wife. LaPena would profit because he was Rosalie's true lover and he would stand, he hoped, as a pecuniary beneficiary to the Krause-Maxwell relationship. NRS 175.291(1) provides: "A conviction shall not be had on the testimony of an accomplice unless he is corroborated by other evidence which in itself, and without the aid of the testimony of the accomplice, tends to connect the defendant with the commission of the offense; and the corroboration shall not be sufficient if it merely shows the commission of the offense or the circumstances thereof." Since Weakland is an accomplice we must determine what evidence is present independent of the accomplice testimony to connect LaPena and Maxwell with the crime. The necessary corroboration need not be found in a single fact or circumstance, rather several circumstances in combination may satisfy the statute. If circumstances and evidence from sources other than the testimony of the accomplice tend on the whole to connect the accused with the crime charged, it is enough. LaPena v. Sheriff, 91 Nev. 692, 541 P.2d 907 (1975); Lamb v. Bennett, 87 Nev. 89, 482 P.2d 298 (1971). The composite of facts and circumstances as established by the testimony of many witnesses take the two accused beyond the status of mere casual association with Weakland. See Eckert v. State, 91 Nev. 183, 533 P.2d 468 (1975); Austin v. State, 87 Nev. 578, 491 P.2d 724 (1971); Ex Parte Hutchinson, 76 Nev. 478, 357 P.2d 589 (1960). From the testimony of other witnesses it is established that LaPena was not merely an acquaintance of Weakland, as we noted in LaPena v. Sheriff, supra, but one who with Maxwell had a motive to get rid of Hilda Krause and who was therefore linked inculpably to Weakland in a criminal scheme. Among the witnesses were persons related to Weakland, brothers, sister-in-law and former wife, all of whom had been brought into contact with Frank LaPena by Weakland, as well as others. Their testimony concerned events and conversations that transpired proximately before and after the crimes were committed. For a short period preceding the offenses, Jerry Weakland lived in the residence of his sister-in-law, Sandra. She testified to receiving phone calls from a "Frank" at her home. The telephone number she noted was traced at the preliminary hearing to Frank LaPena. She eventually was introduced to LaPena by Weakland and she knew of no other acquaintance of Jerry's who bore the same first name of "Frank." Additionally, in the daylight hours after the crimes were committed Weakland brought a portable TV set to her home. A portable TV set was part of the loot from the robbery. She added that the TV set was quickly taken from her dwelling by Jerry's brothers and destroyed, which as they testified was because of the surveillance of Jerry by the police after January 14. Certain jewelry was taken from the Krauses by the culprits, principally a watch and a ring. Jerry gave a friend and a brother a watch and a ring that answered the description of the Krause jewelry. Gail had been taken to Rosalie Maxwell's residence prior to the commission of the crimes by her former husband and after the crimes she was sent twice by Weakland to pick up cash from LaPena. Weakland *1189 also showed his ex-wife, Gail, $1,000 in cash in $100 bills that came suddenly into his possession at or about the time of the robbery and murder. She also saw him hide a watch and a ring a few hours after the time the crimes were committed. Weakland testified that he borrowed his former wife's 1973 Monte Carlo automobile at 3:00 a.m., January 14. Together with Thomas Boutwell they drove to a point near the Krause residence and parked it. After gaining entrance to the house he detailed how Boutwell tied up Marvin Krause and took him to a room away from where they met Hilda Krause. Jerry then hit Marvin Krause over the head with a .38 caliber pistol rendering him unconscious. Boutwell proceeded to strip Krause of his jewelry and what little cash he found on Krause's body. At the same time Weakland took Mrs. Krause to another room, bound her arms behind her, fashioned her with a gag and hit her on the head with his fist which was covered with a black leather glove. He had obtained, prior to this event, a pair of black leather leadfilled gloves from LaPena. While she was thus unconscious, he turned her face down, pulled her head up by the hair and cut her throat. Boutwell was in another part of the house at the time apparently unaware of the murder. Together they carried the TV set outside to Krause's Cadillac automobile and drove to the Monte Carlo car. When they were moving the TV set into the rear portion of Gail Weakland's automobile a corner of the TV set ripped the liner of the car top. Gail testified she recalled that her car was in good shape when Jerry borrowed it but that when it was returned she noted the tear in the roof. This occurred during the morning hours following the murder. Gail corroborated Weakland's testimony that together they went to Lake Havasu after the crimes (although she did not know that crimes had been committed) and that she was present when Weakland attempted to call LaPena long distance from their motel room, to which the motel manager also testified. Gail testified further and variously about Weakland sending her to LaPena for money on two occasions, that she returned the black gloves to LaPena at the Hacienda Hotel under furtive circumstances and even that prior to January 14 he showed her a hand-drawn map of the Krause residence which he later destroyed in her presence. Rosalie Maxwell admitted to a detective that she was a sexual companion to Marvin Krause while his wife was out of the city; that Krause gave her money from time to time; and that Krause was her "live one" but Frank LaPena was her true lover. The totality of the testimony and evidence are supportive of inferences that Rosalie Maxwell and LaPena sought to eliminate Hilda Krause so that Rosalie and LaPena would be in a position to enjoy Krause's wealth without Hilda's interference. For this, Weakland was to be paid $10,000 by the end of the year. One of Weakland's brothers told of instructions from Jerry that if Jerry were ever in circumstances where he needed money, the brother was to see "Frank" and he would get some. Additional permissible inferences can be drawn from the testimony of Bobby Webb, Mary Bordeaux and police officer Avants. LaPena v. Sheriff, supra; Goldsmith v. Sheriff, 85 Nev. 295, 454 P.2d 86 (1969). Weakland, the accomplice and coconspirator, told Webb of the contemplated robbery and indicated that a friend of his had supplied him with a map to the apartment, that he had given him information on what time Krause was to leave the apartment and that the thing was well planned. This was before the crimes were perpetrated. After the crimes were committed, Weakland told Webb that his friend's girl friend would marry Krause and that she would pay him the money. Finally, after the crimes, Weakland told Webb that "if the police ever ask you if you know Frank, say no"; and Weakland said, "and you know *1190 who I am talking about," to which Webb replied, "yes." Webb then identified Frank as the Frank LaPena in court. It is permissible to infer that the individuals to whom Weakland was referring in his extra-judicial statements to Webb were LaPena and Maxwell. Although the magistrate found Webb to be an accomplice (whether this was appropriate was not presented as an issue on appeal), Webb's testimony was corroborated by Mary Bordeaux, by Gail Weakland and by officers Avants and Lee. Maxwell told police officers Avants and Lee of her involvement with Krause, her knowledge of his wealth, Krause's proposals of marriage and her true love for Frank LaPena. The permissible inferences from her testimony tie directly to the statements made by Weakland to Webb and support the conspiracy theory of the state. All of the foregoing "tends to connect" LaPena and Maxwell with the crimes charged. The hearsay statements of Weakland to Webb are admissible under Goldsmith v. Sheriff, supra, and not "testimony" of an accomplice within NRS 175.291. The witnesses who testified corroborating Weakland's testimony do not appear to have been motivated by self-serving purposes. For example, Weakland's ex-wife, Gail, had often been beaten up by him, three times severely enough to cause her to be hospitalized. The most recent such incident occurred at the time of the events surrounding the Krause murder and robbery. It is doubtful that she would shade her testimony to favor him. Although Weakland's participation in these crimes may have warranted a more serious charge than second-degree murder, plea bargaining is permissible. Until legislatively forbidden, or otherwise, his testimony in exchange for a lesser accusation carries whatever weight a magistrate or jury want to give it. For our present purposes the evidence as related is inculpatory and corroborative. Affirmed. MOWBRAY and THOMPSON, JJ., concur. GUNDERSON, Chief Justice, with whom BATJER, Justice, agrees (dissenting): Justice BATJER and I believe that the record before us lacks evidence which, in the legal sense, "corroborates" the accomplice testimony adduced against appellants LaPena and Maxwell. Accordingly, we would reverse the district court's order denying them habeas relief, and order appellants discharged unless the State, believing further evidence of a legally corroborative character to be available, should elect to re-charge them within a specified period of time.
Prefatory Comment To obtain evidence to charge appellants Frank LaPena and Rosalie Maxwell as principals in the robbery of Marvin and Hilda Krause, and in the capital murder of Hilda Krause, the prosecution has bargained for testimony from the admitted actual robber and killer, Gerald Weakland, and from his acknowledged accomplice Robert Webb.[1] Although NRS 200.030(5) expressly declares the death penalty mandatory for capital murder, in an extra-statutory exercise of discretion the prosecution agreed to charge Weakland merely with second degree murder, to withhold related robbery charges, and in addition to drop other charges arising from additional, unrelated crimes. (As hereinafter noted, Weakland's accomplice, Robert Webb, struck an even better bargain.) Thus, it seems the actual killers have been induced to identify LaPena and Maxwell as persons who instigated *1191 their own criminal acts, ostensibly so that Maxwell could marry Krause and, with her lover LaPena, enjoy Krause's money. I will not now address numerous questions potentially concerned in such prosecutorial conduct.[2] At this time, I consider only the issue the majority treat, i.e. whether the testimony of Weakland and Webb has been duly corroborated, as NRS 175.291 requires.
Application of NRS 175.291; In General Enunciating the test to be utilized in applying NRS 175.291, this court has declared, consistently with authority elsewhere: "Under statutes such as NRS 175.291 it is commonly held that `corroborative evidence is insufficient when it merely casts a grave suspicion upon the accused.' People v. Shaw, 17 Cal. 2d 778, 112 P.2d 241, 255 (1941), and cases there cited; Cooper v. Territory, 19 Okl. 496, 91 P. 1032 (1907). As the California Supreme Court said in People v. Shaw, supra, citing numerous authorities: "`The difficulty comes in determining what corroboration is sufficient. First, we must eliminate from the case the evidence of the accomplice, and then examine the evidence of the remaining witness or witnesses with the view to ascertain if there be inculpatory evidence, evidence tending to connect the defendant with the offense. If there is, the accomplice is corroborated; if there is no inculpatory evidence, there is no corroboration, though the accomplice may be corroborated in regard to any number of facts sworn to by him.' Id., 112 P.2d at 255; emphasis in original. "This seems the approach the courts have uniformly taken to application of statutes like NRS 175.291; indeed, it seems the only approach available. How else may we implement the legislative edict that there must be corroborative evidence `which in itself' tends to connect the defendant with the commission of the offense `without the aid of the testimony of the accomplice'? How else may we honor the legislative mandate that `corroboration shall not be sufficient if it merely shows the commission of the offense or the circumstances thereof'? "Implicitly recognizing the propriety of the aforedescribed approach to application of NRS 175.291, this court held in Ex parte Hutchinson, 76 Nev. 478, 357 P.2d 589 (1960), that an accomplice was not sufficiently corroborated, even to show probable cause to hold for trial, merely by showing the defendant was with the accomplice near the scene of the crime on the night it was committed, at the time the accomplice testified they committed it in concert... ." Austin v. State, 87 Nev. 578, 585, 491 P.2d 724, 728-729 (1971). Having called to mind this firmly established approach which NRS 175.291 mandates, I now propose to eliminate from consideration testimony of the established accomplices and then, in fidelity to the legislative command, determine whether any of the remaining evidence alluded to in the majority opinion constitutes "corroboration" in the legal acceptation of that term.
Details Concerning the Crime's Commission and Circumstances By its express terms, NRS 175.291 does not merely mandate that "corroboration," to be legally sufficient, must in itself have independent inculpatory significance "without the aid of the testimony of the accomplice." The Legislature went on to provide, most explicitly, that "corroboration *1192 shall not be sufficient if it merely shows the commission of the offense or the circumstances thereof." It is, of course, not for this Court to question the wisdom of this provision, which in any event has a logical basis, grounded in legal history and precedent. As this court noted in Austin v. State: "A man who has been guilty of a crime himself will always be able to relate the facts of the case, and if the confirmation be only on the truth of that history, without identifying the person, that is really no corroboration at all." 87 Nev. at 584, n. 7, 491 P.2d at 728, quoting Lord Abinger, C.B., in R. v. Farler, 8 C. & P. 106 (1837). This court also noted "that `ex concesso' an accomplice was concerned in the crime and [knows] all the facts ..." Id., quoting Bushe, C.J., in R. v. Sheehan, Jebb 54, 57 (1826). Clearly, many facts which Weakland has related, possibly quite accurately, establish no more than this: a criminal's knowledge of his own crime. For example, Weakland testified that among the items he and Boutwell took from the Krause home were a TV set, a watch and a ring. The prosecution does not suggest that either LaPena or Maxwell ever were connected to this loot in any way whatever. In fact, as the majority opinion notices, apparently Weakland turned over to a friend and to his brother not to LaPena or Maxwell a ring and watch answering the description of the Krause jewelry. Arguably, the fact that Weakland's friend and brother may have received stolen property would be independent evidence tending to connect them to the commission of the offense. However, neither the fact that Weakland stole the jewelry, nor the fact that Weakland delivered it to his friend and brother, tends to inculpate LaPena or Maxwell any more than it would inculpate anyone else Weakland might agree to accuse to buy his life and freedom.[3] Purely and simply, these are merely circumstances of the crime which, in Lord Abinger's words, do not identify the person accused at all. Returning to the TV set, it seems from the testimony of Gail Weakland that, when Weakland borrowed her automobile on the night of the murder-robbery, the car's headliner was intact; but upon return, it was ripped. Again, this circumstance may coincide with Weakland's statement that he and Boutwell ripped the headliner when transferring the Krause TV set into Gail Weakland's car; however, it obviously lacks any independent inculpatory significance so far as LaPena and Maxwell are concerned. The prosecution does not suggest LaPena and Maxwell have been connected either to the TV set or to the rip in the headliner, in any way at all. Indeed, according to the majority's view of the facts, Weakland first took the TV set to Sandra Weakland's home which would inculpate Sandra if anyone. Later, my brethren say, fearing that Weakland was under police surveillance, Weakland's brothers apparently took the TV from Sandra's home and destroyed it facts which, if true, might tend to inculpate the brothers, but certainly not LaPena or Maxwell.[4] Similarly, according to Weakland, he received from Rosalie Maxwell a hand-drawn map of streets near the Krause residence, which he thereupon copied and destroyed. In other words, Weakland says he had a map, the origin of which he and *1193 he alone attributed to LaPena and Maxwell. While Gail Weakland testified she once saw Weakland with what appeared to be a hand-drawn map, her testimony fails even to relate it to the Krause crime, and in no way whatever establishes that either LaPena or Maxwell had anything to do with its origins.
Facts Related Neither To The Crime Nor To Appellants Of even less force to inculpate LaPena or Maxwell is Gail Weakland's testimony that, around January 2, Weakland had some $1,000 in $100 bills. Although the majority omit to mention it, Gail further testified that Weakland had said he had won the money gambling. Instead of suggesting that this explanation was suspect in any way, Gail confirmed that Weakland was indeed a heavy gambler. Thus, far from relating the money to LaPena or Maxwell, or to the Krause crime, it would be altogether speculative to assume from Gail Weakland's testimony that the money had a relationship to a criminal endeavor by anyone.
Evidence of Friendship and Association Even evidence of close association and friendship with an acknowledged wrongdoer will not corroborate his accusation. Eckert v. State, 91 Nev. 183, 533 P.2d 468 (1975); Austin v. State, 87 Nev. 578, 491 P.2d 724 (1971); Ex Parte Hutchinson, 76 Nev. 478, 357 P.2d 589 (1960). Here, of course, it seems clear that Weakland had a friendly relationship with LaPena and was acquainted with Maxwell. It would appear, for example, that LaPena may have telephoned Weakland occasionally at the home of his sister-in-law, Sandra, with whom he was residing. If so, he did not act furtively, but left messages using his true first name, "Frank." It also appears that, at a time prior to the robbery-murder, Gail Weakland waited in the car while Weakland went briefly into Rosalie Maxwell's townhouse. What happened inside who was there Gail does not know. Gail also testified that on one occasion, not two as the majority state, Weakland sent her to LaPena for money: two $20 bills and one $10 bill, or a total of $50. At one time, Weakland told one of his brothers that if he needed money, he could get it from Frank. Obviously, such testimony indicates no more than association or friendship. This is true with other aspects of the evidence. For example, it appears that, during a weekend at Lake Havasu following the murder, Weakland made two phone calls to Las Vegas one, he says, to his mother and the other to LaPena. Assuming such a call to LaPena were independently proved, it would inculpate LaPena no more than it inculpates Weakland's mother. And obviously, not even a prosecutor could think such calls inculpatory of Maxwell. Of course, from Gail's testimony it does appear that at a time subsequent to the murder-robbery, Weakland caused Gail to deliver a pair of weighted black leather gloves to the Hacienda Hotel, where LaPena took them from her furtively. I do not, however, perceive that this fact has been independently related to the crime for which these appellants will stand trial for their lives. In the first place, for purposes of another prosecution, the State's theory is that LaPena delivered the gloves to Weakland for use in beating the Hacienda Hotel's manager, that Weakland so used them, then caused their return. See: LaPena v. Sheriff, 91 Nev. 692, 541 P.2d 907 (1975). Thus, the state has explained the transfer of the gloves, relating them to another totally different crime, which Weakland also committed and later attributed to LaPena. The prosecution here desires, however, to make the gloves do double evidentiary service, which it appears to me cannot be done; for dropping out Weakland's testimony, the record fails to show that either Krause was beaten, with weighted gloves or otherwise. The gloves simply are not shown, except through accomplice testimony, to have any relationship *1194 whatever to the offense here concerned. Furthermore, not only do the gloves lack independent value to connect LaPena with the offense in question; they have, moreover, not been related to Maxwell in any way.
Testimony of Weakland's Accomplice, Webb From the record, it appears that Robert Webb participated with Weakland in planning the murder and robbery in question, although he restricted his participation to aiding and abetting Weakland, both before and afterward. Webb assisted Weakland in procuring the participation of Boutwell, whom Webb supplied with the gloves and jacket and, some evidence indicates, the boots also which Boutwell used in the crimes at the Krause residence. Webb knew these items would be used in the robbery-murder, which he helped to plan. After the crimes, and knowing of them, Webb aided and abetted Weakland by secreting evidence taken from the Krause residence. Thus, under such circumstances, it is evident that the magistrate not only was correct in finding Webb an accomplice, but might have been in error if he had found anything else. See: NRS 195.020; State v. Cushing, 61 Nev. 132, 120 P.2d 208 (1941); State v. Chapman, 6 Nev. 320 (1871).[5] Although Webb also might have been prosecuted for capital murder, the prosecution permitted him to plead guilty to a gross misdemeanor, with a recommendation of probation, and he is now free. On his part, Webb has by his testimony undertaken to assist the prosecution in convicting LaPena and Maxwell of a capital offense. Again, I refrain from considering the Constitutional implications of this exchange, so highly favorable to Webb. I consider only whether Webb's testimony can be viewed as corroborating Weakland's. It is true, of course, that hearsay statements of one co-conspirator to another are admissible, and may be considered as evidence under an exception to the hearsay rule once the conspiracy is proved. NRS 51.035(3) (e); Goldsmith v. Sheriff, 85 Nev. 295, 454 P.2d 86 (1969). However, if the hearsay statements of one accomplice-conspirator, such as Weakland, are only established through the testimony of a second accomplice-conspirator, such as Webb, then it is clear such statements may not be viewed as "corroborating evidence" that a third person, such as LaPena or Maxwell, is also part of the conspiracy. Goldsmith does not suggest otherwise; instead, it explicitly declares that, "before those hearsay statements can be considered by the magistrate it is incumbent upon him to examine all the other evidence to determine whether, aliunde, the existence of a conspiracy was established." 85 Nev. at 304, 454 P.2d at 92. As I am sure the majority know, and as Justice Traynor recognized in People v. Clapp, 24 Cal. 2d 835, 151 P.2d 237 *1195 (1944), citing numerous authorities, "the testimony of one accomplice is not corroborated by that of another." Id. at 238; in accord, State v. Banks, 6 Or. App. 47, 486 P.2d 584 (1971); People v. Jehl, 150 Cal. App. 2d 665, 310 P.2d 495 (1957); State v. Hilbish, 59 Nev. 469, 97 P.2d 435 (1940); VII Wigmore on Evidence, § 2059 (3rd Ed. 1940). Only this fall, our court again recognized the viability of this rule. See: LaPena v. Sheriff, 91 Nev. 692, 541 P.2d 907 (1975). Thus, since the only evidence of Weakland's supposed extra-judicial statements is testimony from Webb, and since Webb's testimony like Weakland's must be eliminated from consideration when deciding whether the prosecution has satisfied NRS 175.291's requirement of corroboration, it is patent that Webb's story of what Weakland said has no more significance than his direct accusation of LaPena or Maxwell would have.
Relationship of LaPena, Maxwell, and Krause Impermissibly, the majority opinion has drawn upon Weakland's story to establish in LaPena and Maxwell a motive to kill Mrs. Krause. Virtually none of the "facts" concerning this supposed motive find any support in the record, save through testimony of the self-acknowledged participant, Weakland. It does appear, of course, that the Maxwell woman was a lady of doubtful morals, who admitted regarding Krause as her "live one" and LaPena as her "true lover." Physically, she accommodated Krause; monetarily, he assisted her. On its face, however, there is nothing about their symbiotic relationship, however contrary to accepted conventions, which suggests a motive to have Krause beaten and Mrs. Krause murdered. Only through the testimony of accomplices Weakland and Webb is a somewhat unlikely motive attributed to LaPena and Maxwell. Supposedly, LaPena and Maxwell believed Krause was quite wealthy, and decided killing Mrs. Krause would set in motion a house-that-Jack-built chain of events enabling them to enjoy more of Krause's money than before. According to the story the prosecution elicited by allowing life and freedom to the two acknowledged participants, Weakland and Webb, LaPena believed that if he had Mrs. Krause killed, Krause would then marry Maxwell; that Maxwell could then induce Krause to supply her greater sums of money; and that he, LaPena, would then share the increased take. Unlike the situation revealed in LaPena v. Sheriff, supra, however, nothing tending independently to establish this motive appears in the record.
Summary I recognize, of course, that several items of evidence, not by themselves inculpatory, may in combination independently establish facts constituting legal corroboration. Cf. LaPena v. Sheriff, cited above. I also recognize that several items of evidence, by themselves only remotely inculpatory, may in their totality rise to the dignity of legal corroboration. Cf. People v. Trujillo, 32 Cal. 2d 105, 194 P.2d 681 (1948). I further recognize, however, that nothing plus nothing plus nothing is nothing. As my brother ZENOFF said, speaking for a unanimous court in Eckert v. State, 91 Nev. 183, 186, 533 P.2d 468, 471 (1975): "Evidence to corroborate accomplice testimony does not suffice if it merely casts grave suspicion on the defendant." And as Lord Abinger has said: "It is a practice which deserves all the reverence of the law, that judges have uniformly told juries that they ought not to pay any respect to the testimony of an accomplice unless the accomplice is corroborated in some material particular... . The danger is that when a man is fixed, and knows that his own guilt is detected, he purchases immunity by falsely accusing others." R. v. Farler, 8 C. & P. 106 (1837). I suggest that Lord Abinger's observation is apposite, not just as to those who are clearly "fixed," such as Weakland and Webb, but also to persons like Gail Weakland *1196 and Mary Bordeaux whose proximity and possible complicity in the crime is manifest, but whose guilt is not certain. I do not, of course, suggest that these women necessarily were accomplices in the legal sense. Since their complicity is not now definitely established, that will be a question of fact to be determined at trial. Cf. Austin v. State, 87 Nev. 578, 491 P.2d 724 (1971). For present purposes, I presume, despite the women's obvious involvement with Weakland and Webb in events of the murder-robbery and ensuing efforts to escape justice, that Gail Weakland and Mary Bordeaux did not know a murder was to be committed until after it occurred.[6] I do, however, challenge the majority's dicta that there is no reason to question Gail Weakland's veracity. She and the Bordeaux woman have the same reason as Weakland and Webb have to testify as the prosecution desires. Beyond this, as a matter of logic, I question that Weakland's frequent beating and hospitalization of Gail Weakland makes it "doubtful that she would shade her testimony to favor him." I note that, after the mentioned beatings, Gail nonetheless let Weakland utilize her car on the night of the murder-robbery and left town with him afterward. Even fully crediting those not definitely shown to be accomplices, much of the record consists of testimony which proves only that Weakland is able to relate, with some measure of accuracy, details of his own vicious crime. The rest of the ostensible corroboration presented by the State, in itself, achieves no more than to prove, redundantly, that LaPena and Weakland were friends or associates. Ignoring Weakland's testimony, the testimony of one Fish (which the magistrate rejected as unworthy of belief), and the testimony of witness Webb (whom the magistrate found as a fact to be an accomplice), I therefore think the record shows only that LaPena and Maxwell are amoral persons, who consort with their own kind, including persons like Weakland. LaPena, a hotel bell captain, has lived with Maxwell, who apparently has slept with Krause and taken as much of his money as she could get. In themselves, however, these facts suggest no reason for either of them to pay Weakland to rob Krause and murder his wife. It does appear that, around the time of the Krause murder, certain weighted black gloves passed between Weakland and LaPena; however, except through the testimony of Weakland and Webb, those gloves cannot be associated with the crimes here concerned. It is, in fact, the prosecution's theory that the gloves in question were particularly related to a different crime, which is concerned in another case before us. In the instant case, the record does not show that either Marvin or Hilda Krause was beaten, or that any plan ever existed that such would be done. Had the magistrate not found Fish's testimony incredible, had he not determined Webb was an accomplice, and had the prosecution proved, independently of accomplice testimony, that appellants paid Weakland a large sum of money (as the prosecution tried and failed to do), then of course a substantially different question might be presented. It seems clear that, upon the present record, by virtue of NRS 175.291, there is insufficient evidence to hold appellants to answer for the crimes with which they stand charged in this case. Thus, the order denying habeas corpus should be reversed. *1197 As to such charges, appellants should stand discharged unless the State, believing further corroborative evidence to be available, should elect to re-charge them within a specified period of time. BATJER, J., concurs. NOTES [1] The now incumbent District Attorney was not serving in that office when the bargain referred to was entered. [2] One must, of course, note concern regarding the propriety of the prosecution's conduct, not only because it seems clearly to contravene our legislature's mandate, but also because, in so doing, it may also violate the United States Supreme Court's edict against "wanton and freakish" applications of the death penalty. See: Furman v. Georgia, 408 U.S. 238, 310, 92 S. Ct. 2726, 33 L. Ed. 2d 346 (1972), Stewart, J., concurring. However, we need not reach such considerations; nor do I here consider whether the purchase of testimony, through a bargain so disproportionate, violates due process of law. [3] Weakland testified that, ultimately, he retrieved the ring and gave it to LaPena, unlikely testimony for which, in any event, there is no confirmation whatever. It also is worth noting that, apparently contradicting Weakland, Webb testified to getting rid of evidence, by throwing "the watches and ring" into a garbage can. [4] As I read the record, the TV set assertedly went first to a condominium occupied by Webb, Boutwell and Mary Beth Bordeaux, on the morning of the crime. Then, as he became fearful of discovery, Weakland and his brother Leo took the TV set from the condominium, and took it to Gordon and Sandra's home. I do not recall that the record reflects destruction of the TV set; however, in any event, certainly no one contends that either of the appellants destroyed it. [5] NRS 195.020 provides:
"Who are principals. Every person concerned in the commission of a felony, gross misdemeanor or misdemeanor, whether he directly commits the act constituting the offense, or aids or abets in its commission, and whether present or absent; and every person who, directly or indirectly, counsels, encourages, hires, commands, induces or otherwise procures another to commit a felony, gross misdemeanor or misdemeanor is a principal, and shall be proceeded against and punished as such... ." Emphasis added. In State v. Cushing, cited above, this court expressly stated that, under our statutes, "it is only necessary in such case to show that a crime has been committed, and that the defendant, if present, aided and assisted, or, if not present, advised and encouraged it." 61 Nev. at 145, 120 P.2d at 215. The magistrate determined Webb was an accomplice, which clearly was within his province. State v. Fuchs, 78 Nev. 63, 368 P.2d 869 (1962); In re Oxley and Mulvaney, 38 Nev. 379, 149 P. 992 (1915); Ex Parte Willoughby, 14 Nev. 451 (1880). I presume the majority do not question the foregoing authorities. We most recently recognized their force only three months ago in State v. Havas, 91 Nev. 611, 540 P.2d 1060 (1975), there invoking them against a defendant, and holding that both the district courts and this court are bound by magistrates' factual determinations. [6] I note, however, that at least the Bordeaux woman who was with Weakland and Webb immediately before the murder-robbery, received some of the loot, and helped destroy evidence afterward has expressly been promised total immunity to induce her testimony against LaPena and Maxwell. Apparently, tacitly or otherwise, the prosecution also is committed not to prosecute the Weakland woman, who supplied the car used for the murder-robbery, and left with Weakland for Lake Havasu when he became fearful of discovery. | 10-30-2013 | [
"544 P.2d 1187 (1976) Frank RALPH LaPENA and Rosalie Maxwell, Appellants, v. The STATE of Nevada, Respondent. No. 8063. Supreme Court of Nevada. January 2, 1976. Goodman & Snyder and Douglas G. Crosby, Las Vegas, for appellants. Robert List, Atty. Gen., Carson City, George E. Holt, Dist. Atty., and Dan M. Seaton, Deputy, Dist. Atty., Clark County, Las Vegas, for respondent. OPINION ZENOFF, Justice: Frank LaPena and Rosalie Maxwell were charged as principals in the robbery of Marvin and Hilda Krause and in the murder of Hilda Krause on January 14, 1974. That the robbery and murder occurred is not in issue. Maxwell and LaPena appeal from orders denying their petition for habeas corpus. They contend *1188 that for lack of sufficient corroborating evidence to the testimony of accomplice Gerald Weakland who admitted the commission of the crime, they should not be bound over for trial.",
"LaPena and Rosalie Maxwell apparently believed that Marvin Krause was a man who possessed substantial wealth. Evidently, Rosalie and Krause had been meeting surreptitiously for a period of time prior to the robbery and killing. Weakland testified at the preliminary hearing that he was hired by LaPena to kill Hilda Krause so that Rosalie would be in a position to enjoy Krause without interference from his wife. LaPena would profit because he was Rosalie's true lover and he would stand, he hoped, as a pecuniary beneficiary to the Krause-Maxwell relationship. NRS 175.291(1) provides: \"A conviction shall not be had on the testimony of an accomplice unless he is corroborated by other evidence which in itself, and without the aid of the testimony of the accomplice, tends to connect the defendant with the commission of the offense; and the corroboration shall not be sufficient if it merely shows the commission of the offense or the circumstances thereof.\" Since Weakland is an accomplice we must determine what evidence is present independent of the accomplice testimony to connect LaPena and Maxwell with the crime. The necessary corroboration need not be found in a single fact or circumstance, rather several circumstances in combination may satisfy the statute.",
"If circumstances and evidence from sources other than the testimony of the accomplice tend on the whole to connect the accused with the crime charged, it is enough. LaPena v. Sheriff, 91 Nev. 692, 541 P.2d 907 (1975); Lamb v. Bennett, 87 Nev. 89, 482 P.2d 298 (1971). The composite of facts and circumstances as established by the testimony of many witnesses take the two accused beyond the status of mere casual association with Weakland. See Eckert v. State, 91 Nev. 183, 533 P.2d 468 (1975); Austin v. State, 87 Nev. 578, 491 P.2d 724 (1971); Ex Parte Hutchinson, 76 Nev. 478, 357 P.2d 589 (1960). From the testimony of other witnesses it is established that LaPena was not merely an acquaintance of Weakland, as we noted in LaPena v. Sheriff, supra, but one who with Maxwell had a motive to get rid of Hilda Krause and who was therefore linked inculpably to Weakland in a criminal scheme. Among the witnesses were persons related to Weakland, brothers, sister-in-law and former wife, all of whom had been brought into contact with Frank LaPena by Weakland, as well as others. Their testimony concerned events and conversations that transpired proximately before and after the crimes were committed. For a short period preceding the offenses, Jerry Weakland lived in the residence of his sister-in-law, Sandra.",
"She testified to receiving phone calls from a \"Frank\" at her home. The telephone number she noted was traced at the preliminary hearing to Frank LaPena. She eventually was introduced to LaPena by Weakland and she knew of no other acquaintance of Jerry's who bore the same first name of \"Frank.\" Additionally, in the daylight hours after the crimes were committed Weakland brought a portable TV set to her home. A portable TV set was part of the loot from the robbery. She added that the TV set was quickly taken from her dwelling by Jerry's brothers and destroyed, which as they testified was because of the surveillance of Jerry by the police after January 14. Certain jewelry was taken from the Krauses by the culprits, principally a watch and a ring. Jerry gave a friend and a brother a watch and a ring that answered the description of the Krause jewelry. Gail had been taken to Rosalie Maxwell's residence prior to the commission of the crimes by her former husband and after the crimes she was sent twice by Weakland to pick up cash from LaPena.",
"Weakland *1189 also showed his ex-wife, Gail, $1,000 in cash in $100 bills that came suddenly into his possession at or about the time of the robbery and murder. She also saw him hide a watch and a ring a few hours after the time the crimes were committed. Weakland testified that he borrowed his former wife's 1973 Monte Carlo automobile at 3:00 a.m., January 14. Together with Thomas Boutwell they drove to a point near the Krause residence and parked it. After gaining entrance to the house he detailed how Boutwell tied up Marvin Krause and took him to a room away from where they met Hilda Krause. Jerry then hit Marvin Krause over the head with a .38 caliber pistol rendering him unconscious. Boutwell proceeded to strip Krause of his jewelry and what little cash he found on Krause's body.",
"At the same time Weakland took Mrs. Krause to another room, bound her arms behind her, fashioned her with a gag and hit her on the head with his fist which was covered with a black leather glove. He had obtained, prior to this event, a pair of black leather leadfilled gloves from LaPena. While she was thus unconscious, he turned her face down, pulled her head up by the hair and cut her throat. Boutwell was in another part of the house at the time apparently unaware of the murder. Together they carried the TV set outside to Krause's Cadillac automobile and drove to the Monte Carlo car. When they were moving the TV set into the rear portion of Gail Weakland's automobile a corner of the TV set ripped the liner of the car top. Gail testified she recalled that her car was in good shape when Jerry borrowed it but that when it was returned she noted the tear in the roof. This occurred during the morning hours following the murder. Gail corroborated Weakland's testimony that together they went to Lake Havasu after the crimes (although she did not know that crimes had been committed) and that she was present when Weakland attempted to call LaPena long distance from their motel room, to which the motel manager also testified.",
"Gail testified further and variously about Weakland sending her to LaPena for money on two occasions, that she returned the black gloves to LaPena at the Hacienda Hotel under furtive circumstances and even that prior to January 14 he showed her a hand-drawn map of the Krause residence which he later destroyed in her presence. Rosalie Maxwell admitted to a detective that she was a sexual companion to Marvin Krause while his wife was out of the city; that Krause gave her money from time to time; and that Krause was her \"live one\" but Frank LaPena was her true lover. The totality of the testimony and evidence are supportive of inferences that Rosalie Maxwell and LaPena sought to eliminate Hilda Krause so that Rosalie and LaPena would be in a position to enjoy Krause's wealth without Hilda's interference. For this, Weakland was to be paid $10,000 by the end of the year.",
"One of Weakland's brothers told of instructions from Jerry that if Jerry were ever in circumstances where he needed money, the brother was to see \"Frank\" and he would get some. Additional permissible inferences can be drawn from the testimony of Bobby Webb, Mary Bordeaux and police officer Avants. LaPena v. Sheriff, supra; Goldsmith v. Sheriff, 85 Nev. 295, 454 P.2d 86 (1969). Weakland, the accomplice and coconspirator, told Webb of the contemplated robbery and indicated that a friend of his had supplied him with a map to the apartment, that he had given him information on what time Krause was to leave the apartment and that the thing was well planned. This was before the crimes were perpetrated. After the crimes were committed, Weakland told Webb that his friend's girl friend would marry Krause and that she would pay him the money.",
"Finally, after the crimes, Weakland told Webb that \"if the police ever ask you if you know Frank, say no\"; and Weakland said, \"and you know *1190 who I am talking about,\" to which Webb replied, \"yes.\" Webb then identified Frank as the Frank LaPena in court. It is permissible to infer that the individuals to whom Weakland was referring in his extra-judicial statements to Webb were LaPena and Maxwell. Although the magistrate found Webb to be an accomplice (whether this was appropriate was not presented as an issue on appeal), Webb's testimony was corroborated by Mary Bordeaux, by Gail Weakland and by officers Avants and Lee. Maxwell told police officers Avants and Lee of her involvement with Krause, her knowledge of his wealth, Krause's proposals of marriage and her true love for Frank LaPena. The permissible inferences from her testimony tie directly to the statements made by Weakland to Webb and support the conspiracy theory of the state.",
"All of the foregoing \"tends to connect\" LaPena and Maxwell with the crimes charged. The hearsay statements of Weakland to Webb are admissible under Goldsmith v. Sheriff, supra, and not \"testimony\" of an accomplice within NRS 175.291. The witnesses who testified corroborating Weakland's testimony do not appear to have been motivated by self-serving purposes. For example, Weakland's ex-wife, Gail, had often been beaten up by him, three times severely enough to cause her to be hospitalized. The most recent such incident occurred at the time of the events surrounding the Krause murder and robbery. It is doubtful that she would shade her testimony to favor him. Although Weakland's participation in these crimes may have warranted a more serious charge than second-degree murder, plea bargaining is permissible.",
"Until legislatively forbidden, or otherwise, his testimony in exchange for a lesser accusation carries whatever weight a magistrate or jury want to give it. For our present purposes the evidence as related is inculpatory and corroborative. Affirmed. MOWBRAY and THOMPSON, JJ., concur. GUNDERSON, Chief Justice, with whom BATJER, Justice, agrees (dissenting): Justice BATJER and I believe that the record before us lacks evidence which, in the legal sense, \"corroborates\" the accomplice testimony adduced against appellants LaPena and Maxwell. Accordingly, we would reverse the district court's order denying them habeas relief, and order appellants discharged unless the State, believing further evidence of a legally corroborative character to be available, should elect to re-charge them within a specified period of time. Prefatory Comment To obtain evidence to charge appellants Frank LaPena and Rosalie Maxwell as principals in the robbery of Marvin and Hilda Krause, and in the capital murder of Hilda Krause, the prosecution has bargained for testimony from the admitted actual robber and killer, Gerald Weakland, and from his acknowledged accomplice Robert Webb. [1] Although NRS 200.030(5) expressly declares the death penalty mandatory for capital murder, in an extra-statutory exercise of discretion the prosecution agreed to charge Weakland merely with second degree murder, to withhold related robbery charges, and in addition to drop other charges arising from additional, unrelated crimes.",
"(As hereinafter noted, Weakland's accomplice, Robert Webb, struck an even better bargain.) Thus, it seems the actual killers have been induced to identify LaPena and Maxwell as persons who instigated *1191 their own criminal acts, ostensibly so that Maxwell could marry Krause and, with her lover LaPena, enjoy Krause's money. I will not now address numerous questions potentially concerned in such prosecutorial conduct. [2] At this time, I consider only the issue the majority treat, i.e. whether the testimony of Weakland and Webb has been duly corroborated, as NRS 175.291 requires. Application of NRS 175.291; In General Enunciating the test to be utilized in applying NRS 175.291, this court has declared, consistently with authority elsewhere: \"Under statutes such as NRS 175.291 it is commonly held that `corroborative evidence is insufficient when it merely casts a grave suspicion upon the accused.' People v. Shaw, 17 Cal.",
"2d 778, 112 P.2d 241, 255 (1941), and cases there cited; Cooper v. Territory, 19 Okl. 496, 91 P. 1032 (1907). As the California Supreme Court said in People v. Shaw, supra, citing numerous authorities: \"`The difficulty comes in determining what corroboration is sufficient. First, we must eliminate from the case the evidence of the accomplice, and then examine the evidence of the remaining witness or witnesses with the view to ascertain if there be inculpatory evidence, evidence tending to connect the defendant with the offense. If there is, the accomplice is corroborated; if there is no inculpatory evidence, there is no corroboration, though the accomplice may be corroborated in regard to any number of facts sworn to by him.' Id., 112 P.2d at 255; emphasis in original. \"This seems the approach the courts have uniformly taken to application of statutes like NRS 175.291; indeed, it seems the only approach available.",
"How else may we implement the legislative edict that there must be corroborative evidence `which in itself' tends to connect the defendant with the commission of the offense `without the aid of the testimony of the accomplice'? How else may we honor the legislative mandate that `corroboration shall not be sufficient if it merely shows the commission of the offense or the circumstances thereof'? \"Implicitly recognizing the propriety of the aforedescribed approach to application of NRS 175.291, this court held in Ex parte Hutchinson, 76 Nev. 478, 357 P.2d 589 (1960), that an accomplice was not sufficiently corroborated, even to show probable cause to hold for trial, merely by showing the defendant was with the accomplice near the scene of the crime on the night it was committed, at the time the accomplice testified they committed it in concert...",
".\" Austin v. State, 87 Nev. 578, 585, 491 P.2d 724, 728-729 (1971). Having called to mind this firmly established approach which NRS 175.291 mandates, I now propose to eliminate from consideration testimony of the established accomplices and then, in fidelity to the legislative command, determine whether any of the remaining evidence alluded to in the majority opinion constitutes \"corroboration\" in the legal acceptation of that term. Details Concerning the Crime's Commission and Circumstances By its express terms, NRS 175.291 does not merely mandate that \"corroboration,\" to be legally sufficient, must in itself have independent inculpatory significance \"without the aid of the testimony of the accomplice.\" The Legislature went on to provide, most explicitly, that \"corroboration *1192 shall not be sufficient if it merely shows the commission of the offense or the circumstances thereof.\" It is, of course, not for this Court to question the wisdom of this provision, which in any event has a logical basis, grounded in legal history and precedent.",
"As this court noted in Austin v. State: \"A man who has been guilty of a crime himself will always be able to relate the facts of the case, and if the confirmation be only on the truth of that history, without identifying the person, that is really no corroboration at all.\" 87 Nev. at 584, n. 7, 491 P.2d at 728, quoting Lord Abinger, C.B., in R. v. Farler, 8 C. & P. 106 (1837). This court also noted \"that `ex concesso' an accomplice was concerned in the crime and [knows] all the facts ...\" Id., quoting Bushe, C.J., in R. v. Sheehan, Jebb 54, 57 (1826).",
"Clearly, many facts which Weakland has related, possibly quite accurately, establish no more than this: a criminal's knowledge of his own crime. For example, Weakland testified that among the items he and Boutwell took from the Krause home were a TV set, a watch and a ring. The prosecution does not suggest that either LaPena or Maxwell ever were connected to this loot in any way whatever. In fact, as the majority opinion notices, apparently Weakland turned over to a friend and to his brother not to LaPena or Maxwell a ring and watch answering the description of the Krause jewelry. Arguably, the fact that Weakland's friend and brother may have received stolen property would be independent evidence tending to connect them to the commission of the offense. However, neither the fact that Weakland stole the jewelry, nor the fact that Weakland delivered it to his friend and brother, tends to inculpate LaPena or Maxwell any more than it would inculpate anyone else Weakland might agree to accuse to buy his life and freedom. [3] Purely and simply, these are merely circumstances of the crime which, in Lord Abinger's words, do not identify the person accused at all.",
"Returning to the TV set, it seems from the testimony of Gail Weakland that, when Weakland borrowed her automobile on the night of the murder-robbery, the car's headliner was intact; but upon return, it was ripped. Again, this circumstance may coincide with Weakland's statement that he and Boutwell ripped the headliner when transferring the Krause TV set into Gail Weakland's car; however, it obviously lacks any independent inculpatory significance so far as LaPena and Maxwell are concerned. The prosecution does not suggest LaPena and Maxwell have been connected either to the TV set or to the rip in the headliner, in any way at all. Indeed, according to the majority's view of the facts, Weakland first took the TV set to Sandra Weakland's home which would inculpate Sandra if anyone. Later, my brethren say, fearing that Weakland was under police surveillance, Weakland's brothers apparently took the TV from Sandra's home and destroyed it facts which, if true, might tend to inculpate the brothers, but certainly not LaPena or Maxwell.",
"[4] Similarly, according to Weakland, he received from Rosalie Maxwell a hand-drawn map of streets near the Krause residence, which he thereupon copied and destroyed. In other words, Weakland says he had a map, the origin of which he and *1193 he alone attributed to LaPena and Maxwell. While Gail Weakland testified she once saw Weakland with what appeared to be a hand-drawn map, her testimony fails even to relate it to the Krause crime, and in no way whatever establishes that either LaPena or Maxwell had anything to do with its origins. Facts Related Neither To The Crime Nor To Appellants Of even less force to inculpate LaPena or Maxwell is Gail Weakland's testimony that, around January 2, Weakland had some $1,000 in $100 bills.",
"Although the majority omit to mention it, Gail further testified that Weakland had said he had won the money gambling. Instead of suggesting that this explanation was suspect in any way, Gail confirmed that Weakland was indeed a heavy gambler. Thus, far from relating the money to LaPena or Maxwell, or to the Krause crime, it would be altogether speculative to assume from Gail Weakland's testimony that the money had a relationship to a criminal endeavor by anyone. Evidence of Friendship and Association Even evidence of close association and friendship with an acknowledged wrongdoer will not corroborate his accusation. Eckert v. State, 91 Nev. 183, 533 P.2d 468 (1975); Austin v. State, 87 Nev. 578, 491 P.2d 724 (1971); Ex Parte Hutchinson, 76 Nev. 478, 357 P.2d 589 (1960).",
"Here, of course, it seems clear that Weakland had a friendly relationship with LaPena and was acquainted with Maxwell. It would appear, for example, that LaPena may have telephoned Weakland occasionally at the home of his sister-in-law, Sandra, with whom he was residing. If so, he did not act furtively, but left messages using his true first name, \"Frank.\" It also appears that, at a time prior to the robbery-murder, Gail Weakland waited in the car while Weakland went briefly into Rosalie Maxwell's townhouse.",
"What happened inside who was there Gail does not know. Gail also testified that on one occasion, not two as the majority state, Weakland sent her to LaPena for money: two $20 bills and one $10 bill, or a total of $50. At one time, Weakland told one of his brothers that if he needed money, he could get it from Frank. Obviously, such testimony indicates no more than association or friendship. This is true with other aspects of the evidence.",
"For example, it appears that, during a weekend at Lake Havasu following the murder, Weakland made two phone calls to Las Vegas one, he says, to his mother and the other to LaPena. Assuming such a call to LaPena were independently proved, it would inculpate LaPena no more than it inculpates Weakland's mother. And obviously, not even a prosecutor could think such calls inculpatory of Maxwell. Of course, from Gail's testimony it does appear that at a time subsequent to the murder-robbery, Weakland caused Gail to deliver a pair of weighted black leather gloves to the Hacienda Hotel, where LaPena took them from her furtively. I do not, however, perceive that this fact has been independently related to the crime for which these appellants will stand trial for their lives. In the first place, for purposes of another prosecution, the State's theory is that LaPena delivered the gloves to Weakland for use in beating the Hacienda Hotel's manager, that Weakland so used them, then caused their return. See: LaPena v. Sheriff, 91 Nev. 692, 541 P.2d 907 (1975). Thus, the state has explained the transfer of the gloves, relating them to another totally different crime, which Weakland also committed and later attributed to LaPena. The prosecution here desires, however, to make the gloves do double evidentiary service, which it appears to me cannot be done; for dropping out Weakland's testimony, the record fails to show that either Krause was beaten, with weighted gloves or otherwise.",
"The gloves simply are not shown, except through accomplice testimony, to have any relationship *1194 whatever to the offense here concerned. Furthermore, not only do the gloves lack independent value to connect LaPena with the offense in question; they have, moreover, not been related to Maxwell in any way. Testimony of Weakland's Accomplice, Webb From the record, it appears that Robert Webb participated with Weakland in planning the murder and robbery in question, although he restricted his participation to aiding and abetting Weakland, both before and afterward. Webb assisted Weakland in procuring the participation of Boutwell, whom Webb supplied with the gloves and jacket and, some evidence indicates, the boots also which Boutwell used in the crimes at the Krause residence. Webb knew these items would be used in the robbery-murder, which he helped to plan.",
"After the crimes, and knowing of them, Webb aided and abetted Weakland by secreting evidence taken from the Krause residence. Thus, under such circumstances, it is evident that the magistrate not only was correct in finding Webb an accomplice, but might have been in error if he had found anything else. See: NRS 195.020; State v. Cushing, 61 Nev. 132, 120 P.2d 208 (1941); State v. Chapman, 6 Nev. 320 (1871). [5] Although Webb also might have been prosecuted for capital murder, the prosecution permitted him to plead guilty to a gross misdemeanor, with a recommendation of probation, and he is now free. On his part, Webb has by his testimony undertaken to assist the prosecution in convicting LaPena and Maxwell of a capital offense. Again, I refrain from considering the Constitutional implications of this exchange, so highly favorable to Webb. I consider only whether Webb's testimony can be viewed as corroborating Weakland's. It is true, of course, that hearsay statements of one co-conspirator to another are admissible, and may be considered as evidence under an exception to the hearsay rule once the conspiracy is proved. NRS 51.035(3) (e); Goldsmith v. Sheriff, 85 Nev. 295, 454 P.2d 86 (1969). However, if the hearsay statements of one accomplice-conspirator, such as Weakland, are only established through the testimony of a second accomplice-conspirator, such as Webb, then it is clear such statements may not be viewed as \"corroborating evidence\" that a third person, such as LaPena or Maxwell, is also part of the conspiracy.",
"Goldsmith does not suggest otherwise; instead, it explicitly declares that, \"before those hearsay statements can be considered by the magistrate it is incumbent upon him to examine all the other evidence to determine whether, aliunde, the existence of a conspiracy was established.\" 85 Nev. at 304, 454 P.2d at 92. As I am sure the majority know, and as Justice Traynor recognized in People v. Clapp, 24 Cal. 2d 835, 151 P.2d 237 *1195 (1944), citing numerous authorities, \"the testimony of one accomplice is not corroborated by that of another.\" Id.",
"at 238; in accord, State v. Banks, 6 Or. App. 47, 486 P.2d 584 (1971); People v. Jehl, 150 Cal. App. 2d 665, 310 P.2d 495 (1957); State v. Hilbish, 59 Nev. 469, 97 P.2d 435 (1940); VII Wigmore on Evidence, § 2059 (3rd Ed. 1940). Only this fall, our court again recognized the viability of this rule. See: LaPena v. Sheriff, 91 Nev. 692, 541 P.2d 907 (1975). Thus, since the only evidence of Weakland's supposed extra-judicial statements is testimony from Webb, and since Webb's testimony like Weakland's must be eliminated from consideration when deciding whether the prosecution has satisfied NRS 175.291's requirement of corroboration, it is patent that Webb's story of what Weakland said has no more significance than his direct accusation of LaPena or Maxwell would have.",
"Relationship of LaPena, Maxwell, and Krause Impermissibly, the majority opinion has drawn upon Weakland's story to establish in LaPena and Maxwell a motive to kill Mrs. Krause. Virtually none of the \"facts\" concerning this supposed motive find any support in the record, save through testimony of the self-acknowledged participant, Weakland. It does appear, of course, that the Maxwell woman was a lady of doubtful morals, who admitted regarding Krause as her \"live one\" and LaPena as her \"true lover.\" Physically, she accommodated Krause; monetarily, he assisted her. On its face, however, there is nothing about their symbiotic relationship, however contrary to accepted conventions, which suggests a motive to have Krause beaten and Mrs. Krause murdered. Only through the testimony of accomplices Weakland and Webb is a somewhat unlikely motive attributed to LaPena and Maxwell. Supposedly, LaPena and Maxwell believed Krause was quite wealthy, and decided killing Mrs. Krause would set in motion a house-that-Jack-built chain of events enabling them to enjoy more of Krause's money than before. According to the story the prosecution elicited by allowing life and freedom to the two acknowledged participants, Weakland and Webb, LaPena believed that if he had Mrs. Krause killed, Krause would then marry Maxwell; that Maxwell could then induce Krause to supply her greater sums of money; and that he, LaPena, would then share the increased take.",
"Unlike the situation revealed in LaPena v. Sheriff, supra, however, nothing tending independently to establish this motive appears in the record. Summary I recognize, of course, that several items of evidence, not by themselves inculpatory, may in combination independently establish facts constituting legal corroboration. Cf. LaPena v. Sheriff, cited above. I also recognize that several items of evidence, by themselves only remotely inculpatory, may in their totality rise to the dignity of legal corroboration. Cf. People v. Trujillo, 32 Cal. 2d 105, 194 P.2d 681 (1948). I further recognize, however, that nothing plus nothing plus nothing is nothing. As my brother ZENOFF said, speaking for a unanimous court in Eckert v. State, 91 Nev. 183, 186, 533 P.2d 468, 471 (1975): \"Evidence to corroborate accomplice testimony does not suffice if it merely casts grave suspicion on the defendant.\"",
"And as Lord Abinger has said: \"It is a practice which deserves all the reverence of the law, that judges have uniformly told juries that they ought not to pay any respect to the testimony of an accomplice unless the accomplice is corroborated in some material particular... . The danger is that when a man is fixed, and knows that his own guilt is detected, he purchases immunity by falsely accusing others.\" R. v. Farler, 8 C. & P. 106 (1837). I suggest that Lord Abinger's observation is apposite, not just as to those who are clearly \"fixed,\" such as Weakland and Webb, but also to persons like Gail Weakland *1196 and Mary Bordeaux whose proximity and possible complicity in the crime is manifest, but whose guilt is not certain.",
"I do not, of course, suggest that these women necessarily were accomplices in the legal sense. Since their complicity is not now definitely established, that will be a question of fact to be determined at trial. Cf. Austin v. State, 87 Nev. 578, 491 P.2d 724 (1971). For present purposes, I presume, despite the women's obvious involvement with Weakland and Webb in events of the murder-robbery and ensuing efforts to escape justice, that Gail Weakland and Mary Bordeaux did not know a murder was to be committed until after it occurred. [6] I do, however, challenge the majority's dicta that there is no reason to question Gail Weakland's veracity.",
"She and the Bordeaux woman have the same reason as Weakland and Webb have to testify as the prosecution desires. Beyond this, as a matter of logic, I question that Weakland's frequent beating and hospitalization of Gail Weakland makes it \"doubtful that she would shade her testimony to favor him.\" I note that, after the mentioned beatings, Gail nonetheless let Weakland utilize her car on the night of the murder-robbery and left town with him afterward. Even fully crediting those not definitely shown to be accomplices, much of the record consists of testimony which proves only that Weakland is able to relate, with some measure of accuracy, details of his own vicious crime. The rest of the ostensible corroboration presented by the State, in itself, achieves no more than to prove, redundantly, that LaPena and Weakland were friends or associates.",
"Ignoring Weakland's testimony, the testimony of one Fish (which the magistrate rejected as unworthy of belief), and the testimony of witness Webb (whom the magistrate found as a fact to be an accomplice), I therefore think the record shows only that LaPena and Maxwell are amoral persons, who consort with their own kind, including persons like Weakland. LaPena, a hotel bell captain, has lived with Maxwell, who apparently has slept with Krause and taken as much of his money as she could get. In themselves, however, these facts suggest no reason for either of them to pay Weakland to rob Krause and murder his wife. It does appear that, around the time of the Krause murder, certain weighted black gloves passed between Weakland and LaPena; however, except through the testimony of Weakland and Webb, those gloves cannot be associated with the crimes here concerned. It is, in fact, the prosecution's theory that the gloves in question were particularly related to a different crime, which is concerned in another case before us.",
"In the instant case, the record does not show that either Marvin or Hilda Krause was beaten, or that any plan ever existed that such would be done. Had the magistrate not found Fish's testimony incredible, had he not determined Webb was an accomplice, and had the prosecution proved, independently of accomplice testimony, that appellants paid Weakland a large sum of money (as the prosecution tried and failed to do), then of course a substantially different question might be presented. It seems clear that, upon the present record, by virtue of NRS 175.291, there is insufficient evidence to hold appellants to answer for the crimes with which they stand charged in this case. Thus, the order denying habeas corpus should be reversed. *1197 As to such charges, appellants should stand discharged unless the State, believing further corroborative evidence to be available, should elect to re-charge them within a specified period of time. BATJER, J., concurs. NOTES [1] The now incumbent District Attorney was not serving in that office when the bargain referred to was entered. [2] One must, of course, note concern regarding the propriety of the prosecution's conduct, not only because it seems clearly to contravene our legislature's mandate, but also because, in so doing, it may also violate the United States Supreme Court's edict against \"wanton and freakish\" applications of the death penalty.",
"See: Furman v. Georgia, 408 U.S. 238, 310, 92 S. Ct. 2726, 33 L. Ed. 2d 346 (1972), Stewart, J., concurring. However, we need not reach such considerations; nor do I here consider whether the purchase of testimony, through a bargain so disproportionate, violates due process of law. [3] Weakland testified that, ultimately, he retrieved the ring and gave it to LaPena, unlikely testimony for which, in any event, there is no confirmation whatever. It also is worth noting that, apparently contradicting Weakland, Webb testified to getting rid of evidence, by throwing \"the watches and ring\" into a garbage can. [4] As I read the record, the TV set assertedly went first to a condominium occupied by Webb, Boutwell and Mary Beth Bordeaux, on the morning of the crime. Then, as he became fearful of discovery, Weakland and his brother Leo took the TV set from the condominium, and took it to Gordon and Sandra's home. I do not recall that the record reflects destruction of the TV set; however, in any event, certainly no one contends that either of the appellants destroyed it. [5] NRS 195.020 provides: \"Who are principals. Every person concerned in the commission of a felony, gross misdemeanor or misdemeanor, whether he directly commits the act constituting the offense, or aids or abets in its commission, and whether present or absent; and every person who, directly or indirectly, counsels, encourages, hires, commands, induces or otherwise procures another to commit a felony, gross misdemeanor or misdemeanor is a principal, and shall be proceeded against and punished as such...",
".\" Emphasis added. In State v. Cushing, cited above, this court expressly stated that, under our statutes, \"it is only necessary in such case to show that a crime has been committed, and that the defendant, if present, aided and assisted, or, if not present, advised and encouraged it.\" 61 Nev. at 145, 120 P.2d at 215. The magistrate determined Webb was an accomplice, which clearly was within his province. State v. Fuchs, 78 Nev. 63, 368 P.2d 869 (1962); In re Oxley and Mulvaney, 38 Nev. 379, 149 P. 992 (1915); Ex Parte Willoughby, 14 Nev. 451 (1880). I presume the majority do not question the foregoing authorities. We most recently recognized their force only three months ago in State v. Havas, 91 Nev. 611, 540 P.2d 1060 (1975), there invoking them against a defendant, and holding that both the district courts and this court are bound by magistrates' factual determinations.",
"[6] I note, however, that at least the Bordeaux woman who was with Weakland and Webb immediately before the murder-robbery, received some of the loot, and helped destroy evidence afterward has expressly been promised total immunity to induce her testimony against LaPena and Maxwell. Apparently, tacitly or otherwise, the prosecution also is committed not to prosecute the Weakland woman, who supplied the car used for the murder-robbery, and left with Weakland for Lake Havasu when he became fearful of discovery."
] | https://www.courtlistener.com/api/rest/v3/opinions/1367393/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] MEMORANDUM OF DECISION RE: MOTION TO STRIKE (#164) On January 29, 1991, the plaintiff, Stanley M. Lessler, initiated this action against the defendant, Astrid A. Sundwall. The plaintiff alleges that the defendant breached a written contract for the purchase of real property in the City of Torrington. The present motion at issue is the plaintiff's motion to strike portions of the defendant's counter claim filed on November 7, 1993. Specifically, the plaintiff moves to strike Count IV of the defendant's counterclaim based upon vexatious litigation and to strike the claim for legal fees, lost time from work, and treble damages set forth in the defendant's prayer for relief. CT Page 2473 "Whenever any party wishes to contest . . . the legal sufficiency of the allegations of any complaint, counterclaim or cross claim, or any one or more counts thereof, to state a claim upon which relief can be granted, or . . . the legal sufficiency of any prayer for relief. . . , that party may do so by filing a motion to strike the contested pleading or part thereof." Practice Book 152. In reviewing a motion to strike, the court admits all facts well pleaded; Mingachos v. CBS, Inc.,196 Conn. 91, 108-109, 491 A.2d 368 (1985); and construes the facts in the manner most favorable to the pleader. Gordon v. Bridgeport Housing Authority, 208 Conn. 161,170, 544 A.2d 1185 (1988). Count IV of the defendant's counterclaim allegedly sets forth a claim for vexatious litigation. It is clear that such a cause of action requires a termination of the underlying suit. DeLaurentis v. City of New Haven,220 Conn. 225, 251-52, 597 A.2d 807 (1991). The defendant's counterclaim against the plaintiff has not yet terminated, and therefore, Count IV fails to allege a necessary element of a cause of action in a vexatious suit. Accordingly, the plaintiff's motion to strike Count IV of the defendant's counterclaim is granted. The motion to strike a prayer for relief should be granted if the relief demanded does not correspond to the allegations of the complaint. Van Epps v. Redfield,68 Conn. 39, 45, 35 A. 809 (1896). In Connecticut, double and treble damages can only be awarded if authorized by statute. DeMilo v. West Haven, 189 Conn. 671, 675-76,458 A.2d 362 (1983). Similarly, absent statutory or contractual authorization, an opposing party is not entitled to attorney fees; Marsh, Day Calhoun v. Solomon, 204 Conn. 639, 652-53, 529 A.2d 702 (1987); nor is a party entitled to recovery of costs or damages for the expenses of litigation. Bross Home Construction Corporation v. Ryan Crane Service Corporation, 32 Conn. Sup. 181,182, 345 A.2d 594 (1975). The defendant's counterclaim fails to allege any statutory or contractual basis for the recovery of treble damages, attorney fees, or the expenses of litigation. CT Page 2474 Therefore, the plaintiff's motion to strike the defendant's prayer for relief is granted. PICKETT, J. | 07-05-2016 | [
"[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] MEMORANDUM OF DECISION RE: MOTION TO STRIKE (#164) On January 29, 1991, the plaintiff, Stanley M. Lessler, initiated this action against the defendant, Astrid A. Sundwall. The plaintiff alleges that the defendant breached a written contract for the purchase of real property in the City of Torrington. The present motion at issue is the plaintiff's motion to strike portions of the defendant's counter claim filed on November 7, 1993. Specifically, the plaintiff moves to strike Count IV of the defendant's counterclaim based upon vexatious litigation and to strike the claim for legal fees, lost time from work, and treble damages set forth in the defendant's prayer for relief. CT Page 2473 \"Whenever any party wishes to contest . . . the legal sufficiency of the allegations of any complaint, counterclaim or cross claim, or any one or more counts thereof, to state a claim upon which relief can be granted, or .",
". . the legal sufficiency of any prayer for relief. . . , that party may do so by filing a motion to strike the contested pleading or part thereof.\" Practice Book 152. In reviewing a motion to strike, the court admits all facts well pleaded; Mingachos v. CBS, Inc.,196 Conn. 91, 108-109, 491 A.2d 368 (1985); and construes the facts in the manner most favorable to the pleader. Gordon v. Bridgeport Housing Authority, 208 Conn. 161,170, 544 A.2d 1185 (1988). Count IV of the defendant's counterclaim allegedly sets forth a claim for vexatious litigation. It is clear that such a cause of action requires a termination of the underlying suit. DeLaurentis v. City of New Haven,220 Conn. 225, 251-52, 597 A.2d 807 (1991). The defendant's counterclaim against the plaintiff has not yet terminated, and therefore, Count IV fails to allege a necessary element of a cause of action in a vexatious suit. Accordingly, the plaintiff's motion to strike Count IV of the defendant's counterclaim is granted.",
"The motion to strike a prayer for relief should be granted if the relief demanded does not correspond to the allegations of the complaint. Van Epps v. Redfield,68 Conn. 39, 45, 35 A. 809 (1896). In Connecticut, double and treble damages can only be awarded if authorized by statute. DeMilo v. West Haven, 189 Conn. 671, 675-76,458 A.2d 362 (1983). Similarly, absent statutory or contractual authorization, an opposing party is not entitled to attorney fees; Marsh, Day Calhoun v. Solomon, 204 Conn. 639, 652-53, 529 A.2d 702 (1987); nor is a party entitled to recovery of costs or damages for the expenses of litigation. Bross Home Construction Corporation v. Ryan Crane Service Corporation, 32 Conn. Sup.",
"181,182, 345 A.2d 594 (1975). The defendant's counterclaim fails to allege any statutory or contractual basis for the recovery of treble damages, attorney fees, or the expenses of litigation. CT Page 2474 Therefore, the plaintiff's motion to strike the defendant's prayer for relief is granted. PICKETT, J."
] | https://www.courtlistener.com/api/rest/v3/opinions/3358144/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
Notice to Applicant 2. This communication is in response to the amendment sent on 06/08/2022. Claims 1, 10-11, 14, and 20, have been amended. Claims 9 and 12 have been cancelled. Claims 1-2 ,4-6, 8, 10-11, 14, 16, 18, 20, 23-24, and 27-30, are presented for examination. 3. Claims 1-2 ,4-6, 8, 10-11, 14, 16, 18, 20, 23-24, and 27-30, are allowed.
Examiner’s Amendment 4. An examiner’s amendment to the record appears below. Should the changes and/or additions be unacceptable to applicant, an amendment may be filed as provided by 37 CFR 1.312. To ensure consideration of such an amendment, it MUST be submitted no later than the payment of the issue fee. 5. Authorization for this Examiner’s Amendment was given in an interview with Stephen Walder on 06/08/2022. 6. The application has been amended as follows:
Claims: 1. (Currently amended) A method, in a data processing system comprising a processor and a memory, the memory comprising instructions that are executed by the processor to specifically configure the processor to implement a question prediction and answering engine for predicting questions a medical professional is attempting to answer, the method comprising: training, by a personalized interaction learning engine, a machine learning model, comprising: monitoring interaction of a user with an electronic medical record (EMR) to identify one or more natural language questions entered by the user into an input device and submitted to a cognitive question answering system; identifying a first set of questions within a predetermined set of questions that match the one or more natural language questions entered by the user; correlating the one or more natural language questions entered by the user to the first set of questions; and training the machine learning model based on the correlation between the one or more natural language questions entered by the user and the first set of questions; monitoring, by an interaction monitoring component executing within the question prediction and answering engine, interaction of a medical professional with a patient electronic medical record (EMR) to identify a medical professional interaction pattern; applying, by a question selection component executing within the question prediction and answering engine, the machine learning model to the medical professional interaction pattern to select a second set of questions, from the predetermined set of questions, the medical professional is attempting to obtain an answer to from the patient EMR, wherein the machine learning model is configured to receive the medical professional interaction pattern and determine the second set of questions that correlate to the medical professional interaction pattern; submitting, by a question submission component executing within the question prediction and answering engine, the second set of questions to the cognitive question answering system; receiving, by an answer processing component executing within the question prediction and answering engine, answers to the second set of questions from the cognitive question answering system based on the patient EMR; processing, by the answer processing component, the answers to the second set of questions to generate a set of answers to the second set of questions from at least a portion of the patient EMR; and outputting, by the question prediction and answering engine, a report correlating the second set of questions and the set of answers to the medical professional at least by generating a graphical user interface (GUI) to present the answers to the second set of questions to the medical professional as a tailored, cognitive information retrieval, wherein the GUI presents areas needing additional data retrieval based on questions in the second set of questions for which an answer could not be found in the patient EMR.
2. (Previously presented) The method of claim 1, wherein monitoring the interaction of the medical professional with the EMR comprises detecting an interaction from the set consisting of portions of the EMR the medical professional views, an order in which the medical professional views EMR portions, the medical professional hovering a cursor over a particular location in the EMR, or the medical professional zooming on the at least a portion of the patient EMR.
4. (Previously presented) The method of claim 1, further comprising: determining a context of the interaction of the medical professional with the patient EMR; and prioritizing the second set of questions based on the determined context.
5. (Previously presented) The method of claim 4, wherein determining the context of the interaction comprises detecting an interaction from the set consisting of portions of the EMR the medical professional views, an order in which the medical professional views EMR portions, the medical professional hovering a cursor over a particular location in the EMR, or the medical professional zooming on the at least a portion of the patient EMR.
6. (Previously presented) The method of claim 4, wherein prioritizing the second set of questions comprises prioritizing the second set of questions based on what medications the patient is taking, medication side effects, patient vital signs, or blood test results.
8. (Previously presented) The method of claim 1, wherein processing the answers to the second set of questions comprises modifying a form of the answers to be included in a graphical user interface (GUI).
9. (Canceled)
10. (Currently amended) The method of claim [[9]] 1, wherein the GUI presents the answers to the second set of questions in association with the second set of questions.
11. (Currently amended) The method of claim [[9]] 1, wherein the GUI provides links to portions of the patient EMR in association with the answers to the second set of questions.
12. (Canceled)
14. (Currently amended) A computer program product comprising a computer readable storage medium having a computer readable program stored therein, wherein the computer readable program, when executed on at least one processor of a data processing system, causes the data processing system to implement a question prediction and answering engine for predicting questions a medical professional is attempting to answer, wherein the computer readable program causes the data processing system to: train, by a personalized interaction learning engine, a machine learning model, comprising: monitoring interaction of a user with an electronic medical record (EMR) to identify one or more natural language questions entered by the user into an input device and submitted to a cognitive question answering system; identifying a first set of questions within a predetermined set of questions that match the one or more natural language questions entered by the user; correlating the one or more natural language questions entered by the user to the first set of questions; and training the machine learning model based on the correlation between the one or more natural language questions entered by the user and the first set of questions; monitor, by an interaction monitoring component executing within the question prediction and answering engine, interaction of a medical professional with a patient electronic medical record (EMR) to identify a medical professional interaction pattern; apply, by a question selection component executing within the question prediction and answering engine, the machine learning model to the medical professional interaction pattern to select a second set of questions, from the predetermined set of questions, the medical professional is attempting to obtain an answer to from the patient EMR, wherein the machine learning model is configured to receive the medical professional interaction pattern and determine the set of questions that correlate to the medical professional interaction pattern; submit, by a question submission component executing within the question prediction and answering engine, the second set of questions to the cognitive question answering system; receive, by an answer processing component executing within the question prediction and answering engine, answers to the second set of questions from the cognitive question answering system based on the patient EMR; process, by the answer processing component, the answers to the second set of questions to generate a set of answers to the second set of questions from at least a portion of the patient EMR; and output, by the question prediction and answering engine, a report correlating the second set of questions and the set of answers to the medical professional at least by generating a graphical user interface (GUI) to present the answers to the second set of questions to the medical professional as a tailored, cognitive information retrieval, wherein the GUI presents areas needing additional data retrieval based on questions in the second set of questions for which an answer could not be found in the patient EMR.
16. (Previously presented) The computer program product of claim 14, wherein the computer readable program further causes the data processing system to: determine a context of the interaction of the medical professional with the patient EMR; and prioritize the second set of questions based on the determined context.
18. (Previously presented) The computer program product of claim 14, wherein processing the answers to the second set of questions comprises modifying a form of the answers to be included in a graphical user interface (GUI).
20. (Currently amended) An apparatus comprising: a processor; and a memory coupled to the processor, wherein the memory comprises instructions which, when executed by the processor, cause the processor to implement a question prediction and answering engine for predicting questions a medical professional is attempting to answer, wherein the instructions cause the processor to: train, by a personalized interaction learning engine, a machine learning model, comprising: monitoring interaction of a user with an electronic medical record (EMR) to identify one or more natural language questions entered by the user into an input device and submitted to a cognitive question answering system; identifying a first set of questions within a predetermined set of questions that match the one or more natural language questions entered by the user; correlating the one or more natural language questions entered by the user to the first set of questions; and training the machine learning model based on the correlation between the one or more natural language questions entered by the user and the first set of questions; monitor, by an interaction monitoring component executing within the question prediction and answering engine, interaction of a medical professional with a patient electronic medical record (EMR) to identify a medical professional interaction pattern; apply, by a question selection component executing within the question prediction and answering engine, the machine learning model to the medical professional interaction pattern to select a second set of questions, from the predetermined set of questions, the medical professional is attempting to obtain an answer to from the patient EMR, wherein the machine learning model is configured to receive the medical professional interaction pattern and determine the set of questions that correlate to the medical professional interaction pattern; submit, by a question submission component executing within the question prediction and answering engine, the second set of questions to the cognitive question answering system; receive, by an answer processing component executing within the question prediction and answering engine, answers to the second set of questions from the cognitive question answering system based on the patient EMR; process, by the answer processing component, the answers to the second set of questions to generate a set of answers to the second set of questions from at least a portion of the patient EMR; and output, by the question prediction and answering engine, a report correlating the second set of questions and the set of answers to the medical professional at least by generating a graphical user interface (GUI) to present the answers to the second set of questions to the medical professional as a tailored, cognitive information retrieval, wherein the GUI presents areas needing additional data retrieval based on questions in the second set of questions for which an answer could not be found in the patient EMR.
23. (Previously presented) The method of claim 1, wherein identifying the first set of questions comprises: examining features from the user interaction pattern; treating the features as if they are evidence passages or portions for candidate answers to a question; and determining which questions from a predetermined set of questions the evidence passages would answer.
24. (Previously presented) The method of claim 1, wherein identifying the first set of questions comprises: submitting each question from a predetermined set of questions to the cognitive question answering system to determine a set of evidence passages or portions that support an answer to each question; and determining which sets of evidence passages or portions match the user interaction pattern.
27. (Previously presented) The computer program product of claim 14, wherein identifying the first set of questions comprises: examining features from the user interaction pattern; treating the features as if they are evidence passages or portions for candidate answers to a question; and determining which questions from a predetermined set of questions the evidence passages would answer.
28. (Previously presented) The computer program product of claim 14, wherein identifying the first set of questions comprises: submitting each question from a predetermined set of questions to the cognitive question answering system to determine a set of evidence passages or portions that support an answer to each question; and determining which sets of evidence passages or portions match the user interaction pattern.
29. (Previously presented) The apparatus of claim 20, wherein identifying the first set of questions comprises: examining features from the user interaction pattern; treating the features as if they are evidence passages or portions for candidate answers to a question; and determining which questions from a predetermined set of questions the evidence passages would answer.
30. (Previously presented) The apparatus of claim 20, wherein identifying the first set of questions comprises: submitting each question from a predetermined set of questions to the cognitive question answering system to determine a set of evidence passages or portions that support an answer to each question; and determining which sets of evidence passages or portions match the user interaction pattern.
Allowable Subject Matter 7. Claims 1-2 ,4-6, 8, 10-11, 14, 16, 18, 20, 23-24, and 27-30, are allowed. The following is an examiner’s statement of reasons for allowance: 8. The prior art of record teaches A method, in a data processing system comprising a processor and a memory, the memory comprising instructions that are executed by the processor to specifically configure the processor to implement a question prediction and answering engine for predicting questions a medical professional is attempting to answer, the method comprising: training, by a personalized interaction learning engine, a machine learning model, comprising: monitoring interaction of a user with an electronic medical record (EMR} to identify one or more natural language questions entered by the user into an input device and submitted to a cognitive question answering system: identifying a first set of questions within a predetermined set of questions that match the one or more natural language questions entered by the user; correlating the one or more natural language questions entered by the user to the first set of questions; and training the machine learning model based on the correlation between the one or more natural language questions entered by the user and the first set of questions; monitoring, by an interaction monitoring component executing within the question prediction and answering engine, interaction of a medical professional with a patient electronic medical record (EMR) to identify a medical professional interaction pattern; applying, by a question selection component executing within the question prediction and answering engine, the machine learning model to the medical professional interaction pattern to select a second set of questions, from the predetermined set of questions, the medical professional is attempting to obtain an answer to from the patient EMR, wherein the machine learning model is configured to receive the medical professional interaction pattern and determine the second set of questions that correlate to the medical professional interaction pattern; submitting, by a question submission component executing within the question prediction and answering engine, the second set of questions Lo the cognitive question answering system; receiving, by an answer processing component executing within the question prediction and answering engine, answers to the second set of questions from the cognitive question answering system based on the patient EMR; processing, by the answer processing component, the answers to the second set of questions to generate a set of answers to the second set of questions from at least a portion of the patient EMR; and outputting, by the question prediction and answering engine, a report correlating the second set of questions and the set of answers to the medical professional. However, they fail to expressly teach or suggest, either alone or in combination, the features found within the independent claims, in particular: “identify one or more natural language questions entered by the user into an input device and submitted to a cognitive question answering system: identifying a first set of questions within a predetermined set of questions that match the one or more natural language questions entered by the user; correlating the one or more natural language questions entered by the user to the first set of questions; and training the machine learning model based on the correlation between the one or more natural language questions entered by the user and the first set of questions” (emphasis added), as recited in the claims. 9. The closest prior art of record is as follows: U.S. Patent App. Pub. No. 2019/0156921 to Kohli, et al. (“Kohli”), U.S. Patent Publication No. 2015/0193583 to McNair, et al. (“McNair”), U.S. Patent App. Pub. No. 2002/0065686 to Monteleone, et al. (“Monteleone”). 10. Any comments considered necessary by applicant must be submitted no later than the payment of the issue fee and, to avoid processing delays, should preferably accompany the issue fee. Such submissions should be clearly labeled “Comments on Statement of Reasons for Allowance.”
Any inquiry concerning this communication or earlier communications from the examiner should be directed to Shyam Goswami whose telephone number is (303)297-4283. The examiner can normally be reached Monday-Thursday, 8:30AM-6:30PM MT. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Victoria Augustine can be reached on (313)446-4858. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of published or unpublished applications may be obtained from Patent Center. Unpublished application information in Patent Center is available to registered users. To file and manage patent submissions in Patent Center, visit: https://patentcenter.uspto.gov. Visit https://www.uspto.gov/patents/apply/patent-center for more information about Patent Center and https://www.uspto.gov/patents/docx for information about filing in DOCX format. For additional questions, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.
SHYAM M GOSWAMI Examiner Art Unit 3686
/ROBERT W MORGAN/ Supervisory Patent Examiner, Art Unit 3626 | 2022-07-07T15:22:19 | [
"Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Notice to Applicant 2. This communication is in response to the amendment sent on 06/08/2022. Claims 1, 10-11, 14, and 20, have been amended. Claims 9 and 12 have been cancelled. Claims 1-2 ,4-6, 8, 10-11, 14, 16, 18, 20, 23-24, and 27-30, are presented for examination. 3. Claims 1-2 ,4-6, 8, 10-11, 14, 16, 18, 20, 23-24, and 27-30, are allowed. Examiner’s Amendment 4. An examiner’s amendment to the record appears below.",
"Should the changes and/or additions be unacceptable to applicant, an amendment may be filed as provided by 37 CFR 1.312. To ensure consideration of such an amendment, it MUST be submitted no later than the payment of the issue fee. 5. Authorization for this Examiner’s Amendment was given in an interview with Stephen Walder on 06/08/2022. 6. The application has been amended as follows: Claims: 1.",
"(Currently amended) A method, in a data processing system comprising a processor and a memory, the memory comprising instructions that are executed by the processor to specifically configure the processor to implement a question prediction and answering engine for predicting questions a medical professional is attempting to answer, the method comprising: training, by a personalized interaction learning engine, a machine learning model, comprising: monitoring interaction of a user with an electronic medical record (EMR) to identify one or more natural language questions entered by the user into an input device and submitted to a cognitive question answering system; identifying a first set of questions within a predetermined set of questions that match the one or more natural language questions entered by the user; correlating the one or more natural language questions entered by the user to the first set of questions; and training the machine learning model based on the correlation between the one or more natural language questions entered by the user and the first set of questions; monitoring, by an interaction monitoring component executing within the question prediction and answering engine, interaction of a medical professional with a patient electronic medical record (EMR) to identify a medical professional interaction pattern; applying, by a question selection component executing within the question prediction and answering engine, the machine learning model to the medical professional interaction pattern to select a second set of questions, from the predetermined set of questions, the medical professional is attempting to obtain an answer to from the patient EMR, wherein the machine learning model is configured to receive the medical professional interaction pattern and determine the second set of questions that correlate to the medical professional interaction pattern; submitting, by a question submission component executing within the question prediction and answering engine, the second set of questions to the cognitive question answering system; receiving, by an answer processing component executing within the question prediction and answering engine, answers to the second set of questions from the cognitive question answering system based on the patient EMR; processing, by the answer processing component, the answers to the second set of questions to generate a set of answers to the second set of questions from at least a portion of the patient EMR; and outputting, by the question prediction and answering engine, a report correlating the second set of questions and the set of answers to the medical professional at least by generating a graphical user interface (GUI) to present the answers to the second set of questions to the medical professional as a tailored, cognitive information retrieval, wherein the GUI presents areas needing additional data retrieval based on questions in the second set of questions for which an answer could not be found in the patient EMR.",
"2. (Previously presented) The method of claim 1, wherein monitoring the interaction of the medical professional with the EMR comprises detecting an interaction from the set consisting of portions of the EMR the medical professional views, an order in which the medical professional views EMR portions, the medical professional hovering a cursor over a particular location in the EMR, or the medical professional zooming on the at least a portion of the patient EMR. 4. (Previously presented) The method of claim 1, further comprising: determining a context of the interaction of the medical professional with the patient EMR; and prioritizing the second set of questions based on the determined context. 5. (Previously presented) The method of claim 4, wherein determining the context of the interaction comprises detecting an interaction from the set consisting of portions of the EMR the medical professional views, an order in which the medical professional views EMR portions, the medical professional hovering a cursor over a particular location in the EMR, or the medical professional zooming on the at least a portion of the patient EMR.",
"6. (Previously presented) The method of claim 4, wherein prioritizing the second set of questions comprises prioritizing the second set of questions based on what medications the patient is taking, medication side effects, patient vital signs, or blood test results. 8. (Previously presented) The method of claim 1, wherein processing the answers to the second set of questions comprises modifying a form of the answers to be included in a graphical user interface (GUI). 9. (Canceled) 10. (Currently amended) The method of claim [[9]] 1, wherein the GUI presents the answers to the second set of questions in association with the second set of questions.",
"11. (Currently amended) The method of claim [[9]] 1, wherein the GUI provides links to portions of the patient EMR in association with the answers to the second set of questions. 12. (Canceled) 14.",
"(Currently amended) A computer program product comprising a computer readable storage medium having a computer readable program stored therein, wherein the computer readable program, when executed on at least one processor of a data processing system, causes the data processing system to implement a question prediction and answering engine for predicting questions a medical professional is attempting to answer, wherein the computer readable program causes the data processing system to: train, by a personalized interaction learning engine, a machine learning model, comprising: monitoring interaction of a user with an electronic medical record (EMR) to identify one or more natural language questions entered by the user into an input device and submitted to a cognitive question answering system; identifying a first set of questions within a predetermined set of questions that match the one or more natural language questions entered by the user; correlating the one or more natural language questions entered by the user to the first set of questions; and training the machine learning model based on the correlation between the one or more natural language questions entered by the user and the first set of questions; monitor, by an interaction monitoring component executing within the question prediction and answering engine, interaction of a medical professional with a patient electronic medical record (EMR) to identify a medical professional interaction pattern; apply, by a question selection component executing within the question prediction and answering engine, the machine learning model to the medical professional interaction pattern to select a second set of questions, from the predetermined set of questions, the medical professional is attempting to obtain an answer to from the patient EMR, wherein the machine learning model is configured to receive the medical professional interaction pattern and determine the set of questions that correlate to the medical professional interaction pattern; submit, by a question submission component executing within the question prediction and answering engine, the second set of questions to the cognitive question answering system; receive, by an answer processing component executing within the question prediction and answering engine, answers to the second set of questions from the cognitive question answering system based on the patient EMR; process, by the answer processing component, the answers to the second set of questions to generate a set of answers to the second set of questions from at least a portion of the patient EMR; and output, by the question prediction and answering engine, a report correlating the second set of questions and the set of answers to the medical professional at least by generating a graphical user interface (GUI) to present the answers to the second set of questions to the medical professional as a tailored, cognitive information retrieval, wherein the GUI presents areas needing additional data retrieval based on questions in the second set of questions for which an answer could not be found in the patient EMR.",
"16. (Previously presented) The computer program product of claim 14, wherein the computer readable program further causes the data processing system to: determine a context of the interaction of the medical professional with the patient EMR; and prioritize the second set of questions based on the determined context. 18. (Previously presented) The computer program product of claim 14, wherein processing the answers to the second set of questions comprises modifying a form of the answers to be included in a graphical user interface (GUI). 20.",
"(Currently amended) An apparatus comprising: a processor; and a memory coupled to the processor, wherein the memory comprises instructions which, when executed by the processor, cause the processor to implement a question prediction and answering engine for predicting questions a medical professional is attempting to answer, wherein the instructions cause the processor to: train, by a personalized interaction learning engine, a machine learning model, comprising: monitoring interaction of a user with an electronic medical record (EMR) to identify one or more natural language questions entered by the user into an input device and submitted to a cognitive question answering system; identifying a first set of questions within a predetermined set of questions that match the one or more natural language questions entered by the user; correlating the one or more natural language questions entered by the user to the first set of questions; and training the machine learning model based on the correlation between the one or more natural language questions entered by the user and the first set of questions; monitor, by an interaction monitoring component executing within the question prediction and answering engine, interaction of a medical professional with a patient electronic medical record (EMR) to identify a medical professional interaction pattern; apply, by a question selection component executing within the question prediction and answering engine, the machine learning model to the medical professional interaction pattern to select a second set of questions, from the predetermined set of questions, the medical professional is attempting to obtain an answer to from the patient EMR, wherein the machine learning model is configured to receive the medical professional interaction pattern and determine the set of questions that correlate to the medical professional interaction pattern; submit, by a question submission component executing within the question prediction and answering engine, the second set of questions to the cognitive question answering system; receive, by an answer processing component executing within the question prediction and answering engine, answers to the second set of questions from the cognitive question answering system based on the patient EMR; process, by the answer processing component, the answers to the second set of questions to generate a set of answers to the second set of questions from at least a portion of the patient EMR; and output, by the question prediction and answering engine, a report correlating the second set of questions and the set of answers to the medical professional at least by generating a graphical user interface (GUI) to present the answers to the second set of questions to the medical professional as a tailored, cognitive information retrieval, wherein the GUI presents areas needing additional data retrieval based on questions in the second set of questions for which an answer could not be found in the patient EMR.",
"23. (Previously presented) The method of claim 1, wherein identifying the first set of questions comprises: examining features from the user interaction pattern; treating the features as if they are evidence passages or portions for candidate answers to a question; and determining which questions from a predetermined set of questions the evidence passages would answer. 24. (Previously presented) The method of claim 1, wherein identifying the first set of questions comprises: submitting each question from a predetermined set of questions to the cognitive question answering system to determine a set of evidence passages or portions that support an answer to each question; and determining which sets of evidence passages or portions match the user interaction pattern. 27. (Previously presented) The computer program product of claim 14, wherein identifying the first set of questions comprises: examining features from the user interaction pattern; treating the features as if they are evidence passages or portions for candidate answers to a question; and determining which questions from a predetermined set of questions the evidence passages would answer. 28.",
"(Previously presented) The computer program product of claim 14, wherein identifying the first set of questions comprises: submitting each question from a predetermined set of questions to the cognitive question answering system to determine a set of evidence passages or portions that support an answer to each question; and determining which sets of evidence passages or portions match the user interaction pattern. 29. (Previously presented) The apparatus of claim 20, wherein identifying the first set of questions comprises: examining features from the user interaction pattern; treating the features as if they are evidence passages or portions for candidate answers to a question; and determining which questions from a predetermined set of questions the evidence passages would answer. 30. (Previously presented) The apparatus of claim 20, wherein identifying the first set of questions comprises: submitting each question from a predetermined set of questions to the cognitive question answering system to determine a set of evidence passages or portions that support an answer to each question; and determining which sets of evidence passages or portions match the user interaction pattern.",
"Allowable Subject Matter 7. Claims 1-2 ,4-6, 8, 10-11, 14, 16, 18, 20, 23-24, and 27-30, are allowed. The following is an examiner’s statement of reasons for allowance: 8.",
"The prior art of record teaches A method, in a data processing system comprising a processor and a memory, the memory comprising instructions that are executed by the processor to specifically configure the processor to implement a question prediction and answering engine for predicting questions a medical professional is attempting to answer, the method comprising: training, by a personalized interaction learning engine, a machine learning model, comprising: monitoring interaction of a user with an electronic medical record (EMR} to identify one or more natural language questions entered by the user into an input device and submitted to a cognitive question answering system: identifying a first set of questions within a predetermined set of questions that match the one or more natural language questions entered by the user; correlating the one or more natural language questions entered by the user to the first set of questions; and training the machine learning model based on the correlation between the one or more natural language questions entered by the user and the first set of questions; monitoring, by an interaction monitoring component executing within the question prediction and answering engine, interaction of a medical professional with a patient electronic medical record (EMR) to identify a medical professional interaction pattern; applying, by a question selection component executing within the question prediction and answering engine, the machine learning model to the medical professional interaction pattern to select a second set of questions, from the predetermined set of questions, the medical professional is attempting to obtain an answer to from the patient EMR, wherein the machine learning model is configured to receive the medical professional interaction pattern and determine the second set of questions that correlate to the medical professional interaction pattern; submitting, by a question submission component executing within the question prediction and answering engine, the second set of questions Lo the cognitive question answering system; receiving, by an answer processing component executing within the question prediction and answering engine, answers to the second set of questions from the cognitive question answering system based on the patient EMR; processing, by the answer processing component, the answers to the second set of questions to generate a set of answers to the second set of questions from at least a portion of the patient EMR; and outputting, by the question prediction and answering engine, a report correlating the second set of questions and the set of answers to the medical professional.",
"However, they fail to expressly teach or suggest, either alone or in combination, the features found within the independent claims, in particular: “identify one or more natural language questions entered by the user into an input device and submitted to a cognitive question answering system: identifying a first set of questions within a predetermined set of questions that match the one or more natural language questions entered by the user; correlating the one or more natural language questions entered by the user to the first set of questions; and training the machine learning model based on the correlation between the one or more natural language questions entered by the user and the first set of questions” (emphasis added), as recited in the claims. 9. The closest prior art of record is as follows: U.S. Patent App.",
"Pub. No. 2019/0156921 to Kohli, et al. (“Kohli”), U.S. Patent Publication No. 2015/0193583 to McNair, et al. (“McNair”), U.S. Patent App. Pub. No. 2002/0065686 to Monteleone, et al. (“Monteleone”). 10. Any comments considered necessary by applicant must be submitted no later than the payment of the issue fee and, to avoid processing delays, should preferably accompany the issue fee. Such submissions should be clearly labeled “Comments on Statement of Reasons for Allowance.” Any inquiry concerning this communication or earlier communications from the examiner should be directed to Shyam Goswami whose telephone number is (303)297-4283. The examiner can normally be reached Monday-Thursday, 8:30AM-6:30PM MT. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Victoria Augustine can be reached on (313)446-4858.",
"The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of published or unpublished applications may be obtained from Patent Center. Unpublished application information in Patent Center is available to registered users. To file and manage patent submissions in Patent Center, visit: https://patentcenter.uspto.gov. Visit https://www.uspto.gov/patents/apply/patent-center for more information about Patent Center and https://www.uspto.gov/patents/docx for information about filing in DOCX format. For additional questions, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000. SHYAM M GOSWAMI Examiner Art Unit 3686 /ROBERT W MORGAN/ Supervisory Patent Examiner, Art Unit 3626"
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2022-07-10.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
SENIOR SECURED, SUPER-PRIORITY DEBTOR-IN-POSSESSION CREDIT AND GUARANTY AGREEMENT DATED AS OF JUNE 6, 2008 BETWEEN TORRENT ENERGY CORPORATION AS BORROWER, THE GUARANTORS PARTY HERETO AND YA GLOBAL INVESTMENTS, L.P. AS LENDER 1. AMOUNT AND TERMS OF CREDIT 1 1.1 Term Loan 1 1.2 Repayment of Term Loan 2 1.3 Use of Proceeds 2 1.4 Interest on Term Loan 3 1.5 Fees 4 1.6 Receipt of Payments 4 1.7 Application and Allocation of Payments 4 1.8 Accounting 4 1.9 Indemnity 4 1.10 Access 5 1.11 Chief Restructuring Officer 6 1.12 Taxes 6 1.13 Super-Priority Nature of Obligations and Lender’s Liens 6 1.14 Payment of Obligations 7 1.15 No Discharge; Survival of Claims 7 1.16 Waiver of Any Priming Rights 8 2. CONDITIONS PRECEDENT 8 2.1 Conditions to the Term Loan 8 3. REPRESENTATIONS AND WARRANTIES 9 3.1 Corporate Existence; Compliance with Law 9 3.2 Executive Offices; Corporate or Other Names; FEIN 9 3.3 Corporate Power; Authorization; Enforceable Obligations 10 3.4 Financial Statements 10 3.5 Material Adverse Effect 10 3.6 Ownership of Property; Liens 11 3.7 Restrictions; No Default 11 3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness 11 3.9 Government Regulation 11 3.10 Taxes 12 3.11 ERISA 12 3.12 No Litigation 13 3.13 Brokers 13 3.14 Full Disclosure 14 3.15 Environmental Matters 14 3.16 Insurance Policies 14 3.17 Deposit and Disbursement Accounts 14 3.18 Government Contracts 14 3.19 Customer and Trade Relations 14 3.20 Agreements and Other Documents 15 -i- 3.21 Bankruptcy Matters 15 4. FINANCIAL STATEMENTS AND INFORMATION 15 4.1 Reports and Notices 16 4.2 Communication with Accountants 16 4.3 Documents Filed with the Bankruptcy Court or Delivered to the U.S.Trustee or Committee 16 5. AFFIRMATIVE COVENANTS 16 5.1 Maintenance of Existence and Conduct of Business 16 5.2 Payment of Charges and Claims 17 5.3 Books and Records 17 5.4 Litigation 17 5.5 Insurance 17 5.6 Compliance with Laws 18 5.7 Agreements; Leases 18 5.8 Intentionally Omitted 18 5.9 Environmental Matters 18 5.10 Application of Proceeds 19 5.11 Fiscal Year 19 5.12 Subsidiaries 19 5.13 Further Assurances 19 5.14 Appraisals 19 5.15 Intellectual Property 19 5.16 Schedule of Financial Affairs 19 6. NEGATIVE COVENANTS 19 6.1 Mergers, Subsidiaries, Etc 19 6.2 Indebtedness 20 6.3 Affiliate and Employee Transactions 20 6.4 Capital Structure and Business 20 6.5 Guaranteed Indebtedness 20 6.6 Liens 20 6.7 Sale of Assets 20 6.8 ERISA 21 6.9 [Intentionally Omitted] 21 6.10 Restricted Payments; Use of Proceeds 21 6.11 Hazardous Materials 21 6.12 Sale-Leasebacks 22 6.13 Cancellation of Indebtedness 22 6.14 Bank Accounts 22 6.15 Margin Regulations 22 6.16 Limitation on Negative Pledge Clauses 22 -ii- 6.17 Material Contracts 22 6.18 Leases 22 6.19 New Premises 22 6.20 Repayment of Indebtedness 22 6.21 Chapter 11 Claims 22 7. TERM 22 7.1 Duration 23 7.2 Survival of Obligations 23 8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES 23 8.1 Events of Default 23 8.2 Remedies 27 8.3 Waivers by Borrower 27 9. SUCCESSORS AND ASSIGNS 28 9.1 Successors and Assigns 28 9.2 Participations; Assignments 28 10. MISCELLANEOUS 28 10.1 Complete Agreement; Modification of Agreement 29 10.2 Fees and Expenses 29 10.3 No Waiver 30 10.4 Remedies 30 10.5 Severability 30 10.6 Conflict of Terms 31 10.7 Right of Setoff 31 10.8 Authorized Signature 31 10.9 Notices 31 10.10 Section Titles 32 10.11 Counterparts 32 10.12 Time of the Essence 33 10.13 GOVERNING LAW 33 10.14 WAIVER OF JURY TRIAL 33 10.15 Publicity 34 10.16 Dating 34 10.17 Parties Including Trustees; Bankruptcy Court Proceedings 34 10.18 Right of First Refusal 34 11. GUARANTY 35 11.1 Guaranty of the Obligations 35 11.2 Payment by Guarantors 35 -iii- 11.3 Liability of Guarantors Absolute 35 11.4 Waivers by Guarantors 37 11.5 Guarantors’ Rights of Subrogation, Contribution, etc 37 11.6 Subordination of Other Obligations 38 11.7 Continuing Guaranty 38 11.8 Authority of Guarantors or Borrower 38 11.9 Financial Condition of Borrower 38 -iv- INDEX OF ANNEXES, SCHEDULES AND EXHIBITS Annex A - Definitions; Rules of Construction Annex B - Financial Statements and Notices Schedule 1.3 - Use of Proceeds Schedule 2.1(a) - Closing Agenda Schedule 3.2 - Executive Offices; Principal Places of Business; Locations of Collateral; Trade Names Schedule 3.5 - Liabilities Schedule 3.6 - Real Estate and Leases Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock Schedule 3.10 - Tax Matters Schedule 3.11 - ERISA Plans, etc. Schedule 3.12 - Litigation Schedule 3.13 Brokers Schedule 3.15 - Environmental Matters Schedule 3.17 - Disbursement and Deposit Accounts Schedule 3.18 - Government Contracts Schedule 3.19 - Customer & Trade Relations Schedule 3.20 - Certain Contracts Schedule 6.2 - Indebtedness Schedule 6.3 - Loans to and Transactions with Employees Schedule 6.6 - Liens Schedule 6.11 - Hazardous Materials Schedule 6.19 Leases Schedule 10.8 - Authorized Signatures Exhibit A - Form of Term Loan Note i SENIOR SECURED, SUPER-PRIORITY DEBTOR-IN-POSSESSION CREDIT AND GUARANTY AGREEMENT, dated as of June 6, 2008 (this “Agreement”), between TORRENT ENERGY CORPORATION, a Colorado corporation (“Borrower”), as borrower, the subsidiaries of the Borrower party hereto, as guarantors (each, a “Guarantor” and collectively, the “Guarantors”) and YA GLOBAL INVESTMENTS, L.P., a Cayman Islands exempt limited partnership (together with its successors, assigns and transferees, the “Lender”), as lender.Capitalized terms used herein are defined in Annex A or in the text hereof. R E C I T A L S A.On | [
"SENIOR SECURED, SUPER-PRIORITY DEBTOR-IN-POSSESSION CREDIT AND GUARANTY AGREEMENT DATED AS OF JUNE 6, 2008 BETWEEN TORRENT ENERGY CORPORATION AS BORROWER, THE GUARANTORS PARTY HERETO AND YA GLOBAL INVESTMENTS, L.P. AS LENDER 1. AMOUNT AND TERMS OF CREDIT 1 1.1 Term Loan 1 1.2 Repayment of Term Loan 2 1.3 Use of Proceeds 2 1.4 Interest on Term Loan 3 1.5 Fees 4 1.6 Receipt of Payments 4 1.7 Application and Allocation of Payments 4 1.8 Accounting 4 1.9 Indemnity 4 1.10 Access 5 1.11 Chief Restructuring Officer 6 1.12 Taxes 6 1.13 Super-Priority Nature of Obligations and Lender’s Liens 6 1.14 Payment of Obligations 7 1.15 No Discharge; Survival of Claims 7 1.16 Waiver of Any Priming Rights 8 2. CONDITIONS PRECEDENT 8 2.1 Conditions to the Term Loan 8 3. REPRESENTATIONS AND WARRANTIES 9 3.1 Corporate Existence; Compliance with Law 9 3.2 Executive Offices; Corporate or Other Names; FEIN 9 3.3 Corporate Power; Authorization; Enforceable Obligations 10 3.4 Financial Statements 10 3.5 Material Adverse Effect 10 3.6 Ownership of Property; Liens 11 3.7 Restrictions; No Default 11 3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness 11 3.9 Government Regulation 11 3.10 Taxes 12 3.11 ERISA 12 3.12 No Litigation 13 3.13 Brokers 13 3.14 Full Disclosure 14 3.15 Environmental Matters 14 3.16 Insurance Policies 14 3.17 Deposit and Disbursement Accounts 14 3.18 Government Contracts 14 3.19 Customer and Trade Relations 14 3.20 Agreements and Other Documents 15 -i- 3.21 Bankruptcy Matters 15 4.",
"FINANCIAL STATEMENTS AND INFORMATION 15 4.1 Reports and Notices 16 4.2 Communication with Accountants 16 4.3 Documents Filed with the Bankruptcy Court or Delivered to the U.S.Trustee or Committee 16 5. AFFIRMATIVE COVENANTS 16 5.1 Maintenance of Existence and Conduct of Business 16 5.2 Payment of Charges and Claims 17 5.3 Books and Records 17 5.4 Litigation 17 5.5 Insurance 17 5.6 Compliance with Laws 18 5.7 Agreements; Leases 18 5.8 Intentionally Omitted 18 5.9 Environmental Matters 18 5.10 Application of Proceeds 19 5.11 Fiscal Year 19 5.12 Subsidiaries 19 5.13 Further Assurances 19 5.14 Appraisals 19 5.15 Intellectual Property 19 5.16 Schedule of Financial Affairs 19 6. NEGATIVE COVENANTS 19 6.1 Mergers, Subsidiaries, Etc 19 6.2 Indebtedness 20 6.3 Affiliate and Employee Transactions 20 6.4 Capital Structure and Business 20 6.5 Guaranteed Indebtedness 20 6.6 Liens 20 6.7 Sale of Assets 20 6.8 ERISA 21 6.9 [Intentionally Omitted] 21 6.10 Restricted Payments; Use of Proceeds 21 6.11 Hazardous Materials 21 6.12 Sale-Leasebacks 22 6.13 Cancellation of Indebtedness 22 6.14 Bank Accounts 22 6.15 Margin Regulations 22 6.16 Limitation on Negative Pledge Clauses 22 -ii- 6.17 Material Contracts 22 6.18 Leases 22 6.19 New Premises 22 6.20 Repayment of Indebtedness 22 6.21 Chapter 11 Claims 22 7. TERM 22 7.1 Duration 23 7.2 Survival of Obligations 23 8.",
"EVENTS OF DEFAULT; RIGHTS AND REMEDIES 23 8.1 Events of Default 23 8.2 Remedies 27 8.3 Waivers by Borrower 27 9. SUCCESSORS AND ASSIGNS 28 9.1 Successors and Assigns 28 9.2 Participations; Assignments 28 10. MISCELLANEOUS 28 10.1 Complete Agreement; Modification of Agreement 29 10.2 Fees and Expenses 29 10.3 No Waiver 30 10.4 Remedies 30 10.5 Severability 30 10.6 Conflict of Terms 31 10.7 Right of Setoff 31 10.8 Authorized Signature 31 10.9 Notices 31 10.10 Section Titles 32 10.11 Counterparts 32 10.12 Time of the Essence 33 10.13 GOVERNING LAW 33 10.14 WAIVER OF JURY TRIAL 33 10.15 Publicity 34 10.16 Dating 34 10.17 Parties Including Trustees; Bankruptcy Court Proceedings 34 10.18 Right of First Refusal 34 11. GUARANTY 35 11.1 Guaranty of the Obligations 35 11.2 Payment by Guarantors 35 -iii- 11.3 Liability of Guarantors Absolute 35 11.4 Waivers by Guarantors 37 11.5 Guarantors’ Rights of Subrogation, Contribution, etc 37 11.6 Subordination of Other Obligations 38 11.7 Continuing Guaranty 38 11.8 Authority of Guarantors or Borrower 38 11.9 Financial Condition of Borrower 38 -iv- INDEX OF ANNEXES, SCHEDULES AND EXHIBITS Annex A - Definitions; Rules of Construction Annex B - Financial Statements and Notices Schedule 1.3 - Use of Proceeds Schedule 2.1(a) - Closing Agenda Schedule 3.2 - Executive Offices; Principal Places of Business; Locations of Collateral; Trade Names Schedule 3.5 - Liabilities Schedule 3.6 - Real Estate and Leases Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock Schedule 3.10 - Tax Matters Schedule 3.11 - ERISA Plans, etc.",
"Schedule 3.12 - Litigation Schedule 3.13 Brokers Schedule 3.15 - Environmental Matters Schedule 3.17 - Disbursement and Deposit Accounts Schedule 3.18 - Government Contracts Schedule 3.19 - Customer & Trade Relations Schedule 3.20 - Certain Contracts Schedule 6.2 - Indebtedness Schedule 6.3 - Loans to and Transactions with Employees Schedule 6.6 - Liens Schedule 6.11 - Hazardous Materials Schedule 6.19 Leases Schedule 10.8 - Authorized Signatures Exhibit A - Form of Term Loan Note i SENIOR SECURED, SUPER-PRIORITY DEBTOR-IN-POSSESSION CREDIT AND GUARANTY AGREEMENT, dated as of June 6, 2008 (this “Agreement”), between TORRENT ENERGY CORPORATION, a Colorado corporation (“Borrower”), as borrower, the subsidiaries of the Borrower party hereto, as guarantors (each, a “Guarantor” and collectively, the “Guarantors”) and YA GLOBAL INVESTMENTS, L.P., a Cayman Islands exempt limited partnership (together with its successors, assigns and transferees, the “Lender”), as lender.Capitalized terms used herein are defined in Annex A or in the text hereof. R E C I T A L S A.On"
] | https://applica-public.s3-eu-west-1.amazonaws.com/contract-discovery/edgar.txt.xz | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
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116 SRES 694 ATS: Recognizing 100 years of service by chief petty officers in the United States Coast Guard. U.S. Senate 2020-09-30 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
III116th CONGRESS2d SessionS. RES. 694IN THE SENATE OF THE UNITED STATESSeptember 15, 2020Mr. Wicker (for himself and Ms. Cantwell) submitted the following resolution; which was referred to the Committee on Commerce, Science, and TransportationSeptember 30 (legislative day, September 29), 2020 Committee discharged; considered and agreed toRESOLUTIONRecognizing 100 years of service by chief petty officers in the United States Coast Guard.Whereas, on May 18, 1920—(1)Congress passed the Act of May 18, 1920 (41 Stat. 601; chapter 190), which blended the enlisted personnel of the Life-Saving Service and the Revenue Cutter Service, the 2 precursors to the modern United States Coast Guard; and(2)the United States Coast Guard issued General Order 43, which amended article 817 of the United States Coast Guard Headquarters Regulations to establish the non-commissioned United States Coast Guard rank of chief petty officer;Whereas May 18, 2020, marked 100 years since the date of the establishment of the rank of chief petty officer in the United States Coast Guard;Whereas individuals who are selected to serve in the esteemed position of chief petty officer in the United States Coast Guard must possess the highest standards of professionalism, technical expertise, and personal integrity;Whereas chief petty officers in the United States Coast Guard provide advice and assistance in matters affecting the enlisted members of the United States Coast Guard and their families; andWhereas, for 100 years, chief petty officers in the United States Coast Guard have—(1)been examples of leadership, honor, and selfless service;(2)freely accepted responsibility beyond the call of printed assignments; and(3)through their actions, and the performance of their duties, gained the respect and admiration of their seniors and juniors: Now, therefore, be itThat the Senate—(1)recognizes 100 years of service by chief petty officers in the United States Coast Guard; and(2)honors past and present chief petty officers in the United States Coast Guard, who have served in support of the safety, security, and stewardship of the United States. | 09-30-2020 | [
"116 SRES 694 ATS: Recognizing 100 years of service by chief petty officers in the United States Coast Guard. U.S. Senate 2020-09-30 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain. III116th CONGRESS2d SessionS. RES. 694IN THE SENATE OF THE UNITED STATESSeptember 15, 2020Mr. Wicker (for himself and Ms. Cantwell) submitted the following resolution; which was referred to the Committee on Commerce, Science, and TransportationSeptember 30 (legislative day, September 29), 2020 Committee discharged; considered and agreed toRESOLUTIONRecognizing 100 years of service by chief petty officers in the United States Coast Guard.Whereas, on May 18, 1920—(1)Congress passed the Act of May 18, 1920 (41 Stat. 601; chapter 190), which blended the enlisted personnel of the Life-Saving Service and the Revenue Cutter Service, the 2 precursors to the modern United States Coast Guard; and(2)the United States Coast Guard issued General Order 43, which amended article 817 of the United States Coast Guard Headquarters Regulations to establish the non-commissioned United States Coast Guard rank of chief petty officer;Whereas May 18, 2020, marked 100 years since the date of the establishment of the rank of chief petty officer in the United States Coast Guard;Whereas individuals who are selected to serve in the esteemed position of chief petty officer in the United States Coast Guard must possess the highest standards of professionalism, technical expertise, and personal integrity;Whereas chief petty officers in the United States Coast Guard provide advice and assistance in matters affecting the enlisted members of the United States Coast Guard and their families; andWhereas, for 100 years, chief petty officers in the United States Coast Guard have—(1)been examples of leadership, honor, and selfless service;(2)freely accepted responsibility beyond the call of printed assignments; and(3)through their actions, and the performance of their duties, gained the respect and admiration of their seniors and juniors: Now, therefore, be itThat the Senate—(1)recognizes 100 years of service by chief petty officers in the United States Coast Guard; and(2)honors past and present chief petty officers in the United States Coast Guard, who have served in support of the safety, security, and stewardship of the United States."
] | https://www.govinfo.gov/content/pkg/BILLS-116sres694ats/xml/BILLS-116sres694ats.xml | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
1 P.3d 673 (2000) M.C. and M.C., Appellants, v. NORTHERN INSURANCE COMPANY OF NEW YORK, Appellee. No. S-8558. Supreme Court of Alaska. April 21, 2000. Rehearing Denied June 2, 2000. Mitchel J. Schapira, Anchorage, for Appellants. David R. Millen and Marc G. Wilhelm, Richmond & Quinn, Anchorage, for Appellee. Before MATTHEWS, Chief Justice, EASTAUGH, BRYNER, and CARPENETI, Justices.
OPINION BRYNER, Justice.
I. INTRODUCTION
Steven Flory sexually abused Mary Cook,[1] a fifteen-year-old girl who worked under his supervision. Mary and her mother sued Flory for damages; Flory confessed judgment and assigned them his right to pursue a claim against his employer's insurer, Northern Insurance Company of New York, which had denied coverage and had declined to defend Flory. The superior court granted summary judgment in favor of Northern, finding that Flory was not covered by the policy and that Northern had no duty to provide him a defense. The Cooks claim error. But the policy in question expressly excludes coverage for an employee's conduct that causes bodily injury to a co-employee. Because the record establishes that Mary was Flory's co-employee and that her claim against him involved a bodily injury, we affirm the superior court's judgment.
*674 II. FACTS AND PROCEEDINGS
In June 1994, while employed by the Anchorage Daily News as a district manager responsible for newspaper home delivery, thirty-four-year-old Steven Flory engaged in sexual relations with a fifteen-year-old girl, Mary, a home delivery solicitor whom he supervised. The state charged Flory with sexual abuse of a minor in the first degree, an unclassified felony.[2] Flory eventually pleaded no contest to the lesser charge of sexual abuse of a minor in the third degree, a class C felony.[3] Meanwhile, Mary and her mother, Mildred Cook, filed an action against the Daily News and Flory, bringing claims of assault, battery, seduction, and intentional and negligent infliction of emotional distress against Flory, and vicarious liability, negligent hiring, and improper supervision against the Daily News. The complaint alleged that Flory's acts occurred within the scope of his employment with the Daily News as Mary's direct supervisor. The Daily News's insurer, Northern Insurance Company of New York, initially informed Flory that no coverage extended to him under the Daily News policies. Northern later offered to provide Flory with representation in the civil case under a reservation of right to contest coverage. Flory accepted the offer. But after Flory entered into a plea bargain and changed his plea to no contest in the criminal case, Northern informed Flory that it would withdraw coverage of his defense in the civil case. Flory then signed a confession of judgment in favor of the Cooks, assigning them his rights to proceed against Northern on the condition that they not pursue the judgment against him. The Cooks ultimately settled their claims against the Daily News and proceeded against Northern on Flory's assigned claims, alleging that as a Daily News employee, Flory was covered under the newspaper's commercial general liability policy and that Northern had breached its duties to defend and indemnify him. The superior court granted summary judgment in Northern's favor, concluding that Flory was not covered under the Northern policy, that Northern had no duty to defend him, and that his confession of judgment in favor of the Cooks was unenforceable against Northern. The Cooks appeal.
III. DISCUSSION
A. The Parties' Arguments
The Cooks principally argue that the trial court erred in granting summary judgment on the question of coverage, contending that the issue of coverage involves questions of fact for the jury. They also contend that regardless of whether Flory was actually covered by the policy, the possibility of coverage required Northern to represent him. Last, they contend that the superior court erred in deciding that the Cooks' confessed judgment against Flory is unenforceable against Northern. Northern responds that Flory is not covered under the Daily News policy for multiple reasons, any one of which relieved it of its duty to pay under the policy: (1) his acts are excluded from coverage because they are intentional torts; (2) he acted outside the scope of his employment; and (3) his conduct fell within policy provisions excluding Daily News employees from coverage for injury to co-employees. For the same reasons, Northern maintains that it had no duty to defend Flory. Last, Northern insists that even if it did have a duty to defend Flory, it would not necessarily be liable to pay for Flory's settlement with the Cooks.
B. Standard of Review
This court reviews a grant of summary judgment de novo, applying its independent *675 judgment.[4] We determine whether the parties genuinely dispute any material facts and, if not, whether the undisputed facts entitle the moving party to judgment as a matter of law.[5] If no facts are in dispute, we apply our independent judgment when we interpret the words of a contract.[6]
C. Even Assuming That Flory Acted Within the Scope of His Employment When He Sexually Abused Mary, Northern's Policy Excluded His Conduct From Coverage Because He Injured a Co-Employee.
Although the Cooks insist that this case presents multiple questions of fact requiring jury resolution, we disagree because we conclude that the undisputed facts establish that Flory's conduct falls within an exclusion under the policy that Northern issued to the Daily News. Because the Cooks assert Flory's assigned claim against Northern, they cannot prevail unless they advance an arguable factual theory under which Flory would qualify as "an insured" under the Daily News policies. In Section II.2.a.(1), titled "WHO IS AN INSURED," the Daily News general liability policy specifies that Daily News employees are considered to be insured under the policy only while acting within the scope of their employment and only if their conduct does not cause injury to a co-employee: Each of the following is also an insured: a. Your employees, other than your executive officers, but only for acts within the scope of their employment by you. However, none of these employees is an insured for (1) "Bodily injury" or "personal injury" to you or to a co-employee while in the course of his or her employment[.] The umbrella policy contains a corresponding exclusion: The insurance provided by this policy does not apply to:.... Any employee as an "insured" with respect to "personal injury"[7] to another employee of the same employer injured in the course of such employment. For present purposes, we may assume, as the Cooks argue, that they have raised genuine issues of material fact supporting their claim that Flory was serving within the scope of his Daily News employment when he abused Mary.[8] But even so, the Cooks advance no factually supported theory under which Flory might qualify for coverage as an insured under the foregoing policy provisions. Flory's conviction for sexual abuse of a minor precludes him from denying that Mary was his co-employee: Flory's felony conviction was predicated on the position of authority that he occupied in relation to Mary by virtue of her status as a Daily News employee; the record suggests no basis for that authority other than co-employee status. Moreover, Flory cannot deny that his claim arises from an incident involving bodily injury to Mary:[9] In the civil complaint upon which Flory confessed judgment, the Cooks asserted a claim for bodily injury, alleging *676 that Flory committed assault and battery. Flory's conviction of sexual abuse, based on the same incident as the civil complaint, also establishes that he caused bodily injury.[10] And in any event, the Cooks could not sustain Flory's claim against Northern without alleging and proving bodily injury, since, under the undisputed facts of this case, bodily injury is the only potential basis for insurance coverage.[11] The Cooks argue that Flory's acts of sexual abuse did not necessarily cause "expected or intended" "bodily injury" to Mary. But that issue is material only to the question of whether Flory's acts would be excluded from coverage under Section II.2.a of the policy.[12] As shown by the language from policy Section II.2.a.(1) quoted above, whether Flory was an insured under the policy when he injured his co-employee is an entirely separate question. Because we find that the exclusion at Section II.2.a.(1) of the policy removes Flory from among those insured, we need not reach the issue of whether he intended or expected to cause Mary bodily injury when he sexually abused her.[13] Since the undisputed facts establish that Flory was not among those insured under the policy, we uphold the superior court's order granting summary judgment to Northern on the Cooks' breach of coverage claim.[14]
D. Northern Had No Duty to Defend Flory, Because There Was No Possibility That He Was Insured Under the Daily News Policy for His Sexual Abuse of Mary.
The Cooks separately dispute Northern's decision to withdraw its defense of Flory, arguing that because it violated its duty to defend, Northern has forfeited its right to argue the merits of any judgment against him. The Cooks contend that if there was any "possibility of coverage" of Flory's claim, Northern's duty to defend him was triggered, regardless of whether coverage was ultimately determined to exist.[15] But under this standard Northern had no duty to defend Flory because, under the facts alleged in the Cooks' complaint against Flory and otherwise known by *677 Northern when it decided to withdraw its defense, Flory could not conceivably have been covered by the policy. Northern withdrew its defense only after Flory pleaded no contest to a felony involving bodily injury to a co-employee. Because at that juncture Northern could fairly conclude that the suit against Flory was not "within or potentially within" the policy's coverage, Northern had no further duty to defend Flory.[16] Since we have held that the policy excluded Flory from coverage and that Northern had no separate duty to defend him, we have no need to address the superior court's independent determination that the Cooks' judgment against Flory is unenforceable against Northern.
IV. CONCLUSION
We AFFIRM the superior court's judgment. FABE, Justice, not participating. NOTES [1] We use pseudonyms for the appellants in order to ensure anonymity and to protect their privacy. [2] See AS 11.41.434(a)(3)(B) (defining first degree sexual abuse of a minor to include engaging in sexual penetration with a person who is under 16 years of age when the defendant occupies a position of authority in relation to the victim). [3] See AS 11.41.438(a)(2) (defining third degree sexual abuse of a minor to include engaging in sexual penetration with a person who is 16 or 17 years old and at least three years younger than the defendant if the defendant occupies a position of authority in relation to the victim). [4] See Christensen v. NCH Corp., 956 P.2d 468, 474 (Alaska 1998). [5] See Brady v. State, 965 P.2d 1, 2 (Alaska 1998). [6] See National Bank of Alaska v. J.B.L. & K. of Alaska, Inc., 546 P.2d 579, 586 (Alaska 1976). [7] The umbrella policy defines "personal injury" to include the general liability policy's definition of "bodily injury." [8] But see Veco, Inc. v. Rosebrock, 970 P.2d 906, 924 n. 36 (Alaska 1999) ("[I]mposing vicarious liability under a scope of employment theory absent at least a partial purpose on the part of the employee to serve the employer seems unjustified.") (modifying Doe v. Samaritan Counseling Ctr., 791 P.2d 344, 348 (Alaska 1990)). [9] Although Mary's mother brought two claims against Flory in her own right, these claims were nonetheless predicated on Flory's acts of sexual abuse. Because Mildred Cook's independent claims were ultimately based on conduct by Flory that caused bodily injury to Mary, it seems plausible that they too might fall within the co-employee exclusion, even though Mildred Cook herself was not a Daily News employee. But we need not resolve this issue here. The Cooks did not separately discuss Mildred Cook's independent claims in their summary judgment pleadings, and they do not mention them on appeal. We therefore decline to consider these claims. [10] It is immaterial that the offense of sexual abuse of a minor does not require the state to prove nonconsensual sexual contact. The Alaska Criminal Code classifies the crime for which Flory was convictedsexual abuse of a minor in the third degreeas an offense against the person. See AS 11.41.438(a)(2). Alaska law regards the victim's minority as precluding meaningful consent. See, e.g., Yearty v. State, 805 P.2d 987, 994 (Alaska App.1991) ("Virtually every case involving sexual abuse of a child is, in this respect, nonconsensual; because no case of child sexual abuse involves conduct that is truly consensual, it is difficult to conceive of a situation in which an act of sexual abuse on a child would not also be an act of sexual assault."). [11] The General Liability Policy provides coverage for "bodily injury," "property damage," "personal injury," and "advertising injury." The underlying facts obviously do not involve an "advertising injury," and the Cooks claimed no "property damage." Furthermore, the policy's narrow definition of "personal injury" precludes coverage on that basis:
"Personal injury" means injury, other than "bodily injury," arising out of one or more of the following offenses: a. False arrest, detention or imprisonment; b. Malicious prosecution; c. Wrongful entry into, or eviction of a person from, a room, dwelling or premises that the person occupies; d. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; or e. Oral or written publication of material that violates a person's right of privacy. This leaves "bodily injury" as the only arguable basis for coverage. The policy defines "bodily injury" as follows: "Bodily injury" means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time. [12] That section reads: "This insurance does not apply to: [¶] a. `Bodily injury' or `property damage' expected or intended from the standpoint of the insured." [13] But see Yearty, 805 P.2d at 994. [14] Given our conclusion that this exclusion barred coverage, we need not consider other potentially applicable exclusions argued by Northern. [15] See State, Dep't of Transp. & Pub. Facilities v. State Farm Fire & Cas. Co., 939 P.2d 788, 792 (Alaska 1997) (noting that duty to defend is triggered if at least one cause of action alleged in complaint presents a "possibility of coverage"). [16] See Afcan v. Mutual Fire, Marine & Inland Ins. Co., 595 P.2d 638, 645 (Alaska 1979). | 10-30-2013 | [
"1 P.3d 673 (2000) M.C. and M.C., Appellants, v. NORTHERN INSURANCE COMPANY OF NEW YORK, Appellee. No. S-8558. Supreme Court of Alaska. April 21, 2000. Rehearing Denied June 2, 2000. Mitchel J. Schapira, Anchorage, for Appellants. David R. Millen and Marc G. Wilhelm, Richmond & Quinn, Anchorage, for Appellee. Before MATTHEWS, Chief Justice, EASTAUGH, BRYNER, and CARPENETI, Justices. OPINION BRYNER, Justice. I. INTRODUCTION Steven Flory sexually abused Mary Cook,[1] a fifteen-year-old girl who worked under his supervision. Mary and her mother sued Flory for damages; Flory confessed judgment and assigned them his right to pursue a claim against his employer's insurer, Northern Insurance Company of New York, which had denied coverage and had declined to defend Flory. The superior court granted summary judgment in favor of Northern, finding that Flory was not covered by the policy and that Northern had no duty to provide him a defense. The Cooks claim error. But the policy in question expressly excludes coverage for an employee's conduct that causes bodily injury to a co-employee.",
"Because the record establishes that Mary was Flory's co-employee and that her claim against him involved a bodily injury, we affirm the superior court's judgment. *674 II. FACTS AND PROCEEDINGS In June 1994, while employed by the Anchorage Daily News as a district manager responsible for newspaper home delivery, thirty-four-year-old Steven Flory engaged in sexual relations with a fifteen-year-old girl, Mary, a home delivery solicitor whom he supervised. The state charged Flory with sexual abuse of a minor in the first degree, an unclassified felony. [2] Flory eventually pleaded no contest to the lesser charge of sexual abuse of a minor in the third degree, a class C felony. [3] Meanwhile, Mary and her mother, Mildred Cook, filed an action against the Daily News and Flory, bringing claims of assault, battery, seduction, and intentional and negligent infliction of emotional distress against Flory, and vicarious liability, negligent hiring, and improper supervision against the Daily News.",
"The complaint alleged that Flory's acts occurred within the scope of his employment with the Daily News as Mary's direct supervisor. The Daily News's insurer, Northern Insurance Company of New York, initially informed Flory that no coverage extended to him under the Daily News policies. Northern later offered to provide Flory with representation in the civil case under a reservation of right to contest coverage. Flory accepted the offer. But after Flory entered into a plea bargain and changed his plea to no contest in the criminal case, Northern informed Flory that it would withdraw coverage of his defense in the civil case.",
"Flory then signed a confession of judgment in favor of the Cooks, assigning them his rights to proceed against Northern on the condition that they not pursue the judgment against him. The Cooks ultimately settled their claims against the Daily News and proceeded against Northern on Flory's assigned claims, alleging that as a Daily News employee, Flory was covered under the newspaper's commercial general liability policy and that Northern had breached its duties to defend and indemnify him. The superior court granted summary judgment in Northern's favor, concluding that Flory was not covered under the Northern policy, that Northern had no duty to defend him, and that his confession of judgment in favor of the Cooks was unenforceable against Northern. The Cooks appeal.",
"III. DISCUSSION A. The Parties' Arguments The Cooks principally argue that the trial court erred in granting summary judgment on the question of coverage, contending that the issue of coverage involves questions of fact for the jury. They also contend that regardless of whether Flory was actually covered by the policy, the possibility of coverage required Northern to represent him. Last, they contend that the superior court erred in deciding that the Cooks' confessed judgment against Flory is unenforceable against Northern. Northern responds that Flory is not covered under the Daily News policy for multiple reasons, any one of which relieved it of its duty to pay under the policy: (1) his acts are excluded from coverage because they are intentional torts; (2) he acted outside the scope of his employment; and (3) his conduct fell within policy provisions excluding Daily News employees from coverage for injury to co-employees.",
"For the same reasons, Northern maintains that it had no duty to defend Flory. Last, Northern insists that even if it did have a duty to defend Flory, it would not necessarily be liable to pay for Flory's settlement with the Cooks. B. Standard of Review This court reviews a grant of summary judgment de novo, applying its independent *675 judgment. [4] We determine whether the parties genuinely dispute any material facts and, if not, whether the undisputed facts entitle the moving party to judgment as a matter of law. [5] If no facts are in dispute, we apply our independent judgment when we interpret the words of a contract. [6] C. Even Assuming That Flory Acted Within the Scope of His Employment When He Sexually Abused Mary, Northern's Policy Excluded His Conduct From Coverage Because He Injured a Co-Employee. Although the Cooks insist that this case presents multiple questions of fact requiring jury resolution, we disagree because we conclude that the undisputed facts establish that Flory's conduct falls within an exclusion under the policy that Northern issued to the Daily News.",
"Because the Cooks assert Flory's assigned claim against Northern, they cannot prevail unless they advance an arguable factual theory under which Flory would qualify as \"an insured\" under the Daily News policies. In Section II.2.a. (1), titled \"WHO IS AN INSURED,\" the Daily News general liability policy specifies that Daily News employees are considered to be insured under the policy only while acting within the scope of their employment and only if their conduct does not cause injury to a co-employee: Each of the following is also an insured: a.",
"Your employees, other than your executive officers, but only for acts within the scope of their employment by you. However, none of these employees is an insured for (1) \"Bodily injury\" or \"personal injury\" to you or to a co-employee while in the course of his or her employment[.] The umbrella policy contains a corresponding exclusion: The insurance provided by this policy does not apply to:.... Any employee as an \"insured\" with respect to \"personal injury\"[7] to another employee of the same employer injured in the course of such employment. For present purposes, we may assume, as the Cooks argue, that they have raised genuine issues of material fact supporting their claim that Flory was serving within the scope of his Daily News employment when he abused Mary. [8] But even so, the Cooks advance no factually supported theory under which Flory might qualify for coverage as an insured under the foregoing policy provisions. Flory's conviction for sexual abuse of a minor precludes him from denying that Mary was his co-employee: Flory's felony conviction was predicated on the position of authority that he occupied in relation to Mary by virtue of her status as a Daily News employee; the record suggests no basis for that authority other than co-employee status. Moreover, Flory cannot deny that his claim arises from an incident involving bodily injury to Mary:[9] In the civil complaint upon which Flory confessed judgment, the Cooks asserted a claim for bodily injury, alleging *676 that Flory committed assault and battery.",
"Flory's conviction of sexual abuse, based on the same incident as the civil complaint, also establishes that he caused bodily injury. [10] And in any event, the Cooks could not sustain Flory's claim against Northern without alleging and proving bodily injury, since, under the undisputed facts of this case, bodily injury is the only potential basis for insurance coverage. [11] The Cooks argue that Flory's acts of sexual abuse did not necessarily cause \"expected or intended\" \"bodily injury\" to Mary.",
"But that issue is material only to the question of whether Flory's acts would be excluded from coverage under Section II.2.a of the policy. [12] As shown by the language from policy Section II.2.a. (1) quoted above, whether Flory was an insured under the policy when he injured his co-employee is an entirely separate question. Because we find that the exclusion at Section II.2.a. (1) of the policy removes Flory from among those insured, we need not reach the issue of whether he intended or expected to cause Mary bodily injury when he sexually abused her. [13] Since the undisputed facts establish that Flory was not among those insured under the policy, we uphold the superior court's order granting summary judgment to Northern on the Cooks' breach of coverage claim. [14] D. Northern Had No Duty to Defend Flory, Because There Was No Possibility That He Was Insured Under the Daily News Policy for His Sexual Abuse of Mary. The Cooks separately dispute Northern's decision to withdraw its defense of Flory, arguing that because it violated its duty to defend, Northern has forfeited its right to argue the merits of any judgment against him.",
"The Cooks contend that if there was any \"possibility of coverage\" of Flory's claim, Northern's duty to defend him was triggered, regardless of whether coverage was ultimately determined to exist. [15] But under this standard Northern had no duty to defend Flory because, under the facts alleged in the Cooks' complaint against Flory and otherwise known by *677 Northern when it decided to withdraw its defense, Flory could not conceivably have been covered by the policy. Northern withdrew its defense only after Flory pleaded no contest to a felony involving bodily injury to a co-employee. Because at that juncture Northern could fairly conclude that the suit against Flory was not \"within or potentially within\" the policy's coverage, Northern had no further duty to defend Flory. [16] Since we have held that the policy excluded Flory from coverage and that Northern had no separate duty to defend him, we have no need to address the superior court's independent determination that the Cooks' judgment against Flory is unenforceable against Northern.",
"IV. CONCLUSION We AFFIRM the superior court's judgment. FABE, Justice, not participating. NOTES [1] We use pseudonyms for the appellants in order to ensure anonymity and to protect their privacy. [2] See AS 11.41.434(a)(3)(B) (defining first degree sexual abuse of a minor to include engaging in sexual penetration with a person who is under 16 years of age when the defendant occupies a position of authority in relation to the victim). [3] See AS 11.41.438(a)(2) (defining third degree sexual abuse of a minor to include engaging in sexual penetration with a person who is 16 or 17 years old and at least three years younger than the defendant if the defendant occupies a position of authority in relation to the victim). [4] See Christensen v. NCH Corp., 956 P.2d 468, 474 (Alaska 1998). [5] See Brady v. State, 965 P.2d 1, 2 (Alaska 1998). [6] See National Bank of Alaska v. J.B.L. & K. of Alaska, Inc., 546 P.2d 579, 586 (Alaska 1976). [7] The umbrella policy defines \"personal injury\" to include the general liability policy's definition of \"bodily injury.\"",
"[8] But see Veco, Inc. v. Rosebrock, 970 P.2d 906, 924 n. 36 (Alaska 1999) (\"[I]mposing vicarious liability under a scope of employment theory absent at least a partial purpose on the part of the employee to serve the employer seems unjustified.\") (modifying Doe v. Samaritan Counseling Ctr., 791 P.2d 344, 348 (Alaska 1990)). [9] Although Mary's mother brought two claims against Flory in her own right, these claims were nonetheless predicated on Flory's acts of sexual abuse. Because Mildred Cook's independent claims were ultimately based on conduct by Flory that caused bodily injury to Mary, it seems plausible that they too might fall within the co-employee exclusion, even though Mildred Cook herself was not a Daily News employee. But we need not resolve this issue here. The Cooks did not separately discuss Mildred Cook's independent claims in their summary judgment pleadings, and they do not mention them on appeal. We therefore decline to consider these claims.",
"[10] It is immaterial that the offense of sexual abuse of a minor does not require the state to prove nonconsensual sexual contact. The Alaska Criminal Code classifies the crime for which Flory was convictedsexual abuse of a minor in the third degreeas an offense against the person. See AS 11.41.438(a)(2). Alaska law regards the victim's minority as precluding meaningful consent. See, e.g., Yearty v. State, 805 P.2d 987, 994 (Alaska App.1991) (\"Virtually every case involving sexual abuse of a child is, in this respect, nonconsensual; because no case of child sexual abuse involves conduct that is truly consensual, it is difficult to conceive of a situation in which an act of sexual abuse on a child would not also be an act of sexual assault.\"). [11] The General Liability Policy provides coverage for \"bodily injury,\" \"property damage,\" \"personal injury,\" and \"advertising injury.\" The underlying facts obviously do not involve an \"advertising injury,\" and the Cooks claimed no \"property damage.\"",
"Furthermore, the policy's narrow definition of \"personal injury\" precludes coverage on that basis: \"Personal injury\" means injury, other than \"bodily injury,\" arising out of one or more of the following offenses: a. False arrest, detention or imprisonment; b. Malicious prosecution; c. Wrongful entry into, or eviction of a person from, a room, dwelling or premises that the person occupies; d. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; or e. Oral or written publication of material that violates a person's right of privacy. This leaves \"bodily injury\" as the only arguable basis for coverage.",
"The policy defines \"bodily injury\" as follows: \"Bodily injury\" means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time. [12] That section reads: \"This insurance does not apply to: [¶] a. `Bodily injury' or `property damage' expected or intended from the standpoint of the insured.\" [13] But see Yearty, 805 P.2d at 994. [14] Given our conclusion that this exclusion barred coverage, we need not consider other potentially applicable exclusions argued by Northern. [15] See State, Dep't of Transp. & Pub. Facilities v. State Farm Fire & Cas. Co., 939 P.2d 788, 792 (Alaska 1997) (noting that duty to defend is triggered if at least one cause of action alleged in complaint presents a \"possibility of coverage\"). [16] See Afcan v. Mutual Fire, Marine & Inland Ins. Co., 595 P.2d 638, 645 (Alaska 1979)."
] | https://www.courtlistener.com/api/rest/v3/opinions/2552531/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Name: Commission Regulation (EEC) No 2648/92 of 11 September 1992 enabling Member States to authorize preventive withdrawals of apples and pears Type: Regulation Subject Matter: character(0) Date Published: nan
12. 9 . 92 Official Journal of the European Communities No L 266/13 COMMISSION REGULATION (EEC) No 2648/92 of 11 September 1992 enabling Member States to authorize preventive withdrawals of apples and pears Whereas the measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Fruit and Vegetables, HAS ADOPTED THIS REGULATION : Article 1 Member States may authorize producer organizations established on their territory to undertake preventive withdrawals of apples and pears during the 1992/93 marketing year. Article 2 1 . Preventive withdrawals may not relate to more than 769 200 tonnes of apples and 225 460 tonnes of pears distributed by Member States in the following manner, in tonnes : THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Regulation (EEC) No 1035/72 of 18 May 1972 on the common organization of the market in fruit and vegetables ('), as last amended by Regulation (EEC) No 1 754/92 (2), and in particular Article 15a (2) thereof, Whereas Commission Regulation (EEC) No 1596/79 of 26 July 1979 on preventive withdrawals of apples and pears (3), as last amended by Regulation (EEC) No 2647/92 (4), lays down the circumstances under which preventive withdrawals may be authorized ; Whereas, for the 1992/93 marketing year, apple produc tion is estimated at 9 198 570 tonnes ; whereas expected surpluses in relation to production of 7 660 000 tonnes amount to 1 538 570 tonnes ; whereas preventive with drawals may relate to no more than 50 % of this quantity, that is, 769 200 tonnes ; Whereas, for the 1992/93 marketing year, pear production is estimated at 2 710 935 tonnes ; whereas expected surpluses in relation to production of 2 360 000 tonnes amount to 450 935 tonnes ; whereas preventive with drawals may relate to no more than 50 % of this quantity, that is 225 460 tonnes ; Whereas these quantities should be distributed among the various Member States in proportion to the surpluses anti cipated in each one of them in respect of varieties subject to withdrawals ; Whereas the prices communicated in accordance with the provisions of the first subparagraph of Article 17 ( 1 ) of Regulation (EEC) No 1035/72 have stood on several representative markets of the Community below the basic price ; Belgium Denmark Germany Greece France Ireland Italy Luxembourg Netherlands United Kingdom Spain Portugal Apples 37 900 1 400 52 100 34 800 257 600 1 200 204 100 200 37 300 18 800 99 900 23 900 Pears 13 100 200 22 100 11 500 30 000 10 65 630 20 15 800 4 500 43 700 18 900. 2. Preventive withdrawals may relate only to varieties referred to in the Annex. Article 3 This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 11 September 1992. For the Commission Ray MAC SHARRY Member of the Commission (') OJ No L 118, 20. 5. 1972, p. 1 . (2) OJ No L 180, 1 . 7. 1992, p. 23. (3) OJ No L 189, 27. 7. 1979, p. 47. (4) See page 12 of this Official Journal . No L 266/ 14 Official Journal of the European Communities 12. 9 . 92 ANNEX List of varieties of apples which may be the subject of preventive withdrawals Golden Delicious Imperatore Red Delicious and mutations Stark Delicious Starkcrimson Black Stayman Staymanred Stayman Winesap Richared Macintosh Red Belle de Boskoop Delicious Pilafa Granny Smith Bramley's Seedling Ingrid Marie Glockenapfel Jonagold Bravo de esmolfe Casa ' nova de Alcobaga Riscadinha List of varieties of pears which may be the subject of preventive withdrawals Passe Crassana Confà ©rence Doyennà © du Comice Empereur Alexandre Crystalli Alexandre Lucas Rocha | nan | [
"Name: Commission Regulation (EEC) No 2648/92 of 11 September 1992 enabling Member States to authorize preventive withdrawals of apples and pears Type: Regulation Subject Matter: character(0) Date Published: nan 12. 9 . 92 Official Journal of the European Communities No L 266/13 COMMISSION REGULATION (EEC) No 2648/92 of 11 September 1992 enabling Member States to authorize preventive withdrawals of apples and pears Whereas the measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Fruit and Vegetables, HAS ADOPTED THIS REGULATION : Article 1 Member States may authorize producer organizations established on their territory to undertake preventive withdrawals of apples and pears during the 1992/93 marketing year. Article 2 1 .",
"Preventive withdrawals may not relate to more than 769 200 tonnes of apples and 225 460 tonnes of pears distributed by Member States in the following manner, in tonnes : THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Regulation (EEC) No 1035/72 of 18 May 1972 on the common organization of the market in fruit and vegetables ('), as last amended by Regulation (EEC) No 1 754/92 (2), and in particular Article 15a (2) thereof, Whereas Commission Regulation (EEC) No 1596/79 of 26 July 1979 on preventive withdrawals of apples and pears (3), as last amended by Regulation (EEC) No 2647/92 (4), lays down the circumstances under which preventive withdrawals may be authorized ; Whereas, for the 1992/93 marketing year, apple produc tion is estimated at 9 198 570 tonnes ; whereas expected surpluses in relation to production of 7 660 000 tonnes amount to 1 538 570 tonnes ; whereas preventive with drawals may relate to no more than 50 % of this quantity, that is, 769 200 tonnes ; Whereas, for the 1992/93 marketing year, pear production is estimated at 2 710 935 tonnes ; whereas expected surpluses in relation to production of 2 360 000 tonnes amount to 450 935 tonnes ; whereas preventive with drawals may relate to no more than 50 % of this quantity, that is 225 460 tonnes ; Whereas these quantities should be distributed among the various Member States in proportion to the surpluses anti cipated in each one of them in respect of varieties subject to withdrawals ; Whereas the prices communicated in accordance with the provisions of the first subparagraph of Article 17 ( 1 ) of Regulation (EEC) No 1035/72 have stood on several representative markets of the Community below the basic price ; Belgium Denmark Germany Greece France Ireland Italy Luxembourg Netherlands United Kingdom Spain Portugal Apples 37 900 1 400 52 100 34 800 257 600 1 200 204 100 200 37 300 18 800 99 900 23 900 Pears 13 100 200 22 100 11 500 30 000 10 65 630 20 15 800 4 500 43 700 18 900. 2.",
"Preventive withdrawals may relate only to varieties referred to in the Annex. Article 3 This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 11 September 1992. For the Commission Ray MAC SHARRY Member of the Commission (') OJ No L 118, 20. 5. 1972, p. 1 . (2) OJ No L 180, 1 . 7. 1992, p. 23. (3) OJ No L 189, 27.",
"7. 1979, p. 47. (4) See page 12 of this Official Journal . No L 266/ 14 Official Journal of the European Communities 12. 9 . 92 ANNEX List of varieties of apples which may be the subject of preventive withdrawals Golden Delicious Imperatore Red Delicious and mutations Stark Delicious Starkcrimson Black Stayman Staymanred Stayman Winesap Richared Macintosh Red Belle de Boskoop Delicious Pilafa Granny Smith Bramley's Seedling Ingrid Marie Glockenapfel Jonagold Bravo de esmolfe Casa ' nova de Alcobaga Riscadinha List of varieties of pears which may be the subject of preventive withdrawals Passe Crassana Confà ©rence Doyennà © du Comice Empereur Alexandre Crystalli Alexandre Lucas Rocha"
] | https://dataverse.harvard.edu/dataset.xhtml?persistentId=doi:10.7910/DVN/0EGYWY | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 1 of 17
20 Civ. 06274 (LAK) United States District Court
for the Southern District of New York
IN RE TRANSCARE CORPORATION, ET AL. DEBTORS,
PATRIARCH PARTNERS AGENCY SERVICES, LLC, ET AL.
DEFENDANTS-APPELLANTS, —against— SALVATORE LAMONICA, AS CHAPTER 7 TRUSTEE OF THE JOINTLY- ADMINISTERED ESTATES OF TRANSCARE CORPORATION, ET AL.,
PLAINTIFF-APPELLEE.
ON APPEAL FROM THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (BERNSTEIN, J.)
IN RE: TRANSCARE CORPORATION, ET AL., CASE NO. 16-10407 (SMB) LAMONICA V. TILTON, ET AL., ADV. PROC. NO. 18-1021 (SMB)
APPENDIX TO BRIEF FOR THE APPELLANTS
Volume XIV- A3151-A3166 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 2 of 17
A3151 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 3 of 17
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A3165 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 17 of 17
A3166 | 2020-09-30 | [
"Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 1 of 17 20 Civ. 06274 (LAK) United States District Court for the Southern District of New York IN RE TRANSCARE CORPORATION, ET AL. DEBTORS, PATRIARCH PARTNERS AGENCY SERVICES, LLC, ET AL. DEFENDANTS-APPELLANTS, —against— SALVATORE LAMONICA, AS CHAPTER 7 TRUSTEE OF THE JOINTLY- ADMINISTERED ESTATES OF TRANSCARE CORPORATION, ET AL., PLAINTIFF-APPELLEE. ON APPEAL FROM THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (BERNSTEIN, J.) IN RE: TRANSCARE CORPORATION, ET AL., CASE NO. 16-10407 (SMB) LAMONICA V. TILTON, ET AL., ADV. PROC. NO. 18-1021 (SMB) APPENDIX TO BRIEF FOR THE APPELLANTS Volume XIV- A3151-A3166 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 2 of 17 A3151 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 3 of 17 A3152 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 4 of 17 A3153 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 5 of 17 A3154 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 6 of 17 A3155 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 7 of 17 A3156 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 8 of 17 A3157 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 9 of 17 A3158 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 10 of 17 A3159 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 11 of 17 A3160 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 12 of 17 A3161 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 13 of 17 A3162 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 14 of 17 A3163 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 15 of 17 A3164 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 16 of 17 A3165 Case 1:20-cv-06274-LAK Document 11-14 Filed 09/30/20 Page 17 of 17 A3166"
] | https://www.courtlistener.com/api/rest/v3/recap-documents/147336387/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
DETAILED ACTION
Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
Rejection under 35 U.S.C. §102
Applicant’s arguments, see page 8, line 2 through line 23, and the amendment to independent claims 1, 12 and 21, filed August 18, 2022, with respect to the rejection of claims 1 and 10-11 under 35 U.S.C. §102(a)(1) as being anticipated by Liu (U.S. Patent Application Publication No. US 2021/0150751 A1) have been fully considered and are persuasive. The rejection of claims 1 and 10-11 under 35 U.S.C. §102(a)(1) as being anticipated by Liu (U.S. Patent Application Publication No. US 2021/0150751 A1) has been withdrawn.
Allowable Subject Matter Claims 1 and 6-24 are allowed.
Contact Information
Any inquiry concerning this communication or earlier communications from the examiner should be directed to Jose L. Couso whose telephone number is (571) 272-7388. The examiner can normally be reached on Monday through Thursday from 5:30am to 3:30pm. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Matthew Bella, can be reached on 571-272-7778. The fax phone number for the organization where this application or proceeding is assigned is (571) 273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see http://portal.uspto.gov/external/portal. Should you have questions about access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice.
/JOSE L COUSO/Primary Examiner, Art Unit 2667 August 29, 2022 | 2022-09-01T14:55:59 | [
"DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Rejection under 35 U.S.C. §102 Applicant’s arguments, see page 8, line 2 through line 23, and the amendment to independent claims 1, 12 and 21, filed August 18, 2022, with respect to the rejection of claims 1 and 10-11 under 35 U.S.C. §102(a)(1) as being anticipated by Liu (U.S. Patent Application Publication No. US 2021/0150751 A1) have been fully considered and are persuasive. The rejection of claims 1 and 10-11 under 35 U.S.C. §102(a)(1) as being anticipated by Liu (U.S. Patent Application Publication No. US 2021/0150751 A1) has been withdrawn. Allowable Subject Matter Claims 1 and 6-24 are allowed. Contact Information Any inquiry concerning this communication or earlier communications from the examiner should be directed to Jose L. Couso whose telephone number is (571) 272-7388. The examiner can normally be reached on Monday through Thursday from 5:30am to 3:30pm.",
"If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Matthew Bella, can be reached on 571-272-7778. The fax phone number for the organization where this application or proceeding is assigned is (571) 273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see http://portal.uspto.gov/external/portal. Should you have questions about access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. /JOSE L COUSO/Primary Examiner, Art Unit 2667 August 29, 2022"
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2022-09-04.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 1 of 64
EXHIBIT 13 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 2 of 64
| RLI Number | 23914 | 1.67 | 1 | | | De fi SSoUmaAE TEE | Juniper Advanoed Ant elners SeniGe Ae he - | on SRX ee Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/20142015
Juniper Advanced Anti-Malware Service on SRX Software Functional Specification
Hopper Wang ho rw@juniper.net
Xiaosong Yang xyang@juniper.net Ping Wu png@juniper.net Andrew Onofreychuk aonofreychuk@juniper.net Lydia Zhao lydiazhao@juniper.net Bruce Kao bkao@juniper.net
TEMPLATE REVISION HISTORY AND GUIDELINES: The revision history is available through the version control function of the application hosting this template.
Please read the file named: README_BEFORE_EDITING_TEMPLATES. tt in the templates folder BEFORE making changes to this template, ensure you check the accuracy of both contents and format:
- Contents: What has changed
- Format? Check if owner, version number (everywhere it appears), TL9000 process number and template number are current in the document properties dialogue.
~~ [ Formatted: Right
© Copyright 2012 Juniper Networks, Inc. all rights reserved— Proprietary and Confidential —
Do not distribute outside of the company without the p i: of F ! g ing Printed or downloaded copies are for reference only! Template: J3.02.P05.T01—Ver. 14 Template Owner: Ramesh RN
HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173278 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 3 of 64
RLI Number —
JUNIPer aa
IRS is Document
23914 | 1.67 | 1 Juniper Advanced Anti-Malware Service on SRX
| Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/201-42015 Table of Contents
1. Introduction ...........0068 Jinvdvenifedensdvareilvers says uitusiahirdiuniie tepid egsh denetbenshaveni sea aaiiddan'e 1 1.1. Reference 3 12 RLIList 4 1.3 Feature Parity Traceability 4 2. Functionality............... ‘ rd itaaie 5 2.1. Goals 20 2.2 Exceptions 21 2.3. Assumptions 21 2.4 Functional competitive data 21 2.6 APlIs/Messages 23 2.6 Manageability 23 2.7 Examples or Interaction Descriptions 33 2.8 Supportability (Serviceability, Diagnose-ability and Fault Handling).............0000. 34 2.9 Dependencies and Interactions with other Components in the System... 41 2.10 Legal Considerations 42 3. Other Requirements .........ccccccsecceneeecnneenesenneeseneneananennenenes 44 4. System Resource Estimation .............:.s:sssecseseseereseecesecesssseseeeesereceenenenenes 45 4.1. Performance Related Resources 45 5. —- Scaling ANd Performance .......cccescceesseessnrsssareesrenserenosreeseneeseesesenanseaser ceases FO 5.1. Target Scaling 46 5.2. Target Performance 46 Compatibility ISSUCS .........ccecccecteneeesneeeneenenenseneeeenenanneneneeseneseneeeensaes sid raha 47
oan a
- Security Considerations ............cccccesreccsresserseerecsereeseecnenennenersereesarevenseeens FO
« —-— Platforms SUPPOrted .......cccseeccessssensseenesseneesnsnensnesensneeterstascenesenseeeeneeesneeens4
. Common Infrastructure Seana svoye 51 9.1 High Availability (HA) 51 9.2. Aggregated Ethernet/ SONET/ IRB Support §2 9.3 Services/JSF (JUNOS Services Framework) IMmpacct........0..sscccscseseessssesteessensteessersenes OZ 9.4 Multi-Chassis Support 52 9.5 64-Bit Support 52 9.6 IPv6 Support 52 9.7 Logical System Support 52
We SOK Mi pae bes cisccte Sige igcsrrestiarete ih aenanaidtneswensaasmieres 53 10.1 SDK Customer Usage 53 11. JUNOS Ready Software considerations casa 54 Rie | INS as coaeia es cag ncesayecap sonerggesteeteagaegeadaenatenziae ectengcisueetorsazeaien 55 13. Glossary 56 14. Design Specification exception ........... Savane 57 © Copyright 2012 Juniper Networks, Inc. all rights reserved— Proprietary and Confidential — Do not distribute outside of the company without the p i: of J N g ing
Printed or downloaded copies are for reference only!
Template: J3.02.F05.T01—Ver. 1.4
HIGHLY CONFIDENTIAL - SOURCE CODE
Template Owner: Ramesh RN
JNPR-FNJN_29002 00173279 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 4 of 64
| RLINumber | 23914 jrez [1 J | | Dp e fi Document Title | Juniper Advanced Anti-Malware . i NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/20442015
15. Functional Specification Approver Checklist ......cccsccesessecrseeresreeneee SO
Functional Specification Document Checklist Compliance
© Copyright 2012 Juniper Networks, Inc. all rights reserved— Proprietary and Confidential —
Do not distribute outside of the pany without the p of P we a ‘ing Printed or downloaded copies are for reference only! Template: J3.02.P065.701—Ver. 1.1 Template Qwner: Ramesh RN
HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173280 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 5 of 64
| RLINumber | 23914 [rez [1 J | | Dp eC fi Document Title Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/20442015
® Copyright 2012 Juniper Networks, Inc. all rights reserved— Proprietary and Confidential —
Do not distribute outside of the pany without the p of iP ks engineering Printed or downloaded copies are for reference only! Template: J3.02.P06.701 —Ver. 1.1 Template Owner: Ramesh RN
HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173281 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 6 of 64
| RLI Number 23914 [rez [1 J | | Dp e fi Document Title | Juniper Advanced Anti-Malware NETWORKS: Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 9510/2523/20442015
© Copyright 2012 Juniper Networks, Inc. all rights reserved— Proprietary and Confidential —
Do not distribute outside of the pany without the p of p g ing Printed or downloaded copies are for reference only! Template: J3.02.P065.701—Ver. 1.1 Template Owner: Ramesh RN
HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173282 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 7 of 64
RLI Number 23914 | 1.67 | 1 J LJ | Pt fi Document Title Juniper Advanced Anti-Malware NETWORKS Service on SRX
Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date 0§10/2523/204442015
1. Introduction
Juniper Advanced Anti-Malware solution can differentiate Juniper from competitors and prevent Juniper's products, solutions and services fram commoditization. It is a scalable and high performing designed to:
« Inline blocking of known malware downloads e Eventual notification of previously unknown malware downloads « Eventual notification of clients which have become infected
Juniper Advanced Anti-Malware (AAMW) solution integrates with SRX (sensor & enforcer), Argon Cloud Server (detection engine, web portal, host analyzer, connector and so on) to achieve both ingress and egress visibilities and enforcement capabilities.
Argon cloud server implements variety of techniques including fast checking, Anti-virus signatures to the comprehensive sandboxing technologies that trick and watch malware exploding, and scores the threat and renders a verdict for sensor (SRX) to enforce a policy, either inline block for the current and/or for future conversation. Argon cloud is an important part of this solution but should be transparent to the customer in many ways when the solution is complete.
5RX acts as a telemetry/inspection sensor and dynamic action enforcer. As the sensor, SRX inspects beth ingress and egress network traffic, extracts the interested file content and passes it to Argon cloud server. Argon cloud analyzes the file input from SRX through series of advanced detection technologies and returns a verdict of the file indicating if the file is malicious. As the enforcer, SRX takes action based on the verdict/threat-level and SRX policy settings.
There are two sets of connections between SRX and Argon cloud. One is on SRX control plane, which is used for SRX to download configurations that include file type/category filters, white/black list, file magic DB from the Argon Cloud, and send health status/counter reports to the Argon Cloud. Another one is on SRX data plane, which is used for SRX to submit files and meta-data to the Argon Cloud and to receive verdicts returned from the Argon Cloud. All the persistent connections will be re-connected if it’s. broken or timeout for some reason, syslog will be generated and connection counters will be increased.
Figure 1 shows the high-level architecture of the Argon solution.
© Copyright 2012 Juniper Networks, Inc, — eee and Confidential — Do not distribute outside of the company without the p p i ing Printed copies are for reference ore Template: J3.02,P05.707 =—Ver 1.1 Template Owner, Ramesh RM
Page 1
HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173283 JUNIPer
NETWORKS
Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 8 of 64
RL! Number
23914 | 1.67 | 1
Document Title
Juniper Advanced Anti-Malware Service on SRX
Document Owner
Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao
Version Date
9510/2523/204.42015
Juniper Advanced Anti-Malware Solution
Argon Cloud Logging API Load Host Server Server Balancer Analzer Feed Server a =~ User Portal Krypton Verdict: Data Plane (Threat-tevel)) (Extracted File Contents) [File Verdict) ‘Control Plane — (UbMaglc DB) |Health Status (Black/White List} Telemetry Data
Internat HTTP(s) Server
Permit OF Inline Block Log Notification
SRX FW
Juniper Advanced Anti-Malware Solution
Argon Cloud Logging API Host Feed Server Server iy pion Analyzer Server ~ AWS Load
Data Plane
(Extracted File Contents) (Mota Gata)
(C&C Eventiag)
Verdict (inspect! (Threat-level) (Fost File Cheek Table} | Health Status (File Category Mapping) | Telemetry Data
internet HTTP(s) Server
End Users
Permit or Inline Blocking Log Notification
SRX FW
a
| Formatted: Font: Calibri, 12 pt, Font color: | Text 1
HIGHLY
Figure 1 Juniper Advanced Anti-Malware Solution Architecture
© Copyright 2012 Juniper Networks, Inc. - Proprietary and Confidential — Do not distribute outside of the company without the permission of Juniper Networks engineering Printed copies are for reference only! Template: J3.02.P05.T01 —Ver, 1.1 Template Owner; Ramesh RN
Page 2
CONFIDENTIAL - SOURCE CODE
JNPR-FNJN_ 29002 00173284 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 9 of 64
RLI Number 23914 | 1.67 | 1 J [ | De ( Document Title | Juniper Advanced Anti-Malware rv Service on SRX NETWORKS an _=! Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date 0510/2523/204.42015
This document and RLI only focus on the advanced anti-malware service running on the SRx. Details of Argon solution can be referred to "Argon Solution Overview" and "Argon SRX Architecture". 1.1 Reference
1. Market Requirements Document (MRD)
https://junipernetworks.sharepoint.com/sites/Projects1/etp/_layouts/15/start.aspx#/supporting/Forms/Allite ms.aspx?R ootFolder=/sites/Projects1 /etp/supporting/Requirements %20and%20ENG%20Response&Fald erCTID=0x01200043A0991 E98C61 B45A93890B65A8EAAS32 View=%/7B3E5F02B4-1 CEA-46E3-8E4B- E3FE7098419A%/7D
2. Argon SRX Architecture
https://junipernetworks.sharepoint.com/sites/Projects1/AAMVV/controlled/Argon%20Technical%20Docum ents/Random%20technical%20docs/Argon%20SRX%20Architecture. pdf
3. Argon System Specification https ://junipernetworks.sharepoint.com/sites/ProjectsT/AAMVWV/ layouts/15/WopiFrame.aspx?sourcedoc=
BC58BB70-C968-418C-B35E- F2B9FB216AE3}&file=Argon%20System%20Specification.docx&action=default
4. Argon Solution Overview
https://junipernetworks.sharepoint.com/sites/Projectst/etp/ layouts/15//VopiFrame.aspx?sourcedoc=%/7B F6CFBAF2-183F-46F0-A6A9- D4336573C57F %7D&file=Argon%20Solution%20v9%208.docx&action=default
5. Argon Sample API
36468- 6FEO-47FA- AO! 1-7EC03B754F D3}&file=Argon %20Client%20APIs. docx&action=defa ult
6. Argon Soft Configuration
https ://junipernetworks.sharepoint.com/sites/Projects1/etp/_layouts/15//VopiFrame.aspx?sourcedoc={43F C337A-757D-4B1E-9D11-59D2B8332A8E}&file=Argon%20S oft% 20Confiquration.docx&action=default De RLI23819- Move WF to RTCOM Branch FS
Move WE to RTCOMM Branch ES, docx
8. JUNOS Qosmos DPI Integration Design Specification https ://matrix juniper net/docs/DOC-148132
9. NextGen Common Protocol Parser
https ://matrix.juniper.net/docs/DOC-183601
10. Syslog over TLS RTCom and SSL Enhancements
ttp://cvs. juniper .net/cgi-bin/viewovs.cgi/*checkout*/: rojects/|sfispecs/Syslog%20o0ver%20TLS%20RTCom%20and%20SSL%20Enhancements.docx
11. JSF SSL Functional Spec http://cvs.juniper.net/cgi-bin/viewcvs.cqgi/sw-projects/jsf/specs/isf_ssl.txt?view=markup
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RLI Number
Document Title
JUNIPer
23914
a a |
Juniper Advanced Anti-Malware Service on SRX
Document Owner
Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao
| | Version Date
0§10/2523/20442015
12. WebSocket RFC http://tools.ietf.org/html/rfc6455
1.2 RLIList
| RLI No Description
| 23914 Juniper Advanced Anti-Malware Service on SRX
1.3. Feature Parity Traceability
This feature is not for Parity purpose.
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RL Number
Document Title
23914 |e || i
| Juniper Advanced Anti-Malware
Service on SRX
JUNIPer
I WOR a re =
Document Hopper Wang, Xiaosong Yang, |, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/20442015
2. Functionality ~ Control Plane
To enable Juniper Advanced Anti-Malware service on SRX, customer needs to go to the Argon cloud
web portal to register an account first, apply for the license (freemium or premium), get the http link of the bootstrap packages, then use Junos "op url" command to download Argon bootstrap package and script to SRX. The bootstrap package includes related security certificates (e.g., SRX key/certificate, Argon Cloud server's CA certificate) for upcoming mutual authentications between 5RX and the Cloud. The script will install related security certificates on the SRX and commit the configuration for Argon cloud connection includes Argon server's URL and the tls-profile. Once the related certificates are installed on SRX, AAMWD daemon starts to establish the secure connections between SRX and the Argon Cloud. In future, Security Design (SD) will integrate with Argon Cloud, so at that time customer no needs to use Argon cloud web portal, but can use SD for centralized management.
ee ee eee J Argon Cloud ' ; Server i — = T = 7 = vy RE =. == cL Palle TL bobtewanil, Health Data || rue magicos op unl script | package Telemery Counters ss watat ' ee r ; cLI ' ' r= ———— = > ' i j Commands cLi i I \ ‘* Configuration \ ' “ . so 5—— 4° St NSD PKID H AAMWD =! | USPINFO F-+----- ; 7 \ ise lec POONN POONN Poon ! PFE wv [rw Policy Modulo| | JSF_AAMW Plugin
Figure 2 SRX Advanced Anti-Malware Service & Control Connections with Argon Cloud
Figure 2 shows JunOS modules running on SRX for advanced anti-malware service and control connections with the Argon Cloud.
From this diagram, we can see there are two logical connections between SRX and Argon cloud:
1. Bootstrap connection
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The user will use “op url" script to download the install package. This is a temporary https connection. In this connection, there is not a certificate-based mutual authentication between S5RX and the Argon Cloud. However, "op url" command can verify file’s integrity by checking md5/sha1/sha-256 result after downloading. For example:
op url <https://cloud.juniper.net/customerl/aamw-install-scritp.qgz> key md5 BddeZglahl2s73313ddfhyil>. Note: The url and key string oreated and “opied From cloud UT.
In order to do mutual authentications between SRX and Argon Cloud, SRX needs to have SRX- cert and private key, and Cloud server's CA cert. These certificates and private key will not
be available to SRX till the Ist connection is set up, from which Cloud will push the info to the SRX. The URLin "op url" is the place to which SRX sets up the 1st connection. In addition, it is the user who will generate the URL (in “op url") in the Cloud web portal and manually copy & paste it to the SRX CLI (i-e., in the command of 'op url’). It is assumed the mutual authentication is assured considering it is the same user who performs the actions on creating the URL and inputting it on SRX. In addition, the URL (in the "op url") has been designed as a one-time URL, meaning that it will be invalid after the 1™ use.
2. AAMW Control Plane connection A persistent TLS connection is set up between AAMWD daemon and Argon Cloud. This secure connection is used for SRX to receive soft-configurations (including file type/category mapping, customized profile, file magic DB, white/black list from the Argon Cloud and send health data to the Argon Cloud. A certificate-based mutual authentication is performed between SRX and Argon Cloud during the secure channel establishment. At the transport protocol level, WebSocket is used as it supports bi-directional real time communication.
1) File categories mapping
This is the global file categories configure which defines category / file type mapping. The mapping table includes category name, mime type, file extension, minimum/maximum size of each file type and submission sample rate.
executable appl wee n-ole msi, mst, 1024 TO4bS7 a0 msm, dat
portable _d appLicatior Sument texr/s
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. applicaticon/s-ter 5 archive ive AsBAsOE applicarion/ rar
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Table 1 File Category Mapping Table
2) Updatable fast file check table
There is a static fast file check table for file fast identifying. It's generated and managed < [aren Indent: Left: 0.75", No bullets or numbering
by cloud which include some static signature for popular file types. 3) Customer specific profile configuration
Customer is allowed to configure for each profile via Argon Web portal is the file types, extensions or file categories that won’t be scanned and per-category sample size thresholds. For the detailed info, please refer to the document <Argon_Soft_Configuration>.
4) Whitelist & Blacklist
Whitelist defines list of file downloading sources from which files downloaded are not needed for an anti-malware inspection, Blacklist defines the list of sources that need to be block for file downloading. There will be 4 lists: Customer White List, Customer Black list, Global White List and Global Black List. Argon cloud will send these 4 lists to SRX.
In each list, there will be 3 types of entries:
® URLs URLs can be defined as basic patterns (* and ? wildcards only) or as exact literal matches. The url pattern must start with “http://”, both http and https traffic will be matched. The maximum length of each URL entry is 2048 Bytes. « IPs IPs can be defined as subnet masks, ranges, or full |P addresses. * Hostnames Hostnames can be defined as basic patterns (* and ? wildcards only), as partial/subdomains (e.g. all subdomains of Microsoft.com, or all subdomains of cdn.akamai.us), or as literal exact matches. The maximum length of each Hostname entry is 128 Bytes. Juniper White List or Juniper Black List JNPR B/W List has up to 3K entries; Customer White list or Black list has up to 1K entries. Customer can define whitelist and blacklist in Argon web portal, which always have higher priority than other lists.
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| Version Date 0510/2523/20442015
The order of Black/White list checking is as follows:
Customer White List
Customer Black List
Global White List
Global Black List
During the matching, First match wins.
es
The Whitelist and Blacklist of AAMW service are only focused on inspecting files downloaded from servers against malwares. While the Whitelist and Blacklist of security intelligence are focus on enforcements on the connections from/to C&C servers.
5) Health Data
Health data collected by AAMWD will be sent to Argon Cloud via the same connection every 5 minutes, and it includes below contents:
Software version ~1T201491006 Mo
Hostname
Cluster
Serial pumber UN11EFO3BAGE SorMeG Lion actives
whitelist hits blacklist hits 2 &Telemetry data
~ Data Plane
Acting as a telemetry sensor and dynamic action enforcer of Juniper Advanced Anti-Malware solution, SRX needs to extract the interested file content from HTTP/HTTPs traffic and pushes them to Argon Cloud for inspectians,, and take enforcement based on the policy settings and the verdict- number/threat-level returned from Argon cloud.
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Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date 0$10/2523/20142015
There are multiple connections lunched from SRX PFE side via RTCOM plugin and used for sending file sample data to Argon cloud and receiving verdicts. It uses the same mutual authentication methods and protocol as control plane connection, i.e., TLS + WebSocket. For performance considerations, each SPU might initialize 16 TCP persistent connections.
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| Formatted: Font: Calibri, 11 pt, Font color: orks Text 1 Pacha PFE ( i JSF AAMW Plugin =| e aes > Pactets<,.) aE ow IT | cco) | eee ee. = eT CATP(s} | oie Filter BS Other \fontests | | _Polleytookue Phughs v "TY" Fital Verdict B/W Unt Type Manage & Tromport Call WebSocket AP] Sockat Simulation q RTCOM ssu|* a ngiour
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JUNIPer
SIET WORF
PRL Number
23914
Document Title
Juniper Advanced Anti-Malware Service on SRX
PFE
Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao Version Date 0510/2523/20442015 JSF AAMW Plugin Plugin Framework | aetion |} > ee se CHIP] | | ~~ Wepect Fife eaves Other —— Sontexts | |, AAMW Policy Looky | Pluglas Ga FilofVerdict ce _* Gale : Buffer car arerurs | * Presi
Fie{Contexts
Call WebSorket AF API Socket Simulation
Figure 3 SRX Advanced Anti-Malware Packets and Event Process Diagram
Figure 3 shows the packets and events workflow on SRX PFE, specifically,
a. Aclientsends HTTP(s) packets to server, the traffic will pass through SRX plugin list.
b. JDPI plugin gets interest check event for this session, and will query other plugins if having an
interest in this session.
c. Only when the SRX Advanced Anti-Malware (AAMW) application service has been configured on the matched FW policy, and Argon file filters have been downloaded and installed on SRX, the AAMW plugin will notify JDP! plugin that it is interested in this session if the session is HTTP(s), and also
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Template Owner: Ramesh RN
JNPR-FNJN_29002 00173293
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| Version Date 0510/2523/20442015
registers with JDPI for the protocol contexts that it needs. SRX AAMW plugin also registers with JSF framework for being interested in this session.
d. After interest check, JDPI plugin will call Qosmos engine to identify the protocol and parse the contexts of this session. As AAMW service focuses on the ingress file downloading, SRX will only inspect the file from server to client.
e, SRX AAMW plugin will hold the last one or two data packets before taking policy action.
ft. For each packet, JDPI module will copy the packet to Qosmos engine and query Qosmos if any application/context is ready or not. If it is ready, then JDP! sends Application Filter Classification (AFC) events or Parsed Context Propagation (PCP) events to each registered plugin. For an AFC event, it includes the application type (e.g., HTTP or HTTPs).For a PCP event, it includes the protocol type, context type, content length and content. AAMW plugin module will copy and manage interested file contents extracted from HTTP/HTTPs traffic.
g. SRX AAMW plugin processes these events. If it's not HTTP(s), then SRX AAMW plugin ignores this session and notifies JDP| to deregister HTTP protecal/context. Otherwise, SRX AAMW plugin will create a buffer management object to maintain the URI and file context buffers.
h. 5RX will look up Argon Whitelist and Black list IP table first, if not match, then waiting for URL event from JOPI. When getting URL event, AAMW plugin will lookup Argon URL/host white list and black list. lf the URL or host matches the whitelist, then permits this file. If matching the blacklist, then block the session.
i. Once the accumulated buffer size is larger than 8192 bytes or file end is reached, SRX AAMW plugin will call file identification module to identify the file type. Once getting the file type, SRX AAMW plugin will look it up in the file type filters. When.a match is hit, it will send the file content to Argon cloud through secure (RTCOM+TLS) connections from SRX SPU. Otherwise it ignores this file content, but still inspects this session because there might be HTTP pipeline requests.
J. Ifthe file size exceeds the maximum file-size-limit defined in file filter, SRX will stop sending the file to Argon cloud and ignore the rest of file contents. A file terminate notification will be sent to Argon cloud. From http header, SRX may get the length of the file content and will ignore it before sending to Argon cloud in this case.
k. Before sending file contents to Argon cloud, SRX will check the sample rate of the file type. The default sample rate is 100%. The sample rate of each file category is defined in the Argon Cloud and can be modified by Argon cloud. It is pushed to SRX through control plane connection. If the submission sample rate is not 100% (1.0), e.g. 50% (0.5), SRX will send one of this category/type file to Argon and ignore the next one on the same SPU. The sample rate check interval is 5 minutes.
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>
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Version Date | 0510/2523/20742015
The connections to Argon cloud is launched on-demand. It is only established when a SRX AAMW policy is matched and SRX needs to send a file to the Argon Cloud. SRX will keep these connections alive after they are established. Once advanced-anti-malware url configuration deleted or deactivated, all these connections will be shutdown.
. After getting the file, Argon cloud will conduct malware inspection on it. For each file, Argon cloud
will return a result with a verdict-number to SRX, If it returns “undetermined”, then SRX will ignore the file but still monitoring the session. If it returns a verdict-number, SRX will lookup AAMW policy and take an action on the session based on the settings of the matched policy (e.g., permit or block).
In order to do inline blocking, AAMW plugin will hold the last 10K bytes for the interested file content. When getting the verdict from cloud server, AAMW plugin will lookup current policy and take corresponding action. If permit, then forward all the contents to client, otherwise will drop these contents and send RST to client.
In this release, we support "block" action as inline blocking. The behavior of block action is to reset the connection by sending RST packet to client and dropping the packets from server. The reason is that if we don't close client session, it will cause partial download. For the server side, we don’t want it to know there is advanced anti-malware service inline checking.
Implementation
To implement the above functionalities, the following SRX modules need to be involved:
1. Policy The SRX Advanced Anti-Malware service is applied to the traffic that is inspected by zone based firewall policy rules. The matching criteria of zone-based firewall include legacy 6 tuples lookup (from and to zones, source and destination address/group, destination port, protocol and application). Advanced Anti-Malware policy extends the firewall policy and it includes: 1) Action and notification based on the verdict-number/threat-level threshold The action can be permit or block. Log can be configured for notification. Customer can use Log Director or STRM to check SRX Advanced Anti-Malware action's log. 2) Default action & notification This is for the verdict-numbers that less than the threshold. The default action is permit and no log. 3) Inspection-profile Customer need to specify the name of inspection-profile in advanced anti-malware policy. The name string is case sensitive. This profile is defined on Argon cloud server,
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and pushed to SRX via control channel. The contents of inspection table includes inspecting file categories and exclude lists. 4) Fallback-options Fallback options should be taken when resources are out of limits or error conditions occur: o v¥erdictsend-timeout-exceeded File content cannot be sent to cloud in 60 seconds. o verdict-timeout-exceeded Argon cloud doesn't return the verdict within 3-2 seconds after file ended. o serveruAreachable © out-of-resource Memory allocation is failed on SRX PFE. a tea-many-requests
leit The-defaul ; 6 : dee Ines baris32 Hlow-SPU, amelie Hpe ey bolt ees ae ALL
a __rate-limit To prevent some corner cases that the system is abused, cloud side will provide sample rate to each file type category and a global rate for whole SRX device. The rates are from 0% to 100% and default is 100%. Category sample rate and global sample rate will be combined (multiplied) together. Based on this combined sample rate, SRX will limit percentage of certain category file contents sending to cloud. When file contents sent exceeded the combined rate, SRX starts to fallback the files by not sending to cloud.
The action of fallback options can be permit or block. Notification can be configured for
each item. Default is permit without log.
3 cy name oY name Applications ——— inspection-profile N/A (1-10) recommended Action ermit | ac
Match Verdict-threshold
Argon policy
Then * Notification ce
Default-notification o Whitelist-notification le Blacklist-notification lex
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| Version Date 0510/2523/20442015
Fallback ootdon permit | block permit a ne le | Sealing limi | masdsis——=sssons }i4—-SSSS5u asses Table 3 SRX AAMW policy table Note: Both capacity of argon palicy and inspection-profile are 32.
2. Administration 1) Argon Cloud configuration Administrator needs to specify the Argon cloud URL setting, includes: Hostname, Port and URI. 2) Authentication Administrator needs to specify the tls-profile for authentication.
Note; The tls-profile should bind With the client's
that is gen
anism, please
3) Traceoptions - Trace flag (policy, parser, context, connection, identification, plugin) and level (all, error, info, notice, verbose, warning) will be supported. So it's easy to get the specified trace information,
4) AAMWD restart When the certificates of tls-profile are updated after installed, customer must restart AAMWD manually so that AAMWD will reload the new certificates for the mutual authentications with Argon Cloud.
nestart advanced-anti-malware =
conipletions:
Rue 3 command gracefully Greve y restart the process immediately y restart (SIGKIL the pracess soft (SIGHUP) the process | Pipe through 4 command
The secure connections between SRX RE and Argon Cloud will be reestablished.
3. Protocol identification and context parsing JDP| Juniper Deep Packet Inspection) is a common parser framework, it can support multiple application services like AppFW, AppTrack and AppQos. Juniper Advanced Anti-Malware service also has dependency on JDPI for protocol classification and content parsing. JDPI includes AFC (Application Filter Classification) and PCP (Parsed Context Propagation) modules. The Application and Proto Context are available via JDP infrastructure for many protocols, and there are rich 1700+ applications and 2500+ protocols contexts supported in JDPI.
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In the first release, SRX only focuses on HTTP (JSF_PROTO_HTTP =67) and HTTPs (JSF_PROTO_HTTPS = 68, JSF_PROTO_SSL = 199) protocols. Regarding the HTTP context types, we need to check below context events:
48) JSF-PROTO_CRA_H TAL BECHUNK_SIZE
1) JSF-PROFO—CRGHARACONTFENT_ENCOBINGISE PROTO CTXT HTTP CONTENT RAW 2) JSF PROTO CTXT HTTP CONTENT
3) JSF PROTO CTXT HTTP URI
4) JSF PROTO CTXT HTTP INDEX 5) JSF PROTO CTXT HTTP MIME 6) JSF PROTO CTXT HTTP MIME TYPE 7)_JSF PROTO CTXT HTTP MIME TYPE MAIN 8) JSF PROTO CTXT HTTP MIME TYPE SUB 3) JSF PROTO CTXT_HTTP_ FILENAME 10) JSF PROTO _CTXT_HTTP PART FILENAME 11) JSF PROTO CTXT _HITP CONTENT TRANSFER ENCODING 12) JSF PROTO CTXT HTTP FILE COMPLETED 13) JSF PROTO CTXT HTTP METHOD 14) JSE PROTO CTXT_ HTTP_HOST
CTXT
15) JSF PROTO HTTP CONTENT ENCODING
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| Version Date 0510/2523/20442015
16) JSF PROTO CTXT_ HTTP_ACCEPT ENCODING
17) JSF PROTO CTXT HTTP CONTENT RANGE
18) JSF PROTO CTXT HTTP CONTENT LEN
19) JSF PROTO CTXT_HTTP URI DECODED
2B HSRPROFOC RH AUSER AGENT
24) ISF_PROTO-CH_HTFFE_VERSION JDP! plugin needs to do TCP reassemble to keep the PCP (Parsed Context Propagation) event in order. SRX Advanced Anti-Malware plugin (jsf_aamw) need to buffer and manage the contexts and send them to Argon cloud through RTCOM+SSL connections. Note: To enable advanced-anti-malware service, Al license must be installed and activated.
4. SRX JSF_AAMW Service Plugin
SRX Advanced Anti-Malware service will add apewIJSF packet and stream plugin to the services chain. This plugin will interact with JOP, register interested protocols and contexts, and provide callback for the parser context event (PCP Event}. When a context is ready, it calls file magic to recognize file type and send file content to Argon cloud through RTCOM+TLS session. Argon cloud will return a verdict score/threat-level for the file, and SRX Advanced Anti-Malware plugin takes action based on the score and policy. To support inline blocking, SRX Advanced Anti- Malware plugin will hold the last one or two packets. The length of file content being held needs to be larger than 1Kbyte to make sure the blocking action is more effective. . Figure 4 shows the SRX Advanced Anti-Malware plugin architecture:
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RLI Number 23914 l1ez [1
Document Title | Juniper Advanced Anti-Malware
Service on SRX
JUNIPer
NETWORKS
Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 9510/2523/20142015 Brief Description: The JG AAW pligin regatens interested: protccols and contests trom JO plugn end pares the setmcted Ale: Peues shaourwergion end paler be ‘ealling eee fo Argen Server Coe verdict on Argon Server
NSD (SLT) AAM (container process)
mice © NSCs simply a conmunenprockis to Hoe the conn /erary When contans all the loge:
Note Libraries Used " ———— ¥ o re ey = plugin = Libetrece 5 sp (ht Py ar = Libysh tate Ware) ‘feed Conieet Pronaganon régrsh es
= (When pavsedcontat isready, a PLP = Libsmplock (Sv hockingy eveotis generated aed JSF A AMY plugin 2 Libjunpar
a Ih event = Libeinn . AANAR plugin pea contaat to oi ener tfirmugh PTIOON fara = GRY AAMY AnE theca ae fie Boone returned from Argon server and: SRM poley setting:
EF rconforennce
rig 4 SRX Advanced Anti-Malware Plugin Architecture
jsf aamw_stream (stream plugin mode), These two plugins share the same JSF infrastructure but only one plugin will handle one http session. The decision of which plugin handles any particular session is based on policy configuration. When a customer wants to blocking action for suspected malware, a user would configure advanced-anti-malware policy action to block those files with verdict larger than threshold, and in this case, jsf aamw stream is the plugin that will handle the session because only in stream mode we can invoke tcp proxy to facilitate inline blocking of the last 10KB of the file content. If customer doesn’t want to block any http transaction and only wants to monitor the behavior, the policy action would be configured as ermit. In this case, jsf aamw packet mode will be chosen for the session since TCP proxy will
not be required.
handles http URL and cookie in c2s (client to server) direction. IDP focuses on full protocol in both c2s and s2c directions. AAMW plugin focuses on file contents mostly in s2c direction. We plan to put JSF AAMW stream/packet plugin after IDP stream/packet plugin and UTM plugin.
© Copyright 2012 Juniper Networks, Inc. — eee and Confidential — Do not distribute outside of the company without the p i ing Printed copies are for reference ciel Template; J3.02,P05,T01 —Ver. 1.1 Template Owner: Ramesh R N
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HIGHLY CONFIDENTIAL - SOURCE CODE
JSF AAMIW stednieaukat plug has no adleraritency.a on |IDP and UTM Aphis: Ssecintel skew
Formatted: Font: 11 pt, Font color: Text 1, (Asian) Chinese (PRC)
Formatted: Font: 11 pt, Font color: Text 1, (Asian) Chinese (PRC)
_
Formatted: Font: 11 pt, Font color: Text 1, (Asian) Chinese (PRC)
Formatted: Font: 11 pt, Font color: Text 1, (Asian) Chinese (PRC)
Formatted: Font: Calibri, 11 pt, Font color: Text 1
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5.
7.
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Version Date 0510/2523/204-42015
Network Transport - RTCOM framework
RT communication framework provides a scalable TCP session to external servers. The SRX AAMW service plugin can initiate one or more TCP sessions ta send and receive data from external servers leveraging RTCOM facility. SRX AAMW service will leverage RTCOM and SSL-I to send extracted content to Argon cloud. Both client and server's certificate will be verified, so the traffic is encrypted and secured. The number of RTCOM connection is 16 on each SPU.
Only when advanced-anti-malware policy configured, SRX AAMW plugin will set up the connection to Argon cloud from each SPU, and will shut down all connections if configuration deleted or deactivated. SRX AAMW plugin will use round robin algorithm to select connection for file transporting, and do affinity binding of file and connection. If connection is closed or broken for some reason, SRX will not resend the file content, and will ignore the future contents of this file.
If error happens in the communication with Argon cloud, RTCOM propagates error codes to SRX AAMW plugin. There are two kind of errors: TCP error and SSL error. RTCOM generates TCP errors via detecting if or not get correct packet and timely response from TCP-| and TCP-T, And for SSL error, RTCOM gets the error code from SSL-! plugin. RTCOM reports the error code to AAMW plugin, then AAMW plugin does error handling actions according to the error code.
Message Communication - WebSocket & Msgpack
WebSocket defines a full-duplex single socket connection over which messages can be sent between client and server. It uses http-like communication for initial handshake, running untrusted code in a controlled environment to a remote host that has opted-in to communications from that code. The benefits of web-socket is the standard mechanism for server to initiate or send updates without having to have client poll (RPC model). We plan to leverage WebSocket to send verdicts asynchronously, without requiring SRX requesting the verdict in a poll mode. Please refer to RFC for more detailed description:
http://tools.ietf.ora/html/ric6455.
File Type inans ification ed ee File Check Table that-describe-the- sell aisaibatw teat oe ies tise igs Conteh ach alli ie eee al rime-types-We use LibMagic updatable fast file check table for file type identification. If a file type is not included in the file magic database, AAMW plug-in is not able to identify it. The file magic database will be pushed from cloud server to SRX. Besides this, cloud will provide the infectable file types list to SRX, each defined file types has the following additional configuration:
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Which file types could be infected and need to be analyzed. * Minimum file size The threshold of how large a file of this type must be, before sending to cloud. e Maximum file size How large a file of this type has to be before no longer make senses to analyze. * Submission sample rate Default is 100%, but can be adjusted by Argon cloud. 8. PKID PKID provides the framework for certificate management and authentication. AAMWD daemon will call libpkic to connect with PKID, requesting for SRX client key and cert, validating server's cert and doing CRL check.
9. Reverse DNS lookup
When PFE seeing a session, it will query local reverse DNS table on SPU locally. If does not exist, eens: Font: Calibri, 11 pt, Fant color: then return NULL and send a request to RE (AAMWD) for reverse DNS lookup. Text 1, (Asian) Chinese (PRC)
AAMWD calls system (gethostbyaddr) API to do reverse DNS lookup, and propagates IP/Name mapping entry to all PFEs, if can get the client computer name by IP successfully,
The next time, jsf_aamw plugin will query local DNS cache table on PFE, it will get the client computer name and attach it into metadata with the field hostname of client_info.
If DNS resolution failed on RE, no |P/name mapping message send back to PFE. On PFE, there Is no new reverse dns request for this IP in 15min. The maximum name length is 64 Bytes. Each entry timeout is 1 hour.
Whether reverse DNS lookup can be successfully or not, it relies on the DNS configuration on SRX. Please confirm that from SRX shell or CLI you can get the computer name by IP and get IP by name.
9.10. SSL forward proxy In order to support HTTPs protocol, customer needs to configure ssl-proxy application services together with advanced-anti-malware on firewall network policy. Please refer to SSL Forward Proxy documents for details.
2.1 Goals
® Extract file content from HTTP/HTIPs traffic
* identify the file types and map to category table
e Take inline actions based on file verdict-number and SRX policy configurations ® Provide secure connections (TLS) between SRX and Argon cloud
© Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the permission of Juniper Networks engineering Printed copies are for reference only! Template: J3.02,P05,T01—Ver, 1.1 Template Owner: Ramesh R N
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2.2 Exceptions 2.2.1 Caveats
«e No 2.2.2 Limitations
| ® Inthe first release, only SRX¢-&4Forge SRX1500 are supported. e AAmode of HA is not supported because of the limitation of RTCOM. ® Single file multi-thread downloading is not supported. e Resuming preen downloading is not See
2.2.3. Non Goals
® LSYSis not supported the first release. ® |Pv6 is not supported.
® Other protocols such as SMTP, IMAP, POP3 and FTP are not supported in the first release.
2.3. Assumptions
* No 2.4 Functional competitive data
e Palo Alto Networks - WildFire WildFireTM simplifies an organization’s response to the most dangerous unknown threats — automatically turning the unknown to known, and quickly preventing them before they compromising organizations. Unlike legacy security solutions, WildFire quickly identifies and stops unknown malware, zero-day exploits, and other advanced attacks without requiring manual human intervention or costly Incidence Response (IR) services after the fact.
https:/Awww.paloaltonetworks.com/praducts/echnologies/wildfire.html https://paloaltonetworks.com/products/features/apt-prevention.html
* FireEye- Cyber Security & Malware Protection
The FireEye FX series is a group of threat prevention platforms that protect against content- based attacks across a wide range of file types. The FireEye FX platforms analyze network file shares to detect and quarantine malware brought into the network through the Web, email, or manual means, such as online file sharing and portable file storage. The FX series thwarts the lateral spread of advanced malware that traditional and next-generation firewalls (NGFW), IPS, AV, and gateways miss. Advanced targeted attacks use sophisticated malware and advanced persistent threat (APT) tactics, not only to penetrate defenses, but also to spread laterally and
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RLI Number 23914 ‘| ier [4
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establisn a long-term foothold in the network.
http://www. fireeye.com/products-and-solutions/content-security.html
Checkpoint - Anti-Malware & Program Control
The Check Point Anti-Malware & Program Control Software Blade efficiently detects and removes malware from laptops and desktops with a single scan. Viruses, spyware, keystroke loggers, Trojans and rootkits are identified using signatures, behavior blockers and heuristic analysis. Program control allows only approved programs to run the endpoint. This software blade is easily managed by unified Endpoint Security Management. https:/Awww.checkpoint.com/products/anti-malware-program-control.html
Fortinet - FortiSandBox
FortiSandbox is an Advanced Threat Protection Appliance designed to identify and help customers thwart the highly targeted and tailored attacks that increasingly bypass traditional defenses and lurk within networks. Offering a unique dual-level Sandbox, inspection of all protocols in one appliance and optional integration with your existing FortiGate infrastructure, FortiSandbox delivers highly effective protection against this emerging class of threats that is affordable to buy and simple to deploy and manage. Complement your established defenses with this cutting edge capability; analyzing suspicious and high risk files in a contained environment to uncover the full attack lifecycle. Rich threat intelligence, actionable insight and the option to share information with FortiGuard Labs in order to receive automated protection updates help organizations reduce the risk of compromise and breach.
http// fortinet.com,.cn/products/fortisandbox/
Cisco Sourcefire AMP (ThreatGrid)
Sourcefire Advanced Malware Protection (AMP) for Networks is the only system to give you the visibility and control necessary to protect your organization against highly sophisticated, targeted, zero-day and persistent advanced malware threats. Designed for FirePOWER appliances, AMP for Networks detects, blocks, tracks and contains malware threats across multiple threat vectors withina single system.
http: -sourcefire.com/products/advanced-malware-protection/amp-capabilitles-network Cyphort - Anti-Sandbox Malware
http://www.cyphort.com/products/
Lastline - Advanced Malware Protection & APT Security http://www.lastline.com/platform
Juniper Advanced Anti-Malware Solution
© Copyright 2012 Juniper Networks, Inc, — cee and Confidential —
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RLI Number 23914 | 1sz [1 - J [ | Pe if Document Title Juniper Advanced Anti-Malware Wer Service on SRX Document ‘Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/204-42015
Please refer to Market Requirements Document (MRD) for detailed info.
2.5 APls/Messages
Please refer to Design Specification,
2.6 Manageability
To enable Juniper Advanced Anti-Malware service on SRX, customer needs to configure argon cloud first, including host name, port, authentication info. For security consideration, we will perform mutual authentication between SRX and argon cloud. So please use setup script or manually run "request security pki ..." commands to install the SRX client cert and Argon cloud server's ca certificate, create profiles for these certificates, and reference it in SRX advanced-anti-malware authentication configuration Both contro! plane and data plane are using the same authentication method with the same client/server certs. All of these things can be done via bootstrap script,
Gustomer needs to define AAMW policy, choose the application for inspection, and configure the action for the verdict threshold. Then attach AAMVV policy to firewall policy, and commit the configuration. After that, the files transported in the pass through traffic which match this FW policy will be extracted and pushed to Argon cloud. Argon cloud will return a verdict number to SRX for each file, which are represented as integer values between 0 and 10. A value of O nearly always represents goodware, while a value of 10 nearly always represents malware. Any value in-between represents an uncertain verdict, but the higher the value, the more likely itis malware, As the number 0 means good, and SRX will permit the session. For other verdict-numbers, customer can define a threshold to block higher in advanced-anti- malware policy. For the file that Argon cloud first seeing, it will return unknown verdict and SRX will permit the session (that is fallback action).
The advanced-anti-malware policy can be enabled on FW policy as an application service, like security intelligence or application firewall. If customer needs to inspect HTTPs traffic, please enable ssl-proxy application service on the same FW policy also.
2.6.1 CLI Configuration
Configure argon cloud url
Configure source address or source interface
Configure authentication parameters
Configure advanced-anti-malware policy
Configure SSL initiation profile for SRX to Argon connection (existingexisted fealure) Configure firewall policy to enable advanced-anti-malware application service
Configure SSL proxy profile to inspect HTTPs traffic in firewall policy (existed featuretng) Configure advanced-anti-malware traceoptions
Sample of advanced-anti-malware configuration
2.6.1.1 CLI Configuration Details « Configure argon-cloud url
**., # # © @ # * @
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feet services advanced-anti-malware connection url 6 set services advanced-anti-malware connéction url <https: //www.hostname.net:443>
« Configure authentication parameters fset services advanced-anti-malware connection authentication
3 et services anvens ed-anti-malware connection authentication tls-profile
profile nane>
* Configure source address or source interface fset services advanced-anti-malware connection source-address <1.1.1.1> OR feet services advanced-anti-malware connection seurce-interface <qe-0/0/2.0> Note: 1), The source address or source interface uses For specifying the source IP to send rilé contants (data plane) to Argon cloud. 2) If configures source interface but not source address, SRN will use the IP address gotten from the specified interface for connections. 3) If none of them configured, then SRX will pick up source address automatically.
« Configure advanced-anti-malware policy fset secvices advanced-anti-malware policy @ set services adyanced-anti-malware policy < ® set services adyvanced-anti-malware policy [<application-name> ...] © set services advanced-anti-malware policy < o set services advanced-anti-malware policy
applications
inspection-prefile pri hateh yerdict-threshold
services advanced-anti-malware policy <name> then action block services adyanced-anti-malware policy <name> then notification log services advanced-anti-malware pelicy <name> default—notification Log t services advanced-anti-malware policy <name> fallback-options ac Biion <permit/block> © Set services advanced-anti-malware policy <name> fallback-options notification log
6 to iy
o 6
ta
ft tote
Q ty a
e Configure SSL initiation profile - example (existed featureing) #set services asl initiation o set services ssl initiation Beeman < elient-certificate <srx client cer Oo set services ssl initiation
A
krusted- 2a { Formatted: Font color: Text 1
‘profile pame> + Formatted: Space Before: 0 pt, Bulleted + Level: 2 + Aligned at; 0.75" + Indent at: 1"
al initiat ion
or TLS version 1.1 or TLS versian 1.2 { Formatted: Indent: Left: 1"
7 1 ‘ or +>) Formatted: Indent: Left: 1", No bullets or Note: There should be a bootstrap script to import certificates and create + numbering asl initiation profile. Please refer to "CLI Command Details" section for how to import Certificates by manual. —By default, we will tlsavl.2 For the Formatted: Don't add space between 3] connections to cloud. ~ paragraphs of the same style
© Copyright 2012 Juniper Networks, Inc. — Sete and Confidential —
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* Configure firewall policy to enable advanced-anti-malware application service © Enable advanced-anti-malware policy
#set security policies from-zene untrust permit applicatian-services advanced-anti-malware <aainw_poli
o Need to configure SSL forward proxy if want to inspect HTTPs traffic
Le-Zone trust poliey 1 then
cyl >
#set security policies From-zone untrust te-zone trust policy 1 then permit application-services ssl-proxy profile-name * Configure ss! proxy profile to inspect HTTPs traffic - example (existed featureing) Feet services ssl proxy profile
@ s8t services ssl proxy profile root—ca ssl-inspect-ca
© Ifthe user wants to ignore the failure of server cert verification, the user can use the following command: #set services ssl proxy profile ssl-inspect-profile actions ignore-
server-auth-failure
e Configure advanced- anti-malware traceoptions advanced-anti-malware traceoptions flag ?
iset sery Possible completions:
all Trace everything connection Trace conn ions te server content Tr content buffer management daemon Tra advanced anti-malWare daemon identification Trace file identification parser 1 context parser plugin ced anti-malware piugin policy d anti-malware policy
Wset services advanced= ait adnan traceoptions level 7
Possible completions:
Warning
Match Match Match Match Match Match
all levels
error conditions informational m conditions yerbose mes warning me
® ul Ly Fi Go 0 iy
* Sample of advanced-anti-malware configuration
root8yellowstarc} show) services
connection |
advanced-anti-malware
url https: //cloud. qjuniper.net: 443;
suthenticatian | tla-profile < f Please use setup ser tomanvally ran "reques |
source-address 5.0.0.2;
size
Sox info; Flag policy;
_Samw. log Level
ipt i se
10m;
to import SRX
and Argon
certs OF pki ..." cma to import
curity
© Copyright 2012 Juniper Networks, Inc. — nen and Confidential — Do not distribute outside of the company without the p ip ing Printed copies are for reference si Template: J3.02,P05,T01—Ver, 1.1 Template Owner: Ramesh RN
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/RLI Number 23914 | 1.6 1.67 [ 1 J [ | De [" Document Title ‘Juniper Adi Advanced Anti-Malware Service on SRX
NETWORKS a eee Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date 0510/2523/20442015
chlon-prefile insp prefilel; # LE this profile could nok be found on IRM ri nateh | application HITP; yerdict-threshold 34: # Greater than_ar sgual this number 1 Bhen | action block; netification Log; | default-notification Log; on log; jen log: " default is permit and no lag. | | pr 32 5 idl recommended; # The recommended number comes Pre Argon cloud yiea profi
2.6.2 CLI Commands
CLI command to show advanced-anti-malware policy
CLI command to show advanced-anti-malware profile
CLI command to show advanced-anti-malware status
CLI command to show advanced-anti-malware statistics
GLI command to clear advanced-anti-malware statistics
CLI command to show flow session summary advanced-anti-malware
GLI command to install advanced-anti-malware argon-server's ca-certificate * CLI command to install SRX local certificate
2.6.2.1 CLI Command Details
« CLI command to show advanced-anti-malware policy sshow services advanced=anti-nalware policy <all/policy name>
.
© Copyright 2012 Juniper Networks, Inc. — cate and Confidential —
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RLI Number 23914 | 1.67 | 1
| J | | | De ( Document Title | Juniper Advanced Anti-Malware
Sou etn ae. Service on SRX NETWORKS
Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date 0510/2523/20442015
| AdVaneed sAnti-malware configuration: Policy Name: pl
Inspection-profile: insp-profilel Applications: HTTE Verdict-threshold: 5 Action: bl . Notification: log Default—notifi Whiteldst-notificatioan: Lag Blacklist-notification: Log
ation: Log
Fallback Options: Aetion: permit Notification: leg « CLI command to show advanced-anti-malware profile =show services advanced-anti-malware profile <all/profile_name> summary AdVanced Anti
anti-malware inspection profile: insp_profilel
“*application/pd (4pdfa+l, Sapplication/mbox {1 | , “disabled categories*: [“documents", tcode™), “category thresholds™: [
‘executable,
512, 1046576 | icategory*: library, nin si 4ng6,
“max size™: 1048576
« CLI command to show advanced-anti-malware status >show services advanced-anti-malware status Server connection status:
Server hostname: cloud.juniper.net Server port: 443 Control Plane: Connection Time: Sat Der 14 2 46 2014 PST : Connectead/Connect| ng+@etted
Connection Status:
Service Plane?
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RLI Number | Dp eC ( Document Title NETWORKS Document Owner Version Date FPC1.SPCO:
Connection Active Number: 4 Connection Failures: 12
The connection status include below states:
e Not connected
= nitializing 4 » Connecting
s Connected
e Disconnected
s Connect failed
e Client certificate not configured
R
Request server certificate validation failed se Server certificate validation succeeded
* Server certificate validation failed
e Server hostname Jookup failed
St siesincte
Say esther a Mie oa rel tat tol
CLI command to show advanced-anti-malware statistics (all SPUs accumulated) Sroot@yellowstar> show services advanced=-anti-malware statistics
Advanced— anti-malware statistics: Interested: 0
Processed: 0
Ignored: Q
s Permitted: a Session Blocked: 0 HTTP Active Seasion: 0 HTTPS Active Session: 0
Total HTTP Session Processed: 0 Total HTTPS Session Proce File Equal or Above Verdict Threshold: 0
File Under Verdict Threshold: 0 File Send ta Cloud Successfully: Q File Send to Cloud Pailed: 0 File Not Send te Cloud: 0 File Send ta Cloud Partially: 0 Blacklist Hit: 0 Whitelist Hit: 0 Fallback Permit: 0 Fallback Block: 0
CLI command to clear advanced-anti-malware statistics >clear services advanced-anti-malware statistics
Note: All advanced-anti-malware statistics on all
SPUs will ‘be cleared.
© Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the permission of Juniper Networks engineering
Printed copies are for reference only! Template Owner: Ramesh RN
Template: J3.02.P05,T01—Ver. 1.1
Page 28
SOURCE CODE
JNPR-FNJN_ 29002 00173310
-{ Formatted: Font: Arial, 10 pt
i}
{ Formatted: Font: (Default) Arial, 10 pt
{ Formatted: Font: (Default) Arial, 10 pt
{ Formatted: Font: (Default) Arial, 10 pt
; { Formatted: Font: (Default) Arial, 10 pt
aA
{ Formatted: Font: (Default) Arial, 10 pt Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 35 of 64
RLI Number 23914 | 1.67 | 1 J [ | | Pe ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015
« CLI command to betel anes PaERee nee (xenaine command) #set security pki ca-profile <srx Erust ca profile name> ca-identity <dUNLPER>
reer secu pki ca-certificate load fi Finan -filename> ca-profile
. CLI Gorarhand to install SRX local certificate (existeding command)
>reguest security pki local-certificate load filename <srx_argon_ca.crt> key <srx_argon_ca,.key> certificate-id <stx client cart profile name> 2.6.2.2 JUNOScript N/A 2.6.3 SNMP N/A
2.6.4 Syslog - ERRMSG 2.6.4.1 Reporting Event Log
The format of the log will be same as syslog, which is the only one supported by SI so far. The detailed format and field come from SI and we need update this part after we get feedback from them. The type will be SRX_AAMW_ACTION_LOG.
This tog contains the following information: —
- time
= TEE
dict—nunmber
So0urce-address
sou —port
q nation-address destination-port protocol application nested-application
© Copyright 2012 Juniper Networks, Inc. — eee and Confidential —
Do not distribute outside of the company without the p i ip i ing Printed copies are for reference set Template: J3.02.P05,T01 —Ver, 1.1 Template Owner: Ramesh RN Page 29
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| RLI Number 23914 | 1.67 | 1 J | | | Pe ts Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date | 9510/2523/204.42015
- policy-name
- username
- roles
- session-id-32
- source-zone-name
- destination-zone-name
Example:
<14>1 20143-12-147T16:06:59.1342 pinarello RT_AAMW — SRX_AAMW ACTION LOG [junes@2636.1.1.1.2.28 http-host="www.sina.com” File-category="executable" action="BLOCK” verdict-number="8" verdict-scource="cloud/blacklist/whitelist” source- address="4.0.0.1" source-port="57116" destination-address="5.0.0.1" destination- port="90" protacol-id="6" application="UNKNOWN" nested-application="UNENOWN" policy- name="argon_ policy” username="user1" session-id-32="50000002" source-zone- name="untrust” destination-zone-name="trust"]
http-host=wwy.sina.com file-category=executable action=BLOCK verdict-number=8 verdict— source=cloud source~address=4.0.0.1 source-port#5/116 destination-address=5.0.0.1 destination-port=80 protocel-id=6 application=UNKNOWN nested-application=UNKNOWN policy-namewargon policy usérnamewuserl session-id-32"50000002 source-zone- name=untrust destination-zone-name=trust
2.64.2 FLOW Action-Logging
A fi ear = AA BU enablec ry
a pet desk bicthbenepee toe Ge py es sciecometl - *
ow - Sete oe WT RE Sete Sheer ae
pes — Teed — “F ep ee HS Te ce
4 ppg pee de eg cede P 7 — ee ES
2.6.4,32.6.4.2 Advanced-anti-malware Status Logging SRX will send RTLOG/RELOG for any normal/abnormal activities. For example:
* Server connection failed
ADMWD-SCoNNSETI ON -PAECYRE—[junos@2636.1.1.1.2.49 hostname="argon- cloud. juniper.net” ip-address="10.208.22.10" port="443") Access host argon- cloud. juniper.net on ip 10.208.22.10 port 443 timeout.
© Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the p of Juni N k Printed copies are for reference only! Template: J3.02.P05,T01 —Ver, 1.1 Template Owner: Ramesh R N
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| RLI Number 23914 | 1.67 | 1 | | | PD eC ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/20442015
« Server connection establishedd <123>1 2014-08-24T17:41:06.212 SRX AAMWD - AAMWD NETWORK CONNECT SUCCESS
CAMVS HE oR CoM Ee? SlSeeee—[junes@2636.1.1.1.2.49 hostname="argon- cloud.juniper.net™ ip-address="10.208.22.10" port="443") Access host argon- cloud. juniper.net on ip 10.208.22.10 port 443 succeeded.
£15351 eas HS 3am. 44 Ae > FT 7} tek Gr 8 mt Dr Oe SG ane
f}unes#2636-4.4.4,3.4G-slob—" FRCL PEGI" yersten=™41430-2614-04") pheq pret
se x = 1 Fi} 4 oo. a ee
tipo aducsesd ohtiatelwrce ite egies GR ipeeeds
<423>4-2014-06-2479 7444-067 212 -SRX_AAMND —RAMW_POLECY_COMMEDTED
L aac a ee | 3 HII 43 He 50. = 4 a es ae = tebesy evdenyp Babb bce seehhe Spf ese abe So eee hin
« AAMW inspection scius deltndhacia atari <123>1 2014-08-24T17:41:06.212 SRX AAMWD - AAMWD INSPECT PROFILE UPDATE SUCCESS ASMW—ENSPECTION—PROFILE-PESATED-[junos@2636.1.1.1.2.49 version="11130-2014-61"] inspection profile updated to version 1113020141 SUSE SUL tae awed
ert 1 fa pie. ao added Hetetea dated> a ee er Spee ten—p == SS —= + .
<123>1 2014-08-24T17:41:06.212 SRX AAMWD - AAMWD INSPECT PROFILE UPDATE SUCCESS Liunos@2636,141,1.2,49] Inspection profile update failed,
2 _A lacklist/Whitelist u e events €123>1 2014-08-24T17:41:06.212 SRX AAMWD - AAMWD GWL UPDATE SUCCESS *------| Formatted: Indent: Left: 0.5", No bullets or [junos@2636.1.1.1.2.49 wersion="1113020141"] Global whitelist updated ta numbering
version 1113020141 successfully.
<123>1 2014-08-24T17:41:06.212 SRX AAMWD - RAMWD GWL UPDATE FAILED [junos@2636.1.1.1.2.49] Global whitelist update failed.
<123>1 2014-08-24T17:41:06.212 SRX AAMWD —- AAMWD GBL UPDATE SUCCESS [junos@2636.1.1.1.2.49 version="1113020141") Global blacklist updated to version 1113020141 successfully.
<123>1 2014-08-24T17:41;06.212 SRR AAMWD — AAMWD GBL UPDATE FAILED [junos@2636.1.1.1.2.49] Global blacklist update failed.
<123>1 2014-08-24T17:41:06.212 SRX AAMWD - AAMWD CWL UPDATE SUCCESS [junos#2636.1.1.1.2.49 yersion="1113020141"] Custom whitelist updated to version 1113020141 successfully.
<123>1 2014-08-24T17:41:06.212 SRX_ AAMWOD - AAMWD CWL UPDATE FAILED [junos@2636.1.1.1.2.49) Custom whitelist update failed.
<123>1 2014-08-24T17:41:06.212 SRK AAMWD - AAMWD CAL UPDATE SUCCESS [junos@2636.1.,1.1,2.49 yversion="1113020141") Custom blacklist updated to Wersion 1113020141 successfully.
© Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential —
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HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173313 jun
2.6.5
2.6.6
Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 38 of 64
RLI Number 23914 | 1.67 | 1
Document Title | Juniper Advanced Anti-Malware
Service on SRX
IPL
NETWORKS
Document Owner
Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao
Version Date 9510/2523/20442015
\AMWD — AAMWD CBL UPDATE FAILED
jk_ update fai
Software Feature Licensing
AAMMVV Llicense will be controlled and handled on Argon cloud side, no argon feature license * installed on SRX. But,
faamwrger service has dependency on JDPI module, which is used by Nextgen AppID_ also, so - a
AtAppID license must be installed and activated on SRX.; root@yellowstar> show system License License usage:
Licenses Licenses Expiry Feature name used installed idp-sig 0 iL 2016-04-28 17:00:00 PDT logical-system 4 6 0 permanent Licenses installed:
License identifier: JUNOS506209 License version: 4 Valid for device: AA1806AC1234 Features:
idp-sig - IDP Signature
date-based, 2014-04-28 17:00:00 PDT - 2016-04-28 17:00:00 PDT License version: 2 Valid for device: AA1S08AC1234 Features: Appid-sig - APPID Signature — : date-based, 2013-11-21 16:00:00 PST -— 2015-11-20 16:00:90 Pst fter installed AppID, license, Customer must download and install the latest AppID signature package. > Ss 5} application-identi fication download cation-identi ation download Status” toe check identific statua™” t ck
Software Packaging
| In this feature, Libmragic-WebSocket and Msgpack are introduced. They will be built into Junos as a library. AAMW plugin will call their exported APIs.
2.6.7 N/A
HIGHLY CONFIDENTIAL -
J-Web Quick Configuration and Monitor Screen
© Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the p i Networks Printed copies are for reference only! Template: J3.02.P05,T01 —Ver, 1.1 Template Owner: Ramesh RN
Page 32
SOURCE CODE
Ee | { Formatted: |
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Space After: Opt
- { Formatted:
Font:
; { Formatted:
Font: (Default) Arial
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single
_ ( Formatted:
Font: (Default) Arial
Formatted: Chinese (PRC)
Font: (Default) Arial, (Asian)
{ Formatted:
J } ) List Paragraph, Indent: Left: 0", ) )
Font: Bold, (Asian) Chinese (PRC)
- { Formatted:
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Formatted:
Font: (Default) Arial, 10 pt, Font
Formatted: color: Auto
Font: (Default) Arial, 10 pt, Font
Formatted:
Font: (Default) Courier New, 9 pt,
Font color: Text 1, (Asian) Chinese (PRC)
Formatted:
Font: (Default) Arial, Not Bold | Font: (Default) Courier New, 9 pt, |
Font color: Text 1, (Asian) Chinese (PRC)
JNPR-FNIN_29002 00173314 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 39 of 64
RLI Number 23914 | 1.67 | 1 [ | De f, Document Title | Juniper Advanced Anti- Malware ra Service on SRX NETWORKS et Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015
2.6.8 Integration with Management Systems N/A 2.7 Examples or Interaction Descriptions
2.7.1 JSF Service Chain for Packet Mode SRX jsf_aamw plugin needs to interact with many plugins such as JDPl, RTCOM, SSL-| and TCP proxy.
JSF Service Chain [Rees ace Siege | | JOPI AAMW RTCOM =| Plugin Packet | | Stream | | set4 | | eR | | ee
>
——=PCP Event=%| Send file context to RTCOM channel
~
J
vv
fehSoch File Context
Verdict
»
»
-~/
Take action andor forward request to next Forward HTTP Request
plug-in
¥v
=] HTTP Session == RTCOM Session
Figure 5 JSF Service Chain for Packet Mode 2742.7.2 JSF Service Chain for H¥TP{s)Inline Blocking+rafic
In order to support HTTPs inline blockinginspections, SRX AAMW needs to interact with JDP| stream/packel plugin, which needs TCP proxy (TCP-T, TCP-l), SSL proxy (SSL-T, SSL-I) plugin support.
© Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential —
Do not distribute outside of the company without the p of Juniper Networks i ing Printed copies are for reference only! Template: J3.02,P05,T01 —Ver. 1.1 Template Owner; Ramesh RN. Page 33
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RLI Number 23914 | 1.67 | 1 [ | Pe f, Document Title | Juniper Advanced Anti- Malware — Service on SRX SET WORK oe
Document Hopper Wang, Xiaosong Yang, Ping
Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date 0510/2523/204-42015 JSF Service Chain TeP-T | [ SSL-T | aes [cco steam | fren | SSL | tera | es|
¥
vv
‘Send file cantext te
RTCOM channel ——
¥
File Contoxt
¥
< JabSack Verdict
-~
a
Take action» andor forward request to maxt |
plug-in Forward HTTP Request i
ash HTTPS Session —7 RTCOM Session
Figure 6 JSF Service Chain for H1+Psinline Blocking 2.4.22.7.3__ Argon Cloud Interaction For SRX and Argon cloud interaction, please refer to "Argon API" for detailed info. 2.8 Supportability (Serviceability, Diagnose-ability and Fault Handling) 2.8.1 Serviceability and Diagnose-ability
e Argon traceoptions 9 setservices advanced-anti-malware traceoptions flag
Possible conpletions: all
; artei Seale ware “p rLugain
d anti-malware policy 9 setservices advanced-anti- aalwere traceoptions level Possible conpléetions:
© Copyright 2012 Juniper Networks, Inc. — eet and Confidential -
Do not distribute outside of the company without the p i ing Printed copies are for reference are Template: J3.02,P05,701 —Ver, 1.1 Template Gwner: Ramesh RN Page 34
HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173316 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 41 of 64
JUNIPer
NETWORKS
all error info netice verbose warning
e VTY plugin list
flowd64]FPCE.PICO (vty) # show usp plugins
RL! Number
23914 | 1.67 | 1
Document Title
Juniper Advanced Anti-Malware Service on SRX
Document Owner
Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao
Version Date
9510/2523/20142015
Match Match Match Match Match
all levels
conditions
Verbose messages
error conditions informational messages
Match warning messages
Number of
Plugin: id: 1, name: junos-syn-term Plugin: id: 2, hamet junos-screen-adapter Plugin: id: 3, heme: junos—fwauth-adapter
Plugin: id: 4, name: id: 5,
Plugin: name:
s-syn-init
junes-rtceam
Plugin: name: junos-jdapi
Plugin: 3 fame: junosappgos Plugin: name: junoes-secintel Plugin: name: junos-aamw
Plugin: hane: junos—idp
Plugin: name: junos—-userftw Plugin: name: junos—uf
Plugin: name: junes-tep-svr-emul
Plugin: 4, name:
junos-ssl-proxy
Plugin: id: 15, name:
junos-ssl-term
Plugin: id: 16, name:
junos—fwauth-stream—-adapter
Plugin: id:
junos-dpi-st ream
Plugin: id:
junos—appfiw- stream
Plugin: id: 19, name: Plugin: id:
jUunos—aamw-stream,
junos—idp-st ream
Plugin: id:
junos-captive-portal
Pilg dns Ode
junos—alg
Plugin: id: 23, name: fi
qunes—-utm
Plugin: id: 24, name: junos-log Plugin: id: 25, name: junos-test Plugin; id: 26, name: junos—-rtcom-stream Plugin: id: 31, name: junos-ssl-init Plugin: id: 32, name: junos—tcep—clt—emul Plugin: id: 33, name: junos-—gprs
Plugin: id: 34, name: junos-appiw
e JSF_AAMW VTY 9 plugin jsf_aamw o plugin jsf_aamw o plugin jsf_aamw Go plugin jsf_saamw
[flowdéd] FPC7T.PICO(vty) # plugin jsf aamw shaw
show policy show profile show status show statistics
AAMW plugin statistics
Session interes
ted : 0
© Copyright 2012 Juniper Networks, Inc. — Proprietary
Do not distribute outside of
HIGHLY CONFIDENTIAL -
the company without the p
Printed copies are for reference only! Template: J3.02.P05.T01 - Ver. 1.1
Page 35
SOURCE CODE
and Confidential -
i 2 ip Ing
Template Owner: Ramesh R N
- -( Formatted: Font: (Default) Courier New, 9 pt }
r [ Formatted: Font: (Default) Courier New, 9 pt,
Highlight { Formatted: Font: (Default) Courier New, 9 pt )
=~ [ Formatted: Font: (Default) Courier New, 9 pt, |
Highlight
_ { Formatted: Font: (Default) Courier New, 9 pt |
numbering
: Eee Indent: Left: 0.5", No bullets or
JNPR-FNJN_ 29002 00173317 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19
UnIPer
NETWORKS
RLI Number
23914 | 1.67 | 1
Document Title
Juniper Advanced Anti-Malware Service on SRX
Page 42 of 64
Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 9510/2523/20442015 processed : O ‘ on permitted 0 Session blocked : 0 Session ignored i 0 Log notifications counter : 0 File equal ocr ower threshold: 0 File below threshold : 0 File send success ; 0 File send failed $ 0 ___4__0 go 3 _ ol : 0 Http n active » 8 Https Session active t 0 Http sessic 0 Https se on proc : 0 Pallback permitted : 0 = Fallback blocked 2 Ss a ecoaiae: Indent: Left: 1”, No bullets or 9 plugin jsf_aamw show counters numbering [flowd64]) FPPC). PICO (vty) # plugin sf aamw shew counters AAMW plugin counters —-----—--------- File ready events turi) a File conplete events 0 File complete events c2s 0 File complete events s2c 0 File content total created 0 File content ever handled 0 File type identified 0 File type not identified —2 File size below min size 0 File size exceeds max sire 0 File ignored by sample rate File submission send total 0 File verdict got total Q File verdict counters BOoOOD DOOD OD Gb (Oy Verdict after session closed 0 Server connection actives 0 Server conne on success 0 Server Q Limit of sessions exceeds 0 >see ener: Indent: Left: 1", No bullets or o plugin isf aamw show Fast category table numbering Version? 1435628487 *------{ Formatted: Indent: Left: 1" }
© Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential - Do not distribute outside of the company without the p of Juniper N k i ing Printed copies are for reference only! Template: J3.02.P05.T01 - Ver. 1.1 Template Owner: Ramesh R N
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HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173318 jun
Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 43 of 64
IPL
NETWORKS
pattern
RL! Number
23914 | 1.67 | 1
Document Title
Juniper Advanced Anti-Malware Service on SRX
Ler
Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao Version Date 0510/2523/201442015
magic type 1G.
o 4 0 No 0 g é a) o a Qa NO 0 = 0 No oS 6 se 2 3 Q No = ax | Sasa Indent: Left: 1”, No bullets or JDPI traceoptions numbering
e@ set services application-identification
JDPI signature package version
°
JDPIVTY © plugin a plugin @ pludin oe plugin o plugin o plugin oe plugin a
oa
[flowd64)FPCS,.PICO (vty) #plugin jdpi show application parsed ctx_: BERT AR EBLE Name::
Protecel Context Name [ID)
idpi {dpi jdpi jdpi jdpi jdpi tapi
set usp flow loca show usp flow trace 0
uri
set set set set set set
debug debug debug debug debuq debug show application 1-debug-buf
module module module module module
http
level 3
—sS2e se See ee ee
traceoptions
show services application-identification version
preto bundle enable timer enable
engine enable engine evt enable Elow enable
patsed ctx stats all state 1
stats all
Number of Hits
mime_type eontent_len filename eontent range header name header part_Filename index
dechunk_
_Value
size
(5) 1 (11) 1 (27) 1 (29) 0 (30) 0 (34) 11 (35) 11 (40) 0 (47) 2 (61) 0
© Copyright 2012 Juniper Networks, Inc. — eee and Confidential —
Do not distribute outside of the company without the p ip
HIGHLY CONFIDENTIAL
Printed copies are for reference ented Template: J3.02.P05,T01—Ver. 1.1
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SOURCE CODE
JNPR-FNJN_ 29002 00173319 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 44 of 64
| RLI Number 23914 | 1.67 | 1 J LJ () | PD e ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 9510/2523/20442015 hest (66) 1 content_encoding (69) Q accept encoding (70) 0 header raw (71) Li file completed (8G) 2 uri_decoded (82) 1 content (530) 17 method (555) 1 time (627) 1 mime type main (628) 1 mime type sub (629) ZL content _raw (632) 17 eoentent transfer _encoding(649) 6
® Dynamic Address for B/W IP list
3 (Formatted: Font: Bold
. sbrys security dynamic-add SE : = [Feces Indent: Left: 1", No bullets or No. iP-start IP-end Feed Address numbering 1 Sy 8. 8 5.550, 00 custom blacklist ID-O00000003
2 AT 1.050 11,11,0.10 custom whitelist ID- *- oi Forcast Indent: Left: 1", No bullets or oo0o000004 numbering
7 _...--{ Formatted: Font: Bold
——
item create error : 0
sync flag (hex) + 0 sync started Paris) syne need replace ee | syne ent announc 0 sync ent received ai
syne first ip expected : 0.0.0.0
sync last ip expected : 255.255.255.255
sync end announced ip : 0.0.0.0
_ max _time[O] i last time[0] : 2 timef it] 3 |
time [i]
[P=start 1P-end ibt-tree hit-count da-id
© Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential -
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RLI Number 23914 | 1.67 | 1
| | | | De ( Document Title | Juniper Advanced Anti-Malware " Service on SRX
NETWORKS
Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date 0510/2523/20442015
| 345.0.) 3-5-0411 285 a fearetiee: Indent: Left: 1", No bullets or vee numbering * RTCOM & SSL traceoptions @ 6b services ssl traceoptions enable-Flow-tracing ® RTCOM & SSLVTY o show usp jsf counters junos-ssl-init o plugin junos 1 show initiation profile all o show Usp jsf ctcom client 1 © show usp {sf rtcom com 11484206 2.8.2 Sample outputs of jsf_aamw plugin VTY * plugin jsf_aamy show policy <all/policy name> Advanced-anti-malware threats protection policy status: Policy Name? pl Inspection-profile: insp profilel Applications: HTTP Verdict-threshold: 5 Action: block Netification: Log Default-notification: Log Whitelist-notifleation: Log Blacklist-notifleation: Log Fallback Options: Action: permit Notification: * plugin jsf_aamw show profile <all/profile name> summary Advanced Anti-malware inspection profile: Profile Name: insp_profilel Version: 1422315427 * plugin jsf_aamw test bwlist www.serverl.com fwww.serverl.com in Customer whitelist. s Plugin jsf aamv test reverse dns [Tlowded | TPCS. PICO iWihy) # plugin jat samw test reverse ais 4.0.0.2 Sa | Formatted: Indent: Left: 0,5" j Pound ip 4.0.0.5 —> eet-1096 edges. Dallas]. levels.net Elowd6a)] FESS. PICO vty) # plugin jsf sanmw test teverse dne 4.0.0.€
P 2.0.06 not fe in tev
ae Formatted: Indent: Left: 0.5", Space Before: Opt, After; 10 pt, No bullets or numbering
* plugin j)sf_aamw show status =-- > --- SRY AAMW Plugin Status ------------- JDPI Plugin PCP is Enabled File Identification is Enabled File Send to Argon Server is Disabled Buffer Management ia Enabl URI Cache is enabled
© Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential —
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+tt+t+tt+++t+++++ Connector Server Status +t+tt+t+tt+ttt +++ Argon Server Hostname/ Port: cloud. juniper.net/443 Concurrent Connection: 4 Last Connection Time: Sat Dec 14 22:52:26 2014 PST Last Connection Status: Caonnected/Connecting/Failed
* plugin jsf_aamw show dbg statistics
Fe lt eee ee See stetisties ee pe ae ek -
oe ee + J. Je * fate Sect 2 — Pipe =a ae. cia. 5 = 5 Bitte dbp de ee Tibet 1 e } ES ea. fh sre ee # Pe be yd ee _— — <4 +. a Sth see ed + = + 4 i 4 5 wo ce ee = - St 4 i 4 ss 2
SSH ee at = r fot + Freq Risse Diethy paritee pptere eat 3 + e Sousa 5
- ra] “ — S[flowdé4] FPC6.PICO(vty) # plugin jsf aamw show —----——- AAMW plugin debuq statistics --------------—-
Stream plugin inte oheck: 2108 stream plugin se. nh : 0 Stream plugin ge n close : 0 Packet plugin interest check: 2108 Packet plugin session create: o
feBE plugin session close : 0 AFC & PCP registration ok ; o AFC event Failure : 6 PCP event Failure ¥ 0 AFC event counter o PCP event counter : 9 RTICOM comnection create done: 0 RICOM connection abort 9 RTCOM peer close i 0 RICOM receive times t 9 Secintel CC hit log events 0 Fast file type ID counter : 9 Full file type ID counter : 0 Reverse dns ready 0 Total feverse dns entries 0 is ae ee Processing Time Statistic s---s-s se -ssSes ssc eeSnsses File identify(ms) t 0 File category (ms) a 0 Ctxt parsing (ms) rs 0 Sending file (ms) : 0 Websocket receiving(ms) : 9 Websocket Sending (ms) F o All websocket event (ms) 0
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! | RLI Number 23914 | 1.62 [ 1 J | | PC [" Document Title ‘Juniper Adi Advanced Anti-Malware
WORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date 0510/2523/204.42015
== ee Fallbac ke Action Statistic ----——-—-—-—-——---—- + -
Cloud error
* plugin es seer sounters
counters —--------------
oopovpo po 8 [Q)
2.8.3 Fault Handling
We have fallback configuration, If Argon cloud cannot be connected or timeout, no PFE memory, or no packet buffer, then specified action will be taken.
2.9 Dependencies and Interactions with other Components in the System
1. JDP! Interaction SRX Advanced Anti-Malware feature has dependency on JDPI module. It will register JDP! JSF event and register interested protocols and contexts. 1) Subscribe JDPI Event in Plugin Initialization
= (jsf _
plugin subscribe ever ats best pid,
teation Ploy
2)
3) Register Protocols and Contexts
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RLI Number 23914 | 1ez [1
J [ | Pe f, Document Title Juniper Advanced Anti-Malware Tl
Service on SRX
Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date | 0510/2523/20742015
tnt3z “12 rote aL plugin td);
4) SRX jsf_ aamw Reet aa event from IDF!
* M5
int32 t protemol id, iIme32_e flay it flag, ant34_t
W_AVATLABLE
* WSVCS DATA EV JDPL EVT NEW PARSED CONTEXT AVAILABLE Return PCG (Parsed Context Group), with context id and context content. J8F_PROTO_CTXT_HTT# JEST
TO CTAT HTTP CONTENT
2. RTCOM Interaction When SRX Advanced Anti-Malware configuration is pushed to PFE, jsf_aamw plugin will initialize SSL connections to Argon cloud through RTCOM.
3. SSL Proxy Interaction To support HTTPs protocol, JDP! plugin has to enable SSL proxy plugin to decrypt SSL traffic.
4. TCP Proxy Interaction SSL proxy plugin needs to enable TCP proxy for inspecting HTTPs traffic.
5. SSL Initial Interaction RTCOM plugin will call SSL-| to setup SSL/TLS connections.
6. NSD Interaction NSD ts responsible for global policy/setting compiling and pushing.
7. AAMWD Interaction AAMWD is responsible for advanced anti-malware configuration syncing and health data, telemetry counter reporting.
8. USPINFO Interaction Uspinfo module will setup temporary PCONN sessions to SRX jsf_aamw plugin on each SPU for fetching PFE status and statistics. 2.10 Legal Considerations 2.10.1 Third-Party Materials:
Are there any Third-Party (non-Juniper) Materials incorporated into the SW? "Third-Party Materials” include (1) Open Source Software, technology, and materials ("OSS"), and (2) Third-Party commercial technology, materials, and code (including code embedded in an ASIC),
[4] Yes [ ] No
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RLI Number 23914 | 1.62 1
[ | Pe fi Document Title. Juniper Advanced Anti-Malware Service on SRX
NETWORKS
Document "Hopper Wang, : Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date 0510/2523/20442015
If Yes, submit a Third-Party Tracking Chart created by your Codemaster listing all such Third-Party Materials to your BU IP Technology Transaction Attorney, Your “Codemaster” is the team member assigned to track all Third-Party Materials for a Functional Specification,
All Third-Party Materials must be approved prior to Functional Specification approval, as follows:
« All OSS must be approved in accordance with Juniper's Inbound OSS Policy; and
«~All Third-Party commercial technology must be approved by Legal in accordance with Juniper's
Third-Party Commercial Technology Policy. 2.10.2 Export Control Matters
Encryption
All encryption features/content must be reviewed and all US/International legal requirements met prior to HVV/SW release. Such review/approval may take upto 50 days. “HVV/SVW" includes a system, card, IC device, software OS or application or module embedded therein, or revision of any of the foregoing.
ft Encryption Questions Yes/No
a | Is there cryptography incorporated in, controlled by, or linked (dynamically or otherwise) to HW/SW? Yes
b | Is cryptography used for key ‘xchange, authentication, or message integrity? Yes
cl 1 Does ; cryptography operate in the HW/SW to decrypt already- encrypted content? Yes f
d | Is cryptography used to encrypt or decrypt network management, monitoring or administrative traffic? Yes
e | Is “publicly available" or OSS-derived cryptography used? No
F | Is the HW/SW designed to use encryption embedded in another product? Noa
g | |s there cryptography in or used by the HW/SW that was furnished, or developed, by a Third-Party? No Does any hardware component incorporated in the HW/SW implement (or accelerate computations for) any) Yes cryptographic algorithm or security protacal?
If you answered “Yes” to any of the above questions, then there is encryption and you must complete the Encryption Checklist at https://www.t-baccess.com/juniper/engineering/default.aspx.
High-Speed IO Technology
ls the product, subsystem, component or feature designed to, or does it operate to enable the system in which it is incorporated to support >120Gbps per channel I/O? []Yes [X]No
lf Yes, then email kniven@juniper.net and cc compliance helpdesk@juniper.net with “URGENT—High
Speed Interconnect Issue" as the Subject Line. In the email, identify the project code name/feature description and a brief description of the product or feature,
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For questions about encryption or the Encryption Checklist, email new_product_export_classification@juniper.net. For all other questions, email legal-ip
checklist@juniper.net.
3. Other Requirements
<As necessary, outline the general implementation requirements *not* covered in the project requirements (RLIs, etc.) and call out any specific additional requirements for protocols, edge cases, etc. If there is a significant amount of the latter then you should break this section down in to subsections.>
[=== Everything from here down is internal (white box) documentation and should not be
documented or related to customers without a specific need. (e.g. customer support workarounds for critical issues, performance targets where the performance is the feature, etc.) ===
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4. System Resource Estimation
Similar to UTM or IDP feature, SRX Advanced Anti-Malware feature needs more PFE arena memory for session state maintenance, file context list caching, and packet holding.
For each session, there is a global cookie for maintaining session state machine. Roughly estimation, it | needs about4100«248Bytes,
For each file, there is a buffer list data structure. including uri, http header, file context, file size and spinlock.
Each file content needs:
(32584 (fille content structure)
Sense butter list
ere oe +. (Formatted: Font: (Default) Arial
For-each file-piece, it needs Jeb ede hp ieee oe [ Formatted: Indent: Left: 0"
addi ng4—t pies size SRACwill copy the first<+-+ content for file identification and hold a copy of last one/two content packets for inline blocking,so-totally for each-session it needs about #33 +442 + 3 pssekets} + 4kR + Bysb—— Ske memory.
By design, there are also some global variables, such as global lock, counters, policy tree. They just needs less than 10KE.
Additionally, in order to support URI caching, it needs about 2000" (nKB) memory. If support 49K 3K URL caching, totally needs about =o42—sMb_ memory.
As SRX jsf_aamw plugin will enable PCP mode of JDPI, it also needs more memory for TCP reassembling, packet holding and context event buffer.
4.1. Performance Related Resources
Except for global variables and policy, all other memory are performance related.
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RLI Number 23914 |iez [1 J [ | Pe f, Document Title | Juniper Advanced Anti- Malware WORK { hm 2 —_| Service or on SRX_ — Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date | 0510/2523/20742015
5. Scaling and Performance
Actually, it's very hard to measure the end-to-end performance, as there are so many modules involved, such as JDPI, SRX jsf_aamw plugin (Plugin framework, Buffer management/transport, WebSocket,
| Uibmagic, MSGPACK), SSL proxy, TCP Proxy, RTCOM, and SSL-|. We are planning to track SnP data in separated document.
5.1 Target Scaling The expected concurrent session scaling should reach 32K XLR flow mode SPU, 16K for combo SPU. §.2 Target Performance
The scaling and performance numbers of Juniper AAMW can be found in the document SRX_Argon Scaling Performance.
5.3 Limits
1. Policy and profile limit
The capacity number of advancved anti-malware pr
The capacity oumber of inspertion-prafiles is 2. Blacklist or whitelist limit | * Customer whitelist
The capacity number is 1024. | © Customer blacklist The capacity number is 1024, » Global whitelist The capacity nunber 125 3072. e Global blacklist The capacity number is 3072
3. Whitelist and Blacklist URL and Hestnanié limit * Hostname Length Limit
The maximun length of each Hostname entry t= 126 Bytes. . UBL Leng Limit The maximum length of each URL entry is 2048 Pytea.
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RLI Number Document Title
Document Owner
zoe [tet ft
Juniper Advanced Anti-Malware Service on SRX
‘Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao
Version Date
0§10/2523/204442015
Compatibility Issues
This is the first release for security-argon feature.
HIGHLY
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RL! Number 23914 fa a [1 [ | Sa f, Document Title | Juniper Advanced Anti-Malware WORKS Service on SRX Document | Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 8810/2523/20442015
7. Security Considerations
Communication between the SRX and Argon needs to be authenticated and encrypted. A number of properties are required:
« Integrity of data: we know that the data has not been altered Endpoint authentication; both Argon and any client need to be sure that they are communicating with the correct entity
« Endpoint tracking: The Argon needs to be able to log a unique client ID for requests Endpoints should be able to be revoked: Should an endpoint, be it Argon or client, be compromised there should be a simple way to revoke access,
« Sections of the API should be role restricted: a sample submitting client should not be allowed to submit scores, etc.
* The mechanism should scale for many clients and many Argon machines.
The scheme proposed is to use TLS client certificates to provide the properties we want.
Argon will act as a Certificate Authority. For each client of the API, Argon will issue its cert's public key and a client certificate derived from the same certificate, lt is assumed that there is a secure distribution mechanism that bootstraps the system. The client certificate will include two pieces of information that are specific to the individual client,
Common Name(CN): <SHA256(customer |D + salt)><delim><SHA256(unique ID +salt)> Organizational Unit Name(OU): <AES encrypted unique |D + list of role names>
The customer ID \s global to a customer, and is a way to refer to the entity who has purchased the entitlement to Argon. This document does not consider the case of a sell-through, or resell arrangement.
The unique ID |s a stable piece of information about the client. In the SRX case it will be the serial of the particular SRX the certificate is assigned to,
The role name is a description of the access level the client has to the API. It will be a single string that denotes a role. There will be a number of roles pre-configured for the Argon API, something that could be extended at a later date to be more flexible.
Note: encrypting the data in the certificate raises the bar for forgeries. It will also require a separate key that remains private to the Argon machines.
Once the client has its certificate and the public key of the server cert, TLS proceeds normally with strict server and client certificate checking. This will ensure that application level code is not exposed until the TLS layer has completed. This gives an added level of protection to the application layer. The second stage of authentication is at the application level, where the OU is extracted from the client certificate, decrypted, and the role extracted so that it may be compared against the URL being accessed, or the messages being sent. This role determines, at the application level, what operations are possible.
This scheme generalizes to multiple Argon machines and clients. Where there are multiple Argon machines, each must behave identically. To do this each Argon must have the same server certificate and issue client certs identically. The server cert and encryption keys are again, assumed to be shared securely by an outside mechanism.
The CN includes derivatives of the customer ID and the unique ID, which may be used to route connections or apply policy based on them. This gives us the ability to alter our service later without having to reissue certificates.
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WOR
| Service on SRX
Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
Version Date | 0810/2523/20742015
The SHA + salt, make it harder for an adversary to learn the value of the customer ID and the unique ID.
To handle the case where we wish to revoke access, a client “untrusting"” an Argon cloud is simply a matter of removing the server's public key from the trusted set.
The reverse is only moderately more difficult. The client, who we wish to revoke access for, has their certificate added to a Certificate Revocation List (CRL). This CRL is loaded by the Argon application server, and the CRL is distributed in the cluster.
This CRL is the third piece of information that needs to be shared, and maintained to be identical within a cluster of Argon machines.
The distribution mechanism, while being outside the scope of this document, is to be conducted by the cloud bootstrap procedure in the first release, Subsequent releases may use Security Director to achieve secure distribution.
HIGHLY
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CONFIDENTIAL - SOURCE CODE
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RLI Number Document Title
Document Owner
aoa [tet [te
Juniper Advanced Anti-Malware Service on SRX
‘Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date
0§10/2523/20442015
Platforms Supported
This feature support only SRX1500 platforms includes: SRX1500
HIGHLY
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| [RL Number 23914 jvez [4 J LJ | F eC f, Document Title | Juniper Advanced Anti-Malware TWORK Service on SRX
Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date | 0510/2523/204.42015
9. Common Infrastructure
9.1. High Availability (HA) 9.1.1 Graceful RE Switchover (GRES), ISSU and NSSU Impact
The bootstrap package only needs to be downloaded and run on primary nodes, the script will install certificates via CLI commands, all the certs and configurations will be synced to backup nodes automatically.
For control plane, only the daemon on primary will connect to Argon cloud for profile syncing, file DB downloading and health/telemetry data reporting. File magic DB will be copied to backup node after downloaded on primary. When doing failover, daemon on the new primary will download all profiles, and will check the version on PFE to see if need resync with it.
For data plane, RTCOM only can setup connection from primary node, so no connection to Argon cloud on backup. With this limitation, argon feature does not support AA mode.
For AP mode, during failover, the original master SRX clears session state, file context list, shutdown RTCOM connection. New master will set up new connections to Argon via RTCOM. New pass through HTTP/HTTPS sessions will go to new master node. The current existing session will be ignored. So ISSU is not supported and NSSU is supported.
Argon Server | Ss Web portal
RE side 3 PFE side “SsL_ SSL Argon Server Detection Engine Figure 7 SRX Advanced Anti-Malware HA Process Diagram © Copyright 2012 Juniper Networks, Inc. — cee and Confidential — Do not distribute outside of the company without the p i ing Printed copies are for reference ore Template: J3,02,P05,701 —Ver, 1.1 Template Owner; Ramesh RN Page 51
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9.1.2 NSR Impact
NIA
9.2 Aggregated Ethernet/ SONET/ IRB Support N/A
9.3. Services/JSF (JUNOS Services Framework) Impact NIA
9.4 Multi-Chassis Support
Yes
9.5 64-Bit Support
Yes
9.6 IPv6 Support
No
9.7 Logical System Support
No
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RLI Number Document Title
Document Owner
zoe [tet ft
Juniper Advanced Anti-Malware Service on SRX
‘Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date
0§10/2523/204442015
10. SDK Impact
NIA
10.1 SDK Customer Usage NIA
HIGHLY
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Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date | 8510/2523/201-42015
11. JUNOS Ready Software considerations
NIA
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RLI Number Document Title
Document Owner
23914
a a |
Juniper Advanced Anti-Malware Service on SRX
Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date
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12. Notes
HIGHLY
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RL! Number 23914
Document ‘Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
a ee
J [ | Pe f, Document Title | Juniper Advanced Anti-Malware NET WO
Service on SRX
| Version Date | 0510/2523/201.42015
13. Glossary
AAMW - Advanced Anti-Malware
AFC - Application Filter Classification
PCP - Parsed Context Propagation
JDP! - Juniper Deep Packet Inspection
JSF - Juniper Service Framework
SD - Security Design
PKID - Public Key Infrastructure Daemon
IPFD - Security Intelligence feed handling Daemon
RTCOM - Real-Time Socket like API for TCP/UDP connection
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14. Design Specification exception
<If you do not intend to provide design spec for this RLI/feature, please provide detailed explanation here. Also include software director approval in section 20 (Review Comments) indicating his/her approval on the Design Specification exception. If you plan provide Design Specification, mark this section as NA.>
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RL Number 23914
JUNIPer
eT Service on SRX
Document
Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao
| Version Date | 9510/2523/20142015
15. Functional Specification Approver Checklist
[rez [1 Document Title Juniper Advanced Anti-Malware
Approver's checklist (If you agree with the statements in the cell next to your role, please sign and date in the Approved by column)
Org. Role
| Approved by & date (or NA)
PLM Approver | The FS has detailed requirements for the feature and is in-line with the customer/product requirements,
The FS has detailed functional and system scale &
SW Eng. SPEIS performance requirements and correctly captures the —_ thie overallsystem impact The FS has detailed functional and system scale eo Sys Test Approver | performance requirements for use to create the feature test plan Information The FS has detailed functional and system scale & Experience Approver performance requirements for use as input to create the documentation plan Archi Approver The FS has detailed functional and system scale & rchitecture : : , z ; Reviewer (optional) performance requirements and is consistent with overall system architecture Approver The FS has detailed functional and system scale & Hardware (Optional) performance requirements and is consistent with the Hiw design Regression Approver The FS has detailed requirements that provide inputs Test PP to identify the regression test plan Program Approver The FS has detailed requirements and correctly Mamt (Optional) captures the overall requirements for the feature The FS captures the overall requirements for the eres : rtonnt feature and provide inputs required to create any
Customer support plan document
Manufacturing Approver “The FS ‘correctly identifies any impact to Manufacturing ~
(Optional) | process
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ONPR-FNIN_29002__
00173340 | 2019-05-13 | [
"Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 1 of 64 EXHIBIT 13 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 2 of 64 | RLI Number | 23914 | 1.67 | 1 | | | De fi SSoUmaAE TEE | Juniper Advanoed Ant elners SeniGe Ae he - | on SRX ee Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/20142015 Juniper Advanced Anti-Malware Service on SRX Software Functional Specification Hopper Wang ho rw@juniper.net Xiaosong Yang xyang@juniper.net Ping Wu png@juniper.net Andrew Onofreychuk aonofreychuk@juniper.net Lydia Zhao lydiazhao@juniper.net Bruce Kao bkao@juniper.net TEMPLATE REVISION HISTORY AND GUIDELINES: The revision history is available through the version control function of the application hosting this template. Please read the file named: README_BEFORE_EDITING_TEMPLATES.",
"tt in the templates folder BEFORE making changes to this template, ensure you check the accuracy of both contents and format: - Contents: What has changed - Format? Check if owner, version number (everywhere it appears), TL9000 process number and template number are current in the document properties dialogue. ~~ [ Formatted: Right © Copyright 2012 Juniper Networks, Inc. all rights reserved— Proprietary and Confidential — Do not distribute outside of the company without the p i: of F !",
"g ing Printed or downloaded copies are for reference only! Template: J3.02.P05.T01—Ver. 14 Template Owner: Ramesh RN HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173278 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 3 of 64 RLI Number — JUNIPer aa IRS is Document 23914 | 1.67 | 1 Juniper Advanced Anti-Malware Service on SRX | Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/201-42015 Table of Contents 1. Introduction ...........0068 Jinvdvenifedensdvareilvers says uitusiahirdiuniie tepid egsh denetbenshaveni sea aaiiddan'e 1 1.1. Reference 3 12 RLIList 4 1.3 Feature Parity Traceability 4 2. Functionality............... ‘ rd itaaie 5 2.1. Goals 20 2.2 Exceptions 21 2.3. Assumptions 21 2.4 Functional competitive data 21 2.6 APlIs/Messages 23 2.6 Manageability 23 2.7 Examples or Interaction Descriptions 33 2.8 Supportability (Serviceability, Diagnose-ability and Fault Handling).............0000. 34 2.9 Dependencies and Interactions with other Components in the System... 41 2.10 Legal Considerations 42 3.",
"Other Requirements .........ccccccsecceneeecnneenesenneeseneneananennenenes 44 4. System Resource Estimation .............:.s:sssecseseseereseecesecesssseseeeesereceenenenenes 45 4.1. Performance Related Resources 45 5. —- Scaling ANd Performance .......cccescceesseessnrsssareesrenserenosreeseneeseesesenanseaser ceases FO 5.1. Target Scaling 46 5.2. Target Performance 46 Compatibility ISSUCS .........ccecccecteneeesneeeneenenenseneeeenenanneneneeseneseneeeensaes sid raha 47 oan a - Security Considerations ............cccccesreccsresserseerecsereeseecnenennenersereesarevenseeens FO « —-— Platforms SUPPOrted .......cccseeccessssensseenesseneesnsnensnesensneeterstascenesenseeeeneeesneeens4 . Common Infrastructure Seana svoye 51 9.1 High Availability (HA) 51 9.2. Aggregated Ethernet/ SONET/ IRB Support §2 9.3 Services/JSF (JUNOS Services Framework) IMmpacct........0..sscccscseseessssesteessensteessersenes OZ 9.4 Multi-Chassis Support 52 9.5 64-Bit Support 52 9.6 IPv6 Support 52 9.7 Logical System Support 52 We SOK Mi pae bes cisccte Sige igcsrrestiarete ih aenanaidtneswensaasmieres 53 10.1 SDK Customer Usage 53 11. JUNOS Ready Software considerations casa 54 Rie | INS as coaeia es cag ncesayecap sonerggesteeteagaegeadaenatenziae ectengcisueetorsazeaien 55 13. Glossary 56 14.",
"Design Specification exception ........... Savane 57 © Copyright 2012 Juniper Networks, Inc. all rights reserved— Proprietary and Confidential — Do not distribute outside of the company without the p i: of J N g ing Printed or downloaded copies are for reference only! Template: J3.02.F05.T01—Ver. 1.4 HIGHLY CONFIDENTIAL - SOURCE CODE Template Owner: Ramesh RN JNPR-FNJN_29002 00173279 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 4 of 64 | RLINumber | 23914 jrez [1 J | | Dp e fi Document Title | Juniper Advanced Anti-Malware . i NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/20442015 15. Functional Specification Approver Checklist ......cccsccesessecrseeresreeneee SO Functional Specification Document Checklist Compliance © Copyright 2012 Juniper Networks, Inc. all rights reserved— Proprietary and Confidential — Do not distribute outside of the pany without the p of P we a ‘ing Printed or downloaded copies are for reference only! Template: J3.02.P065.701—Ver.",
"1.1 Template Qwner: Ramesh RN HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173280 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 5 of 64 | RLINumber | 23914 [rez [1 J | | Dp eC fi Document Title Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/20442015 ® Copyright 2012 Juniper Networks, Inc. all rights reserved— Proprietary and Confidential — Do not distribute outside of the pany without the p of iP ks engineering Printed or downloaded copies are for reference only! Template: J3.02.P06.701 —Ver. 1.1 Template Owner: Ramesh RN HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173281 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 6 of 64 | RLI Number 23914 [rez [1 J | | Dp e fi Document Title | Juniper Advanced Anti-Malware NETWORKS: Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 9510/2523/20442015 © Copyright 2012 Juniper Networks, Inc. all rights reserved— Proprietary and Confidential — Do not distribute outside of the pany without the p of p g ing Printed or downloaded copies are for reference only! Template: J3.02.P065.701—Ver. 1.1 Template Owner: Ramesh RN HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173282 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 7 of 64 RLI Number 23914 | 1.67 | 1 J LJ | Pt fi Document Title Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0§10/2523/204442015 1.",
"Introduction Juniper Advanced Anti-Malware solution can differentiate Juniper from competitors and prevent Juniper's products, solutions and services fram commoditization. It is a scalable and high performing designed to: « Inline blocking of known malware downloads e Eventual notification of previously unknown malware downloads « Eventual notification of clients which have become infected Juniper Advanced Anti-Malware (AAMW) solution integrates with SRX (sensor & enforcer), Argon Cloud Server (detection engine, web portal, host analyzer, connector and so on) to achieve both ingress and egress visibilities and enforcement capabilities. Argon cloud server implements variety of techniques including fast checking, Anti-virus signatures to the comprehensive sandboxing technologies that trick and watch malware exploding, and scores the threat and renders a verdict for sensor (SRX) to enforce a policy, either inline block for the current and/or for future conversation.",
"Argon cloud is an important part of this solution but should be transparent to the customer in many ways when the solution is complete. 5RX acts as a telemetry/inspection sensor and dynamic action enforcer. As the sensor, SRX inspects beth ingress and egress network traffic, extracts the interested file content and passes it to Argon cloud server. Argon cloud analyzes the file input from SRX through series of advanced detection technologies and returns a verdict of the file indicating if the file is malicious. As the enforcer, SRX takes action based on the verdict/threat-level and SRX policy settings.",
"There are two sets of connections between SRX and Argon cloud. One is on SRX control plane, which is used for SRX to download configurations that include file type/category filters, white/black list, file magic DB from the Argon Cloud, and send health status/counter reports to the Argon Cloud. Another one is on SRX data plane, which is used for SRX to submit files and meta-data to the Argon Cloud and to receive verdicts returned from the Argon Cloud. All the persistent connections will be re-connected if it’s. broken or timeout for some reason, syslog will be generated and connection counters will be increased. Figure 1 shows the high-level architecture of the Argon solution. © Copyright 2012 Juniper Networks, Inc, — eee and Confidential — Do not distribute outside of the company without the p p i ing Printed copies are for reference ore Template: J3.02,P05.707 =—Ver 1.1 Template Owner, Ramesh RM Page 1 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173283 JUNIPer NETWORKS Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 8 of 64 RL! Number 23914 | 1.67 | 1 Document Title Juniper Advanced Anti-Malware Service on SRX Document Owner Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao Version Date 9510/2523/204.42015 Juniper Advanced Anti-Malware Solution Argon Cloud Logging API Load Host Server Server Balancer Analzer Feed Server a =~ User Portal Krypton Verdict: Data Plane (Threat-tevel)) (Extracted File Contents) [File Verdict) ‘Control Plane — (UbMaglc DB) |Health Status (Black/White List} Telemetry Data Internat HTTP(s) Server Permit OF Inline Block Log Notification SRX FW Juniper Advanced Anti-Malware Solution Argon Cloud Logging API Host Feed Server Server iy pion Analyzer Server ~ AWS Load Data Plane (Extracted File Contents) (Mota Gata) (C&C Eventiag) Verdict (inspect!",
"(Threat-level) (Fost File Cheek Table} | Health Status (File Category Mapping) | Telemetry Data internet HTTP(s) Server End Users Permit or Inline Blocking Log Notification SRX FW a | Formatted: Font: Calibri, 12 pt, Font color: | Text 1 HIGHLY Figure 1 Juniper Advanced Anti-Malware Solution Architecture © Copyright 2012 Juniper Networks, Inc. - Proprietary and Confidential — Do not distribute outside of the company without the permission of Juniper Networks engineering Printed copies are for reference only! Template: J3.02.P05.T01 —Ver, 1.1 Template Owner; Ramesh RN Page 2 CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173284 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 9 of 64 RLI Number 23914 | 1.67 | 1 J [ | De ( Document Title | Juniper Advanced Anti-Malware rv Service on SRX NETWORKS an _=! Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204.42015 This document and RLI only focus on the advanced anti-malware service running on the SRx.",
"Details of Argon solution can be referred to \"Argon Solution Overview\" and \"Argon SRX Architecture\". 1.1 Reference 1. Market Requirements Document (MRD) https://junipernetworks.sharepoint.com/sites/Projects1/etp/_layouts/15/start.aspx#/supporting/Forms/Allite ms.aspx?R ootFolder=/sites/Projects1 /etp/supporting/Requirements %20and%20ENG%20Response&Fald erCTID=0x01200043A0991 E98C61 B45A93890B65A8EAAS32 View=%/7B3E5F02B4-1 CEA-46E3-8E4B- E3FE7098419A%/7D 2. Argon SRX Architecture https://junipernetworks.sharepoint.com/sites/Projects1/AAMVV/controlled/Argon%20Technical%20Docum ents/Random%20technical%20docs/Argon%20SRX%20Architecture. pdf 3. Argon System Specification https ://junipernetworks.sharepoint.com/sites/ProjectsT/AAMVWV/ layouts/15/WopiFrame.aspx?sourcedoc= BC58BB70-C968-418C-B35E- F2B9FB216AE3}&file=Argon%20System%20Specification.docx&action=default 4. Argon Solution Overview https://junipernetworks.sharepoint.com/sites/Projectst/etp/ layouts/15//VopiFrame.aspx?sourcedoc=%/7B F6CFBAF2-183F-46F0-A6A9- D4336573C57F %7D&file=Argon%20Solution%20v9%208.docx&action=default 5. Argon Sample API 36468- 6FEO-47FA- AO! 1-7EC03B754F D3}&file=Argon %20Client%20APIs. docx&action=defa ult 6. Argon Soft Configuration https ://junipernetworks.sharepoint.com/sites/Projects1/etp/_layouts/15//VopiFrame.aspx?sourcedoc={43F C337A-757D-4B1E-9D11-59D2B8332A8E}&file=Argon%20S oft% 20Confiquration.docx&action=default De RLI23819- Move WF to RTCOM Branch FS Move WE to RTCOMM Branch ES, docx 8. JUNOS Qosmos DPI Integration Design Specification https ://matrix juniper net/docs/DOC-148132 9. NextGen Common Protocol Parser https ://matrix.juniper.net/docs/DOC-183601 10. Syslog over TLS RTCom and SSL Enhancements ttp://cvs. juniper .net/cgi-bin/viewovs.cgi/*checkout*/: rojects/|sfispecs/Syslog%20o0ver%20TLS%20RTCom%20and%20SSL%20Enhancements.docx 11. JSF SSL Functional Spec http://cvs.juniper.net/cgi-bin/viewcvs.cqgi/sw-projects/jsf/specs/isf_ssl.txt?view=markup © Copyright 2012 Juniper Networks, Inc. — ene and Confidential — Do not distribute outside of the company without the p i: i ing Printed copies are for reference oneal Template: J3.02,P05,701 —Ver, 1.1 Template Owner; Ramesh R N Page 3 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173285 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 10 of 64 RLI Number Document Title JUNIPer 23914 a a | Juniper Advanced Anti-Malware Service on SRX Document Owner Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao | | Version Date 0§10/2523/20442015 12.",
"WebSocket RFC http://tools.ietf.org/html/rfc6455 1.2 RLIList | RLI No Description | 23914 Juniper Advanced Anti-Malware Service on SRX 1.3. Feature Parity Traceability This feature is not for Parity purpose. © Copyright 2012 Juniper Networks, Inc, — ea and Confidential — Do not distribute outside of the company without the p Printed copies are for reference one Template Owner; Ramesh RN Template: J3.02,P05 701 —Ver. 1.1 Page 4 HIGHLY CONFIDENTIAL - SOURCE CODE ip Ing JNPR-FNJN_29002 00173286 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 11 of 64 RL Number Document Title 23914 |e || i | Juniper Advanced Anti-Malware Service on SRX JUNIPer I WOR a re = Document Hopper Wang, Xiaosong Yang, |, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/20442015 2.",
"Functionality ~ Control Plane To enable Juniper Advanced Anti-Malware service on SRX, customer needs to go to the Argon cloud web portal to register an account first, apply for the license (freemium or premium), get the http link of the bootstrap packages, then use Junos \"op url\" command to download Argon bootstrap package and script to SRX. The bootstrap package includes related security certificates (e.g., SRX key/certificate, Argon Cloud server's CA certificate) for upcoming mutual authentications between 5RX and the Cloud. The script will install related security certificates on the SRX and commit the configuration for Argon cloud connection includes Argon server's URL and the tls-profile. Once the related certificates are installed on SRX, AAMWD daemon starts to establish the secure connections between SRX and the Argon Cloud.",
"In future, Security Design (SD) will integrate with Argon Cloud, so at that time customer no needs to use Argon cloud web portal, but can use SD for centralized management. ee ee eee J Argon Cloud ' ; Server i — = T = 7 = vy RE =. == cL Palle TL bobtewanil, Health Data || rue magicos op unl script | package Telemery Counters ss watat ' ee r ; cLI ' ' r= ———— = > ' i j Commands cLi i I \\ ‘* Configuration \\ ' “ . so 5—— 4° St NSD PKID H AAMWD =!",
"| USPINFO F-+----- ; 7 \\ ise lec POONN POONN Poon ! PFE wv [rw Policy Modulo| | JSF_AAMW Plugin Figure 2 SRX Advanced Anti-Malware Service & Control Connections with Argon Cloud Figure 2 shows JunOS modules running on SRX for advanced anti-malware service and control connections with the Argon Cloud. From this diagram, we can see there are two logical connections between SRX and Argon cloud: 1. Bootstrap connection © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the permission of Juniper Networks engineering Printed copies are for reference only! Template: J3.02.P05.T01 —Ver, 1.1 Template Owner: Ramesh RM Page5 HIGHLY CONFIDENTIAL SOURCE CODE JNPR-FNJN_29002_ 00173287 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 12 of 64 RL!",
"Number 23914 | 1.67 | 1 J [ | | Pe ( Document Title | Juniper Advanced Anti-Malware NETWORRS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015 The user will use “op url\" script to download the install package. This is a temporary https connection. In this connection, there is not a certificate-based mutual authentication between S5RX and the Argon Cloud. However, \"op url\" command can verify file’s integrity by checking md5/sha1/sha-256 result after downloading. For example: op url <https://cloud.juniper.net/customerl/aamw-install-scritp.qgz> key md5 BddeZglahl2s73313ddfhyil>. Note: The url and key string oreated and “opied From cloud UT. In order to do mutual authentications between SRX and Argon Cloud, SRX needs to have SRX- cert and private key, and Cloud server's CA cert. These certificates and private key will not be available to SRX till the Ist connection is set up, from which Cloud will push the info to the SRX. The URLin \"op url\" is the place to which SRX sets up the 1st connection. In addition, it is the user who will generate the URL (in “op url\") in the Cloud web portal and manually copy & paste it to the SRX CLI (i-e., in the command of 'op url’).",
"It is assumed the mutual authentication is assured considering it is the same user who performs the actions on creating the URL and inputting it on SRX. In addition, the URL (in the \"op url\") has been designed as a one-time URL, meaning that it will be invalid after the 1™ use. 2. AAMW Control Plane connection A persistent TLS connection is set up between AAMWD daemon and Argon Cloud. This secure connection is used for SRX to receive soft-configurations (including file type/category mapping, customized profile, file magic DB, white/black list from the Argon Cloud and send health data to the Argon Cloud. A certificate-based mutual authentication is performed between SRX and Argon Cloud during the secure channel establishment.",
"At the transport protocol level, WebSocket is used as it supports bi-directional real time communication. 1) File categories mapping This is the global file categories configure which defines category / file type mapping. The mapping table includes category name, mime type, file extension, minimum/maximum size of each file type and submission sample rate. executable appl wee n-ole msi, mst, 1024 TO4bS7 a0 msm, dat portable _d appLicatior Sument texr/s 10de 5/400 . applicaticon/s-ter 5 archive ive AsBAsOE applicarion/ rar © Copyright 2012 Juniper Networks, Inc, — ceeeen and Confidential - Do not distribute outside of the company without the p Pp i ing Printed copies are for reference ore Template: J3.02,P05,T01 —Ver, 1.1 Template Gwner: Ramesh RN Page 6 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173288 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 13 of 64 /RLI Number 23914 J1ez [4 J [ | Pe f, Document Title | Juniper Advanced Anti-Malware NETWORK Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015 Table 1 File Category Mapping Table 2) Updatable fast file check table There is a static fast file check table for file fast identifying. It's generated and managed < [aren Indent: Left: 0.75\", No bullets or numbering by cloud which include some static signature for popular file types.",
"3) Customer specific profile configuration Customer is allowed to configure for each profile via Argon Web portal is the file types, extensions or file categories that won’t be scanned and per-category sample size thresholds. For the detailed info, please refer to the document <Argon_Soft_Configuration>. 4) Whitelist & Blacklist Whitelist defines list of file downloading sources from which files downloaded are not needed for an anti-malware inspection, Blacklist defines the list of sources that need to be block for file downloading. There will be 4 lists: Customer White List, Customer Black list, Global White List and Global Black List.",
"Argon cloud will send these 4 lists to SRX. In each list, there will be 3 types of entries: ® URLs URLs can be defined as basic patterns (* and ? wildcards only) or as exact literal matches. The url pattern must start with “http://”, both http and https traffic will be matched. The maximum length of each URL entry is 2048 Bytes. « IPs IPs can be defined as subnet masks, ranges, or full |P addresses. * Hostnames Hostnames can be defined as basic patterns (* and ? wildcards only), as partial/subdomains (e.g. all subdomains of Microsoft.com, or all subdomains of cdn.akamai.us), or as literal exact matches. The maximum length of each Hostname entry is 128 Bytes. Juniper White List or Juniper Black List JNPR B/W List has up to 3K entries; Customer White list or Black list has up to 1K entries.",
"Customer can define whitelist and blacklist in Argon web portal, which always have higher priority than other lists. © Copyright 2012 Juniper Networks, Inc. — cen and Confidential - Do not distribute outside of the company without the p i ing Printed copies are for reference ore Template: J3.02,P05,T01—Ver. 1.1 Template Owner: Ramesh RN Page 7 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173289 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 14 of 64 RLI Number 23914 | 1.67 | 1 J [ | | Pe ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/20442015 The order of Black/White list checking is as follows: Customer White List Customer Black List Global White List Global Black List During the matching, First match wins. es The Whitelist and Blacklist of AAMW service are only focused on inspecting files downloaded from servers against malwares.",
"While the Whitelist and Blacklist of security intelligence are focus on enforcements on the connections from/to C&C servers. 5) Health Data Health data collected by AAMWD will be sent to Argon Cloud via the same connection every 5 minutes, and it includes below contents: Software version ~1T201491006 Mo Hostname Cluster Serial pumber UN11EFO3BAGE SorMeG Lion actives whitelist hits blacklist hits 2 &Telemetry data ~ Data Plane Acting as a telemetry sensor and dynamic action enforcer of Juniper Advanced Anti-Malware solution, SRX needs to extract the interested file content from HTTP/HTTPs traffic and pushes them to Argon Cloud for inspectians,, and take enforcement based on the policy settings and the verdict- number/threat-level returned from Argon cloud. © Copyright 2012 Juniper Networks, Inc. -— cee een and Confidential - Do not distribute outside of the company without the p Pp i ing Printed copies are for reference are Template: J3.02,P05,T01 —Ver, 1.1 Template Gwner: Ramesh RN Page & HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173290 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 15 of 64 /RLI Number 23914 | 1.67 | 1 J [ | Pe fi Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0$10/2523/20142015 There are multiple connections lunched from SRX PFE side via RTCOM plugin and used for sending file sample data to Argon cloud and receiving verdicts.",
"It uses the same mutual authentication methods and protocol as control plane connection, i.e., TLS + WebSocket. For performance considerations, each SPU might initialize 16 TCP persistent connections. © Copyright 2042 Juniper Networks, Inc, — vse and Confidential — Do not distribute outside of the company without the p p i ing Printed copies are for reference one Template: J3.02,P05.707 =Ver 1.1 Template Owner, Ramesn RM PageS HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173291 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 16 of 64 | RLI Number 23914 | 1.67 _| 1 J | | | De ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/20442015 | Formatted: Font: Calibri, 11 pt, Font color: orks Text 1 Pacha PFE ( i JSF AAMW Plugin =| e aes > Pactets<,.) aE ow IT | cco) | eee ee. = eT CATP(s} | oie Filter BS Other \\fontests | | _Polleytookue Phughs v \"TY\" Fital Verdict B/W Unt Type Manage & Tromport Call WebSocket AP] Sockat Simulation q RTCOM ssu|* a ngiour © Copyright 2012 Juniper Networks, Inc. ~ Proprietary and Confidential - Do not distribute outside of the company without the permission of Juniper Networks engineering Printed copies are for reference only!",
"Template: J3.02.F05.T01 —Ver, 7.1 Template Owner; Ramesh RN Page 10 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173292 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 17 of 64 JUNIPer SIET WORF PRL Number 23914 Document Title Juniper Advanced Anti-Malware Service on SRX PFE Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao Version Date 0510/2523/20442015 JSF AAMW Plugin Plugin Framework | aetion |} > ee se CHIP] | | ~~ Wepect Fife eaves Other —— Sontexts | |, AAMW Policy Looky | Pluglas Ga FilofVerdict ce _* Gale : Buffer car arerurs | * Presi Fie{Contexts Call WebSorket AF API Socket Simulation Figure 3 SRX Advanced Anti-Malware Packets and Event Process Diagram Figure 3 shows the packets and events workflow on SRX PFE, specifically, a. Aclientsends HTTP(s) packets to server, the traffic will pass through SRX plugin list.",
"b. JDPI plugin gets interest check event for this session, and will query other plugins if having an interest in this session. c. Only when the SRX Advanced Anti-Malware (AAMW) application service has been configured on the matched FW policy, and Argon file filters have been downloaded and installed on SRX, the AAMW plugin will notify JDP! plugin that it is interested in this session if the session is HTTP(s), and also © Copyright 2012 Juniper Networks, Inc. — ac th lad and Confidential - Do not distribute outside of the company without the p Temptate: J3.02,P05,T01 —Ver. 1.1 HIGHLY CONFIDENTIAL Printed copies are for reference ore Page 11 SOURCE CODE Template Owner: Ramesh RN JNPR-FNJN_29002 00173293 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 18 of 64 RLI Number 23914 | 1.67 | 1 J [ | Pe (.",
"Document Title | Juniper Advanced Anti-Malware NETWORRS Service on SRK Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/20442015 registers with JDPI for the protocol contexts that it needs. SRX AAMW plugin also registers with JSF framework for being interested in this session. d. After interest check, JDPI plugin will call Qosmos engine to identify the protocol and parse the contexts of this session. As AAMW service focuses on the ingress file downloading, SRX will only inspect the file from server to client. e, SRX AAMW plugin will hold the last one or two data packets before taking policy action.",
"ft. For each packet, JDPI module will copy the packet to Qosmos engine and query Qosmos if any application/context is ready or not. If it is ready, then JDP! sends Application Filter Classification (AFC) events or Parsed Context Propagation (PCP) events to each registered plugin. For an AFC event, it includes the application type (e.g., HTTP or HTTPs).For a PCP event, it includes the protocol type, context type, content length and content. AAMW plugin module will copy and manage interested file contents extracted from HTTP/HTTPs traffic. g. SRX AAMW plugin processes these events. If it's not HTTP(s), then SRX AAMW plugin ignores this session and notifies JDP| to deregister HTTP protecal/context. Otherwise, SRX AAMW plugin will create a buffer management object to maintain the URI and file context buffers. h. 5RX will look up Argon Whitelist and Black list IP table first, if not match, then waiting for URL event from JOPI. When getting URL event, AAMW plugin will lookup Argon URL/host white list and black list. lf the URL or host matches the whitelist, then permits this file. If matching the blacklist, then block the session. i. Once the accumulated buffer size is larger than 8192 bytes or file end is reached, SRX AAMW plugin will call file identification module to identify the file type.",
"Once getting the file type, SRX AAMW plugin will look it up in the file type filters. When.a match is hit, it will send the file content to Argon cloud through secure (RTCOM+TLS) connections from SRX SPU. Otherwise it ignores this file content, but still inspects this session because there might be HTTP pipeline requests. J. Ifthe file size exceeds the maximum file-size-limit defined in file filter, SRX will stop sending the file to Argon cloud and ignore the rest of file contents.",
"A file terminate notification will be sent to Argon cloud. From http header, SRX may get the length of the file content and will ignore it before sending to Argon cloud in this case. k. Before sending file contents to Argon cloud, SRX will check the sample rate of the file type. The default sample rate is 100%. The sample rate of each file category is defined in the Argon Cloud and can be modified by Argon cloud. It is pushed to SRX through control plane connection. If the submission sample rate is not 100% (1.0), e.g. 50% (0.5), SRX will send one of this category/type file to Argon and ignore the next one on the same SPU. The sample rate check interval is 5 minutes. © Copyright 2012 Juniper Networks, Inc, — cee and Confidential — Do not distribute outside of the company without the p p i ing Printed copies are for reference ore Template: J3.02,P05.707 =—Ver 1.1 Template Owner, Ramesh RN Page 12 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173294 RLI Number 23914 | 1ez [1 J [ | De (.",
"Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document “Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao > Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 19 of 64 Version Date | 0510/2523/20742015 The connections to Argon cloud is launched on-demand. It is only established when a SRX AAMW policy is matched and SRX needs to send a file to the Argon Cloud. SRX will keep these connections alive after they are established. Once advanced-anti-malware url configuration deleted or deactivated, all these connections will be shutdown. . After getting the file, Argon cloud will conduct malware inspection on it. For each file, Argon cloud will return a result with a verdict-number to SRX, If it returns “undetermined”, then SRX will ignore the file but still monitoring the session. If it returns a verdict-number, SRX will lookup AAMW policy and take an action on the session based on the settings of the matched policy (e.g., permit or block).",
"In order to do inline blocking, AAMW plugin will hold the last 10K bytes for the interested file content. When getting the verdict from cloud server, AAMW plugin will lookup current policy and take corresponding action. If permit, then forward all the contents to client, otherwise will drop these contents and send RST to client. In this release, we support \"block\" action as inline blocking. The behavior of block action is to reset the connection by sending RST packet to client and dropping the packets from server. The reason is that if we don't close client session, it will cause partial download. For the server side, we don’t want it to know there is advanced anti-malware service inline checking. Implementation To implement the above functionalities, the following SRX modules need to be involved: 1. Policy The SRX Advanced Anti-Malware service is applied to the traffic that is inspected by zone based firewall policy rules.",
"The matching criteria of zone-based firewall include legacy 6 tuples lookup (from and to zones, source and destination address/group, destination port, protocol and application). Advanced Anti-Malware policy extends the firewall policy and it includes: 1) Action and notification based on the verdict-number/threat-level threshold The action can be permit or block. Log can be configured for notification. Customer can use Log Director or STRM to check SRX Advanced Anti-Malware action's log. 2) Default action & notification This is for the verdict-numbers that less than the threshold.",
"The default action is permit and no log. 3) Inspection-profile Customer need to specify the name of inspection-profile in advanced anti-malware policy. The name string is case sensitive. This profile is defined on Argon cloud server, © Copyright 2012 Juniper Networks, Inc, — cee and Confidential — Do not distribute outside of the company without the p Pp i ing Printed copies are for reference Tet Template: J3.02,P05.707 =—Ver 1.1 Template Owner; Ramesh RN Page 13 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173295 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 20 of 64 | RLI Number 23914 | 1.67 | 1 J | | | De ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/204.42015 and pushed to SRX via control channel. The contents of inspection table includes inspecting file categories and exclude lists.",
"4) Fallback-options Fallback options should be taken when resources are out of limits or error conditions occur: o v¥erdictsend-timeout-exceeded File content cannot be sent to cloud in 60 seconds. o verdict-timeout-exceeded Argon cloud doesn't return the verdict within 3-2 seconds after file ended. o serveruAreachable © out-of-resource Memory allocation is failed on SRX PFE. a tea-many-requests leit The-defaul ; 6 : dee Ines baris32 Hlow-SPU, amelie Hpe ey bolt ees ae ALL a __rate-limit To prevent some corner cases that the system is abused, cloud side will provide sample rate to each file type category and a global rate for whole SRX device. The rates are from 0% to 100% and default is 100%. Category sample rate and global sample rate will be combined (multiplied) together. Based on this combined sample rate, SRX will limit percentage of certain category file contents sending to cloud.",
"When file contents sent exceeded the combined rate, SRX starts to fallback the files by not sending to cloud. The action of fallback options can be permit or block. Notification can be configured for each item. Default is permit without log. 3 cy name oY name Applications ——— inspection-profile N/A (1-10) recommended Action ermit | ac Match Verdict-threshold Argon policy Then * Notification ce Default-notification o Whitelist-notification le Blacklist-notification lex © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the permission of Juniper Networks engineering Printed copies are for reference only! Template: J3.02.P05,T01 —Ver, 1.1 Template Owner: Ramesh RN Page 14 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173296 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 21 of 64 RLI Number 23914 | 1ez [4 J [ | Pe f, Document Title | Juniper Advanced Anti-Malware MET WORK Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/20442015 Fallback ootdon permit | block permit a ne le | Sealing limi | masdsis——=sssons }i4—-SSSS5u asses Table 3 SRX AAMW policy table Note: Both capacity of argon palicy and inspection-profile are 32.",
"2. Administration 1) Argon Cloud configuration Administrator needs to specify the Argon cloud URL setting, includes: Hostname, Port and URI. 2) Authentication Administrator needs to specify the tls-profile for authentication. Note; The tls-profile should bind With the client's that is gen anism, please 3) Traceoptions - Trace flag (policy, parser, context, connection, identification, plugin) and level (all, error, info, notice, verbose, warning) will be supported. So it's easy to get the specified trace information, 4) AAMWD restart When the certificates of tls-profile are updated after installed, customer must restart AAMWD manually so that AAMWD will reload the new certificates for the mutual authentications with Argon Cloud. nestart advanced-anti-malware = conipletions: Rue 3 command gracefully Greve y restart the process immediately y restart (SIGKIL the pracess soft (SIGHUP) the process | Pipe through 4 command The secure connections between SRX RE and Argon Cloud will be reestablished. 3. Protocol identification and context parsing JDP| Juniper Deep Packet Inspection) is a common parser framework, it can support multiple application services like AppFW, AppTrack and AppQos.",
"Juniper Advanced Anti-Malware service also has dependency on JDPI for protocol classification and content parsing. JDPI includes AFC (Application Filter Classification) and PCP (Parsed Context Propagation) modules. The Application and Proto Context are available via JDP infrastructure for many protocols, and there are rich 1700+ applications and 2500+ protocols contexts supported in JDPI. © Copyright 2012 Juniper Networks, Inc. — ceeteen and Confidential — Do not distribute outside of the company without the p i: i ing Printed copies are for reference are Temptate: J3.02,P05,T01 —Ver.",
"1.1 Template Owner: Ramesh RN Page 15 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173297 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 22 of 64 RLI Number 23914 [rez [1 J [ | | Pe ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao Version Date 0510/2523/20442015 In the first release, SRX only focuses on HTTP (JSF_PROTO_HTTP =67) and HTTPs (JSF_PROTO_HTTPS = 68, JSF_PROTO_SSL = 199) protocols. Regarding the HTTP context types, we need to check below context events: 48) JSF-PROTO_CRA_H TAL BECHUNK_SIZE 1) JSF-PROFO—CRGHARACONTFENT_ENCOBINGISE PROTO CTXT HTTP CONTENT RAW 2) JSF PROTO CTXT HTTP CONTENT 3) JSF PROTO CTXT HTTP URI 4) JSF PROTO CTXT HTTP INDEX 5) JSF PROTO CTXT HTTP MIME 6) JSF PROTO CTXT HTTP MIME TYPE 7)_JSF PROTO CTXT HTTP MIME TYPE MAIN 8) JSF PROTO CTXT HTTP MIME TYPE SUB 3) JSF PROTO CTXT_HTTP_ FILENAME 10) JSF PROTO _CTXT_HTTP PART FILENAME 11) JSF PROTO CTXT _HITP CONTENT TRANSFER ENCODING 12) JSF PROTO CTXT HTTP FILE COMPLETED 13) JSF PROTO CTXT HTTP METHOD 14) JSE PROTO CTXT_ HTTP_HOST CTXT 15) JSF PROTO HTTP CONTENT ENCODING © Copyright 2012 Juniper Networks, Inc. — ilerthend and Confidential — Do not distribute outside of the company without the p i ing Printed copies are for reference cael Template: J3.02.P05,T01—Ver, 1.1 Template Owner: Ramesh R N Page 16 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173298 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 23 of 64 RLI Number 23914 | 1.67 | 1 J | | Pe f, Document Title | Juniper Advanced Anti-Malware Service on SRX =) WORK et _—___ Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/20442015 16) JSF PROTO CTXT_ HTTP_ACCEPT ENCODING 17) JSF PROTO CTXT HTTP CONTENT RANGE 18) JSF PROTO CTXT HTTP CONTENT LEN 19) JSF PROTO CTXT_HTTP URI DECODED 2B HSRPROFOC RH AUSER AGENT 24) ISF_PROTO-CH_HTFFE_VERSION JDP!",
"plugin needs to do TCP reassemble to keep the PCP (Parsed Context Propagation) event in order. SRX Advanced Anti-Malware plugin (jsf_aamw) need to buffer and manage the contexts and send them to Argon cloud through RTCOM+SSL connections. Note: To enable advanced-anti-malware service, Al license must be installed and activated. 4. SRX JSF_AAMW Service Plugin SRX Advanced Anti-Malware service will add apewIJSF packet and stream plugin to the services chain. This plugin will interact with JOP, register interested protocols and contexts, and provide callback for the parser context event (PCP Event}. When a context is ready, it calls file magic to recognize file type and send file content to Argon cloud through RTCOM+TLS session. Argon cloud will return a verdict score/threat-level for the file, and SRX Advanced Anti-Malware plugin takes action based on the score and policy. To support inline blocking, SRX Advanced Anti- Malware plugin will hold the last one or two packets. The length of file content being held needs to be larger than 1Kbyte to make sure the blocking action is more effective.",
". Figure 4 shows the SRX Advanced Anti-Malware plugin architecture: © Copyright 2012 Juniper Networks, Inc. — eee and Confidential - Do not distribute outside of the company without the p i ing Printed copies are for reference ore Template: J3.02,P05,701 —Ver, 1.1 Template Gwner; Ramesh RN Page 17 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173299 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 24 of 64 RLI Number 23914 l1ez [1 Document Title | Juniper Advanced Anti-Malware Service on SRX JUNIPer NETWORKS Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 9510/2523/20142015 Brief Description: The JG AAW pligin regatens interested: protccols and contests trom JO plugn end pares the setmcted Ale: Peues shaourwergion end paler be ‘ealling eee fo Argen Server Coe verdict on Argon Server NSD (SLT) AAM (container process) mice © NSCs simply a conmunenprockis to Hoe the conn /erary When contans all the loge: Note Libraries Used \" ———— ¥ o re ey = plugin = Libetrece 5 sp (ht Py ar = Libysh tate Ware) ‘feed Conieet Pronaganon régrsh es = (When pavsedcontat isready, a PLP = Libsmplock (Sv hockingy eveotis generated aed JSF A AMY plugin 2 Libjunpar a Ih event = Libeinn . AANAR plugin pea contaat to oi ener tfirmugh PTIOON fara = GRY AAMY AnE theca ae fie Boone returned from Argon server and: SRM poley setting: EF rconforennce rig 4 SRX Advanced Anti-Malware Plugin Architecture jsf aamw_stream (stream plugin mode), These two plugins share the same JSF infrastructure but only one plugin will handle one http session.",
"The decision of which plugin handles any particular session is based on policy configuration. When a customer wants to blocking action for suspected malware, a user would configure advanced-anti-malware policy action to block those files with verdict larger than threshold, and in this case, jsf aamw stream is the plugin that will handle the session because only in stream mode we can invoke tcp proxy to facilitate inline blocking of the last 10KB of the file content. If customer doesn’t want to block any http transaction and only wants to monitor the behavior, the policy action would be configured as ermit. In this case, jsf aamw packet mode will be chosen for the session since TCP proxy will not be required.",
"handles http URL and cookie in c2s (client to server) direction. IDP focuses on full protocol in both c2s and s2c directions. AAMW plugin focuses on file contents mostly in s2c direction. We plan to put JSF AAMW stream/packet plugin after IDP stream/packet plugin and UTM plugin. © Copyright 2012 Juniper Networks, Inc. — eee and Confidential — Do not distribute outside of the company without the p i ing Printed copies are for reference ciel Template; J3.02,P05,T01 —Ver. 1.1 Template Owner: Ramesh R N Page 18 HIGHLY CONFIDENTIAL - SOURCE CODE JSF AAMIW stednieaukat plug has no adleraritency.a on |IDP and UTM Aphis: Ssecintel skew Formatted: Font: 11 pt, Font color: Text 1, (Asian) Chinese (PRC) Formatted: Font: 11 pt, Font color: Text 1, (Asian) Chinese (PRC) _ Formatted: Font: 11 pt, Font color: Text 1, (Asian) Chinese (PRC) Formatted: Font: 11 pt, Font color: Text 1, (Asian) Chinese (PRC) Formatted: Font: Calibri, 11 pt, Font color: Text 1 JNPR-FNJN_ 29002 00173300 RLI Number 23914 | 1.67 | 1 J [ | Pe f, Document Title | Juniper Advanced Anti-Malware NET WORR Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao 5.",
"7. Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 25 of 64 Version Date 0510/2523/204-42015 Network Transport - RTCOM framework RT communication framework provides a scalable TCP session to external servers. The SRX AAMW service plugin can initiate one or more TCP sessions ta send and receive data from external servers leveraging RTCOM facility. SRX AAMW service will leverage RTCOM and SSL-I to send extracted content to Argon cloud. Both client and server's certificate will be verified, so the traffic is encrypted and secured. The number of RTCOM connection is 16 on each SPU. Only when advanced-anti-malware policy configured, SRX AAMW plugin will set up the connection to Argon cloud from each SPU, and will shut down all connections if configuration deleted or deactivated. SRX AAMW plugin will use round robin algorithm to select connection for file transporting, and do affinity binding of file and connection. If connection is closed or broken for some reason, SRX will not resend the file content, and will ignore the future contents of this file.",
"If error happens in the communication with Argon cloud, RTCOM propagates error codes to SRX AAMW plugin. There are two kind of errors: TCP error and SSL error. RTCOM generates TCP errors via detecting if or not get correct packet and timely response from TCP-| and TCP-T, And for SSL error, RTCOM gets the error code from SSL-! plugin. RTCOM reports the error code to AAMW plugin, then AAMW plugin does error handling actions according to the error code. Message Communication - WebSocket & Msgpack WebSocket defines a full-duplex single socket connection over which messages can be sent between client and server. It uses http-like communication for initial handshake, running untrusted code in a controlled environment to a remote host that has opted-in to communications from that code. The benefits of web-socket is the standard mechanism for server to initiate or send updates without having to have client poll (RPC model). We plan to leverage WebSocket to send verdicts asynchronously, without requiring SRX requesting the verdict in a poll mode. Please refer to RFC for more detailed description: http://tools.ietf.ora/html/ric6455. File Type inans ification ed ee File Check Table that-describe-the- sell aisaibatw teat oe ies tise igs Conteh ach alli ie eee al rime-types-We use LibMagic updatable fast file check table for file type identification.",
"If a file type is not included in the file magic database, AAMW plug-in is not able to identify it. The file magic database will be pushed from cloud server to SRX. Besides this, cloud will provide the infectable file types list to SRX, each defined file types has the following additional configuration: ® Copyright 2012 Juniper Networks, Inc, — cee eee and Confidential — Do not distribute outside of the company without the p p i ing Printed copies are for reference are Template: J3.02,P05, 707 —Ver. 1.1 Template Owner: Ramesh RN Page 19 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173301 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 26 of 64 | RLI Number 23914 | 1.67 | 1 J | | | De ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015 « File types Which file types could be infected and need to be analyzed. * Minimum file size The threshold of how large a file of this type must be, before sending to cloud.",
"e Maximum file size How large a file of this type has to be before no longer make senses to analyze. * Submission sample rate Default is 100%, but can be adjusted by Argon cloud. 8. PKID PKID provides the framework for certificate management and authentication. AAMWD daemon will call libpkic to connect with PKID, requesting for SRX client key and cert, validating server's cert and doing CRL check. 9. Reverse DNS lookup When PFE seeing a session, it will query local reverse DNS table on SPU locally. If does not exist, eens: Font: Calibri, 11 pt, Fant color: then return NULL and send a request to RE (AAMWD) for reverse DNS lookup. Text 1, (Asian) Chinese (PRC) AAMWD calls system (gethostbyaddr) API to do reverse DNS lookup, and propagates IP/Name mapping entry to all PFEs, if can get the client computer name by IP successfully, The next time, jsf_aamw plugin will query local DNS cache table on PFE, it will get the client computer name and attach it into metadata with the field hostname of client_info. If DNS resolution failed on RE, no |P/name mapping message send back to PFE.",
"On PFE, there Is no new reverse dns request for this IP in 15min. The maximum name length is 64 Bytes. Each entry timeout is 1 hour. Whether reverse DNS lookup can be successfully or not, it relies on the DNS configuration on SRX. Please confirm that from SRX shell or CLI you can get the computer name by IP and get IP by name. 9.10. SSL forward proxy In order to support HTTPs protocol, customer needs to configure ssl-proxy application services together with advanced-anti-malware on firewall network policy. Please refer to SSL Forward Proxy documents for details. 2.1 Goals ® Extract file content from HTTP/HTIPs traffic * identify the file types and map to category table e Take inline actions based on file verdict-number and SRX policy configurations ® Provide secure connections (TLS) between SRX and Argon cloud © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the permission of Juniper Networks engineering Printed copies are for reference only!",
"Template: J3.02,P05,T01—Ver, 1.1 Template Owner: Ramesh R N Page 20 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173302 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 27 of 64 RLI Number 23914 | 1.67 | 1 J [ | Pe f, Document Title | Juniper Advanced Anti-Malware NET Service on SRK Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015 2.2 Exceptions 2.2.1 Caveats «e No 2.2.2 Limitations | ® Inthe first release, only SRX¢-&4Forge SRX1500 are supported. e AAmode of HA is not supported because of the limitation of RTCOM. ® Single file multi-thread downloading is not supported.",
"e Resuming preen downloading is not See 2.2.3. Non Goals ® LSYSis not supported the first release. ® |Pv6 is not supported. ® Other protocols such as SMTP, IMAP, POP3 and FTP are not supported in the first release. 2.3. Assumptions * No 2.4 Functional competitive data e Palo Alto Networks - WildFire WildFireTM simplifies an organization’s response to the most dangerous unknown threats — automatically turning the unknown to known, and quickly preventing them before they compromising organizations. Unlike legacy security solutions, WildFire quickly identifies and stops unknown malware, zero-day exploits, and other advanced attacks without requiring manual human intervention or costly Incidence Response (IR) services after the fact. https:/Awww.paloaltonetworks.com/praducts/echnologies/wildfire.html https://paloaltonetworks.com/products/features/apt-prevention.html * FireEye- Cyber Security & Malware Protection The FireEye FX series is a group of threat prevention platforms that protect against content- based attacks across a wide range of file types. The FireEye FX platforms analyze network file shares to detect and quarantine malware brought into the network through the Web, email, or manual means, such as online file sharing and portable file storage.",
"The FX series thwarts the lateral spread of advanced malware that traditional and next-generation firewalls (NGFW), IPS, AV, and gateways miss. Advanced targeted attacks use sophisticated malware and advanced persistent threat (APT) tactics, not only to penetrate defenses, but also to spread laterally and © Copyright 2012 Juniper Networks, Inc, — ceeteens and Confidential — Do not distribute outside of the company without the p ii: p i ing Printed copies are for reference Sree Template: J3.02,P05,707 =Ver. 1.1 Template Owner, Ramesh RM Page 21 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173303 [ | PC f, Document Title. Juniper Advanced Anti- Malware Hl Service on SRX_ Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 28 of 64 RLI Number 23914 ‘| ier [4 Document Hopper Wang, : Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao Version Date 0510/2523/20442015 establisn a long-term foothold in the network. http://www. fireeye.com/products-and-solutions/content-security.html Checkpoint - Anti-Malware & Program Control The Check Point Anti-Malware & Program Control Software Blade efficiently detects and removes malware from laptops and desktops with a single scan.",
"Viruses, spyware, keystroke loggers, Trojans and rootkits are identified using signatures, behavior blockers and heuristic analysis. Program control allows only approved programs to run the endpoint. This software blade is easily managed by unified Endpoint Security Management. https:/Awww.checkpoint.com/products/anti-malware-program-control.html Fortinet - FortiSandBox FortiSandbox is an Advanced Threat Protection Appliance designed to identify and help customers thwart the highly targeted and tailored attacks that increasingly bypass traditional defenses and lurk within networks. Offering a unique dual-level Sandbox, inspection of all protocols in one appliance and optional integration with your existing FortiGate infrastructure, FortiSandbox delivers highly effective protection against this emerging class of threats that is affordable to buy and simple to deploy and manage. Complement your established defenses with this cutting edge capability; analyzing suspicious and high risk files in a contained environment to uncover the full attack lifecycle. Rich threat intelligence, actionable insight and the option to share information with FortiGuard Labs in order to receive automated protection updates help organizations reduce the risk of compromise and breach. http// fortinet.com,.cn/products/fortisandbox/ Cisco Sourcefire AMP (ThreatGrid) Sourcefire Advanced Malware Protection (AMP) for Networks is the only system to give you the visibility and control necessary to protect your organization against highly sophisticated, targeted, zero-day and persistent advanced malware threats. Designed for FirePOWER appliances, AMP for Networks detects, blocks, tracks and contains malware threats across multiple threat vectors withina single system.",
"http: -sourcefire.com/products/advanced-malware-protection/amp-capabilitles-network Cyphort - Anti-Sandbox Malware http://www.cyphort.com/products/ Lastline - Advanced Malware Protection & APT Security http://www.lastline.com/platform Juniper Advanced Anti-Malware Solution © Copyright 2012 Juniper Networks, Inc, — cee and Confidential — Do not distribute outside of the company without the p i: i ing Printed copies are for reference ore Template: J3.02,P05,T01 —Ver, 1.1 Template Owner: Ramesh RN Page 22 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173304 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 29 of 64 RLI Number 23914 | 1sz [1 - J [ | Pe if Document Title Juniper Advanced Anti-Malware Wer Service on SRX Document ‘Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/204-42015 Please refer to Market Requirements Document (MRD) for detailed info. 2.5 APls/Messages Please refer to Design Specification, 2.6 Manageability To enable Juniper Advanced Anti-Malware service on SRX, customer needs to configure argon cloud first, including host name, port, authentication info.",
"For security consideration, we will perform mutual authentication between SRX and argon cloud. So please use setup script or manually run \"request security pki ...\" commands to install the SRX client cert and Argon cloud server's ca certificate, create profiles for these certificates, and reference it in SRX advanced-anti-malware authentication configuration Both contro! plane and data plane are using the same authentication method with the same client/server certs. All of these things can be done via bootstrap script, Gustomer needs to define AAMW policy, choose the application for inspection, and configure the action for the verdict threshold. Then attach AAMVV policy to firewall policy, and commit the configuration. After that, the files transported in the pass through traffic which match this FW policy will be extracted and pushed to Argon cloud. Argon cloud will return a verdict number to SRX for each file, which are represented as integer values between 0 and 10.",
"A value of O nearly always represents goodware, while a value of 10 nearly always represents malware. Any value in-between represents an uncertain verdict, but the higher the value, the more likely itis malware, As the number 0 means good, and SRX will permit the session. For other verdict-numbers, customer can define a threshold to block higher in advanced-anti- malware policy. For the file that Argon cloud first seeing, it will return unknown verdict and SRX will permit the session (that is fallback action). The advanced-anti-malware policy can be enabled on FW policy as an application service, like security intelligence or application firewall. If customer needs to inspect HTTPs traffic, please enable ssl-proxy application service on the same FW policy also. 2.6.1 CLI Configuration Configure argon cloud url Configure source address or source interface Configure authentication parameters Configure advanced-anti-malware policy Configure SSL initiation profile for SRX to Argon connection (existingexisted fealure) Configure firewall policy to enable advanced-anti-malware application service Configure SSL proxy profile to inspect HTTPs traffic in firewall policy (existed featuretng) Configure advanced-anti-malware traceoptions Sample of advanced-anti-malware configuration 2.6.1.1 CLI Configuration Details « Configure argon-cloud url **., # # © @ # * @ © Copyright 2012 Juniper Networks, Inc, — ee and Confidential - Do not distribute outside of the company without the p ii: p i ing Printed copies are for reference one Template: J3.02,P05.707 =—Ver 1.1 Template Owner, Ramesh RN Page 23 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173305 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 30 of 64 | RLI Number 23914 [iez [1 J | | | Pe ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015 feet services advanced-anti-malware connection url 6 set services advanced-anti-malware connéction url <https: //www.hostname.net:443> « Configure authentication parameters fset services advanced-anti-malware connection authentication 3 et services anvens ed-anti-malware connection authentication tls-profile profile nane> * Configure source address or source interface fset services advanced-anti-malware connection source-address <1.1.1.1> OR feet services advanced-anti-malware connection seurce-interface <qe-0/0/2.0> Note: 1), The source address or source interface uses For specifying the source IP to send rilé contants (data plane) to Argon cloud.",
"2) If configures source interface but not source address, SRN will use the IP address gotten from the specified interface for connections. 3) If none of them configured, then SRX will pick up source address automatically. « Configure advanced-anti-malware policy fset secvices advanced-anti-malware policy @ set services adyanced-anti-malware policy < ® set services adyvanced-anti-malware policy [<application-name> ...] © set services advanced-anti-malware policy < o set services advanced-anti-malware policy applications inspection-prefile pri hateh yerdict-threshold services advanced-anti-malware policy <name> then action block services adyanced-anti-malware policy <name> then notification log services advanced-anti-malware pelicy <name> default—notification Log t services advanced-anti-malware policy <name> fallback-options ac Biion <permit/block> © Set services advanced-anti-malware policy <name> fallback-options notification log 6 to iy o 6 ta ft tote Q ty a e Configure SSL initiation profile - example (existed featureing) #set services asl initiation o set services ssl initiation Beeman < elient-certificate <srx client cer Oo set services ssl initiation A krusted- 2a { Formatted: Font color: Text 1 ‘profile pame> + Formatted: Space Before: 0 pt, Bulleted + Level: 2 + Aligned at; 0.75\" + Indent at: 1\" al initiat ion or TLS version 1.1 or TLS versian 1.2 { Formatted: Indent: Left: 1\" 7 1 ‘ or +>) Formatted: Indent: Left: 1\", No bullets or Note: There should be a bootstrap script to import certificates and create + numbering asl initiation profile. Please refer to \"CLI Command Details\" section for how to import Certificates by manual.",
"—By default, we will tlsavl.2 For the Formatted: Don't add space between 3] connections to cloud. ~ paragraphs of the same style © Copyright 2012 Juniper Networks, Inc. — Sete and Confidential — Do not distribute outside of the company without the p issi ip i ing Printed copies are for reference sae Template: J3.02.P05,T01 —Ver, 1.1 Template Owner: Ramesh R N Page 24 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173306 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 31 of 64 RLI Number 23914 l1ez [1 J [ | | De (. Document Title | Juniper Advanced Anti-Malware NETWORKS SEIMbE DD SRN Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015 * Configure firewall policy to enable advanced-anti-malware application service © Enable advanced-anti-malware policy #set security policies from-zene untrust permit applicatian-services advanced-anti-malware <aainw_poli o Need to configure SSL forward proxy if want to inspect HTTPs traffic Le-Zone trust poliey 1 then cyl > #set security policies From-zone untrust te-zone trust policy 1 then permit application-services ssl-proxy profile-name * Configure ss!",
"proxy profile to inspect HTTPs traffic - example (existed featureing) Feet services ssl proxy profile @ s8t services ssl proxy profile root—ca ssl-inspect-ca © Ifthe user wants to ignore the failure of server cert verification, the user can use the following command: #set services ssl proxy profile ssl-inspect-profile actions ignore- server-auth-failure e Configure advanced- anti-malware traceoptions advanced-anti-malware traceoptions flag ? iset sery Possible completions: all Trace everything connection Trace conn ions te server content Tr content buffer management daemon Tra advanced anti-malWare daemon identification Trace file identification parser 1 context parser plugin ced anti-malware piugin policy d anti-malware policy Wset services advanced= ait adnan traceoptions level 7 Possible completions: Warning Match Match Match Match Match Match all levels error conditions informational m conditions yerbose mes warning me ® ul Ly Fi Go 0 iy * Sample of advanced-anti-malware configuration root8yellowstarc} show) services connection | advanced-anti-malware url https: //cloud. qjuniper.net: 443; suthenticatian | tla-profile < f Please use setup ser tomanvally ran \"reques | source-address 5.0.0.2; size Sox info; Flag policy; _Samw. log Level ipt i se 10m; to import SRX and Argon certs OF pki ...\" cma to import curity © Copyright 2012 Juniper Networks, Inc. — nen and Confidential — Do not distribute outside of the company without the p ip ing Printed copies are for reference si Template: J3.02,P05,T01—Ver, 1.1 Template Owner: Ramesh RN Page 25 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173307 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 32 of 64 /RLI Number 23914 | 1.6 1.67 [ 1 J [ | De [\" Document Title ‘Juniper Adi Advanced Anti-Malware Service on SRX NETWORKS a eee Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/20442015 chlon-prefile insp prefilel; # LE this profile could nok be found on IRM ri nateh | application HITP; yerdict-threshold 34: # Greater than_ar sgual this number 1 Bhen | action block; netification Log; | default-notification Log; on log; jen log: \" default is permit and no lag.",
"| | pr 32 5 idl recommended; # The recommended number comes Pre Argon cloud yiea profi 2.6.2 CLI Commands CLI command to show advanced-anti-malware policy CLI command to show advanced-anti-malware profile CLI command to show advanced-anti-malware status CLI command to show advanced-anti-malware statistics GLI command to clear advanced-anti-malware statistics CLI command to show flow session summary advanced-anti-malware GLI command to install advanced-anti-malware argon-server's ca-certificate * CLI command to install SRX local certificate 2.6.2.1 CLI Command Details « CLI command to show advanced-anti-malware policy sshow services advanced=anti-nalware policy <all/policy name> . © Copyright 2012 Juniper Networks, Inc. — cate and Confidential — Do not distribute outside of the company without the p i ing Printed copies are for reference att Template: J3.02,P05,T01—Ver, 1.1 Template Owner: Ramesh RN Page 26 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173308 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 33 of 64 RLI Number 23914 | 1.67 | 1 | J | | | De ( Document Title | Juniper Advanced Anti-Malware Sou etn ae.",
"Service on SRX NETWORKS Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/20442015 | AdVaneed sAnti-malware configuration: Policy Name: pl Inspection-profile: insp-profilel Applications: HTTE Verdict-threshold: 5 Action: bl . Notification: log Default—notifi Whiteldst-notificatioan: Lag Blacklist-notification: Log ation: Log Fallback Options: Aetion: permit Notification: leg « CLI command to show advanced-anti-malware profile =show services advanced-anti-malware profile <all/profile_name> summary AdVanced Anti anti-malware inspection profile: insp_profilel “*application/pd (4pdfa+l, Sapplication/mbox {1 | , “disabled categories*: [“documents\", tcode™), “category thresholds™: [ ‘executable, 512, 1046576 | icategory*: library, nin si 4ng6, “max size™: 1048576 « CLI command to show advanced-anti-malware status >show services advanced-anti-malware status Server connection status: Server hostname: cloud.juniper.net Server port: 443 Control Plane: Connection Time: Sat Der 14 2 46 2014 PST : Connectead/Connect| ng+@etted Connection Status: Service Plane? © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the permission of Juniper Networks engineering Printed copies are for reference only! Template: J3.02,P05,T01—Ver, 1.1 Template Owner: Ramesh R N Page 27 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173309 jun .",
"HIGHLY CONFIDENTIAL - Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 34 of 64 23914 | 1.67 | 1 Juniper Advanced Anti-Malware Service on SRX Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao 0510/2523/204.42015 RLI Number | Dp eC ( Document Title NETWORKS Document Owner Version Date FPC1.SPCO: Connection Active Number: 4 Connection Failures: 12 The connection status include below states: e Not connected = nitializing 4 » Connecting s Connected e Disconnected s Connect failed e Client certificate not configured R Request server certificate validation failed se Server certificate validation succeeded * Server certificate validation failed e Server hostname Jookup failed St siesincte Say esther a Mie oa rel tat tol CLI command to show advanced-anti-malware statistics (all SPUs accumulated) Sroot@yellowstar> show services advanced=-anti-malware statistics Advanced— anti-malware statistics: Interested: 0 Processed: 0 Ignored: Q s Permitted: a Session Blocked: 0 HTTP Active Seasion: 0 HTTPS Active Session: 0 Total HTTP Session Processed: 0 Total HTTPS Session Proce File Equal or Above Verdict Threshold: 0 File Under Verdict Threshold: 0 File Send ta Cloud Successfully: Q File Send to Cloud Pailed: 0 File Not Send te Cloud: 0 File Send ta Cloud Partially: 0 Blacklist Hit: 0 Whitelist Hit: 0 Fallback Permit: 0 Fallback Block: 0 CLI command to clear advanced-anti-malware statistics >clear services advanced-anti-malware statistics Note: All advanced-anti-malware statistics on all SPUs will ‘be cleared. © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the permission of Juniper Networks engineering Printed copies are for reference only!",
"Template Owner: Ramesh RN Template: J3.02.P05,T01—Ver. 1.1 Page 28 SOURCE CODE JNPR-FNJN_ 29002 00173310 -{ Formatted: Font: Arial, 10 pt i} { Formatted: Font: (Default) Arial, 10 pt { Formatted: Font: (Default) Arial, 10 pt { Formatted: Font: (Default) Arial, 10 pt ; { Formatted: Font: (Default) Arial, 10 pt aA { Formatted: Font: (Default) Arial, 10 pt Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 35 of 64 RLI Number 23914 | 1.67 | 1 J [ | | Pe ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015 « CLI command to betel anes PaERee nee (xenaine command) #set security pki ca-profile <srx Erust ca profile name> ca-identity <dUNLPER> reer secu pki ca-certificate load fi Finan -filename> ca-profile . CLI Gorarhand to install SRX local certificate (existeding command) >reguest security pki local-certificate load filename <srx_argon_ca.crt> key <srx_argon_ca,.key> certificate-id <stx client cart profile name> 2.6.2.2 JUNOScript N/A 2.6.3 SNMP N/A 2.6.4 Syslog - ERRMSG 2.6.4.1 Reporting Event Log The format of the log will be same as syslog, which is the only one supported by SI so far.",
"The detailed format and field come from SI and we need update this part after we get feedback from them. The type will be SRX_AAMW_ACTION_LOG. This tog contains the following information: — - time = TEE dict—nunmber So0urce-address sou —port q nation-address destination-port protocol application nested-application © Copyright 2012 Juniper Networks, Inc. — eee and Confidential — Do not distribute outside of the company without the p i ip i ing Printed copies are for reference set Template: J3.02.P05,T01 —Ver, 1.1 Template Owner: Ramesh RN Page 29 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173311 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 36 of 64 | RLI Number 23914 | 1.67 | 1 J | | | Pe ts Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 9510/2523/204.42015 - policy-name - username - roles - session-id-32 - source-zone-name - destination-zone-name Example: <14>1 20143-12-147T16:06:59.1342 pinarello RT_AAMW — SRX_AAMW ACTION LOG [junes@2636.1.1.1.2.28 http-host=\"www.sina.com” File-category=\"executable\" action=\"BLOCK” verdict-number=\"8\" verdict-scource=\"cloud/blacklist/whitelist” source- address=\"4.0.0.1\" source-port=\"57116\" destination-address=\"5.0.0.1\" destination- port=\"90\" protacol-id=\"6\" application=\"UNKNOWN\" nested-application=\"UNENOWN\" policy- name=\"argon_ policy” username=\"user1\" session-id-32=\"50000002\" source-zone- name=\"untrust” destination-zone-name=\"trust\"] http-host=wwy.sina.com file-category=executable action=BLOCK verdict-number=8 verdict— source=cloud source~address=4.0.0.1 source-port#5/116 destination-address=5.0.0.1 destination-port=80 protocel-id=6 application=UNKNOWN nested-application=UNKNOWN policy-namewargon policy usérnamewuserl session-id-32\"50000002 source-zone- name=untrust destination-zone-name=trust 2.64.2 FLOW Action-Logging A fi ear = AA BU enablec ry a pet desk bicthbenepee toe Ge py es sciecometl - * ow - Sete oe WT RE Sete Sheer ae pes — Teed — “F ep ee HS Te ce 4 ppg pee de eg cede P 7 — ee ES 2.6.4,32.6.4.2 Advanced-anti-malware Status Logging SRX will send RTLOG/RELOG for any normal/abnormal activities.",
"For example: * Server connection failed ADMWD-SCoNNSETI ON -PAECYRE—[junos@2636.1.1.1.2.49 hostname=\"argon- cloud. juniper.net” ip-address=\"10.208.22.10\" port=\"443\") Access host argon- cloud. juniper.net on ip 10.208.22.10 port 443 timeout. © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the p of Juni N k Printed copies are for reference only! Template: J3.02.P05,T01 —Ver, 1.1 Template Owner: Ramesh R N Page 30 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173312 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 37 of 64 | RLI Number 23914 | 1.67 | 1 | | | PD eC ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/20442015 « Server connection establishedd <123>1 2014-08-24T17:41:06.212 SRX AAMWD - AAMWD NETWORK CONNECT SUCCESS CAMVS HE oR CoM Ee? SlSeeee—[junes@2636.1.1.1.2.49 hostname=\"argon- cloud.juniper.net™ ip-address=\"10.208.22.10\" port=\"443\") Access host argon- cloud.",
"juniper.net on ip 10.208.22.10 port 443 succeeded. £15351 eas HS 3am. 44 Ae > FT 7} tek Gr 8 mt Dr Oe SG ane f}unes#2636-4.4.4,3.4G-slob—\" FRCL PEGI\" yersten=™41430-2614-04\") pheq pret se x = 1 Fi} 4 oo. a ee tipo aducsesd ohtiatelwrce ite egies GR ipeeeds <423>4-2014-06-2479 7444-067 212 -SRX_AAMND —RAMW_POLECY_COMMEDTED L aac a ee | 3 HII 43 He 50. = 4 a es ae = tebesy evdenyp Babb bce seehhe Spf ese abe So eee hin « AAMW inspection scius deltndhacia atari <123>1 2014-08-24T17:41:06.212 SRX AAMWD - AAMWD INSPECT PROFILE UPDATE SUCCESS ASMW—ENSPECTION—PROFILE-PESATED-[junos@2636.1.1.1.2.49 version=\"11130-2014-61\"] inspection profile updated to version 1113020141 SUSE SUL tae awed ert 1 fa pie.",
"ao added Hetetea dated> a ee er Spee ten—p == SS —= + . <123>1 2014-08-24T17:41:06.212 SRX AAMWD - AAMWD INSPECT PROFILE UPDATE SUCCESS Liunos@2636,141,1.2,49] Inspection profile update failed, 2 _A lacklist/Whitelist u e events €123>1 2014-08-24T17:41:06.212 SRX AAMWD - AAMWD GWL UPDATE SUCCESS *------| Formatted: Indent: Left: 0.5\", No bullets or [junos@2636.1.1.1.2.49 wersion=\"1113020141\"] Global whitelist updated ta numbering version 1113020141 successfully. <123>1 2014-08-24T17:41:06.212 SRX AAMWD - RAMWD GWL UPDATE FAILED [junos@2636.1.1.1.2.49] Global whitelist update failed. <123>1 2014-08-24T17:41:06.212 SRX AAMWD —- AAMWD GBL UPDATE SUCCESS [junos@2636.1.1.1.2.49 version=\"1113020141\") Global blacklist updated to version 1113020141 successfully. <123>1 2014-08-24T17:41;06.212 SRR AAMWD — AAMWD GBL UPDATE FAILED [junos@2636.1.1.1.2.49] Global blacklist update failed. <123>1 2014-08-24T17:41:06.212 SRX AAMWD - AAMWD CWL UPDATE SUCCESS [junos#2636.1.1.1.2.49 yersion=\"1113020141\"] Custom whitelist updated to version 1113020141 successfully.",
"<123>1 2014-08-24T17:41:06.212 SRX_ AAMWOD - AAMWD CWL UPDATE FAILED [junos@2636.1.1.1.2.49) Custom whitelist update failed. <123>1 2014-08-24T17:41:06.212 SRK AAMWD - AAMWD CAL UPDATE SUCCESS [junos@2636.1.,1.1,2.49 yversion=\"1113020141\") Custom blacklist updated to Wersion 1113020141 successfully. © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the p i: of Junip i ing Printed copies are for reference only! Template: J3.02.P05.T01 - Ver. 1.1 Template Owner: Ramesh R N Page 31 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173313 jun 2.6.5 2.6.6 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 38 of 64 RLI Number 23914 | 1.67 | 1 Document Title | Juniper Advanced Anti-Malware Service on SRX IPL NETWORKS Document Owner Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao Version Date 9510/2523/20442015 \\AMWD — AAMWD CBL UPDATE FAILED jk_ update fai Software Feature Licensing AAMMVV Llicense will be controlled and handled on Argon cloud side, no argon feature license * installed on SRX. But, faamwrger service has dependency on JDPI module, which is used by Nextgen AppID_ also, so - a AtAppID license must be installed and activated on SRX. ; root@yellowstar> show system License License usage: Licenses Licenses Expiry Feature name used installed idp-sig 0 iL 2016-04-28 17:00:00 PDT logical-system 4 6 0 permanent Licenses installed: License identifier: JUNOS506209 License version: 4 Valid for device: AA1806AC1234 Features: idp-sig - IDP Signature date-based, 2014-04-28 17:00:00 PDT - 2016-04-28 17:00:00 PDT License version: 2 Valid for device: AA1S08AC1234 Features: Appid-sig - APPID Signature — : date-based, 2013-11-21 16:00:00 PST -— 2015-11-20 16:00:90 Pst fter installed AppID, license, Customer must download and install the latest AppID signature package.",
"> Ss 5} application-identi fication download cation-identi ation download Status” toe check identific statua™” t ck Software Packaging | In this feature, Libmragic-WebSocket and Msgpack are introduced. They will be built into Junos as a library. AAMW plugin will call their exported APIs. 2.6.7 N/A HIGHLY CONFIDENTIAL - J-Web Quick Configuration and Monitor Screen © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the p i Networks Printed copies are for reference only! Template: J3.02.P05,T01 —Ver, 1.1 Template Owner: Ramesh RN Page 32 SOURCE CODE Ee | { Formatted: | -{ Formatted: Font: | ; -{ Formatted: Space After: Opt - { Formatted: Font: ; { Formatted: Font: (Default) Arial Formatted: Line spacing: single _ ( Formatted: Font: (Default) Arial Formatted: Chinese (PRC) Font: (Default) Arial, (Asian) { Formatted: J } ) List Paragraph, Indent: Left: 0\", ) ) Font: Bold, (Asian) Chinese (PRC) - { Formatted: Highlight ) Formatted: Font: (Default) Arial, 10 pt, Font Formatted: color: Auto Font: (Default) Arial, 10 pt, Font Formatted: Font: (Default) Courier New, 9 pt, Font color: Text 1, (Asian) Chinese (PRC) Formatted: Font: (Default) Arial, Not Bold | Font: (Default) Courier New, 9 pt, | Font color: Text 1, (Asian) Chinese (PRC) JNPR-FNIN_29002 00173314 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 39 of 64 RLI Number 23914 | 1.67 | 1 [ | De f, Document Title | Juniper Advanced Anti- Malware ra Service on SRX NETWORKS et Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015 2.6.8 Integration with Management Systems N/A 2.7 Examples or Interaction Descriptions 2.7.1 JSF Service Chain for Packet Mode SRX jsf_aamw plugin needs to interact with many plugins such as JDPl, RTCOM, SSL-| and TCP proxy.",
"JSF Service Chain [Rees ace Siege | | JOPI AAMW RTCOM =| Plugin Packet | | Stream | | set4 | | eR | | ee > ——=PCP Event=%| Send file context to RTCOM channel ~ J vv fehSoch File Context Verdict » » -~/ Take action andor forward request to next Forward HTTP Request plug-in ¥v =] HTTP Session == RTCOM Session Figure 5 JSF Service Chain for Packet Mode 2742.7.2 JSF Service Chain for H¥TP{s)Inline Blocking+rafic In order to support HTTPs inline blockinginspections, SRX AAMW needs to interact with JDP| stream/packel plugin, which needs TCP proxy (TCP-T, TCP-l), SSL proxy (SSL-T, SSL-I) plugin support. © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the p of Juniper Networks i ing Printed copies are for reference only! Template: J3.02,P05,T01 —Ver.",
"1.1 Template Owner; Ramesh RN. Page 33 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173315 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 40 of 64 RLI Number 23914 | 1.67 | 1 [ | Pe f, Document Title | Juniper Advanced Anti- Malware — Service on SRX SET WORK oe Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015 JSF Service Chain TeP-T | [ SSL-T | aes [cco steam | fren | SSL | tera | es| ¥ vv ‘Send file cantext te RTCOM channel —— ¥ File Contoxt ¥ < JabSack Verdict -~ a Take action» andor forward request to maxt | plug-in Forward HTTP Request i ash HTTPS Session —7 RTCOM Session Figure 6 JSF Service Chain for H1+Psinline Blocking 2.4.22.7.3__ Argon Cloud Interaction For SRX and Argon cloud interaction, please refer to \"Argon API\" for detailed info. 2.8 Supportability (Serviceability, Diagnose-ability and Fault Handling) 2.8.1 Serviceability and Diagnose-ability e Argon traceoptions 9 setservices advanced-anti-malware traceoptions flag Possible conpletions: all ; artei Seale ware “p rLugain d anti-malware policy 9 setservices advanced-anti- aalwere traceoptions level Possible conpléetions: © Copyright 2012 Juniper Networks, Inc. — eet and Confidential - Do not distribute outside of the company without the p i ing Printed copies are for reference are Template: J3.02,P05,701 —Ver, 1.1 Template Gwner: Ramesh RN Page 34 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173316 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 41 of 64 JUNIPer NETWORKS all error info netice verbose warning e VTY plugin list flowd64]FPCE.PICO (vty) # show usp plugins RL!",
"Number 23914 | 1.67 | 1 Document Title Juniper Advanced Anti-Malware Service on SRX Document Owner Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao Version Date 9510/2523/20142015 Match Match Match Match Match all levels conditions Verbose messages error conditions informational messages Match warning messages Number of Plugin: id: 1, name: junos-syn-term Plugin: id: 2, hamet junos-screen-adapter Plugin: id: 3, heme: junos—fwauth-adapter Plugin: id: 4, name: id: 5, Plugin: name: s-syn-init junes-rtceam Plugin: name: junos-jdapi Plugin: 3 fame: junosappgos Plugin: name: junoes-secintel Plugin: name: junos-aamw Plugin: hane: junos—idp Plugin: name: junos—-userftw Plugin: name: junos—uf Plugin: name: junes-tep-svr-emul Plugin: 4, name: junos-ssl-proxy Plugin: id: 15, name: junos-ssl-term Plugin: id: 16, name: junos—fwauth-stream—-adapter Plugin: id: junos-dpi-st ream Plugin: id: junos—appfiw- stream Plugin: id: 19, name: Plugin: id: jUunos—aamw-stream, junos—idp-st ream Plugin: id: junos-captive-portal Pilg dns Ode junos—alg Plugin: id: 23, name: fi qunes—-utm Plugin: id: 24, name: junos-log Plugin: id: 25, name: junos-test Plugin; id: 26, name: junos—-rtcom-stream Plugin: id: 31, name: junos-ssl-init Plugin: id: 32, name: junos—tcep—clt—emul Plugin: id: 33, name: junos-—gprs Plugin: id: 34, name: junos-appiw e JSF_AAMW VTY 9 plugin jsf_aamw o plugin jsf_aamw o plugin jsf_aamw Go plugin jsf_saamw [flowdéd] FPC7T.PICO(vty) # plugin jsf aamw shaw show policy show profile show status show statistics AAMW plugin statistics Session interes ted : 0 © Copyright 2012 Juniper Networks, Inc. — Proprietary Do not distribute outside of HIGHLY CONFIDENTIAL - the company without the p Printed copies are for reference only!",
"Template: J3.02.P05.T01 - Ver. 1.1 Page 35 SOURCE CODE and Confidential - i 2 ip Ing Template Owner: Ramesh R N - -( Formatted: Font: (Default) Courier New, 9 pt } r [ Formatted: Font: (Default) Courier New, 9 pt, Highlight { Formatted: Font: (Default) Courier New, 9 pt ) =~ [ Formatted: Font: (Default) Courier New, 9 pt, | Highlight _ { Formatted: Font: (Default) Courier New, 9 pt | numbering : Eee Indent: Left: 0.5\", No bullets or JNPR-FNJN_ 29002 00173317 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 UnIPer NETWORKS RLI Number 23914 | 1.67 | 1 Document Title Juniper Advanced Anti-Malware Service on SRX Page 42 of 64 Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 9510/2523/20442015 processed : O ‘ on permitted 0 Session blocked : 0 Session ignored i 0 Log notifications counter : 0 File equal ocr ower threshold: 0 File below threshold : 0 File send success ; 0 File send failed $ 0 ___4__0 go 3 _ ol : 0 Http n active » 8 Https Session active t 0 Http sessic 0 Https se on proc : 0 Pallback permitted : 0 = Fallback blocked 2 Ss a ecoaiae: Indent: Left: 1”, No bullets or 9 plugin jsf_aamw show counters numbering [flowd64]) FPPC).",
"PICO (vty) # plugin sf aamw shew counters AAMW plugin counters —-----—--------- File ready events turi) a File conplete events 0 File complete events c2s 0 File complete events s2c 0 File content total created 0 File content ever handled 0 File type identified 0 File type not identified —2 File size below min size 0 File size exceeds max sire 0 File ignored by sample rate File submission send total 0 File verdict got total Q File verdict counters BOoOOD DOOD OD Gb (Oy Verdict after session closed 0 Server connection actives 0 Server conne on success 0 Server Q Limit of sessions exceeds 0 >see ener: Indent: Left: 1\", No bullets or o plugin isf aamw show Fast category table numbering Version? 1435628487 *------{ Formatted: Indent: Left: 1\" } © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential - Do not distribute outside of the company without the p of Juniper N k i ing Printed copies are for reference only!",
"Template: J3.02.P05.T01 - Ver. 1.1 Template Owner: Ramesh R N Page 36 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173318 jun Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 43 of 64 IPL NETWORKS pattern RL! Number 23914 | 1.67 | 1 Document Title Juniper Advanced Anti-Malware Service on SRX Ler Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao Version Date 0510/2523/201442015 magic type 1G. o 4 0 No 0 g é a) o a Qa NO 0 = 0 No oS 6 se 2 3 Q No = ax | Sasa Indent: Left: 1”, No bullets or JDPI traceoptions numbering e@ set services application-identification JDPI signature package version ° JDPIVTY © plugin a plugin @ pludin oe plugin o plugin o plugin oe plugin a oa [flowd64)FPCS,.PICO (vty) #plugin jdpi show application parsed ctx_: BERT AR EBLE Name:: Protecel Context Name [ID) idpi {dpi jdpi jdpi jdpi jdpi tapi set usp flow loca show usp flow trace 0 uri set set set set set set debug debug debug debug debuq debug show application 1-debug-buf module module module module module http level 3 —sS2e se See ee ee traceoptions show services application-identification version preto bundle enable timer enable engine enable engine evt enable Elow enable patsed ctx stats all state 1 stats all Number of Hits mime_type eontent_len filename eontent range header name header part_Filename index dechunk_ _Value size (5) 1 (11) 1 (27) 1 (29) 0 (30) 0 (34) 11 (35) 11 (40) 0 (47) 2 (61) 0 © Copyright 2012 Juniper Networks, Inc. — eee and Confidential — Do not distribute outside of the company without the p ip HIGHLY CONFIDENTIAL Printed copies are for reference ented Template: J3.02.P05,T01—Ver.",
"1.1 Template Owner: Ramesh R N Page 37 SOURCE CODE JNPR-FNJN_ 29002 00173319 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 44 of 64 | RLI Number 23914 | 1.67 | 1 J LJ () | PD e ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 9510/2523/20442015 hest (66) 1 content_encoding (69) Q accept encoding (70) 0 header raw (71) Li file completed (8G) 2 uri_decoded (82) 1 content (530) 17 method (555) 1 time (627) 1 mime type main (628) 1 mime type sub (629) ZL content _raw (632) 17 eoentent transfer _encoding(649) 6 ® Dynamic Address for B/W IP list 3 (Formatted: Font: Bold . sbrys security dynamic-add SE : = [Feces Indent: Left: 1\", No bullets or No.",
"iP-start IP-end Feed Address numbering 1 Sy 8. 8 5.550, 00 custom blacklist ID-O00000003 2 AT 1.050 11,11,0.10 custom whitelist ID- *- oi Forcast Indent: Left: 1\", No bullets or oo0o000004 numbering 7 _...--{ Formatted: Font: Bold —— item create error : 0 sync flag (hex) + 0 sync started Paris) syne need replace ee | syne ent announc 0 sync ent received ai syne first ip expected : 0.0.0.0 sync last ip expected : 255.255.255.255 sync end announced ip : 0.0.0.0 _ max _time[O] i last time[0] : 2 timef it] 3 | time [i] [P=start 1P-end ibt-tree hit-count da-id © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential - Do not distribute outside of the company without the p of ip i ing Printed copies are for reference only! Template: J3.02.P05.T01 - Ver.",
"1.1 Template Owner: Ramesh R N Page 38 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173320 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 45 of 64 RLI Number 23914 | 1.67 | 1 | | | | De ( Document Title | Juniper Advanced Anti-Malware \" Service on SRX NETWORKS Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/20442015 | 345.0.) 3-5-0411 285 a fearetiee: Indent: Left: 1\", No bullets or vee numbering * RTCOM & SSL traceoptions @ 6b services ssl traceoptions enable-Flow-tracing ® RTCOM & SSLVTY o show usp jsf counters junos-ssl-init o plugin junos 1 show initiation profile all o show Usp jsf ctcom client 1 © show usp {sf rtcom com 11484206 2.8.2 Sample outputs of jsf_aamw plugin VTY * plugin jsf_aamy show policy <all/policy name> Advanced-anti-malware threats protection policy status: Policy Name? pl Inspection-profile: insp profilel Applications: HTTP Verdict-threshold: 5 Action: block Netification: Log Default-notification: Log Whitelist-notifleation: Log Blacklist-notifleation: Log Fallback Options: Action: permit Notification: * plugin jsf_aamw show profile <all/profile name> summary Advanced Anti-malware inspection profile: Profile Name: insp_profilel Version: 1422315427 * plugin jsf_aamw test bwlist www.serverl.com fwww.serverl.com in Customer whitelist. s Plugin jsf aamv test reverse dns [Tlowded | TPCS.",
"PICO iWihy) # plugin jat samw test reverse ais 4.0.0.2 Sa | Formatted: Indent: Left: 0,5\" j Pound ip 4.0.0.5 —> eet-1096 edges. Dallas]. levels.net Elowd6a)] FESS. PICO vty) # plugin jsf sanmw test teverse dne 4.0.0.€ P 2.0.06 not fe in tev ae Formatted: Indent: Left: 0.5\", Space Before: Opt, After; 10 pt, No bullets or numbering * plugin j)sf_aamw show status =-- > --- SRY AAMW Plugin Status ------------- JDPI Plugin PCP is Enabled File Identification is Enabled File Send to Argon Server is Disabled Buffer Management ia Enabl URI Cache is enabled © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the p ission of ip i ing Printed copies are for reference only! Template: J3.02.P05,T01—Ver, 1.1 Template Owner: Ramesh R N Page 39 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173321 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 46 of 64 | RLI Number 23914 | 1.67 | 1 J | | | Pe ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015 +tt+t+tt+++t+++++ Connector Server Status +t+tt+t+tt+ttt +++ Argon Server Hostname/ Port: cloud. juniper.net/443 Concurrent Connection: 4 Last Connection Time: Sat Dec 14 22:52:26 2014 PST Last Connection Status: Caonnected/Connecting/Failed * plugin jsf_aamw show dbg statistics Fe lt eee ee See stetisties ee pe ae ek - oe ee + J. Je * fate Sect 2 — Pipe =a ae.",
"cia. 5 = 5 Bitte dbp de ee Tibet 1 e } ES ea. fh sre ee # Pe be yd ee _— — <4 +. a Sth see ed + = + 4 i 4 5 wo ce ee = - St 4 i 4 ss 2 SSH ee at = r fot + Freq Risse Diethy paritee pptere eat 3 + e Sousa 5 - ra] “ — S[flowdé4] FPC6.PICO(vty) # plugin jsf aamw show —----——- AAMW plugin debuq statistics --------------—- Stream plugin inte oheck: 2108 stream plugin se. nh : 0 Stream plugin ge n close : 0 Packet plugin interest check: 2108 Packet plugin session create: o feBE plugin session close : 0 AFC & PCP registration ok ; o AFC event Failure : 6 PCP event Failure ¥ 0 AFC event counter o PCP event counter : 9 RTICOM comnection create done: 0 RICOM connection abort 9 RTCOM peer close i 0 RICOM receive times t 9 Secintel CC hit log events 0 Fast file type ID counter : 9 Full file type ID counter : 0 Reverse dns ready 0 Total feverse dns entries 0 is ae ee Processing Time Statistic s---s-s se -ssSes ssc eeSnsses File identify(ms) t 0 File category (ms) a 0 Ctxt parsing (ms) rs 0 Sending file (ms) : 0 Websocket receiving(ms) : 9 Websocket Sending (ms) F o All websocket event (ms) 0 © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the p of Junip i ing Printed copies are for reference only! Template: J3.02.P05.T01 - Ver.",
"1.1 Template Owner: Ramesh R N Page 40 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173322 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 47 of 64 ! | RLI Number 23914 | 1.62 [ 1 J | | PC [\" Document Title ‘Juniper Adi Advanced Anti-Malware WORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204.42015 == ee Fallbac ke Action Statistic ----——-—-—-—-——---—- + - Cloud error * plugin es seer sounters counters —-------------- oopovpo po 8 [Q) 2.8.3 Fault Handling We have fallback configuration, If Argon cloud cannot be connected or timeout, no PFE memory, or no packet buffer, then specified action will be taken. 2.9 Dependencies and Interactions with other Components in the System 1.",
"JDP! Interaction SRX Advanced Anti-Malware feature has dependency on JDPI module. It will register JDP! JSF event and register interested protocols and contexts. 1) Subscribe JDPI Event in Plugin Initialization = (jsf _ plugin subscribe ever ats best pid, teation Ploy 2) 3) Register Protocols and Contexts © Copyright 2012 Juniper Networks, Inc. — eee and Confidential — Do not distribute outside of the company without the p Printed copies are for reference ae Template: J3,02,P05,T01 —Ver, 1.1 Template Owner: Ramesh RN Page 41 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173323 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 48 of 64 RLI Number 23914 | 1ez [1 J [ | Pe f, Document Title Juniper Advanced Anti-Malware Tl Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/20742015 tnt3z “12 rote aL plugin td); 4) SRX jsf_ aamw Reet aa event from IDF! * M5 int32 t protemol id, iIme32_e flay it flag, ant34_t W_AVATLABLE * WSVCS DATA EV JDPL EVT NEW PARSED CONTEXT AVAILABLE Return PCG (Parsed Context Group), with context id and context content.",
"J8F_PROTO_CTXT_HTT# JEST TO CTAT HTTP CONTENT 2. RTCOM Interaction When SRX Advanced Anti-Malware configuration is pushed to PFE, jsf_aamw plugin will initialize SSL connections to Argon cloud through RTCOM. 3. SSL Proxy Interaction To support HTTPs protocol, JDP! plugin has to enable SSL proxy plugin to decrypt SSL traffic. 4. TCP Proxy Interaction SSL proxy plugin needs to enable TCP proxy for inspecting HTTPs traffic. 5. SSL Initial Interaction RTCOM plugin will call SSL-| to setup SSL/TLS connections. 6. NSD Interaction NSD ts responsible for global policy/setting compiling and pushing. 7. AAMWD Interaction AAMWD is responsible for advanced anti-malware configuration syncing and health data, telemetry counter reporting. 8. USPINFO Interaction Uspinfo module will setup temporary PCONN sessions to SRX jsf_aamw plugin on each SPU for fetching PFE status and statistics. 2.10 Legal Considerations 2.10.1 Third-Party Materials: Are there any Third-Party (non-Juniper) Materials incorporated into the SW?",
"\"Third-Party Materials” include (1) Open Source Software, technology, and materials (\"OSS\"), and (2) Third-Party commercial technology, materials, and code (including code embedded in an ASIC), [4] Yes [ ] No © Copyright 2012 Juniper Networks, Inc, — cere and Confidential — Do not distribute outside of the company without the p p i ing Printed copies are for reference ore Template: J3.02,P05.707 =—Ver 1.1 Template Owner, Ramesh RN Page 42 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173324 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 49 of 64 RLI Number 23914 | 1.62 1 [ | Pe fi Document Title. Juniper Advanced Anti-Malware Service on SRX NETWORKS Document \"Hopper Wang, : Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/20442015 If Yes, submit a Third-Party Tracking Chart created by your Codemaster listing all such Third-Party Materials to your BU IP Technology Transaction Attorney, Your “Codemaster” is the team member assigned to track all Third-Party Materials for a Functional Specification, All Third-Party Materials must be approved prior to Functional Specification approval, as follows: « All OSS must be approved in accordance with Juniper's Inbound OSS Policy; and «~All Third-Party commercial technology must be approved by Legal in accordance with Juniper's Third-Party Commercial Technology Policy.",
"2.10.2 Export Control Matters Encryption All encryption features/content must be reviewed and all US/International legal requirements met prior to HVV/SW release. Such review/approval may take upto 50 days. “HVV/SVW\" includes a system, card, IC device, software OS or application or module embedded therein, or revision of any of the foregoing. ft Encryption Questions Yes/No a | Is there cryptography incorporated in, controlled by, or linked (dynamically or otherwise) to HW/SW? Yes b | Is cryptography used for key ‘xchange, authentication, or message integrity? Yes cl 1 Does ; cryptography operate in the HW/SW to decrypt already- encrypted content?",
"Yes f d | Is cryptography used to encrypt or decrypt network management, monitoring or administrative traffic? Yes e | Is “publicly available\" or OSS-derived cryptography used? No F | Is the HW/SW designed to use encryption embedded in another product? Noa g | |s there cryptography in or used by the HW/SW that was furnished, or developed, by a Third-Party? No Does any hardware component incorporated in the HW/SW implement (or accelerate computations for) any) Yes cryptographic algorithm or security protacal? If you answered “Yes” to any of the above questions, then there is encryption and you must complete the Encryption Checklist at https://www.t-baccess.com/juniper/engineering/default.aspx. High-Speed IO Technology ls the product, subsystem, component or feature designed to, or does it operate to enable the system in which it is incorporated to support >120Gbps per channel I/O? []Yes [X]No lf Yes, then email kniven@juniper.net and cc compliance helpdesk@juniper.net with “URGENT—High Speed Interconnect Issue\" as the Subject Line. In the email, identify the project code name/feature description and a brief description of the product or feature, © Copyright 2012 Juniper Networks, Inc, — cen and Confidential — Do not distribute outside of the company without the p i: Pp i ing Printed copies are for reference Te Template: J3.02.P05,T07 —Ver.",
"1.1 Template Owner: Ramesh RN Page 43 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173325 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 50 of 64 RLI Number 23914 | 1.67 | 1 [ | De (. Document Title | Juniper Advanced Anti-Malware ey Service on SRX NETWORKS i 4 Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015 For questions about encryption or the Encryption Checklist, email new_product_export_classification@juniper.net. For all other questions, email legal-ip checklist@juniper.net. 3. Other Requirements <As necessary, outline the general implementation requirements *not* covered in the project requirements (RLIs, etc.) and call out any specific additional requirements for protocols, edge cases, etc.",
"If there is a significant amount of the latter then you should break this section down in to subsections.> [=== Everything from here down is internal (white box) documentation and should not be documented or related to customers without a specific need. (e.g. customer support workarounds for critical issues, performance targets where the performance is the feature, etc.) === © Copyright 2012 Juniper Networks, Inc. — eee and Confidential — Do not distribute outside of the company without the p i ing Printed copies are for reference oneal Template: J3.02,P05,701 —Ver, 1.1 Template Owner; Ramesh R N Page 44 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173326 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 51 of 64 RLI Number 23914 | 1.67 | 1 [ | | Pe ( Document Title ‘Juniper Advanced Anti-Malware = Service on SRX NETWORKS a a = Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015 4. System Resource Estimation Similar to UTM or IDP feature, SRX Advanced Anti-Malware feature needs more PFE arena memory for session state maintenance, file context list caching, and packet holding. For each session, there is a global cookie for maintaining session state machine. Roughly estimation, it | needs about4100«248Bytes, For each file, there is a buffer list data structure.",
"including uri, http header, file context, file size and spinlock. Each file content needs: (32584 (fille content structure) Sense butter list ere oe +. (Formatted: Font: (Default) Arial For-each file-piece, it needs Jeb ede hp ieee oe [ Formatted: Indent: Left: 0\" addi ng4—t pies size SRACwill copy the first<+-+ content for file identification and hold a copy of last one/two content packets for inline blocking,so-totally for each-session it needs about #33 +442 + 3 pssekets} + 4kR + Bysb—— Ske memory. By design, there are also some global variables, such as global lock, counters, policy tree. They just needs less than 10KE.",
"Additionally, in order to support URI caching, it needs about 2000\" (nKB) memory. If support 49K 3K URL caching, totally needs about =o42—sMb_ memory. As SRX jsf_aamw plugin will enable PCP mode of JDPI, it also needs more memory for TCP reassembling, packet holding and context event buffer. 4.1. Performance Related Resources Except for global variables and policy, all other memory are performance related. © Copyright 2012 Juniper Networks, Inc. — Proprietary and Confidential — Do not distribute outside of the company without the p ii: of Juniper Networks i ing Printed copies are for reference only! Template: J3.02.P05,T01 —Ver, 1.1 Template Owner: Ramesh RN Page 45 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173327 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 52 of 64 RLI Number 23914 |iez [1 J [ | Pe f, Document Title | Juniper Advanced Anti- Malware WORK { hm 2 —_| Service or on SRX_ — Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/20742015 5. Scaling and Performance Actually, it's very hard to measure the end-to-end performance, as there are so many modules involved, such as JDPI, SRX jsf_aamw plugin (Plugin framework, Buffer management/transport, WebSocket, | Uibmagic, MSGPACK), SSL proxy, TCP Proxy, RTCOM, and SSL-|.",
"We are planning to track SnP data in separated document. 5.1 Target Scaling The expected concurrent session scaling should reach 32K XLR flow mode SPU, 16K for combo SPU. §.2 Target Performance The scaling and performance numbers of Juniper AAMW can be found in the document SRX_Argon Scaling Performance. 5.3 Limits 1. Policy and profile limit The capacity number of advancved anti-malware pr The capacity oumber of inspertion-prafiles is 2. Blacklist or whitelist limit | * Customer whitelist The capacity number is 1024. | © Customer blacklist The capacity number is 1024, » Global whitelist The capacity nunber 125 3072. e Global blacklist The capacity number is 3072 3. Whitelist and Blacklist URL and Hestnanié limit * Hostname Length Limit The maximun length of each Hostname entry t= 126 Bytes. . UBL Leng Limit The maximum length of each URL entry is 2048 Pytea. © Copyright 2012 Juniper Networks, Inc, — eee and Confidential — Do not distribute outside of the company without the p p i ing Printed copies are for reference are Template: J3.02,P05, 707 —Ver. 1.1 Template Owner: Ramesh RN Page 46 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173328 JUNIPer Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 53 of 64 RLI Number Document Title Document Owner zoe [tet ft Juniper Advanced Anti-Malware Service on SRX ‘Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao Version Date 0§10/2523/204442015 Compatibility Issues This is the first release for security-argon feature.",
"HIGHLY © Copyright 2012 Juniper Networks, Inc, — ee and Confidential — Do not distribute outside of the company without the p Printed copies are for reference net Template Owner: Ramesh RN Template: J3,.02,P05.T01 —Ver. 1.1 Page 47 CONFIDENTIAL - SOURCE CODE ip Ing JNPR-FNJN_29002 00173329 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 54 of 64 RL! Number 23914 fa a [1 [ | Sa f, Document Title | Juniper Advanced Anti-Malware WORKS Service on SRX Document | Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 8810/2523/20442015 7. Security Considerations Communication between the SRX and Argon needs to be authenticated and encrypted. A number of properties are required: « Integrity of data: we know that the data has not been altered Endpoint authentication; both Argon and any client need to be sure that they are communicating with the correct entity « Endpoint tracking: The Argon needs to be able to log a unique client ID for requests Endpoints should be able to be revoked: Should an endpoint, be it Argon or client, be compromised there should be a simple way to revoke access, « Sections of the API should be role restricted: a sample submitting client should not be allowed to submit scores, etc.",
"* The mechanism should scale for many clients and many Argon machines. The scheme proposed is to use TLS client certificates to provide the properties we want. Argon will act as a Certificate Authority. For each client of the API, Argon will issue its cert's public key and a client certificate derived from the same certificate, lt is assumed that there is a secure distribution mechanism that bootstraps the system. The client certificate will include two pieces of information that are specific to the individual client, Common Name(CN): <SHA256(customer |D + salt)><delim><SHA256(unique ID +salt)> Organizational Unit Name(OU): <AES encrypted unique |D + list of role names> The customer ID \\s global to a customer, and is a way to refer to the entity who has purchased the entitlement to Argon. This document does not consider the case of a sell-through, or resell arrangement. The unique ID |s a stable piece of information about the client.",
"In the SRX case it will be the serial of the particular SRX the certificate is assigned to, The role name is a description of the access level the client has to the API. It will be a single string that denotes a role. There will be a number of roles pre-configured for the Argon API, something that could be extended at a later date to be more flexible. Note: encrypting the data in the certificate raises the bar for forgeries. It will also require a separate key that remains private to the Argon machines. Once the client has its certificate and the public key of the server cert, TLS proceeds normally with strict server and client certificate checking.",
"This will ensure that application level code is not exposed until the TLS layer has completed. This gives an added level of protection to the application layer. The second stage of authentication is at the application level, where the OU is extracted from the client certificate, decrypted, and the role extracted so that it may be compared against the URL being accessed, or the messages being sent. This role determines, at the application level, what operations are possible.",
"This scheme generalizes to multiple Argon machines and clients. Where there are multiple Argon machines, each must behave identically. To do this each Argon must have the same server certificate and issue client certs identically. The server cert and encryption keys are again, assumed to be shared securely by an outside mechanism. The CN includes derivatives of the customer ID and the unique ID, which may be used to route connections or apply policy based on them.",
"This gives us the ability to alter our service later without having to reissue certificates. © Copyright 2042 Juniper Networks, Inc. — ere and Confidential — Do not distribute outside of the company without the p i p i ing Printed copies are for reference one Template: J3,.02,P05.T01 —Ver 1.1 Template Owner, Ramesh RN Page 48 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173330 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 55 of 64 RL! Number 23914 | 1.67 | 1 J [ | Pe if Document Title | Juniper Advanced Anti-Malware WOR | Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao Version Date | 0810/2523/20742015 The SHA + salt, make it harder for an adversary to learn the value of the customer ID and the unique ID. To handle the case where we wish to revoke access, a client “untrusting\"” an Argon cloud is simply a matter of removing the server's public key from the trusted set. The reverse is only moderately more difficult. The client, who we wish to revoke access for, has their certificate added to a Certificate Revocation List (CRL). This CRL is loaded by the Argon application server, and the CRL is distributed in the cluster.",
"This CRL is the third piece of information that needs to be shared, and maintained to be identical within a cluster of Argon machines. The distribution mechanism, while being outside the scope of this document, is to be conducted by the cloud bootstrap procedure in the first release, Subsequent releases may use Security Director to achieve secure distribution. HIGHLY Do not distribute outside of the company without the p CONFIDENTIAL - SOURCE CODE © Copyright 2012 Juniper Networks, Inc, — eee and Confidential — p i ing Printed copies are for reference one Template: J3,.02,P05.T01 —Ver. 1.1 Template Owner: Ramesh RN Page 49 JNPR-FNJN_29002 00173331 JUNIPer Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 56 of 64 RLI Number Document Title Document Owner aoa [tet [te Juniper Advanced Anti-Malware Service on SRX ‘Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0§10/2523/20442015 Platforms Supported This feature support only SRX1500 platforms includes: SRX1500 HIGHLY © Copyright 2012 Juniper Networks, Inc, — ee and Confidential — Do not distribute outside of the company without the p Printed copies are for reference net Template Owner; Ramesh RN Template: J3,.02,P05.T01 —Ver.",
"1.1 Page 50 CONFIDENTIAL - SOURCE CODE ip Ing JNPR-FNIN_ 29002 00173332 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 57 of 64 | [RL Number 23914 jvez [4 J LJ | F eC f, Document Title | Juniper Advanced Anti-Malware TWORK Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/204.42015 9. Common Infrastructure 9.1. High Availability (HA) 9.1.1 Graceful RE Switchover (GRES), ISSU and NSSU Impact The bootstrap package only needs to be downloaded and run on primary nodes, the script will install certificates via CLI commands, all the certs and configurations will be synced to backup nodes automatically. For control plane, only the daemon on primary will connect to Argon cloud for profile syncing, file DB downloading and health/telemetry data reporting. File magic DB will be copied to backup node after downloaded on primary. When doing failover, daemon on the new primary will download all profiles, and will check the version on PFE to see if need resync with it. For data plane, RTCOM only can setup connection from primary node, so no connection to Argon cloud on backup. With this limitation, argon feature does not support AA mode. For AP mode, during failover, the original master SRX clears session state, file context list, shutdown RTCOM connection.",
"New master will set up new connections to Argon via RTCOM. New pass through HTTP/HTTPS sessions will go to new master node. The current existing session will be ignored. So ISSU is not supported and NSSU is supported. Argon Server | Ss Web portal RE side 3 PFE side “SsL_ SSL Argon Server Detection Engine Figure 7 SRX Advanced Anti-Malware HA Process Diagram © Copyright 2012 Juniper Networks, Inc. — cee and Confidential — Do not distribute outside of the company without the p i ing Printed copies are for reference ore Template: J3,02,P05,701 —Ver, 1.1 Template Owner; Ramesh RN Page 51 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173333 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 58 of 64 | RL! Number 23914 1 a [1 J | | De fi Document Title | Juniper Advanced Anti-Malware NETWORKS | Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 0510/2523/201-42015 9.1.2 NSR Impact NIA 9.2 Aggregated Ethernet/ SONET/ IRB Support N/A 9.3.",
"Services/JSF (JUNOS Services Framework) Impact NIA 9.4 Multi-Chassis Support Yes 9.5 64-Bit Support Yes 9.6 IPv6 Support No 9.7 Logical System Support No © Copyright 2012 Juniper Networks, Inc, — veer and Confidential — Do not distribute outside of the company without the p ii ip i ing Printed copies are for reference one Template: J3,.02,P05.T01 —Ver. 1.1 Template Owner, Ramesh RN Page 52 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173334 JUNIPer Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 59 of 64 RLI Number Document Title Document Owner zoe [tet ft Juniper Advanced Anti-Malware Service on SRX ‘Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0§10/2523/204442015 10. SDK Impact NIA 10.1 SDK Customer Usage NIA HIGHLY © Copyright 2012 Juniper Networks, Inc, — ener and Confidential — Do not distribute outside of the company without the p Printed copies are for reference re Template Owner; Ramesh RN Template: J3,.02,P05.T01 —Ver. 1.1 Page 53 CONFIDENTIAL - SOURCE CODE ip Ing JNPR-FNJN_29002_ 00173335 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 60 of 64 RL!",
"Number 23914 | 1.67 | 1 J | | De fi Document Title | Juniper Advanced Anti-Malware NETWORKS: Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 8510/2523/201-42015 11. JUNOS Ready Software considerations NIA © Copyright 2012 Juniper Networks, Inc, -— eee and Confidential — Do not distribute outside of the company without the p p i ing Printed copies are for reference one Template: J3,.02,P05.T01 —Ver. 1.1 Template Owner: Ramesh RN Page 54 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_29002 00173336 JUNIPer Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 61 of 64 RLI Number Document Title Document Owner 23914 a a | Juniper Advanced Anti-Malware Service on SRX Hopper Wang, Xiaosong Yang, Ping Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0§10/2523/204442015 12. Notes HIGHLY © Copyright 2012 Juniper Networks, Inc, — ee and Confidential - Do not distribute outside of the company without the p Printed copies are for reference net Template Owner: Ramesh RN Template: J3.02,P05 701 —Ver. 1.1 Page 55 CONFIDENTIAL - SOURCE CODE ip Ing JNPR-FNJN_29002 00173337 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 62 of 64 RL!",
"Number 23914 Document ‘Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao a ee J [ | Pe f, Document Title | Juniper Advanced Anti-Malware NET WO Service on SRX | Version Date | 0510/2523/201.42015 13. Glossary AAMW - Advanced Anti-Malware AFC - Application Filter Classification PCP - Parsed Context Propagation JDP! - Juniper Deep Packet Inspection JSF - Juniper Service Framework SD - Security Design PKID - Public Key Infrastructure Daemon IPFD - Security Intelligence feed handling Daemon RTCOM - Real-Time Socket like API for TCP/UDP connection © Copyright 2012 Juniper Networks, Inc, — eee and Confidential — Do not distribute outside of the company without the p Printed copies are for reference one ip Template: J3,.02,P05.T01 —Ver. 1.1 Template Owner: Ramesh RN Page 56 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNIJN_29002 00173338 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 63 of 64 RL! Number 23914 | 1.67 | 1 J [ | | Pe ( Document Title | Juniper Advanced Anti-Malware NETWORKS Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date 0510/2523/204-42015 14.",
"Design Specification exception <If you do not intend to provide design spec for this RLI/feature, please provide detailed explanation here. Also include software director approval in section 20 (Review Comments) indicating his/her approval on the Design Specification exception. If you plan provide Design Specification, mark this section as NA.> © Copyright 2012 Juniper Networks, Inc. — eon eeaN and Confidential — Do not distribute outside of the company without the p i ing Printed copies are for reference si Template: J3.02,P05,T01—Ver, 1.1 Template Owner: Ramesh RN Page 57 HIGHLY CONFIDENTIAL - SOURCE CODE JNPR-FNJN_ 29002 00173339 Case 3:17-cv-05659-WHA Document 470-15 Filed 05/13/19 Page 64 of 64 RL Number 23914 JUNIPer eT Service on SRX Document Hopper Wang, Xiaosong Yang, Ping Owner Wu, Andrew Onofreychuk, Lydia Zhao | Version Date | 9510/2523/20142015 15. Functional Specification Approver Checklist [rez [1 Document Title Juniper Advanced Anti-Malware Approver's checklist (If you agree with the statements in the cell next to your role, please sign and date in the Approved by column) Org.",
"Role | Approved by & date (or NA) PLM Approver | The FS has detailed requirements for the feature and is in-line with the customer/product requirements, The FS has detailed functional and system scale & SW Eng. SPEIS performance requirements and correctly captures the —_ thie overallsystem impact The FS has detailed functional and system scale eo Sys Test Approver | performance requirements for use to create the feature test plan Information The FS has detailed functional and system scale & Experience Approver performance requirements for use as input to create the documentation plan Archi Approver The FS has detailed functional and system scale & rchitecture : : , z ; Reviewer (optional) performance requirements and is consistent with overall system architecture Approver The FS has detailed functional and system scale & Hardware (Optional) performance requirements and is consistent with the Hiw design Regression Approver The FS has detailed requirements that provide inputs Test PP to identify the regression test plan Program Approver The FS has detailed requirements and correctly Mamt (Optional) captures the overall requirements for the feature The FS captures the overall requirements for the eres : rtonnt feature and provide inputs required to create any Customer support plan document Manufacturing Approver “The FS ‘correctly identifies any impact to Manufacturing ~ (Optional) | process © Copyright 2012 Juniper Networks, Inc, — eee and Confidential — Do not distribute outside of the company without the p Printed copies are for reference net Template: J3,.02,P05.T01—Ver 1.1 Template Owner: Ramesh RN Page 58 HIGHLY CONFIDENTIAL - SOURCE CODE ONPR-FNIN_29002__ 00173340"
] | https://www.courtlistener.com/api/rest/v3/recap-documents/145900561/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
UNPUBLISHED
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
No. 18-4570
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
SEAN DARNELL JEFFRIES,
Defendant - Appellant.
Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. Thomas D. Schroeder, Chief District Judge. (1:11-cr-00127-TDS-1)
Submitted: August 5, 2019 Decided: August 22, 2019
Before GREGORY, Chief Judge, and KING and THACKER, Circuit Judges.
Dismissed in part and affirmed in part by unpublished per curiam opinion.
Seth A. Neyhart, STARK LAW GROUP, PLLC, Chapel Hill, North Carolina, for Appellant. Matthew G.T. Martin, United States Attorney, Lisa B. Boggs, Senior Litigation Counsel, Stephen T. Inman, Deputy Criminal Chief, OFFICE OF THE UNITED STATES ATTORNEY, Greensboro, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit. PER CURIAM:
A jury found Sean Darnell Jeffries guilty of conspiracy to distribute 280 grams or
more of cocaine base and at least 500 grams, but not more than 5 kilograms, of cocaine, in
violation of 21 U.S.C. § 846 (2012), possession with intent to distribute 11.5 grams of
cocaine base, in violation of 21 U.S.C. § 841(a)(1) (2012), and possession of firearms in
furtherance of a drug trafficking crime, in violation of 18 U.S.C. § 924(c)(1) (2012). We
affirmed Jeffries’ convictions and 360-month sentence. United States v. Benn, 572 F.
App’x 167 (4th Cir. 2014) (Nos. 12-4522, 12-4803, 12-4804, 12-4851) (argued but
unpublished). Jeffries filed a timely 28 U.S.C. § 2255 (2012) motion and, as relevant on
appeal, claimed that his first attorney failed to timely communicate acceptance of the
Government’s offer to plead guilty to the initial indictment and that his second attorney
failed to object to the application of the Sentencing Guidelines Manual used at sentencing.
After an evidentiary hearing, the district court denied relief on Jeffries’ failure-to-
communicate claim, granted relief on his Guidelines Manual claim, and ordered
resentencing. At resentencing, the district court correctly calculated the Sentencing
Guidelines range using the proper Guidelines Manual, granted Jeffries’ motion for a
downward variance, and imposed a total sentence of 340 months.
Jeffries appeals the amended criminal judgment, arguing that his 340-month
sentence is substantively unreasonable. He also seeks to appeal the denial of § 2255 relief
on his claim that his first attorney was ineffective by failing to communicate acceptance of
a plea offer. We have jurisdiction over this appeal. See United States v. Hadden, 475 F.3d
652, 662-66 (4th Cir. 2007); see also Williamson v. Stirling, 912 F.3d 154, 168 (4th
2 Cir. 2018) (recognizing our “independent obligation to verify the existence of appellate
jurisdiction”). We affirm in part and dismiss in part.
Jeffries may not appeal the district court’s denial of § 2255 relief on his claim that
counsel failed to communicate a plea offer unless a circuit justice or judge issues a
certificate of appealability (COA). 28 U.S.C. § 2253(c)(1)(B) (2012). A COA will not
issue absent “a substantial showing of the denial of a constitutional right.” 28 U.S.C.
§ 2253(c)(2) (2012). When the district court denies relief on the merits, a prisoner satisfies
this standard by demonstrating that reasonable jurists would find that the district court’s
assessment of the constitutional claims is debatable or wrong. Slack v. McDaniel, 529 U.S.
473, 484 (2000); see Miller-El v. Cockrell, 537 U.S. 322, 336-38 (2003). We have
independently reviewed the record and conclude that Jeffries has not made the requisite
showing with regard to this claim. Accordingly, we deny a COA and dismiss this portion
of the appeal.
We now turn to the appeal of the amended criminal judgment. Because Jeffries does
not challenge on appeal the procedural reasonableness of his sentence, we assess “the
substantive reasonableness of the sentence imposed under an abuse-of-discretion standard,
. . . tak[ing] into account the totality of the circumstances, including the extent of any
variance from the Guidelines range.” Gall v. United States, 552 U.S. 38, 51 (2007). The
sentence imposed must be “sufficient, but not greater than necessary,” to satisfy the goals
of sentencing. See 18 U.S.C. § 3553(a) (2012). “[W]e are obliged to apply a presumption
of reasonableness to a sentence within or below a properly calculated [G]uidelines range
[and] [t]hat presumption can only be rebutted by showing that the sentence is
3 unreasonable when measured against the 18 U.S.C. § 3553(a) factors.” United States v.
Vinson, 852 F.3d 333, 357-58 (4th Cir. 2017) (citation and internal quotation marks
omitted).
We conclude that Jeffries has failed to meet his burden of demonstrating that his
below-Guidelines-range sentence is unreasonable when measured against the § 3553(a)
factors. Jeffries was a manager or supervisor in an extensive drug trafficking conspiracy,
possessed a significant amount of cocaine base, possessed firearms in furtherance of a drug
trafficking crime, and demonstrated a lack of respect for the law by providing the court
with contradictory allegations in the § 2255 proceedings. The mitigating factors identified
by counsel do not clearly outweigh the seriousness of Jeffries’ offenses. Accordingly, we
affirm the district court’s amended criminal judgment.
We deny Jeffries’ motion to file a pro se supplemental brief because he is
represented by counsel. See United States v. Washington, 743 F.3d 938, 941 n.1 (4th Cir.
2014). We dispense with oral argument because the facts and legal contentions are
adequately presented in the materials before this court and argument would not aid the
decisional process.
DISMISSED IN PART, AFFIRMED IN PART
4 | 08-22-2019 | [
"UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 18-4570 UNITED STATES OF AMERICA, Plaintiff - Appellee, v. SEAN DARNELL JEFFRIES, Defendant - Appellant. Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. Thomas D. Schroeder, Chief District Judge. (1:11-cr-00127-TDS-1) Submitted: August 5, 2019 Decided: August 22, 2019 Before GREGORY, Chief Judge, and KING and THACKER, Circuit Judges. Dismissed in part and affirmed in part by unpublished per curiam opinion. Seth A. Neyhart, STARK LAW GROUP, PLLC, Chapel Hill, North Carolina, for Appellant. Matthew G.T. Martin, United States Attorney, Lisa B. Boggs, Senior Litigation Counsel, Stephen T. Inman, Deputy Criminal Chief, OFFICE OF THE UNITED STATES ATTORNEY, Greensboro, North Carolina, for Appellee.",
"Unpublished opinions are not binding precedent in this circuit. PER CURIAM: A jury found Sean Darnell Jeffries guilty of conspiracy to distribute 280 grams or more of cocaine base and at least 500 grams, but not more than 5 kilograms, of cocaine, in violation of 21 U.S.C. § 846 (2012), possession with intent to distribute 11.5 grams of cocaine base, in violation of 21 U.S.C. § 841(a)(1) (2012), and possession of firearms in furtherance of a drug trafficking crime, in violation of 18 U.S.C. § 924(c)(1) (2012). We affirmed Jeffries’ convictions and 360-month sentence. United States v. Benn, 572 F. App’x 167 (4th Cir. 2014) (Nos. 12-4522, 12-4803, 12-4804, 12-4851) (argued but unpublished). Jeffries filed a timely 28 U.S.C. § 2255 (2012) motion and, as relevant on appeal, claimed that his first attorney failed to timely communicate acceptance of the Government’s offer to plead guilty to the initial indictment and that his second attorney failed to object to the application of the Sentencing Guidelines Manual used at sentencing.",
"After an evidentiary hearing, the district court denied relief on Jeffries’ failure-to- communicate claim, granted relief on his Guidelines Manual claim, and ordered resentencing. At resentencing, the district court correctly calculated the Sentencing Guidelines range using the proper Guidelines Manual, granted Jeffries’ motion for a downward variance, and imposed a total sentence of 340 months. Jeffries appeals the amended criminal judgment, arguing that his 340-month sentence is substantively unreasonable. He also seeks to appeal the denial of § 2255 relief on his claim that his first attorney was ineffective by failing to communicate acceptance of a plea offer. We have jurisdiction over this appeal. See United States v. Hadden, 475 F.3d 652, 662-66 (4th Cir. 2007); see also Williamson v. Stirling, 912 F.3d 154, 168 (4th 2 Cir.",
"2018) (recognizing our “independent obligation to verify the existence of appellate jurisdiction”). We affirm in part and dismiss in part. Jeffries may not appeal the district court’s denial of § 2255 relief on his claim that counsel failed to communicate a plea offer unless a circuit justice or judge issues a certificate of appealability (COA). 28 U.S.C. § 2253(c)(1)(B) (2012). A COA will not issue absent “a substantial showing of the denial of a constitutional right.” 28 U.S.C. § 2253(c)(2) (2012). When the district court denies relief on the merits, a prisoner satisfies this standard by demonstrating that reasonable jurists would find that the district court’s assessment of the constitutional claims is debatable or wrong.",
"Slack v. McDaniel, 529 U.S. 473, 484 (2000); see Miller-El v. Cockrell, 537 U.S. 322, 336-38 (2003). We have independently reviewed the record and conclude that Jeffries has not made the requisite showing with regard to this claim. Accordingly, we deny a COA and dismiss this portion of the appeal. We now turn to the appeal of the amended criminal judgment. Because Jeffries does not challenge on appeal the procedural reasonableness of his sentence, we assess “the substantive reasonableness of the sentence imposed under an abuse-of-discretion standard, . . .",
"tak[ing] into account the totality of the circumstances, including the extent of any variance from the Guidelines range.” Gall v. United States, 552 U.S. 38, 51 (2007). The sentence imposed must be “sufficient, but not greater than necessary,” to satisfy the goals of sentencing. See 18 U.S.C. § 3553(a) (2012). “[W]e are obliged to apply a presumption of reasonableness to a sentence within or below a properly calculated [G]uidelines range [and] [t]hat presumption can only be rebutted by showing that the sentence is 3 unreasonable when measured against the 18 U.S.C. § 3553(a) factors.” United States v. Vinson, 852 F.3d 333, 357-58 (4th Cir.",
"2017) (citation and internal quotation marks omitted). We conclude that Jeffries has failed to meet his burden of demonstrating that his below-Guidelines-range sentence is unreasonable when measured against the § 3553(a) factors. Jeffries was a manager or supervisor in an extensive drug trafficking conspiracy, possessed a significant amount of cocaine base, possessed firearms in furtherance of a drug trafficking crime, and demonstrated a lack of respect for the law by providing the court with contradictory allegations in the § 2255 proceedings. The mitigating factors identified by counsel do not clearly outweigh the seriousness of Jeffries’ offenses. Accordingly, we affirm the district court’s amended criminal judgment. We deny Jeffries’ motion to file a pro se supplemental brief because he is represented by counsel. See United States v. Washington, 743 F.3d 938, 941 n.1 (4th Cir. 2014). We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before this court and argument would not aid the decisional process.",
"DISMISSED IN PART, AFFIRMED IN PART 4"
] | https://www.courtlistener.com/api/rest/v3/opinions/4432231/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
No. 01-31050 Conference Calendar
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
COREY D. JONES,
Defendant-Appellant.
-------------------- Appeal from the United States District Court for the Western District of Louisiana USDC No. 00-CR-30032-1 -------------------- June 18, 2002
Before HIGGINBOTHAM, DAVIS, and EMILIO M. GARZA, Circuit Judges.
PER CURIAM:*
Corey D. Jones argues that the district court clearly erred
by increasing his offense level by four levels pursuant to
U.S.S.G. § 3B1.1(a) based on his organizational or leadership
role in a cocaine-trafficking conspiracy.
The Sentencing Guidelines provide for a four-level upward
adjustment of the defendant’s offense level if a defendant is an
organizer or leader of criminal activity involving five or more
participants. See U.S.S.G. § 3B1.1(a). The district court’s
determination of a defendant’s role in the offense is a finding
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. No. 01-31050 -2-
of fact that is reviewed for clear error. See United States v.
Posada-Rios, 158 F.3d 832, 878 (5th Cir. 1998). If the finding
is plausible in light of the record as a whole, it is not clear
error. United States v. Parker, 133 F.3d 322, 330 (5th Cir.
1998).
The PSR and sentencing transcript reveal plausible evidence
that there were at least five individuals involved in the drug-
trafficking activity and that Jones instructed participants with
regard to the time, place, and manner in which the operation was
to be carried out, including the purchasing of telephones and the
renting of a house where the cocaine trafficking occurred. See
United States v. Wilder, 15 F.3d 1292, 1299 (5th Cir. 1994). The
district court’s determination that Jones held a leadership role
in the criminal activity was not clearly erroneous. United
States v. Lage, 183 F.3d 374, 383 (5th Cir. 1999), cert. denied,
528 U.S. 1163 (2000). The sentence is AFFIRMED. | 04-25-2010 | [
"IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 01-31050 Conference Calendar UNITED STATES OF AMERICA, Plaintiff-Appellee, versus COREY D. JONES, Defendant-Appellant. -------------------- Appeal from the United States District Court for the Western District of Louisiana USDC No. 00-CR-30032-1 -------------------- June 18, 2002 Before HIGGINBOTHAM, DAVIS, and EMILIO M. GARZA, Circuit Judges. PER CURIAM:* Corey D. Jones argues that the district court clearly erred by increasing his offense level by four levels pursuant to U.S.S.G. § 3B1.1(a) based on his organizational or leadership role in a cocaine-trafficking conspiracy. The Sentencing Guidelines provide for a four-level upward adjustment of the defendant’s offense level if a defendant is an organizer or leader of criminal activity involving five or more participants. See U.S.S.G. § 3B1.1(a).",
"The district court’s determination of a defendant’s role in the offense is a finding * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. No. 01-31050 -2- of fact that is reviewed for clear error. See United States v. Posada-Rios, 158 F.3d 832, 878 (5th Cir. 1998). If the finding is plausible in light of the record as a whole, it is not clear error.",
"United States v. Parker, 133 F.3d 322, 330 (5th Cir. 1998). The PSR and sentencing transcript reveal plausible evidence that there were at least five individuals involved in the drug- trafficking activity and that Jones instructed participants with regard to the time, place, and manner in which the operation was to be carried out, including the purchasing of telephones and the renting of a house where the cocaine trafficking occurred. See United States v. Wilder, 15 F.3d 1292, 1299 (5th Cir. 1994). The district court’s determination that Jones held a leadership role in the criminal activity was not clearly erroneous.",
"United States v. Lage, 183 F.3d 374, 383 (5th Cir. 1999), cert. denied, 528 U.S. 1163 (2000). The sentence is AFFIRMED."
] | https://www.courtlistener.com/api/rest/v3/opinions/27926/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
204 U.S. 272 (1907) ARMSTRONG, RECEIVER, v. ASHLEY. No. 122. Supreme Court of United States. Argued December 7, 10, 1906. Decided January 21, 1907. APPEAL FROM THE COURT OF APPEALS OF THE DISTRICT OF COLUMBIA. *278 Mr. Blair Lee and Mr. George H. Lamar, for appellant. Mr. J.J. Darlington for appellees. *279 MR. JUSTICE PECKHAM, after making the foregoing statement, delivered the opinion of the court. The foregoing facts show that Bradshaw, if he were plaintiff, would have no cause of action against the defendants, based upon any allegation that he was permitted by them to build on what he thought was his own land, while the defendants stood by and did not interfere to prevent it, although knowing that the land was not his and claiming title themselves. At all times Bradshaw had knowledge that not only was his title denied, but that these defendants were asserting to the best of their ability in actions of ejectment against him, the right to the possession of, and title to, the property in question. Under such circumstances it would simply be at his own risk that he expended money on what might turn out to be other people's property, and which he knew was so claimed. His attitude in the matter would seem to have been that if he *280 could successfully defend the ejectment actions he could then pay the loan he had obtained from the company, while if he should prove unsuccessful in the defense it would be the company's misfortune. The company now insists that the money was obtained from it through the fraud of Bradshaw and the others, as stated. But before coming to the question of what duty the defendants owed to the company it may be well to examine for a moment the position of the company in the transaction leading up to its loan to Bradshaw. It is true, the company asserts, that it has acted in good faith throughout the whole matter. Upon examining its position one fact is apparent and uncontradicted: Before the execution of the deed of trust, and, of course, before the advance of any of the moneys by the company to Bradshaw, the company was aware, through its general attorney in New Orleans, that a suit in equity had been commenced about March 1, 1890, by the Ashleys against Bradshaw and others, wherein they alleged their claim of ownership of the property, which included the lots in question in this case, and in which the plaintiffs sought to enjoin the defendants from setting up any title thereto. It appeared that there was a common source of title to all the lots mentioned in the bill. The bill charged fraudulent and illegal acts on the part of Bradshaw, Walter and other confederates, in undertaking to seize possession of the lots there claimed to belong to the plaintiffs therein (the defendants in this suit), and specifically described the status of the parties then existing, and denied to Walter and Bradshaw any ownership or right to the possession of the lots. The facts regarding this equity suit were presented by the general attorney for the company, in New Orleans, to the local attorney of the company in this District, and the fact that the bill had been dismissed only for want of prosecution and without prejudice was specially called to the attention of the local attorney. No action seems to have been taken regarding the contents of that letter by the local attorney after its receipt other than *281 to certify to the title, nor does the general attorney seem to have inquired further about the facts. The bill was, of course, on file in the clerk's office, and it showed the contention as to the title between these defendants and Bradshaw and his associates. With this knowledge, therefore, it is impossible to say that the company was ignorant of the fact of the existence of a question as to the title of Bradshaw to the premises on which he was seeking to obtain this loan. The dismissal of the bill without prejudice, for want of prosecution, would not be evidence that the title of Bradshaw was good or that the controversy had been settled. It certainly was a warning of the existence of a question as to the title, and it was, at any rate, notice enough to start the company upon some investigation of the facts as to the actual condition of the controversy respecting it. And at this time the ejectment actions had been brought and were pending. The declarations in those actions were then on file in the clerk's office of the Supreme Court of the District, and showed the actions were originally brought to recover possession of "ink-lot" one. It is true that while that particular lot did not include the premises upon which the buildings were subsequently erected, yet the source of title to all the lots was the same. Some months before the deed of trust was executed amendments to these declarations, which did include those lots, had been made and were on file in the clerk's office among the papers in those actions. Actual knowledge of the fact of the existence of the ejectment actions in regard to "ink-lot" one is, however, denied by the company, and a like denial is made in regard to the amendments to the declarations. The local attorney had knowledge of them, or ought to have had. But so long as the company had knowledge of the equity suit and the contents of the bill therein there was enough to put the company on inquiry as to the state of the title. If under such facts the company loaned the money, it showed its willingness to take the risk of the validity and sufficiency of the title of Bradshaw. *282 The company denied knowledge of the amended declarations because of the alleged defect in the manner of keeping the books in the clerk's office, wherein the ejectment actions were entered, but no statement was made on the page of the docket devoted to those actions of the existence of amendments to the declarations. The amendments were, however, duly filed in the clerk's office, and the alleged failure of the clerk to properly index the amendments was no answer to the failure on the part of the searcher to examine the files for the purpose of seeing the papers in existence in the actions. In this matter we agree with the opinion of the Court of Appeals, in holding that the respondents here were in nowise responsible for the alleged failure of the clerk to make additions to the docket or index book. Nor is there any evidence that the persons acting for the company were in any way misled by such failure, to the company's detriment. The company also insists that it ought not to be charged with any knowledge of any fact which was known only by Walter and the local attorney. The company asserts, first, that Walter and the local attorney were not its agents; and, in any event, by reason of their fraud, knowledge by the company should not be imputed to it because of the knowledge of its agents. The company asserts that Walter was simply the president of its local board, composed of the stockholders in the company residing or to be found in Washington, and that his action was not the action of an agent under such circumstances. It also asserts the same thing in regard to the local attorney, and denies liability for their acts. We think the position can not be maintained. The president and attorney were directors of the local board and had to be directors before they could hold either office, and the local directors had to be approved by the board of the main office. It was to this local board that the application was first to be made for a loan, and it was to be approved by it and transmitted at once to the main office, signed by the president, secretary and attorney of the local board on a form furnished by the *283 association to applicants for a loan. Transactions of a local nature were put in charge of the local attorney, who represented the company at his locality, and loans were consummated by him and papers sent to him by the company for such action as was necessary for the completion of a loan. The knowledge of the attorney and of the president of the board in regard to a matter coming within the sphere of their duty, and acquired while acting in regard to the same, and sending to the company in New Orleans their report which it was their duty to make, must be imputed to the company. The fact that those agents committed a fraud can not alter the legal effect of their acts or of their knowledge with respect to the company in regard to third parties who had no connection whatever with them in relation to the perpetration of the fraud, and no knowledge that any such fraud had been perpetrated. There is no pretense of any evidence that the defendants had any connection with these alleged frauds, and no pretense that they had any knowledge of their existence, if they did exist. In such case the rule imputing knowledge to the company by reason of the knowledge of its agent remains. But, even if it be assumed that the company had no more than a knowledge of the equity suit and its dismissal without prejudice, it simply shows that the company was willing to take the risk of the title, although confessedly questionable. Upon these facts we can not see that the defendants can be held liable to the plaintiffs on account of any failure of duty on defendants' part. If the buildings were being erected by Bradshaw, there was certainly no duty on the part of defendants to notify him of their title to the property, and we can not see that there was any such duty resting upon the defendants to endeavor to find out through what sources Bradshaw obtained the money to erect the buildings, and to inform the person who was loaning the money that the defendants claimed the property as theirs. Assuming even that the company made the loan in the bona fide belief that Bradshaw had title and that the claims *284 of the defendants to the ownership of the lots were not well founded, and also that no knowledge of the agents of the company in Washington could properly be imputed to it, and we still have the fact that the company loaned its money with knowledge of the equity suit and of the allegations of the bill therein regarding the title of the defendants and the lack of any title in Bradshaw. Imputing no knowledge to the company other than it actually possessed, the same course should be taken with the defendants. In that case we have their sworn denial, unaffected with any proof to the contrary, that they had any actual knowledge of the existence of the deed of trust or of any connection of the company with Bradshaw, or of any advances made by it to Bradshaw, until February, 1895 (long after all the moneys had been advanced), and even in regard to Bradshaw himself they notified the contractor early in January, 1894, that they owned the property and they would not be responsible for any expenditures made by Bradshaw, and that if the contractor went on he would be regarded as a trespasser. There is no finding that Bradshaw was insolvent, or that the defendants had any knowledge of it if he were insolvent, and hence there is nothing to lead to the assumption that the defendants knew the buildings could only be erected by Bradshaw with borrowed money, and nothing to show any duty on the part of defendants to take active steps and make a search to endeavor to find out who was loaning him money, and on what security. And yet this is the contention on the part of the complainant. We think it must be regarded as an extraordinary contention and an unreasonable application of the doctrine of constructive notice. This is the language used by the Court of Appeals, and it properly describes the situation. Certainly constructive notice can not be applied to the owner of property in regard to the existence of a mortgage thereon, placed there by some one who did not own such property. The owner of real estate is under no obligation whatever to watch the records to see whether some one who *285 does not own his property has assumed to place a mortgage upon it or convey it by deed to some third person. The defendants knew Bradshaw was in possession and they saw buildings being erected on the lots. Were they to assume that Bradshaw was borrowing the money and that they must, therefore, go to work to find out from whom he was borrowing and notify him of the facts? They in fact knew nothing of the deed of trust, but, by imputing knowledge, the claim is made that a duty founded upon such imputed, but not upon any actual, knowledge, rested upon defendants, for the failure to discharge which the defendants ought to be held liable. No case has been called to our attention which in any degree resembles the claim made by the company herein. The man who actually erected the buildings knew all about the state of the title, and that it was contested by the defendants in the most earnest and emphatic manner in their actions of ejectment to recover the lots. The evidence fails to show that the company was, before the money was advanced, entirely innocent of any knowledge on its part which would lead to doubt as to the ownership of the property by Bradshaw. But even its actual good faith, in the popular sense, can not charge the defendants with the duty of active investigation to discover from what source Bradshaw obtained the money to build. The simple facts are that the defendants were in possession of the property when this suit was commenced, and they ask no aid from a court of equity to place them in possession. They had recovered it in their actions at law, and a court of equity will not, even in the case of a bona fide improver, grant active relief in such a case. 2 Story Eq. Juris. (12th ed.) secs. 1237-1238; Williams v. Gibbes, 20 How. 535-538; Anderson v. Reid, 14 App. D.C. 54; Canal Bank v. Hudson, 111 U.S. 66, 79; Searl v. School District, &c., 133 U.S. 553, 561, and other cases, cited by the trial judge in his opinion, and in the opinion of the Court of Appeals. The case of the company is not strengthened by its knowledge that the title of Bradshaw was questionable. *286 Morgan v. Railroad Co., 96 U.S. 716, 720, cited, among other cases, by the appellant, has no application. The facts are so wholly different in their nature as to present a case which does not touch the principle decided herein. There was conduct on the part of the appellant which was such as to amount to fraud or misrepresentation, leading appellee to believe the existence of a fact upon the existence of which appellee acted. We find no cases in opposition to the result we have arrived at. The decree of the court below is Affirmed. | 04-28-2010 | [
"204 U.S. 272 (1907) ARMSTRONG, RECEIVER, v. ASHLEY. No. 122. Supreme Court of United States. Argued December 7, 10, 1906. Decided January 21, 1907. APPEAL FROM THE COURT OF APPEALS OF THE DISTRICT OF COLUMBIA. *278 Mr. Blair Lee and Mr. George H. Lamar, for appellant. Mr. J.J. Darlington for appellees. *279 MR. JUSTICE PECKHAM, after making the foregoing statement, delivered the opinion of the court. The foregoing facts show that Bradshaw, if he were plaintiff, would have no cause of action against the defendants, based upon any allegation that he was permitted by them to build on what he thought was his own land, while the defendants stood by and did not interfere to prevent it, although knowing that the land was not his and claiming title themselves. At all times Bradshaw had knowledge that not only was his title denied, but that these defendants were asserting to the best of their ability in actions of ejectment against him, the right to the possession of, and title to, the property in question.",
"Under such circumstances it would simply be at his own risk that he expended money on what might turn out to be other people's property, and which he knew was so claimed. His attitude in the matter would seem to have been that if he *280 could successfully defend the ejectment actions he could then pay the loan he had obtained from the company, while if he should prove unsuccessful in the defense it would be the company's misfortune. The company now insists that the money was obtained from it through the fraud of Bradshaw and the others, as stated. But before coming to the question of what duty the defendants owed to the company it may be well to examine for a moment the position of the company in the transaction leading up to its loan to Bradshaw. It is true, the company asserts, that it has acted in good faith throughout the whole matter.",
"Upon examining its position one fact is apparent and uncontradicted: Before the execution of the deed of trust, and, of course, before the advance of any of the moneys by the company to Bradshaw, the company was aware, through its general attorney in New Orleans, that a suit in equity had been commenced about March 1, 1890, by the Ashleys against Bradshaw and others, wherein they alleged their claim of ownership of the property, which included the lots in question in this case, and in which the plaintiffs sought to enjoin the defendants from setting up any title thereto. It appeared that there was a common source of title to all the lots mentioned in the bill. The bill charged fraudulent and illegal acts on the part of Bradshaw, Walter and other confederates, in undertaking to seize possession of the lots there claimed to belong to the plaintiffs therein (the defendants in this suit), and specifically described the status of the parties then existing, and denied to Walter and Bradshaw any ownership or right to the possession of the lots. The facts regarding this equity suit were presented by the general attorney for the company, in New Orleans, to the local attorney of the company in this District, and the fact that the bill had been dismissed only for want of prosecution and without prejudice was specially called to the attention of the local attorney. No action seems to have been taken regarding the contents of that letter by the local attorney after its receipt other than *281 to certify to the title, nor does the general attorney seem to have inquired further about the facts.",
"The bill was, of course, on file in the clerk's office, and it showed the contention as to the title between these defendants and Bradshaw and his associates. With this knowledge, therefore, it is impossible to say that the company was ignorant of the fact of the existence of a question as to the title of Bradshaw to the premises on which he was seeking to obtain this loan. The dismissal of the bill without prejudice, for want of prosecution, would not be evidence that the title of Bradshaw was good or that the controversy had been settled. It certainly was a warning of the existence of a question as to the title, and it was, at any rate, notice enough to start the company upon some investigation of the facts as to the actual condition of the controversy respecting it.",
"And at this time the ejectment actions had been brought and were pending. The declarations in those actions were then on file in the clerk's office of the Supreme Court of the District, and showed the actions were originally brought to recover possession of \"ink-lot\" one. It is true that while that particular lot did not include the premises upon which the buildings were subsequently erected, yet the source of title to all the lots was the same. Some months before the deed of trust was executed amendments to these declarations, which did include those lots, had been made and were on file in the clerk's office among the papers in those actions. Actual knowledge of the fact of the existence of the ejectment actions in regard to \"ink-lot\" one is, however, denied by the company, and a like denial is made in regard to the amendments to the declarations. The local attorney had knowledge of them, or ought to have had. But so long as the company had knowledge of the equity suit and the contents of the bill therein there was enough to put the company on inquiry as to the state of the title. If under such facts the company loaned the money, it showed its willingness to take the risk of the validity and sufficiency of the title of Bradshaw.",
"*282 The company denied knowledge of the amended declarations because of the alleged defect in the manner of keeping the books in the clerk's office, wherein the ejectment actions were entered, but no statement was made on the page of the docket devoted to those actions of the existence of amendments to the declarations. The amendments were, however, duly filed in the clerk's office, and the alleged failure of the clerk to properly index the amendments was no answer to the failure on the part of the searcher to examine the files for the purpose of seeing the papers in existence in the actions. In this matter we agree with the opinion of the Court of Appeals, in holding that the respondents here were in nowise responsible for the alleged failure of the clerk to make additions to the docket or index book.",
"Nor is there any evidence that the persons acting for the company were in any way misled by such failure, to the company's detriment. The company also insists that it ought not to be charged with any knowledge of any fact which was known only by Walter and the local attorney. The company asserts, first, that Walter and the local attorney were not its agents; and, in any event, by reason of their fraud, knowledge by the company should not be imputed to it because of the knowledge of its agents.",
"The company asserts that Walter was simply the president of its local board, composed of the stockholders in the company residing or to be found in Washington, and that his action was not the action of an agent under such circumstances. It also asserts the same thing in regard to the local attorney, and denies liability for their acts. We think the position can not be maintained. The president and attorney were directors of the local board and had to be directors before they could hold either office, and the local directors had to be approved by the board of the main office. It was to this local board that the application was first to be made for a loan, and it was to be approved by it and transmitted at once to the main office, signed by the president, secretary and attorney of the local board on a form furnished by the *283 association to applicants for a loan. Transactions of a local nature were put in charge of the local attorney, who represented the company at his locality, and loans were consummated by him and papers sent to him by the company for such action as was necessary for the completion of a loan.",
"The knowledge of the attorney and of the president of the board in regard to a matter coming within the sphere of their duty, and acquired while acting in regard to the same, and sending to the company in New Orleans their report which it was their duty to make, must be imputed to the company. The fact that those agents committed a fraud can not alter the legal effect of their acts or of their knowledge with respect to the company in regard to third parties who had no connection whatever with them in relation to the perpetration of the fraud, and no knowledge that any such fraud had been perpetrated. There is no pretense of any evidence that the defendants had any connection with these alleged frauds, and no pretense that they had any knowledge of their existence, if they did exist. In such case the rule imputing knowledge to the company by reason of the knowledge of its agent remains.",
"But, even if it be assumed that the company had no more than a knowledge of the equity suit and its dismissal without prejudice, it simply shows that the company was willing to take the risk of the title, although confessedly questionable. Upon these facts we can not see that the defendants can be held liable to the plaintiffs on account of any failure of duty on defendants' part. If the buildings were being erected by Bradshaw, there was certainly no duty on the part of defendants to notify him of their title to the property, and we can not see that there was any such duty resting upon the defendants to endeavor to find out through what sources Bradshaw obtained the money to erect the buildings, and to inform the person who was loaning the money that the defendants claimed the property as theirs. Assuming even that the company made the loan in the bona fide belief that Bradshaw had title and that the claims *284 of the defendants to the ownership of the lots were not well founded, and also that no knowledge of the agents of the company in Washington could properly be imputed to it, and we still have the fact that the company loaned its money with knowledge of the equity suit and of the allegations of the bill therein regarding the title of the defendants and the lack of any title in Bradshaw.",
"Imputing no knowledge to the company other than it actually possessed, the same course should be taken with the defendants. In that case we have their sworn denial, unaffected with any proof to the contrary, that they had any actual knowledge of the existence of the deed of trust or of any connection of the company with Bradshaw, or of any advances made by it to Bradshaw, until February, 1895 (long after all the moneys had been advanced), and even in regard to Bradshaw himself they notified the contractor early in January, 1894, that they owned the property and they would not be responsible for any expenditures made by Bradshaw, and that if the contractor went on he would be regarded as a trespasser. There is no finding that Bradshaw was insolvent, or that the defendants had any knowledge of it if he were insolvent, and hence there is nothing to lead to the assumption that the defendants knew the buildings could only be erected by Bradshaw with borrowed money, and nothing to show any duty on the part of defendants to take active steps and make a search to endeavor to find out who was loaning him money, and on what security.",
"And yet this is the contention on the part of the complainant. We think it must be regarded as an extraordinary contention and an unreasonable application of the doctrine of constructive notice. This is the language used by the Court of Appeals, and it properly describes the situation. Certainly constructive notice can not be applied to the owner of property in regard to the existence of a mortgage thereon, placed there by some one who did not own such property. The owner of real estate is under no obligation whatever to watch the records to see whether some one who *285 does not own his property has assumed to place a mortgage upon it or convey it by deed to some third person. The defendants knew Bradshaw was in possession and they saw buildings being erected on the lots.",
"Were they to assume that Bradshaw was borrowing the money and that they must, therefore, go to work to find out from whom he was borrowing and notify him of the facts? They in fact knew nothing of the deed of trust, but, by imputing knowledge, the claim is made that a duty founded upon such imputed, but not upon any actual, knowledge, rested upon defendants, for the failure to discharge which the defendants ought to be held liable. No case has been called to our attention which in any degree resembles the claim made by the company herein. The man who actually erected the buildings knew all about the state of the title, and that it was contested by the defendants in the most earnest and emphatic manner in their actions of ejectment to recover the lots.",
"The evidence fails to show that the company was, before the money was advanced, entirely innocent of any knowledge on its part which would lead to doubt as to the ownership of the property by Bradshaw. But even its actual good faith, in the popular sense, can not charge the defendants with the duty of active investigation to discover from what source Bradshaw obtained the money to build. The simple facts are that the defendants were in possession of the property when this suit was commenced, and they ask no aid from a court of equity to place them in possession. They had recovered it in their actions at law, and a court of equity will not, even in the case of a bona fide improver, grant active relief in such a case.",
"2 Story Eq. Juris. (12th ed.) secs. 1237-1238; Williams v. Gibbes, 20 How. 535-538; Anderson v. Reid, 14 App. D.C. 54; Canal Bank v. Hudson, 111 U.S. 66, 79; Searl v. School District, &c., 133 U.S. 553, 561, and other cases, cited by the trial judge in his opinion, and in the opinion of the Court of Appeals. The case of the company is not strengthened by its knowledge that the title of Bradshaw was questionable. *286 Morgan v. Railroad Co., 96 U.S. 716, 720, cited, among other cases, by the appellant, has no application.",
"The facts are so wholly different in their nature as to present a case which does not touch the principle decided herein. There was conduct on the part of the appellant which was such as to amount to fraud or misrepresentation, leading appellee to believe the existence of a fact upon the existence of which appellee acted. We find no cases in opposition to the result we have arrived at. The decree of the court below is Affirmed."
] | https://www.courtlistener.com/api/rest/v3/opinions/96580/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
If this opinion indicates that it is “FOR PUBLICATION,” it is subject to revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
EMPLOYERS MUTUAL CASUALTY UNPUBLISHED COMPANY, May 7, 2019
Plaintiff/Defendant-Appellant,
v No. 342940 Bay Circuit Court BOBBY DUVAL, doing business as KOSECKI LC No. 16-003751-CK CONSTRUCTION, and TYLER KUK,
Defendants-Appellees,
and
SELECTIVE INSURANCE COMPANY OF SOUTH CAROLINA,
Intervening Plaintiff-Appellee.
Before: BOONSTRA, P.J., and METER and FORT HOOD, JJ.
PER CURIAM.
Plaintiff/Defendant Employers Mutual Casualty Company (EMC), appeals by right the trial court’s order granting summary disposition in favor of intervening plaintiff, Selective Insurance Company of South Carolina (Selective), and its subsequent entry of a declaratory judgment in favor of Selective.1 The judgment effectively resolved EMC’s claims for
1 EMC filed a complaint seeking a declaratory judgment against defendants and rescission of insurance policies it had issued based on alleged misrepresentations by defendant Bobby Duval. Selective intervened in the action and moved the trial court for leave to file an “intervenor’s complaint” for declaratory judgment against EMC. Because Selective’s complaint was not designated a counterclaim, EMC was the plaintiff in one action and the defendant in another; the
-1- declaratory relief against defendants Bobby Duval (Duval) d/b/a Kosecki Construction (Kosecki Construction), and Tyler Kuk (Kuk). We affirm in part, reverse in part, and remand for further proceedings.
I. PERTINENT FACTS AND PROCEDURAL HISTORY
In February 2016, Kuk fell off a roof and became paralyzed while doing roofing work for Kosecki Construction at a building owned by GLD Management. At that time, EMC had issued workers’ compensation and general liability policies to Kosecki Construction. In June 2016, EMC canceled the insurance policies on the basis that Duval had made material misrepresentations in the insurance applications.2 After Kuk filed a workers’ compensation claim, EMC filed a declaratory judgment action, seeking rescission of the policies. Selective, which insured GLD Management, filed an intervenor’s complaint for declaratory relief, seeking a declaration that at the time of Kuk’s injury, Kosecki Construction was covered by a valid workers’ compensation policy issued by EMC, because if the policy was rescinded, Selective would be liable to pay Kuk’s workers’ compensation benefits.
Following discovery, Selective moved for summary disposition, arguing that EMC had waived its right to rescind the workers’ compensation policy because it had instead elected to cancel the policy. EMC also sought summary disposition, arguing that it could still rescind the policies because it discovered some of Duval’s misrepresentations after it had determined to cancel the policies. EMC also argued that when Kuk was injured, he was employed by Thomas Kosecki, not Kosecki Construction; further, it argued that the policies it had issued had insured Duval alone, not Kosecki Construction.
The trial court granted Selective’s motion for summary disposition and denied EMC’s motion for summary disposition on the basis that Kuk was working for Kosecki Construction, Kosecki Construction was jointly operated by Duval and Kosecki, and Duval had sought insurance for the company when she applied for a policy through EMC. The trial court further determined that, while there were questions of fact regarding whether Duval made material misrepresentations, EMC was not entitled to rescind the policy because it had elected the remedy of cancellation rather than rescission. Accordingly, the trial court denied EMC’s motion, granted Selective’s motion, and declared that EMC was the insurance carrier obligated to defend and pay for Kuk’s workers’ compensation claims. The trial court denied EMC’s motion for reconsideration.
This appeal followed.
two actions were, in essence, consolidated by virtue of Selective’s intervention, resulting in EMC’s unusual designation of “Plaintiff/Defendant.” 2 Duval was Thomas Kosecki’s longtime business and romantic partner, and she performed all of Kosecki’s clerical work.
-2- II. STANDARD OF REVIEW
This Court reviews de novo a trial court’s decision on a motion for summary disposition. See Maiden v Rozwood, 461 Mich. 109, 118; 597 NW2d 817 (1999). A party is entitled to summary disposition under MCR 2.116(C)(10) if “there is no genuine issue as to any material fact, and the moving party is entitled to judgment . . . as a matter of law.” A genuine issue of material fact exists if, when viewing the record in the light most favorable to the nonmoving party, reasonable minds could differ on the issue. Gorman v American Honda Motor Co, Inc, 302 Mich. App. 113, 116; 839 NW2d 223 (2013).
We review de novo a trial court’s decision in a declaratory judgment action. Flanders Indus, Inc v Michigan, 203 Mich. App. 15, 20; 512 NW2d 328 (1993). We also review de novo issues of contract interpretation, Titan Ins Co v Hyten, 491 Mich. 547, 553; 817 NW2d 562 (2012), and whether a contract’s language is ambiguous. Klapp v United Ins Group Agency, Inc, 468 Mich. 459, 463; 663 NW2d 447 (2003).
III. ELECTION OF REMEDIES
EMC argues that the trial court erred by holding that EMC could not rescind the worker’s compensation policy. We agree that the trial court erred by concluding that EMC had necessarily waived its right to rescind when it canceled the workers’ compensation policy, and conclude that remand is required for the trial court to more specifically consider the alleged misrepresentations and to balance the equities and determine whether, if proven, rescission is the appropriate remedy.
Insurance policies are contracts, and a party may invoke common-law defenses to avoid enforcement of them. Id. at 554. A party may be entitled to “a legal or equitable remedy if a contract is obtained as a result of fraud or misrepresentation.” Id. at 555. “Fraud in the procurement of a contract may be grounds for monetary damages in an action at law or . . . grounds to retroactively avoid contractual obligations through traditional legal and equitable remedies such as cancellation, rescission, or reformation.” Id. at 557-558 (citations omitted).
An insurer may rescind an insurance policy if there was a material misrepresentation in the application for insurance. Lash v Allstate Ins Co, 210 Mich. App. 98, 103; 532 NW2d 869 (1995). It does not matter whether the misrepresentation was intentional or innocent. Id. It also does not matter whether the misrepresentation was discovered before or after the loss. Burton v Wolverine Mut Ins Co, 213 Mich. App. 514, 518; 540 NW2d 480 (1995). However, “[b]ecause a claim to rescind a transaction is equitable in nature, it is not strictly a matter of right but is granted only in the sound discretion of the court.” Bazzi v Sentinel Ins Co, 502 Mich. 390, 409; 919 NW2d 20 (2018), quoting Amster v Stratton, 250 Mich. 679, 686; 244 N.W. 201 (1932) (quotation marks omitted). “[C]ourts are not required to rescind in all cases.” Bazzi, 502 Mich. at 410. When two equally innocent parties are affected by fraud in an application, the trial court must balance the equities of the situation to determine which party should assume the loss. Id. at 410-411.
Selective relies, as did the trial court, upon Burton, in which the defendant insurer chose to cancel an insurance policy after discovering a material misrepresentation, but later sought
-3- rescission. Id. at 515-517. After the insurer canceled the policy, but before the effective date of the cancellation, an accident occurred, and the insurer then sought to rescind the policy. This Court concluded that the defendant waived its right of rescission because it had chosen the remedy of cancellation. Id. at 517-518. The Burton Court essentially held defendant to its decision; having elected, upon discovering a misrepresentation, to cancel the policy at a future date (and therefore to provide insurance until that date, while retaining premiums paid), it could not retroactively make a different choice merely because a claim was made under the policy. Id. at 518-519. The Burton Court noted that the plaintiffs reasonably believed that they would be covered by insurance until the cancellation date; in fact, the Court noted that even if plaintiffs had obtained a new policy in anticipation of that cancellation, “it is unlikely that either they or their insurance agent would have requested that the coverage become effective” before the cancellation date. Id. at 519.3
In this case, EMC elected to cancel the workers’ compensation policy, rather than rescind it, when it learned of alleged misrepresentations by Duval in applying for the policy. The precise contours of the alleged misrepresentations on which EMC relied in making this election remain, however, unclear. Were it clear that the same alleged misrepresentations formed the basis for EMC’s election to cancel and its later effort to rescind, we would likely follow the Burton Court’s rationale. However, EMC argued before the trial court, and argues on appeal, that it only later became aware of additional grounds for rescission; specifically, EMC contends that it only became aware after discovery that Kosecki Construction’s primary business was roofing, and that it sought to rescind the policy based on the additional misrepresentation in the policy application (which misrepresentation was unknown at the time of the cancellation decision) that roofing jobs made up less than 5% of the business. The trial court nonetheless held that EMC had waived its opportunity to elect to rescind the policy by virtue of its earlier decision to cancel.
But Burton does not state that an insurer may not respond to newly discovered information that it believes supports rescission, merely because it responded to the earlier discovery of a distinct material misrepresentation by electing to cancel (rather than rescind) the policy. Our Supreme Court has stated that an insurer cannot waive its right to seek traditional common-law remedies based on misrepresentations in an insurance application, including rescission, based on facts it does not know, even if it could have “easily ascertained” the misrepresentation. See Titan Ins Co v Hyten, 491 Mich. 547, 571; 817 NW2d 562 (2012), quoting Keys v Pace, 358 Mich. 74, 84; 99 NW2d 547 (1959).
We conclude that Burton does not necessarily bar EMC from seeking rescission based on the newly-discovered information about the amount of roofing work done by Kosecki Construction, although EMC did waive its right to seek rescission based on the alleged misrepresentations on which the cancellation decision rested. Because the contours of the alleged misrepresentations on which the cancellation and rescission decisions were based have not yet been fleshed out, and because rescission is not automatic, Bazzi, 502 Mich. at 410, we
3 Such a concern is not present in the instant case, where Kuk’s injury occurred before EMC elected to cancel the policy.
-4- conclude that remand is appropriate for the trial court to more specifically consider the alleged misrepresentations and to balance the equities and determine whether, if proven, rescission is the appropriate remedy.
Accordingly, and subject to further proceedings on remand, we hold that the trial court erred by concluding that EMC had necessarily waived its right to rescind the policy, and by granting Selective’s motion for summary disposition on that basis. See Maiden, 461 Mich. at 118.
IV. IDENTITY OF KUK’S EMPLOYER
EMC also argues that the trial court should have granted its motion for summary disposition on the basis that EMC contracted solely with Duval, not Kosecki Construction, or because Thomas Kosecki individually employed Kuk at the time of the injury. We disagree.
An insurance policy is a contract subject to the same principles of contractual interpretation as any other contract. Royal Prop Group, LLC v Prime Ins Syndicate, Inc, 267 Mich. App. 708, 714; 706 NW2d 426 (2005). “The policy application, declarations page of policy, and the policy itself construed together constitute the contract.” Id. at 715.
Generally, “the meaning of an ambiguous contract is a question of fact that must be decided by the jury.” Klapp, 468 Mich. at 469. “An insurance contract is ambiguous when its provisions are capable of conflicting interpretations.” Id. at 467 (quotation marks and citation omitted).
Here, the trial court noted that there were conflicting statements in the workers’ compensation insurance application, declarations page, and policy concerning the identity of the insured. On the workers’ compensation insurance application, the applicant’s name was listed as “Kosecki Construction.” A questionnaire that was part of the application also listed the applicant as “Kosecki Construction.” The policy itself listed “Kosecki Construction, Bobby Duval DBA” as the named insured, but referred to “Kosecki Construction” on the policy declarations, disclosures, and information pages. A commercial liability insurance obtained at the same time as the workers’ compensation policy contained similar ambiguities.
We conclude that the workers’ compensation policy was capable of conflicting interpretations. In this case, the pertinent documents inconsistently identify the named insured. The possible conflicting interpretations of the contract are that (1) the insured was Kosecki Construction (a separate entity from Duval) or (2) the insured was the individual Bobby Duval (doing business as Kosecki Construction). Because this ambiguity existed, the trial court could consider extrinsic evidence to determine the intent of the parties. See Klapp, 468 Mich. at 469; Shay v Aldrich, 487 Mich. 648, 667; 790 NW2d 629 (2010).
We conclude that, when considering the extrinsic evidence, the trial court correctly determined that there was no genuine issue of material fact that the insured was Kosecki Construction. Duval testified that she contacted EMC intending to obtain insurance for Kosecki Construction. Duval only employed people through Kosecki Construction and did not need workers’ compensation or general liability insurance for any other reason. Kosecki and Duval
-5- operated Kosecki Construction together, with Kosecki working in the field and Duval working in the office, and they jointly shared the money made by the business. When EMC filed its Notice of Termination of Liability (otherwise known as “Form 401”) with the Workers’ Compensation Agency, it listed the business as Kosecki Construction and the owner as Bobby Duval. Finally, when EMC sent a letter cancelling the workers’ compensation policy, it addressed the letter to “Kosecki Construction.” Other than the reference to “Bobby Duval DBA” on parts of the application and policies, no evidence supports EMC’s contention that the policy did not cover Kosecki Construction. Reasonable minds could not differ on this issue, and the trial court correctly denied EMC’s motion for summary disposition on this basis. See Maiden, 461 Mich. at 118.
Additionally, there were no genuine issues of material fact regarding whether Kosecki Construction employed Kuk. EMC argues that the record shows that Kuk worked for Thomas Kosecki, who was hired as an individual contractor by GLD; in essence, EMC argues that Kosecki Construction was not involved in Kuk’s employment that led to his injury. We disagree. EMC’s May 25, 2016 claims notes noted that Kuk “worked for Kosecki Construction, not DBA Bobby Duval.” Additionally, Kuk was paid from the Kosecki Construction bank account, and Kuk’s Facebook page indicated that he was a roofer for Kosecki Construction. Further, Kosecki Construction undisputedly worked for GLD. The proposals for work that Kosecki Construction provided to GLD Management were on letterhead reading “KOSECKI CONSTRUCTION.” Duval and Kosecki both testified that they ran Kosecki Construction together, and that the business was hired by GLD and employed Kuk. While GLD’s regional maintenance supervisor testified that he made the checks for the work payable to “Tom Kosecki,” he also testified that Kosecki had not asked him to do so; Kosecki Construction had a separate checking account from Thomas Kosecki or Duval. We conclude that reasonable minds could not differ regarding whether Kuk worked for Kosecki Construction, or whether Kosecki Construction (rather than Kosecki individually) worked for GLD Management.
In sum, the trial court did not err when it held that EMC insured Kosecki Construction and that Kosecki Construction employed Kuk, or by denying EMC’s motion for summary disposition on this basis. See Maiden, 461 Mich. at 118.
V. COMMERCIAL GENERAL LIABILITY POLICY
EMC also argues that the trial court erred by failing to address the commercial general liability policy in its judgment. We disagree.
A trial court may grant a declaratory judgment to establish the rights and legal relations of an interested party if there is an actual controversy. MCR 2.605(A)(1). However, the trial court may not grant a declaratory judgment unless an actual controversy exists. Flanders Indus, 203 Mich. App. at 20. To show an actual controversy, a plaintiff must plead and prove facts that show that adverse interests exist. Citizens for Common Sense in Gov’t v Attorney General, 243 Mich. App. 43, 55; 620 NW2d 546 (2000). An actual controversy does not exist when the injury is “merely hypothetical.” Id.
In this case, EMC argues on appeal that if the commercial general liability policy is not rescinded, Kuk may bring a claim against EMC under that policy. However, EMC pleaded to
-6- the contrary by asserting in its complaint that, if the workers’ compensation policy was rescinded, “EMC has no duty to provide insurance benefits of any sort to any party in the action pending in the Michigan Workers Compensation Agency” (emphasis added) and that the commercial general liability policy did not cover claims of bodily injury. No one has made a claim under the general liability policy or argued before the trial court that the commercial general liability policy provided coverage for Kuk’s injury. We conclude that the trial court did not err by failing to issue a declaratory judgment regarding the commercial general liability policy, because any dispute regarding that policy was merely hypothetical. Citizens for Common Sense in Gov’t, 243 Mich. App. at 55.
VI. REQUEST FOR DEFAULT JUDGMENT
EMC also argues that the trial court erred by not granting its request for a default judgment against Duval. We conclude that the trial court erred by failing to address EMC’s request, but that the error was harmless.
“[F]ailure to exercise discretion when called on to do so constitutes an abdication and hence an abuse of discretion.” Rieth v Keeler, 230 Mich. App. 346, 348; 583 NW2d 552 (1998) (quotation marks and citation omitted). Here, EMC entered a default against Duval on February 14, 2017, after she failed to answer its complaint for declaratory judgment. In its motion for summary disposition, EMC requested that the trial court enter a default judgment against Duval. The trial court did not address EMC’s request for a default judgment, and accordingly, it erred.
However, an error is harmless if it is not decisive to the outcome of the case. See Ypsilanti Fire Marshal v Kircher (On Reconsideration), 273 Mich. App. 496, 529; 730 NW2d 481 (2007). And a matter is moot if this Court’s ruling “cannot for any reason have a practical legal effect on the existing controversy.” Gen Motors Corp v Dep’t of Treasury, 290 Mich. App. 355, 386; 803 NW2d 698 (2010).
EMC argues that the trial court should have entered a default judgment against Duval permitting it to rescind the workers’ compensation policy and ordering restitution of the attorney fees incurred by EMC in defending against Kuk’s workers’ compensation claim. However, the trial court on remand will determine, in accordance with this opinion, the merits of EMC’s misrepresentation claims, and the appropriate remedy, if any. The trial court also has properly determined that Kosecki Construction, not Duval individually, was EMC’s insured. A default judgment against Duval would not have altered this conclusion, and would have had no practical legal effect.
Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
/s/ Mark T. Boonstra /s/ Patrick M. Meter /s/ Karen M. Fort Hood
-7- | 05-08-2019 | [
"If this opinion indicates that it is “FOR PUBLICATION,” it is subject to revision until final publication in the Michigan Appeals Reports. STATE OF MICHIGAN COURT OF APPEALS EMPLOYERS MUTUAL CASUALTY UNPUBLISHED COMPANY, May 7, 2019 Plaintiff/Defendant-Appellant, v No. 342940 Bay Circuit Court BOBBY DUVAL, doing business as KOSECKI LC No. 16-003751-CK CONSTRUCTION, and TYLER KUK, Defendants-Appellees, and SELECTIVE INSURANCE COMPANY OF SOUTH CAROLINA, Intervening Plaintiff-Appellee. Before: BOONSTRA, P.J., and METER and FORT HOOD, JJ. PER CURIAM.",
"Plaintiff/Defendant Employers Mutual Casualty Company (EMC), appeals by right the trial court’s order granting summary disposition in favor of intervening plaintiff, Selective Insurance Company of South Carolina (Selective), and its subsequent entry of a declaratory judgment in favor of Selective.1 The judgment effectively resolved EMC’s claims for 1 EMC filed a complaint seeking a declaratory judgment against defendants and rescission of insurance policies it had issued based on alleged misrepresentations by defendant Bobby Duval. Selective intervened in the action and moved the trial court for leave to file an “intervenor’s complaint” for declaratory judgment against EMC. Because Selective’s complaint was not designated a counterclaim, EMC was the plaintiff in one action and the defendant in another; the -1- declaratory relief against defendants Bobby Duval (Duval) d/b/a Kosecki Construction (Kosecki Construction), and Tyler Kuk (Kuk). We affirm in part, reverse in part, and remand for further proceedings. I. PERTINENT FACTS AND PROCEDURAL HISTORY In February 2016, Kuk fell off a roof and became paralyzed while doing roofing work for Kosecki Construction at a building owned by GLD Management.",
"At that time, EMC had issued workers’ compensation and general liability policies to Kosecki Construction. In June 2016, EMC canceled the insurance policies on the basis that Duval had made material misrepresentations in the insurance applications.2 After Kuk filed a workers’ compensation claim, EMC filed a declaratory judgment action, seeking rescission of the policies. Selective, which insured GLD Management, filed an intervenor’s complaint for declaratory relief, seeking a declaration that at the time of Kuk’s injury, Kosecki Construction was covered by a valid workers’ compensation policy issued by EMC, because if the policy was rescinded, Selective would be liable to pay Kuk’s workers’ compensation benefits. Following discovery, Selective moved for summary disposition, arguing that EMC had waived its right to rescind the workers’ compensation policy because it had instead elected to cancel the policy. EMC also sought summary disposition, arguing that it could still rescind the policies because it discovered some of Duval’s misrepresentations after it had determined to cancel the policies.",
"EMC also argued that when Kuk was injured, he was employed by Thomas Kosecki, not Kosecki Construction; further, it argued that the policies it had issued had insured Duval alone, not Kosecki Construction. The trial court granted Selective’s motion for summary disposition and denied EMC’s motion for summary disposition on the basis that Kuk was working for Kosecki Construction, Kosecki Construction was jointly operated by Duval and Kosecki, and Duval had sought insurance for the company when she applied for a policy through EMC. The trial court further determined that, while there were questions of fact regarding whether Duval made material misrepresentations, EMC was not entitled to rescind the policy because it had elected the remedy of cancellation rather than rescission. Accordingly, the trial court denied EMC’s motion, granted Selective’s motion, and declared that EMC was the insurance carrier obligated to defend and pay for Kuk’s workers’ compensation claims. The trial court denied EMC’s motion for reconsideration. This appeal followed.",
"two actions were, in essence, consolidated by virtue of Selective’s intervention, resulting in EMC’s unusual designation of “Plaintiff/Defendant.” 2 Duval was Thomas Kosecki’s longtime business and romantic partner, and she performed all of Kosecki’s clerical work. -2- II. STANDARD OF REVIEW This Court reviews de novo a trial court’s decision on a motion for summary disposition. See Maiden v Rozwood, 461 Mich. 109, 118; 597 NW2d 817 (1999). A party is entitled to summary disposition under MCR 2.116(C)(10) if “there is no genuine issue as to any material fact, and the moving party is entitled to judgment .",
". . as a matter of law.” A genuine issue of material fact exists if, when viewing the record in the light most favorable to the nonmoving party, reasonable minds could differ on the issue. Gorman v American Honda Motor Co, Inc, 302 Mich. App. 113, 116; 839 NW2d 223 (2013). We review de novo a trial court’s decision in a declaratory judgment action. Flanders Indus, Inc v Michigan, 203 Mich. App. 15, 20; 512 NW2d 328 (1993). We also review de novo issues of contract interpretation, Titan Ins Co v Hyten, 491 Mich. 547, 553; 817 NW2d 562 (2012), and whether a contract’s language is ambiguous. Klapp v United Ins Group Agency, Inc, 468 Mich. 459, 463; 663 NW2d 447 (2003). III.",
"ELECTION OF REMEDIES EMC argues that the trial court erred by holding that EMC could not rescind the worker’s compensation policy. We agree that the trial court erred by concluding that EMC had necessarily waived its right to rescind when it canceled the workers’ compensation policy, and conclude that remand is required for the trial court to more specifically consider the alleged misrepresentations and to balance the equities and determine whether, if proven, rescission is the appropriate remedy. Insurance policies are contracts, and a party may invoke common-law defenses to avoid enforcement of them. Id. at 554. A party may be entitled to “a legal or equitable remedy if a contract is obtained as a result of fraud or misrepresentation.” Id. at 555.",
"“Fraud in the procurement of a contract may be grounds for monetary damages in an action at law or . . . grounds to retroactively avoid contractual obligations through traditional legal and equitable remedies such as cancellation, rescission, or reformation.” Id. at 557-558 (citations omitted). An insurer may rescind an insurance policy if there was a material misrepresentation in the application for insurance. Lash v Allstate Ins Co, 210 Mich. App. 98, 103; 532 NW2d 869 (1995). It does not matter whether the misrepresentation was intentional or innocent. Id. It also does not matter whether the misrepresentation was discovered before or after the loss. Burton v Wolverine Mut Ins Co, 213 Mich. App. 514, 518; 540 NW2d 480 (1995). However, “[b]ecause a claim to rescind a transaction is equitable in nature, it is not strictly a matter of right but is granted only in the sound discretion of the court.” Bazzi v Sentinel Ins Co, 502 Mich. 390, 409; 919 NW2d 20 (2018), quoting Amster v Stratton, 250 Mich. 679, 686; 244 N.W.",
"201 (1932) (quotation marks omitted). “[C]ourts are not required to rescind in all cases.” Bazzi, 502 Mich. at 410. When two equally innocent parties are affected by fraud in an application, the trial court must balance the equities of the situation to determine which party should assume the loss. Id. at 410-411. Selective relies, as did the trial court, upon Burton, in which the defendant insurer chose to cancel an insurance policy after discovering a material misrepresentation, but later sought -3- rescission. Id. at 515-517. After the insurer canceled the policy, but before the effective date of the cancellation, an accident occurred, and the insurer then sought to rescind the policy. This Court concluded that the defendant waived its right of rescission because it had chosen the remedy of cancellation.",
"Id. at 517-518. The Burton Court essentially held defendant to its decision; having elected, upon discovering a misrepresentation, to cancel the policy at a future date (and therefore to provide insurance until that date, while retaining premiums paid), it could not retroactively make a different choice merely because a claim was made under the policy. Id. at 518-519. The Burton Court noted that the plaintiffs reasonably believed that they would be covered by insurance until the cancellation date; in fact, the Court noted that even if plaintiffs had obtained a new policy in anticipation of that cancellation, “it is unlikely that either they or their insurance agent would have requested that the coverage become effective” before the cancellation date. Id.",
"at 519.3 In this case, EMC elected to cancel the workers’ compensation policy, rather than rescind it, when it learned of alleged misrepresentations by Duval in applying for the policy. The precise contours of the alleged misrepresentations on which EMC relied in making this election remain, however, unclear. Were it clear that the same alleged misrepresentations formed the basis for EMC’s election to cancel and its later effort to rescind, we would likely follow the Burton Court’s rationale. However, EMC argued before the trial court, and argues on appeal, that it only later became aware of additional grounds for rescission; specifically, EMC contends that it only became aware after discovery that Kosecki Construction’s primary business was roofing, and that it sought to rescind the policy based on the additional misrepresentation in the policy application (which misrepresentation was unknown at the time of the cancellation decision) that roofing jobs made up less than 5% of the business.",
"The trial court nonetheless held that EMC had waived its opportunity to elect to rescind the policy by virtue of its earlier decision to cancel. But Burton does not state that an insurer may not respond to newly discovered information that it believes supports rescission, merely because it responded to the earlier discovery of a distinct material misrepresentation by electing to cancel (rather than rescind) the policy. Our Supreme Court has stated that an insurer cannot waive its right to seek traditional common-law remedies based on misrepresentations in an insurance application, including rescission, based on facts it does not know, even if it could have “easily ascertained” the misrepresentation.",
"See Titan Ins Co v Hyten, 491 Mich. 547, 571; 817 NW2d 562 (2012), quoting Keys v Pace, 358 Mich. 74, 84; 99 NW2d 547 (1959). We conclude that Burton does not necessarily bar EMC from seeking rescission based on the newly-discovered information about the amount of roofing work done by Kosecki Construction, although EMC did waive its right to seek rescission based on the alleged misrepresentations on which the cancellation decision rested. Because the contours of the alleged misrepresentations on which the cancellation and rescission decisions were based have not yet been fleshed out, and because rescission is not automatic, Bazzi, 502 Mich. at 410, we 3 Such a concern is not present in the instant case, where Kuk’s injury occurred before EMC elected to cancel the policy. -4- conclude that remand is appropriate for the trial court to more specifically consider the alleged misrepresentations and to balance the equities and determine whether, if proven, rescission is the appropriate remedy. Accordingly, and subject to further proceedings on remand, we hold that the trial court erred by concluding that EMC had necessarily waived its right to rescind the policy, and by granting Selective’s motion for summary disposition on that basis.",
"See Maiden, 461 Mich. at 118. IV. IDENTITY OF KUK’S EMPLOYER EMC also argues that the trial court should have granted its motion for summary disposition on the basis that EMC contracted solely with Duval, not Kosecki Construction, or because Thomas Kosecki individually employed Kuk at the time of the injury. We disagree. An insurance policy is a contract subject to the same principles of contractual interpretation as any other contract. Royal Prop Group, LLC v Prime Ins Syndicate, Inc, 267 Mich. App. 708, 714; 706 NW2d 426 (2005). “The policy application, declarations page of policy, and the policy itself construed together constitute the contract.” Id. at 715. Generally, “the meaning of an ambiguous contract is a question of fact that must be decided by the jury.” Klapp, 468 Mich. at 469.",
"“An insurance contract is ambiguous when its provisions are capable of conflicting interpretations.” Id. at 467 (quotation marks and citation omitted). Here, the trial court noted that there were conflicting statements in the workers’ compensation insurance application, declarations page, and policy concerning the identity of the insured. On the workers’ compensation insurance application, the applicant’s name was listed as “Kosecki Construction.” A questionnaire that was part of the application also listed the applicant as “Kosecki Construction.” The policy itself listed “Kosecki Construction, Bobby Duval DBA” as the named insured, but referred to “Kosecki Construction” on the policy declarations, disclosures, and information pages. A commercial liability insurance obtained at the same time as the workers’ compensation policy contained similar ambiguities. We conclude that the workers’ compensation policy was capable of conflicting interpretations. In this case, the pertinent documents inconsistently identify the named insured. The possible conflicting interpretations of the contract are that (1) the insured was Kosecki Construction (a separate entity from Duval) or (2) the insured was the individual Bobby Duval (doing business as Kosecki Construction). Because this ambiguity existed, the trial court could consider extrinsic evidence to determine the intent of the parties. See Klapp, 468 Mich. at 469; Shay v Aldrich, 487 Mich. 648, 667; 790 NW2d 629 (2010). We conclude that, when considering the extrinsic evidence, the trial court correctly determined that there was no genuine issue of material fact that the insured was Kosecki Construction. Duval testified that she contacted EMC intending to obtain insurance for Kosecki Construction. Duval only employed people through Kosecki Construction and did not need workers’ compensation or general liability insurance for any other reason.",
"Kosecki and Duval -5- operated Kosecki Construction together, with Kosecki working in the field and Duval working in the office, and they jointly shared the money made by the business. When EMC filed its Notice of Termination of Liability (otherwise known as “Form 401”) with the Workers’ Compensation Agency, it listed the business as Kosecki Construction and the owner as Bobby Duval. Finally, when EMC sent a letter cancelling the workers’ compensation policy, it addressed the letter to “Kosecki Construction.” Other than the reference to “Bobby Duval DBA” on parts of the application and policies, no evidence supports EMC’s contention that the policy did not cover Kosecki Construction.",
"Reasonable minds could not differ on this issue, and the trial court correctly denied EMC’s motion for summary disposition on this basis. See Maiden, 461 Mich. at 118. Additionally, there were no genuine issues of material fact regarding whether Kosecki Construction employed Kuk. EMC argues that the record shows that Kuk worked for Thomas Kosecki, who was hired as an individual contractor by GLD; in essence, EMC argues that Kosecki Construction was not involved in Kuk’s employment that led to his injury. We disagree. EMC’s May 25, 2016 claims notes noted that Kuk “worked for Kosecki Construction, not DBA Bobby Duval.” Additionally, Kuk was paid from the Kosecki Construction bank account, and Kuk’s Facebook page indicated that he was a roofer for Kosecki Construction. Further, Kosecki Construction undisputedly worked for GLD. The proposals for work that Kosecki Construction provided to GLD Management were on letterhead reading “KOSECKI CONSTRUCTION.” Duval and Kosecki both testified that they ran Kosecki Construction together, and that the business was hired by GLD and employed Kuk.",
"While GLD’s regional maintenance supervisor testified that he made the checks for the work payable to “Tom Kosecki,” he also testified that Kosecki had not asked him to do so; Kosecki Construction had a separate checking account from Thomas Kosecki or Duval. We conclude that reasonable minds could not differ regarding whether Kuk worked for Kosecki Construction, or whether Kosecki Construction (rather than Kosecki individually) worked for GLD Management. In sum, the trial court did not err when it held that EMC insured Kosecki Construction and that Kosecki Construction employed Kuk, or by denying EMC’s motion for summary disposition on this basis. See Maiden, 461 Mich. at 118. V. COMMERCIAL GENERAL LIABILITY POLICY EMC also argues that the trial court erred by failing to address the commercial general liability policy in its judgment. We disagree. A trial court may grant a declaratory judgment to establish the rights and legal relations of an interested party if there is an actual controversy. MCR 2.605(A)(1). However, the trial court may not grant a declaratory judgment unless an actual controversy exists. Flanders Indus, 203 Mich. App. at 20. To show an actual controversy, a plaintiff must plead and prove facts that show that adverse interests exist. Citizens for Common Sense in Gov’t v Attorney General, 243 Mich. App. 43, 55; 620 NW2d 546 (2000).",
"An actual controversy does not exist when the injury is “merely hypothetical.” Id. In this case, EMC argues on appeal that if the commercial general liability policy is not rescinded, Kuk may bring a claim against EMC under that policy. However, EMC pleaded to -6- the contrary by asserting in its complaint that, if the workers’ compensation policy was rescinded, “EMC has no duty to provide insurance benefits of any sort to any party in the action pending in the Michigan Workers Compensation Agency” (emphasis added) and that the commercial general liability policy did not cover claims of bodily injury. No one has made a claim under the general liability policy or argued before the trial court that the commercial general liability policy provided coverage for Kuk’s injury.",
"We conclude that the trial court did not err by failing to issue a declaratory judgment regarding the commercial general liability policy, because any dispute regarding that policy was merely hypothetical. Citizens for Common Sense in Gov’t, 243 Mich. App. at 55. VI. REQUEST FOR DEFAULT JUDGMENT EMC also argues that the trial court erred by not granting its request for a default judgment against Duval. We conclude that the trial court erred by failing to address EMC’s request, but that the error was harmless. “[F]ailure to exercise discretion when called on to do so constitutes an abdication and hence an abuse of discretion.” Rieth v Keeler, 230 Mich. App. 346, 348; 583 NW2d 552 (1998) (quotation marks and citation omitted).",
"Here, EMC entered a default against Duval on February 14, 2017, after she failed to answer its complaint for declaratory judgment. In its motion for summary disposition, EMC requested that the trial court enter a default judgment against Duval. The trial court did not address EMC’s request for a default judgment, and accordingly, it erred. However, an error is harmless if it is not decisive to the outcome of the case. See Ypsilanti Fire Marshal v Kircher (On Reconsideration), 273 Mich. App. 496, 529; 730 NW2d 481 (2007).",
"And a matter is moot if this Court’s ruling “cannot for any reason have a practical legal effect on the existing controversy.” Gen Motors Corp v Dep’t of Treasury, 290 Mich. App. 355, 386; 803 NW2d 698 (2010). EMC argues that the trial court should have entered a default judgment against Duval permitting it to rescind the workers’ compensation policy and ordering restitution of the attorney fees incurred by EMC in defending against Kuk’s workers’ compensation claim. However, the trial court on remand will determine, in accordance with this opinion, the merits of EMC’s misrepresentation claims, and the appropriate remedy, if any.",
"The trial court also has properly determined that Kosecki Construction, not Duval individually, was EMC’s insured. A default judgment against Duval would not have altered this conclusion, and would have had no practical legal effect. Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction. /s/ Mark T. Boonstra /s/ Patrick M. Meter /s/ Karen M. Fort Hood -7-"
] | https://www.courtlistener.com/api/rest/v3/opinions/4394754/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
*665OPINION. Van Fossan: Under the decisions of the Supreme Court in United States v. Flannery, 268 U. S. 98, and McCaughn v. Ludington, 268 U. S. 106, the loss in this case is to be computed by deducting the sale price from the aggregate cost. So computed, the loss is $375. Judgment will be entered on 15 days' notice, under Rule 50. Considered by Maeqtjette and Phillips. | 07-23-2022 | [
"*665OPINION. Van Fossan: Under the decisions of the Supreme Court in United States v. Flannery, 268 U. S. 98, and McCaughn v. Ludington, 268 U. S. 106, the loss in this case is to be computed by deducting the sale price from the aggregate cost. So computed, the loss is $375. Judgment will be entered on 15 days' notice, under Rule 50. Considered by Maeqtjette and Phillips."
] | https://www.courtlistener.com/api/rest/v3/opinions/6806080/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
140 F. Supp. 2d 166 (2001) Joseph LASTIH, on behalf of himself and all others similarly situated, Plaintiff, v. ELK CORP. OF ALABAMA, Defendant. Civ.No. 3:00cv1444(PCD). United States District Court, D. Connecticut. May 1, 2001. *167 Richard M. Quinlan, Walter A. Twachtman, Jr., Boatman, Boscarino, Grasso & Twachtman, Glastonbury, CT, John C. Martland, Martland & Brooks, Saugus, MA, for plaintiffs. *168 Richard L. Josephson, David George, Keith Jaasma, Baker & Botts, Houston, TX, Charles F. Corcoran, III, Howard K. Levine, Carmody & Torrance, New Haven, CT, for defendant.
RULING ON PLAINTIFF'S MOTION TO REMAND DORSEY, Senior District Judge. Plaintiff moves to remand the case to the Connecticut Superior Court, arguing that there is no subject matter jurisdiction. The motion is granted.
I. BACKGROUND Plaintiff alleges that he suffered damages as a result of purchasing and installing defective roof shingles manufactured by defendant. He seeks a declaration, on behalf of himself and others in his class, that defendant's warranty is unconscionable, and he requests reformation of the warranty. Plaintiff claims damages for: 1) breach of written warranty pursuant to 15 U.S.C. §§ 2301(6) and 2310(d)(1)(A) and Conn.Gen.Stat. § 42a-2-313; 2) breach of implied warranties pursuant to 15 U.S.C. §§ 2301(7) and 2310(d)(1) and Conn.Gen. Stat. § 42a-2-314(2)(c); and 3) violation of the Connecticut Unfair Trade Practices Act ("CUTPA") and other state deceptive trade practices statutes. Plaintiff brought this purported class action in the Hartford Connecticut Superior Court on June 26, 2000. Defendant removed the suit to this Court on August 1, 2000, on the basis of diversity jurisdiction and supplemental jurisdiction. Plaintiff now moves to remand this suit back to Connecticut Superior Court.
II. DISCUSSION
A. Legal Standard
Defendant bears the burden of showing that removal was proper. United Food & Commercial Workers Union v. CenterMark Props. Meriden Square, Inc., 30 F.3d 298, 300 (2d Cir.1994). The removal statutes are to be strictly construed, Somlyo v. J. Lu-Rob Enters., Inc., 932 F.2d 1043, 1045-46 (2d Cir.1991), and doubts as to the existence of federal jurisdiction are to be resolved in favor of state court jurisdiction, Lupo v. Human Affairs Int'l, Inc., 28 F.3d 269, 273 (2d Cir.1994).
B. Federal Question Jurisdiction
In its Notice of Removal, defendant does not assert federal question jurisdiction as a basis for removal. It does, however, argue in its objection to plaintiff's motion to remand that the case is properly in federal court because there is federal question jurisdiction. In general, a notice of removal in a civil action must be filed within thirty days after defendant receives copies of the initial pleadings. 28 U.S.C. § 1446(b). A defendant may not amend its notice of removal after the thirty days elapses to remedy a substantive defect in its removal petition. Briarpatch Ltd. v. Pate, 81 F. Supp. 2d 509, 517 (S.D.N.Y.2000). "Failure to assert federal question jurisdiction as a basis for removal is a substantive defect." Id. Accordingly, federal question jurisdiction cannot serve as a basis for removal.
C. Diversity Jurisdiction
Plaintiff seeks to remand, arguing that diversity jurisdiction does not exist because the amount in controversy between the defendant and each individual member of the putative class does not exceed $75,000. Defendant disagrees, arguing that: 1) the economic impact of injunctive relief exceeds $75,000; 2) attorney's fees and a possible award of punitive damages may be taken into account when determining the amount in controversy, and they *169 bring the case within the jurisdiction of the Court; and 3) the "common fund" doctrine applies in this case, allowing the aggregation of the putative class members' claims in calculating the amount in controversy.
1. Economic Impact of Injunctive Relief
Defendant argues that, because it is defendant invoking the Court's jurisdiction, the amount in controversy should be measured from defendant's perspective. It asserts that where a plaintiff seeks injunctive relief, the amount in controversy can be determined by the cost to defendant to comply with the injunction. Title 28 U.S.C. § 1332 provides that district courts have jurisdiction over diversity suits "where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs." In general, the jurisdictional amount cannot be satisfied through the aggregation of claims. See Zahn v. International Paper Co., 414 U.S. 291, 300, 94 S. Ct. 505, 38 L. Ed. 2d 511 (1973) ("[E]ach of several plaintiffs asserting separate and distinct claims must satisfy the jurisdictional-amount requirement ...."). This rule pertains to class actions. See id. at 301, 94 S. Ct. 505; Snyder v. Harris, 394 U.S. 332, 335-36, 89 S. Ct. 1053, 22 L. Ed. 2d 319 (1969). Where a plaintiff seeks injunctive relief, however, "the value of his claim is generally assessed with reference to the right he seeks to protect and measured by the extent of the impairment to be prevented by the injunction." See A.F.A. Tours, Inc. v. Whitchurch, 937 F.2d 82, 87 (2d Cir.1991). In the instant case, defendant claims that the warranty changes that plaintiff proposes will cost defendant at least $35 million. It contends that plaintiff seeks an injunction that will require defendant to pay for labor and allow subsequent purchasers of homes to bring warranty claims. Plaintiff states that the typical cost to replace the roofs is between $3500 to $7500. Plaintiff estimates the class to be 10,000 homeowners. Thus, multiplying $3500 by 10,000, defendant arrives at the $35 million figure. Defendant misstates the injunctive relief sought and conflates the damages plaintiff seeks with the costs stemming directly from the injunction. The injunction sought would require defendant to notify all class members of the reformation of the warranty; direct defendant to allow a reasonable time after the notice for class members to pursue a warranty claim; and direct defendant to recalculate its warranty liabilities, in accordance with the reformed warranty, to any class members who previously resolved warranty claims with defendant. The $35 million amount that defendant states as its cost in complying with the proposed injunction is more accurately regarded as the aggregate damages sought. There is no significant monetary distinction between the benefit the class action plaintiffs would receive versus the cost to defendant. Moreover, the Second Circuit has displayed skepticism with respect to measuring the amount in controversy in a class action by the value of the object of the litigation or the stake to defendant. See Gilman v. BHC Securities, Inc., 104 F.3d 1418, 1420 n. 2 (2d Cir.1997) (stating that "the soundness of such a jurisdictional premise is not obvious"). Gilman expressed concern that, "[i]n a diversity-based class action seeking primarily money damages, allowing the amount in controversy to be measured by the defendant's costs would eviscerate Snyder [v. Harris]'s holding that the claims of class members may not be aggregated in order to meet the jurisdictional threshold." Id. (citing Packard v. Provident *170 Nat'l Bank, 994 F.2d 1039, 1050 (3d Cir.1993)). Accordingly, the amount in controversy is not properly measured here from the defendant's perspective. As the damages, from the perspective of each individual putative class plaintiff, potentially range from $3500 to $7500, the amount in controversy is not met.
2. Attorney's Fees and Punitive Damages
Defendant argues that including attorney's fees and punitive damages in the amount in controversy calculation places this case properly in federal court. However, attorney's fees cannot be aggregated to manufacture diversity jurisdiction as such would be inconsistent with Zahn. Prospective attorney's fees should not be used "as a bootstrap for establishing federal jurisdiction" in class actions. Colon v. Rent-A-Center, Inc., 13 F. Supp. 2d 553, 562 (S.D.N.Y.1998). It strains credulity to believe that, without aggregating fees, an award of attorney's fees would bring this case anywhere close to the amount in controversy. Punitive damages also may not be aggregated. See Gilman, 104 F.3d at 1428. Plaintiff's prayer for punitive damages does not state a dollar amount, and defendant does not allege facts adequate to establish that the amount in controversy would be met by an award of punitive damages. As doubts are to be resolved against removability, see id., defendant's claim that the amount in controversy is met based on a possible award of attorney's fees and punitive damages fails.
3. Common Fund Doctrine
Finally, defendant argues that diversity jurisdiction is proper pursuant to the common fund doctrine because plaintiffs are uniting to enforce a single right created by the same warranty provisions. Accordingly, defendant contends that the claims of the putative class may be aggregated to determine the amount in controversy. The common fund doctrine is only applied, however, when the parties have a "common, undivided interest." Id. at 1423. Where, as here, claims "could be adjudicated on an individual basis," id., the common fund exception to the non-aggregation rule is inapplicable.
III. CONCLUSION As the Court lacks subject matter jurisdiction, plaintiff's motion to remand (doc. 16) is hereby granted. SO ORDERED. | 10-30-2013 | [
"140 F. Supp. 2d 166 (2001) Joseph LASTIH, on behalf of himself and all others similarly situated, Plaintiff, v. ELK CORP. OF ALABAMA, Defendant. Civ.No. 3:00cv1444(PCD). United States District Court, D. Connecticut. May 1, 2001. *167 Richard M. Quinlan, Walter A. Twachtman, Jr., Boatman, Boscarino, Grasso & Twachtman, Glastonbury, CT, John C. Martland, Martland & Brooks, Saugus, MA, for plaintiffs. *168 Richard L. Josephson, David George, Keith Jaasma, Baker & Botts, Houston, TX, Charles F. Corcoran, III, Howard K. Levine, Carmody & Torrance, New Haven, CT, for defendant. RULING ON PLAINTIFF'S MOTION TO REMAND DORSEY, Senior District Judge. Plaintiff moves to remand the case to the Connecticut Superior Court, arguing that there is no subject matter jurisdiction.",
"The motion is granted. I. BACKGROUND Plaintiff alleges that he suffered damages as a result of purchasing and installing defective roof shingles manufactured by defendant. He seeks a declaration, on behalf of himself and others in his class, that defendant's warranty is unconscionable, and he requests reformation of the warranty. Plaintiff claims damages for: 1) breach of written warranty pursuant to 15 U.S.C. §§ 2301(6) and 2310(d)(1)(A) and Conn.Gen.Stat. § 42a-2-313; 2) breach of implied warranties pursuant to 15 U.S.C. §§ 2301(7) and 2310(d)(1) and Conn.Gen. Stat. § 42a-2-314(2)(c); and 3) violation of the Connecticut Unfair Trade Practices Act (\"CUTPA\") and other state deceptive trade practices statutes. Plaintiff brought this purported class action in the Hartford Connecticut Superior Court on June 26, 2000. Defendant removed the suit to this Court on August 1, 2000, on the basis of diversity jurisdiction and supplemental jurisdiction. Plaintiff now moves to remand this suit back to Connecticut Superior Court. II.",
"DISCUSSION A. Legal Standard Defendant bears the burden of showing that removal was proper. United Food & Commercial Workers Union v. CenterMark Props. Meriden Square, Inc., 30 F.3d 298, 300 (2d Cir.1994). The removal statutes are to be strictly construed, Somlyo v. J. Lu-Rob Enters., Inc., 932 F.2d 1043, 1045-46 (2d Cir.1991), and doubts as to the existence of federal jurisdiction are to be resolved in favor of state court jurisdiction, Lupo v. Human Affairs Int'l, Inc., 28 F.3d 269, 273 (2d Cir.1994). B. Federal Question Jurisdiction In its Notice of Removal, defendant does not assert federal question jurisdiction as a basis for removal. It does, however, argue in its objection to plaintiff's motion to remand that the case is properly in federal court because there is federal question jurisdiction. In general, a notice of removal in a civil action must be filed within thirty days after defendant receives copies of the initial pleadings. 28 U.S.C. § 1446(b).",
"A defendant may not amend its notice of removal after the thirty days elapses to remedy a substantive defect in its removal petition. Briarpatch Ltd. v. Pate, 81 F. Supp. 2d 509, 517 (S.D.N.Y.2000). \"Failure to assert federal question jurisdiction as a basis for removal is a substantive defect.\" Id. Accordingly, federal question jurisdiction cannot serve as a basis for removal. C. Diversity Jurisdiction Plaintiff seeks to remand, arguing that diversity jurisdiction does not exist because the amount in controversy between the defendant and each individual member of the putative class does not exceed $75,000.",
"Defendant disagrees, arguing that: 1) the economic impact of injunctive relief exceeds $75,000; 2) attorney's fees and a possible award of punitive damages may be taken into account when determining the amount in controversy, and they *169 bring the case within the jurisdiction of the Court; and 3) the \"common fund\" doctrine applies in this case, allowing the aggregation of the putative class members' claims in calculating the amount in controversy. 1. Economic Impact of Injunctive Relief Defendant argues that, because it is defendant invoking the Court's jurisdiction, the amount in controversy should be measured from defendant's perspective.",
"It asserts that where a plaintiff seeks injunctive relief, the amount in controversy can be determined by the cost to defendant to comply with the injunction. Title 28 U.S.C. § 1332 provides that district courts have jurisdiction over diversity suits \"where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.\" In general, the jurisdictional amount cannot be satisfied through the aggregation of claims. See Zahn v. International Paper Co., 414 U.S. 291, 300, 94 S. Ct. 505, 38 L. Ed.",
"2d 511 (1973) (\"[E]ach of several plaintiffs asserting separate and distinct claims must satisfy the jurisdictional-amount requirement ....\"). This rule pertains to class actions. See id. at 301, 94 S. Ct. 505; Snyder v. Harris, 394 U.S. 332, 335-36, 89 S. Ct. 1053, 22 L. Ed. 2d 319 (1969). Where a plaintiff seeks injunctive relief, however, \"the value of his claim is generally assessed with reference to the right he seeks to protect and measured by the extent of the impairment to be prevented by the injunction.\" See A.F.A. Tours, Inc. v. Whitchurch, 937 F.2d 82, 87 (2d Cir.1991). In the instant case, defendant claims that the warranty changes that plaintiff proposes will cost defendant at least $35 million. It contends that plaintiff seeks an injunction that will require defendant to pay for labor and allow subsequent purchasers of homes to bring warranty claims. Plaintiff states that the typical cost to replace the roofs is between $3500 to $7500.",
"Plaintiff estimates the class to be 10,000 homeowners. Thus, multiplying $3500 by 10,000, defendant arrives at the $35 million figure. Defendant misstates the injunctive relief sought and conflates the damages plaintiff seeks with the costs stemming directly from the injunction. The injunction sought would require defendant to notify all class members of the reformation of the warranty; direct defendant to allow a reasonable time after the notice for class members to pursue a warranty claim; and direct defendant to recalculate its warranty liabilities, in accordance with the reformed warranty, to any class members who previously resolved warranty claims with defendant. The $35 million amount that defendant states as its cost in complying with the proposed injunction is more accurately regarded as the aggregate damages sought. There is no significant monetary distinction between the benefit the class action plaintiffs would receive versus the cost to defendant. Moreover, the Second Circuit has displayed skepticism with respect to measuring the amount in controversy in a class action by the value of the object of the litigation or the stake to defendant.",
"See Gilman v. BHC Securities, Inc., 104 F.3d 1418, 1420 n. 2 (2d Cir.1997) (stating that \"the soundness of such a jurisdictional premise is not obvious\"). Gilman expressed concern that, \"[i]n a diversity-based class action seeking primarily money damages, allowing the amount in controversy to be measured by the defendant's costs would eviscerate Snyder [v. Harris]'s holding that the claims of class members may not be aggregated in order to meet the jurisdictional threshold.\" Id. (citing Packard v. Provident *170 Nat'l Bank, 994 F.2d 1039, 1050 (3d Cir.1993)). Accordingly, the amount in controversy is not properly measured here from the defendant's perspective.",
"As the damages, from the perspective of each individual putative class plaintiff, potentially range from $3500 to $7500, the amount in controversy is not met. 2. Attorney's Fees and Punitive Damages Defendant argues that including attorney's fees and punitive damages in the amount in controversy calculation places this case properly in federal court. However, attorney's fees cannot be aggregated to manufacture diversity jurisdiction as such would be inconsistent with Zahn. Prospective attorney's fees should not be used \"as a bootstrap for establishing federal jurisdiction\" in class actions. Colon v. Rent-A-Center, Inc., 13 F. Supp.",
"2d 553, 562 (S.D.N.Y.1998). It strains credulity to believe that, without aggregating fees, an award of attorney's fees would bring this case anywhere close to the amount in controversy. Punitive damages also may not be aggregated. See Gilman, 104 F.3d at 1428. Plaintiff's prayer for punitive damages does not state a dollar amount, and defendant does not allege facts adequate to establish that the amount in controversy would be met by an award of punitive damages. As doubts are to be resolved against removability, see id., defendant's claim that the amount in controversy is met based on a possible award of attorney's fees and punitive damages fails. 3. Common Fund Doctrine Finally, defendant argues that diversity jurisdiction is proper pursuant to the common fund doctrine because plaintiffs are uniting to enforce a single right created by the same warranty provisions. Accordingly, defendant contends that the claims of the putative class may be aggregated to determine the amount in controversy. The common fund doctrine is only applied, however, when the parties have a \"common, undivided interest.\"",
"Id. at 1423. Where, as here, claims \"could be adjudicated on an individual basis,\" id., the common fund exception to the non-aggregation rule is inapplicable. III. CONCLUSION As the Court lacks subject matter jurisdiction, plaintiff's motion to remand (doc. 16) is hereby granted. SO ORDERED."
] | https://www.courtlistener.com/api/rest/v3/opinions/2389919/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Exhibit 10.3 KING PHARMACEUTICALS, INC. INCENTIVE PLAN RESTRICTED STOCK CERTIFICATE This Certificate, when executed by a duly authorized officer of King Pharmaceuticals, Inc. (the “Company”), evidences the grant to the Participant named below of Restricted Common Stock of the Company.
1. Name of Participant: [Participant Name] 2. Social Security Number of Participant: [Social Security Number] 3. Date of Grant: [Grant Date] 4. Type of Grant: [Grant Type] 5. Number of Shares: [Number of Shares Granted] 6. Vesting Schedule: The restrictions upon the Restricted Stock shall lapse upon the 3rd anniversary of the date of grant. 7. Purchase Price: $0.00
This Restricted Stock is subject to and governed by the terms of this Restricted Stock Certificate, the Restricted Stock Agreement attached hereto and incorporated by reference herein and the Company’s Incentive Plan.
KING PHARMACEUTICALS, INC. By: Name: Title:
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RESTRICTED STOCK GRANT AGREEMENT PURSUANT TO THE KING PHARMACEUTICALS, INC. INCENTIVE PLAN This Restricted Stock Grant Agreement (the “Agreement”) is made as of the date set forth on the Restricted Stock Certificate attached hereto (the “Grant Date”) by King Pharmaceuticals, Inc. (the “Company”) and the individual identified on the Restricted Stock Certificate (the “Participant”) to effect an award of restricted stock by the Company to the Participant on the terms and conditions set forth below: 1. AWARD OF RESTRICTED STOCK. As of the Grant Date, subject to the terms, conditions and restrictions set forth herein, the Company grants and issues to the Participant the number of shares of the Company’s common stock indicated on the Restricted Stock Certificate (the “Restricted Stock”). 2. GOVERNING PLAN. The Restricted Stock shall be granted pursuant to and (except as specifically set forth herein) subject in all respects to the applicable provisions of the King Pharmaceutical, Inc. Incentive Plan (“Plan”), which are incorporated herein by reference. Terms not otherwise defined in this Agreement have the meanings ascribed to them in the Plan. 3. RESTRICTIONS ON THE RESTRICTED STOCK. (a) No Transfer. The shares of Restricted Stock (including any shares received by the Participant with respect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization or a similar transaction affecting the Company’s securities without receipt of consideration) may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, alienated or encumbered during the Restricted Period. (b) Vesting. The restrictions imposed under Section 3(a) will be removed from the Restricted Stock at the end of the applicable Restricted Period. Removal of the restrictions imposed under Section 3(a) from particular shares of Restricted Stock is referred to as “vesting” of those shares and shares from which the restrictions have been removed are referred to as “vested.” 4. VOTING AND OTHER RIGHTS. During the period prior to vesting, except as otherwise provided herein, the Participant will have all of the rights of a shareholder with respect to all of the Restricted Stock, including without limitation the right to vote such Restricted Stock and the right to receive all dividends or other distributions with respect to such Restricted Stock. In connection with the payment of such
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dividends or other distributions, the Company will be entitled to deduct from any amounts otherwise payable by the Company to Participant (including without limitation salary or other compensation) any taxes or other amounts required by any governmental authority to be withheld and paid over to such authority for Participant’s account. 5. CERTIFICATION, ESCROW AND DELIVERY OF SHARES. (a) Certificates. Each certificate representing the Restricted Stock will be endorsed with a legend substantially as set forth below, as well as such other legends as the Company may deem appropriate to comply with applicable laws and regulations: The securities evidenced by this certificate are subject to certain limitations on transfer and other restrictions as set forth in that certain Restricted Stock Grant Agreement, dated as of , 200 , between the Company and the holder of such securities, pursuant to the King Pharmaceutical, Inc. Incentive Plan (copies of which are available for inspection at the offices of the Company). (b) Escrow. With respect to the Restricted Stock (including any shares received by Participant with respect to shares of Restricted Stock that have not yet vested as a result of stock dividends, stock splits or any other form of recapitalization or a similar transaction affecting the Company’s securities without receipt of consideration), the Secretary of the Company, or such other escrow holder as the Secretary may appoint, will retain physical custody of the certificate representing such share until such share vests. (c) Delivery of Certificates. As soon as reasonably practicable after the vesting of any Restricted Stock, the Company will release the certificate(s) representing such vested Restricted Stock to Participant. If other still unvested shares of Restricted Stock are also represented by the same stock certificate as vested shares, then such certificate will be retired and new certificates representing the vested and unvested portions of the Restricted Stock will be issued in place of the existing certificate. The certificate representing the vested Restricted Stock will be delivered to Participant and the certificate representing the still unvested shares of Restricted Stock will be retained by the escrow holder. 6. ADDITIONAL AGREEMENTS. (a) Tax Matters. The Restricted Stock is subject to appropriate income tax withholding and other deductions required by applicable laws or regulations, and Participant and his successors will be responsible for all income and other taxes payable as a result of grant or vesting of the Restricted Stock or otherwise in connection with this Agreement. The Company is not required to provide any gross-up or other tax assistance. Participant understands that Participant may make an election pursuant to Section 83(b) of the Internal Revenue Code (the “Code”) within thirty (30) days after the date Participant acquired the Restricted Stock hereunder, or comparable provisions of any state tax law, to include in Participant’s gross income the fair market value (as of the date
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of acquisition) of the Restricted Stock. Participant may make such an election only if, prior to making any such election, Participant (a) notifies the Company of Participant’s intention to make such election, by delivering to the Company a copy of a fully-executed Section 83(b) election form such as the Company may from time to time prescribe, and (b) pays to the Company an amount sufficient to satisfy any taxes or other amounts required by any governmental authority to be withheld or paid over to such authority for Participant’s account, or otherwise makes arrangements satisfactory to the Company for the payment of such amounts through withholding or otherwise. Participant understands that if Participant does not make a proper and timely Section 83(b) election, generally under Section 83 of the Code, at the time the Restricted Period lapses with respect to any portion of the Restricted Stock, Participant will recognize ordinary income and be taxed in an amount equal to the fair market value (as of the date the forfeiture restrictions lapse) of the Restricted Stock less the purchase price paid for the Restricted Stock. Participant acknowledges that it is Participant’s sole responsibility, and not the Company’s, to file a timely election under Section 83(b). Participant is relying solely on Participant’s advisors with respect to the decision as to whether or not to file a Section 83(b) election. (b) Independent Advice; No Representations. Participant acknowledges that (i) (s)he was free to use professional advisors of his choice in connection with this Agreement, has received advice from her/his professional advisors in connection with this Agreement, understands its meaning and import, and is entering into this Agreement freely and without coercion or duress; and (ii) (s)he has not received and is not relying upon any advice, representations or assurances made by or on behalf of the Company or any Company affiliate or any employee of or counsel to the Company regarding any tax or other effects or implications of the Restricted Stock or other matters contemplated by this Agreement. (c) Value of Restricted Stock. No representations or promises are made to Participant regarding the value of the Restricted Stock or Company’s business prospects. Participant acknowledges that information about investment in Company stock, including financial information and related risks, is contained in Company’s SEC reports which have been made available for Participant’s review at any time before Participant’s acceptance of this Agreement. Further, Participant understands that the Company does not provide tax or investment advice and acknowledges Company’s recommendation that Participant consult with independent specialists regarding such matters. Sale or other transfer of the Company stock may be limited by and subject to Company policies as well as applicable securities laws and regulations. (d) Adjustment in Capitalization. In the event of an Adjustment Event that is a merger, consolidation, reorganization, liquidation, dissolution or other similar transaction, then the Award pursuant to Section 1 of this Agreement shall be deemed to pertain to the securities and other property, including cash, to which a holder of the number of shares equal to the Restricted Stock would have been entitled to receive in connection with such Adjustment Event; provided, that any securities issued to Participant in respect of unvested Granted Shares will be subject to the same restrictions
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and vesting provisions that were applicable to the Restricted Stock in exchange for which the securities were issued. (e) Change of Control. Upon a Change of Control, vesting shall occur with respect to the Restricted Stock in accordance with Article 11 of the Plan. (f) Termination of Employment. Upon a Termination of Employment, vesting or forfeiture of the Restricted Stock shall be determined according to Section 8.7 of the Plan. (g) No Right to Continued Employment. This Agreement does not confer upon Participant any right to continue as an employee of the Company or its subsidiary or to any particular employment tenure, nor does it limit in any way the right of Company or its subsidiary to terminate Participant’s services to the Company or its subsidiary at any time, with or without cause. (h) Approved Retirement. “Approved Retirement” means, with respect to the interpretation of the Plan and this Agreement, with the express consent of the Company at or before the time of such Approved Retirement, which consent may be withheld for any or no reason, any voluntary termination of employment by the Participant after having reached the age of fifty-five (55) years and after having completed at least fifteen (15) years of continuous employment with the Company. 7. GENERAL. (a) Successors and Assigns. This Agreement is personal in its nature and Participant may not assign or transfer his/her rights under this Agreement. (b) Notices. Any notices, demands or other communications required or desired to be given by any party shall be in writing and shall be validly given to another party if served either personally or if deposited in the United States mail, certified or registered, postage prepaid, return receipt requested. If such notice, demand or other communication shall be served personally, service shall be conclusively deemed made at the time of such personal service. If such notice, demand or other communication is given by mail, such notice shall be conclusively deemed given forty-eight (48) hours after the deposit thereof in the United States mail addressed to the party to whom such notice, demand or other communication is to be given as hereinafter set forth:
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To the Company: King Pharmaceuticals, Inc. 400 Crossing Boulevard Bridgewater, NJ 08807 Attention: Human Resources
To Participant: At his/her address of record as maintained in the Company’s files. Any party may change its address for the purpose of receiving notices, demands and other communications by providing written notice to the other party in the manner described in this paragraph. (c) Entire Agreement. Except as this Agreement may expressly provide otherwise, this Agreement, the Restricted Stock Certificate and the Plan constitute the entire agreement and understanding of the Company and Participant with respect to the subject matter hereof and thereof, and supersede all prior written or verbal agreements and understandings between Participant and the Company relating to such subject matter. Except as required by applicable law, this Agreement may only be amended by written instrument signed by Participant and an authorized officer of the Company. (d) Governing Law; Severability. This Agreement will be construed and interpreted under the laws of the State of Tennessee applicable to agreements executed and to be wholly performed within the State of Tennessee. If any provision of this Agreement as applied to any party or to any circumstance is adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the invalidity of that provision shall in no way affect (to the maximum extent permissible by law) the application of such provision under circumstances different from those adjudicated by the court, the application of any other provision of this Agreement, or the enforceability or invalidity of this Agreement as a whole. If any provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall be deemed amended to the extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision will be stricken and the remainder of this Agreement shall continue in full force and effect. (e) Remedies. All rights and remedies provided pursuant to this Agreement or by law shall be cumulative, and no such right or remedy shall be exclusive of any other. A party may pursue any one or more rights or remedies hereunder or may seek damages or specific performance in the event of another party’s breach hereunder or may pursue any other remedy by law or equity, whether or not stated in this Agreement. (f) Interpretation. Headings herein are for convenience of reference only, do not constitute a part of this Agreement, and will not affect the meaning or interpretation of this Agreement. References herein to Sections are references to the referenced Section hereof, unless otherwise specified.
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(g) Waivers; Amendments. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any later breach of that provision. Except as required by applicable law, this Agreement may be modified only by written agreement signed by Participant and the Company.
7 | [
"Exhibit 10.3 KING PHARMACEUTICALS, INC. INCENTIVE PLAN RESTRICTED STOCK CERTIFICATE This Certificate, when executed by a duly authorized officer of King Pharmaceuticals, Inc. (the “Company”), evidences the grant to the Participant named below of Restricted Common Stock of the Company. 1. Name of Participant: [Participant Name] 2. Social Security Number of Participant: [Social Security Number] 3. Date of Grant: [Grant Date] 4. Type of Grant: [Grant Type] 5. Number of Shares: [Number of Shares Granted] 6. Vesting Schedule: The restrictions upon the Restricted Stock shall lapse upon the 3rd anniversary of the date of grant. 7. Purchase Price: $0.00 This Restricted Stock is subject to and governed by the terms of this Restricted Stock Certificate, the Restricted Stock Agreement attached hereto and incorporated by reference herein and the Company’s Incentive Plan.",
"KING PHARMACEUTICALS, INC. By: Name: Title: -------------------------------------------------------------------------------- RESTRICTED STOCK GRANT AGREEMENT PURSUANT TO THE KING PHARMACEUTICALS, INC. INCENTIVE PLAN This Restricted Stock Grant Agreement (the “Agreement”) is made as of the date set forth on the Restricted Stock Certificate attached hereto (the “Grant Date”) by King Pharmaceuticals, Inc. (the “Company”) and the individual identified on the Restricted Stock Certificate (the “Participant”) to effect an award of restricted stock by the Company to the Participant on the terms and conditions set forth below: 1. AWARD OF RESTRICTED STOCK.",
"As of the Grant Date, subject to the terms, conditions and restrictions set forth herein, the Company grants and issues to the Participant the number of shares of the Company’s common stock indicated on the Restricted Stock Certificate (the “Restricted Stock”). 2. GOVERNING PLAN. The Restricted Stock shall be granted pursuant to and (except as specifically set forth herein) subject in all respects to the applicable provisions of the King Pharmaceutical, Inc. Incentive Plan (“Plan”), which are incorporated herein by reference.",
"Terms not otherwise defined in this Agreement have the meanings ascribed to them in the Plan. 3. RESTRICTIONS ON THE RESTRICTED STOCK. (a) No Transfer. The shares of Restricted Stock (including any shares received by the Participant with respect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization or a similar transaction affecting the Company’s securities without receipt of consideration) may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, alienated or encumbered during the Restricted Period. (b) Vesting.",
"The restrictions imposed under Section 3(a) will be removed from the Restricted Stock at the end of the applicable Restricted Period. Removal of the restrictions imposed under Section 3(a) from particular shares of Restricted Stock is referred to as “vesting” of those shares and shares from which the restrictions have been removed are referred to as “vested.” 4. VOTING AND OTHER RIGHTS. During the period prior to vesting, except as otherwise provided herein, the Participant will have all of the rights of a shareholder with respect to all of the Restricted Stock, including without limitation the right to vote such Restricted Stock and the right to receive all dividends or other distributions with respect to such Restricted Stock.",
"In connection with the payment of such 2 -------------------------------------------------------------------------------- dividends or other distributions, the Company will be entitled to deduct from any amounts otherwise payable by the Company to Participant (including without limitation salary or other compensation) any taxes or other amounts required by any governmental authority to be withheld and paid over to such authority for Participant’s account. 5. CERTIFICATION, ESCROW AND DELIVERY OF SHARES. (a) Certificates. Each certificate representing the Restricted Stock will be endorsed with a legend substantially as set forth below, as well as such other legends as the Company may deem appropriate to comply with applicable laws and regulations: The securities evidenced by this certificate are subject to certain limitations on transfer and other restrictions as set forth in that certain Restricted Stock Grant Agreement, dated as of , 200 , between the Company and the holder of such securities, pursuant to the King Pharmaceutical, Inc. Incentive Plan (copies of which are available for inspection at the offices of the Company).",
"(b) Escrow. With respect to the Restricted Stock (including any shares received by Participant with respect to shares of Restricted Stock that have not yet vested as a result of stock dividends, stock splits or any other form of recapitalization or a similar transaction affecting the Company’s securities without receipt of consideration), the Secretary of the Company, or such other escrow holder as the Secretary may appoint, will retain physical custody of the certificate representing such share until such share vests. (c) Delivery of Certificates. As soon as reasonably practicable after the vesting of any Restricted Stock, the Company will release the certificate(s) representing such vested Restricted Stock to Participant.",
"If other still unvested shares of Restricted Stock are also represented by the same stock certificate as vested shares, then such certificate will be retired and new certificates representing the vested and unvested portions of the Restricted Stock will be issued in place of the existing certificate. The certificate representing the vested Restricted Stock will be delivered to Participant and the certificate representing the still unvested shares of Restricted Stock will be retained by the escrow holder. 6. ADDITIONAL AGREEMENTS. (a) Tax Matters. The Restricted Stock is subject to appropriate income tax withholding and other deductions required by applicable laws or regulations, and Participant and his successors will be responsible for all income and other taxes payable as a result of grant or vesting of the Restricted Stock or otherwise in connection with this Agreement.",
"The Company is not required to provide any gross-up or other tax assistance. Participant understands that Participant may make an election pursuant to Section 83(b) of the Internal Revenue Code (the “Code”) within thirty (30) days after the date Participant acquired the Restricted Stock hereunder, or comparable provisions of any state tax law, to include in Participant’s gross income the fair market value (as of the date 3 -------------------------------------------------------------------------------- of acquisition) of the Restricted Stock. Participant may make such an election only if, prior to making any such election, Participant (a) notifies the Company of Participant’s intention to make such election, by delivering to the Company a copy of a fully-executed Section 83(b) election form such as the Company may from time to time prescribe, and (b) pays to the Company an amount sufficient to satisfy any taxes or other amounts required by any governmental authority to be withheld or paid over to such authority for Participant’s account, or otherwise makes arrangements satisfactory to the Company for the payment of such amounts through withholding or otherwise.",
"Participant understands that if Participant does not make a proper and timely Section 83(b) election, generally under Section 83 of the Code, at the time the Restricted Period lapses with respect to any portion of the Restricted Stock, Participant will recognize ordinary income and be taxed in an amount equal to the fair market value (as of the date the forfeiture restrictions lapse) of the Restricted Stock less the purchase price paid for the Restricted Stock. Participant acknowledges that it is Participant’s sole responsibility, and not the Company’s, to file a timely election under Section 83(b). Participant is relying solely on Participant’s advisors with respect to the decision as to whether or not to file a Section 83(b) election. (b) Independent Advice; No Representations. Participant acknowledges that (i) (s)he was free to use professional advisors of his choice in connection with this Agreement, has received advice from her/his professional advisors in connection with this Agreement, understands its meaning and import, and is entering into this Agreement freely and without coercion or duress; and (ii) (s)he has not received and is not relying upon any advice, representations or assurances made by or on behalf of the Company or any Company affiliate or any employee of or counsel to the Company regarding any tax or other effects or implications of the Restricted Stock or other matters contemplated by this Agreement.",
"(c) Value of Restricted Stock. No representations or promises are made to Participant regarding the value of the Restricted Stock or Company’s business prospects. Participant acknowledges that information about investment in Company stock, including financial information and related risks, is contained in Company’s SEC reports which have been made available for Participant’s review at any time before Participant’s acceptance of this Agreement. Further, Participant understands that the Company does not provide tax or investment advice and acknowledges Company’s recommendation that Participant consult with independent specialists regarding such matters. Sale or other transfer of the Company stock may be limited by and subject to Company policies as well as applicable securities laws and regulations. (d) Adjustment in Capitalization. In the event of an Adjustment Event that is a merger, consolidation, reorganization, liquidation, dissolution or other similar transaction, then the Award pursuant to Section 1 of this Agreement shall be deemed to pertain to the securities and other property, including cash, to which a holder of the number of shares equal to the Restricted Stock would have been entitled to receive in connection with such Adjustment Event; provided, that any securities issued to Participant in respect of unvested Granted Shares will be subject to the same restrictions 4 -------------------------------------------------------------------------------- and vesting provisions that were applicable to the Restricted Stock in exchange for which the securities were issued.",
"(e) Change of Control. Upon a Change of Control, vesting shall occur with respect to the Restricted Stock in accordance with Article 11 of the Plan. (f) Termination of Employment. Upon a Termination of Employment, vesting or forfeiture of the Restricted Stock shall be determined according to Section 8.7 of the Plan. (g) No Right to Continued Employment. This Agreement does not confer upon Participant any right to continue as an employee of the Company or its subsidiary or to any particular employment tenure, nor does it limit in any way the right of Company or its subsidiary to terminate Participant’s services to the Company or its subsidiary at any time, with or without cause. (h) Approved Retirement.",
"“Approved Retirement” means, with respect to the interpretation of the Plan and this Agreement, with the express consent of the Company at or before the time of such Approved Retirement, which consent may be withheld for any or no reason, any voluntary termination of employment by the Participant after having reached the age of fifty-five (55) years and after having completed at least fifteen (15) years of continuous employment with the Company. 7. GENERAL. (a) Successors and Assigns. This Agreement is personal in its nature and Participant may not assign or transfer his/her rights under this Agreement. (b) Notices. Any notices, demands or other communications required or desired to be given by any party shall be in writing and shall be validly given to another party if served either personally or if deposited in the United States mail, certified or registered, postage prepaid, return receipt requested. If such notice, demand or other communication shall be served personally, service shall be conclusively deemed made at the time of such personal service. If such notice, demand or other communication is given by mail, such notice shall be conclusively deemed given forty-eight (48) hours after the deposit thereof in the United States mail addressed to the party to whom such notice, demand or other communication is to be given as hereinafter set forth: 5 -------------------------------------------------------------------------------- To the Company: King Pharmaceuticals, Inc. 400 Crossing Boulevard Bridgewater, NJ 08807 Attention: Human Resources To Participant: At his/her address of record as maintained in the Company’s files. Any party may change its address for the purpose of receiving notices, demands and other communications by providing written notice to the other party in the manner described in this paragraph.",
"(c) Entire Agreement. Except as this Agreement may expressly provide otherwise, this Agreement, the Restricted Stock Certificate and the Plan constitute the entire agreement and understanding of the Company and Participant with respect to the subject matter hereof and thereof, and supersede all prior written or verbal agreements and understandings between Participant and the Company relating to such subject matter. Except as required by applicable law, this Agreement may only be amended by written instrument signed by Participant and an authorized officer of the Company. (d) Governing Law; Severability. This Agreement will be construed and interpreted under the laws of the State of Tennessee applicable to agreements executed and to be wholly performed within the State of Tennessee. If any provision of this Agreement as applied to any party or to any circumstance is adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the invalidity of that provision shall in no way affect (to the maximum extent permissible by law) the application of such provision under circumstances different from those adjudicated by the court, the application of any other provision of this Agreement, or the enforceability or invalidity of this Agreement as a whole. If any provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall be deemed amended to the extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision will be stricken and the remainder of this Agreement shall continue in full force and effect.",
"(e) Remedies. All rights and remedies provided pursuant to this Agreement or by law shall be cumulative, and no such right or remedy shall be exclusive of any other. A party may pursue any one or more rights or remedies hereunder or may seek damages or specific performance in the event of another party’s breach hereunder or may pursue any other remedy by law or equity, whether or not stated in this Agreement. (f) Interpretation. Headings herein are for convenience of reference only, do not constitute a part of this Agreement, and will not affect the meaning or interpretation of this Agreement. References herein to Sections are references to the referenced Section hereof, unless otherwise specified. 6 -------------------------------------------------------------------------------- (g) Waivers; Amendments. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any later breach of that provision. Except as required by applicable law, this Agreement may be modified only by written agreement signed by Participant and the Company. 7"
] | https://github.com/TheAtticusProject/cuad | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
|
Exhibit 10.35
The confidential portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. REDACTED PORTIONS OF THIS EXHIBIT ARE INDICATED BY AN [###].
SERVICE AGREEMENT
This Service Agreement (this “Agreement”) is made as of this 1st day of July 2009 by and between DDN/OBERGFEL, LLC, a Wisconsin limited liability company (“DDN”), and OMP, Inc., a Delaware corporation (“Manufacturer”). RECITALS DDN is in the business of providing a variety of logistics and related services to the pharmaceutical industry, including warehousing and shipment services, order-to-cash services, contract administration services, chargeback processing, sample drug distribution and other services. Manufacturer desires to retain DDN to provide certain of these services as more fully described herein.
Accordingly, in consideration of the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
IT IS HEREBY AGREED AS FOLLOWS:
AGREEMENT
1. DEFINITIONS. For purposes of this Agreement, the following words shall have the meanings set forth below:
(a) “Adjustment Notice” has the meaning set forth in Section 3(f) hereof.
(b) “Customers” means those customers or distributees of Manufacturer to whom Products are distributed by DDN.
(c) “DDN Standard Operating Procedures” means DDN’s standard operating procedures, as revised and changed by DDN from time to time.
(d) “Force Majeure” means acts of God or the public enemy, earthquakes, fire, flood, epidemic, civil insurrection or war, acts of terrorism, inability to procure raw materials, power or supplies, labor shortages or strife, and other conditions (other than financial difficulties) beyond the control of the involved party which delay or prevent the rendition of such party’s performance hereunder.
(e) “Initial Delivery Date” means the date on which any Products are first received in DDN facilities.
DDN/Obergfel
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(f) “Laws” means all United States federal, state and local laws, statutes, rules, regulations, guidelines, ordinances and orders.
(g) “Premises” means DDN’s corporate office and its warehouse facilities located at 1560-A Baker Avenue, Ontario, California 91761 and 4580 Mendenhall Road, Memphis, Tennessee 38141, or such other facilities as DDN and Manufacturer may mutually agree.
(h) “Products” means all of the pharmaceutical products manufactured, distributed or marketed by Manufacturer which Manufacturer distributes or desires to distribute in the Territory.
(i) “Replacement Cost” means Manufacturer’s incremental, actual manufacturing cost to replace Products lost or damaged.
(j) “Term” shall have the meaning set forth in Section 8(a).
(k) “Territory” means the states east of the Mississippi in the United States of America, including its territories and possessions.
2. OBLIGATIONS OF DDN. During the Term, DDN shall provide Manufacturer with the following services with respect to Products delivered to DDN for distribution in the Territory:
(a) Maintain the Premises and perform the warehousing, shipping and other services specified hereunder in material compliance with (i) all Laws known by DDN to be applicable to its business, including those of the U.S. Food and Drug Administration, Drug Enforcement Administration and state pharmaceutical boards, (ii) applicable DDN Standard Operating Procedures and (iii) any special operating procedures specified by Manufacturer, agreed to by DDN and set forth on Exhibit A attached hereto and incorporated herein; provided, however, that DDN shall not be responsible for maintaining its Premises or performing services in compliance with any of the foregoing to the extent such failure arises from or is attributable to any failure by Manufacturer to comply with its obligations hereunder.
(b) Receive, warehouse and, pursuant to Manufacturer’s instructions, ship Products from the Premises and provide standard reporting associated therewith, including order fulfillment and shipping information through the EDI connectivity agreed to between DDN and Manufacturer.
(c) Provide reverse distribution services in support of returned Product processing and Manufacturer’s Product recall management.
(g) Provide such additional services as Manufacturer and DDN may separately agree in writing if and to the extent, and in consideration of the fees and expenses, set forth on Exhibit B attached hereto and incorporated herein, or as mutually amended.
(h) Maintain chain of custody compliance documentation and provide Pedigree reports within a 24-hour turnaround as required by state law where applicable. Designate a responsible person to respond to Pedigree inquiries and verification. Costs incurred by future Pedigree legislation will be negotiated and agreed upon by DDN and Manufacturer. DDN shall
DDN/Obergfel
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not be obligated to provide services under this Section 2(h) with respect to future Pedigree legislation or regulation, unless the parties negotiate in good faith and agree upon the additional fees to be paid to DDN in connection therewith, and DDN agrees that such additional fees will be reasonable in relation to the services under this Section 2(h) that will be provided to Manufacturer. (i) Notify Manufacturer within 24 hours of any regulatory actions by Federal, State and Local agencies against DDN and which could reasonably impact Manufacturer’s Products or DDN’s Obligations as defined in this Section 2, including but not limited to, FDA 483’s, Warning letters, DEA license revocations. Provide copies of responses and corrective actions to regulatory agencies.
3. OBLIGATIONS OF MANUFACTURER. During the Term, Manufacturer shall:
(a) Deliver Products to the Premises specified by DDN during DDN’s normal business hours.
(b) Properly mark, label and package all Products in accordance with all applicable Laws and include a manifest showing sizes or specific stock keeping units.
(c) Comply with all applicable Laws to which Manufacturer is subject including, without limitation, those with respect to the manufacture of Products, their safety, labeling, packaging, advertising, marketing and sale and, to the extent applicable, advance verification of distributees’ licensure or authorization to receive and/or prescribe Products (or samples thereof).
(d) Provide DDN on a timely basis with true and correct information necessary for DDN to perform its duties hereunder, including, without limitation, information regarding the Products, the name and address of the intended Customers, all contracts and pricing agreements, promotional policies and other information as may be needed by DDN in connection with its duties under Section 2, and validate in advance of shipment the distributees designated by Manufacturer to receive shipment of such Products as may be required for DDN to comply with any obligations under applicable Laws (including, without limitation, the Prescription Drug Marketing Act and regulations promulgated thereunder). DDN shall be entitled to rely upon all such information provided without independent verification, shall have no liability with respect to, and shall be indemnified and held harmless by Manufacturer from and against the inaccuracy or inadequacy of, such information.
(e) Utilize DDN exclusively as its third party logistics provider for the types of services to be provided under Section 2 for all of Manufacturer’s requirements for such services with respect to all Products destined for delivery or delivered within the Territory. Notwithstanding the foregoing, nothing herein shall prevent Manufacturer from continuing to warehouse and ship Products from its company-owned or leased facilities.
(f) Pay when due the fees and expenses for DDN’s services rendered hereunder, as listed on Exhibit B, and as maybe hereafter adjusted from time to time by DDN by giving a written notice to Manufacturer (an “Adjustment Notice”), subject to Manufacturer’s right to terminate for
DDN/Obergfel
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certain rate increases as set forth at Section 8 hereof. Each Adjustment Notice shall specify the effective date of the adjusted fees and expenses, which effective date (i) must be at least 90 days after the date the Adjustment Notice is given, (ii) may not occur during the first 18 months of the Term and (iii) if the fees and expenses have been adjusted pursuant to a previously given Adjustment Notice, must be at least 12 months after the effective date specified in the immediately preceding Adjustment Notice.
4. COMMERCIAL TERMS.
(a) Except for freight, all fees and expenses will be invoiced monthly. All fixed one time or periodic fees and expenses are payable within 30 days from the date of invoice. All variable one time or periodic fees and expenses will be invoiced in arrears, with payment due within 30 days from the date of invoice (except for freight). Any such fees and expenses unless expressly agreed to on Exhibit B, will not be incurred on Manufacturer’s behalf without prior written approval, which will not be unreasonably withheld or delayed.
(b) Freight charges will be invoiced weekly with payment due within 30 days from the date of invoice.
(c) Payments will be deemed past due if not received by the due date, unless received after the due date with a timely postmark. If any amount owed by Manufacturer to DDN is not paid when due, a late payment charge of [###]% of the amount past due will apply for each 30 day period or part thereof that the amount remains unpaid. Undisputed amounts will still be subject to normal terms as set forth in this Section 4(c).
5. LEGAL RELATIONSHIP; STANDARD OF CARE; LOSS LIMITATIONS.
(a) Title to and ownership of Products delivered to DDN by Manufacturer shall remain solely with Manufacturer. Manufacturer shall be solely responsible for the care, custody and control of Products at all times prior to DDN’s receipt of such Products at the Premises.
(b) The relationship between Manufacturer and DDN hereunder is that of bailor and bailee, as specifically described and limited by the terms of this Agreement. In performing its obligations hereunder, DDN shall have no liability (whether by indemnification or otherwise, and regardless of whether any claim is based upon contract, in tort, common law principles or otherwise) to Manufacturer except only for (i) DDN’s breach of its obligations and agreements expressly contained herein or (ii) loss or damage caused by DDN’s gross negligence, reckless or intentional misconduct.
(c) Notwithstanding anything to the contrary contained herein, in no event shall DDN have liability (whether by indemnification or otherwise) for: (i) any loss or damage attributable to events, circumstances or conditions which shall constitute a Force Majeure; or (ii) unexplained loss, mysterious disappearance (including theft), misshipment, loss or shortage of Product disclosed upon the taking of an inventory, or other shrinkage of Product (collectively, “shrinkage”) to the extent that such annual shrinkage does not exceed [###]% of the aggregate annual number of Product units handled by DDN. DDN is responsible for shrinkage losses above that shrinkage percentage for any loss of Product other than that which is carved out above.
(d) Notwithstanding anything to the contrary contained herein, Manufacturer’s exclusive remedy for any loss or damage to Products arising from this Agreement or DDN’s services hereunder is recovery of the Replacement Cost of such Products lost or damaged.
(e) Subject to Section 5(f) hereof, DDN’s maximum liability to Manufacturer arising out of this Agreement or the performance of DDN’s services hereunder (including, without limitation, loss or damage to Products) shall not exceed: (i) during the first [###] of the Term, the sum of $[###]; and (ii) following such [###] period, the sum of [###].
(f) NEITHER DDN NOR MANUFACTURER SHALL BE LIABLE (BY INDEMNIFICATION OR OTHERWISE) FOR CONSEQUENTIAL (INCLUDING LOST PROFITS), INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES (WHETHER OR NOT CONTEMPLATED OR FORESEEABLE), WHETHER A CLAIM THEREFOR IS BROUGHT AT LAW OR IN EQUITY AND REGARDLESS OF WHETHER ANY CLAIM THEREFOR IS BASED UPON CONTRACT, TORT OR OTHER PRINCIPLES.
6. INSURANCE; INDEMNITY.
(a) Manufacturer shall maintain during the Term or as otherwise provided in Section 6(c) hereof the following insurance coverage: (i) Commercial general liability insurance, including products liability insurance on Manufacturer’s Products, which insurance shall be fully sufficient (in terms of coverage and policy limits) to cover property loss or damage and bodily injury or death arising from the Products. Such insurance shall be written on an ISO occurrence form CG 00 01 12 04 (or a substitute form providing equivalent coverage) and shall cover, among other things, bodily injury and property damage arising from products-completed operations and liability assumed under an insured contract including Manufacturer’s contractual liability to indemnify DDN under Section 6(d) hereof. The limits of such insurance shall not be less than $[###] per occurrence. Such insurance shall name DDN and its subsidiaries as additional insureds using ISO additional insured endorsement CG 2015 0704 or a substitute providing equivalent coverage. This insurance shall apply as primary insurance with respect to any other insurance or self-insurance program.
(ii) Fire and extended property insurance sufficient to cover the replacement value for all Products while in the possession or under the control of DDN. Upon demand, Manufacturer shall promptly provide DDN with insurance certificates evidencing Manufacturer’s compliance with the foregoing insurance requirements. Such certificates shall also require the insurer to endeavor to notify DDN at least 30 days prior to the cancellation or non-renewal of such insurance.
DDN/Obergfel
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(b) DDN shall maintain during the Term or as otherwise provided in Section 6(c) hereof the following insurance coverage:
(i) Warehouseman’s legal liability insurance in the amount of at least $[###] with respect to DDN’s operations in Memphis, TN and $[###] with respect to DDN’s operations in Ontario, CA. Manufacturer acknowledges that such warehouseman’s legal liability insurance also insures property in the possession of DDN other than Products of Manufacturer.
(ii) Worker’s Compensation insurance as required by law.
(iii) Commercial general liability insurance and umbrella insurance having a combined limit of not less than $[###] per occurrence and $[###] annual aggregate. Such insurance shall be written on an ISO occurrence form CG 00 01 1204 (or a substitute for providing equivalent coverage).
Prior to the Initial Delivery Date and thereafter upon demand, DDN promptly shall provide Manufacturer with insurance certificates evidencing DDN’s compliance with the foregoing requirements. Such certificates shall also require the insurer to endeavor to notify Manufacturer at least 30 days prior to the cancellation or non-renewal of such insurance.
(c) All insurance required hereunder shall be with insurance companies rated “A” or better by A. M. Best, and shall not have deductibles or self-insured retentions in excess of $[###]. If any insurance required hereunder of Manufacturer is provided on a claims-made basis, then said insurance shall be maintained in full force and effect for at least three years after the expiration of this Agreement and any renewals hereunder.
(d) The parties hereto acknowledge that DDN has not had and will not have any role in the manufacture, branding, labeling, packaging, marketing or sale of Products and that, as between the parties, Manufacturer or shall have the sole liability for any product liability or similar claims (regardless of the legal theory upon which such claims may be brought) with respect to Products (other than any claims for which it is determined by the final decision of a court of competent jurisdiction that (i) the actual Product was tampered or altered in any manner, while under the custody or control of DDN, and (ii) such alteration or tampering was the primary cause of the injury and damages incurred for which the claim is made (the “Excluded Claims”)). Accordingly, other than with respect to Excluded Claims, Manufacturer indemnifies and agrees to defend and hold DDN and its members, directors, officers, managers, employees and agents (“DDN Indemnitees”), harmless from any and all claims, damages (whether for bodily injury or death, third-party property damage or otherwise), demands, causes of action, losses, judgments, costs and expenses of any nature whatsoever, including, without limitation, reasonable attorneys’ fees (collectively, “Claims”) caused by or attributable in whole or part to, or alleged to have been caused by or attributable in whole or part to:
(i) The Products, including, without limitation, their inherent safety, defects in the manufacture thereof, their branding, labeling, packaging, marketing or sale and
DDN/Obergfel
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regardless of whether the Claim is asserted based upon strict liability or absolute liability, negligence, warranty, common law principles or other cause of action.
(ii) Any actual or asserted violation of the Federal Food, Drug and Cosmetic Act or any other Law by virtue of which Products supplied or delivered by Manufacturer shall be alleged or determined to be adulterated, misbranded, mislabeled or otherwise not in full compliance with such Law.
(iii) Any actual or asserted infringement or violation of any patent, trademark, trade name, copyright or other intellectual or proprietary rights of any third party.
(e) Subject to the limitations of Section 5 hereof, each party (an “Indemnifying Party”) indemnifies and agrees to defend and hold the other party and its members, directors, officers, managers, employees and agents, harmless from any and all Claims to the extent caused by or the Indemnifying Party’s gross negligence or willful misconduct.
(f) Subject to the limitations of Section 5 hereof, DDN indemnifies and agrees to defend and hold Manufacturer and its members, directors, officers, managers, employees and agents, harmless from any and all Claims to the extent caused by or attributable to the following:
(i) Any actual violation by DDN of the Federal Food, Drug and Cosmetic Act or any other Law.
(ii) Excluded Claims as defined in Section 6(d).
(ii) Any Product shrinkage losses above the amounts set forth in Section 5(e).
(g) Alleged claims will be reviewed by both parties according to the limitations set forth in Sections 5 and 6 of this Agreement to discuss the best course of action regarding the management of the claim.
7. INSPECTION. Manufacturer has visited and physically inspected the Premises and observed the DDN Standard Operating Procedures and the standard practices and procedures employed by DDN thereat. Manufacturer acknowledges that the Premises, the DDN Standard Operating Procedures and such observed practices and procedures are acceptable to Manufacturer with respect to the performance by DDN of its services hereunder. Furthermore, during the Term, Manufacturer may, upon reasonable prior notice and during working hours, inspect the Premises and observe the DDN Standard Operating Procedures and the standard practices and procedures employed by DDN in rendering its services hereunder. Such inspection may be conducted not more than one (1) time per quarter and shall be conducted in a manner so as to not unreasonably disrupt normal warehouse and other DDN operations.
8. TERM AND TERMINATION.
(a) Unless sooner terminated as herein provided, (i) the initial term of this Agreement shall commence on the date this Agreement is executed by the parties and end thirty-six (36)
DDN/Obergfel
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months following the Initial Delivery Date (the “Initial Term”) and (ii) thereafter, the Agreement shall automatically renew for successive [###] periods, unless, at least [###] prior to the expiration of the initial or renewal term then in effect, Manufacturer or DDN notifies the other party in writing of its intent not to renew (each such [###] period, an “Extension Term”). The Initial Term and any applicable Extension Term shall sometimes be referred to herein collectively as the “Term.” In addition, Manufacturer may terminate this Agreement during the Term by (i) giving DDN at least [###] prior written notice (the “Termination Notice”) of the date of its intended termination (which must be the last day of a month) and (ii) paying to DDN, at the time of the giving of the Termination Notice or within [###] thereafter, the Early Termination Fee. The “Early Termination Fee” means the lesser of: (a) $[###] or (b) the aggregate amount of [###]. “Remaining Months” means the number of months from the date of termination specified in the Termination Notice to the end of the applicable Term in effect immediately before the giving of the Termination Notice.
(b) If DDN provides Manufacturer with an Adjustment Notice and if such Adjustment Notice specifies an increase in the aggregate fee rates from the fee rates then in effect that is more than the greater of the following: (i) [###]% or (ii) the CPI Increase (as hereinafter defined) plus [###] percentage points ([###]%), Manufacturer may terminate the Term by giving DDN written notice of termination within 30 days after the Adjustment Notice was given. Failure by Manufacturer to give such notice of termination within such 30-day period shall constitute acceptance of the Adjustment Notice. If Manufacturer timely gives notice of termination, the Term shall terminate on the 60th day following the date the Adjustment Notice was given and no Early Termination Fee will be due. “CPI Increase” means the percentage increase of the CPI, as hereinafter defined, for the month last published immediately preceding the date the Adjustment Notice is given over the CPI published for the identical month of the immediately preceding year. “CPI” means the Consumer Price Index - All Urban Consumers, U.S. City Average, All Items, (1982-84=100) published by the Bureau of Labor Statistics, United States Department of Labor, or any successor index thereto.
(c) If DDN or Manufacturer believes that the other party has breached this Agreement (other than a breach by Manufacturer of a payment obligation) and desires to terminate the Term because of such breach, such party (“Aggrieved Party”) shall give written notice of such intent to the breaching party (“Breaching Party”) and shall grant the Breaching Party thirty (30) days in which to remedy the cause for termination. During such period, the parties shall make a good-faith effort to assist each other to remedy the breach. If the breach is not remedied or waived by the end of such period, then the Aggrieved Party may terminate the Term, effective as of the last day of such 30-day period and, in the case of a DDN breach, no Early Termination Fee will be due. In the event of Manufacturer’s breach of any of its payment obligations under this Agreement, DDN may, by written notice to Manufacturer, terminate this Agreement at any time on or after giving of such notice, provided such breach is not remedied within 10 working days and occurs no more than 2 times per year, subject to Section 4 (c).
(d) The (i) obligation of Manufacturer to pay fees and expenses earned or incurred by DDN prior to the expiration or effective date of termination of the Term and (ii) obligations of each
DDN/Obergfel
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party pursuant to Sections 5, 6, 7, this Section 8(d), 9, 10 and 11 hereof, shall survive the expiration or termination of the Term.
(e) Upon termination of the Term, and in consideration of the fees and expenses therefor set forth on Exhibit B, DDN and Manufacturer shall cooperate with each other for the removal of all of Products from the Premises to a location specified by Manufacturer.
9. CONFIDENTIALITY.
(a) DDN shall not disclose (except as required in the performance of its services hereunder or as provided in this Section 9) or use for the direct or indirect benefit of any person, other than Manufacturer, any information regarding the Products or Manufacturer’s business methods, policies, procedures, techniques, computer programs, research or development projects, trade secrets or inventions, names or addresses of Manufacturer’s customers, data concerning past, present or prospective customers of Manufacturer, information concerning Manufacturer sales, shipments, costs or inventories, or any other information concerning the business operations of Manufacturer or Manufacturer’s customers (“Manufacturer Information”) provided to DDN or learned or acquired by DDN while providing services under this Agreement. The fact that Manufacturer is a customer of DDN is not Manufacturer Information; provided that DDN will not use Manufacturer’s name in any promotional or other literature without the prior written consent of Manufacturer, which consent will not be unreasonably withheld or delayed.
(b) Manufacturer shall not disclose or use for the direct or indirect benefit of any person, other than DDN, any written or oral information regarding DDN’s business methods, policies, procedures, techniques, computer programs, research or development projects, trade secrets or inventions, names or addresses of DDN’s customers, any data concerning past, present or prospective customers of DDN, information concerning DDN’s business revenues, pricing policies or costs, the terms and conditions of this Agreement, or any other information concerning the business operations of DDN or its customers (the “DDN Information”) provided to Manufacturer or learned or acquired by Manufacturer while receiving services from DDN under this Agreement.
(c) The terms “Manufacturer Information” and “DDN Information” do not include any:
(i) Information that, at the time of disclosure, is in or, after disclosure by the disclosing party, becomes a part of the public domain, other than by reason of breach of this Agreement;
(ii) Information that, prior to disclosure by the disclosing party, the recipient party can demonstrate from written records was already within its possession from another source not under a contractual, fiduciary or other obligation of confidentiality to the disclosing party; or
(iii) Information that, subsequent to disclosure, is obtained by the recipient party from a third party who is not prohibited from disclosing such information by a contractual, fiduciary or other obligation owed to the disclosing party.
DDN/Obergfel
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(d) DDN may disclose Manufacturer Information, and Manufacturer may disclose DDN Information, to their respective officers, employees, directors, consultants, professional advisors, agents and representatives (collectively, “Representatives”) who have a need to know. Each Representative to whom DDN discloses Manufacturer Information and to whom Manufacturer discloses DDN Information shall be apprised by DDN and Manufacturer, respectively, of the restrictions on disclosure and use thereof contained in this Section 9 and shall agree (for the benefit of Manufacturer and DDN, respectively) to be bound by the terms of this Section 9. Notwithstanding the foregoing, each party hereto shall be responsible and liable for any breach of this Section 9 by its Representatives.
(e) If either DDN (with respect to Manufacturer Information) or Manufacturer (with respect to DDN Information) is compelled to disclose the same by court order, subpoena, interrogatory or other legal process, such disclosure shall be permitted, provided that the recipient party shall promptly notify the disclosing party of the existence and terms of such legal process and provide a copy thereof, and reasonably assist the disclosing party’s efforts to obtain a protective order or such other relief as may be available to prevent or limit such disclosure.
(f) The confidentiality covenants of this Section 9 shall remain in effect during the Term and for a period of two years following the expiration or termination thereof.
(g) Each of DDN and Manufacturer acknowledges that its breach of this Section 9 will cause irreparable harm to the other which cannot be adequately compensated by monetary damages. Accordingly, in the event of a breach or default under this Section 9 by a recipient party, the disclosing party shall be entitled to compel specific performances by, or to obtain injunctive or other equitable relief against, the recipient party, without the necessity of posting bond or other surety, in addition to all other remedies available at law or in equity.
10. TAXES. Except for income or franchise taxes payable by DDN with respect to the fees payable to it hereunder, DDN shall have no liability for any, and Manufacturer shall bear all, property, ad valorem, inventory, sales, use or other taxes in connection with the Products or the services rendered by DDN hereunder.
11. MISCELLANEOUS.
(a) Amendment; Entire Agreement. This Agreement, the attached Exhibits and any Adjustment Notice constitute the entire understanding of the parties with respect to the subject matter hereof, and supersede any and all previous or contemporaneous agreements, statements and understandings, whether written or oral. The terms and conditions of this Agreement shall prevail over any contradictory terms or conditions contained in any purchase order, acceptance, acknowledgment, standard forms used by the parties in performing this Agreement or other correspondence. This Agreement may not be amended, supplemented or otherwise modified except by an Adjustment Notice or an instrument in writing executed by both of the parties hereto.
(b) Assignment. This Agreement shall inure to the benefit of the parties and their successors and assigns. The rights and obligations under this Agreement may not be assigned or delegated to a third party by either party, by operation of law or otherwise, without obtaining the
DDN/Obergfel
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prior written consent of the other party. Notwithstanding the foregoing, either party may assign and delegate, without obtaining the consent of the other party, all of the assignor’s rights and/or obligations of this Agreement (i) to one or more of its parent, subsidiaries or affiliated entities or (ii) in connection with the sale or transfer of all or substantially all of the assignor’s business to which this Agreement pertains; provided, however, that any such assignee shall have executed and delivered to the other party hereto an agreement, in form and substance reasonably satisfactory to the other party hereto, assuming all of the assignor’s obligations hereunder. No such assignment, delegation or assumption, however, shall relieve the assignor of its obligations hereunder.
(c) Force Majeure. Each party to this Agreement will be relieved from the performance of its obligations hereunder to the extent performance is delayed or prevented by Force Majeure, and such relief will continue for so long as the condition constituting the Force Majeure prevails; provided, however, that (i) if such Force Majeure continues for more than seven consecutive days, either party hereto may elect to terminate this Agreement by giving written notice thereof to the other party, in which case no Early Termination Fee will be payable and (ii) the foregoing shall not relieve Manufacturer of its obligation to timely pay amounts otherwise due under this Agreement.
(d) Status as an Authorized Distributor of Record. Both DDN and Manufacturer agree and acknowledge that (i) the Agreement evidences the parties’ “ongoing relationship” (as that term is defined by the Food and Drug Administration in 21 CFR § 203.3(u), as amended) for the distribution of Manufacturer’s products; and (ii) DDN is at all times during the Term an “authorized distributor of record” (as that term is defined by the Food and Drug Administration in 21 CFR § 203.3(b), as amended) for Products. DDN’s status as an authorized distributor of record shall be reflected in Manufacturer’s list of authorized distributors of record (“List”) at all times during the Term. Manufacturer shall comply fully with 21 CFR § 203.50(d), as amended with respect to maintaining (and granting access to) the List. The parties hereto understand and agree that the Agreement may be made available to the FDA upon the FDA’s request.
(e) Notice. Any notice provided for herein shall be given in writing and shall be deemed given to a party at the earlier of (i) when actually delivered to such party, by hand, facsimile or pdf or (ii) five (5) days following mailing to such party by registered or certified U.S. Mail (return receipt requested) or (iii) sent by overnight courier, confirmed by receipt, and addressed to such party at the address designated below for such party (or to such other address for such party as such party may have substituted by notice pursuant to this Section):
If to DDN: DDN/Obergfel, LLC
800 Woodland Prime, Suite 200
Menomonee Falls, Wisconsin 53051
ATTN: Mr. Ross Bjella
If to Manufacturer: OMP, Inc.
3760 Kilroy Airport Way, Suite 500
Long Beach, CA 90806
ATTN: CFO
(f) Attorneys’ Fees. The prevailing party in any suit, proceeding or other action brought against the other party to enforce the terms of this Agreement or any rights or obligations hereunder shall be entitled to receive reimbursement of its reasonable costs, expenses and disbursements (including court costs and attorneys’ fees) incurred in connection with such enforcement.
(g) Independent Contractors. The relationship of the parties is that of independent contractors. Neither party has the authority to bind the other, except only to the extent expressly set forth herein. Nothing herein is intended to create or shall be construed as creating between the parties the relationship of joint venturers, partners, employer/employee or principal and agent.
(h) Liability of the Parties. The obligations of each of the parties hereto under this Agreement are its sole obligations, and no member, manager or employee or agent of such party shall have any individual liability therefor. (i) Severability. If any term or provision of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision hereof, and this Agreement shall be interpreted and construed as if such term or provision, to the extent the same shall have been held to be invalid, illegal or unenforceable, had never been contained herein.
(j) Governing Law; Construction. This Agreement shall be governed by the internal laws of the state of Wisconsin, and shall be construed without giving effect to any rule of construction concerning the party responsible for the drafting thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.
DDN/OBERGFEL, LLC
By:/s/ Ross Bjella Its: President
OMP, INC.
By: /s/ Preston Romm Its: CFO
DDN/Obergfel
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LIST OF EXHIBITS
EXHIBIT A - Manufacturer’s Special Operational Requirements EXHIBIT B – Fee and Expense Schedule
Obagi Medical Products, Inc. agrees to furnish supplementally any of the foregoing exhibits to the Securities and Exchange Commission upon request.
DDN/Obergfel
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"Exhibit 10.35 The confidential portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. REDACTED PORTIONS OF THIS EXHIBIT ARE INDICATED BY AN [###]. SERVICE AGREEMENT This Service Agreement (this “Agreement”) is made as of this 1st day of July 2009 by and between DDN/OBERGFEL, LLC, a Wisconsin limited liability company (“DDN”), and OMP, Inc., a Delaware corporation (“Manufacturer”). RECITALS DDN is in the business of providing a variety of logistics and related services to the pharmaceutical industry, including warehousing and shipment services, order-to-cash services, contract administration services, chargeback processing, sample drug distribution and other services. Manufacturer desires to retain DDN to provide certain of these services as more fully described herein. Accordingly, in consideration of the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, IT IS HEREBY AGREED AS FOLLOWS: AGREEMENT 1. DEFINITIONS.",
"For purposes of this Agreement, the following words shall have the meanings set forth below: (a) “Adjustment Notice” has the meaning set forth in Section 3(f) hereof. (b) “Customers” means those customers or distributees of Manufacturer to whom Products are distributed by DDN. (c) “DDN Standard Operating Procedures” means DDN’s standard operating procedures, as revised and changed by DDN from time to time. (d) “Force Majeure” means acts of God or the public enemy, earthquakes, fire, flood, epidemic, civil insurrection or war, acts of terrorism, inability to procure raw materials, power or supplies, labor shortages or strife, and other conditions (other than financial difficulties) beyond the control of the involved party which delay or prevent the rendition of such party’s performance hereunder. (e) “Initial Delivery Date” means the date on which any Products are first received in DDN facilities.",
"DDN/Obergfel -------------------------------------------------------------------------------- (f) “Laws” means all United States federal, state and local laws, statutes, rules, regulations, guidelines, ordinances and orders. (g) “Premises” means DDN’s corporate office and its warehouse facilities located at 1560-A Baker Avenue, Ontario, California 91761 and 4580 Mendenhall Road, Memphis, Tennessee 38141, or such other facilities as DDN and Manufacturer may mutually agree. (h) “Products” means all of the pharmaceutical products manufactured, distributed or marketed by Manufacturer which Manufacturer distributes or desires to distribute in the Territory. (i) “Replacement Cost” means Manufacturer’s incremental, actual manufacturing cost to replace Products lost or damaged. (j) “Term” shall have the meaning set forth in Section 8(a). (k) “Territory” means the states east of the Mississippi in the United States of America, including its territories and possessions. 2.",
"OBLIGATIONS OF DDN. During the Term, DDN shall provide Manufacturer with the following services with respect to Products delivered to DDN for distribution in the Territory: (a) Maintain the Premises and perform the warehousing, shipping and other services specified hereunder in material compliance with (i) all Laws known by DDN to be applicable to its business, including those of the U.S. Food and Drug Administration, Drug Enforcement Administration and state pharmaceutical boards, (ii) applicable DDN Standard Operating Procedures and (iii) any special operating procedures specified by Manufacturer, agreed to by DDN and set forth on Exhibit A attached hereto and incorporated herein; provided, however, that DDN shall not be responsible for maintaining its Premises or performing services in compliance with any of the foregoing to the extent such failure arises from or is attributable to any failure by Manufacturer to comply with its obligations hereunder. (b) Receive, warehouse and, pursuant to Manufacturer’s instructions, ship Products from the Premises and provide standard reporting associated therewith, including order fulfillment and shipping information through the EDI connectivity agreed to between DDN and Manufacturer. (c) Provide reverse distribution services in support of returned Product processing and Manufacturer’s Product recall management.",
"(g) Provide such additional services as Manufacturer and DDN may separately agree in writing if and to the extent, and in consideration of the fees and expenses, set forth on Exhibit B attached hereto and incorporated herein, or as mutually amended. (h) Maintain chain of custody compliance documentation and provide Pedigree reports within a 24-hour turnaround as required by state law where applicable. Designate a responsible person to respond to Pedigree inquiries and verification. Costs incurred by future Pedigree legislation will be negotiated and agreed upon by DDN and Manufacturer. DDN shall DDN/Obergfel -------------------------------------------------------------------------------- not be obligated to provide services under this Section 2(h) with respect to future Pedigree legislation or regulation, unless the parties negotiate in good faith and agree upon the additional fees to be paid to DDN in connection therewith, and DDN agrees that such additional fees will be reasonable in relation to the services under this Section 2(h) that will be provided to Manufacturer.",
"(i) Notify Manufacturer within 24 hours of any regulatory actions by Federal, State and Local agencies against DDN and which could reasonably impact Manufacturer’s Products or DDN’s Obligations as defined in this Section 2, including but not limited to, FDA 483’s, Warning letters, DEA license revocations. Provide copies of responses and corrective actions to regulatory agencies. 3. OBLIGATIONS OF MANUFACTURER. During the Term, Manufacturer shall: (a) Deliver Products to the Premises specified by DDN during DDN’s normal business hours. (b) Properly mark, label and package all Products in accordance with all applicable Laws and include a manifest showing sizes or specific stock keeping units.",
"(c) Comply with all applicable Laws to which Manufacturer is subject including, without limitation, those with respect to the manufacture of Products, their safety, labeling, packaging, advertising, marketing and sale and, to the extent applicable, advance verification of distributees’ licensure or authorization to receive and/or prescribe Products (or samples thereof). (d) Provide DDN on a timely basis with true and correct information necessary for DDN to perform its duties hereunder, including, without limitation, information regarding the Products, the name and address of the intended Customers, all contracts and pricing agreements, promotional policies and other information as may be needed by DDN in connection with its duties under Section 2, and validate in advance of shipment the distributees designated by Manufacturer to receive shipment of such Products as may be required for DDN to comply with any obligations under applicable Laws (including, without limitation, the Prescription Drug Marketing Act and regulations promulgated thereunder).",
"DDN shall be entitled to rely upon all such information provided without independent verification, shall have no liability with respect to, and shall be indemnified and held harmless by Manufacturer from and against the inaccuracy or inadequacy of, such information. (e) Utilize DDN exclusively as its third party logistics provider for the types of services to be provided under Section 2 for all of Manufacturer’s requirements for such services with respect to all Products destined for delivery or delivered within the Territory. Notwithstanding the foregoing, nothing herein shall prevent Manufacturer from continuing to warehouse and ship Products from its company-owned or leased facilities. (f) Pay when due the fees and expenses for DDN’s services rendered hereunder, as listed on Exhibit B, and as maybe hereafter adjusted from time to time by DDN by giving a written notice to Manufacturer (an “Adjustment Notice”), subject to Manufacturer’s right to terminate for DDN/Obergfel -------------------------------------------------------------------------------- certain rate increases as set forth at Section 8 hereof. Each Adjustment Notice shall specify the effective date of the adjusted fees and expenses, which effective date (i) must be at least 90 days after the date the Adjustment Notice is given, (ii) may not occur during the first 18 months of the Term and (iii) if the fees and expenses have been adjusted pursuant to a previously given Adjustment Notice, must be at least 12 months after the effective date specified in the immediately preceding Adjustment Notice.",
"4. COMMERCIAL TERMS. (a) Except for freight, all fees and expenses will be invoiced monthly. All fixed one time or periodic fees and expenses are payable within 30 days from the date of invoice. All variable one time or periodic fees and expenses will be invoiced in arrears, with payment due within 30 days from the date of invoice (except for freight). Any such fees and expenses unless expressly agreed to on Exhibit B, will not be incurred on Manufacturer’s behalf without prior written approval, which will not be unreasonably withheld or delayed. (b) Freight charges will be invoiced weekly with payment due within 30 days from the date of invoice. (c) Payments will be deemed past due if not received by the due date, unless received after the due date with a timely postmark.",
"If any amount owed by Manufacturer to DDN is not paid when due, a late payment charge of [###]% of the amount past due will apply for each 30 day period or part thereof that the amount remains unpaid. Undisputed amounts will still be subject to normal terms as set forth in this Section 4(c). 5. LEGAL RELATIONSHIP; STANDARD OF CARE; LOSS LIMITATIONS. (a) Title to and ownership of Products delivered to DDN by Manufacturer shall remain solely with Manufacturer. Manufacturer shall be solely responsible for the care, custody and control of Products at all times prior to DDN’s receipt of such Products at the Premises. (b) The relationship between Manufacturer and DDN hereunder is that of bailor and bailee, as specifically described and limited by the terms of this Agreement. In performing its obligations hereunder, DDN shall have no liability (whether by indemnification or otherwise, and regardless of whether any claim is based upon contract, in tort, common law principles or otherwise) to Manufacturer except only for (i) DDN’s breach of its obligations and agreements expressly contained herein or (ii) loss or damage caused by DDN’s gross negligence, reckless or intentional misconduct. (c) Notwithstanding anything to the contrary contained herein, in no event shall DDN have liability (whether by indemnification or otherwise) for: (i) any loss or damage attributable to events, circumstances or conditions which shall constitute a Force Majeure; or (ii) unexplained loss, mysterious disappearance (including theft), misshipment, loss or shortage of Product disclosed upon the taking of an inventory, or other shrinkage of Product (collectively, “shrinkage”) to the extent that such annual shrinkage does not exceed [###]% of the aggregate annual number of Product units handled by DDN.",
"DDN is responsible for shrinkage losses above that shrinkage percentage for any loss of Product other than that which is carved out above. (d) Notwithstanding anything to the contrary contained herein, Manufacturer’s exclusive remedy for any loss or damage to Products arising from this Agreement or DDN’s services hereunder is recovery of the Replacement Cost of such Products lost or damaged. (e) Subject to Section 5(f) hereof, DDN’s maximum liability to Manufacturer arising out of this Agreement or the performance of DDN’s services hereunder (including, without limitation, loss or damage to Products) shall not exceed: (i) during the first [###] of the Term, the sum of $[###]; and (ii) following such [###] period, the sum of [###]. (f) NEITHER DDN NOR MANUFACTURER SHALL BE LIABLE (BY INDEMNIFICATION OR OTHERWISE) FOR CONSEQUENTIAL (INCLUDING LOST PROFITS), INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES (WHETHER OR NOT CONTEMPLATED OR FORESEEABLE), WHETHER A CLAIM THEREFOR IS BROUGHT AT LAW OR IN EQUITY AND REGARDLESS OF WHETHER ANY CLAIM THEREFOR IS BASED UPON CONTRACT, TORT OR OTHER PRINCIPLES. 6. INSURANCE; INDEMNITY. (a) Manufacturer shall maintain during the Term or as otherwise provided in Section 6(c) hereof the following insurance coverage: (i) Commercial general liability insurance, including products liability insurance on Manufacturer’s Products, which insurance shall be fully sufficient (in terms of coverage and policy limits) to cover property loss or damage and bodily injury or death arising from the Products.",
"Such insurance shall be written on an ISO occurrence form CG 00 01 12 04 (or a substitute form providing equivalent coverage) and shall cover, among other things, bodily injury and property damage arising from products-completed operations and liability assumed under an insured contract including Manufacturer’s contractual liability to indemnify DDN under Section 6(d) hereof. The limits of such insurance shall not be less than $[###] per occurrence. Such insurance shall name DDN and its subsidiaries as additional insureds using ISO additional insured endorsement CG 2015 0704 or a substitute providing equivalent coverage. This insurance shall apply as primary insurance with respect to any other insurance or self-insurance program.",
"(ii) Fire and extended property insurance sufficient to cover the replacement value for all Products while in the possession or under the control of DDN. Upon demand, Manufacturer shall promptly provide DDN with insurance certificates evidencing Manufacturer’s compliance with the foregoing insurance requirements. Such certificates shall also require the insurer to endeavor to notify DDN at least 30 days prior to the cancellation or non-renewal of such insurance. DDN/Obergfel -------------------------------------------------------------------------------- (b) DDN shall maintain during the Term or as otherwise provided in Section 6(c) hereof the following insurance coverage: (i) Warehouseman’s legal liability insurance in the amount of at least $[###] with respect to DDN’s operations in Memphis, TN and $[###] with respect to DDN’s operations in Ontario, CA.",
"Manufacturer acknowledges that such warehouseman’s legal liability insurance also insures property in the possession of DDN other than Products of Manufacturer. (ii) Worker’s Compensation insurance as required by law. (iii) Commercial general liability insurance and umbrella insurance having a combined limit of not less than $[###] per occurrence and $[###] annual aggregate. Such insurance shall be written on an ISO occurrence form CG 00 01 1204 (or a substitute for providing equivalent coverage). Prior to the Initial Delivery Date and thereafter upon demand, DDN promptly shall provide Manufacturer with insurance certificates evidencing DDN’s compliance with the foregoing requirements.",
"Such certificates shall also require the insurer to endeavor to notify Manufacturer at least 30 days prior to the cancellation or non-renewal of such insurance. (c) All insurance required hereunder shall be with insurance companies rated “A” or better by A. M. Best, and shall not have deductibles or self-insured retentions in excess of $[###]. If any insurance required hereunder of Manufacturer is provided on a claims-made basis, then said insurance shall be maintained in full force and effect for at least three years after the expiration of this Agreement and any renewals hereunder. (d) The parties hereto acknowledge that DDN has not had and will not have any role in the manufacture, branding, labeling, packaging, marketing or sale of Products and that, as between the parties, Manufacturer or shall have the sole liability for any product liability or similar claims (regardless of the legal theory upon which such claims may be brought) with respect to Products (other than any claims for which it is determined by the final decision of a court of competent jurisdiction that (i) the actual Product was tampered or altered in any manner, while under the custody or control of DDN, and (ii) such alteration or tampering was the primary cause of the injury and damages incurred for which the claim is made (the “Excluded Claims”)).",
"Accordingly, other than with respect to Excluded Claims, Manufacturer indemnifies and agrees to defend and hold DDN and its members, directors, officers, managers, employees and agents (“DDN Indemnitees”), harmless from any and all claims, damages (whether for bodily injury or death, third-party property damage or otherwise), demands, causes of action, losses, judgments, costs and expenses of any nature whatsoever, including, without limitation, reasonable attorneys’ fees (collectively, “Claims”) caused by or attributable in whole or part to, or alleged to have been caused by or attributable in whole or part to: (i) The Products, including, without limitation, their inherent safety, defects in the manufacture thereof, their branding, labeling, packaging, marketing or sale and DDN/Obergfel -------------------------------------------------------------------------------- regardless of whether the Claim is asserted based upon strict liability or absolute liability, negligence, warranty, common law principles or other cause of action. (ii) Any actual or asserted violation of the Federal Food, Drug and Cosmetic Act or any other Law by virtue of which Products supplied or delivered by Manufacturer shall be alleged or determined to be adulterated, misbranded, mislabeled or otherwise not in full compliance with such Law.",
"(iii) Any actual or asserted infringement or violation of any patent, trademark, trade name, copyright or other intellectual or proprietary rights of any third party. (e) Subject to the limitations of Section 5 hereof, each party (an “Indemnifying Party”) indemnifies and agrees to defend and hold the other party and its members, directors, officers, managers, employees and agents, harmless from any and all Claims to the extent caused by or the Indemnifying Party’s gross negligence or willful misconduct. (f) Subject to the limitations of Section 5 hereof, DDN indemnifies and agrees to defend and hold Manufacturer and its members, directors, officers, managers, employees and agents, harmless from any and all Claims to the extent caused by or attributable to the following: (i) Any actual violation by DDN of the Federal Food, Drug and Cosmetic Act or any other Law. (ii) Excluded Claims as defined in Section 6(d). (ii) Any Product shrinkage losses above the amounts set forth in Section 5(e).",
"(g) Alleged claims will be reviewed by both parties according to the limitations set forth in Sections 5 and 6 of this Agreement to discuss the best course of action regarding the management of the claim. 7. INSPECTION. Manufacturer has visited and physically inspected the Premises and observed the DDN Standard Operating Procedures and the standard practices and procedures employed by DDN thereat. Manufacturer acknowledges that the Premises, the DDN Standard Operating Procedures and such observed practices and procedures are acceptable to Manufacturer with respect to the performance by DDN of its services hereunder.",
"Furthermore, during the Term, Manufacturer may, upon reasonable prior notice and during working hours, inspect the Premises and observe the DDN Standard Operating Procedures and the standard practices and procedures employed by DDN in rendering its services hereunder. Such inspection may be conducted not more than one (1) time per quarter and shall be conducted in a manner so as to not unreasonably disrupt normal warehouse and other DDN operations. 8. TERM AND TERMINATION. (a) Unless sooner terminated as herein provided, (i) the initial term of this Agreement shall commence on the date this Agreement is executed by the parties and end thirty-six (36) DDN/Obergfel -------------------------------------------------------------------------------- months following the Initial Delivery Date (the “Initial Term”) and (ii) thereafter, the Agreement shall automatically renew for successive [###] periods, unless, at least [###] prior to the expiration of the initial or renewal term then in effect, Manufacturer or DDN notifies the other party in writing of its intent not to renew (each such [###] period, an “Extension Term”).",
"The Initial Term and any applicable Extension Term shall sometimes be referred to herein collectively as the “Term.” In addition, Manufacturer may terminate this Agreement during the Term by (i) giving DDN at least [###] prior written notice (the “Termination Notice”) of the date of its intended termination (which must be the last day of a month) and (ii) paying to DDN, at the time of the giving of the Termination Notice or within [###] thereafter, the Early Termination Fee. The “Early Termination Fee” means the lesser of: (a) $[###] or (b) the aggregate amount of [###]. “Remaining Months” means the number of months from the date of termination specified in the Termination Notice to the end of the applicable Term in effect immediately before the giving of the Termination Notice. (b) If DDN provides Manufacturer with an Adjustment Notice and if such Adjustment Notice specifies an increase in the aggregate fee rates from the fee rates then in effect that is more than the greater of the following: (i) [###]% or (ii) the CPI Increase (as hereinafter defined) plus [###] percentage points ([###]%), Manufacturer may terminate the Term by giving DDN written notice of termination within 30 days after the Adjustment Notice was given.",
"Failure by Manufacturer to give such notice of termination within such 30-day period shall constitute acceptance of the Adjustment Notice. If Manufacturer timely gives notice of termination, the Term shall terminate on the 60th day following the date the Adjustment Notice was given and no Early Termination Fee will be due. “CPI Increase” means the percentage increase of the CPI, as hereinafter defined, for the month last published immediately preceding the date the Adjustment Notice is given over the CPI published for the identical month of the immediately preceding year. “CPI” means the Consumer Price Index - All Urban Consumers, U.S. City Average, All Items, (1982-84=100) published by the Bureau of Labor Statistics, United States Department of Labor, or any successor index thereto. (c) If DDN or Manufacturer believes that the other party has breached this Agreement (other than a breach by Manufacturer of a payment obligation) and desires to terminate the Term because of such breach, such party (“Aggrieved Party”) shall give written notice of such intent to the breaching party (“Breaching Party”) and shall grant the Breaching Party thirty (30) days in which to remedy the cause for termination.",
"During such period, the parties shall make a good-faith effort to assist each other to remedy the breach. If the breach is not remedied or waived by the end of such period, then the Aggrieved Party may terminate the Term, effective as of the last day of such 30-day period and, in the case of a DDN breach, no Early Termination Fee will be due. In the event of Manufacturer’s breach of any of its payment obligations under this Agreement, DDN may, by written notice to Manufacturer, terminate this Agreement at any time on or after giving of such notice, provided such breach is not remedied within 10 working days and occurs no more than 2 times per year, subject to Section 4 (c). (d) The (i) obligation of Manufacturer to pay fees and expenses earned or incurred by DDN prior to the expiration or effective date of termination of the Term and (ii) obligations of each DDN/Obergfel -------------------------------------------------------------------------------- party pursuant to Sections 5, 6, 7, this Section 8(d), 9, 10 and 11 hereof, shall survive the expiration or termination of the Term.",
"(e) Upon termination of the Term, and in consideration of the fees and expenses therefor set forth on Exhibit B, DDN and Manufacturer shall cooperate with each other for the removal of all of Products from the Premises to a location specified by Manufacturer. 9. CONFIDENTIALITY. (a) DDN shall not disclose (except as required in the performance of its services hereunder or as provided in this Section 9) or use for the direct or indirect benefit of any person, other than Manufacturer, any information regarding the Products or Manufacturer’s business methods, policies, procedures, techniques, computer programs, research or development projects, trade secrets or inventions, names or addresses of Manufacturer’s customers, data concerning past, present or prospective customers of Manufacturer, information concerning Manufacturer sales, shipments, costs or inventories, or any other information concerning the business operations of Manufacturer or Manufacturer’s customers (“Manufacturer Information”) provided to DDN or learned or acquired by DDN while providing services under this Agreement. The fact that Manufacturer is a customer of DDN is not Manufacturer Information; provided that DDN will not use Manufacturer’s name in any promotional or other literature without the prior written consent of Manufacturer, which consent will not be unreasonably withheld or delayed.",
"(b) Manufacturer shall not disclose or use for the direct or indirect benefit of any person, other than DDN, any written or oral information regarding DDN’s business methods, policies, procedures, techniques, computer programs, research or development projects, trade secrets or inventions, names or addresses of DDN’s customers, any data concerning past, present or prospective customers of DDN, information concerning DDN’s business revenues, pricing policies or costs, the terms and conditions of this Agreement, or any other information concerning the business operations of DDN or its customers (the “DDN Information”) provided to Manufacturer or learned or acquired by Manufacturer while receiving services from DDN under this Agreement. (c) The terms “Manufacturer Information” and “DDN Information” do not include any: (i) Information that, at the time of disclosure, is in or, after disclosure by the disclosing party, becomes a part of the public domain, other than by reason of breach of this Agreement; (ii) Information that, prior to disclosure by the disclosing party, the recipient party can demonstrate from written records was already within its possession from another source not under a contractual, fiduciary or other obligation of confidentiality to the disclosing party; or (iii) Information that, subsequent to disclosure, is obtained by the recipient party from a third party who is not prohibited from disclosing such information by a contractual, fiduciary or other obligation owed to the disclosing party.",
"DDN/Obergfel -------------------------------------------------------------------------------- (d) DDN may disclose Manufacturer Information, and Manufacturer may disclose DDN Information, to their respective officers, employees, directors, consultants, professional advisors, agents and representatives (collectively, “Representatives”) who have a need to know. Each Representative to whom DDN discloses Manufacturer Information and to whom Manufacturer discloses DDN Information shall be apprised by DDN and Manufacturer, respectively, of the restrictions on disclosure and use thereof contained in this Section 9 and shall agree (for the benefit of Manufacturer and DDN, respectively) to be bound by the terms of this Section 9. Notwithstanding the foregoing, each party hereto shall be responsible and liable for any breach of this Section 9 by its Representatives.",
"(e) If either DDN (with respect to Manufacturer Information) or Manufacturer (with respect to DDN Information) is compelled to disclose the same by court order, subpoena, interrogatory or other legal process, such disclosure shall be permitted, provided that the recipient party shall promptly notify the disclosing party of the existence and terms of such legal process and provide a copy thereof, and reasonably assist the disclosing party’s efforts to obtain a protective order or such other relief as may be available to prevent or limit such disclosure. (f) The confidentiality covenants of this Section 9 shall remain in effect during the Term and for a period of two years following the expiration or termination thereof. (g) Each of DDN and Manufacturer acknowledges that its breach of this Section 9 will cause irreparable harm to the other which cannot be adequately compensated by monetary damages.",
"Accordingly, in the event of a breach or default under this Section 9 by a recipient party, the disclosing party shall be entitled to compel specific performances by, or to obtain injunctive or other equitable relief against, the recipient party, without the necessity of posting bond or other surety, in addition to all other remedies available at law or in equity.",
"10. TAXES. Except for income or franchise taxes payable by DDN with respect to the fees payable to it hereunder, DDN shall have no liability for any, and Manufacturer shall bear all, property, ad valorem, inventory, sales, use or other taxes in connection with the Products or the services rendered by DDN hereunder. 11. MISCELLANEOUS. (a) Amendment; Entire Agreement. This Agreement, the attached Exhibits and any Adjustment Notice constitute the entire understanding of the parties with respect to the subject matter hereof, and supersede any and all previous or contemporaneous agreements, statements and understandings, whether written or oral. The terms and conditions of this Agreement shall prevail over any contradictory terms or conditions contained in any purchase order, acceptance, acknowledgment, standard forms used by the parties in performing this Agreement or other correspondence.",
"This Agreement may not be amended, supplemented or otherwise modified except by an Adjustment Notice or an instrument in writing executed by both of the parties hereto. (b) Assignment. This Agreement shall inure to the benefit of the parties and their successors and assigns. The rights and obligations under this Agreement may not be assigned or delegated to a third party by either party, by operation of law or otherwise, without obtaining the DDN/Obergfel -------------------------------------------------------------------------------- prior written consent of the other party. Notwithstanding the foregoing, either party may assign and delegate, without obtaining the consent of the other party, all of the assignor’s rights and/or obligations of this Agreement (i) to one or more of its parent, subsidiaries or affiliated entities or (ii) in connection with the sale or transfer of all or substantially all of the assignor’s business to which this Agreement pertains; provided, however, that any such assignee shall have executed and delivered to the other party hereto an agreement, in form and substance reasonably satisfactory to the other party hereto, assuming all of the assignor’s obligations hereunder.",
"No such assignment, delegation or assumption, however, shall relieve the assignor of its obligations hereunder. (c) Force Majeure. Each party to this Agreement will be relieved from the performance of its obligations hereunder to the extent performance is delayed or prevented by Force Majeure, and such relief will continue for so long as the condition constituting the Force Majeure prevails; provided, however, that (i) if such Force Majeure continues for more than seven consecutive days, either party hereto may elect to terminate this Agreement by giving written notice thereof to the other party, in which case no Early Termination Fee will be payable and (ii) the foregoing shall not relieve Manufacturer of its obligation to timely pay amounts otherwise due under this Agreement.",
"(d) Status as an Authorized Distributor of Record. Both DDN and Manufacturer agree and acknowledge that (i) the Agreement evidences the parties’ “ongoing relationship” (as that term is defined by the Food and Drug Administration in 21 CFR § 203.3(u), as amended) for the distribution of Manufacturer’s products; and (ii) DDN is at all times during the Term an “authorized distributor of record” (as that term is defined by the Food and Drug Administration in 21 CFR § 203.3(b), as amended) for Products. DDN’s status as an authorized distributor of record shall be reflected in Manufacturer’s list of authorized distributors of record (“List”) at all times during the Term. Manufacturer shall comply fully with 21 CFR § 203.50(d), as amended with respect to maintaining (and granting access to) the List. The parties hereto understand and agree that the Agreement may be made available to the FDA upon the FDA’s request. (e) Notice.",
"Any notice provided for herein shall be given in writing and shall be deemed given to a party at the earlier of (i) when actually delivered to such party, by hand, facsimile or pdf or (ii) five (5) days following mailing to such party by registered or certified U.S. Mail (return receipt requested) or (iii) sent by overnight courier, confirmed by receipt, and addressed to such party at the address designated below for such party (or to such other address for such party as such party may have substituted by notice pursuant to this Section): If to DDN: DDN/Obergfel, LLC 800 Woodland Prime, Suite 200 Menomonee Falls, Wisconsin 53051 ATTN: Mr. Ross Bjella If to Manufacturer: OMP, Inc. 3760 Kilroy Airport Way, Suite 500 Long Beach, CA 90806 ATTN: CFO (f) Attorneys’ Fees. The prevailing party in any suit, proceeding or other action brought against the other party to enforce the terms of this Agreement or any rights or obligations hereunder shall be entitled to receive reimbursement of its reasonable costs, expenses and disbursements (including court costs and attorneys’ fees) incurred in connection with such enforcement. (g) Independent Contractors.",
"The relationship of the parties is that of independent contractors. Neither party has the authority to bind the other, except only to the extent expressly set forth herein. Nothing herein is intended to create or shall be construed as creating between the parties the relationship of joint venturers, partners, employer/employee or principal and agent. (h) Liability of the Parties. The obligations of each of the parties hereto under this Agreement are its sole obligations, and no member, manager or employee or agent of such party shall have any individual liability therefor. (i) Severability. If any term or provision of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision hereof, and this Agreement shall be interpreted and construed as if such term or provision, to the extent the same shall have been held to be invalid, illegal or unenforceable, had never been contained herein. (j) Governing Law; Construction. This Agreement shall be governed by the internal laws of the state of Wisconsin, and shall be construed without giving effect to any rule of construction concerning the party responsible for the drafting thereof.",
"IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above. DDN/OBERGFEL, LLC By:/s/ Ross Bjella Its: President OMP, INC. By: /s/ Preston Romm Its: CFO DDN/Obergfel -------------------------------------------------------------------------------- LIST OF EXHIBITS EXHIBIT A - Manufacturer’s Special Operational Requirements EXHIBIT B – Fee and Expense Schedule Obagi Medical Products, Inc. agrees to furnish supplementally any of the foregoing exhibits to the Securities and Exchange Commission upon request. DDN/Obergfel --------------------------------------------------------------------------------"
] | https://github.com/TheAtticusProject/cuad | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
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DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Response to Arguments Applicant’s arguments in B. Objections to the Specification and C. Objections to the Drawings on pg. 12 and their respective amendments have been fully considered and are persuasive. The objections to the abstract and drawings have been withdrawn in view of the amendments. Applicant’s arguments in D. Claim Objections on pg. 12 and amendments have been fully considered and are persuasive. The objections to the claims have been withdrawn in view of the amendments. Applicant’s arguments in E. Claim Interpretation – 35 U.S.C. § 112(f) on pg. 12 and amendment have been fully considered but are not persuasive. The amendment of the individual ‘units’ to the new ‘processing system’ does not overcome the 112(f) interpretation, because ‘processing system’ does not recite sufficient structure. ‘System’ is a nonce term that is only being limited by the function of ‘processing.’ Applicant could overcome this interpretation by replacing “processing system” with “processor”, “processor system”, or like-term that connotes sufficient structure. Applicant’s arguments and amendments to the 112(a) Written Description and 112(b) with respect to the 112(f) interpretation amendment have been fully considered. As noted above, the amendment to “processing system” remains interpreted under 35 U.S.C. 112(f) since it is coupled with functional language and is not modified by sufficient structure in the claim(s). The Applicant’s arguments in F. Claim Rejections – 35 U.S.C. § 112(a) and amendment with respect to the Enablement on pg. 13 and amendment to the claims have been fully considered and are persuasive. The rejection has been withdrawn in view of the amendments. Applicant’s arguments in G. Claim Rejections – 35 U.S.C. § 112(b) on pg. 13 and amendments have been fully considered and are persuasive. The rejection to the claims under 112(b) has been withdrawn in view of the amendments except where noted above with respect to the means-plus-function limitation invoking 35 U.S.C. 112(f). Applicant’s arguments in H. Claim Rejections – 35 U.S.C. § 101 on pgs. 14-16 and amendments have been fully considered and are persuasive. It is noted in claim 1, for example, that while the ‘processing system’ (corresponding to a “processing unit” in [0067]) and ‘display’ can be construed as generic computer components performing the judicial exceptions, the amended claims are being evaluated as an ordered combination that amounts to significantly more than the judicial exceptions of the individual claim elements. The rejection to the claims under 101 has been withdrawn in view of the amendments. Applicant’s arguments in I. Claim Rejections – 35 U.S.C. § 102 on pgs. 16-19 and amendments have been fully considered but are not persuasive. Grady, and by virtue of its incorporation of the application of Taylor as a whole, remains a suitable reference for a 102 rejection of the amended claims, as presented below in the ‘Claim Rejection-35 USC § 102’ below.
Claim Objections Claims 11 and 14 recite “an intravascular measurement device arranged at the given position” each in the second paragraph. There is insufficient antecedent basis for this limitation in the claims as these are both independent claims. To overcome this rejection, “the” should be changed to “a”.
Claim Interpretation The following is a quotation of 35 U.S.C. 112(f): (f) Element in Claim for a Combination. – An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.
The following is a quotation of pre-AIA 35 U.S.C. 112, sixth paragraph: An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.
The claims in this application are given their broadest reasonable interpretation using the plain meaning of the claim language in light of the specification as it would be understood by one of ordinary skill in the art. The broadest reasonable interpretation of a claim element (also commonly referred to as a claim limitation) is limited by the description in the specification when 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is invoked. As explained in MPEP § 2181, subsection I, claim limitations that meet the following three-prong test will be interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph:
(B) the term “means” or “step” or the generic placeholder is modified by functional language, typically, but not always linked by the transition word “for” (e.g., “means for”) or another linking word or phrase, such as “configured to” or “so that”; and (C) the term “means” or “step” or the generic placeholder is not modified by sufficient structure, material, or acts for performing the claimed function. Use of the word “means” (or “step”) in a claim with functional language creates a rebuttable presumption that the claim limitation is to be treated in accordance with 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph. The presumption that the claim limitation is interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is rebutted when the claim limitation recites sufficient structure, material, or acts to entirely perform the recited function. Absence of the word “means” (or “step”) in a claim creates a rebuttable presumption that the claim limitation is not to be treated in accordance with 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph. The presumption that the claim limitation is not interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is rebutted when the claim limitation recites function without reciting sufficient structure, material or acts to entirely perform the recited function. Claim limitations in this application that use the word “means” (or “step”) are being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, except as otherwise indicated in an Office action. Conversely, claim limitations in this application that do This application includes one or more claim limitations that do not use the word “means,” but are nonetheless being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, because the claim limitation(s) uses a generic placeholder that is coupled with functional language without reciting sufficient structure to perform the recited function and the generic placeholder is not preceded by a structural modifier. Such claim limitation is: ‘a processing system’ in claims 1 and those depending therefrom. Because this claim limitation is being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, it is being interpreted to cover the corresponding structure described in the specification as performing the claimed function, and equivalents thereof. A review of the specification shows that the following appear to be the corresponding structure described for the 35 U.S.C. 112(f) limitation: “It shall be understood that the apparatus for analyzing a vasculature of a patient may be implemented by means of a processing unit,” disclosed in [0067]. However, this does not represent complete corresponding disclosed structure for a computer-implemented limitation invoking 35 U.S.C. 112(f). See MPEP § 2181(II)(B). If applicant does not intend to have this limitation interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, applicant may: (1) amend the claim limitation(s) to avoid it/them being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph (e.g., by reciting sufficient structure to perform the claimed function); or (2) present a sufficient showing that the claim limitation(s) recite(s) sufficient structure to perform the claimed function so as to avoid it/them being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph.
Claim Rejections - 35 USC § 112(a) The following is a quotation of the first paragraph of 35 U.S.C. 112(a): (a) IN GENERAL.—The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.
The following is a quotation of the first paragraph of pre-AIA 35 U.S.C. 112: The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.
Claims 1-8, 10-12, and 14-15 are rejected under 35 U.S.C. 112(a) or 35 U.S.C. 112 (pre-AIA ), first paragraph, as failing to comply with the written description requirement. The claims contain subject matter which was not described in the specification in such a way as to reasonably convey to one skilled in the relevant art that the inventor or a joint inventor, or for applications subject to pre-AIA 35 U.S.C. 112, the inventor(s), at the time the application was filed, had possession of the claimed invention. Claim 1 and those depending therefrom incorporate a processing system which invokes 35 U.S.C. 112(f) according to the analysis set forth above. For computer-implemented limitations invoking 35 U.S.C. 112(f), the corresponding structure must include computer hardware and the associated algorithm(s) which accomplish the claimed functions, as required by MPEP § 2181(II)(B). While some of the functions associated with the processing system imply their underlying algorithm, such as “receiv[ing]” and “output[ting],” the function of “determin[ing] a respective simulated parameter value of a plurality of simulated parameter values on the basis of a physiological model derived from diagnostic data of the vasculature for Regarding claims 14 and 15, applicant does not describe in the specification how the non-transitory computer-readable medium (CRM) performs the claimed function. In other words, the specification is devoid of content pertaining to the algorithm of the functions of ‘identifying’, ‘determining’, and ‘co-registering’. It is not sufficient to restate the claim language in the specification, nor does the description associated with Fig. 4 provide additional details as to how the functions are being performed by the program code of the non-transitory CRM. See MPEP § 2161.01(I) for the written description requirement for computer-implemented functions.
Claim Rejections - 35 USC § 112(b) The following is a quotation of 35 U.S.C. 112(b): (b) CONCLUSION.—The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.
The following is a quotation of 35 U.S.C. 112 (pre-AIA ), second paragraph: The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.
Claim 1-15 rejected under 35 U.S.C. 112(b) or 35 U.S.C. 112 (pre-AIA ), second paragraph, as being indefinite for failing to particularly point out and distinctly claim the subject Claim 1 and those depending therefrom incorporate a processing system which invokes 35 U.S.C. 112(f) according to the analysis set forth above. For computer-implemented limitations invoking 35 U.S.C. 112(f), the corresponding structure must include computer hardware and the associated algorithm(s) which accomplish the claimed functions, as required by MPEP § 2181(II)(B). While some of the functions associated with the processing system imply their underlying algorithm, such as “receiv[ing]” and “output[ting],” the function of “determin[ing] a respective simulated parameter value of a plurality of simulated parameter values on the basis of a physiological model derived from diagnostic data of the vasculature for each of the plurality of candidate positions” requires description of the algorithm detailing how the physiological model is manipulated in order to determine the simulated parameter. Additionally, the function of “identify[ing]” requires details of the underlying algorithm as to how candidate positions are distinguished from other positions. The disclosure is silent to the underlying algorithm and therefore it is unclear what structure applicant intends to use to accomplish each of the functions associated with the claimed processing system. See MPEP § 2181(II)(B). Claims 1, 11, and 14 recites the limitation "diagnostic image data" in the fourth paragraph of the claim. There is insufficient antecedent basis for this limitation in the claim as there is no defining article (e.g., ‘a’, ‘the’, etc.). Subsequently, it is unclear from the wording of the claim whether this diagnostic image data is related to the “extravascular image data” recited earlier in the claim or whether it represents a separate and additional form of acquired data. Based on examiner’s review of the specification, it is interpreted as non-invasively acquired – and
Claim Rejections - 35 USC § 112 (d) The following is a quotation of 35 U.S.C. 112(d): (d) REFERENCE IN DEPENDENT FORMS.—Subject to subsection (e), a claim in dependent form shall contain a reference to a claim previously set forth and then specify a further limitation of the subject matter claimed. A claim in dependent form shall be construed to incorporate by reference all the limitations of the claim to which it refers.
The following is a quotation of pre-AIA 35 U.S.C. 112, fourth paragraph: Subject to the following paragraph [i.e., the fifth paragraph of pre-AIA 35 U.S.C. 112], a claim in dependent form shall contain a reference to a claim previously set forth and then specify a further limitation of the subject matter claimed. A claim in dependent form shall be construed to incorporate by reference all the limitations of the claim to which it refers.
Claim 8 is rejected under 35 U.S.C. 112(d) or pre-AIA 35 U.S.C. 112, 4th paragraph, as being of improper dependent form for failing to further limit the subject matter of the claim upon which it depends, or for failing to include all the limitations of the claim upon which it depends. Claim 8 reads: “… to determine the plurality of candidate positions, the processing system is configured to identify, for each of the vessels, a respective candidate position corresponding to the given position; and8Application No. 16/132,349Docket No. 2017P02160US / 44755.2193US01 to determine the plurality of simulated parameter values, the processing system is configured to determine the respective simulated parameter value at the respective candidate position.” The scope of this claim is construed as being the same as the scope of the following claimed elements of claim 1: “….identify, based on the extravascular tracking image and a reconstruction of the vasculature, a plurality of candidate positions in the reconstruction of the vasculature corresponding to the given position; determine a respective simulated parameter value of a plurality of simulated parameter values on the basis of a physiological model derived from diagnostic image data of the vasculature for each of the plurality of candidate positions.” The bolded text highlights the differences in language used between the
Claim Rejections - 35 USC § 102 The following is a quotation of the appropriate paragraphs of 35 U.S.C. 102 that form the basis for the rejections under this section made in this Office action: A person shall be entitled to a patent unless –
(a)(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.
(a)(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention.
Claims 1-15 are rejected under 35 U.S.C. 102(a)(1) as being anticipated by Grady et al. (US 2017/0132388). For the following sections, instant claim language is represented by underlined text, while the evidence from the reference are presented in quotation marks. Regarding claim 1, Grady discloses an apparatus for analyzing vasculature (“an anatomical modeling system includes a processor configured to receive a patient-specific, three-dimensional anatomical model of at least one cardiovascular vessel” in [0013]) comprising an intravascular measurement device configured to be introduced into the vasculature and to acquire at least one intravascular parameter value from a given position within a vessel of interest in the vasculature (interventional and/or measurement devices 204 in [0040]): The list of interventional/measurement devices 204 includes, for example, flow meters that necessarily provide information – or a parameter value - from the their positioning within the vasculature. a processing system (“an anatomical modeling system includes a processor configured to receive a patient-specific, three-dimensional anatomical model of at least one cardiovascular vessel” in [0013]) configured to receive an extravascular tracking image of the intravascular measurement device arranged at the given position within the vessel of interest (“the presently-disclosed systems and methods may receive patient information (e.g., via medical imaging performed on the patient), generate a patient-specific geometry of vessels, blood flow, and/or pathologies based on the patient information in [0024]). It is disclosed that “medical imaging performed on the patient” includes “for example, CT scans, MRI procedures, PET scans, SPECT scans, and/or CCTA” ([0032]) which are ‘extravascular’ imaging methods, whose resulting image would necessarily include the position of an intravascular measurement device (i.e. 204) within a vessel. Besides, such ‘extravascular’ imaging methods are typically necessitated for inserting and navigating intravascular devices inside the body. Grady further teaches the processing system configured to identify, based on the extravascular tracking image and a reconstruction of the vasculature, a plurality of candidate positions in the reconstruction of the vasculature corresponding to the given position. First, Grady discloses “a modeling engine 114 which may create…an anatomical model using images and data received” ([0029]) to “generate…a three-dimensional anatomical model” ([0037]). Here, the “three-dimensional anatomical model”, which is based on the extravascular images received, reads on the reconstruction of the vasculature under its broadest reasonable interpretation. Second, “the recommendation engine 118 may receive an anatomical model and associated characteristics from the modeling engine 114, and may generate a list of recommended treatment options based on a plurality of potential treatment options, the received anatomical model, and/or the associated characteristics. The recommended treatment options correspond to particular characteristics in the anatomical model, which the recommendation engine 118 may categorize as being of interest. For example, the recommendation engine 118 may recognize a lower-than-optimal blood flow rate represented at a given locus in the anatomical model” ([0055]). Stated differently, the recommendation engine identifies loci from the generated anatomical model from the modeling engine 114 based on parameters of interest that may correspond to a parameter indicative of the location of an intravascular device – interpreted as the given position. Further, the recitation of “a given locus” in [0055] may extend to multiple loci as described in [0033]: “intervention data 110 of physician systems 102 and/or third party provider systems 104 may include any data obtained around or during a medical procedure, e.g. …appropriate loci for an intervention.” Grady further teaches the processing system configured to determine a respective simulated parameter value of a plurality of simulated parameter values on the basis of a physiological model derived from diagnostic image data of the vasculature for each of the plurality of candidate positions based on the evidence presented in the immediately preceding paragraph. Particularly, the evidence from [0055] above states that “the recommendation engine 118 may receive an anatomical model and associated characteristics from the modeling engine 114,” wherein the “associated characteristics” are being interpreted as the simulated parameter values. The modelling engine 118 of Grady encompasses both the functions of identifying a of plurality of candidate positions in the reconstruction and determining simulated parameter values, since the determination is based on the same model that is generated from received image data. Grady further teaches that the processing system receive the at least one intravascular parameter value acquired by the intravascular measurement device from the vessel of interest in the vasculature in [0040]: “Interventional and/or measurement devices 204 may also be or include one or more computer processors, which may assist in taking and/or recording measurements, and/or transmitting measurements to…processing devices 122, modeling engine 114, interventions engine 116 and/or recommendations engine 118.” Conversely, it is established that the processor of the anatomical modeling system from [0013] receives the transmitted measurements from the interventional and/or measurement devices 204. Grady further teaches the processing system configured to identify a candidate position of the plurality of candidate positions as the given position based on a comparison between each of the plurality of simulated parameter values and the at least one intravascular parameter value; to identify, based on the identified candidate position, a vessel in the reconstruction of the vasculature as corresponding to the vessel of interest; and6Application No. 16/132,349Docket No. 2017P02160US / 44755.2193US01 output, to a display in communication with the processing system, the reconstruction of the vasculature and a graphical representation identifying the vessel in the reconstruction of the vasculature in [0008]: “In some embodiments, a method of automatically updating a cardiovascular model includes receiving an anatomical model of at least one cardiovascular vessel; receiving at least one characteristic associated with the anatomical model, transmitting a representation of at least one of the anatomical model or the at least one associated characteristic to a display unit, receiving additional patient-specific data relating to the anatomical model from a medical procedure, determining a correspondence between the additional patient-specific data and at least one of the anatomical model or the at least one associated characteristic, identifying a discrepancy between the additional patient-specific data and at least one of the anatomical model or the at least one associated characteristic, modifying at least one of the anatomical model or the at least one associated characteristic to reduce the discrepancy, and transmitting an updated representation of at least one of the anatomical model or the at least one associated characteristic to the display unit.” Here, the model and its updating based on the correspondence between the simulated parameter value (from the positions in the anatomical model) and the intravascular parameter reads on the broadest reasonable interpretation of the claimed elements. Further, “modifying” the anatomical model based on the comparison determines a more accurate prediction of a parameter of interest in a vessel of interest. Therefore, the modification of the model inherently includes the identification of a given position of an interventional device. Independent claims 11 and 14 echo the language of claim 1, with claim 11 defining a method without the inclusion of the apparatus or processing system and claim 14 encompassing non-transitory CRM and code for performing the functions of an apparatus (without recitation of processing system). The evidence used for claim 1 applies directly to claims 11 and 14, with the additional representation of the systems and network of Fig. 1 and the descriptions in [0011] and [0029] satisfying the non-transitory CRM components of claim 14. The “server system 106,” which may encompasses the modeling engine 114, intervention engine 116, and the recommendation engine 118, suggests an inherent use of hardware or software requiring code, algorithms, etc. to perform the functions disclosed. In regard to claim 2, Grady also teaches that the diagnostic image data comprises computed tomography (CT) projection data; and the reconstruction comprises volumetric data reconstructed from the computed tomography projection data. Paragraphs [0030] and [0032] disclose the inclusion of CT machines and scans, respectively, as being included in the physician system 102, which provides CT patient data 112 to the modeling engine 114 ([0049]) for the construction of a three-dimensional model ([0009]). The ‘three-dimensional model’ as described reconstructed volumetric data, under the broadest reasonable interpretation of the term ‘volumetric’. Regarding claim 3, Grady further teaches the at least one intravascular parameter value is acquired using the intravascular measurement device during a pullback recording. Grady discloses interventional and measurement devices such as pressure wires and IVUS devices ([0040]) that are used in the field of cardiovascular imaging for pullback recording. While pullback recording is not explicitly stated, it is a widely used technique with intravascular interventional/measurement devices and is therefore inherent to many of the devices listed by Grady in [0040]. With respect to claim 4, Grady further anticipates that the processing system is configured to generate the physiological model based on the diagnostic image data of the vasculature, the physiological model representing the fluid dynamics through the vasculature: In [0014] via the modeling engine 114 wherein “a characteristic such as a blood flow characteristic may be determined by performing, with the anatomical model, a three-dimensional blood flow simulation, reduced order model blood flow simulation (e.g., a one-dimensional blood flow simulation)” ([0048]). Fluid dynamics, under its broadest reasonable interpretation, encompasses the ‘blood-flow’ simulations of the anatomical model. Regarding claim 5, Grady further teaches that the processing system is configured to identify the candidate position as the given position based on determining, based on the comparison, that the respective simulated parameter value for the candidate position more closely matches the at least one intravascular parameter value than any other simulated parameter value of the plurality of simulated parameter values. Grady references “U.S. Pat. No. 8,315,812, which is incorporated herein by reference in its entirety” at least in [0004]. at one or more points within the patient's anatomy represented by the solid model 320 and the mesh 380. The measured FFR at a location may be compared with the cFFR at the same location, and the comparison may be performed at multiple locations” (Taylor [0216]). This method allows for the comparison of a multiple simulated parameters with an intravascular parameter based on its given location, whereby the computational analysis can identify which of the simulated parameters most closely matches the intravascular parameter and identify it as the candidate position relative to the other simulated parameters and their associated positions. Regarding claim 6, Grady further teaches the processing system is configured to receive at least one additional information indicative of the vessel of interest (“interventional and/or measurement devices 204 may be added to or removed from the system as needed” in [0040]) and identify the vessel in the reconstruction of the vasculature as corresponding to the vessel of interest further based on the at least one additional information: The list of interventional devices in [0040] may be supplied in any number to transmit “measurements to…processing devices 122, modeling engine 114, interventions engine 116 and/or recommendations engine 118.” Additionally, as illustrated in the diagram of Fig. 2, the connecting line (i.e. transmission) between the two interventional/measurement devices 204 and the system containing the modelling engine 114, intervention engine 116, and recommendation engine 118 indicates their necessary inclusion for “updating a cardiovascular model” by “receiving an anatomical model of receiving additional patient-specific data relating to the anatomical model from a medical procedure, determining a correspondence between the additional patient-specific data and at least one of the anatomical model or the at least one associated characteristic, identifying a discrepancy between the additional patient-specific data and at least one of the anatomical model or the at least one associated characteristic, modifying at least one of the anatomical model or the at least one associated characteristic to reduce the discrepancy, and transmitting an updated representation of at least one of the anatomical model or the at least one associated characteristic to the display unit” ([0008]) as described above in claim 1. Regarding claim 7, Grady via Taylor further teaches that the processing system is configured to co-register the extravascular tracking image to the reconstruction, wherein, to identify the plurality of candidate positions, the processing system is configured to identify the plurality of candidate positions based on the co-registration of the extravascular tracking image to the reconstruction. Taylor teaches in [0269] that a “reduced order model may also be incorporated into an angiography system to allow for live computation of treatment options,” wherein “the model may be registered to the same orientation as the angiography display, allowing…overlapping results of a live angiographic view of the coronary arteries with simulated blood flow solutions.” Angiography is encompassed by extravascular tracking image. Therefore, Taylor, by its incorporation into Grady, teaches the identification of a plurality of candidate positions obtained based on the co-registration of the angiogram (i.e., extravascular Claims 12 and 15 that depend on claims 11 and 14, respectively, are anticipated by this same evidence in Taylor, and therefore Grady, due to the same functional language applied to the method (claim 12) and non-transitory CRM (claim 15). As above for the relationship between claims 1, 11, and 14, Grady provides the additional elements of CRM and program code in Fig. 1, [0011], and [0029]. With regard to claim 8, Grady further teaches that to determine the plurality of candidate positions, the processing system is configured to identify, for each of the vessels, a respective candidate position corresponding to the given position; and8Application No. 16/132,349Docket No. 2017P02160US / 44755.2193US01 to determine the plurality of simulated parameter values, the processing system is configured to determine the respective simulated parameter value at the respective candidate position in the previously recited paragraph [0055] above for claim 1. Regarding claim 10, Grady further teaches that the processing system is configured to output, to the display a graphical representation of the at least one intravascular parameter in [0042]: “In some embodiments, various characteristics and measurements may be labeled in text form on the model display 210, such as, for example, one or more blood flow characteristics, the location of one or more lesions or blockages, and/or the location of one or more interventional devices, e.g., stents, prosthetic valves, grafts, etc.” Under the broadest reasonable interpretation including the field of computer graphics, graphical representation may encompass text labels as described here in Grady. Conclusion The prior art made of record and not relied upon is considered pertinent to applicant's disclosure. Schmitt et al. (US 2017/0245824 A1) teaches an apparatus and computer program for processing cardiac data from non-invasive imaging for evaluating and assessing arterial stenosis in a living being. Itu et al. (US 2019/0029519-A1) teaches a method for evaluating coronary artery disease from a model that integrates non-invasive and invasive medical imaging techniques. Tanaka et al. (doi.org/10.1007/s10439-015-1436-y) discloses a study comparing FFR derived from non-invasive imaging (coronary computed tomography angiography) and invasive guidewire pullback angiography using a three-dimensional CT model and coronary flow dynamics data. THIS ACTION IS MADE FINAL. Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a). A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within TWO MONTHS of the mailing date of this final action and the advisory action is not mailed until after the end of the THREE-MONTH shortened statutory period, then the shortened statutory period will expire on the date the advisory action is mailed, and any extension fee pursuant to 37 CFR 1.136(a) will be calculated from the mailing date of the advisory action. In no event, however, will the statutory period for reply expire later than SIX MONTHS from the mailing date of this final action.
Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, JEFFREY HOEKSTRA can be reached on (571)272-7232. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.
/REMY C COOPER/ Examiner, Art Unit 3793 | 2021-04-07T05:30:20 | [
"DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Response to Arguments Applicant’s arguments in B. Objections to the Specification and C. Objections to the Drawings on pg. 12 and their respective amendments have been fully considered and are persuasive. The objections to the abstract and drawings have been withdrawn in view of the amendments. Applicant’s arguments in D. Claim Objections on pg. 12 and amendments have been fully considered and are persuasive. The objections to the claims have been withdrawn in view of the amendments.",
"Applicant’s arguments in E. Claim Interpretation – 35 U.S.C. § 112(f) on pg. 12 and amendment have been fully considered but are not persuasive. The amendment of the individual ‘units’ to the new ‘processing system’ does not overcome the 112(f) interpretation, because ‘processing system’ does not recite sufficient structure. ‘System’ is a nonce term that is only being limited by the function of ‘processing.’ Applicant could overcome this interpretation by replacing “processing system” with “processor”, “processor system”, or like-term that connotes sufficient structure. Applicant’s arguments and amendments to the 112(a) Written Description and 112(b) with respect to the 112(f) interpretation amendment have been fully considered.",
"As noted above, the amendment to “processing system” remains interpreted under 35 U.S.C. 112(f) since it is coupled with functional language and is not modified by sufficient structure in the claim(s). The Applicant’s arguments in F. Claim Rejections – 35 U.S.C. § 112(a) and amendment with respect to the Enablement on pg. 13 and amendment to the claims have been fully considered and are persuasive. The rejection has been withdrawn in view of the amendments. Applicant’s arguments in G. Claim Rejections – 35 U.S.C. § 112(b) on pg. 13 and amendments have been fully considered and are persuasive.",
"The rejection to the claims under 112(b) has been withdrawn in view of the amendments except where noted above with respect to the means-plus-function limitation invoking 35 U.S.C. 112(f). Applicant’s arguments in H. Claim Rejections – 35 U.S.C. § 101 on pgs. 14-16 and amendments have been fully considered and are persuasive. It is noted in claim 1, for example, that while the ‘processing system’ (corresponding to a “processing unit” in [0067]) and ‘display’ can be construed as generic computer components performing the judicial exceptions, the amended claims are being evaluated as an ordered combination that amounts to significantly more than the judicial exceptions of the individual claim elements. The rejection to the claims under 101 has been withdrawn in view of the amendments. Applicant’s arguments in I.",
"Claim Rejections – 35 U.S.C. § 102 on pgs. 16-19 and amendments have been fully considered but are not persuasive. Grady, and by virtue of its incorporation of the application of Taylor as a whole, remains a suitable reference for a 102 rejection of the amended claims, as presented below in the ‘Claim Rejection-35 USC § 102’ below. Claim Objections Claims 11 and 14 recite “an intravascular measurement device arranged at the given position” each in the second paragraph. There is insufficient antecedent basis for this limitation in the claims as these are both independent claims. To overcome this rejection, “the” should be changed to “a”.",
"Claim Interpretation The following is a quotation of 35 U.S.C. 112(f): (f) Element in Claim for a Combination. – An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof. The following is a quotation of pre-AIA 35 U.S.C. 112, sixth paragraph: An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.",
"The claims in this application are given their broadest reasonable interpretation using the plain meaning of the claim language in light of the specification as it would be understood by one of ordinary skill in the art. The broadest reasonable interpretation of a claim element (also commonly referred to as a claim limitation) is limited by the description in the specification when 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is invoked. As explained in MPEP § 2181, subsection I, claim limitations that meet the following three-prong test will be interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph: (B) the term “means” or “step” or the generic placeholder is modified by functional language, typically, but not always linked by the transition word “for” (e.g., “means for”) or another linking word or phrase, such as “configured to” or “so that”; and (C) the term “means” or “step” or the generic placeholder is not modified by sufficient structure, material, or acts for performing the claimed function. Use of the word “means” (or “step”) in a claim with functional language creates a rebuttable presumption that the claim limitation is to be treated in accordance with 35 U.S.C.",
"112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph. The presumption that the claim limitation is interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is rebutted when the claim limitation recites sufficient structure, material, or acts to entirely perform the recited function. Absence of the word “means” (or “step”) in a claim creates a rebuttable presumption that the claim limitation is not to be treated in accordance with 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph. The presumption that the claim limitation is not interpreted under 35 U.S.C.",
"112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is rebutted when the claim limitation recites function without reciting sufficient structure, material or acts to entirely perform the recited function. Claim limitations in this application that use the word “means” (or “step”) are being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, except as otherwise indicated in an Office action. Conversely, claim limitations in this application that do This application includes one or more claim limitations that do not use the word “means,” but are nonetheless being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, because the claim limitation(s) uses a generic placeholder that is coupled with functional language without reciting sufficient structure to perform the recited function and the generic placeholder is not preceded by a structural modifier. Such claim limitation is: ‘a processing system’ in claims 1 and those depending therefrom. Because this claim limitation is being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, it is being interpreted to cover the corresponding structure described in the specification as performing the claimed function, and equivalents thereof.",
"A review of the specification shows that the following appear to be the corresponding structure described for the 35 U.S.C. 112(f) limitation: “It shall be understood that the apparatus for analyzing a vasculature of a patient may be implemented by means of a processing unit,” disclosed in [0067]. However, this does not represent complete corresponding disclosed structure for a computer-implemented limitation invoking 35 U.S.C. 112(f). See MPEP § 2181(II)(B).",
"If applicant does not intend to have this limitation interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, applicant may: (1) amend the claim limitation(s) to avoid it/them being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph (e.g., by reciting sufficient structure to perform the claimed function); or (2) present a sufficient showing that the claim limitation(s) recite(s) sufficient structure to perform the claimed function so as to avoid it/them being interpreted under 35 U.S.C.",
"112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph. Claim Rejections - 35 USC § 112(a) The following is a quotation of the first paragraph of 35 U.S.C. 112(a): (a) IN GENERAL.—The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention. The following is a quotation of the first paragraph of pre-AIA 35 U.S.C.",
"112: The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.",
"Claims 1-8, 10-12, and 14-15 are rejected under 35 U.S.C. 112(a) or 35 U.S.C. 112 (pre-AIA ), first paragraph, as failing to comply with the written description requirement. The claims contain subject matter which was not described in the specification in such a way as to reasonably convey to one skilled in the relevant art that the inventor or a joint inventor, or for applications subject to pre-AIA 35 U.S.C. 112, the inventor(s), at the time the application was filed, had possession of the claimed invention. Claim 1 and those depending therefrom incorporate a processing system which invokes 35 U.S.C. 112(f) according to the analysis set forth above. For computer-implemented limitations invoking 35 U.S.C. 112(f), the corresponding structure must include computer hardware and the associated algorithm(s) which accomplish the claimed functions, as required by MPEP § 2181(II)(B). While some of the functions associated with the processing system imply their underlying algorithm, such as “receiv[ing]” and “output[ting],” the function of “determin[ing] a respective simulated parameter value of a plurality of simulated parameter values on the basis of a physiological model derived from diagnostic data of the vasculature for Regarding claims 14 and 15, applicant does not describe in the specification how the non-transitory computer-readable medium (CRM) performs the claimed function.",
"In other words, the specification is devoid of content pertaining to the algorithm of the functions of ‘identifying’, ‘determining’, and ‘co-registering’. It is not sufficient to restate the claim language in the specification, nor does the description associated with Fig. 4 provide additional details as to how the functions are being performed by the program code of the non-transitory CRM. See MPEP § 2161.01(I) for the written description requirement for computer-implemented functions. Claim Rejections - 35 USC § 112(b) The following is a quotation of 35 U.S.C. 112(b): (b) CONCLUSION.—The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.",
"The following is a quotation of 35 U.S.C. 112 (pre-AIA ), second paragraph: The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention. Claim 1-15 rejected under 35 U.S.C. 112(b) or 35 U.S.C. 112 (pre-AIA ), second paragraph, as being indefinite for failing to particularly point out and distinctly claim the subject Claim 1 and those depending therefrom incorporate a processing system which invokes 35 U.S.C.",
"112(f) according to the analysis set forth above. For computer-implemented limitations invoking 35 U.S.C. 112(f), the corresponding structure must include computer hardware and the associated algorithm(s) which accomplish the claimed functions, as required by MPEP § 2181(II)(B). While some of the functions associated with the processing system imply their underlying algorithm, such as “receiv[ing]” and “output[ting],” the function of “determin[ing] a respective simulated parameter value of a plurality of simulated parameter values on the basis of a physiological model derived from diagnostic data of the vasculature for each of the plurality of candidate positions” requires description of the algorithm detailing how the physiological model is manipulated in order to determine the simulated parameter. Additionally, the function of “identify[ing]” requires details of the underlying algorithm as to how candidate positions are distinguished from other positions. The disclosure is silent to the underlying algorithm and therefore it is unclear what structure applicant intends to use to accomplish each of the functions associated with the claimed processing system.",
"See MPEP § 2181(II)(B). Claims 1, 11, and 14 recites the limitation \"diagnostic image data\" in the fourth paragraph of the claim. There is insufficient antecedent basis for this limitation in the claim as there is no defining article (e.g., ‘a’, ‘the’, etc.). Subsequently, it is unclear from the wording of the claim whether this diagnostic image data is related to the “extravascular image data” recited earlier in the claim or whether it represents a separate and additional form of acquired data. Based on examiner’s review of the specification, it is interpreted as non-invasively acquired – and Claim Rejections - 35 USC § 112 (d) The following is a quotation of 35 U.S.C.",
"112(d): (d) REFERENCE IN DEPENDENT FORMS.—Subject to subsection (e), a claim in dependent form shall contain a reference to a claim previously set forth and then specify a further limitation of the subject matter claimed. A claim in dependent form shall be construed to incorporate by reference all the limitations of the claim to which it refers. The following is a quotation of pre-AIA 35 U.S.C.",
"112, fourth paragraph: Subject to the following paragraph [i.e., the fifth paragraph of pre-AIA 35 U.S.C. 112], a claim in dependent form shall contain a reference to a claim previously set forth and then specify a further limitation of the subject matter claimed. A claim in dependent form shall be construed to incorporate by reference all the limitations of the claim to which it refers. Claim 8 is rejected under 35 U.S.C. 112(d) or pre-AIA 35 U.S.C. 112, 4th paragraph, as being of improper dependent form for failing to further limit the subject matter of the claim upon which it depends, or for failing to include all the limitations of the claim upon which it depends. Claim 8 reads: “… to determine the plurality of candidate positions, the processing system is configured to identify, for each of the vessels, a respective candidate position corresponding to the given position; and8Application No. 16/132,349Docket No. 2017P02160US / 44755.2193US01 to determine the plurality of simulated parameter values, the processing system is configured to determine the respective simulated parameter value at the respective candidate position.” The scope of this claim is construed as being the same as the scope of the following claimed elements of claim 1: “….identify, based on the extravascular tracking image and a reconstruction of the vasculature, a plurality of candidate positions in the reconstruction of the vasculature corresponding to the given position; determine a respective simulated parameter value of a plurality of simulated parameter values on the basis of a physiological model derived from diagnostic image data of the vasculature for each of the plurality of candidate positions.” The bolded text highlights the differences in language used between the Claim Rejections - 35 USC § 102 The following is a quotation of the appropriate paragraphs of 35 U.S.C.",
"102 that form the basis for the rejections under this section made in this Office action: A person shall be entitled to a patent unless – (a)(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention. (a)(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention. Claims 1-15 are rejected under 35 U.S.C.",
"102(a)(1) as being anticipated by Grady et al. (US 2017/0132388). For the following sections, instant claim language is represented by underlined text, while the evidence from the reference are presented in quotation marks. Regarding claim 1, Grady discloses an apparatus for analyzing vasculature (“an anatomical modeling system includes a processor configured to receive a patient-specific, three-dimensional anatomical model of at least one cardiovascular vessel” in [0013]) comprising an intravascular measurement device configured to be introduced into the vasculature and to acquire at least one intravascular parameter value from a given position within a vessel of interest in the vasculature (interventional and/or measurement devices 204 in [0040]): The list of interventional/measurement devices 204 includes, for example, flow meters that necessarily provide information – or a parameter value - from the their positioning within the vasculature. a processing system (“an anatomical modeling system includes a processor configured to receive a patient-specific, three-dimensional anatomical model of at least one cardiovascular vessel” in [0013]) configured to receive an extravascular tracking image of the intravascular measurement device arranged at the given position within the vessel of interest (“the presently-disclosed systems and methods may receive patient information (e.g., via medical imaging performed on the patient), generate a patient-specific geometry of vessels, blood flow, and/or pathologies based on the patient information in [0024]). It is disclosed that “medical imaging performed on the patient” includes “for example, CT scans, MRI procedures, PET scans, SPECT scans, and/or CCTA” ([0032]) which are ‘extravascular’ imaging methods, whose resulting image would necessarily include the position of an intravascular measurement device (i.e. 204) within a vessel. Besides, such ‘extravascular’ imaging methods are typically necessitated for inserting and navigating intravascular devices inside the body. Grady further teaches the processing system configured to identify, based on the extravascular tracking image and a reconstruction of the vasculature, a plurality of candidate positions in the reconstruction of the vasculature corresponding to the given position.",
"First, Grady discloses “a modeling engine 114 which may create…an anatomical model using images and data received” ([0029]) to “generate…a three-dimensional anatomical model” ([0037]). Here, the “three-dimensional anatomical model”, which is based on the extravascular images received, reads on the reconstruction of the vasculature under its broadest reasonable interpretation. Second, “the recommendation engine 118 may receive an anatomical model and associated characteristics from the modeling engine 114, and may generate a list of recommended treatment options based on a plurality of potential treatment options, the received anatomical model, and/or the associated characteristics. The recommended treatment options correspond to particular characteristics in the anatomical model, which the recommendation engine 118 may categorize as being of interest.",
"For example, the recommendation engine 118 may recognize a lower-than-optimal blood flow rate represented at a given locus in the anatomical model” ([0055]). Stated differently, the recommendation engine identifies loci from the generated anatomical model from the modeling engine 114 based on parameters of interest that may correspond to a parameter indicative of the location of an intravascular device – interpreted as the given position. Further, the recitation of “a given locus” in [0055] may extend to multiple loci as described in [0033]: “intervention data 110 of physician systems 102 and/or third party provider systems 104 may include any data obtained around or during a medical procedure, e.g. …appropriate loci for an intervention.” Grady further teaches the processing system configured to determine a respective simulated parameter value of a plurality of simulated parameter values on the basis of a physiological model derived from diagnostic image data of the vasculature for each of the plurality of candidate positions based on the evidence presented in the immediately preceding paragraph. Particularly, the evidence from [0055] above states that “the recommendation engine 118 may receive an anatomical model and associated characteristics from the modeling engine 114,” wherein the “associated characteristics” are being interpreted as the simulated parameter values.",
"The modelling engine 118 of Grady encompasses both the functions of identifying a of plurality of candidate positions in the reconstruction and determining simulated parameter values, since the determination is based on the same model that is generated from received image data. Grady further teaches that the processing system receive the at least one intravascular parameter value acquired by the intravascular measurement device from the vessel of interest in the vasculature in [0040]: “Interventional and/or measurement devices 204 may also be or include one or more computer processors, which may assist in taking and/or recording measurements, and/or transmitting measurements to…processing devices 122, modeling engine 114, interventions engine 116 and/or recommendations engine 118.” Conversely, it is established that the processor of the anatomical modeling system from [0013] receives the transmitted measurements from the interventional and/or measurement devices 204. Grady further teaches the processing system configured to identify a candidate position of the plurality of candidate positions as the given position based on a comparison between each of the plurality of simulated parameter values and the at least one intravascular parameter value; to identify, based on the identified candidate position, a vessel in the reconstruction of the vasculature as corresponding to the vessel of interest; and6Application No.",
"16/132,349Docket No. 2017P02160US / 44755.2193US01 output, to a display in communication with the processing system, the reconstruction of the vasculature and a graphical representation identifying the vessel in the reconstruction of the vasculature in [0008]: “In some embodiments, a method of automatically updating a cardiovascular model includes receiving an anatomical model of at least one cardiovascular vessel; receiving at least one characteristic associated with the anatomical model, transmitting a representation of at least one of the anatomical model or the at least one associated characteristic to a display unit, receiving additional patient-specific data relating to the anatomical model from a medical procedure, determining a correspondence between the additional patient-specific data and at least one of the anatomical model or the at least one associated characteristic, identifying a discrepancy between the additional patient-specific data and at least one of the anatomical model or the at least one associated characteristic, modifying at least one of the anatomical model or the at least one associated characteristic to reduce the discrepancy, and transmitting an updated representation of at least one of the anatomical model or the at least one associated characteristic to the display unit.” Here, the model and its updating based on the correspondence between the simulated parameter value (from the positions in the anatomical model) and the intravascular parameter reads on the broadest reasonable interpretation of the claimed elements. Further, “modifying” the anatomical model based on the comparison determines a more accurate prediction of a parameter of interest in a vessel of interest.",
"Therefore, the modification of the model inherently includes the identification of a given position of an interventional device. Independent claims 11 and 14 echo the language of claim 1, with claim 11 defining a method without the inclusion of the apparatus or processing system and claim 14 encompassing non-transitory CRM and code for performing the functions of an apparatus (without recitation of processing system). The evidence used for claim 1 applies directly to claims 11 and 14, with the additional representation of the systems and network of Fig. 1 and the descriptions in [0011] and [0029] satisfying the non-transitory CRM components of claim 14. The “server system 106,” which may encompasses the modeling engine 114, intervention engine 116, and the recommendation engine 118, suggests an inherent use of hardware or software requiring code, algorithms, etc. to perform the functions disclosed. In regard to claim 2, Grady also teaches that the diagnostic image data comprises computed tomography (CT) projection data; and the reconstruction comprises volumetric data reconstructed from the computed tomography projection data. Paragraphs [0030] and [0032] disclose the inclusion of CT machines and scans, respectively, as being included in the physician system 102, which provides CT patient data 112 to the modeling engine 114 ([0049]) for the construction of a three-dimensional model ([0009]).",
"The ‘three-dimensional model’ as described reconstructed volumetric data, under the broadest reasonable interpretation of the term ‘volumetric’. Regarding claim 3, Grady further teaches the at least one intravascular parameter value is acquired using the intravascular measurement device during a pullback recording. Grady discloses interventional and measurement devices such as pressure wires and IVUS devices ([0040]) that are used in the field of cardiovascular imaging for pullback recording. While pullback recording is not explicitly stated, it is a widely used technique with intravascular interventional/measurement devices and is therefore inherent to many of the devices listed by Grady in [0040].",
"With respect to claim 4, Grady further anticipates that the processing system is configured to generate the physiological model based on the diagnostic image data of the vasculature, the physiological model representing the fluid dynamics through the vasculature: In [0014] via the modeling engine 114 wherein “a characteristic such as a blood flow characteristic may be determined by performing, with the anatomical model, a three-dimensional blood flow simulation, reduced order model blood flow simulation (e.g., a one-dimensional blood flow simulation)” ([0048]). Fluid dynamics, under its broadest reasonable interpretation, encompasses the ‘blood-flow’ simulations of the anatomical model. Regarding claim 5, Grady further teaches that the processing system is configured to identify the candidate position as the given position based on determining, based on the comparison, that the respective simulated parameter value for the candidate position more closely matches the at least one intravascular parameter value than any other simulated parameter value of the plurality of simulated parameter values. Grady references “U.S.",
"Pat. No. 8,315,812, which is incorporated herein by reference in its entirety” at least in [0004]. at one or more points within the patient's anatomy represented by the solid model 320 and the mesh 380. The measured FFR at a location may be compared with the cFFR at the same location, and the comparison may be performed at multiple locations” (Taylor [0216]). This method allows for the comparison of a multiple simulated parameters with an intravascular parameter based on its given location, whereby the computational analysis can identify which of the simulated parameters most closely matches the intravascular parameter and identify it as the candidate position relative to the other simulated parameters and their associated positions. Regarding claim 6, Grady further teaches the processing system is configured to receive at least one additional information indicative of the vessel of interest (“interventional and/or measurement devices 204 may be added to or removed from the system as needed” in [0040]) and identify the vessel in the reconstruction of the vasculature as corresponding to the vessel of interest further based on the at least one additional information: The list of interventional devices in [0040] may be supplied in any number to transmit “measurements to…processing devices 122, modeling engine 114, interventions engine 116 and/or recommendations engine 118.” Additionally, as illustrated in the diagram of Fig.",
"2, the connecting line (i.e. transmission) between the two interventional/measurement devices 204 and the system containing the modelling engine 114, intervention engine 116, and recommendation engine 118 indicates their necessary inclusion for “updating a cardiovascular model” by “receiving an anatomical model of receiving additional patient-specific data relating to the anatomical model from a medical procedure, determining a correspondence between the additional patient-specific data and at least one of the anatomical model or the at least one associated characteristic, identifying a discrepancy between the additional patient-specific data and at least one of the anatomical model or the at least one associated characteristic, modifying at least one of the anatomical model or the at least one associated characteristic to reduce the discrepancy, and transmitting an updated representation of at least one of the anatomical model or the at least one associated characteristic to the display unit” ([0008]) as described above in claim 1.",
"Regarding claim 7, Grady via Taylor further teaches that the processing system is configured to co-register the extravascular tracking image to the reconstruction, wherein, to identify the plurality of candidate positions, the processing system is configured to identify the plurality of candidate positions based on the co-registration of the extravascular tracking image to the reconstruction. Taylor teaches in [0269] that a “reduced order model may also be incorporated into an angiography system to allow for live computation of treatment options,” wherein “the model may be registered to the same orientation as the angiography display, allowing…overlapping results of a live angiographic view of the coronary arteries with simulated blood flow solutions.” Angiography is encompassed by extravascular tracking image. Therefore, Taylor, by its incorporation into Grady, teaches the identification of a plurality of candidate positions obtained based on the co-registration of the angiogram (i.e., extravascular Claims 12 and 15 that depend on claims 11 and 14, respectively, are anticipated by this same evidence in Taylor, and therefore Grady, due to the same functional language applied to the method (claim 12) and non-transitory CRM (claim 15). As above for the relationship between claims 1, 11, and 14, Grady provides the additional elements of CRM and program code in Fig. 1, [0011], and [0029]. With regard to claim 8, Grady further teaches that to determine the plurality of candidate positions, the processing system is configured to identify, for each of the vessels, a respective candidate position corresponding to the given position; and8Application No.",
"16/132,349Docket No. 2017P02160US / 44755.2193US01 to determine the plurality of simulated parameter values, the processing system is configured to determine the respective simulated parameter value at the respective candidate position in the previously recited paragraph [0055] above for claim 1. Regarding claim 10, Grady further teaches that the processing system is configured to output, to the display a graphical representation of the at least one intravascular parameter in [0042]: “In some embodiments, various characteristics and measurements may be labeled in text form on the model display 210, such as, for example, one or more blood flow characteristics, the location of one or more lesions or blockages, and/or the location of one or more interventional devices, e.g., stents, prosthetic valves, grafts, etc.” Under the broadest reasonable interpretation including the field of computer graphics, graphical representation may encompass text labels as described here in Grady.",
"Conclusion The prior art made of record and not relied upon is considered pertinent to applicant's disclosure. Schmitt et al. (US 2017/0245824 A1) teaches an apparatus and computer program for processing cardiac data from non-invasive imaging for evaluating and assessing arterial stenosis in a living being. Itu et al. (US 2019/0029519-A1) teaches a method for evaluating coronary artery disease from a model that integrates non-invasive and invasive medical imaging techniques. Tanaka et al. (doi.org/10.1007/s10439-015-1436-y) discloses a study comparing FFR derived from non-invasive imaging (coronary computed tomography angiography) and invasive guidewire pullback angiography using a three-dimensional CT model and coronary flow dynamics data. THIS ACTION IS MADE FINAL. Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a). A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action.",
"In the event a first reply is filed within TWO MONTHS of the mailing date of this final action and the advisory action is not mailed until after the end of the THREE-MONTH shortened statutory period, then the shortened statutory period will expire on the date the advisory action is mailed, and any extension fee pursuant to 37 CFR 1.136(a) will be calculated from the mailing date of the advisory action. In no event, however, will the statutory period for reply expire later than SIX MONTHS from the mailing date of this final action. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, JEFFREY HOEKSTRA can be reached on (571)272-7232. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.",
"Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000. /REMY C COOPER/ Examiner, Art Unit 3793"
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2021-04-11.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Title: How are these kinds of court fines legal? Question:So I recently went to court for a speeding ticket in Illinois (McHenry County). The speeding fine was $150. Ok fair enough I was speeding I should pay that. However I'm done and my total balance is $395. [Here](http://i.imgur.com/FhbnFri.jpg). Is it legal for them to assess me fines for something that has nothing to do with my speeding ticket? I understand the clerk fee and the processing fee (which are still way to high considering I literally talked to the judge for 30 seconds). But things that the child advocacy center fine, the trauma center fine, drug court fine, and mental health court fine just don't make any sense to me. Answer #1: Simple answer:
They are legal because the legislative bodies of your city/county/state voted to impose them. | 11-20-2015 | [
"Title: How are these kinds of court fines legal? Question:So I recently went to court for a speeding ticket in Illinois (McHenry County). The speeding fine was $150. Ok fair enough I was speeding I should pay that. However I'm done and my total balance is $395. [Here](http://i.imgur.com/FhbnFri.jpg). Is it legal for them to assess me fines for something that has nothing to do with my speeding ticket?",
"I understand the clerk fee and the processing fee (which are still way to high considering I literally talked to the judge for 30 seconds). But things that the child advocacy center fine, the trauma center fine, drug court fine, and mental health court fine just don't make any sense to me. Answer #1: Simple answer: They are legal because the legislative bodies of your city/county/state voted to impose them."
] | https://www.reddit.com/r/legaladvice/comments/3tm460/how_are_these_kinds_of_court_fines_legal/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
OPINION STRAS, Justice. Appellant Charles William Lemert was convicted of a fifth-degree controlled-substance offense based on evidence that law-enforcement officers recovered from his pockets during a pat search. Prior to trial, Lemert moved to suppress the evidence, arguing that the search was unlawful because the officers lacked a reasonable, articulable suspicion that he might have been armed and dangerous. The district court denied Lemert’s motion and the court of appeals affirmed. Because we conclude that, under the totality of the circumstances, the officers had a reasonable, articulable suspicion that Lemert might have been armed and dangerous, we affirm. I. In January 2010, officers from the Nicol-let County Sheriffs Office and the Minnesota River Valley Drug Task Force were investigating Thomas Anthony for suspected drug trafficking. The police suspected that Anthony was an established dealer of large quantities of methamphetamine in the St. Peter area. To confirm their suspicions, the police arranged two controlled buys of methamphetamine from Anthony. Each time, Anthony sold a confidential informant roughly 7 grams of methamphetamine for $700. For the first purchase, which was completed on January 18, the confidential informant picked up the methamphetamine inside the garage at Anthony’s apartment in St. Peter. *229For the second purchase, which occurred on January 20, a confidential informant met Anthony at a prearranged location, got into Anthony’s truck, and gave $700 to Anthony. Anthony told the informant to pick up the methamphetamine at a residence in Le Sueur County from someone named “Curt.” The informant picked up the methamphetamine later that day in accordance with Anthony’s instructions. Also on January 20, the police applied for and obtained two search warrants, one for Anthony’s apartment and another for his garage. As they prepared to execute the search warrants, the police placed Anthony’s apartment under surveillance. Before the police could conduct the searches, however, Anthony left the apartment in his truck — the same truck in which he had met a confidential informant in connection with a methamphetamine sale earlier that day. Once Anthony left his apartment, Agent Aaron Petersen and another agent followed Anthony. During the pursuit, an officer with the Nicollet County Sheriffs Office instructed one of the agents to stop Anthony and arrest him based on the controlled buy that had occurred earlier that day. Once he stopped Anthony’s truck, Agent Petersen ordered Anthony to get out of the truck and lie face down on the ground, after which Agent Petersen searched Anthony, handcuffed him, and placed him in a police car. When the agents stopped Anthony’s truck, they discovered that Anthony had a passenger: Charles Lemert. The other agent ordered Lemert to get out of the truck and instructed him to stand facing the truck, at which point Agent Petersen approached Lemert and asked him his name. Lemert replied that his name was “Chuck,” and at about the same time, Agent Petersen began to conduct a pat search of Lemert. During the pat search, Agent Petersen felt an object in Lemert’s pocket that he recognized as a pipe for smoking drugs. Agent Petersen removed the pipe, saw that it appeared to contain drug residue, and informed Lemert that he was under arrest for drug possession. Agent Petersen also recovered three other glass devices for smoking drugs and a glass vial containing less than 1 gram of methamphetamine from Lemert’s pockets. As Agent Petersen conducted the pat search, Lemert had his hands on Anthony’s truck, except that Agent Petersen’s report indicated that Lemert moved his hands toward his waist during the pat search, which caused Agent Petersen to forcibly restrain Lemert and order him to place his hands back on the truck. At the suppression hearing, however, Agent Petersen testified that Lemert removed his hands from the truck only after the pat search had concluded and he had been told to do so. Agent Petersen also indicated that he was not aware of whether Lemert had a weapon or posed a danger to the officers. Instead, he searched Lemert based on a departmental policy that required him to conduct a pat search during a “felony stop.”1 Based on the evidence discovered during the pat search, the State charged Lemert with a fifth-degree controlled-substance offense. See Minn.Stat. § .025, subd.(a)(l) (2012). Lemert moved to suppress the evidence, arguing that the search violated his rights under the Fourth Amendment to *230the United States Constitution and Article, Section, of the Minnesota Constitution. Following an evidentiary hearing, the district court denied Lemert’s motion. The parties then agreed to a bench trial on stipulated facts, after which the court convicted Lemert of the fifth-degree controlled-substance offense, stayed imposition of Lemert’s sentence, and imposed a five-year term of probation. The court of appeals affirmed. State v. Lemert, 829 N.W.2d 421 (Minn.App.2013). We granted Lemert’s petition for review. II. The sole question presented by this case is the legality of the pat search of Lemert conducted by Agent Petersen. The Fourth Amendment to the United States Constitution and Article I, Section 10, of the Minnesota Constitution forbid “unreasonable searches” by the government. U.S. Const, amend. IV; Minn. Const. art.I, § 10. Lemert does not argue that the Minnesota Constitution provides him with greater protection than the United States Constitution, so we confine our analysis to the requirements of the Fourth Amendment. A warrantless search, such as the one at issue in this case, is generally unreasonable unless it falls within an exception to the Fourth Amendment’s warrant requirement. Missouri v. McNeely, — U.S. -, -, 133 S.Ct. 1552, 1558, 185 L.Ed.2d 696 (2013) (noting that “a warrantless search of the person is reasonable only if it falls within a recognized exception” to the Fourth Amendment’s warrant requirement). The Supreme Court of the United States recognized one such exception in Terry v. Ohio, in which it held that a law-enforcement officer may conduct a protective pat search of a person’s outer clothing so long as the officer has a reasonable, articulable suspicion that the person whom the officer has lawfully detained may be armed and dangérous. 392 U.S. 1, 26-27, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968). The protective pat search “must be strictly ‘limited to that which is necessary for the discovery of weapons which might be used to harm the officer or others nearby.’ ” Minnesota v. Dickerson, 508 U.S. 366, 373, 113 S.Ct. 2130, 124 L.Ed.2d 334 (1993) (quoting Terry, 392 U.S. at 26, 88 S.Ct. 1868). However, an officer is entitled to seize contraband, including drug paraphernalia, found during a pat search if the incriminating character of the contraband is immediately apparent to the officer such that it gives rise to probable cause for the seizure. See id. at 376, 378, 113 S.Ct. 2130. A pat search must be lawful at its inception, which means that a reasonable, articulable suspicion must exist when the pat search begins. Terry, 392 U.S. at 21-22, 88 S.Ct. 1868 (holding that the justification for a search depends on “the facts available to the officer at the moment of the ... search”). We evaluate whether a reasonable, articulable suspicion exists from the perspective of a trained police officer, who may make “inferences and deductions that might well elude an untrained person.” United States v. Cortez, 449 U.S. 411, 418, 101 S.Ct. 690, 66 L.Ed.2d 621 (1981). The legality of a pat search depends on an objective examination of the totality of the circumstances. See United States v. Arvizu, 534 U.S. 266, 273, 122 S.Ct. 744, 151 L.Ed.2d 740 (2002). Thus, a pat search may still be lawful even if the officer conducted it based on departmental policy rather than the officer’s subjective assessment of the circumstances. See United States v. Tinnie, 629 F.3d 749, 753 (7th Cir.2011); see also Whren v. United States, 517 U.S. 806, 812, 116 S.Ct. 1769, 135 L.Ed.2d 89 (1996) (ex*231plaining that, other than for inventory searches or administrative inspections, an “officer’s motive” does not invalidate “objectively justifiable behavior under the Fourth Amendment”). After all, “[t]he actual, subjective beliefs of the officer are not the focus in evaluating reasonableness.” State v. Koppi, 798 N.W.2d 358, 368 (Minn.2011). In this case, the district court denied Lemert’s suppression motion because, after considering the totality of the circumstances, it found that the officers had a reasonable, articulable suspicion that Le-mert was armed and dangerous. The court of appeals affirmed the district court’s decision, but adopted different reasoning. Rather than evaluate the totality of the circumstances, as the district court did, the court of appeals concluded that the pat search was legal “[biased on [Le-mert’s] presence in a vehicle stopped on suspicion that its driver had recently engaged in large-scale drug activity.” Lemert, 829 N.W.2d at 422. The court of appeals thus adopted a variation of the automatic-companion rule, which permits law-enforcement officers to conduct a pat search of any person who is in the company of someone whom the officers have arrested. See, e.g., United States v. Berryhill, 445 F.2d 1189, 1193 (9th Cir.1971) (articulating the automatic-companion rule); Owens v. Commonwealth, 291 S.W.3d 704, 709-10 (Ky.2009) (describing the automatic-companion rule). The State does not defend the reasoning of the court of appeals, and instead urges us to affirm the district court based on the totality of the circumstances surrounding the pat search. This case was submitted to the district court on stipulated facts, and we review de novo whether the stipulated facts were sufficient to provide the officer with a reasonable, articulable suspicion to conduct a pat search of Lemert. See State v. Diede, 795 N.W.2d 836, 843 (Minn.2011). In a series of cases, the Supreme Court has explained that courts must evaluate whether reasonable, articulable suspicion exists under a totality-of-the circumstances approach. See Arvizu, 534 U.S. at 273, 122 S.Ct. 744; United States v. Sokolow, 490 U.S. 1, 7-8, 109 S.Ct. 1581, 104 L.Ed.2d 1 (1989); Cortez, 449 U.S. at 417-18, 101 S.Ct. 690. In Arvizu, for example, the Court explained that “[w]hen discussing how reviewing courts should make reasonable-suspicion determinations, we have said repeatedly that they must look at the ‘totality of the circumstances’ of each case to see whether the detaining officer has a ‘particularized and objective basis’ for suspecting legal wrongdoing.” 534 U.S. at 273, 122 S.Ct. 744 (quoting Cortez, 449 U.S. at 417, 101 S.Ct. 690). Applying those principles here, our task is to determine whether, under the totality of the circumstances at the inception of the pat search, the officers had a reasonable, artic-ulable suspicion that Lemert might have been armed and dangerous.2 *232Based on the stipulated facts, we conclude that the officers had a reasonable, articulable suspicion that Lemert might have been armed and dangerous. In addition to the fact that Lemert was a passenger of a suspected drug dealer whom the officers had arrested, the officers knew other facts that supported the pat search. In particular, the officers knew details about Anthony’s drug-trafficking activities that increased the likelihood that Lemert was either Anthony’s customer or a fellow participant in those activities. First, the officers knew that Anthony was not a solo operator: earlier that same day, Anthony had directed a confidential informant to pick up methamphetamine from a third party named “Curt.” Second, the officers knew that the truck in which Anthony and Lemert had been stopped was used, earlier that day, for a meeting between Anthony and a confidential informant about a methamphetamine sale. Third, a confidential informant had picked up methamphetamine at Anthony’s garage just 2 days before the traffic stop, and the police knew that Anthony and Lemert had left Anthony’s apartment together. Fourth, the police knew that Anthony was a dealer of felony-level quantities of methamphetamine.3 In addition to these facts, the totality of the circumstances includes any reasonable inferences that an officer could make in light of the facts, including that “a car passenger ... will often be engaged in a common enterprise with the driver, and have the same interest in concealing the fruits or the evidence of their wrongdoing.” Wyoming v. Houghton, 526 U.S. 295, 304-05, 119 S.Ct. 1297, 143 L.Ed.2d 408 (1999). Furthermore, as we have noted, a substantial nexus exists between drug dealing and violence. State v. Craig, 826 N.W.2d 789, 797 (Minn.2013); see also United States v. Bustos-Torres, 396 F.3d 935, 943 (8th Cir.2005) (“Because weapons and violence are frequently associated with drug transactions, it is reasonable for an officer to believe a person may be armed and dangerous when the person is suspected of being involved in a drug transaction.”). Accordingly, under the totality of the circumstances, it was reasonable for the officers to suspect that Lemert may have been armed and dangerous and to conduct a pat search to ensure their safety. Cf. State v. Brazil, 269 N.W.2d 15, 20 (Minn.1978) (observing, in dictum, that the police could have lawfully conducted a pat search of a passenger when the police arrested the driver for selling drugs). In affirming the district court’s decision, however, we decline to adopt the automatic-companion rule. In the Fourth Amendment context, the Supreme Court has “consistently eschewed bright-line rules, instead emphasizing the fact-specific nature of the reasonableness inquiry.” Ohio v. Robinette, 519 U.S. 33, 39, 117 *233S.Ct. 417, 136 L.Ed.2d 347 (1996). Most recently, the Supreme Court rejected a categorical rule permitting warrantless blood testing in drunk-driving cases and instead held that “[wjhether a warrantless blood test of a drunk-driving suspect is reasonable must be determined case by case based on the totality of the circumstances.” Missouri v. McNeely, — U.S. at -, 133 S.Ct. at 1563. The clear import of these decisions is that, although being a companion to an arrestee is part of the totality of the circumstances, the Fourth Amendment does not provide for an automatic search of an arrestee’s companion. Cf. Chimel v. California, 395 U.S. 752, 767-68, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969) (holding that the arrest of a person in a residence does not give the police an automatic right to search the rest of the house without a warrant). Any other conclusion would be inconsistent with the fact-specific nature of the reasonableness inquiry. See McNeely, — U.S. at -, 133 S.Ct. at 1559. III. For the foregoing reasons, we conclude that the district court did not err when it denied Lemert’s motion to suppress the evidence recovered during the pat search. Accordingly, although we decline to adopt the reasoning of the court of appeals, we affirm. Affirmed.
. Agent Petersen testified that not every stop for a felony offense is a "felony stop” that triggers the departmental policy of conducting a pat search of every vehicle occupant. It appears from the record that stops related to drag trafficking qualify as "felony stops” for purposes of the policy, but the record does not disclose what other types of stops qualify as "felony stops.”
. Because a search must be justified at its inception and we evaluate the legality of the search based on the collective knowledge of the officers, we rely only on facts that the officers knew at the inception of the pat search of Lemert in determining its legality. See State v. Riley, 568 N.W.2d 518, 523 (Minn.1997) (applying the "collective knowledge" approach to determine the legality of an arrest). Accordingly, we disregard evidence that Lemert had received methamphetamine from Anthony in the past because there is no evidence that, at the inception of the search, any of the officers knew that Anthony’s passenger was Charles Lemert. We likewise disregard the fact that Lemert was wearing a leather case on his belt that could have contained a knife or other weapon because the record does not show that the officers observed the case prior to conducting the search or that any officer could have done so under the circumstances.
. The details in the record about Anthony’s drug-trafficking activities distinguish this case from Diede, 795 N.W.2d 836, in which we held that the police unlawfully seized the driver of a truck when they stopped the truck for a license-plate violation. During the stop, the police arrested the driver’s passenger for previous drug sales, and then investigated the driver for drug-related criminal activity. Id. at-44. Unlike the record in this case, however, the record in Diede included no evidence about the nature of the arrestee's drug-trafficking activities and no evidence linking those activities to the vehicle that the police stopped. Id. at(“The only basis in the record for suspecting that anyone possessed drugs was [a police officer’s] assertion that he had probable cause to arrest [the passenger] for previous drug sales. But the record does not describe the foundation of that probable cause. Nor does it indicate any objectively articulable facts that would have allowed the police to reasonably infer that [the passenger] was carrying drugs at the time of his arrest. ...”). | 10-16-2022 | [
"OPINION STRAS, Justice. Appellant Charles William Lemert was convicted of a fifth-degree controlled-substance offense based on evidence that law-enforcement officers recovered from his pockets during a pat search. Prior to trial, Lemert moved to suppress the evidence, arguing that the search was unlawful because the officers lacked a reasonable, articulable suspicion that he might have been armed and dangerous. The district court denied Lemert’s motion and the court of appeals affirmed. Because we conclude that, under the totality of the circumstances, the officers had a reasonable, articulable suspicion that Lemert might have been armed and dangerous, we affirm. I. In January 2010, officers from the Nicol-let County Sheriffs Office and the Minnesota River Valley Drug Task Force were investigating Thomas Anthony for suspected drug trafficking. The police suspected that Anthony was an established dealer of large quantities of methamphetamine in the St. Peter area.",
"To confirm their suspicions, the police arranged two controlled buys of methamphetamine from Anthony. Each time, Anthony sold a confidential informant roughly 7 grams of methamphetamine for $700. For the first purchase, which was completed on January 18, the confidential informant picked up the methamphetamine inside the garage at Anthony’s apartment in St. Peter. *229For the second purchase, which occurred on January 20, a confidential informant met Anthony at a prearranged location, got into Anthony’s truck, and gave $700 to Anthony. Anthony told the informant to pick up the methamphetamine at a residence in Le Sueur County from someone named “Curt.” The informant picked up the methamphetamine later that day in accordance with Anthony’s instructions.",
"Also on January 20, the police applied for and obtained two search warrants, one for Anthony’s apartment and another for his garage. As they prepared to execute the search warrants, the police placed Anthony’s apartment under surveillance. Before the police could conduct the searches, however, Anthony left the apartment in his truck — the same truck in which he had met a confidential informant in connection with a methamphetamine sale earlier that day. Once Anthony left his apartment, Agent Aaron Petersen and another agent followed Anthony. During the pursuit, an officer with the Nicollet County Sheriffs Office instructed one of the agents to stop Anthony and arrest him based on the controlled buy that had occurred earlier that day. Once he stopped Anthony’s truck, Agent Petersen ordered Anthony to get out of the truck and lie face down on the ground, after which Agent Petersen searched Anthony, handcuffed him, and placed him in a police car.",
"When the agents stopped Anthony’s truck, they discovered that Anthony had a passenger: Charles Lemert. The other agent ordered Lemert to get out of the truck and instructed him to stand facing the truck, at which point Agent Petersen approached Lemert and asked him his name. Lemert replied that his name was “Chuck,” and at about the same time, Agent Petersen began to conduct a pat search of Lemert. During the pat search, Agent Petersen felt an object in Lemert’s pocket that he recognized as a pipe for smoking drugs. Agent Petersen removed the pipe, saw that it appeared to contain drug residue, and informed Lemert that he was under arrest for drug possession. Agent Petersen also recovered three other glass devices for smoking drugs and a glass vial containing less than 1 gram of methamphetamine from Lemert’s pockets.",
"As Agent Petersen conducted the pat search, Lemert had his hands on Anthony’s truck, except that Agent Petersen’s report indicated that Lemert moved his hands toward his waist during the pat search, which caused Agent Petersen to forcibly restrain Lemert and order him to place his hands back on the truck. At the suppression hearing, however, Agent Petersen testified that Lemert removed his hands from the truck only after the pat search had concluded and he had been told to do so. Agent Petersen also indicated that he was not aware of whether Lemert had a weapon or posed a danger to the officers. Instead, he searched Lemert based on a departmental policy that required him to conduct a pat search during a “felony stop.”1 Based on the evidence discovered during the pat search, the State charged Lemert with a fifth-degree controlled-substance offense.",
"See Minn.Stat. § .025, subd. (a)(l) (2012). Lemert moved to suppress the evidence, arguing that the search violated his rights under the Fourth Amendment to *230the United States Constitution and Article, Section, of the Minnesota Constitution. Following an evidentiary hearing, the district court denied Lemert’s motion. The parties then agreed to a bench trial on stipulated facts, after which the court convicted Lemert of the fifth-degree controlled-substance offense, stayed imposition of Lemert’s sentence, and imposed a five-year term of probation. The court of appeals affirmed. State v. Lemert, 829 N.W.2d 421 (Minn.App.2013). We granted Lemert’s petition for review. II. The sole question presented by this case is the legality of the pat search of Lemert conducted by Agent Petersen. The Fourth Amendment to the United States Constitution and Article I, Section 10, of the Minnesota Constitution forbid “unreasonable searches” by the government. U.S. Const, amend. IV; Minn. Const. art.I, § 10. Lemert does not argue that the Minnesota Constitution provides him with greater protection than the United States Constitution, so we confine our analysis to the requirements of the Fourth Amendment. A warrantless search, such as the one at issue in this case, is generally unreasonable unless it falls within an exception to the Fourth Amendment’s warrant requirement. Missouri v. McNeely, — U.S. -, -, 133 S.Ct.",
"1552, 1558, 185 L.Ed.2d 696 (2013) (noting that “a warrantless search of the person is reasonable only if it falls within a recognized exception” to the Fourth Amendment’s warrant requirement). The Supreme Court of the United States recognized one such exception in Terry v. Ohio, in which it held that a law-enforcement officer may conduct a protective pat search of a person’s outer clothing so long as the officer has a reasonable, articulable suspicion that the person whom the officer has lawfully detained may be armed and dangérous. 392 U.S. 1, 26-27, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968). The protective pat search “must be strictly ‘limited to that which is necessary for the discovery of weapons which might be used to harm the officer or others nearby.’ ” Minnesota v. Dickerson, 508 U.S. 366, 373, 113 S.Ct. 2130, 124 L.Ed.2d 334 (1993) (quoting Terry, 392 U.S. at 26, 88 S.Ct.",
"1868). However, an officer is entitled to seize contraband, including drug paraphernalia, found during a pat search if the incriminating character of the contraband is immediately apparent to the officer such that it gives rise to probable cause for the seizure. See id. at 376, 378, 113 S.Ct. 2130. A pat search must be lawful at its inception, which means that a reasonable, articulable suspicion must exist when the pat search begins. Terry, 392 U.S. at 21-22, 88 S.Ct. 1868 (holding that the justification for a search depends on “the facts available to the officer at the moment of the ... search”). We evaluate whether a reasonable, articulable suspicion exists from the perspective of a trained police officer, who may make “inferences and deductions that might well elude an untrained person.” United States v. Cortez, 449 U.S. 411, 418, 101 S.Ct. 690, 66 L.Ed.2d 621 (1981). The legality of a pat search depends on an objective examination of the totality of the circumstances.",
"See United States v. Arvizu, 534 U.S. 266, 273, 122 S.Ct. 744, 151 L.Ed.2d 740 (2002). Thus, a pat search may still be lawful even if the officer conducted it based on departmental policy rather than the officer’s subjective assessment of the circumstances. See United States v. Tinnie, 629 F.3d 749, 753 (7th Cir.2011); see also Whren v. United States, 517 U.S. 806, 812, 116 S.Ct. 1769, 135 L.Ed.2d 89 (1996) (ex*231plaining that, other than for inventory searches or administrative inspections, an “officer’s motive” does not invalidate “objectively justifiable behavior under the Fourth Amendment”). After all, “[t]he actual, subjective beliefs of the officer are not the focus in evaluating reasonableness.” State v. Koppi, 798 N.W.2d 358, 368 (Minn.2011). In this case, the district court denied Lemert’s suppression motion because, after considering the totality of the circumstances, it found that the officers had a reasonable, articulable suspicion that Le-mert was armed and dangerous. The court of appeals affirmed the district court’s decision, but adopted different reasoning. Rather than evaluate the totality of the circumstances, as the district court did, the court of appeals concluded that the pat search was legal “[biased on [Le-mert’s] presence in a vehicle stopped on suspicion that its driver had recently engaged in large-scale drug activity.” Lemert, 829 N.W.2d at 422.",
"The court of appeals thus adopted a variation of the automatic-companion rule, which permits law-enforcement officers to conduct a pat search of any person who is in the company of someone whom the officers have arrested. See, e.g., United States v. Berryhill, 445 F.2d 1189, 1193 (9th Cir.1971) (articulating the automatic-companion rule); Owens v. Commonwealth, 291 S.W.3d 704, 709-10 (Ky.2009) (describing the automatic-companion rule). The State does not defend the reasoning of the court of appeals, and instead urges us to affirm the district court based on the totality of the circumstances surrounding the pat search. This case was submitted to the district court on stipulated facts, and we review de novo whether the stipulated facts were sufficient to provide the officer with a reasonable, articulable suspicion to conduct a pat search of Lemert. See State v. Diede, 795 N.W.2d 836, 843 (Minn.2011). In a series of cases, the Supreme Court has explained that courts must evaluate whether reasonable, articulable suspicion exists under a totality-of-the circumstances approach. See Arvizu, 534 U.S. at 273, 122 S.Ct.",
"744; United States v. Sokolow, 490 U.S. 1, 7-8, 109 S.Ct. 1581, 104 L.Ed.2d 1 (1989); Cortez, 449 U.S. at 417-18, 101 S.Ct. 690. In Arvizu, for example, the Court explained that “[w]hen discussing how reviewing courts should make reasonable-suspicion determinations, we have said repeatedly that they must look at the ‘totality of the circumstances’ of each case to see whether the detaining officer has a ‘particularized and objective basis’ for suspecting legal wrongdoing.” 534 U.S. at 273, 122 S.Ct. 744 (quoting Cortez, 449 U.S. at 417, 101 S.Ct. 690). Applying those principles here, our task is to determine whether, under the totality of the circumstances at the inception of the pat search, the officers had a reasonable, artic-ulable suspicion that Lemert might have been armed and dangerous.2 *232Based on the stipulated facts, we conclude that the officers had a reasonable, articulable suspicion that Lemert might have been armed and dangerous. In addition to the fact that Lemert was a passenger of a suspected drug dealer whom the officers had arrested, the officers knew other facts that supported the pat search. In particular, the officers knew details about Anthony’s drug-trafficking activities that increased the likelihood that Lemert was either Anthony’s customer or a fellow participant in those activities.",
"First, the officers knew that Anthony was not a solo operator: earlier that same day, Anthony had directed a confidential informant to pick up methamphetamine from a third party named “Curt.” Second, the officers knew that the truck in which Anthony and Lemert had been stopped was used, earlier that day, for a meeting between Anthony and a confidential informant about a methamphetamine sale. Third, a confidential informant had picked up methamphetamine at Anthony’s garage just 2 days before the traffic stop, and the police knew that Anthony and Lemert had left Anthony’s apartment together. Fourth, the police knew that Anthony was a dealer of felony-level quantities of methamphetamine.3 In addition to these facts, the totality of the circumstances includes any reasonable inferences that an officer could make in light of the facts, including that “a car passenger ... will often be engaged in a common enterprise with the driver, and have the same interest in concealing the fruits or the evidence of their wrongdoing.” Wyoming v. Houghton, 526 U.S. 295, 304-05, 119 S.Ct.",
"1297, 143 L.Ed.2d 408 (1999). Furthermore, as we have noted, a substantial nexus exists between drug dealing and violence. State v. Craig, 826 N.W.2d 789, 797 (Minn.2013); see also United States v. Bustos-Torres, 396 F.3d 935, 943 (8th Cir.2005) (“Because weapons and violence are frequently associated with drug transactions, it is reasonable for an officer to believe a person may be armed and dangerous when the person is suspected of being involved in a drug transaction.”). Accordingly, under the totality of the circumstances, it was reasonable for the officers to suspect that Lemert may have been armed and dangerous and to conduct a pat search to ensure their safety.",
"Cf. State v. Brazil, 269 N.W.2d 15, 20 (Minn.1978) (observing, in dictum, that the police could have lawfully conducted a pat search of a passenger when the police arrested the driver for selling drugs). In affirming the district court’s decision, however, we decline to adopt the automatic-companion rule. In the Fourth Amendment context, the Supreme Court has “consistently eschewed bright-line rules, instead emphasizing the fact-specific nature of the reasonableness inquiry.” Ohio v. Robinette, 519 U.S. 33, 39, 117 *233S.Ct. 417, 136 L.Ed.2d 347 (1996). Most recently, the Supreme Court rejected a categorical rule permitting warrantless blood testing in drunk-driving cases and instead held that “[wjhether a warrantless blood test of a drunk-driving suspect is reasonable must be determined case by case based on the totality of the circumstances.” Missouri v. McNeely, — U.S. at -, 133 S.Ct. at 1563. The clear import of these decisions is that, although being a companion to an arrestee is part of the totality of the circumstances, the Fourth Amendment does not provide for an automatic search of an arrestee’s companion.",
"Cf. Chimel v. California, 395 U.S. 752, 767-68, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969) (holding that the arrest of a person in a residence does not give the police an automatic right to search the rest of the house without a warrant). Any other conclusion would be inconsistent with the fact-specific nature of the reasonableness inquiry. See McNeely, — U.S. at -, 133 S.Ct. at 1559. III. For the foregoing reasons, we conclude that the district court did not err when it denied Lemert’s motion to suppress the evidence recovered during the pat search. Accordingly, although we decline to adopt the reasoning of the court of appeals, we affirm. Affirmed. .",
"Agent Petersen testified that not every stop for a felony offense is a \"felony stop” that triggers the departmental policy of conducting a pat search of every vehicle occupant. It appears from the record that stops related to drag trafficking qualify as \"felony stops” for purposes of the policy, but the record does not disclose what other types of stops qualify as \"felony stops.” .",
"Because a search must be justified at its inception and we evaluate the legality of the search based on the collective knowledge of the officers, we rely only on facts that the officers knew at the inception of the pat search of Lemert in determining its legality. See State v. Riley, 568 N.W.2d 518, 523 (Minn.1997) (applying the \"collective knowledge\" approach to determine the legality of an arrest). Accordingly, we disregard evidence that Lemert had received methamphetamine from Anthony in the past because there is no evidence that, at the inception of the search, any of the officers knew that Anthony’s passenger was Charles Lemert. We likewise disregard the fact that Lemert was wearing a leather case on his belt that could have contained a knife or other weapon because the record does not show that the officers observed the case prior to conducting the search or that any officer could have done so under the circumstances. . The details in the record about Anthony’s drug-trafficking activities distinguish this case from Diede, 795 N.W.2d 836, in which we held that the police unlawfully seized the driver of a truck when they stopped the truck for a license-plate violation.",
"During the stop, the police arrested the driver’s passenger for previous drug sales, and then investigated the driver for drug-related criminal activity. Id. at-44. Unlike the record in this case, however, the record in Diede included no evidence about the nature of the arrestee's drug-trafficking activities and no evidence linking those activities to the vehicle that the police stopped. Id. at(“The only basis in the record for suspecting that anyone possessed drugs was [a police officer’s] assertion that he had probable cause to arrest [the passenger] for previous drug sales. But the record does not describe the foundation of that probable cause. Nor does it indicate any objectively articulable facts that would have allowed the police to reasonably infer that [the passenger] was carrying drugs at the time of his arrest. ...”)."
] | https://www.courtlistener.com/api/rest/v3/opinions/8247186/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
419 F.2d 416 Lillian H. HORNEv.The UNITED STATES. No. 400-65. United States Court of Claims. December 12, 1969.
Carl L. Shipley, Washington, D. C., attorney of record, for plaintiff. Rufus W. Peckham, Jr., and Shipley, Akerman & Pickett, Washington, D. C., of counsel. Katherine H. Johnson, Washington, D. C., with whom was Asst. Atty. Gen. William D. Ruckelshaus, for defendant. Before COWEN, Chief Judge, LARAMORE, DURFEE, DAVIS, COLLINS, SKELTON, and NICHOLS, Judges. OPINION PER CURIAM:
1 This case was referred to Trial Commissioner Saul Richard Gamer with directions to make findings of fact and recommendation for conclusions of law under the order of reference and Rule 57(a) [since September 1, 1969, Rule 134(h)]. The commissioner has done so in an opinion and report filed on August 15, 1969. Neither party has filed exceptions to the commissioner's opinion and report and the time for so filing pursuant to the rules of this court has expired. On October 15, 1969 the defendant filed a motion that the court adopt the commissioner's report as the basis for its judgment in this case. Plaintiff has filed no response to this motion and the time for so filing pursuant to the rules of the court has expired. Since the court agrees with the commissioner's opinion, findings and recommended conclusion of law, as hereinafter set forth, it hereby grants defendant's motion and adopts the said opinion, findings and recommended conclusion of law as the basis for its judgment in this case without oral argument. Therefore, plaintiff is not entitled to recover and the petition is dismissed.
OPINION OF COMMISSIONER GAMER, Commissioner:
2 On November 27, 1964, plaintiff, while in her one-year probationary period, was separated from her position with the Manhattan, New York, District of the Internal Revenue Service. Plaintiff had been appointed to the position on June 15, 1964. Her appeals to the Civil Service Commission were unsuccessful. Her petition here alleges that her discharge was arbitrary, capricious, and unlawful, and seeks judgment for loss of salary.
3 A detailed consideration of the record herein, following a full trial,1 fails to disclose any basis for recovery.
4 No procedural defect in effecting plaintiff's separation has been shown. The only pertinent regulation applicable at the time was Section 315.804 of the Civil Service Regulations,2 which prescribed the procedure for the termination of employment of probationers for unsatisfactory performance or conduct. The quite summary procedure authorized was here followed. The regulation simply provides that the agency shall set forth its "conclusions as to the inadequacies of [the probationer's] performance or conduct."3 By letter of November 17, 1964, to plaintiff, the agency notified her that, effective November 27, 1964, she would be separated because she had been "uncooperative" with agency officials in that she had "unnecessarily impeded audit procedures" in connection with an audit conducted of her own income tax returns. Such audits were routinely made as part of the investigation of all IRS employees in plaintiff's category (tax technician) prior to the expiration of their probationary periods. The letter went on to state, after a full recitation of the acts and events upon which the agency's "conclusions" were based, that:
5 As a Tax Technician, one of your major responsibilities is to obtain the cooperation of taxpayers in the enforcement of provisions of the Tax Code and to encourage voluntary compliance. By your actions in regard to your own audit you have shown that you would be unable to perform your duties suitably and conscientiously, and are, therefore, being separated to promote the efficiency of the Revenue Service.
6 In thus stating that plaintiff's uncooperative conduct in connection with her own tax audit demonstrated an inability to perform the duties of a tax technician suitably and conscientiously, the agency was manifestly in compliance with the "conclusions" requirement of the regulation. Actually, the letter, setting forth in considerable detail plaintiff's various acts (and failures to act) upon which the agency's conclusions were grounded, went further than required by the regulation.
7 Apparently, as shown by her appeal to the Civil Service Commission, plaintiff was under the misconception that she was entitled to advance written notice of the proposed dismissal, presumably in the nature of charges, to which she had a right to reply, for that was one of the points she made in her appeal.4 (As shown, the notice did set forth the date upon which the termination would become effective.) However, unlike employees with permanent civil service status in their positions, who are entitled to the protections of the Lloyd-LaFollette Act,5 including advance written notice based on charges, as well as the opportunity to reply, probationary employees are subject to the summary dismissal procedure described in the above-mentioned Civil Service regulation. Dargo v. United States, 176 Ct. Cl. 1193 (1966). Plaintiff seemingly now concedes this, for the contention is no longer pressed.
8 Similarly, the contention plaintiff has sometimes asserted that, because she had, since 1952, served in various federal positions in which she had attained civil service status, she was not subject to the summary dismissal procedure applicable to probationers, is also now apparently abandoned. Plaintiff concedes that her previous positions, which were of the secretarial-stenographic type in agencies other than the IRS, involved duties of a different nature and character than that of the tax technician position for which she was employed by the Internal Revenue Service. Thus, she was properly subject to a one-year probationary period in her new position.6 Dargo v. United States, supra.
9 Consequently, the only basis upon which plaintiff's dismissal can be attacked is on the merits, and plaintiff's main thrust is now so grounded. She says that, despite the conclusion of the agency that she was "uncooperative" because she had "unnecessarily impeded audit procedures," and that therefore she would not, in the agency's opinion, be an employee who could "perform [her] duties suitably and conscientiously," she had in fact been cooperative and her attitude and conduct had been proper.
10 Considering the strong presumption that public officials act in good faith, an employee carries a heavy burden in attempting to show, in cases of this kind, that his discharge was so lacking in rational support that it must be characterized as arbitrary or capricious. Greenway v. United States, 175 Ct. Cl. 350, cert. denied, 385 U.S. 881, 87 S. Ct. 167, 17 L. Ed. 2d 108 (1966); Knotts v. United States, 121 F. Supp. 630, 128 Ct. Cl. 489 (1954).
11 It is settled that "the courts cannot be drawn into the merits of controversies relating to competence. Judgments as to an employee's qualifications or the satisfactory nature of his services must necessarily rest with the agencies and not with the courts. [Cases cited] All the courts can do in questions of this kind is to make certain the agency's action represents honest judgment." Dargo v. United States, supra at 1206.7 And here the record, including the testimony of the official who initiated the dismissal action, affirmatively shows that the agency's action was taken in good faith and, in its sound opinion, to promote the efficiency of the Service. Further, the evidence demonstrates that such determination and action were not so lacking in factual support as to compel the conclusion that they were without any reasonable foundation and therefore arbitrary and capricious.
12 For one attempting to demonstrate her fitness for the tax technician job to which she was aspiring, plaintiff certainly acted in a strange manner. In notices (a telegram and a letter) of May 28, 1964, which plaintiff received, stating that she had been selected for appointment, plaintiff was specifically advised that the appointment would be "subject to the results of a character investigation and an audit of your income tax returns filed for three prior years" and that "the first year of this appointment will be a probationary period." Actually, in anticipation of her selection, an employee audit had already been initiated of plaintiff's 1962 and 1963 (joint) returns. Plaintiff was so advised by letter of May 7, 1964, from the Brooklyn, New York, District Director. The letter stated that additional information was necessary to verify her reported tax liabilities, and requested that she bring the records she used in computing her taxes for such years to the District Director's Office on May 11, 1964. The letter further stated that information was specifically required to support the deductions plaintiff had taken for interest expense, as well as for medical and dental expenses. Plaintiff's conference appointment, the letter advised, was with Miss Jean Kaufman, an experienced tax technician who was then assigned to conducting audits of the returns of IRS employees.
13 On May 11, 1964, plaintiff did appear for the conference, but brought no data at all with respect to 1962. As to 1963, all she brought was partial verification (medical bills and canceled checks) of her medical expenses (around $800 out of total claimed expenditures of over $1,700). Some canceled checks to credit unions, finance companies, and stores were submitted as proof of loans and installment purchases. However, because there was no showing as to what part of the total check amount, if any, represented interest, these were not accepted as interest expense verification. In justification for the paucity of verification material presented, plaintiff explained that she had recently moved from Washington, D. C., to the New York City area and that the papers she required could not be located. Miss Kaufman explained to plaintiff, however, that the loss of the papers plaintiff felt she needed would not necessarily prevent verification since experience indicated that, in such cases, the writing by the taxpayer of a few short notes to the doctors or hospitals involved to obtain copies of their bills or statements of payments, or, with respect to the interest payments claimed, to the lenders to obtain statements of the loan accounts, invariably promptly produced acceptable verification.8 Similarly, plaintiff was also asked to obtain verification of the deductions claimed with respect to charitable contributions and taxes. Plaintiff agreed she would write such letters as Miss Kaufman described immediately, and, since it was expected that replies thereto would be received in about two weeks, it was further agreed that another conference would be held in Miss Kaufman's office on May 26, 1964, to review the material and possibly to complete the audit.
14 Despite their continued best efforts to arrange for another meeting with plaintiff, however, that was the last that Miss Kaufman or anyone else in the Brooklyn District Office ever saw of plaintiff. By letter of May 25, 1964, the day before the agreed-upon conference date, plaintiff wrote to Miss Kaufman that she was still unable to locate the missing papers. She consequently requested a postponement, but stated she hoped that "in a few days" she could obtain "all the necessary documents, so as not to delay my entrance on duty with your Service any longer." Nothing was mentioned above having written the letters she had promised to send, nor was any new conference date suggested.
15 Hearing nothing further from plaintiff "in a few days," Miss Kaufman, by letter of June 12, 1964, reminded plaintiff that the information she had submitted was insufficient to complete the audit, and asked plaintiff to telephone her on June 15, 1964.
16 Miss Kaufman did not receive the requested call on June 15, 1964 (that was the day plaintiff was appointed to her position). However, the next day plaintiff wrote to Miss Kaufman, stated that the Baltimore, Maryland, IRS Office, where she had filed her 1963 return, was also examining it, and requested that Miss Kaufman's audit "be withheld" until the Baltimore District completed its examination. Plaintiff further stated that her missing papers still had not been located, "[b]ut in order not to delay your processing further," she requested a copy of her 1962 return (being unable to locate her own copy), "so that I may submit what information I have, if any, or justification therefor."9 There was still no indication the plaintiff had written any of the verification letters she had promised to send.
17 By letter of June 22, 1964, Miss Kaufman sent plaintiff the requested copy of the 1962 return, stated that she would like to complete the audit "as soon as possible," and advised that if plaintiff could not make a personal visit, the verification data should be mailed to her.
18 Another two weeks passed without any communication from plaintiff. The Brooklyn District officials then decided to contact the Manhattan District Office, where plaintiff was employed and was taking her training course, and request that that office speak to plaintiff and encourage her to communicate with the Brooklyn officials and assist them in completing the audit. Accordingly, on July 6, 1964, Miss Kaufman telephoned plaintiff's supervisor at the Training Branch of the Manhattan Office, explained the situation to him, stated she considered it desirable to have another conference with plaintiff, and solicited his aid in having plaintiff come to the Brooklyn Office, or at least contact her by telephone. Miss Kaufman was assured that trainees could take off such time as was necessary in connection with matters pertaining to their own audits. After conferring with plaintiff, a Manhattan Office official (one of plaintiff's instructors), advised Miss Kaufman the following day that he had relayed Miss Kaufman's message to plaintiff, but that plaintiff stated she would mail the verification data to Miss Kaufman.
19 Plaintiff's supervisor, apparently having followed up the matter about a week later, and having ascertained that plaintiff had still done nothing about the matter, was assured by plaintiff that she would send in the papers immediately. The supervisor then again so advised Miss Kaufman.
20 By letter of July 14, 1964, plaintiff forwarded to the Brooklyn Office certain data which she referred to as "information sheets regarding specific items on the returns." The sheets consisted only of explanations as to how the deductions on the returns had been computed. These were substantially the same explanations plaintiff had already made at the conference as long ago as May 11, 1964. No independent verification materials were submitted, nor again was there any indication that plaintiff had sent any of the letters she had promised to send over two months ago.
21 Concluding that plaintiff was not co-operating and that further delay was unjustified, Miss Kaufman decided to complete the audit on the basis of the data she had. The amounts of the deductions verified or otherwise allowable were insufficient to exceed the standard deductions. Accordingly, the claimed deductions were disallowed and instead the standard deductions allowed for both years. Plaintiff was so informed by letters of July 21, 1964, from the Brooklyn District Director. The resulting recomputations showed deficiencies of $164.43 for 1962 and $443 for 1963.10 The letters further advised that, if plaintiff wished, she could discuss the matter in person with the examining office, or have an informal conference with an independent conferee.
22 By letter of August 1, 1964, plaintiff requested reconsideration of the matter "by conference or any other means or method you deem necessary" (although, because of her training program, she stated she preferred that the matter be handled "without a personal visitation on my part, if at all possible"). The letter went on to recite that the deficiency report was "unreasonable in view of the circumstances," that the "audits were occasioned by my acceptance for employment with the Internal Revenue Service" and that "I find this additional taxation or employment fee is much more than I bargained for * * *." Again she attached "information" sheets containing substantially the same deduction explanations previously made.11
23 The matter was then assigned to a staff conferee at the Brooklyn Office, who, since plaintiff indicated a willingness to confer about the matter, sent plaintiff an "Invitation to Conference" letter dated September 5, 1964. However, by letter of September 13, 1964, plaintiff requested that the matter be reviewed on the basis of the data already submitted.
24 The staff conferee then advised plaintiff by telephone that the information already submitted was insufficient to warrant greater allowances, and invited her to a conference to review the entire matter. However, although she had previously indicated a willingness to have a conference (which caused the case to be assigned to a staff conferee), plaintiff now declined the invitation.
25 Accordingly, plaintiff's case was referred back to the Audit Division for the issuance of formal deficiency determinations. Letters containing such determinations were sent on October 6, 1964.
26 The Brooklyn officials then decided to call plaintiff's case to the attention of Mr. Peter Dillon, the chief of the branch in the Manhattan District Office to which plaintiff was assigned. Dillon immediately spoke to plaintiff about the matter. Dillon was not familiar with or concerned about the details of plaintiff's tax problems. What he was concerned about was plaintiff's apparent attitude and failure to cooperate. Plaintiff told him that the delays in the completion of her audit were due to her missing papers, that she was still searching for them, and that just as soon as she could locate them, she would mail them to the Brooklyn District Office. Dillon advised her of the Brooklyn District's concern. He told her that the officials there stood ready to see her immediately. Plaintiff stated she could not go to Brooklyn at that time because (apparently considering the matter as a personal one) she had no leave. However, Dillon stated he would allow her such time as was necessary for the purpose, without charging it to leave. Plaintiff responded that other engagements prevented her from going immediately, but that she would mail some verification data to the Brooklyn Office the following day, and would attempt to visit it the day after.
27 By the close of the interview, Dillon was troubled by what he felt constituted evasive conduct on plaintiff's part. In any event, he advised the Brooklyn officials of plaintiff's statements that she would both forward further data and attempt to visit them personally to enable them to close their audit file. However, when Dillon's subsequent follow-up with the Brooklyn officials disclosed that plaintiff had done neither (as the Brooklyn officials had anticipated), he once more conferred with plaintiff, told her of his concern about her failure to do as she had promised, and advised her of the serious nature of the matter. Plaintiff then stated that she had no other data to submit, and that she would promptly mail her check to pay the deficiencies in full (which plaintiff did). As she had stated in her letter of August 1, 1964, to the Brooklyn Office, plaintiff reiterated to Dillon, however, that she felt the amount involved constituted the exaction of a high employment fee by the Internal Revenue Service, a statement which Dillon felt reflected an attitude which was wholly improper.
28 Dillon ultimately concluded that the audit of plaintiff's returns disclosed attitudes which would be incompatible with satisfactory performance by a tax technician. Such an employee would have constant contact with the public. One of her important duties would be to obtain the cooperation of, and voluntary compliance by, taxpayers when their returns were being audited and questions raised with respect thereto. With the attitude toward the Service, and the lack of cooperation plaintiff had herself displayed in connection with the audit of her own returns, he concluded that she would make a poor representative of the Service. Accordingly, he initiated her separation by the District Director by the letter of November 17, 1964, as above set forth.
29 Certainly as the above review amply demonstrates, the good faith action by the Service in separating plaintiff for the good of the Service was well within the ambit of permissible agency discretion and in no way can be labeled arbitrary or capricious. And this is so whether or not others might reasonably have taken different or less drastic action with respect to plaintiff. "* * * such matters as the appropriate disciplinary action to be taken normally lie within the agency's discretion." Dargo v. United States, supra at 1207.
30 Plaintiff further says she was proving herself to be a technically competent employee but was nevertheless discharged simply because she had a tax controversy with the IRS. This, she says, does not constitute, under the regulation, "performance or conduct on the job." She was doing nothing impermissible, she says, in claiming deductions, even if it turned out she could not substantiate them. Such inability, she argues, is not unusual taxpayer conduct. It would be unfair, plaintiff urges, to hold a competent IRS employee to a higher standard of conduct in this respect than any other taxpayer.
31 The above review and analysis of plaintiff's relations with her agency with respect to the audit of her tax returns refute the contention. Plaintiff was not discharged because she had, as she says, "a personal tax controversy with the I.R.S." As plaintiff herself points out, many taxpayers fail to substantiate deductions. This is also true of IRS employees and is not in itself considered as any indication of dishonesty. It is especially true of new IRS employees, who may not be familiar with the tax laws or regulations. In this respect, the audit of the past years' returns also serves as an educational tool and as part of their training. What plaintiff was discharged for, as the letter of termination explicitly stated, was her attitude, obviously an important job ingredient. That attitude indeed left much to be desired, as was amply illustrated by plaintiff's considering the disallowance of her unsubstantiated deductions as the exaction of an "employment fee," thus in effect impugning the good faith of her agency-employer. It was further illustrated by her uncooperative conduct, as demonstrated by her several promises to supply substantiating data and then apparently making little or no effort to obtain such data, as well as by her statements that she desired or was willing to have personal conferences but then not following through with respect thereto, and indeed actually declining to attend such conferences when specifically invited to do so. To the agency officials, it almost seemed, not unreasonably, that plaintiff was, for reasons best known to herself, deliberately engaging in dilatory tactics. Technical competence is not the sole test of job qualification. Cf. Ruderer v. United States, 412 F.2d 1285, 1287-1288, 188 Ct. Cl. 456, 459-460 (1969).12
32 Finally, plaintiff argues that she was discharged for reasons other than those set forth in the termination letter of November 17, 1964. The contention is grounded upon the fact that, after he was drawn into the matter of plaintiff's personnel problem and had his conferences with plaintiff, Dillon, prior to arriving at a final conclusion on the question of whether he should recommend plaintiff's dismissal on the audit bases indicated, inquired of plaintiff's supervisor concerning her on-the-job performance. The supervisor reported that technically, plaintiff was performing competently. He further stated, however, that her attitude toward her supervisor was not one of being willing to consult with him freely, and that, consequently, she failed to so consult with him on the more complex problems which he felt called for such consultation. She tended, he said, to operate alone and to fail to seek help. Dillon felt that the work traits the supervisor described reinforced his conclusion that plaintiff had some of the weaknesses which the audit of her returns had uncovered. It was then that he recommended to the District Director that plaintiff be dismissed for the reasons growing out of the audit of her returns. Accordingly, plaintiff now says she was discharged for the reasons, inter alia, that she was not free and willing to consult with her supervisor and failed to consult with him on matters concerning which he felt she should; that she failed to seek help; and that she operated alone, none of which reasons were set forth in the termination notice. This, she argues, violated the pertinent regulation hereinabove mentioned, requiring that the notice set forth the agency's "conclusions as to the inadequacies of [the employee's] performance or conduct."
33 The contention cannot be accepted. Clearly, plaintiff's discharge was based only upon the conduct and attitudes she displayed in connection with her audit. That other work traits she exhibited, although not of such character in themselves as to justify dismissal, reinforced the agency's conclusion as to the correctness of its decision concerning the weaknesses she displayed in connection with the audit, is quite immaterial. It was perfectly natural for Dillon, prior to his final dismissal recommendation, to have called for an on-the-job report of plaintiff's performance. There is no showing that, the audit matter aside, Dillon would have recommended the termination of plaintiff's employment during her probationary period on the basis of the supervisor's report, especially in light of the supervisor's conclusion that technically she was proving to be a competent employee. Nor was there any reason why, if plaintiff's on-the-job performance was actually considered to be unsatisfactory, her termination could not have been on such basis, without any need for a cover-up. Considering the entire record, no basis becomes apparent for any assumption that plaintiff's discharge was actually grounded in any part upon the on-the-job work traits discussed by plaintiff's supervisor.
34 For all of the above reasons, plaintiff is not entitled to recover.
Notes:
1 By order of January 16, 1967, the court denied both defendant's motion and plaintiff's cross-motion for summary judgment
2 5 C.F.R. § 315.804 (1964)
3 "Section 315.804 Termination of probationers for unsatisfactory performance or conduct "When an agency decides to terminate an employee serving a probationary or trial period because his work performance or conduct during this period fails to demonstrate his fitness or his qualifications for continued employment, it shall terminate his services by notifying him in writing as to why he is being separated and the effective date of the action. The information in the notice as to why the employee is being terminated shall, as a minimum, consist of the agency's conclusions as to the inadequacies of his performance or conduct."
4 She stated: "No advance or written notice of proposed action was initiated by the Agency."
5 37 Stat. 539, 555, as amended by the Act of June 10, 1948, 62 Stat. 354, 5 U.S.C. § 652(a) (1964)
6 The official title of the position to which plaintiff was appointed was "Tax Technician (Trainee)."
7 The Civil Service Commission also took the position that it would not entertain an appeal based on a probationer's inadequate performance or conduct on the job
8 Plaintiff was claiming total medical and dental expenditures of $1,223.71 for 1962 and $1,714 for 1963. Interest expense deductions of $299 and $450 were being claimed for 1962 and 1963, respectively
9 The letter stated that plaintiff had unsuccessfully attempted to reach Miss Kaufman by telephone both on June 15 and 16. The record contains no satisfactory explanation for any such inability, since Miss Kaufman was on duty both days and her telephone was covered at all times
10 Withholdings for 1963 were in such amounts as to require the payment of only $48 to liquidate the 1963 deficiency
11 There were a few changes as follows: (1) for 1963, plaintiff claimed three more charitable contribution deductions; (2) in support of the claimed 1963 interest expense deduction, which included $200 paid to credit unions, she submitted "a machine tape" in the amount of $122.20 from one union; and (3) agreed that $278.24 previously claimed as health and accident insurance premiums was not allowable, since such amount actually constituted premiums for life insurance
12 As to this contention of plaintiff's, the Civil Service Commission stated: "Your claim that your separation was not due to performance or conduct on the job is without merit. Your actions subsequent to your appointment, as outlined in the letter of November 17, 1964, certainly relate to your conduct on the job." | 08-23-2011 | [
"419 F.2d 416 Lillian H. HORNEv.The UNITED STATES. No. 400-65. United States Court of Claims. December 12, 1969. Carl L. Shipley, Washington, D. C., attorney of record, for plaintiff. Rufus W. Peckham, Jr., and Shipley, Akerman & Pickett, Washington, D. C., of counsel. Katherine H. Johnson, Washington, D. C., with whom was Asst. Atty. Gen. William D. Ruckelshaus, for defendant. Before COWEN, Chief Judge, LARAMORE, DURFEE, DAVIS, COLLINS, SKELTON, and NICHOLS, Judges. OPINION PER CURIAM: 1 This case was referred to Trial Commissioner Saul Richard Gamer with directions to make findings of fact and recommendation for conclusions of law under the order of reference and Rule 57(a) [since September 1, 1969, Rule 134(h)]. The commissioner has done so in an opinion and report filed on August 15, 1969. Neither party has filed exceptions to the commissioner's opinion and report and the time for so filing pursuant to the rules of this court has expired.",
"On October 15, 1969 the defendant filed a motion that the court adopt the commissioner's report as the basis for its judgment in this case. Plaintiff has filed no response to this motion and the time for so filing pursuant to the rules of the court has expired. Since the court agrees with the commissioner's opinion, findings and recommended conclusion of law, as hereinafter set forth, it hereby grants defendant's motion and adopts the said opinion, findings and recommended conclusion of law as the basis for its judgment in this case without oral argument. Therefore, plaintiff is not entitled to recover and the petition is dismissed. OPINION OF COMMISSIONER GAMER, Commissioner: 2 On November 27, 1964, plaintiff, while in her one-year probationary period, was separated from her position with the Manhattan, New York, District of the Internal Revenue Service.",
"Plaintiff had been appointed to the position on June 15, 1964. Her appeals to the Civil Service Commission were unsuccessful. Her petition here alleges that her discharge was arbitrary, capricious, and unlawful, and seeks judgment for loss of salary. 3 A detailed consideration of the record herein, following a full trial,1 fails to disclose any basis for recovery. 4 No procedural defect in effecting plaintiff's separation has been shown. The only pertinent regulation applicable at the time was Section 315.804 of the Civil Service Regulations,2 which prescribed the procedure for the termination of employment of probationers for unsatisfactory performance or conduct.",
"The quite summary procedure authorized was here followed. The regulation simply provides that the agency shall set forth its \"conclusions as to the inadequacies of [the probationer's] performance or conduct. \"3 By letter of November 17, 1964, to plaintiff, the agency notified her that, effective November 27, 1964, she would be separated because she had been \"uncooperative\" with agency officials in that she had \"unnecessarily impeded audit procedures\" in connection with an audit conducted of her own income tax returns.",
"Such audits were routinely made as part of the investigation of all IRS employees in plaintiff's category (tax technician) prior to the expiration of their probationary periods. The letter went on to state, after a full recitation of the acts and events upon which the agency's \"conclusions\" were based, that: 5 As a Tax Technician, one of your major responsibilities is to obtain the cooperation of taxpayers in the enforcement of provisions of the Tax Code and to encourage voluntary compliance. By your actions in regard to your own audit you have shown that you would be unable to perform your duties suitably and conscientiously, and are, therefore, being separated to promote the efficiency of the Revenue Service. 6 In thus stating that plaintiff's uncooperative conduct in connection with her own tax audit demonstrated an inability to perform the duties of a tax technician suitably and conscientiously, the agency was manifestly in compliance with the \"conclusions\" requirement of the regulation. Actually, the letter, setting forth in considerable detail plaintiff's various acts (and failures to act) upon which the agency's conclusions were grounded, went further than required by the regulation. 7 Apparently, as shown by her appeal to the Civil Service Commission, plaintiff was under the misconception that she was entitled to advance written notice of the proposed dismissal, presumably in the nature of charges, to which she had a right to reply, for that was one of the points she made in her appeal.4 (As shown, the notice did set forth the date upon which the termination would become effective.)",
"However, unlike employees with permanent civil service status in their positions, who are entitled to the protections of the Lloyd-LaFollette Act,5 including advance written notice based on charges, as well as the opportunity to reply, probationary employees are subject to the summary dismissal procedure described in the above-mentioned Civil Service regulation. Dargo v. United States, 176 Ct. Cl. 1193 (1966). Plaintiff seemingly now concedes this, for the contention is no longer pressed. 8 Similarly, the contention plaintiff has sometimes asserted that, because she had, since 1952, served in various federal positions in which she had attained civil service status, she was not subject to the summary dismissal procedure applicable to probationers, is also now apparently abandoned. Plaintiff concedes that her previous positions, which were of the secretarial-stenographic type in agencies other than the IRS, involved duties of a different nature and character than that of the tax technician position for which she was employed by the Internal Revenue Service.",
"Thus, she was properly subject to a one-year probationary period in her new position.6 Dargo v. United States, supra. 9 Consequently, the only basis upon which plaintiff's dismissal can be attacked is on the merits, and plaintiff's main thrust is now so grounded. She says that, despite the conclusion of the agency that she was \"uncooperative\" because she had \"unnecessarily impeded audit procedures,\" and that therefore she would not, in the agency's opinion, be an employee who could \"perform [her] duties suitably and conscientiously,\" she had in fact been cooperative and her attitude and conduct had been proper. 10 Considering the strong presumption that public officials act in good faith, an employee carries a heavy burden in attempting to show, in cases of this kind, that his discharge was so lacking in rational support that it must be characterized as arbitrary or capricious. Greenway v. United States, 175 Ct. Cl. 350, cert.",
"denied, 385 U.S. 881, 87 S. Ct. 167, 17 L. Ed. 2d 108 (1966); Knotts v. United States, 121 F. Supp. 630, 128 Ct. Cl. 489 (1954). 11 It is settled that \"the courts cannot be drawn into the merits of controversies relating to competence. Judgments as to an employee's qualifications or the satisfactory nature of his services must necessarily rest with the agencies and not with the courts. [Cases cited] All the courts can do in questions of this kind is to make certain the agency's action represents honest judgment.\" Dargo v. United States, supra at 1206.7 And here the record, including the testimony of the official who initiated the dismissal action, affirmatively shows that the agency's action was taken in good faith and, in its sound opinion, to promote the efficiency of the Service. Further, the evidence demonstrates that such determination and action were not so lacking in factual support as to compel the conclusion that they were without any reasonable foundation and therefore arbitrary and capricious. 12 For one attempting to demonstrate her fitness for the tax technician job to which she was aspiring, plaintiff certainly acted in a strange manner. In notices (a telegram and a letter) of May 28, 1964, which plaintiff received, stating that she had been selected for appointment, plaintiff was specifically advised that the appointment would be \"subject to the results of a character investigation and an audit of your income tax returns filed for three prior years\" and that \"the first year of this appointment will be a probationary period.\"",
"Actually, in anticipation of her selection, an employee audit had already been initiated of plaintiff's 1962 and 1963 (joint) returns. Plaintiff was so advised by letter of May 7, 1964, from the Brooklyn, New York, District Director. The letter stated that additional information was necessary to verify her reported tax liabilities, and requested that she bring the records she used in computing her taxes for such years to the District Director's Office on May 11, 1964.",
"The letter further stated that information was specifically required to support the deductions plaintiff had taken for interest expense, as well as for medical and dental expenses. Plaintiff's conference appointment, the letter advised, was with Miss Jean Kaufman, an experienced tax technician who was then assigned to conducting audits of the returns of IRS employees. 13 On May 11, 1964, plaintiff did appear for the conference, but brought no data at all with respect to 1962. As to 1963, all she brought was partial verification (medical bills and canceled checks) of her medical expenses (around $800 out of total claimed expenditures of over $1,700). Some canceled checks to credit unions, finance companies, and stores were submitted as proof of loans and installment purchases. However, because there was no showing as to what part of the total check amount, if any, represented interest, these were not accepted as interest expense verification. In justification for the paucity of verification material presented, plaintiff explained that she had recently moved from Washington, D. C., to the New York City area and that the papers she required could not be located.",
"Miss Kaufman explained to plaintiff, however, that the loss of the papers plaintiff felt she needed would not necessarily prevent verification since experience indicated that, in such cases, the writing by the taxpayer of a few short notes to the doctors or hospitals involved to obtain copies of their bills or statements of payments, or, with respect to the interest payments claimed, to the lenders to obtain statements of the loan accounts, invariably promptly produced acceptable verification.8 Similarly, plaintiff was also asked to obtain verification of the deductions claimed with respect to charitable contributions and taxes. Plaintiff agreed she would write such letters as Miss Kaufman described immediately, and, since it was expected that replies thereto would be received in about two weeks, it was further agreed that another conference would be held in Miss Kaufman's office on May 26, 1964, to review the material and possibly to complete the audit. 14 Despite their continued best efforts to arrange for another meeting with plaintiff, however, that was the last that Miss Kaufman or anyone else in the Brooklyn District Office ever saw of plaintiff. By letter of May 25, 1964, the day before the agreed-upon conference date, plaintiff wrote to Miss Kaufman that she was still unable to locate the missing papers. She consequently requested a postponement, but stated she hoped that \"in a few days\" she could obtain \"all the necessary documents, so as not to delay my entrance on duty with your Service any longer.\"",
"Nothing was mentioned above having written the letters she had promised to send, nor was any new conference date suggested. 15 Hearing nothing further from plaintiff \"in a few days,\" Miss Kaufman, by letter of June 12, 1964, reminded plaintiff that the information she had submitted was insufficient to complete the audit, and asked plaintiff to telephone her on June 15, 1964. 16 Miss Kaufman did not receive the requested call on June 15, 1964 (that was the day plaintiff was appointed to her position). However, the next day plaintiff wrote to Miss Kaufman, stated that the Baltimore, Maryland, IRS Office, where she had filed her 1963 return, was also examining it, and requested that Miss Kaufman's audit \"be withheld\" until the Baltimore District completed its examination. Plaintiff further stated that her missing papers still had not been located, \"[b]ut in order not to delay your processing further,\" she requested a copy of her 1962 return (being unable to locate her own copy), \"so that I may submit what information I have, if any, or justification therefor.",
"\"9 There was still no indication the plaintiff had written any of the verification letters she had promised to send. 17 By letter of June 22, 1964, Miss Kaufman sent plaintiff the requested copy of the 1962 return, stated that she would like to complete the audit \"as soon as possible,\" and advised that if plaintiff could not make a personal visit, the verification data should be mailed to her. 18 Another two weeks passed without any communication from plaintiff. The Brooklyn District officials then decided to contact the Manhattan District Office, where plaintiff was employed and was taking her training course, and request that that office speak to plaintiff and encourage her to communicate with the Brooklyn officials and assist them in completing the audit.",
"Accordingly, on July 6, 1964, Miss Kaufman telephoned plaintiff's supervisor at the Training Branch of the Manhattan Office, explained the situation to him, stated she considered it desirable to have another conference with plaintiff, and solicited his aid in having plaintiff come to the Brooklyn Office, or at least contact her by telephone. Miss Kaufman was assured that trainees could take off such time as was necessary in connection with matters pertaining to their own audits. After conferring with plaintiff, a Manhattan Office official (one of plaintiff's instructors), advised Miss Kaufman the following day that he had relayed Miss Kaufman's message to plaintiff, but that plaintiff stated she would mail the verification data to Miss Kaufman. 19 Plaintiff's supervisor, apparently having followed up the matter about a week later, and having ascertained that plaintiff had still done nothing about the matter, was assured by plaintiff that she would send in the papers immediately. The supervisor then again so advised Miss Kaufman.",
"20 By letter of July 14, 1964, plaintiff forwarded to the Brooklyn Office certain data which she referred to as \"information sheets regarding specific items on the returns.\" The sheets consisted only of explanations as to how the deductions on the returns had been computed. These were substantially the same explanations plaintiff had already made at the conference as long ago as May 11, 1964. No independent verification materials were submitted, nor again was there any indication that plaintiff had sent any of the letters she had promised to send over two months ago. 21 Concluding that plaintiff was not co-operating and that further delay was unjustified, Miss Kaufman decided to complete the audit on the basis of the data she had. The amounts of the deductions verified or otherwise allowable were insufficient to exceed the standard deductions. Accordingly, the claimed deductions were disallowed and instead the standard deductions allowed for both years. Plaintiff was so informed by letters of July 21, 1964, from the Brooklyn District Director.",
"The resulting recomputations showed deficiencies of $164.43 for 1962 and $443 for 1963.10 The letters further advised that, if plaintiff wished, she could discuss the matter in person with the examining office, or have an informal conference with an independent conferee. 22 By letter of August 1, 1964, plaintiff requested reconsideration of the matter \"by conference or any other means or method you deem necessary\" (although, because of her training program, she stated she preferred that the matter be handled \"without a personal visitation on my part, if at all possible\").",
"The letter went on to recite that the deficiency report was \"unreasonable in view of the circumstances,\" that the \"audits were occasioned by my acceptance for employment with the Internal Revenue Service\" and that \"I find this additional taxation or employment fee is much more than I bargained for * * *.\" Again she attached \"information\" sheets containing substantially the same deduction explanations previously made.11 23 The matter was then assigned to a staff conferee at the Brooklyn Office, who, since plaintiff indicated a willingness to confer about the matter, sent plaintiff an \"Invitation to Conference\" letter dated September 5, 1964. However, by letter of September 13, 1964, plaintiff requested that the matter be reviewed on the basis of the data already submitted. 24 The staff conferee then advised plaintiff by telephone that the information already submitted was insufficient to warrant greater allowances, and invited her to a conference to review the entire matter. However, although she had previously indicated a willingness to have a conference (which caused the case to be assigned to a staff conferee), plaintiff now declined the invitation. 25 Accordingly, plaintiff's case was referred back to the Audit Division for the issuance of formal deficiency determinations. Letters containing such determinations were sent on October 6, 1964.",
"26 The Brooklyn officials then decided to call plaintiff's case to the attention of Mr. Peter Dillon, the chief of the branch in the Manhattan District Office to which plaintiff was assigned. Dillon immediately spoke to plaintiff about the matter. Dillon was not familiar with or concerned about the details of plaintiff's tax problems. What he was concerned about was plaintiff's apparent attitude and failure to cooperate. Plaintiff told him that the delays in the completion of her audit were due to her missing papers, that she was still searching for them, and that just as soon as she could locate them, she would mail them to the Brooklyn District Office. Dillon advised her of the Brooklyn District's concern.",
"He told her that the officials there stood ready to see her immediately. Plaintiff stated she could not go to Brooklyn at that time because (apparently considering the matter as a personal one) she had no leave. However, Dillon stated he would allow her such time as was necessary for the purpose, without charging it to leave. Plaintiff responded that other engagements prevented her from going immediately, but that she would mail some verification data to the Brooklyn Office the following day, and would attempt to visit it the day after. 27 By the close of the interview, Dillon was troubled by what he felt constituted evasive conduct on plaintiff's part. In any event, he advised the Brooklyn officials of plaintiff's statements that she would both forward further data and attempt to visit them personally to enable them to close their audit file.",
"However, when Dillon's subsequent follow-up with the Brooklyn officials disclosed that plaintiff had done neither (as the Brooklyn officials had anticipated), he once more conferred with plaintiff, told her of his concern about her failure to do as she had promised, and advised her of the serious nature of the matter. Plaintiff then stated that she had no other data to submit, and that she would promptly mail her check to pay the deficiencies in full (which plaintiff did). As she had stated in her letter of August 1, 1964, to the Brooklyn Office, plaintiff reiterated to Dillon, however, that she felt the amount involved constituted the exaction of a high employment fee by the Internal Revenue Service, a statement which Dillon felt reflected an attitude which was wholly improper. 28 Dillon ultimately concluded that the audit of plaintiff's returns disclosed attitudes which would be incompatible with satisfactory performance by a tax technician. Such an employee would have constant contact with the public. One of her important duties would be to obtain the cooperation of, and voluntary compliance by, taxpayers when their returns were being audited and questions raised with respect thereto.",
"With the attitude toward the Service, and the lack of cooperation plaintiff had herself displayed in connection with the audit of her own returns, he concluded that she would make a poor representative of the Service. Accordingly, he initiated her separation by the District Director by the letter of November 17, 1964, as above set forth. 29 Certainly as the above review amply demonstrates, the good faith action by the Service in separating plaintiff for the good of the Service was well within the ambit of permissible agency discretion and in no way can be labeled arbitrary or capricious.",
"And this is so whether or not others might reasonably have taken different or less drastic action with respect to plaintiff. \"* * * such matters as the appropriate disciplinary action to be taken normally lie within the agency's discretion.\" Dargo v. United States, supra at 1207. 30 Plaintiff further says she was proving herself to be a technically competent employee but was nevertheless discharged simply because she had a tax controversy with the IRS. This, she says, does not constitute, under the regulation, \"performance or conduct on the job.\" She was doing nothing impermissible, she says, in claiming deductions, even if it turned out she could not substantiate them.",
"Such inability, she argues, is not unusual taxpayer conduct. It would be unfair, plaintiff urges, to hold a competent IRS employee to a higher standard of conduct in this respect than any other taxpayer. 31 The above review and analysis of plaintiff's relations with her agency with respect to the audit of her tax returns refute the contention. Plaintiff was not discharged because she had, as she says, \"a personal tax controversy with the I.R.S.\" As plaintiff herself points out, many taxpayers fail to substantiate deductions. This is also true of IRS employees and is not in itself considered as any indication of dishonesty. It is especially true of new IRS employees, who may not be familiar with the tax laws or regulations. In this respect, the audit of the past years' returns also serves as an educational tool and as part of their training. What plaintiff was discharged for, as the letter of termination explicitly stated, was her attitude, obviously an important job ingredient. That attitude indeed left much to be desired, as was amply illustrated by plaintiff's considering the disallowance of her unsubstantiated deductions as the exaction of an \"employment fee,\" thus in effect impugning the good faith of her agency-employer.",
"It was further illustrated by her uncooperative conduct, as demonstrated by her several promises to supply substantiating data and then apparently making little or no effort to obtain such data, as well as by her statements that she desired or was willing to have personal conferences but then not following through with respect thereto, and indeed actually declining to attend such conferences when specifically invited to do so. To the agency officials, it almost seemed, not unreasonably, that plaintiff was, for reasons best known to herself, deliberately engaging in dilatory tactics. Technical competence is not the sole test of job qualification. Cf. Ruderer v. United States, 412 F.2d 1285, 1287-1288, 188 Ct. Cl. 456, 459-460 (1969).12 32 Finally, plaintiff argues that she was discharged for reasons other than those set forth in the termination letter of November 17, 1964. The contention is grounded upon the fact that, after he was drawn into the matter of plaintiff's personnel problem and had his conferences with plaintiff, Dillon, prior to arriving at a final conclusion on the question of whether he should recommend plaintiff's dismissal on the audit bases indicated, inquired of plaintiff's supervisor concerning her on-the-job performance. The supervisor reported that technically, plaintiff was performing competently. He further stated, however, that her attitude toward her supervisor was not one of being willing to consult with him freely, and that, consequently, she failed to so consult with him on the more complex problems which he felt called for such consultation.",
"She tended, he said, to operate alone and to fail to seek help. Dillon felt that the work traits the supervisor described reinforced his conclusion that plaintiff had some of the weaknesses which the audit of her returns had uncovered. It was then that he recommended to the District Director that plaintiff be dismissed for the reasons growing out of the audit of her returns.",
"Accordingly, plaintiff now says she was discharged for the reasons, inter alia, that she was not free and willing to consult with her supervisor and failed to consult with him on matters concerning which he felt she should; that she failed to seek help; and that she operated alone, none of which reasons were set forth in the termination notice. This, she argues, violated the pertinent regulation hereinabove mentioned, requiring that the notice set forth the agency's \"conclusions as to the inadequacies of [the employee's] performance or conduct.\" 33 The contention cannot be accepted. Clearly, plaintiff's discharge was based only upon the conduct and attitudes she displayed in connection with her audit. That other work traits she exhibited, although not of such character in themselves as to justify dismissal, reinforced the agency's conclusion as to the correctness of its decision concerning the weaknesses she displayed in connection with the audit, is quite immaterial. It was perfectly natural for Dillon, prior to his final dismissal recommendation, to have called for an on-the-job report of plaintiff's performance.",
"There is no showing that, the audit matter aside, Dillon would have recommended the termination of plaintiff's employment during her probationary period on the basis of the supervisor's report, especially in light of the supervisor's conclusion that technically she was proving to be a competent employee. Nor was there any reason why, if plaintiff's on-the-job performance was actually considered to be unsatisfactory, her termination could not have been on such basis, without any need for a cover-up. Considering the entire record, no basis becomes apparent for any assumption that plaintiff's discharge was actually grounded in any part upon the on-the-job work traits discussed by plaintiff's supervisor. 34 For all of the above reasons, plaintiff is not entitled to recover. Notes: 1 By order of January 16, 1967, the court denied both defendant's motion and plaintiff's cross-motion for summary judgment 2 5 C.F.R. § 315.804 (1964) 3 \"Section 315.804 Termination of probationers for unsatisfactory performance or conduct \"When an agency decides to terminate an employee serving a probationary or trial period because his work performance or conduct during this period fails to demonstrate his fitness or his qualifications for continued employment, it shall terminate his services by notifying him in writing as to why he is being separated and the effective date of the action.",
"The information in the notice as to why the employee is being terminated shall, as a minimum, consist of the agency's conclusions as to the inadequacies of his performance or conduct.\" 4 She stated: \"No advance or written notice of proposed action was initiated by the Agency.\" 5 37 Stat. 539, 555, as amended by the Act of June 10, 1948, 62 Stat. 354, 5 U.S.C. § 652(a) (1964) 6 The official title of the position to which plaintiff was appointed was \"Tax Technician (Trainee).\"",
"7 The Civil Service Commission also took the position that it would not entertain an appeal based on a probationer's inadequate performance or conduct on the job 8 Plaintiff was claiming total medical and dental expenditures of $1,223.71 for 1962 and $1,714 for 1963. Interest expense deductions of $299 and $450 were being claimed for 1962 and 1963, respectively 9 The letter stated that plaintiff had unsuccessfully attempted to reach Miss Kaufman by telephone both on June 15 and 16. The record contains no satisfactory explanation for any such inability, since Miss Kaufman was on duty both days and her telephone was covered at all times 10 Withholdings for 1963 were in such amounts as to require the payment of only $48 to liquidate the 1963 deficiency 11 There were a few changes as follows: (1) for 1963, plaintiff claimed three more charitable contribution deductions; (2) in support of the claimed 1963 interest expense deduction, which included $200 paid to credit unions, she submitted \"a machine tape\" in the amount of $122.20 from one union; and (3) agreed that $278.24 previously claimed as health and accident insurance premiums was not allowable, since such amount actually constituted premiums for life insurance 12 As to this contention of plaintiff's, the Civil Service Commission stated: \"Your claim that your separation was not due to performance or conduct on the job is without merit. Your actions subsequent to your appointment, as outlined in the letter of November 17, 1964, certainly relate to your conduct on the job.\""
] | https://www.courtlistener.com/api/rest/v3/opinions/287626/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
786 A.2d 275 (2001) John J. SILIQUINI, Jr., Appellee v. Jennifer L. KEGEL-SILIQUINI, Appellant. Superior Court of Pennsylvania. Argued October 16, 2001. Filed November 9, 2001. *276 Sandra G.E. Gray, Lancaster, for appellant. Anthony J. Baratta, Huntingdon Valley, for appellee. Before: CAVANAUGH, MUSMANNO, and OLSZEWSKI, JJ. OLSZEWSKI, J. ¶ 1 Jennifer L. Kegel-Siliquini appeals from an order entered March 8, 2001. We reverse. ¶ 2 In this custody action, the parties requested that the trial court decide a narrow list of issues for completion of a comprehensive custody order. Appellant's Brief at 13. On February 21, 2001, the parties participated in a hearing to present testimony. Appellant's Brief at 15. The parties intended to allow their agreement and the trial court's rulings from the hearing to become the custody order in this case. See Agreement at 6. ¶ 3 The principal issue between the parties was whether their four-year-old daughter should be permitted to be a passenger in small aircraft, piloted by appellee ("father"). N.T., 2/21/01, at 4. These flights would include, but would not be limited to, bringing the child to some weekend custody exchanges. Id. at 5-6. Usually, exchange of the child takes place Friday and Sunday evenings. N.T., 9/20/99, at 6. On Fridays, father picks up the child at the Pottstown exit of the Pennsylvania Turnpike. Id. Father returns the child to the Morgantown exit on Sunday evenings. Id. at 7. ¶ 4 Following the hearing, Judge Kenderdine entered a Supplemental Custody Order, permitting father to transport the child by private aircraft, as long as appellant ("mother") received adequate notice. Order, 3/8/00. ¶ 5 This appeal followed. Mother raises five issues, each related to the airplane transport of the child: 1. Whether the lower court erred when it failed to include father's offer and intention to have a responsible adult fly with the child until the child is of school age? 2. Whether the lower court abused its discretion by forcing mother to participate in an activity that she firmly believes *277 to be inherently dangerous to the parties' daughter? 3. Whether the lower court abused its discretion in that its order regarding father's flights requires mother to arrange her weekend schedule around father's choice? 4. Whether the lower court erred in that it did not require father to utilize any type of protective safety features that would be legally required if the child were transported in an automobile? 5. Whether the lower court erred in that it failed to give adequate consideration to mother's testimony regarding father's carelessness and irresponsible conduct with regard to the child? Appellant's Brief at 16. On appeal, our scope of review [in custody matters] is broad in that we are not bound by deductions and inferences drawn by the trial court from the facts found, nor are we required to accept findings which are wholly without support in the record. On the other hand, our scope of review does not authorize us to nullify the fact-finding function of the trial court in order to substitute our judgment for that of the trial court. Rather we are bound by findings supported in the record, and may reject conclusions drawn by the trial court only if they involve an error of law, or are unreasonable in light of the sustainable findings of the trial court. Garr v. Peters, 773 A.2d 183, 187 (Pa.Super.2001). ¶ 6 Great deference should be given to the hearing judge, who is in a better position to assess the circumstances. Bury v. Bury, 312 Pa.Super. 393, 458 A.2d 1017, 1019 (1983). We, however, should not accept a finding that is not supported, or is contradicted, by the record. Id. We review the evidence and render an independent judgment which will assure that the Commonwealth's justifiable concern for the health and safety of its children is met. Robert H.H. v. May L.H., 293 Pa.Super. 431, 439 A.2d 187, 188-89 (1981) ¶ 7 Initially, we note that the trial court fulfilled its responsibility to provide a complete record. The judge also wrote a thorough and well-considered opinion. We have emphasized that the hearing court must provide us with a complete record and a comprehensive opinion, containing a thorough analysis of the record and specific reasons for the court's ultimate decision. In re Arnold, 286 Pa.Super. 171, 428 A.2d 627, 628 (1981). ¶ 8 It is well settled that the sole issue to be decided in a custody proceeding is the best interest and welfare of the child. Wenger v. Wenger, 267 Pa.Super. 134, 406 A.2d 555, 556 (1979). This is determined on a case by case basis, considering all factors which legitimately impact upon the child's physical, intellectual, moral and spiritual well-being. Zummo v. Zummo, 394 Pa.Super. 30, 574 A.2d 1130, 1142 (1990). ¶ 9 In short, mother objects to father being permitted to transport the child by airplane during his period of custody. Mother is concerned for the physical safety of the child. We agree that there is a substantial issue regarding safety. We believe that the trial court failed to consider all factors impacting the child's physical well being, and therefore, we reverse. ¶ 10 Mother focuses her concern on the safety of flying in a rented plane. N.T., 2/21/01, at 26. Mother fears father may not be familiar with the plane he is flying. Id. More than anything, mother objects to the airplane being the means of the exchange. Id. at 28. The time periods for these exchanges are rigid, and she doesn't *278 want father to rush, perhaps being careless. Id. ¶ 11 Father is licensed to fly single engine land aircraft. Id. at 50. Additionally, he has obtained an instrument rating. Id. at 51. Yet father has only flown 250 hours since 1987, including many flights with a flight instructor. Id. at 53, 77. According to FAA regulations, a pilot needs to make three landings and take-offs to be "current", allowing him to carry passengers. Id. at 66. Father is not current. To be exact, father has not flown since July 2000. Id. at 66. Further, father has not flown the proposed route in at least a year. Id. at 78. ¶ 12 We have grave concerns regarding the child's safety. First, father does not own the planes he proposes to fly. He plans to rent them from Northeast Philadelphia Airport. Id. at 54. Although father is responsible for a pre-flight check, he is not responsible for maintenance and upkeep of these planes. He is not intimately familiar with these planes, as he does not own them. ¶ 13 Approximately six different planes, four different models among them, are available at this airport. Id. at 69. He cannot know which plane he will be flying before arriving at the airport. Id. at 84. He has no choice in the matter. Id. He cannot request a certain aircraft. No possibility exists for father to fly the same plane in order to become comfortable with it. This lack of familiarity with the peculiar nature of each aircraft, not to mention each model, creates a question of the child's safety. ¶ 14 Father has been a licensed pilot since 1987. Although father may be an able pilot, we must consider the safety of a four-year-old child. He has only logged 250 hours in that 14-year period. Much of this time included flight instruction. Father has not flown since July 2000 and by FAA requirements, he cannot carry passengers at this time. We cannot say that it would be safe for the child to be a passenger. ¶ 15 Lastly, we are concerned with the nature of the flights. Father wants to fly the child to her exchanges. The lower court expressed difficulty in understanding why that was a good time to do this and its advisability to do it then as opposed to visitations when father had the child longer. Id. at 107. We agree. Airplane use for exchanges would be a rushed situation, due to the strict custody arrangement. A pilot must meticulously examine the aircraft, carefully plan his course, study the weather conditions and prepare for flight. Safety may be compromised if this were done in a hurried manner. ¶ 16 The lower court, despite its reservations, found that with no showing of the inherent danger of small aircraft, it could impose no restrictions. It is the child's safety at issue. We utilize a best interest standard, not an inherent danger standard. An activity does not have to be inherently dangerous to be dangerous in certain circumstances. A child's safety and welfare can be threatened by an innocuous activity just as easily as by an inherently dangerous activity. We find that the lower court abused its discretion by imposing a burden of inherent danger on mother. ¶ 17 Upon review of the record, we find that small aircraft travel with father, especially to exchanges, raises doubts about the child's safety. Since the facts above create serious questions about the safety of the child during these flights, restrictions may be imposed. We, therefore, reverse the order permitting father to transport the child via small aircraft. *279 ¶ 18 Order reversed. Jurisdiction relinquished. | 10-30-2013 | [
"786 A.2d 275 (2001) John J. SILIQUINI, Jr., Appellee v. Jennifer L. KEGEL-SILIQUINI, Appellant. Superior Court of Pennsylvania. Argued October 16, 2001. Filed November 9, 2001. *276 Sandra G.E. Gray, Lancaster, for appellant. Anthony J. Baratta, Huntingdon Valley, for appellee. Before: CAVANAUGH, MUSMANNO, and OLSZEWSKI, JJ. OLSZEWSKI, J. ¶ 1 Jennifer L. Kegel-Siliquini appeals from an order entered March 8, 2001. We reverse. ¶ 2 In this custody action, the parties requested that the trial court decide a narrow list of issues for completion of a comprehensive custody order. Appellant's Brief at 13. On February 21, 2001, the parties participated in a hearing to present testimony. Appellant's Brief at 15.",
"The parties intended to allow their agreement and the trial court's rulings from the hearing to become the custody order in this case. See Agreement at 6. ¶ 3 The principal issue between the parties was whether their four-year-old daughter should be permitted to be a passenger in small aircraft, piloted by appellee (\"father\"). N.T., 2/21/01, at 4. These flights would include, but would not be limited to, bringing the child to some weekend custody exchanges. Id. at 5-6. Usually, exchange of the child takes place Friday and Sunday evenings. N.T., 9/20/99, at 6. On Fridays, father picks up the child at the Pottstown exit of the Pennsylvania Turnpike. Id. Father returns the child to the Morgantown exit on Sunday evenings. Id. at 7.",
"¶ 4 Following the hearing, Judge Kenderdine entered a Supplemental Custody Order, permitting father to transport the child by private aircraft, as long as appellant (\"mother\") received adequate notice. Order, 3/8/00. ¶ 5 This appeal followed. Mother raises five issues, each related to the airplane transport of the child: 1. Whether the lower court erred when it failed to include father's offer and intention to have a responsible adult fly with the child until the child is of school age? 2. Whether the lower court abused its discretion by forcing mother to participate in an activity that she firmly believes *277 to be inherently dangerous to the parties' daughter? 3. Whether the lower court abused its discretion in that its order regarding father's flights requires mother to arrange her weekend schedule around father's choice? 4. Whether the lower court erred in that it did not require father to utilize any type of protective safety features that would be legally required if the child were transported in an automobile?",
"5. Whether the lower court erred in that it failed to give adequate consideration to mother's testimony regarding father's carelessness and irresponsible conduct with regard to the child? Appellant's Brief at 16. On appeal, our scope of review [in custody matters] is broad in that we are not bound by deductions and inferences drawn by the trial court from the facts found, nor are we required to accept findings which are wholly without support in the record. On the other hand, our scope of review does not authorize us to nullify the fact-finding function of the trial court in order to substitute our judgment for that of the trial court. Rather we are bound by findings supported in the record, and may reject conclusions drawn by the trial court only if they involve an error of law, or are unreasonable in light of the sustainable findings of the trial court.",
"Garr v. Peters, 773 A.2d 183, 187 (Pa.Super.2001). ¶ 6 Great deference should be given to the hearing judge, who is in a better position to assess the circumstances. Bury v. Bury, 312 Pa.Super. 393, 458 A.2d 1017, 1019 (1983). We, however, should not accept a finding that is not supported, or is contradicted, by the record. Id. We review the evidence and render an independent judgment which will assure that the Commonwealth's justifiable concern for the health and safety of its children is met. Robert H.H. v. May L.H., 293 Pa.Super. 431, 439 A.2d 187, 188-89 (1981) ¶ 7 Initially, we note that the trial court fulfilled its responsibility to provide a complete record. The judge also wrote a thorough and well-considered opinion. We have emphasized that the hearing court must provide us with a complete record and a comprehensive opinion, containing a thorough analysis of the record and specific reasons for the court's ultimate decision. In re Arnold, 286 Pa.Super.",
"171, 428 A.2d 627, 628 (1981). ¶ 8 It is well settled that the sole issue to be decided in a custody proceeding is the best interest and welfare of the child. Wenger v. Wenger, 267 Pa.Super. 134, 406 A.2d 555, 556 (1979). This is determined on a case by case basis, considering all factors which legitimately impact upon the child's physical, intellectual, moral and spiritual well-being. Zummo v. Zummo, 394 Pa.Super. 30, 574 A.2d 1130, 1142 (1990). ¶ 9 In short, mother objects to father being permitted to transport the child by airplane during his period of custody. Mother is concerned for the physical safety of the child.",
"We agree that there is a substantial issue regarding safety. We believe that the trial court failed to consider all factors impacting the child's physical well being, and therefore, we reverse. ¶ 10 Mother focuses her concern on the safety of flying in a rented plane. N.T., 2/21/01, at 26. Mother fears father may not be familiar with the plane he is flying. Id. More than anything, mother objects to the airplane being the means of the exchange. Id. at 28. The time periods for these exchanges are rigid, and she doesn't *278 want father to rush, perhaps being careless. Id. ¶ 11 Father is licensed to fly single engine land aircraft. Id. at 50. Additionally, he has obtained an instrument rating. Id. at 51. Yet father has only flown 250 hours since 1987, including many flights with a flight instructor. Id. at 53, 77.",
"According to FAA regulations, a pilot needs to make three landings and take-offs to be \"current\", allowing him to carry passengers. Id. at 66. Father is not current. To be exact, father has not flown since July 2000. Id. at 66. Further, father has not flown the proposed route in at least a year. Id. at 78. ¶ 12 We have grave concerns regarding the child's safety. First, father does not own the planes he proposes to fly. He plans to rent them from Northeast Philadelphia Airport. Id. at 54. Although father is responsible for a pre-flight check, he is not responsible for maintenance and upkeep of these planes. He is not intimately familiar with these planes, as he does not own them. ¶ 13 Approximately six different planes, four different models among them, are available at this airport. Id. at 69. He cannot know which plane he will be flying before arriving at the airport.",
"Id. at 84. He has no choice in the matter. Id. He cannot request a certain aircraft. No possibility exists for father to fly the same plane in order to become comfortable with it. This lack of familiarity with the peculiar nature of each aircraft, not to mention each model, creates a question of the child's safety. ¶ 14 Father has been a licensed pilot since 1987. Although father may be an able pilot, we must consider the safety of a four-year-old child. He has only logged 250 hours in that 14-year period. Much of this time included flight instruction. Father has not flown since July 2000 and by FAA requirements, he cannot carry passengers at this time. We cannot say that it would be safe for the child to be a passenger. ¶ 15 Lastly, we are concerned with the nature of the flights. Father wants to fly the child to her exchanges.",
"The lower court expressed difficulty in understanding why that was a good time to do this and its advisability to do it then as opposed to visitations when father had the child longer. Id. at 107. We agree. Airplane use for exchanges would be a rushed situation, due to the strict custody arrangement. A pilot must meticulously examine the aircraft, carefully plan his course, study the weather conditions and prepare for flight. Safety may be compromised if this were done in a hurried manner. ¶ 16 The lower court, despite its reservations, found that with no showing of the inherent danger of small aircraft, it could impose no restrictions. It is the child's safety at issue. We utilize a best interest standard, not an inherent danger standard. An activity does not have to be inherently dangerous to be dangerous in certain circumstances.",
"A child's safety and welfare can be threatened by an innocuous activity just as easily as by an inherently dangerous activity. We find that the lower court abused its discretion by imposing a burden of inherent danger on mother. ¶ 17 Upon review of the record, we find that small aircraft travel with father, especially to exchanges, raises doubts about the child's safety. Since the facts above create serious questions about the safety of the child during these flights, restrictions may be imposed. We, therefore, reverse the order permitting father to transport the child via small aircraft.",
"*279 ¶ 18 Order reversed. Jurisdiction relinquished."
] | https://www.courtlistener.com/api/rest/v3/opinions/1469213/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
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EXHIBIT 10.39
Amendment No. 1 to the Weingarten Realty Investors Retirement Benefit Restoration Plan
WHEREAS, Weingarten Realty Investors (the “Employer”) sponsors the Weingarten Realty Investors Retirement Benefit Restoration Plan (the “Plan”); and
WHEREAS, a restatement of the Plan was adopted on August 4, 2006, effective January 1, 2005; and
WHEREAS, the purpose of the Plan is to supplement the retirement benefit provided under the terms of the Weingarten Realty Pension Plan, as amended (the “Pension Plan”) for selected eligible employees; and
WHEREAS, the Employer desires to clarify certain provisions relating to the payment of Plan benefits and revise the Plan’s vesting provisions, as hereafter provided;
NOW, THEREFORE, the Employer amends the Plan as follows, effective as stated herein:
1. Section 4.1 of the Plan is hereby amended as underlined to be and read as follows, effective with respect to individuals commencing Plan participation on and January 1, 2007:
4.1 Vesting of Account. A Participant’s Account shall be 0% vested until a Participant has completed ten (10) Vesting Years of Service, at which time his or her Account shall be 100% vested.
2. Article VI of the Plan is hereby amended to be and read as follows, effective January 1, 2005 and as otherwise provided herein:
Article VI - Distributions
6.1 Entitlement to Distribution. A Participant shall be entitled to distribution due to separation from service on account of death, Disability, Early Retirement, Retirement or any other reason, provided the Participant is vested in his Account.
6.2 Distribution Election.
(a) General Rule. Distribution of the vested balance of a Participant’s Accounts shall be made in accordance with his or her election which indicates the Participant’s choice with respect to the form of distribution among the options available under Section 6.3 hereof. The Participant may make a separate election as to the form of distribution in the event of death and the time at which distribution is to commence following death. Such distribution elections must be made at the time the Participant completes his or her initial Participation Agreement in accordance with Section 2.1.
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A Participant may modify his or her previously-made elections relating to the form of distribution and may modify the time at which distribution would otherwise commence under Section 6.4 hereof in accordance with Section 6.2(b). Notwithstanding the preceding, if an Eligible Employee is participating in the Plan in 2005 or 2006 and has not previously designated the form of distribution of his or her Accounts or desires to modify a previously-filed distribution election, he or she must make or modify such an election, as the case may be, and file it with the Administrator on or before December 31, 2006; provided, however, that a Participant may not file a modified payment election in 2006 that has the effect of deferring payment of amounts the Participant would otherwise receive in 2006 or cause payments to be made in 2006 that would otherwise be made subsequent to 2006. The elections referred to in the immediately preceding sentence shall not be required to meet the requirements of Section 6.2(b).
(b) Modification to the Time or Form of Distribution. Except as may be permitted under 6.2(a) hereof, any election by a Participant to modify a previously-filed distribution election or to modify the time at which distribution would otherwise commence under Section 6.4 hereof is ineffective unless all of the following requirements are satisfied:
(i) Such modification may not be effective for at least twelve (12) months after the date on which the modification is made.
(ii) Except in the case of modifications relating to distributions on account of death or Disability, the modification must provide that payment will not commence for at least five (5) years from the date payment would otherwise have been made or commenced.
(iii) A modification related to a distribution to be made at a specified time or under a fixed schedule may not be made less than twelve (12) months prior to the date of the first otherwise scheduled payment.
(iv) Such modification may not permit acceleration of the time or schedule of any payment under the Plan, except as may be permitted pursuant to applicable Treasury Regulations.
6.3 Form of Payment. A Participant entitled to distribution shall receive such distribution in one of the following forms, as previously elected by the Participant in accordance with Section 6.2 and commencing in accordance with Section 6.4: (i) a single life annuity; (ii) a joint and 50%, 75% or 100% survivor annuity; (iii) a ten-year certain and life annuity; (iv) a five-year certain and life annuity; (v) one lump sum; and (vi) annual installments over a period elected by the Participant (up to twenty (20) years). If payment is to be made in the form of an annuity, the amount payable to a Participant (and if applicable, the
--------------------------------------------------------------------------------
6.3 survivor annuitant) as an annuity shall be determined, in the sole discretion of the Administrator, by reference to a commercial annuity which could be purchased from an insurer with the Participant's vested Account at the time such payments are to commence. Under no circumstances shall the Participant have any preferential or secured right to or interest in any annuity contract purchased from an insurer by the Employer or Trustee, and the rights of such Participant (and if applicable, the survivor annuitant) shall remain that of a general creditor. If the Participant has not made a valid election in accordance with Section 6.2 regarding the form of distribution of his Plan benefit, distribution shall be made in the form of one lump sum payment.
6.4 Commencement of Payment.
(a) For purposes of this Section 6.4, the “Earliest Distribution Date” shall mean the earliest date on which distribution could be made or commence to the Participant under the Pension Plan, determined with regard to each Participant as of the date the Participant commenced participation under this Plan, without regard to any applicable amendments to the Pension Plan effective subsequent to the date the Participant commenced participation under this Plan.
(b) Effective for distributions payable on and after August 4, 2006, subject to paragraph (c) of this Section 6.4, payment to a Participant shall be made or commence on the Earliest Distribution Date; provided, however, that the Participant may elect, in accordance with Section 6.2, to defer payment to a date subsequent to the Earliest Distribution Date. In the case of distribution in the event of death, if a Participant previously made an election as to the time benefits commence following death, distribution shall be made at the time elected. Effective with respect to distributions payable on and after January 1, 2005 and prior to August 4, 2006, subject to paragraph (c) of this Section 6.4, payment to a Participant shall be made or commence as soon as administratively feasible after the Participant’s death, Disability, separation from service, or Retirement.
(c) Notwithstanding anything contained herein to the contrary, if a Participant is a Key Employee and separates from service for a reason other than death or Disability, such Participant’s distribution may not commence earlier than six (6) months from the date of his or her separation from service. Any payment that would have been made within six (6) months of the Participant’s separation from service without regard to the foregoing sentence
6.5 Minimum Distribution. Notwithstanding any provision to the contrary, but subject to Section 6.4(c), if the balance of a Participant's Account at the time of separation from service is less than $50,000, then the Participant shall be paid his
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or her benefits as a single lump sum thirty (30) days following the Participant’s separation from service.
IN WITNESS WHEREOF, the Employer has executed this instrument this 15th day of December, 2006, effective as stated herein.
Weingarten Realty Investors
By: /s/ Stephen C. Richter Its (Title): Chief Financial Officer
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-------------------------------------------------------------------------------- | [
"-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- EXHIBIT 10.39 Amendment No. 1 to the Weingarten Realty Investors Retirement Benefit Restoration Plan WHEREAS, Weingarten Realty Investors (the “Employer”) sponsors the Weingarten Realty Investors Retirement Benefit Restoration Plan (the “Plan”); and WHEREAS, a restatement of the Plan was adopted on August 4, 2006, effective January 1, 2005; and WHEREAS, the purpose of the Plan is to supplement the retirement benefit provided under the terms of the Weingarten Realty Pension Plan, as amended (the “Pension Plan”) for selected eligible employees; and WHEREAS, the Employer desires to clarify certain provisions relating to the payment of Plan benefits and revise the Plan’s vesting provisions, as hereafter provided; NOW, THEREFORE, the Employer amends the Plan as follows, effective as stated herein: 1. Section 4.1 of the Plan is hereby amended as underlined to be and read as follows, effective with respect to individuals commencing Plan participation on and January 1, 2007: 4.1 Vesting of Account.",
"A Participant’s Account shall be 0% vested until a Participant has completed ten (10) Vesting Years of Service, at which time his or her Account shall be 100% vested. 2. Article VI of the Plan is hereby amended to be and read as follows, effective January 1, 2005 and as otherwise provided herein: Article VI - Distributions 6.1 Entitlement to Distribution. A Participant shall be entitled to distribution due to separation from service on account of death, Disability, Early Retirement, Retirement or any other reason, provided the Participant is vested in his Account.",
"6.2 Distribution Election. (a) General Rule. Distribution of the vested balance of a Participant’s Accounts shall be made in accordance with his or her election which indicates the Participant’s choice with respect to the form of distribution among the options available under Section 6.3 hereof. The Participant may make a separate election as to the form of distribution in the event of death and the time at which distribution is to commence following death. Such distribution elections must be made at the time the Participant completes his or her initial Participation Agreement in accordance with Section 2.1. -------------------------------------------------------------------------------- A Participant may modify his or her previously-made elections relating to the form of distribution and may modify the time at which distribution would otherwise commence under Section 6.4 hereof in accordance with Section 6.2(b). Notwithstanding the preceding, if an Eligible Employee is participating in the Plan in 2005 or 2006 and has not previously designated the form of distribution of his or her Accounts or desires to modify a previously-filed distribution election, he or she must make or modify such an election, as the case may be, and file it with the Administrator on or before December 31, 2006; provided, however, that a Participant may not file a modified payment election in 2006 that has the effect of deferring payment of amounts the Participant would otherwise receive in 2006 or cause payments to be made in 2006 that would otherwise be made subsequent to 2006.",
"The elections referred to in the immediately preceding sentence shall not be required to meet the requirements of Section 6.2(b). (b) Modification to the Time or Form of Distribution. Except as may be permitted under 6.2(a) hereof, any election by a Participant to modify a previously-filed distribution election or to modify the time at which distribution would otherwise commence under Section 6.4 hereof is ineffective unless all of the following requirements are satisfied: (i) Such modification may not be effective for at least twelve (12) months after the date on which the modification is made. (ii) Except in the case of modifications relating to distributions on account of death or Disability, the modification must provide that payment will not commence for at least five (5) years from the date payment would otherwise have been made or commenced. (iii) A modification related to a distribution to be made at a specified time or under a fixed schedule may not be made less than twelve (12) months prior to the date of the first otherwise scheduled payment.",
"(iv) Such modification may not permit acceleration of the time or schedule of any payment under the Plan, except as may be permitted pursuant to applicable Treasury Regulations. 6.3 Form of Payment. A Participant entitled to distribution shall receive such distribution in one of the following forms, as previously elected by the Participant in accordance with Section 6.2 and commencing in accordance with Section 6.4: (i) a single life annuity; (ii) a joint and 50%, 75% or 100% survivor annuity; (iii) a ten-year certain and life annuity; (iv) a five-year certain and life annuity; (v) one lump sum; and (vi) annual installments over a period elected by the Participant (up to twenty (20) years). If payment is to be made in the form of an annuity, the amount payable to a Participant (and if applicable, the -------------------------------------------------------------------------------- 6.3 survivor annuitant) as an annuity shall be determined, in the sole discretion of the Administrator, by reference to a commercial annuity which could be purchased from an insurer with the Participant's vested Account at the time such payments are to commence. Under no circumstances shall the Participant have any preferential or secured right to or interest in any annuity contract purchased from an insurer by the Employer or Trustee, and the rights of such Participant (and if applicable, the survivor annuitant) shall remain that of a general creditor.",
"If the Participant has not made a valid election in accordance with Section 6.2 regarding the form of distribution of his Plan benefit, distribution shall be made in the form of one lump sum payment. 6.4 Commencement of Payment. (a) For purposes of this Section 6.4, the “Earliest Distribution Date” shall mean the earliest date on which distribution could be made or commence to the Participant under the Pension Plan, determined with regard to each Participant as of the date the Participant commenced participation under this Plan, without regard to any applicable amendments to the Pension Plan effective subsequent to the date the Participant commenced participation under this Plan. (b) Effective for distributions payable on and after August 4, 2006, subject to paragraph (c) of this Section 6.4, payment to a Participant shall be made or commence on the Earliest Distribution Date; provided, however, that the Participant may elect, in accordance with Section 6.2, to defer payment to a date subsequent to the Earliest Distribution Date.",
"In the case of distribution in the event of death, if a Participant previously made an election as to the time benefits commence following death, distribution shall be made at the time elected. Effective with respect to distributions payable on and after January 1, 2005 and prior to August 4, 2006, subject to paragraph (c) of this Section 6.4, payment to a Participant shall be made or commence as soon as administratively feasible after the Participant’s death, Disability, separation from service, or Retirement. (c) Notwithstanding anything contained herein to the contrary, if a Participant is a Key Employee and separates from service for a reason other than death or Disability, such Participant’s distribution may not commence earlier than six (6) months from the date of his or her separation from service. Any payment that would have been made within six (6) months of the Participant’s separation from service without regard to the foregoing sentence 6.5 Minimum Distribution. Notwithstanding any provision to the contrary, but subject to Section 6.4(c), if the balance of a Participant's Account at the time of separation from service is less than $50,000, then the Participant shall be paid his -------------------------------------------------------------------------------- or her benefits as a single lump sum thirty (30) days following the Participant’s separation from service. IN WITNESS WHEREOF, the Employer has executed this instrument this 15th day of December, 2006, effective as stated herein.",
"Weingarten Realty Investors By: /s/ Stephen C. Richter Its (Title): Chief Financial Officer -------------------------------------------------------------------------------- --------------------------------------------------------------------------------"
] | https://github.com/TheAtticusProject/cuad | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
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Dye, J. The Grumman Aircraft Engineering Corporation, hereinafter called Grumman, instituted this special proceeding under article 13 of the Tax Law against the Assessors of the Town of Riverhead, Suffolk County, New York, hereinafter called Assessors, for an order striking from its assessment rolls an assessment made against Grumman’s alleged interest in real property lying in said town and leased by it from the United States, hereinafter called Government, on the ground that such leasehold interest is not subject to assessment and tax within the provisions of the State Tax Law. Grumman now appeals as of right from an order of the Appellate Division, Second Department, which reversed an order of the Supreme Court, Suffolk County, denying respondents’ motion to dismiss Grumman’s petition for insufficiency, and dismissed the petition. Under date of January 23, 1952, Grumman made a contract with the Government known as Facilities Contract NOa-1151, which, in brief, dealt with the acquisition of machine equipment and tools and the design, layout and construction of what is now *504known as the Naval Industrial Reserve Aircraft Plant at Calverton, Suffolk County, New York. This was under the direction of the Secretary of the Navy. The construction work cost the Government about $23,500,000. In addition, Grumman contributed engineering, design and supervisory work amounting to $2,356,112 or a total cost of $25,856,112 for the completed facility. Upon completion of the work, the Government leased the whole facility to Grumman by written lease dated April 1, 1954 for a term of five years ending March 31, 1959, with the right of renewal on the same terms at the option of the tenant for two successive five-year periods, the rental, however, for the latter periods being subject to renegotiation prior to the commencement of such renewal or extended term. Various other terms and conditions are dealt with which need not be mentioned except to call attention to the lease provision dealing with termination before the end of the term when and if the Secretary determines the facilities or a major portion thereof are excess to the further needs of the Navy Department (art. VII, par. [d])1 and, if so terminated, the tenant’s option to purchase (art. X, par. [a])2. *505The assessments complained of were levied pnrsnant to provisions of subdivision 17 of section 4 of the Tax Law3 and in reliance on a waiver of immunity as contained in Federal Statute (U. S. Code, tit. 34, §§ 522a, 522c, 522e)4 as follows: *5061955-1956 ............................... $743,100 For amount omitted from 1954 tax roll..... 496,000 Total .................................. $1,239,1005 The petitioner-appellant challenges the validity of such assessments (1) for lack of statutory authority; (2) if deemed authorized by subdivision 17 of section 4 of the Tax Law, then such statute is constitutionally invalid as violative of the immunity of the Federal Government from taxation by the States (United States v. County of Allegheny, 322 U .S. 174); and (3) that, in any event, the petition should not have been dismissed but, instead, remanded to the Supreme Court, Suffolk County, for further proceedings. The Special Term sustained the petitioner’s objections and granted an order directing the Assessors to remove the assessment from its tax rolls. This ruling was on the theory that Grumman’s interest in the facilities, at best, was personalty, and — -as such —not liable to assessment and tax as real property (Tax Law, § 3). Upon appeal, the Appellate Division took a contrary view, reversed the order and dismissed the petition on the ground that Grumman’s interest was taxable within the meaning of subdivision 17 of section 4 of the Tax Law. Initially let it be said that Grumman does not assert that it is exempt from taxation. Its assertion is that it has no interest in the subject premises, otherwise immune from taxation, which can be said to fall within the purview of any tax statute. *507In New York, all real property within the State is taxable unless specially exempt by law (Tax Law, § 3). Property of the United States is exempt unless made subject to taxation under the Constitution and laws of the United States (Tax Law, § 4, subd. 1). On the other hand, personal property — whether tangible or intangible — is not liable to taxation locally for State or local purposes (Tax Law, § 3). Although it is fundamental that the Legislature may classify property for tax purposes in any manner it deems proper (People ex rel. Hudson Riv. Day Line v. Franck, 257 N. Y. 69), its power in that regard is not without limitation, for the classification must have some reasonable basis (People ex rel. Farrington v. Mensching, 187 N. Y. 8). It is significant to note that nowhere in the Tax Law has the Legislature characterized a leasehold as taxable real property. Such omission is understandable, as a lease for years is deemed personalty (Matter of Althause, 63 App. Div. 252, affd. without opinion 168 N. Y. 670; Fifth Ave. Bldg. Co. v. Kernochan, 221 N. Y. 370; First Trust & Deposit Co. v. Syrdelco, Inc., 249 App. Div. 285; Matter of Ehrsam v. City of Utica, 37 App. Div. 272; Restatement, Property, § 8; 1949 Atty. Gen. 90, 91). We do not read subdivision 17 of section 4 of the Tax Law as changing this basic concept. Subdivision 17 of section 4 of the Tax Law was enacted following our decision in People ex rel. Donner-Union Coke Corp. v. Burke (204 App. Div. 557, affd. without opinion 236 N. Y. 650). In that case, the Donner Company was in possession of the plant which it had purchased from the United States Government under an executory contract of sale, the Government retaining the legal title as security analogous to a mortgage. We struck down an assessment against Donner on the theory that to apply the principle that a vendee in possession of real property under an executory contract of sale is to be regarded as the owner for purposes of taxation, might cause embarrassment to the title of the United States in the event of a tax sale. It was the illegality of such assessment which the Legislature sought to cure by enacting subdivision 17 of section 4 (see People ex rel. Donner-Hanna Coke Corp. v. Burke, 248 N. Y. 507). *508Grumman is not in the same position as Donner. It is not in possession under an executory contract of purchase as was Donner, but is in possession under a long-term lease which casts the parties in the relationship of landlord and tenant. Under the lease, the Government retains legal title, not as an equitable mortgagee, but as an owner in fee — together with all rights of ownership — including the right to terminate the lease at will. Nothing in the lease is tantamount to an equitable ownership such as is contemplated by the statute. According to the lease, Grumman has no more than an option “ to purchase the Facilities at their original cost to the Government less depreciation ” (art. X,. subd. [a] — for full text, see Note 2 above, p. 504) which, however, may not be exercised until after 90 days ’ written notice to the lessee that ‘ ‘ the Secretary has determined that the Facilities, or the major portion thereof, are excess to the further needs and responsibilities of the Department; provided, however, that if, within such ninety (90) day period, the Lessee shall notify the Department of its intention to exercise the right to purchase the Facilities as provided in Article X hereof, termination of this lease * * * shall not become effective unless and until the Department shall have obtained all necessary authorizations and approvals required to effectuate such sale * * * and shall have notified Lessee that it has obtained such necessary authorizations and approvals ” (art. VII; for full text see Note 1 above, p. 504). When this so-called option is read in its most favorable light, it confers upon the lessee nothing more than a right of first refusal to purchase the facilities at a price to be fixed at the time and conditioned upon a variety of circumstances that only affirmative action of the secretary can bring to pass — and even then — it is subject at all times to the secretary’s having obtained “ all necessary authorizations or approvals ”. Until these prerequisite conditions are met, the lessee is in no position to exercise its right of first refusal. Grumman’s connection with the property will come to an end at the termination of the lease. Since Grumman is under no obligation to purchase the property and in no position to bring about an opportunity in which to exercise its right of first refusal, it cannot be said, as matter of fact or as matter of law, that Grumman is a vendee in possession under an executory contract of purchase. So viewed, Grumman has no interest in the facilities subject to assessment *509and taxation within the meaning of subdivision 17 of section 4. It is only when the Government holds a bare legal title analogous to a mortgage that the immunity of the United States no longer attaches (Tax Law, § 4,- subd. 1). When such is the case, the assessment for taxation ‘ ‘ shall be at the full value of such property without deduction ”, the same as if the legal title were held by the vendee (Tax Law, § 4, subd. 17). Nothing in subdivision 17 of section 4 conflicts with Federal law. As we read section 522e of title 34 of the United States Code (Note 4 above, p. 505), the United States has consented to a waiver of its immunity from taxation to the extent of permitting local taxation of a lessee’s interest in Government property. The Federal statute is, however, permissive only and no tax is possible unless local law authorizes and provides for it. Since subdivision 17 of section 4 authorizes the assessment of the interest of the party in possession “ in the same manner as if ” it “ held the legal title ” to the property owned by the United States and that it be assessed “at the full value of such property”, the question arises whether this section is void because it disregards and exceeds the limited nature of the United States Government’s waiver which extends only to the “lessee’s interest”. The answer to that question is to be found in United States v. County of Allegheny, (322 U. S. 174, 187-189, supra), wherein the court said: “ We have held that where private interests in property were so preponderant that all the Government held was a naked title and a nominal interest, the whole value was taxable to the equitable owner. Northern Pacific Ry. Co. v. Myers, 172 U. S. 589; New Brunswick v. United States, 276 U. S. 547. But that is not the situation here, and the State has made no effort to segregate Mesta’s interest and tax it. The full value of the property, including the whole ownership interest, as well as whatever value proper appraisal might attribute to the leasehold, was included in Mesta’s assessment. * * * “We hold that Government-owned property, to the full extent of the Government’s interest therein, is immune from taxation, either as against the Government itself or as against one who holds it as a bailee. ’ ’ In the case before us, the respondents attempt to circumvent subdivision 1 of section 4 of the Tax Law which prevents the taxing of property of the United States, by categorizing the *510assessment as being on ‘ ‘ interest under contract with U. S. of 4/1/54 ” and adding that “ The interest of the United States or of this State in the foregoing property is not assessed or taxed ”. In so doing, they have disregarded the mandatory language of subdivision 17 of section 4 of the Tax Law, which provides that where taxable, the tax shall be “at the full value of such property ’ Eespondents ’ reasoning to the effect that ■ Grumman’s services in supervising the construction of the Government buildings which Grumman subsequently leased from the Government (valued by respondents at $2,350,000) constituted real property taxable to Grumman, is unconvincing. There is no proof that such expenditures by Grumman gave it any right of ownership in the buildings, the construction of which they supervised. More reasonable is the assumption that such expenditures by Grumman were in the nature of additional rent, since nowhere is it provided that such amounts are to be reimbursed on termination or applied on the purchase price if, as and when Grumman has an opportunity to exercise its right of refusal. The assessment and tax are, therefore, even if considered as authorized by subdivision 17 of section 4, either illegal because not made in conformity with the dictates of that section with respect to valuation, or, if considered as made at the full value of the property, void for lack of consent by the United States. In dealing with the applicability of tax statutes, it is a basic rule not “ to extend their provisions, by implication, beyond the clear import of the language used ” (American Locker Co. v. City of New York, 308 N. Y. 264, 269). In case of doubt, they are to be construed more strongly against the Government and in favor of the citizen (Gould v. Gould, 245 U. S. 151, 153; Matter of Good Humor Corp. v. McGoldrick, 289 N. Y. 452). Finally, by way of summary, Grumman is not seeking an exemption from taxation. The property is not taxable by virtue of the overriding immunity of the United States Government as owner. It is the local government which is attempting to levy a tax where the property is already immune from taxation under a statute that has no application to the present situation. We are not dealing with an executory agreement whereby upon a certain payment or payments the legal title may be acquired. This agreement imposes a variety of other conditions besides “ certain payment or payments.” *511Since we deem the assessment illegal ab initio, it is unnecessary to consider the question whether the petition by Grumman for review of the assessment should have been remanded for further proceedings. The order of the Appellate Division should be reversed and that of the Supreme Court, Suffolk County, ordering the assessment stricken, affirmed, with costs in all courts.
. “ Upon ninety (90) days written notiee to the Lessee that the Secretary has determined that the Facilities, or the major portion thereof, are excess to the further needs and responsibilities of the Department; provided, however, that if, within such ninety (90) day period, the Lessee shall notify the Department of its intention to exercise the right to purchase the Facilities as provided in Article X hereof, termination of this lease pursuant to this paragraph (d) shall not become effective unless and until the Department shall have obtained all necessary authorizations and approvals required to effectuate such sale to the Lessee and shall have notified Lessee that it has obtained such necessary authorizations and approvals.”
. “ (a) In the event that the Facilities are determined to be excess to the further needs and responsibilities of the Department, and the Department elects to terminate this lease in accordance with the provisions of paragraph (d) of Article VII hereof, the Lessee shall have an option, which may be exercised by notiee of intention to purchase delivered to the Department at any time during a period of ninety (90) days after receipt of notice of termination, to purchase the Facilities at their original cost to the Government less depreciation on improvements (exclusive of improvements financed by Lessee) at the rate of 3% per annum from the date of completion of the Facilities to the date notiee of Lessee’s intention to exercise such option is received by the Government. Sale of the facilities to the Lessee shall, however, be subject to the Department obtaining all necessary authorizations and approvals required to enable it to sell the Facilities to the Lessee.”
. Insofar as pertinent, subdivision 17 of section 4 of the Tax Law provides: “17. Whenever the legal title of real property is in the United States or in this state, but the use, occupation or possession thereof is in a corporation, association, co-partnership or individual, or its or his successor in interest, under a contract of sale or other agreement whereby upon certain payment or payments the legal title is to be or may be acquired by such corporation, association, co-partnership or individual, his or its interest in such real property shall be assessed and taxed as real property subject to the provisions of this subdivision. The interest of the United States, or of this state, in such property shall not be assessed or taxed * * *. The interest in any such property of the corporation * * * shall be assessed and taxed in the same manner as if said corporation * * * held the legal title to such property, except for the addition to the description of the words ‘interest under contract,’ or other appropriate words descriptive of the interest in the property so assessed. Such assessment shall be at the full value of such property without deduction therefrom on account of the whole or any part of the purchase price, or other sum due on such property, remaining unpaid. The classification of such property or any part thereof as real property for the purposes of taxation under this chapter shall not be affected by any provision of the contract or agreement under which the same is held.” (Emphasis supplied. This section was formerly § 24, as added by L. 1925, eh. 99, and was renum. 17 by L. 1933, eh. 470, eff. June 30, 1933. Former subd. 17 was repealed by L. 1933, ch. 470, § 9, and was derived from Tax Law of 1896, L. 1896, eh. 908, § 4.)
. “ § 522e. Lease of real or personal property; State or local taxation; renegotiation of leases. “ The lessee’s interest, made or created pursuant to the provisions of sections 522a-522e and 522e of this title, shall be made subject to State or local taxation. Any lease of property authorized under the provisions of said sections shall contain a provision that if and to the extent that such property is made taxable by State and local governments by Act of Congress, in such event the terms of such lease shall be renegotiated.” (Aug. 5, 1947, ch. 493, § 6, 61 U. S. Stat. 775. Repealed by Act Aug. 10, 1956, eh. 1041, § 53, 70A U. S. Stat. 641, 677, see U. S. Code, tit. 10, Armed Forces, § 2667. Substantially re-enacted with changes appropriate to the various departments of the armed forces as U. S. Code, tit. 10, Armed Forces, § 2667.) Subdivision (e) thereof provides: “ (e) The interest of a lessee of property leased under this section may be taxed by State or local governments. A lease under this section shall provide that, if and to the extent that the leased property is later made taxable by State or local governments under an act of Congress, the lease shall be renegotiated,”
. The method of evaluation apparently employed to reach the 1955-1956 amount of $743,100 is described in Exhibit B as follows: “ 1. Loss by petitioner on acreage sold to the U. S. Govt..... 1,052.00 2. Cost of engineering survey made at petitioner’s expense prior to contract with U. S. Government for establishment of Facilities ................................. 5,060.00 3. 10% of the cost of constructing improvements on Government property at Government expense on the theory that petitioner contributed services worth 10% in supervising the several contracts involved ...................... 2,350,000.00 Total .............................................$2,356,112.00 With a deduction for property in another town, and ‘ equalizing ’ the assessment at 33%, the total assessed value for the Town of Riverhead is.................. $743,100.00” | 01-10-2022 | [
"Dye, J. The Grumman Aircraft Engineering Corporation, hereinafter called Grumman, instituted this special proceeding under article 13 of the Tax Law against the Assessors of the Town of Riverhead, Suffolk County, New York, hereinafter called Assessors, for an order striking from its assessment rolls an assessment made against Grumman’s alleged interest in real property lying in said town and leased by it from the United States, hereinafter called Government, on the ground that such leasehold interest is not subject to assessment and tax within the provisions of the State Tax Law. Grumman now appeals as of right from an order of the Appellate Division, Second Department, which reversed an order of the Supreme Court, Suffolk County, denying respondents’ motion to dismiss Grumman’s petition for insufficiency, and dismissed the petition. Under date of January 23, 1952, Grumman made a contract with the Government known as Facilities Contract NOa-1151, which, in brief, dealt with the acquisition of machine equipment and tools and the design, layout and construction of what is now *504known as the Naval Industrial Reserve Aircraft Plant at Calverton, Suffolk County, New York. This was under the direction of the Secretary of the Navy. The construction work cost the Government about $23,500,000.",
"In addition, Grumman contributed engineering, design and supervisory work amounting to $2,356,112 or a total cost of $25,856,112 for the completed facility. Upon completion of the work, the Government leased the whole facility to Grumman by written lease dated April 1, 1954 for a term of five years ending March 31, 1959, with the right of renewal on the same terms at the option of the tenant for two successive five-year periods, the rental, however, for the latter periods being subject to renegotiation prior to the commencement of such renewal or extended term.",
"Various other terms and conditions are dealt with which need not be mentioned except to call attention to the lease provision dealing with termination before the end of the term when and if the Secretary determines the facilities or a major portion thereof are excess to the further needs of the Navy Department (art. VII, par. [d])1 and, if so terminated, the tenant’s option to purchase (art. X, par. [a])2. *505The assessments complained of were levied pnrsnant to provisions of subdivision 17 of section 4 of the Tax Law3 and in reliance on a waiver of immunity as contained in Federal Statute (U. S. Code, tit. 34, §§ 522a, 522c, 522e)4 as follows: *5061955-1956 ............................... $743,100 For amount omitted from 1954 tax roll..... 496,000 Total .................................. $1,239,1005 The petitioner-appellant challenges the validity of such assessments (1) for lack of statutory authority; (2) if deemed authorized by subdivision 17 of section 4 of the Tax Law, then such statute is constitutionally invalid as violative of the immunity of the Federal Government from taxation by the States (United States v. County of Allegheny, 322 U .S. 174); and (3) that, in any event, the petition should not have been dismissed but, instead, remanded to the Supreme Court, Suffolk County, for further proceedings.",
"The Special Term sustained the petitioner’s objections and granted an order directing the Assessors to remove the assessment from its tax rolls. This ruling was on the theory that Grumman’s interest in the facilities, at best, was personalty, and — -as such —not liable to assessment and tax as real property (Tax Law, § 3). Upon appeal, the Appellate Division took a contrary view, reversed the order and dismissed the petition on the ground that Grumman’s interest was taxable within the meaning of subdivision 17 of section 4 of the Tax Law. Initially let it be said that Grumman does not assert that it is exempt from taxation.",
"Its assertion is that it has no interest in the subject premises, otherwise immune from taxation, which can be said to fall within the purview of any tax statute. *507In New York, all real property within the State is taxable unless specially exempt by law (Tax Law, § 3). Property of the United States is exempt unless made subject to taxation under the Constitution and laws of the United States (Tax Law, § 4, subd. 1).",
"On the other hand, personal property — whether tangible or intangible — is not liable to taxation locally for State or local purposes (Tax Law, § 3). Although it is fundamental that the Legislature may classify property for tax purposes in any manner it deems proper (People ex rel. Hudson Riv. Day Line v. Franck, 257 N. Y. 69), its power in that regard is not without limitation, for the classification must have some reasonable basis (People ex rel. Farrington v. Mensching, 187 N. Y. 8). It is significant to note that nowhere in the Tax Law has the Legislature characterized a leasehold as taxable real property. Such omission is understandable, as a lease for years is deemed personalty (Matter of Althause, 63 App. Div. 252, affd. without opinion 168 N. Y. 670; Fifth Ave. Bldg.",
"Co. v. Kernochan, 221 N. Y. 370; First Trust & Deposit Co. v. Syrdelco, Inc., 249 App. Div. 285; Matter of Ehrsam v. City of Utica, 37 App. Div. 272; Restatement, Property, § 8; 1949 Atty. Gen. 90, 91). We do not read subdivision 17 of section 4 of the Tax Law as changing this basic concept. Subdivision 17 of section 4 of the Tax Law was enacted following our decision in People ex rel. Donner-Union Coke Corp. v. Burke (204 App. Div. 557, affd.",
"without opinion 236 N. Y. 650). In that case, the Donner Company was in possession of the plant which it had purchased from the United States Government under an executory contract of sale, the Government retaining the legal title as security analogous to a mortgage. We struck down an assessment against Donner on the theory that to apply the principle that a vendee in possession of real property under an executory contract of sale is to be regarded as the owner for purposes of taxation, might cause embarrassment to the title of the United States in the event of a tax sale.",
"It was the illegality of such assessment which the Legislature sought to cure by enacting subdivision 17 of section 4 (see People ex rel. Donner-Hanna Coke Corp. v. Burke, 248 N. Y. 507). *508Grumman is not in the same position as Donner. It is not in possession under an executory contract of purchase as was Donner, but is in possession under a long-term lease which casts the parties in the relationship of landlord and tenant. Under the lease, the Government retains legal title, not as an equitable mortgagee, but as an owner in fee — together with all rights of ownership — including the right to terminate the lease at will. Nothing in the lease is tantamount to an equitable ownership such as is contemplated by the statute. According to the lease, Grumman has no more than an option “ to purchase the Facilities at their original cost to the Government less depreciation ” (art. X,. subd.",
"[a] — for full text, see Note 2 above, p. 504) which, however, may not be exercised until after 90 days ’ written notice to the lessee that ‘ ‘ the Secretary has determined that the Facilities, or the major portion thereof, are excess to the further needs and responsibilities of the Department; provided, however, that if, within such ninety (90) day period, the Lessee shall notify the Department of its intention to exercise the right to purchase the Facilities as provided in Article X hereof, termination of this lease * * * shall not become effective unless and until the Department shall have obtained all necessary authorizations and approvals required to effectuate such sale * * * and shall have notified Lessee that it has obtained such necessary authorizations and approvals ” (art. VII; for full text see Note 1 above, p. 504).",
"When this so-called option is read in its most favorable light, it confers upon the lessee nothing more than a right of first refusal to purchase the facilities at a price to be fixed at the time and conditioned upon a variety of circumstances that only affirmative action of the secretary can bring to pass — and even then — it is subject at all times to the secretary’s having obtained “ all necessary authorizations or approvals ”. Until these prerequisite conditions are met, the lessee is in no position to exercise its right of first refusal. Grumman’s connection with the property will come to an end at the termination of the lease. Since Grumman is under no obligation to purchase the property and in no position to bring about an opportunity in which to exercise its right of first refusal, it cannot be said, as matter of fact or as matter of law, that Grumman is a vendee in possession under an executory contract of purchase. So viewed, Grumman has no interest in the facilities subject to assessment *509and taxation within the meaning of subdivision 17 of section 4. It is only when the Government holds a bare legal title analogous to a mortgage that the immunity of the United States no longer attaches (Tax Law, § 4,- subd. 1). When such is the case, the assessment for taxation ‘ ‘ shall be at the full value of such property without deduction ”, the same as if the legal title were held by the vendee (Tax Law, § 4, subd.",
"17). Nothing in subdivision 17 of section 4 conflicts with Federal law. As we read section 522e of title 34 of the United States Code (Note 4 above, p. 505), the United States has consented to a waiver of its immunity from taxation to the extent of permitting local taxation of a lessee’s interest in Government property. The Federal statute is, however, permissive only and no tax is possible unless local law authorizes and provides for it. Since subdivision 17 of section 4 authorizes the assessment of the interest of the party in possession “ in the same manner as if ” it “ held the legal title ” to the property owned by the United States and that it be assessed “at the full value of such property”, the question arises whether this section is void because it disregards and exceeds the limited nature of the United States Government’s waiver which extends only to the “lessee’s interest”. The answer to that question is to be found in United States v. County of Allegheny, (322 U. S. 174, 187-189, supra), wherein the court said: “ We have held that where private interests in property were so preponderant that all the Government held was a naked title and a nominal interest, the whole value was taxable to the equitable owner. Northern Pacific Ry.",
"Co. v. Myers, 172 U. S. 589; New Brunswick v. United States, 276 U. S. 547. But that is not the situation here, and the State has made no effort to segregate Mesta’s interest and tax it. The full value of the property, including the whole ownership interest, as well as whatever value proper appraisal might attribute to the leasehold, was included in Mesta’s assessment. * * * “We hold that Government-owned property, to the full extent of the Government’s interest therein, is immune from taxation, either as against the Government itself or as against one who holds it as a bailee. ’ ’ In the case before us, the respondents attempt to circumvent subdivision 1 of section 4 of the Tax Law which prevents the taxing of property of the United States, by categorizing the *510assessment as being on ‘ ‘ interest under contract with U. S. of 4/1/54 ” and adding that “ The interest of the United States or of this State in the foregoing property is not assessed or taxed ”. In so doing, they have disregarded the mandatory language of subdivision 17 of section 4 of the Tax Law, which provides that where taxable, the tax shall be “at the full value of such property ’ Eespondents ’ reasoning to the effect that ■ Grumman’s services in supervising the construction of the Government buildings which Grumman subsequently leased from the Government (valued by respondents at $2,350,000) constituted real property taxable to Grumman, is unconvincing.",
"There is no proof that such expenditures by Grumman gave it any right of ownership in the buildings, the construction of which they supervised. More reasonable is the assumption that such expenditures by Grumman were in the nature of additional rent, since nowhere is it provided that such amounts are to be reimbursed on termination or applied on the purchase price if, as and when Grumman has an opportunity to exercise its right of refusal. The assessment and tax are, therefore, even if considered as authorized by subdivision 17 of section 4, either illegal because not made in conformity with the dictates of that section with respect to valuation, or, if considered as made at the full value of the property, void for lack of consent by the United States.",
"In dealing with the applicability of tax statutes, it is a basic rule not “ to extend their provisions, by implication, beyond the clear import of the language used ” (American Locker Co. v. City of New York, 308 N. Y. 264, 269). In case of doubt, they are to be construed more strongly against the Government and in favor of the citizen (Gould v. Gould, 245 U. S. 151, 153; Matter of Good Humor Corp. v. McGoldrick, 289 N. Y. 452). Finally, by way of summary, Grumman is not seeking an exemption from taxation. The property is not taxable by virtue of the overriding immunity of the United States Government as owner.",
"It is the local government which is attempting to levy a tax where the property is already immune from taxation under a statute that has no application to the present situation. We are not dealing with an executory agreement whereby upon a certain payment or payments the legal title may be acquired. This agreement imposes a variety of other conditions besides “ certain payment or payments.” *511Since we deem the assessment illegal ab initio, it is unnecessary to consider the question whether the petition by Grumman for review of the assessment should have been remanded for further proceedings. The order of the Appellate Division should be reversed and that of the Supreme Court, Suffolk County, ordering the assessment stricken, affirmed, with costs in all courts. . “ Upon ninety (90) days written notiee to the Lessee that the Secretary has determined that the Facilities, or the major portion thereof, are excess to the further needs and responsibilities of the Department; provided, however, that if, within such ninety (90) day period, the Lessee shall notify the Department of its intention to exercise the right to purchase the Facilities as provided in Article X hereof, termination of this lease pursuant to this paragraph (d) shall not become effective unless and until the Department shall have obtained all necessary authorizations and approvals required to effectuate such sale to the Lessee and shall have notified Lessee that it has obtained such necessary authorizations and approvals.” .",
"“ (a) In the event that the Facilities are determined to be excess to the further needs and responsibilities of the Department, and the Department elects to terminate this lease in accordance with the provisions of paragraph (d) of Article VII hereof, the Lessee shall have an option, which may be exercised by notiee of intention to purchase delivered to the Department at any time during a period of ninety (90) days after receipt of notice of termination, to purchase the Facilities at their original cost to the Government less depreciation on improvements (exclusive of improvements financed by Lessee) at the rate of 3% per annum from the date of completion of the Facilities to the date notiee of Lessee’s intention to exercise such option is received by the Government. Sale of the facilities to the Lessee shall, however, be subject to the Department obtaining all necessary authorizations and approvals required to enable it to sell the Facilities to the Lessee.” . Insofar as pertinent, subdivision 17 of section 4 of the Tax Law provides: “17. Whenever the legal title of real property is in the United States or in this state, but the use, occupation or possession thereof is in a corporation, association, co-partnership or individual, or its or his successor in interest, under a contract of sale or other agreement whereby upon certain payment or payments the legal title is to be or may be acquired by such corporation, association, co-partnership or individual, his or its interest in such real property shall be assessed and taxed as real property subject to the provisions of this subdivision.",
"The interest of the United States, or of this state, in such property shall not be assessed or taxed * * *. The interest in any such property of the corporation * * * shall be assessed and taxed in the same manner as if said corporation * * * held the legal title to such property, except for the addition to the description of the words ‘interest under contract,’ or other appropriate words descriptive of the interest in the property so assessed.",
"Such assessment shall be at the full value of such property without deduction therefrom on account of the whole or any part of the purchase price, or other sum due on such property, remaining unpaid. The classification of such property or any part thereof as real property for the purposes of taxation under this chapter shall not be affected by any provision of the contract or agreement under which the same is held.” (Emphasis supplied. This section was formerly § 24, as added by L. 1925, eh. 99, and was renum. 17 by L. 1933, eh. 470, eff. June 30, 1933. Former subd. 17 was repealed by L. 1933, ch. 470, § 9, and was derived from Tax Law of 1896, L. 1896, eh.",
"908, § 4.) . “ § 522e. Lease of real or personal property; State or local taxation; renegotiation of leases. “ The lessee’s interest, made or created pursuant to the provisions of sections 522a-522e and 522e of this title, shall be made subject to State or local taxation. Any lease of property authorized under the provisions of said sections shall contain a provision that if and to the extent that such property is made taxable by State and local governments by Act of Congress, in such event the terms of such lease shall be renegotiated.” (Aug. 5, 1947, ch. 493, § 6, 61 U. S. Stat. 775. Repealed by Act Aug. 10, 1956, eh.",
"1041, § 53, 70A U. S. Stat. 641, 677, see U. S. Code, tit. 10, Armed Forces, § 2667. Substantially re-enacted with changes appropriate to the various departments of the armed forces as U. S. Code, tit. 10, Armed Forces, § 2667.) Subdivision (e) thereof provides: “ (e) The interest of a lessee of property leased under this section may be taxed by State or local governments. A lease under this section shall provide that, if and to the extent that the leased property is later made taxable by State or local governments under an act of Congress, the lease shall be renegotiated,” . The method of evaluation apparently employed to reach the 1955-1956 amount of $743,100 is described in Exhibit B as follows: “ 1.",
"Loss by petitioner on acreage sold to the U. S. Govt..... 1,052.00 2. Cost of engineering survey made at petitioner’s expense prior to contract with U. S. Government for establishment of Facilities ................................. 5,060.00 3. 10% of the cost of constructing improvements on Government property at Government expense on the theory that petitioner contributed services worth 10% in supervising the several contracts involved ...................... 2,350,000.00 Total .............................................$2,356,112.00 With a deduction for property in another town, and ‘ equalizing ’ the assessment at 33%, the total assessed value for the Town of Riverhead is.................. $743,100.00”"
] | https://www.courtlistener.com/api/rest/v3/opinions/5516241/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
This memorandum opinion was not selected for publication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please also note that this electronic memorandum opinion may contain computer-generated errors or other deviations from the official paper version filed by the Court of Appeals and does not include the filing date.
1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 CITY OF BLOOMFIELD,
3 Plaintiff-Appellee,
4 v. NO. 32,011
5 DANNY KURINKO,
6 Defendant-Appellant.
7 APPEAL FROM THE DISTRICT COURT OF SAN JUAN COUNTY 8 Thomas J. Hynes, District Judge
9 Gerding & O’Loughlin, P.C. 10 T. Ryan Lane 11 Farmington, NM
12 for Appellee
13 Frederick D. Jones, Jr. 14 Albuquerque, NM
15 for Appellant
16 MEMORANDUM OPINION
17 HANISEE, Judge. 1 {1} Defendant Danny Kurinko appeals his conviction for driving on a suspended
2 or revoked license. He challenges the admission of certain documentary evidence and
3 the sufficiency of the evidence in support of his conviction. As neither of these claims
4 of error have merit, we affirm.
5 Foundation for the Admission of Documentary Evidence
6 {2} Kurinko contends that the district court erred in admitting certain documentary
7 evidence that was provided by the Motor Vehicle Division of the State Department
8 of Taxation and Revenue. We review the admission of evidence for an abuse of
9 discretion. Ruiz v. Vigil-Giron, 2008-NMSC-063, ¶ 7, 145 N.M. 280, 196 P.3d 1286.
10 {3} Kurinko asserts that the documents were inadmissible under Rule 11-803(H)
11 NMRA (2011, amended 2012) because no foundation had been laid for their
12 admission. However, laying a foundation is generally unnecessary when introducing
13 a public record into evidence “because a public official is presumed to properly
14 perform his or her duty and because it is therefore more likely that the public record
15 will be accurate.” Ruiz, 2008-NMSC-063, ¶ 8. Here, the documents were certified
16 by the director of the Motor Vehicle Division, and the certification was stamped with
17 the seal of the State of New Mexico. In State v. Padilla, 1978-NMCA-060, ¶¶ 23-24,
18 92 N.M. 19, 582 P.2d 396, we held that documents that have been authenticated
19 through the certification process necessarily have the proper foundation to establish
2 1 that they are evidence of the activities of the public body under Rule 11-803(H)(1).
2 We therefore hold that the necessary foundation was laid for the admission of the
3 documents.
4 {4} Kurinko states in a single sentence, unsupported by any authority, that if a
5 proper foundation were not laid, then the admission of the evidence would violate the
6 right to confront the witnesses against him. However, we have concluded that a
7 proper foundation was laid. As Kurinko makes no other argument based on the
8 Confrontation Clause and does not explain why this evidence was testimonial so as
9 to come within the clause’s protections, he has failed to demonstrate error on this
10 basis.
11 Sufficiency of the Evidence
12 {5} Kurinko asserts that there was insufficient evidence that he knew or should have
13 known that he was driving on a suspended or revoked license as required by NMSA
14 1978, Section 66-5-39(A) (1993, amended 2013). “In reviewing the sufficiency of
15 evidence used to support a conviction, we resolve all disputed facts in favor of the
16 State, indulge all reasonable inferences in support of the verdict, and disregard all
17 evidence and inferences to the contrary.” State v. Rojo, 1999-NMSC-001, ¶ 19, 126
18 N.M. 438, 971 P.2d 829. Viewing the evidence in this manner, we then “determine
19 whether any rational jury could have found the essential facts to establish each
3 1 element of the crime beyond a reasonable doubt.” State v. Dowling, 2011-NMSC-
2 016, ¶ 20, 150 N.M. 110, 257 P.3d 930.
3 {6} In a case involving driving on a revoked license, the defendant’s knowledge of
4 the revocation is generally proved by circumstantial evidence and reasonable
5 inferences drawn from that evidence. See State v. Herrera, 1991-NMCA-005, ¶¶ 10,
6 20, 111 N.M. 560, 807 P.2d 744. Evidence that a defendant was mailed or otherwise
7 provided with a notice of revocation will support a conviction, as will evidence that
8 he refused to submit to a chemical test, since it is presumed that the arresting officer
9 complied with the statute that requires that the arresting officer advise the defendant
10 that the failure to submit to a chemical test will result in revocation. Id. ¶¶ 21-22.
11 {7} At Kurinko’s trial, the City of Bloomfield (City) presented a variety of evidence
12 that supported a reasonable inference that Kurinko knew or should have known that
13 his license had been revoked. The City introduced a revocation notice issued by the
14 Motor Vehicle Division, which stated that the revocation was based on a “DWI
15 Criminal Conviction.” The notice stated that the revocation of Kurinko’s license
16 would begin on January 29, 2007, and continue for a minimum of a year. It explained
17 that reinstatement of Kurinko’s license would not be automatic and that the revocation
18 would remain effective until all the requirements for reinstatement were met,
19 including payment of a reinstatement fee. The notice stated that it was mailed on
4 1 March 7, 2007. The City also introduced a subsequent notice of revocation that was
2 issued by the officer who arrested Kurinko in another drunk driving incident on April
3 18, 2009. This document stated that Kurinko refused to submit to chemical testing
4 and that the arresting officer “personally served a copy” of the notice on Kurinko on
5 that date. These documents provided circumstantial evidence that on two different
6 occasions, as a consequence of two different drunk driving offenses, Kurinko was
7 given notice that his license would be revoked. In addition, the officer who arrested
8 Kurinko testified that when he informed Kurinko that his license had been revoked,
9 it was the officer’s opinion that Kurinko did not appear to be surprised. The officer
10 also testified that Kurinko was carrying multiple licenses from several states, none of
11 which was valid. The fact that Kurinko felt the need to carry multiple licenses with
12 him provided additional circumstantial evidence that he was aware that he did not
13 have a valid New Mexico license. See NMSA 1978, § 66-5-2(A)(2) (2007, amended
14 2013) (stating that in order to receive a New Mexico license, a person must either
15 surrender all other state driver’s licenses or provide an affidavit stating that he does
16 not have any other license). Taking all of this evidence together and viewing it in the
17 light most favorable to the City, we hold that the evidence was sufficient to support
18 a conclusion that Kurinko actually knew or should have known that his license had
19 been revoked.
5 1 {8} Accordingly, we affirm Kurinko’s conviction for driving on a revoked or
2 suspended license.
3 {9} IT IS SO ORDERED.
4 _________________________ 5 J. MILES HANISEE, Judge
6 WE CONCUR:
7 _________________________________ 8 JONATHAN B. SUTIN, Judge
9 _________________________________ 10 LINDA M. VANZI, Judge
6 | 10-21-2013 | [
"This memorandum opinion was not selected for publication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please also note that this electronic memorandum opinion may contain computer-generated errors or other deviations from the official paper version filed by the Court of Appeals and does not include the filing date. 1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO 2 CITY OF BLOOMFIELD, 3 Plaintiff-Appellee, 4 v. NO.",
"32,011 5 DANNY KURINKO, 6 Defendant-Appellant. 7 APPEAL FROM THE DISTRICT COURT OF SAN JUAN COUNTY 8 Thomas J. Hynes, District Judge 9 Gerding & O’Loughlin, P.C. 10 T. Ryan Lane 11 Farmington, NM 12 for Appellee 13 Frederick D. Jones, Jr. 14 Albuquerque, NM 15 for Appellant 16 MEMORANDUM OPINION 17 HANISEE, Judge. 1 {1} Defendant Danny Kurinko appeals his conviction for driving on a suspended 2 or revoked license.",
"He challenges the admission of certain documentary evidence and 3 the sufficiency of the evidence in support of his conviction. As neither of these claims 4 of error have merit, we affirm. 5 Foundation for the Admission of Documentary Evidence 6 {2} Kurinko contends that the district court erred in admitting certain documentary 7 evidence that was provided by the Motor Vehicle Division of the State Department 8 of Taxation and Revenue. We review the admission of evidence for an abuse of 9 discretion. Ruiz v. Vigil-Giron, 2008-NMSC-063, ¶ 7, 145 N.M. 280, 196 P.3d 1286. 10 {3} Kurinko asserts that the documents were inadmissible under Rule 11-803(H) 11 NMRA (2011, amended 2012) because no foundation had been laid for their 12 admission.",
"However, laying a foundation is generally unnecessary when introducing 13 a public record into evidence “because a public official is presumed to properly 14 perform his or her duty and because it is therefore more likely that the public record 15 will be accurate.” Ruiz, 2008-NMSC-063, ¶ 8. Here, the documents were certified 16 by the director of the Motor Vehicle Division, and the certification was stamped with 17 the seal of the State of New Mexico. In State v. Padilla, 1978-NMCA-060, ¶¶ 23-24, 18 92 N.M. 19, 582 P.2d 396, we held that documents that have been authenticated 19 through the certification process necessarily have the proper foundation to establish 2 1 that they are evidence of the activities of the public body under Rule 11-803(H)(1).",
"2 We therefore hold that the necessary foundation was laid for the admission of the 3 documents. 4 {4} Kurinko states in a single sentence, unsupported by any authority, that if a 5 proper foundation were not laid, then the admission of the evidence would violate the 6 right to confront the witnesses against him. However, we have concluded that a 7 proper foundation was laid. As Kurinko makes no other argument based on the 8 Confrontation Clause and does not explain why this evidence was testimonial so as 9 to come within the clause’s protections, he has failed to demonstrate error on this 10 basis. 11 Sufficiency of the Evidence 12 {5} Kurinko asserts that there was insufficient evidence that he knew or should have 13 known that he was driving on a suspended or revoked license as required by NMSA 14 1978, Section 66-5-39(A) (1993, amended 2013). “In reviewing the sufficiency of 15 evidence used to support a conviction, we resolve all disputed facts in favor of the 16 State, indulge all reasonable inferences in support of the verdict, and disregard all 17 evidence and inferences to the contrary.” State v. Rojo, 1999-NMSC-001, ¶ 19, 126 18 N.M. 438, 971 P.2d 829. Viewing the evidence in this manner, we then “determine 19 whether any rational jury could have found the essential facts to establish each 3 1 element of the crime beyond a reasonable doubt.” State v. Dowling, 2011-NMSC- 2 016, ¶ 20, 150 N.M. 110, 257 P.3d 930. 3 {6} In a case involving driving on a revoked license, the defendant’s knowledge of 4 the revocation is generally proved by circumstantial evidence and reasonable 5 inferences drawn from that evidence.",
"See State v. Herrera, 1991-NMCA-005, ¶¶ 10, 6 20, 111 N.M. 560, 807 P.2d 744. Evidence that a defendant was mailed or otherwise 7 provided with a notice of revocation will support a conviction, as will evidence that 8 he refused to submit to a chemical test, since it is presumed that the arresting officer 9 complied with the statute that requires that the arresting officer advise the defendant 10 that the failure to submit to a chemical test will result in revocation. Id.",
"¶¶ 21-22. 11 {7} At Kurinko’s trial, the City of Bloomfield (City) presented a variety of evidence 12 that supported a reasonable inference that Kurinko knew or should have known that 13 his license had been revoked. The City introduced a revocation notice issued by the 14 Motor Vehicle Division, which stated that the revocation was based on a “DWI 15 Criminal Conviction.” The notice stated that the revocation of Kurinko’s license 16 would begin on January 29, 2007, and continue for a minimum of a year. It explained 17 that reinstatement of Kurinko’s license would not be automatic and that the revocation 18 would remain effective until all the requirements for reinstatement were met, 19 including payment of a reinstatement fee. The notice stated that it was mailed on 4 1 March 7, 2007. The City also introduced a subsequent notice of revocation that was 2 issued by the officer who arrested Kurinko in another drunk driving incident on April 3 18, 2009. This document stated that Kurinko refused to submit to chemical testing 4 and that the arresting officer “personally served a copy” of the notice on Kurinko on 5 that date. These documents provided circumstantial evidence that on two different 6 occasions, as a consequence of two different drunk driving offenses, Kurinko was 7 given notice that his license would be revoked.",
"In addition, the officer who arrested 8 Kurinko testified that when he informed Kurinko that his license had been revoked, 9 it was the officer’s opinion that Kurinko did not appear to be surprised. The officer 10 also testified that Kurinko was carrying multiple licenses from several states, none of 11 which was valid. The fact that Kurinko felt the need to carry multiple licenses with 12 him provided additional circumstantial evidence that he was aware that he did not 13 have a valid New Mexico license. See NMSA 1978, § 66-5-2(A)(2) (2007, amended 14 2013) (stating that in order to receive a New Mexico license, a person must either 15 surrender all other state driver’s licenses or provide an affidavit stating that he does 16 not have any other license). Taking all of this evidence together and viewing it in the 17 light most favorable to the City, we hold that the evidence was sufficient to support 18 a conclusion that Kurinko actually knew or should have known that his license had 19 been revoked. 5 1 {8} Accordingly, we affirm Kurinko’s conviction for driving on a revoked or 2 suspended license. 3 {9} IT IS SO ORDERED.",
"4 _________________________ 5 J. MILES HANISEE, Judge 6 WE CONCUR: 7 _________________________________ 8 JONATHAN B. SUTIN, Judge 9 _________________________________ 10 LINDA M. VANZI, Judge 6"
] | https://www.courtlistener.com/api/rest/v3/opinions/1086060/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Continued Examination Under 37 CFR 1.114 A request for continued examination under 37 CFR 1.114, including the fee set forth in 37 CFR 1.17(e), was filed in this application after final rejection. Since this application is eligible for continued examination under 37 CFR 1.114, and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114. Applicant's submission filed on August 29, 2022 has been entered. Status of Claims Amendments to claims 1 and 5 – 6 have been entered. Claim 7 is newly added. Accordingly, claims 1 – 7 are currently pending. Response to Remarks Based on further search and consideration, a new reference has been found. Claim Interpretation The following is a quotation of 35 U.S.C. 112(f): (f) Element in Claim for a Combination. – An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.
The claims in this application are given their broadest reasonable interpretation using the plain meaning of the claim language in light of the specification as it would be understood by one of ordinary skill in the art. The broadest reasonable interpretation of a claim element (also commonly referred to as a claim limitation) is limited by the description in the specification when 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is invoked. As explained in MPEP § 2181, subsection I, claim limitations that meet the following three-prong test will be interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph: (A) the claim limitation uses the term “means” or “step” or a term used as a substitute for “means” that is a generic placeholder (also called a nonce term or a non-structural term having no specific structural meaning) for performing the claimed function; (B) the term “means” or “step” or the generic placeholder is modified by functional language, typically, but not always linked by the transition word “for” (e.g., “means for”) or another linking word or phrase, such as “configured to” or “so that”; and (C) the term “means” or “step” or the generic placeholder is not modified by sufficient structure, material, or acts for performing the claimed function. Use of the word “means” (or “step”) in a claim with functional language creates a rebuttable presumption that the claim limitation is to be treated in accordance with 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph. The presumption that the claim limitation is interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is rebutted when the claim limitation recites sufficient structure, material, or acts to entirely perform the recited function. Absence of the word “means” (or “step”) in a claim creates a rebuttable presumption that the claim limitation is not to be treated in accordance with 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph. The presumption that the claim limitation is not interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is rebutted when the claim limitation recites function without reciting sufficient structure, material or acts to entirely perform the recited function. Claim limitations in this application that use the word “means” (or “step”) are being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, except as otherwise indicated in an Office action. Conversely, claim limitations in this application that do not use the word “means” (or “step”) are not being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, except as otherwise indicated in an Office action. This application includes one or more claim limitations that do not use the word “means,” but are nonetheless being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, because the claim limitation(s) uses a generic placeholder that is coupled with functional language without reciting sufficient structure to perform the recited function and the generic placeholder is not preceded by a structural modifier. Such claim limitation(s) is/are: frequency controller in claims 1 – 7. The term controller is a generic nonce term modified by “frequency” and has functional language “configured to provide digital frequency control signals …” Neither the modifier nor the functional language provides structure. According to the specification, “The frequency synthesizer includes elements to generate electrical signals at frequencies that are used by the transmit and receive components. In an embodiment, the frequency synthesizer may include elements such as a crystal oscillator, a phase-locked loop (PLL), a frequency doubler, and/or a combination thereof. In an embodiment, the frequency synthesizer is digitally controlled by digital frequency control signals received from the digital baseband system.” See Spec. Para. 60. As such, the structure provided for the frequency controller is the microcontroller 666 as shown in the baseband system 650 as shown in Fig. 6 wherein the control signal is sent to a phase lock loop 772 as shown in Fig. 7 in accordance with written description/specification of paragraph 60. The algorithm of the microcontroller 666 for scanning at two different frequencies and different step sizes is described in the specification at Para. 105 and Para. 113, respectively. Because this/these claim limitation(s) is/are being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, it/they is/are being interpreted to cover the corresponding structure described in the specification as performing the claimed function, and equivalents thereof. If applicant does not intend to have this/these limitation(s) interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, applicant may: (1) amend the claim limitation(s) to avoid it/them being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph (e.g., by reciting sufficient structure to perform the claimed function); or (2) present a sufficient showing that the claim limitation(s) recite(s) sufficient structure to perform the claimed function so as to avoid it/them being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph. Claim Rejections - 35 USC § 112(b) The following is a quotation of 35 U.S.C. 112(b): (b) CONCLUSION.—The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.
Claims 3 – 4 are rejected under 35 U.S.C. 112(b) or 35 U.S.C. 112 (pre-AIA ), second paragraph, as being indefinite for failing to particularly point out and distinctly claim the subject matter which the inventor or a joint inventor (or for applications subject to pre-AIA 35 U.S.C. 112, the applicant), regards as the invention. The language of claim 3 “wherein the frequency controller is configured to control the RF units in the two-dimensional array of RF units to simultaneously transmit and receive at RF unit-specific frequencies that are different from each other” and similar language in claim 4 is ambiguous. For example, RF unit 1 is one of the RF units claimed. Let’s say RF transmitter antenna of RF unit 1 is transmitting frequency range 1. It is unclear whether the two-dimensional array of receive antennas of RF unit 1 is receiving frequency range 1 or whether the two-dimensional array of receive antennas of RF unit 2 is receiving frequency range 1 and vice versa. Each of the two possibilities requires a unique design from the other possibility and thus cannot just simply be considered broad. As such, the metes and bounds of the claims cannot be fully understood, thus the claims are indefinite. Claim Rejections - 35 USC § 103 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
Claims 1, 3 and 7 are rejected under 35 U.S.C. 103 as being unpatentable over obvious over Bonthron (US 2005/0225481) in view of Harman (US 2019/0310347) having effective filing date of Jun. 1, 2017 and Cornic (US 2015/0061928). As to claim 1, Bontron teaches a stepped frequency radar system (Para. 6 “combination of a pulsed stepped-frequency-continuous-wave waveform and electrically beam-switched radar architecture”), the system comprising: a two-dimensional array of radio frequency (RF) units (Para. 204 “The beam scanning/switching radar means 195 utilizes an architecture compatible with electrically steering or switching one or a plurality of transmit and/or receive electromagnetic beams across a plurality of angular positions. Examples of beam scanning/switching means, not meant as a limitation, can include the use of multi-position transmit/receive signal beam switches, signal splitters, phase shifters, variable attenuators, or phased antenna arrays.”), wherein each RF unit is configured to implement stepped frequency scanning (Id. “beam scanning” see also Para. 265 and Fig. 14E showing various PRI step sizes. Note that pulse repetition interval (PRI) is the inverse of pulse repetition frequency (PRF). In other words, the frequency is getting bigger or smaller based on step size especially for a continuous wave. See also Para. 312 Fig. 21C – 21D. It appears that Fig. 14E and 21C are showing different step sizes. Regardless, the teachings of Para. 265 and 312 make it clear that the patterns of Fig. 14F and Fig. 21D may have different step sizes.) and includes a unit-specific mixer (Fig. 16A mixer 270 or Para. 236 “down-converter mixer 270”), at least one RF transmit antenna, and a two-dimensional array of receive antennas (Para. 49A), wherein the unit-specific mixer of each RF unit is configured to mix a signal that is transmitted from the RF transmit antenna of the RF unit at a transmit frequency with a signal that is received at the two-dimensional array of receive antennas of the RF unit (Para. 236 “down-converter mixer 270”); and a frequency controller configured to provide digital frequency control signals to the RF units in the two-dimensional array of RF units (Para. 244 “Another embodiment of modulation signal generator 230 is shown in FIG. 12F. In this arrangement, a frequency pattern controller 298 controls a frequency synthesizer 299.” See also Para. 297 “A frequency pattern controller 288 controls a frequency synthesizer 268. The output of frequency synthesizer 268 will be a signal whose frequency hops or steps according to the pattern and timing dictated by the frequency pattern controller 288.” See also Para. 299 “A further embodiment of the frequency-hopping signal generator 295 is shown in FIG. 20C. This arrangement can also be used as a further embodiment of modulation signal generator 230. A frequency pattern controller 288a controls a frequency synthesizer 268a. The output of frequency synthesizer 268a will be a signal whose frequency hops or steps according to the pattern and timing dictated by the frequency pattern controller 288a”) that cause at least two of the RF units to simultaneously perform stepped frequency scanning across two different RF frequency ranges (Para. 217 “Let one of the two TX channels transmit an up-chirp linearly frequency modulated radar wave, while the other TX channel simultaneously transmits a down-chirp linearly frequency modulated radar wave of the same or different center frequency.”) and at two different step sizes (Para. 265 “different step sizes” as shown in Fig. 14E see also Para. 312 “different sept sizes” as shown in Fig. 21A). The teachings of Bontron cited above may include more than one embodiment. In the interest of compact prosecution, the Examiner will provide motivation for some of the cited features. The use of a mixer to down-convert is beneficial because this allows for a signal to be transmitted on a carrier thus allowing for the use of smaller antennae thus saving cost and conserving space. The mixer is at least located downstream a frequency signal generator such as an oscillator and upstream an antenna. The use of a two-dimensional antenna phased array of antenna over a single transmit and/or singe receive antenna is that said antenna phased array allows for beamforming for being able to track and illuminate areas of interest wherein said phased array is more efficient, faster, accurate and stable than a mechanical rotating antenna. The advantage of transmitting at least two signals at two different carrier/center frequencies is to minimize the risk of interference because said interference would need to be capable of interfering with the at least said two different carrier/center frequencies which inevitably corresponding to two different frequency ranges even if said frequency ranges are overlapping. The advantage of having different step sizes is improved resolution including velocity resolution as well as minimizing interference because different step sizes implies reception that is not always at the same time, e.g. jammer may not necessarily jam both at the same time. The claimed language appears to suggest that there are at least two separate units wherein each unit has its own separate two-dimensional array of receive antennas, separate one transmits antenna and a separate mixer. The mixer would be required for each unit for down-conversion purposes discussed supra. Bontron appears to only teach phased arrays in general. Bontron does teach transmitting two different carrier frequencies as discussed supra thus having a need to have two separate phased antenna arrays. Thus, it would be best to find a secondary reference that teaches two separate and preferably transceiving antenna phases arrays. In the same field of endeavor, Harman teaches “the radar may include a plurality of panels, wherein, on each panel, there is a transmit antenna and a receive antenna, together including a single antenna system. This is particularly advantageous where the transmitted signals are CW (carrier wave), such as FMCW, or where the receive antenna is operated as a phased array (which may or may not be a variable phase (steerable) phased array) (Para. 15).” In view of the teachings of Harman, it would have been obvious to a person having ordinary skill in the art that the antenna array as taught by Bontron could be replace by a plurality of antennae arrays having at least one transmit antenna and plurality of receive antenna operated as a phased array wherein a phased array is already taught by Bontron as discussed supra. The motivation of having multiple antenna panels is to increase coverage area, e.g. up to 360-degree coverage. Bontron and Harman does not recite simultaneous transmission. In the same field of endeavor, Cornic teaches “The oscillator can be adapted to generate, on the individual subarrays, simultaneous transmissions in different and separate frequency bands (Para. 16).” In view of the teachings of Cornic, it would have been obvious to a person having ordinary skill in the art to simultaneously transmit the up and down chirp as taught by Bontron in view of Harman in order to allow for more transmissions over the same period of time thus increasing the amount of data in less time to improve and make more efficient the radar imaging in Bontron. As to claim 3, Bontron in view of Harman and Cornic teaches the stepped frequency radar system of claim 1, wherein the frequency controller is configured to control the RF units in the two-dimensional array of RF units to simultaneously transmit and receive at RF unit-specific frequencies that are different from each other (Harman: Para. 217; Cornic: Para. 16 as cited in claim 1). The teachings of Bontron cited alone only requires different center frequencies. However, Cornic clearly teaches different frequency ranges which one of ordinary skill would understand to provide better protection against interference than simply having slightly different frequency ranges, e.g. different center/carrier frequencies. In view of the teachings of Cornic, it would have been obvious to simultaneously transmit two completely different frequency ranges in order to provide for even better protection from interference thus improving signal-to-noise and reducing false detections. As to claim 7, Bontron in view of Harman and Cornic teaches the stepped frequency radar system of claim 1, wherein the two different RF frequency ranges are in the 2 - 6 GHz frequency range (Para. 332 “"high-frequency" refers to a frequency greater than or equal to 5 GHz,”). In cases where the claimed ranges “overlap or lie inside ranges disclosed by the prior art” a prima facie case of obviousness exists. In re Wertheim, 541 F.2d 257, 191 USPQ90 (CCPA 1976); In re Woodruff, 919 F.2d 1575, 16 USPQ2d 1934 (Fed. Cir. 1990). Claims 2 and 4 – 6 are rejected under 35 U.S.C. 103 as being unpatentable over obvious over Bonthron in view of Harman and Cornic applied to claim 1 and in further view of Garrec (US 2011/0160941). As to claim 2, Bontron in view of Harman and Cornic may not teach the stepped frequency radar system of claim 1, wherein each of the RF units in the two-dimensional array of RF units is individually controllable to transmit and receive at an RF unit-specific frequency. In the same field of endeavor, Garrec teaches “the antenna modules may be transmit and/or receive antenna modules (Para. 28).” In view of the teachings of Garrec, it would have been obvious to modify each antenna of Bonthron in view of Harman and Cornic so that each antenna may transceive (transmit and receive) thus improving the overall beamforming capability by allowing for more flexibility among selection of antenna in order to superpose either one or both of the transmit antennae beams and/or receive antennae beams for beamforming. As to claim 4, Bontron in view of Harman and Cornic teaches the stepped frequency radar system of claim 1, wherein each of the RF units in the two-dimensional array of RF units is individually controllable to transmit and receive at an RF unit-specific frequency and wherein the frequency controller is configured to control the RF units in the two-dimensional array of RF units to simultaneously transmit and receive at RF unit-specific frequencies that are different from each other (same rationale as in claim 3. The only language that is different is “individually controllable to transmit and receive”). Bontron in view of Harman and Cornic may not teach that the antennae are individually controllable to transmit and receive. In the same field of endeavor, Garrec teaches “the antenna modules may be transmit and/or receive antenna modules (Para. 28).” In view of the teachings of Garrec, it would have been obvious to modify each antenna of Bonthron in view of Harman and Cornic so that each antenna may transceive (transmit and receive) thus improving the overall beamforming capability by allowing for more flexibility among selection of antenna in order to superpose either one or both of the transmit and receive beams for beamforming. As to claim 5, Bontron in view of Harman, Cornic and Garrec teaches the stepped frequency radar system of claim 4, wherein the frequency controller is configured to provide digital frequency control signals that cause simultaneous stepped frequency scanning in which: a first RF unit of the at least two RF units scans across a first RF frequency range at a first step size (Bontron: Para. 312 “using patterns that have different step sizes from each other” see also Para. 265 “non-equal PRI step sizes, … different step sizes …” see also Para. 204 “The beam scanning/switching radar means 195 utilizes an architecture compatible with electrically steering or switching one or a plurality of transmit and/or receive electromagnetic beams across a plurality of angular positions.” Cornic: Cornic was used to teach simultaneous transmission of different frequencies as discussed supra. Examples of patterns can be seen in Figs. 21C – 21D and Figs. 14E – 14F); a second RF unit of the at least two RF units scans across a second RF frequency range at a second step size (Id. at least signal A and signal B of Figs. 14E and 21C having different step sizes can be transmitted simultaneously based on modification with Cornic to have different frequency ranges.); wherein the second RF frequency range is narrower than the first RF frequency range and the second step size is smaller than the first step size (In order for the signals to have unequal/different step sizes, one has to be narrower than the other.). As to claim 6, Bontron in view of Harman, Cornic and Garrec teaches the stepped frequency radar system of claim 5, wherein the first RF frequency range and the second RF frequency range are non-overlapping RF frequency ranges (Cornic: Para. 16). The teachings of Bontron cited alone only requires different center frequencies. However, Cornic clearly teaches different frequency ranges which one of ordinary skill would understand to provide better protection against interference than simply having slightly different frequency ranges, e.g. different center/carrier frequencies. In view of the teachings of Cornic, it would have been obvious to simultaneously transmit two completely different frequency ranges in order to provide for even better protection from interference thus improving signal-to-noise and reducing false detections.
Conclusion
Any inquiry concerning this communication or earlier communications from the examiner should be directed to MICHAEL W JUSTICE whose telephone number is (571)270-7029. The examiner can normally be reached 7:30 - 5:30 M-F. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Erin Heard can be reached on 571-272-3236. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of published or unpublished applications may be obtained from Patent Center. Unpublished application information in Patent Center is available to registered users. To file and manage patent submissions in Patent Center, visit: https://patentcenter.uspto.gov. Visit https://www.uspto.gov/patents/apply/patent-center for more information about Patent Center and https://www.uspto.gov/patents/docx for information about filing in DOCX format. For additional questions, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.
/MICHAEL W JUSTICE/Examiner, Art Unit 3648 | 2022-09-14T10:53:32 | [
"DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Continued Examination Under 37 CFR 1.114 A request for continued examination under 37 CFR 1.114, including the fee set forth in 37 CFR 1.17(e), was filed in this application after final rejection. Since this application is eligible for continued examination under 37 CFR 1.114, and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114. Applicant's submission filed on August 29, 2022 has been entered. Status of Claims Amendments to claims 1 and 5 – 6 have been entered. Claim 7 is newly added. Accordingly, claims 1 – 7 are currently pending.",
"Response to Remarks Based on further search and consideration, a new reference has been found. Claim Interpretation The following is a quotation of 35 U.S.C. 112(f): (f) Element in Claim for a Combination. – An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof. The claims in this application are given their broadest reasonable interpretation using the plain meaning of the claim language in light of the specification as it would be understood by one of ordinary skill in the art.",
"The broadest reasonable interpretation of a claim element (also commonly referred to as a claim limitation) is limited by the description in the specification when 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is invoked. As explained in MPEP § 2181, subsection I, claim limitations that meet the following three-prong test will be interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph: (A) the claim limitation uses the term “means” or “step” or a term used as a substitute for “means” that is a generic placeholder (also called a nonce term or a non-structural term having no specific structural meaning) for performing the claimed function; (B) the term “means” or “step” or the generic placeholder is modified by functional language, typically, but not always linked by the transition word “for” (e.g., “means for”) or another linking word or phrase, such as “configured to” or “so that”; and (C) the term “means” or “step” or the generic placeholder is not modified by sufficient structure, material, or acts for performing the claimed function. Use of the word “means” (or “step”) in a claim with functional language creates a rebuttable presumption that the claim limitation is to be treated in accordance with 35 U.S.C. 112(f) or pre-AIA 35 U.S.C.",
"112, sixth paragraph. The presumption that the claim limitation is interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is rebutted when the claim limitation recites sufficient structure, material, or acts to entirely perform the recited function. Absence of the word “means” (or “step”) in a claim creates a rebuttable presumption that the claim limitation is not to be treated in accordance with 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph. The presumption that the claim limitation is not interpreted under 35 U.S.C.",
"112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is rebutted when the claim limitation recites function without reciting sufficient structure, material or acts to entirely perform the recited function. Claim limitations in this application that use the word “means” (or “step”) are being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, except as otherwise indicated in an Office action. Conversely, claim limitations in this application that do not use the word “means” (or “step”) are not being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, except as otherwise indicated in an Office action.",
"This application includes one or more claim limitations that do not use the word “means,” but are nonetheless being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, because the claim limitation(s) uses a generic placeholder that is coupled with functional language without reciting sufficient structure to perform the recited function and the generic placeholder is not preceded by a structural modifier. Such claim limitation(s) is/are: frequency controller in claims 1 – 7. The term controller is a generic nonce term modified by “frequency” and has functional language “configured to provide digital frequency control signals …” Neither the modifier nor the functional language provides structure. According to the specification, “The frequency synthesizer includes elements to generate electrical signals at frequencies that are used by the transmit and receive components. In an embodiment, the frequency synthesizer may include elements such as a crystal oscillator, a phase-locked loop (PLL), a frequency doubler, and/or a combination thereof.",
"In an embodiment, the frequency synthesizer is digitally controlled by digital frequency control signals received from the digital baseband system.” See Spec. Para. 60. As such, the structure provided for the frequency controller is the microcontroller 666 as shown in the baseband system 650 as shown in Fig. 6 wherein the control signal is sent to a phase lock loop 772 as shown in Fig.",
"7 in accordance with written description/specification of paragraph 60. The algorithm of the microcontroller 666 for scanning at two different frequencies and different step sizes is described in the specification at Para. 105 and Para. 113, respectively. Because this/these claim limitation(s) is/are being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, it/they is/are being interpreted to cover the corresponding structure described in the specification as performing the claimed function, and equivalents thereof. If applicant does not intend to have this/these limitation(s) interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C.",
"112, sixth paragraph, applicant may: (1) amend the claim limitation(s) to avoid it/them being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph (e.g., by reciting sufficient structure to perform the claimed function); or (2) present a sufficient showing that the claim limitation(s) recite(s) sufficient structure to perform the claimed function so as to avoid it/them being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph. Claim Rejections - 35 USC § 112(b) The following is a quotation of 35 U.S.C. 112(b): (b) CONCLUSION.—The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention. Claims 3 – 4 are rejected under 35 U.S.C. 112(b) or 35 U.S.C.",
"112 (pre-AIA ), second paragraph, as being indefinite for failing to particularly point out and distinctly claim the subject matter which the inventor or a joint inventor (or for applications subject to pre-AIA 35 U.S.C. 112, the applicant), regards as the invention. The language of claim 3 “wherein the frequency controller is configured to control the RF units in the two-dimensional array of RF units to simultaneously transmit and receive at RF unit-specific frequencies that are different from each other” and similar language in claim 4 is ambiguous. For example, RF unit 1 is one of the RF units claimed. Let’s say RF transmitter antenna of RF unit 1 is transmitting frequency range 1.",
"It is unclear whether the two-dimensional array of receive antennas of RF unit 1 is receiving frequency range 1 or whether the two-dimensional array of receive antennas of RF unit 2 is receiving frequency range 1 and vice versa. Each of the two possibilities requires a unique design from the other possibility and thus cannot just simply be considered broad. As such, the metes and bounds of the claims cannot be fully understood, thus the claims are indefinite.",
"Claim Rejections - 35 USC § 103 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status.",
"The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made. Claims 1, 3 and 7 are rejected under 35 U.S.C. 103 as being unpatentable over obvious over Bonthron (US 2005/0225481) in view of Harman (US 2019/0310347) having effective filing date of Jun.",
"1, 2017 and Cornic (US 2015/0061928). As to claim 1, Bontron teaches a stepped frequency radar system (Para. 6 “combination of a pulsed stepped-frequency-continuous-wave waveform and electrically beam-switched radar architecture”), the system comprising: a two-dimensional array of radio frequency (RF) units (Para. 204 “The beam scanning/switching radar means 195 utilizes an architecture compatible with electrically steering or switching one or a plurality of transmit and/or receive electromagnetic beams across a plurality of angular positions. Examples of beam scanning/switching means, not meant as a limitation, can include the use of multi-position transmit/receive signal beam switches, signal splitters, phase shifters, variable attenuators, or phased antenna arrays.”), wherein each RF unit is configured to implement stepped frequency scanning (Id. “beam scanning” see also Para. 265 and Fig. 14E showing various PRI step sizes. Note that pulse repetition interval (PRI) is the inverse of pulse repetition frequency (PRF).",
"In other words, the frequency is getting bigger or smaller based on step size especially for a continuous wave. See also Para. 312 Fig. 21C – 21D. It appears that Fig. 14E and 21C are showing different step sizes. Regardless, the teachings of Para. 265 and 312 make it clear that the patterns of Fig. 14F and Fig. 21D may have different step sizes.) and includes a unit-specific mixer (Fig. 16A mixer 270 or Para. 236 “down-converter mixer 270”), at least one RF transmit antenna, and a two-dimensional array of receive antennas (Para. 49A), wherein the unit-specific mixer of each RF unit is configured to mix a signal that is transmitted from the RF transmit antenna of the RF unit at a transmit frequency with a signal that is received at the two-dimensional array of receive antennas of the RF unit (Para. 236 “down-converter mixer 270”); and a frequency controller configured to provide digital frequency control signals to the RF units in the two-dimensional array of RF units (Para.",
"244 “Another embodiment of modulation signal generator 230 is shown in FIG. 12F. In this arrangement, a frequency pattern controller 298 controls a frequency synthesizer 299.” See also Para. 297 “A frequency pattern controller 288 controls a frequency synthesizer 268. The output of frequency synthesizer 268 will be a signal whose frequency hops or steps according to the pattern and timing dictated by the frequency pattern controller 288.” See also Para. 299 “A further embodiment of the frequency-hopping signal generator 295 is shown in FIG. 20C. This arrangement can also be used as a further embodiment of modulation signal generator 230. A frequency pattern controller 288a controls a frequency synthesizer 268a. The output of frequency synthesizer 268a will be a signal whose frequency hops or steps according to the pattern and timing dictated by the frequency pattern controller 288a”) that cause at least two of the RF units to simultaneously perform stepped frequency scanning across two different RF frequency ranges (Para. 217 “Let one of the two TX channels transmit an up-chirp linearly frequency modulated radar wave, while the other TX channel simultaneously transmits a down-chirp linearly frequency modulated radar wave of the same or different center frequency.”) and at two different step sizes (Para.",
"265 “different step sizes” as shown in Fig. 14E see also Para. 312 “different sept sizes” as shown in Fig. 21A). The teachings of Bontron cited above may include more than one embodiment. In the interest of compact prosecution, the Examiner will provide motivation for some of the cited features. The use of a mixer to down-convert is beneficial because this allows for a signal to be transmitted on a carrier thus allowing for the use of smaller antennae thus saving cost and conserving space. The mixer is at least located downstream a frequency signal generator such as an oscillator and upstream an antenna.",
"The use of a two-dimensional antenna phased array of antenna over a single transmit and/or singe receive antenna is that said antenna phased array allows for beamforming for being able to track and illuminate areas of interest wherein said phased array is more efficient, faster, accurate and stable than a mechanical rotating antenna. The advantage of transmitting at least two signals at two different carrier/center frequencies is to minimize the risk of interference because said interference would need to be capable of interfering with the at least said two different carrier/center frequencies which inevitably corresponding to two different frequency ranges even if said frequency ranges are overlapping.",
"The advantage of having different step sizes is improved resolution including velocity resolution as well as minimizing interference because different step sizes implies reception that is not always at the same time, e.g. jammer may not necessarily jam both at the same time. The claimed language appears to suggest that there are at least two separate units wherein each unit has its own separate two-dimensional array of receive antennas, separate one transmits antenna and a separate mixer.",
"The mixer would be required for each unit for down-conversion purposes discussed supra. Bontron appears to only teach phased arrays in general. Bontron does teach transmitting two different carrier frequencies as discussed supra thus having a need to have two separate phased antenna arrays. Thus, it would be best to find a secondary reference that teaches two separate and preferably transceiving antenna phases arrays. In the same field of endeavor, Harman teaches “the radar may include a plurality of panels, wherein, on each panel, there is a transmit antenna and a receive antenna, together including a single antenna system. This is particularly advantageous where the transmitted signals are CW (carrier wave), such as FMCW, or where the receive antenna is operated as a phased array (which may or may not be a variable phase (steerable) phased array) (Para. 15).” In view of the teachings of Harman, it would have been obvious to a person having ordinary skill in the art that the antenna array as taught by Bontron could be replace by a plurality of antennae arrays having at least one transmit antenna and plurality of receive antenna operated as a phased array wherein a phased array is already taught by Bontron as discussed supra.",
"The motivation of having multiple antenna panels is to increase coverage area, e.g. up to 360-degree coverage. Bontron and Harman does not recite simultaneous transmission. In the same field of endeavor, Cornic teaches “The oscillator can be adapted to generate, on the individual subarrays, simultaneous transmissions in different and separate frequency bands (Para. 16).” In view of the teachings of Cornic, it would have been obvious to a person having ordinary skill in the art to simultaneously transmit the up and down chirp as taught by Bontron in view of Harman in order to allow for more transmissions over the same period of time thus increasing the amount of data in less time to improve and make more efficient the radar imaging in Bontron. As to claim 3, Bontron in view of Harman and Cornic teaches the stepped frequency radar system of claim 1, wherein the frequency controller is configured to control the RF units in the two-dimensional array of RF units to simultaneously transmit and receive at RF unit-specific frequencies that are different from each other (Harman: Para. 217; Cornic: Para.",
"16 as cited in claim 1). The teachings of Bontron cited alone only requires different center frequencies. However, Cornic clearly teaches different frequency ranges which one of ordinary skill would understand to provide better protection against interference than simply having slightly different frequency ranges, e.g. different center/carrier frequencies. In view of the teachings of Cornic, it would have been obvious to simultaneously transmit two completely different frequency ranges in order to provide for even better protection from interference thus improving signal-to-noise and reducing false detections. As to claim 7, Bontron in view of Harman and Cornic teaches the stepped frequency radar system of claim 1, wherein the two different RF frequency ranges are in the 2 - 6 GHz frequency range (Para. 332 “\"high-frequency\" refers to a frequency greater than or equal to 5 GHz,”). In cases where the claimed ranges “overlap or lie inside ranges disclosed by the prior art” a prima facie case of obviousness exists. In re Wertheim, 541 F.2d 257, 191 USPQ90 (CCPA 1976); In re Woodruff, 919 F.2d 1575, 16 USPQ2d 1934 (Fed.",
"Cir. 1990). Claims 2 and 4 – 6 are rejected under 35 U.S.C. 103 as being unpatentable over obvious over Bonthron in view of Harman and Cornic applied to claim 1 and in further view of Garrec (US 2011/0160941). As to claim 2, Bontron in view of Harman and Cornic may not teach the stepped frequency radar system of claim 1, wherein each of the RF units in the two-dimensional array of RF units is individually controllable to transmit and receive at an RF unit-specific frequency. In the same field of endeavor, Garrec teaches “the antenna modules may be transmit and/or receive antenna modules (Para. 28).” In view of the teachings of Garrec, it would have been obvious to modify each antenna of Bonthron in view of Harman and Cornic so that each antenna may transceive (transmit and receive) thus improving the overall beamforming capability by allowing for more flexibility among selection of antenna in order to superpose either one or both of the transmit antennae beams and/or receive antennae beams for beamforming. As to claim 4, Bontron in view of Harman and Cornic teaches the stepped frequency radar system of claim 1, wherein each of the RF units in the two-dimensional array of RF units is individually controllable to transmit and receive at an RF unit-specific frequency and wherein the frequency controller is configured to control the RF units in the two-dimensional array of RF units to simultaneously transmit and receive at RF unit-specific frequencies that are different from each other (same rationale as in claim 3.",
"The only language that is different is “individually controllable to transmit and receive”). Bontron in view of Harman and Cornic may not teach that the antennae are individually controllable to transmit and receive. In the same field of endeavor, Garrec teaches “the antenna modules may be transmit and/or receive antenna modules (Para. 28).” In view of the teachings of Garrec, it would have been obvious to modify each antenna of Bonthron in view of Harman and Cornic so that each antenna may transceive (transmit and receive) thus improving the overall beamforming capability by allowing for more flexibility among selection of antenna in order to superpose either one or both of the transmit and receive beams for beamforming.",
"As to claim 5, Bontron in view of Harman, Cornic and Garrec teaches the stepped frequency radar system of claim 4, wherein the frequency controller is configured to provide digital frequency control signals that cause simultaneous stepped frequency scanning in which: a first RF unit of the at least two RF units scans across a first RF frequency range at a first step size (Bontron: Para. 312 “using patterns that have different step sizes from each other” see also Para. 265 “non-equal PRI step sizes, … different step sizes …” see also Para. 204 “The beam scanning/switching radar means 195 utilizes an architecture compatible with electrically steering or switching one or a plurality of transmit and/or receive electromagnetic beams across a plurality of angular positions.” Cornic: Cornic was used to teach simultaneous transmission of different frequencies as discussed supra. Examples of patterns can be seen in Figs.",
"21C – 21D and Figs. 14E – 14F); a second RF unit of the at least two RF units scans across a second RF frequency range at a second step size (Id. at least signal A and signal B of Figs. 14E and 21C having different step sizes can be transmitted simultaneously based on modification with Cornic to have different frequency ranges. ); wherein the second RF frequency range is narrower than the first RF frequency range and the second step size is smaller than the first step size (In order for the signals to have unequal/different step sizes, one has to be narrower than the other.). As to claim 6, Bontron in view of Harman, Cornic and Garrec teaches the stepped frequency radar system of claim 5, wherein the first RF frequency range and the second RF frequency range are non-overlapping RF frequency ranges (Cornic: Para. 16). The teachings of Bontron cited alone only requires different center frequencies. However, Cornic clearly teaches different frequency ranges which one of ordinary skill would understand to provide better protection against interference than simply having slightly different frequency ranges, e.g. different center/carrier frequencies.",
"In view of the teachings of Cornic, it would have been obvious to simultaneously transmit two completely different frequency ranges in order to provide for even better protection from interference thus improving signal-to-noise and reducing false detections. Conclusion Any inquiry concerning this communication or earlier communications from the examiner should be directed to MICHAEL W JUSTICE whose telephone number is (571)270-7029. The examiner can normally be reached 7:30 - 5:30 M-F. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice.",
"If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Erin Heard can be reached on 571-272-3236. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of published or unpublished applications may be obtained from Patent Center. Unpublished application information in Patent Center is available to registered users. To file and manage patent submissions in Patent Center, visit: https://patentcenter.uspto.gov. Visit https://www.uspto.gov/patents/apply/patent-center for more information about Patent Center and https://www.uspto.gov/patents/docx for information about filing in DOCX format. For additional questions, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free).",
"If you would like assistance from a USPTO Customer Service Representative, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000. /MICHAEL W JUSTICE/Examiner, Art Unit 3648"
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2022-09-18.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Response to Arguments Applicant's arguments filed on 01/15/2021 have been fully considered but they are not persuasive. Applicant argues: “and it is noted that previously presented claim 13 recited "providing a common header information to both the first block and the second block, after determining a prediction information ... . " Accordingly, it is respectfully submitted that previously presented claim 13 clearly limited the scope of the claim according to a condition of whether or not to provide a common header information according to "determining a prediction information of the first block is the same as a prediction information of the second block."” Examiner notes that Applicant’s argument is not clear. Simply underlining a part of the claim language does not communicate what Applicant believes to be the limitation of that language. Examiner notes that the claims are not limited to any particular steps of determination. And the decision in the prior art to code a parameter to be the same for all blocks in a set or to code parameters individually for each block indicates that the parameters were so determined by the encoder before encoding the information into the video. If Applicant intends a more particular method of determination to be used, Applicant should claim the particular details of the intended method of determination. Applicant argues: “Applicant notes that the Examiner appears to take the position that the bi-directional motion vectors taught by Li correspond to the prediction information required by the claimed invention. However, it is noted that Li does not contain any disclosure related to comparison of the bi-directional motion vectors of a first block to bi-directional motion vectors of a second block.” Examiner notes that (1) the cited portion of Li are directed to storing a for indicating motion information for a block or for a group of blocks, and (2) the claims do not recite a “comparison” of any quantity and do not limit the scope of prediction information to meaningfully distinguish over the examples in the prior art.
Claim Construction Note that, for purposes of compact prosecution, multiple reasons for rejection may be provided for a claim or a part of the claim. The rejection reasons are cumulative, and Applicant should review all the stated reasons as guides to improving the claim language and advancing the prosecution toward an allowance. Claim scope is not limited by claim language that suggests or makes optional but does not require steps to be performed by a method claim, or by claim language that does not limit an apparatus claim to a particular structure. However, examples of claim language, although not exhaustive, that may raise a question as to the limiting effect of the language in a claim are: (A) “adapted to” or “adapted for” clauses; (B) “wherein” clauses; and (C) “whereby” clauses. M.P.E.P. 2111.04. Other examples are where the claim passively indicates that a function is performed or a structure is used without requiring that the function or structure is a limitation on the claim itself. The clause may be given some weight to the extent it provides "meaning and purpose” to the claimed invention but not when “it simply expresses the intended result” of the invention. In Hoffer v. Microsoft Corp., 405 F.3d 1326, 1329, 74 USPQ2d 1481, 1483 (Fed. Cir. 2005). Further, during prosecution, claim language that may or may not be limiting should be considered non-limiting under the standard of the broadest reasonable interpretation. See M.P.E.P. 904.01(a); In re Morris, 127 F.3d 1048, 44 USPQ2d 1023 (Fed. Cir. 1997). Where Applicant recites optional claim language, such as optional claim language that may follow the term(s) “wherein …, for …,” such claim language does not limit the claims, and does not require a separate reason for rejection. While a cumulative rejection of such language is provided below for purposes of compact prosecution, Examiner suggests rephrasing important claim language to make sure it recites clear limitations corresponding to the subject matter of the claim. Claim scope is not limited by claim language directed to a content of a signal (such as “information …”) but does not require steps to be performed, or by claim In re Lowry, 32 F.3d 1579, 1583-84, 32 USPQ2d 1031, 1035 (Fed. Cir. 1994); In re Ngai, 367 F.3d 1336, 1339, 70 USPQ2d 1862, 1864 (Fed. Cir. 2004); In re Gulack, 703 F.2d 1381, 1385, 217 USPQ 401, 404 (Fed. Cir. 1983). Where the claimed and prior art products are identical or substantially identical in structure or composition, or the claimed and prior art methods are identical or substantially identical processes, a prima facie case of either anticipation or obviousness has been established. In re Best, 562 F.2d 1252, 1255, 195 USPQ 430, 433 (CCPA 1977); M.P.E.P. 2112.01. “The functions corresponding to ‘processing,’ ‘receiving,’ and ‘storing’ are coextensive with a general purpose processor” In re Katz Interactive Call Processing Patent Litigation, 639 F.3d 1303, 1316, 97 USPQ2d 1737, 1747 (Fed. Cir. 2011). While substantive rejection of such language is provided below for purposes of compact prosecution, Examiner suggests rephrasing such claim language to recite limitations corresponding to the subject matter of the claim. Machine limitations should make clear that the use of the machine in the claimed process imposes a meaningful limitation on the claim’s scope. See MPEP 2106.01.
“When a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result.” KSR International Co. v. Teleflex Inc. (KSR), 550 U.S. 398, 415, 82 USPQ2d 1385 (2007). Claim Rejections - 35 USC § 103 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
The factual inquiries set forth in Graham v. John Deere Co., 383 U.S. 1, 148 USPQ 459 (1966), that are applied for establishing a background for determining obviousness under 35 U.S.C. 103 are summarized as follows: 1. Determining the scope and contents of the prior art. 2. Ascertaining the differences between the prior art and the claims at issue. 3. Resolving the level of ordinary skill in the pertinent art. 4. Considering objective evidence present in the application indicating obviousness or nonobviousness. This paragraph describes the treatment of admitted prior art. In describing an invention, Applicant must inevitably reference that which is known in the art as the basis for the invention, however it is important that the claims particularly point out and distinctly claim that which Applicant regards to be his own invention. See 35 U.S.C. 112 (b) or 35 U.S.C. 112 (pre-AIA ), second paragraph. A statement by an applicant in the Claim 13 is rejected under 35 U.S.C. 103 as being unpatentable over Applicant admitted prior art in the Specification (“AAPA”) in view of US 20140185680 Li (“Li”). Regarding Claim 13: “A video coding apparatus that codes a current picture to generate a code string, the video coding apparatus comprising: dividing the current picture into a plurality of blocks, the plurality of blocks including a first block and a second block; (“In video coding, each coding target picture 1s divided into blocks which are coding units” AAPA, Specification, Page 2, lines 5-6.) generating a residual coefficient by calculating a difference between a prediction image which is generated for each of the plurality of blocks and the current picture; and generating the code string based on the residual coefficient, (“Transform processing such as a discrete cosine transform and quantization processing are performed on the obtained difference image, and a code string is generated …” AAPA, Specification, Page 2, lines 16-18.) AAPA does not discuss header information embodied in: “providing a common header information to both the first block and the second block, after the determining the prediction information of the first block is the same as the prediction information of the second block, and … providing a prediction information of the first block as a header information of the first block to the first block and provides a prediction information of the second block as a header information of the second block to the second block, when the prediction information of the first block is different from the prediction information of the second block.” Li teaches an embodiment of the above feature for storing prediction at a block level, or at a higher level to be shared by multiple blocks: “The selection of the [determined] direction to be used for bi-directional motion vectors [prediction information] can be signaled at least as a high level flag at some header such as picture parameter set (PPS), sequence parameter set (SPS), slice or it can be signaled at a block level, such as largest coding unit (LCU), coding unit (CU), or prediction unit (PU) levels.” Li, Paragraph 172. Thus, the first part of the claim is disclosed as the common header information is stored in picture parameter set (PPS), sequence parameter set (SPS), or a slice, and applies to all the blocks within these partitions [i.e. the second part of the claim is disclosed as header information signaled at a block level is individualized [different information] to each block. Also note that substituting the above example of prediction information for any other prediction information conventional to the video compression standards, would be obvious because the alternatives are known (provided in the industry standards), storage of shared parameters in higher level headers is known (as indicated above), and it is generally desirable in the art of video compression to remove redundancy by coding shared information at higher levels of partition. See Li, Paragraphs 173, 190, 193, 199, 226, and AAPA, Specification, Page 2, lines 7-12. Therefore, before the effective filing date of the claimed invention, it would have been obvious to one of ordinary skill in the art to supplement the teachings of AAPA to implement the claim feature above according to the embodiment taught in Li, in order to remove redundancy of coding each blocks with the same information by coding the common information at higher levels of partition that contain the sharing blocks. See Li, Paragraph 173 and AAPA, Specification, Page 2, lines 7-12. “determining a prediction information of the first block is the same as a prediction information of the second block;” (“The selection of the direction to be used for bi-directional motion vectors can be signaled at least as a high level flag at some header such as picture parameter set (PPS), sequence parameter set (SPS), slice” partitions which contain multiple blocks embodying at AAPA does not teach “a processor; … and a non-transitory memory having stored thereon executable instructions, which when executed, cause the processor to perform: Li teaches the above claim features in the context of processing data for video encoding: “a device may store instructions for the software in a suitable, non-transitory computer readable storage medium and may execute the instructions in hardware using one or more processors to perform the techniques of this disclosure.” Li, Paragraph 54. Therefore, before the effective filing date of the claimed invention, it would have been obvious to one of ordinary skill in the art to supplement the teachings of AAPA to use “a processor; and a non-transitory memory having stored thereon executable instructions, which when executed, cause the processor to perform” signal processing as taught in Li, in order implement signal processing by programming a general purpose processor to implement the desired functions.
Conclusion Note that, for purposes of compact prosecution, multiple reasons for rejection may be provided for a claim or a part of the claim. The rejection reasons are The referenced citations made in the rejections above are intended to exemplify areas in the prior art documents in which the examiner believed are the most relevant to the claimed subject matter. However, it is incumbent upon the applicant to analyze each prior art document in its entirety since other areas of the document may be relied upon at a later time to substantiate examiner's rationale of record. See W.L. Gore & associates, Inc. v. Garlock, Inc., 721 F.2d 1540, 220 USPQ 303 (Fed. Cir. 1983), cert. denied, 469 U.S. 851 (1984). However, "the prior art's mere disclosure of more than one alternative does not constitute a teaching away from any of these alternatives because such disclosure does not criticize, discredit, or otherwise discourage the solution claimed ...." In re Fulton, 391 F.3d 1195, 1201,73 USPQ2d 1141, 1146 (Fed. Cir. 2004). THIS ACTION IS MADE FINAL. Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a). A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within TWO MONTHS of the mailing date of this final action and the advisory action is not mailed until after the end of the THREE-MONTH shortened statutory period, then the shortened statutory period will expire on the date the advisory action is mailed, and any extension fee pursuant to 37 CFR 1.136(a) will be calculated from the mailing date of the advisory action. In no event, however, will the statutory period for reply expire later than SIX MONTHS from the mailing date of this final action. Any inquiry concerning this communication or earlier communications from the examiner should be directed to MIKHAIL ITSKOVICH whose telephone number is (571)270-7940. The examiner can normally be reached on Mon. - Thu. 9am - 8pm. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Joseph Ustaris can be reached on (571)272-7383. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000. | 2021-04-25T05:45:24 | [
"DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Response to Arguments Applicant's arguments filed on 01/15/2021 have been fully considered but they are not persuasive. Applicant argues: “and it is noted that previously presented claim 13 recited \"providing a common header information to both the first block and the second block, after determining a prediction information ... . \" Accordingly, it is respectfully submitted that previously presented claim 13 clearly limited the scope of the claim according to a condition of whether or not to provide a common header information according to \"determining a prediction information of the first block is the same as a prediction information of the second block.",
"\"” Examiner notes that Applicant’s argument is not clear. Simply underlining a part of the claim language does not communicate what Applicant believes to be the limitation of that language. Examiner notes that the claims are not limited to any particular steps of determination. And the decision in the prior art to code a parameter to be the same for all blocks in a set or to code parameters individually for each block indicates that the parameters were so determined by the encoder before encoding the information into the video. If Applicant intends a more particular method of determination to be used, Applicant should claim the particular details of the intended method of determination.",
"Applicant argues: “Applicant notes that the Examiner appears to take the position that the bi-directional motion vectors taught by Li correspond to the prediction information required by the claimed invention. However, it is noted that Li does not contain any disclosure related to comparison of the bi-directional motion vectors of a first block to bi-directional motion vectors of a second block.” Examiner notes that (1) the cited portion of Li are directed to storing a for indicating motion information for a block or for a group of blocks, and (2) the claims do not recite a “comparison” of any quantity and do not limit the scope of prediction information to meaningfully distinguish over the examples in the prior art. Claim Construction Note that, for purposes of compact prosecution, multiple reasons for rejection may be provided for a claim or a part of the claim. The rejection reasons are cumulative, and Applicant should review all the stated reasons as guides to improving the claim language and advancing the prosecution toward an allowance.",
"Claim scope is not limited by claim language that suggests or makes optional but does not require steps to be performed by a method claim, or by claim language that does not limit an apparatus claim to a particular structure. However, examples of claim language, although not exhaustive, that may raise a question as to the limiting effect of the language in a claim are: (A) “adapted to” or “adapted for” clauses; (B) “wherein” clauses; and (C) “whereby” clauses. M.P.E.P. 2111.04. Other examples are where the claim passively indicates that a function is performed or a structure is used without requiring that the function or structure is a limitation on the claim itself. The clause may be given some weight to the extent it provides \"meaning and purpose” to the claimed invention but not when “it simply expresses the intended result” of the invention.",
"In Hoffer v. Microsoft Corp., 405 F.3d 1326, 1329, 74 USPQ2d 1481, 1483 (Fed. Cir. 2005). Further, during prosecution, claim language that may or may not be limiting should be considered non-limiting under the standard of the broadest reasonable interpretation. See M.P.E.P. 904.01(a); In re Morris, 127 F.3d 1048, 44 USPQ2d 1023 (Fed. Cir. 1997). Where Applicant recites optional claim language, such as optional claim language that may follow the term(s) “wherein …, for …,” such claim language does not limit the claims, and does not require a separate reason for rejection. While a cumulative rejection of such language is provided below for purposes of compact prosecution, Examiner suggests rephrasing important claim language to make sure it recites clear limitations corresponding to the subject matter of the claim.",
"Claim scope is not limited by claim language directed to a content of a signal (such as “information …”) but does not require steps to be performed, or by claim In re Lowry, 32 F.3d 1579, 1583-84, 32 USPQ2d 1031, 1035 (Fed. Cir. 1994); In re Ngai, 367 F.3d 1336, 1339, 70 USPQ2d 1862, 1864 (Fed. Cir. 2004); In re Gulack, 703 F.2d 1381, 1385, 217 USPQ 401, 404 (Fed. Cir. 1983). Where the claimed and prior art products are identical or substantially identical in structure or composition, or the claimed and prior art methods are identical or substantially identical processes, a prima facie case of either anticipation or obviousness has been established. In re Best, 562 F.2d 1252, 1255, 195 USPQ 430, 433 (CCPA 1977); M.P.E.P.",
"2112.01. “The functions corresponding to ‘processing,’ ‘receiving,’ and ‘storing’ are coextensive with a general purpose processor” In re Katz Interactive Call Processing Patent Litigation, 639 F.3d 1303, 1316, 97 USPQ2d 1737, 1747 (Fed. Cir. 2011). While substantive rejection of such language is provided below for purposes of compact prosecution, Examiner suggests rephrasing such claim language to recite limitations corresponding to the subject matter of the claim. Machine limitations should make clear that the use of the machine in the claimed process imposes a meaningful limitation on the claim’s scope. See MPEP 2106.01. “When a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result.” KSR International Co. v. Teleflex Inc. (KSR), 550 U.S. 398, 415, 82 USPQ2d 1385 (2007). Claim Rejections - 35 USC § 103 In the event the determination of the status of the application as subject to AIA 35 U.S.C.",
"102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.",
"The factual inquiries set forth in Graham v. John Deere Co., 383 U.S. 1, 148 USPQ 459 (1966), that are applied for establishing a background for determining obviousness under 35 U.S.C. 103 are summarized as follows: 1. Determining the scope and contents of the prior art. 2. Ascertaining the differences between the prior art and the claims at issue. 3. Resolving the level of ordinary skill in the pertinent art. 4. Considering objective evidence present in the application indicating obviousness or nonobviousness. This paragraph describes the treatment of admitted prior art. In describing an invention, Applicant must inevitably reference that which is known in the art as the basis for the invention, however it is important that the claims particularly point out and distinctly claim that which Applicant regards to be his own invention. See 35 U.S.C.",
"112 (b) or 35 U.S.C. 112 (pre-AIA ), second paragraph. A statement by an applicant in the Claim 13 is rejected under 35 U.S.C. 103 as being unpatentable over Applicant admitted prior art in the Specification (“AAPA”) in view of US 20140185680 Li (“Li”). Regarding Claim 13: “A video coding apparatus that codes a current picture to generate a code string, the video coding apparatus comprising: dividing the current picture into a plurality of blocks, the plurality of blocks including a first block and a second block; (“In video coding, each coding target picture 1s divided into blocks which are coding units” AAPA, Specification, Page 2, lines 5-6.) generating a residual coefficient by calculating a difference between a prediction image which is generated for each of the plurality of blocks and the current picture; and generating the code string based on the residual coefficient, (“Transform processing such as a discrete cosine transform and quantization processing are performed on the obtained difference image, and a code string is generated …” AAPA, Specification, Page 2, lines 16-18.) AAPA does not discuss header information embodied in: “providing a common header information to both the first block and the second block, after the determining the prediction information of the first block is the same as the prediction information of the second block, and … providing a prediction information of the first block as a header information of the first block to the first block and provides a prediction information of the second block as a header information of the second block to the second block, when the prediction information of the first block is different from the prediction information of the second block.” Li teaches an embodiment of the above feature for storing prediction at a block level, or at a higher level to be shared by multiple blocks: “The selection of the [determined] direction to be used for bi-directional motion vectors [prediction information] can be signaled at least as a high level flag at some header such as picture parameter set (PPS), sequence parameter set (SPS), slice or it can be signaled at a block level, such as largest coding unit (LCU), coding unit (CU), or prediction unit (PU) levels.” Li, Paragraph 172.",
"Thus, the first part of the claim is disclosed as the common header information is stored in picture parameter set (PPS), sequence parameter set (SPS), or a slice, and applies to all the blocks within these partitions [i.e. the second part of the claim is disclosed as header information signaled at a block level is individualized [different information] to each block. Also note that substituting the above example of prediction information for any other prediction information conventional to the video compression standards, would be obvious because the alternatives are known (provided in the industry standards), storage of shared parameters in higher level headers is known (as indicated above), and it is generally desirable in the art of video compression to remove redundancy by coding shared information at higher levels of partition. See Li, Paragraphs 173, 190, 193, 199, 226, and AAPA, Specification, Page 2, lines 7-12. Therefore, before the effective filing date of the claimed invention, it would have been obvious to one of ordinary skill in the art to supplement the teachings of AAPA to implement the claim feature above according to the embodiment taught in Li, in order to remove redundancy of coding each blocks with the same information by coding the common information at higher levels of partition that contain the sharing blocks.",
"See Li, Paragraph 173 and AAPA, Specification, Page 2, lines 7-12. “determining a prediction information of the first block is the same as a prediction information of the second block;” (“The selection of the direction to be used for bi-directional motion vectors can be signaled at least as a high level flag at some header such as picture parameter set (PPS), sequence parameter set (SPS), slice” partitions which contain multiple blocks embodying at AAPA does not teach “a processor; … and a non-transitory memory having stored thereon executable instructions, which when executed, cause the processor to perform: Li teaches the above claim features in the context of processing data for video encoding: “a device may store instructions for the software in a suitable, non-transitory computer readable storage medium and may execute the instructions in hardware using one or more processors to perform the techniques of this disclosure.” Li, Paragraph 54. Therefore, before the effective filing date of the claimed invention, it would have been obvious to one of ordinary skill in the art to supplement the teachings of AAPA to use “a processor; and a non-transitory memory having stored thereon executable instructions, which when executed, cause the processor to perform” signal processing as taught in Li, in order implement signal processing by programming a general purpose processor to implement the desired functions. Conclusion Note that, for purposes of compact prosecution, multiple reasons for rejection may be provided for a claim or a part of the claim.",
"The rejection reasons are The referenced citations made in the rejections above are intended to exemplify areas in the prior art documents in which the examiner believed are the most relevant to the claimed subject matter. However, it is incumbent upon the applicant to analyze each prior art document in its entirety since other areas of the document may be relied upon at a later time to substantiate examiner's rationale of record. See W.L. Gore & associates, Inc. v. Garlock, Inc., 721 F.2d 1540, 220 USPQ 303 (Fed. Cir. 1983), cert. denied, 469 U.S. 851 (1984). However, \"the prior art's mere disclosure of more than one alternative does not constitute a teaching away from any of these alternatives because such disclosure does not criticize, discredit, or otherwise discourage the solution claimed ....\" In re Fulton, 391 F.3d 1195, 1201,73 USPQ2d 1141, 1146 (Fed. Cir.",
"2004). THIS ACTION IS MADE FINAL. Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a). A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within TWO MONTHS of the mailing date of this final action and the advisory action is not mailed until after the end of the THREE-MONTH shortened statutory period, then the shortened statutory period will expire on the date the advisory action is mailed, and any extension fee pursuant to 37 CFR 1.136(a) will be calculated from the mailing date of the advisory action. In no event, however, will the statutory period for reply expire later than SIX MONTHS from the mailing date of this final action. Any inquiry concerning this communication or earlier communications from the examiner should be directed to MIKHAIL ITSKOVICH whose telephone number is (571)270-7940. The examiner can normally be reached on Mon. - Thu. 9am - 8pm.",
"Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Joseph Ustaris can be reached on (571)272-7383. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair.",
"Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000."
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2021-05-02.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
139 F.3d 191 Jeff EMERY, Petitioner-Appellant,v.Gary L. JOHNSON, Director, Texas Department of CriminalJustice, Institutional Division, Respondent-Appellee. No. 96-20826. United States Court of Appeals,Fifth Circuit. Sept. 10, 1997.On Petition for Rehearing April 15, 1998.
Thomas Donald Moran, Leora Teicher Kahn, Schneider & McKinney, Houston, TX, for Petitioner-Appellant. Meredith Anne Martinez, Assistant Attorney General, Austin, TX, for Respondent-Appellee. Appeal from the United States District Court for the Southern District of Texas. Before KING, SMITH and BENAVIDES, Circuit Judges. JERRY E. SMITH, Circuit Judge:
1 Jeff Emery, proceeding in forma pauperis, appeals the denial of his petition for writ of habeas corpus. Concluding that several of his claims are barred by procedural default and that the others are without merit, we affirm and vacate the stay of execution.
I. A.
2 One day in 1979, LaShan Muhlinghaus returned to her apartment and undressed. Unbeknownst to her, Emery, an accomplished burglar, had entered her apartment using a stolen pass key. When Muhlinghaus entered the apartment, Emery hid in her roommate's closet.
3 Muhlinghaus went into her roommate's bedroom to return a dress she had borrowed. Emery attacked Muhlinghaus, stabbing her twenty-five times. After she was dead, Emery had sexual intercourse with her body. The police did not find any evidence that Emery stole anything.
4 Emery returned to the house where he lived with his wife, Deborah Emery ("Deborah"). After showering and disposing of his blood-stained knife and clothes, Emery drove to the scene of the crime with Deborah to observe the police investigation. Emery confessed his actions to his wife and later to James Smith, his foster brother, and Marie Michaeloff.
5 Emery assaulted his wife at least every other day. Although he usually hit her with his fists, he occasionally used a metal bar, ashtrays, nicknacks, and lighters. He also would pound her head on the bathtub. At least once, he hit her child, who was a toddler, across the room. Finally, in July 1982, Deborah began divorce proceedings. Five months later, she reported Emery's crimes to the police.
B.
6 Emery was convicted of capital murder during the commission of a burglary, see TEX. PEN.CODE ANN. § 19.03(a)(2) (Vernon 1994), and was sentenced to death in 1986. The Texas Court of Criminal Appeals reversed because portions of the trial transcript had been stolen. See Emery v. Texas, 800 S.W.2d 530 (Tex.Crim.App.1990) (en banc).
7 The state retried Emery and obtained a second conviction, whereupon the jury sentenced him to death in 1991. On appeal, Emery unsuccessfully argued, inter alia, that the jury instructions at the penalty phase were inadequate because they did not allow the jury to consider all relevant mitigating evidence. See Emery v. Texas, 881 S.W.2d 702, 711-12 (Tex.Crim.App.1994), cert. denied, 513 U.S. 1192, 115 S.Ct. 1257, 131 L.Ed.2d 137 (1995).
C.
8 In 1995, Emery filed his first state habeas petition, arguing, inter alia, that his right to testify on his own behalf had been denied and that his counsel rendered ineffective assistance by opening the door to the admission of his confession to Deborah and his history of burglary and by not objecting to the introduction of evidence that he slapped his wife. The state habeas trial court conducted an evidentiary hearing and issued various findings of fact.1 The Texas Court of Criminal Appeals denied the habeas petition on the merits in August 1995.
9 In November 1995, Emery filed a second state habeas petition, raising several new issues, including general challenges to Texas's death penalty scheme and new claims of ineffective assistance based on counsel's having convinced Emery not to testify and having not objected to a particular part of the jury charge. While that petition was pending, Emery filed the instant federal habeas petition.
10 Texas follows the rule that a state prisoner may seek habeas relief in state or federal court, but not both. Consequently, the Texas courts refuse to consider a habeas petition while a federal petition is pending. See Ex parte Green, 548 S.W.2d 914, 916 (Tex.Crim.App.1977). In February 1996, the Court of Criminal Appeals invoked this principle and dismissed Emery's second state habeas petition. In August 1996, the federal district court denied Emery relief on all his claims but granted a certificate of probable cause ("CPC") to appeal. See Emery v. Johnson, 940 F.Supp. 1046, 1065 (S.D.Tex.1996).2
II. A.
11 Our analysis of the claims that Emery raised only in his second state habeas petition is complicated by the doctrine of procedural default. A federal court may not consider a state prisoner's constitutional claim if the state courts based their rejection of that claim on an adequate and independent state ground. See Martin v. Maxey, 98 F.3d 844, 847 (5th Cir.1996). It is not always easy, however, to determine whether a state court decision denying collateral relief is based on state procedural grounds or, instead, on the court's interpretation of federal law. The Supreme Court has supplied us with a useful default rule: We will not apply a procedural default unless the last state court to consider a particular claim "clearly and expressly" relied on an independent and adequate state ground. Coleman v. Thompson, 501 U.S. 722, 735, 111 S.Ct. 2546, 2557, 115 L.Ed.2d 640 (1991).
12 This default rule does not apply, however, "if the petitioner failed to exhaust state remedies and the court to which the petitioner would be required to present his claims in order to meet the exhaustion requirement would now find the claims procedurally barred." Id. at 735 n. 1, 111 S.Ct. at 2557 n. 1. In such a case, "there is a procedural default for purposes of federal habeas regardless of the decision of the last state court to which the petitioner actually presented his claims." Id.
B. 1.
13 The federal district court reasoned that Emery's claims were procedurally barred because, if he tried to exhaust them in a proper manner, they would be barred by TEX.CODE CRIM. PROC. ANN. art. 11.071, § 5(a) (Vernon Supp.1997), which prohibits the filing of subsequent or untimely habeas applications, absent cause or actual innocence.3 See Ex parte Davis, 947 S.W.2d 216 (Tex.Crim.App.1996) (en banc) (upholding the constitutionality of article 11.071). In a habeas context, we review the district court's determinations of law de novo and its findings of facts for clear error. See Dison v. Whitley, 20 F.3d 185, 186 (5th Cir.1994).
14 Because article 11.071 is a new statute that is largely uninterpreted by state cases, we instead consider whether we should affirm on the basis of the abuse-of-the-writ doctrine. We may affirm a judgment on any ground supported by the record. See Mangaroo v. Nelson, 864 F.2d 1202, 1204 n. 2 (5th Cir.1989).4
15 A second habeas petition is an abuse of the writ if the prisoner urges grounds that could have been, but were not, raised in his first habeas petition. See Russell v. Collins, 944 F.2d 202, 205 (5th Cir.1991) (per curiam). Such a doctrine, which the federal courts recognize, encourages efficient justice by requiring a prisoner to present all claims for relief at once. See McCleskey v. Zant, 499 U.S. 467, 493, 111 S.Ct. 1454, 1469-70, 113 L.Ed.2d 517 (1991). The Texas courts have recognized this doctrine for over twenty years. See, e.g., Ex parte Carr, 511 S.W.2d 523, 525-26 (Tex.Crim.App.1974).
16 An abuse of the writ can qualify as a procedural bar. See Murch v. Mottram, 409 U.S. 41, 45-46, 93 S.Ct. 71, 73-74, 34 L.Ed.2d 194 (1972) (per curiam). A procedural bar is not adequate, however, unless it is applied "strictly or regularly" to the "vast majority of similar claims." Amos v. Scott, 61 F.3d 333, 339 (5th Cir.), cert. denied, 516 U.S. 1005, 116 S.Ct. 557, 133 L.Ed.2d 458 (1995). Historically, Texas courts have failed to apply the abuse-of-the-writ-doctrine in a strict or regular manner, and, therefore, we have refused to honor it. See Lowe v. Scott, 48 F.3d 873, 876 (5th Cir.1995).
17 This changed in 1994, when the Texas Court of Criminal Appeals announced the adoption of a strict abuse-of-the-writ-doctrine, tempered only by an exception for cause. See Ex parte Barber, 879 S.W.2d 889, 891 n. 1 (Tex.Crim.App.1994) (en banc) (plurality opinion). Barber represents an adequate procedural bar for purposes of federal habeas review. See Fearance v. Scott, 56 F.3d 633, 642 (5th Cir.1995).
18 Emery has not cited any post-Barber case allowing an abusive writ, and our research has revealed none. Therefore, we are bound to follow Fearance and to hold that Emery's violation of Texas's abuse-of-the-writ-doctrine constitutes an independent and adequate procedural bar to our consideration of his barred claims.5
2.
19 A petitioner may overcome a procedural default by showing cause and prejudice for that default. See Tucker v. Johnson, No. 97-20101 (5th Cir. July 2, 1997) (on petition for rehearing). Emery argues that his failure to anticipate the passage of article 11.071 constitutes cause for his failure to plead all his grounds for relief in his first habeas petition.
20 Emery filed his first state habeas petition in July 1995, over one year after Barber was decided, so he cannot claim ignorance of his duty to plead all his grounds for relief during his first petition for collateral review. Therefore, he has shown no cause for his violation of Texas's abuse of the writ doctrine.
III. A.
21 Emery raises several ineffective-assistance-of-counsel claims. To establish ineffective assistance, he must demonstrate both deficient performance by his counsel and prejudice resulting from that deficiency. See Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 2064, 80 L.Ed.2d 674 (1984).
22 We compare counsel's performance to an objective standard of reasonableness, mindful of the strong presumption of adequacy. We will not find inadequate representation merely because, with the benefit of hindsight, we disagree with counsel's strategic choices. See Garland v. Maggio, 717 F.2d 199, 206 (5th Cir.1983) (on petition for rehearing). To establish prejudice, Emery must demonstrate that counsel's errors "render the verdict fundamentally unfair or unreliable." Carter v. Johnson, 110 F.3d 1098, 1110 (5th Cir.1997).6 Specifically, he must "show a 'reasonable probability' that the jury would have otherwise harbored a reasonable doubt concerning guilt." Id.
B. 1.
23 Emery's first ineffectiveness claim concerns his counsel's questioning Deborah about his confession, thus waiving the marital privilege, see TEX.R.CRIM. EVID. 504(1), and allowing the admission of the confession. Explaining this claim requires some exploration of its factual background.
24 Under Texas law, the marital privilege extends only to confidential communications, not observed acts. See Sterling v. Texas, 814 S.W.2d 261, 261-62 (Tex.App.--Austin 1991, writ ref'd) (per curiam). Deborah testified that Emery returned to the house shortly after the murder with a blood-stained knife and blood-stained underpants and "had blood on his arms, smeared on his arms and his hands, on his shirt, and his pants, and some on his work boot." She testified that Emery drove her to the site of the murder to watch the investigation and that Emery told James Smith that he had killed a man in Texas and instructed Smith to request verification from Debbie.
25 Impeaching this testimony was vital to Emery's defense of mistaken identity. John Quinn, his counsel, feared that an effective cross-examination would open the door to Deborah's testimony about Emery's confession. Furthermore, at that time, Emery still intended to testify. Quinn feared that Emery would make statements that would waive the privilege and allow the admission of the confession.
26 To be successful, the mistaken-identity theory required the defense to obtain a high degree of credibility with the jury. Consequently, one of counsel's strategic priorities was to be honest and straightforward. Accordingly, Quinn wanted to introduce, and lessen the impact of, any incriminating evidence that the prosecution might present.
2.
27 Emery argues that Quinn was incorrect in his belief (1) that Emery would testify and (2) that an effective cross-examination would open the door to the admission of Emery's confession. It is difficult to determine whether Quinn was correct in the latter belief. The record reveals that the most effective portion of the cross-examination was Quinn's careful and detailed analysis of the inconsistencies among Deborah's various statements to the police. Whether the Texas Rules of Criminal Evidence7 would have required the admission of Deborah's entire statement, including her report of Emery's confession, is an open question.
28 We need not resolve this issue of state evidentiary law. The Sixth Amendment does not guarantee criminal defendants the right to error-free representation. See Skillern v. Estelle, 720 F.2d 839, 851 (5th Cir.1983). Standing alone, counsel's erroneous judgment, if any, about the requirements of state law does not constitute deficient performance unless it is so unreasonable that it rebuts the strong presumption that counsel's performance "falls within the wide range of reasonable professional assistance." Washington, 466 U.S. at 689, 104 S.Ct. at 2065.
29 Quinn's judgment that an effective cross-examination of Deborah would have been impossible without opening the door to the admission of the confession was reasonable. Similarly, as explained in more detail infra, Quinn's belief that Emery would testify and open the door to that confession also was reasonable. These reasonable judgments, even if ultimately erroneous, satisfy the standard for effective assistance of counsel.
3.
30 In any event, Emery has not demonstrated prejudice. At trial, both Smith and Michaeloff testified that Emery had confessed to them. Although Emery originally told Smith that he had stabbed a man, he later identified Muhlinghaus in a picture. Michaeloff recounted a confession that was far more detailed and accurate than that reported by Deborah.
31 In short, Deborah's testimony about the confession was duplicative of testimony given by Smith and Michaeloff. Emery cannot demonstrate that a third source of the same confession would have sufficed to change the result of his trial.8 The lack of prejudice is an alternative ground for denying Emery relief on this claim.
C.
32 Emery's second ineffectiveness claim is akin to the first. Quinn questioned Deborah about Emery's practice of committing pass key burglaries, opening the door to Mitchell McGrady's testimony about Emery's stealing quarters and televisions. Emery argues that, by opening the door to the admission of this evidence of an extraneous act, Quinn rendered ineffective assistance.
33 According to Emery's affidavit, he intended to testify about his criminal history as a pass key burglar. His theory was that, as an experienced burglar, he would not have entered Muhlinghaus's home, as it contained nothing worth stealing. At the time that Deborah testified, Emery still intended to take the stand.
34 As mentioned above, Quinn's trial strategy required him to maintain credibility by not appearing to have anything to hide. Furthermore, Quinn reasonably believed that it was better strategy to vet damaging information himself, rather than allowing the prosecution to introduce it. It is not our province, on habeas review, to second-guess counsel's strategic choices.
35 Finally, Emery argues that Quinn was ineffective for not requesting a limiting instruction for this evidence. We must reject this argument, as the state trial court stated that it would not have granted such a limiting instruction, because the defense introduced the evidence. Although Emery argues that this is an incorrect interpretation of state law, "it is not the province of a federal habeas court to reexamine state-court determinations on state-law questions." Estelle v. McGuire, 502 U.S. 62, 67-68, 112 S.Ct. 475, 479-80, 116 L.Ed.2d 385 (1991).
D.
36 Emery's third ineffectiveness claim concerns Quinn's failure to object when the prosecution questioned McGrady about Emery's slapping Deborah. This claim is easily dismissed.
37 As we have explained, a successful defense required impeaching Deborah's testimony. Part of the cross-examination centered on Deborah's delay in reporting Emery's crime. Deborah stated that the delay was caused by her fear of Emery. Consequently, Emery's slapping Deborah was admissible to show the reasonableness of her fear. Objection to its admission would have been futile, and failure to assert a meritless objection cannot be grounds for a finding of deficient performance. See Clark v. Collins, 19 F.3d 959, 966 (5th Cir.1994).
38 Regarding Quinn's failure to request a limiting instruction that this evidence not be considered for general criminal propensity, Emery has not even argued that the lack of that instruction rendered the trial fundamentally unfair or unreliable. We conclude that Emery was not prejudiced by this failure.
IV. A.
39 Emery alleges that he was denied the right to testify at trial. A criminal defendant has a constitutional right to testify on his own behalf. See Rock v. Arkansas, 483 U.S. 44, 49-53, 107 S.Ct. 2704, 2707-10, 97 L.Ed.2d 37 (1987). This right can be waived only by the defendant, not by his counsel. See United States v. Teague, 953 F.2d 1525, 1532 (11th Cir.1992) (en banc). A waiver of this right must be knowing and voluntary. See United States v. Blum, 65 F.3d 1436, 1444 (8th Cir.1995), cert. denied, 516 U.S. 1097, 116 S.Ct. 824, 133 L.Ed.2d 767 (1996).
40 Emery did not testify at his first trial. Because he was convicted there, he was convinced that he should do everything in the second trial differently. At the beginning of the trial, he informed his counsel that he wished to testify.
41 Emery and Quinn discussed his testimony several times during the trial. Emery told Quinn radically different versions of what happened the night of the murder. For example, at one point, he told Quinn that he had stabbed a black male using a screwdriver to break into Emery's car, and that was why he was covered with blood.
42 Somewhat later, Emery informed Quinn that he had met Muhlinghaus in a bar and eventually had an affair with her. He stated that he killed her to prevent her from exposing the adultery to his wife. When Quinn informed him that the jury was unlikely to believe that story, Emery suggested returning to the "screwdriver in the parking lot story." Faced with these conversations, Quinn reasonably believed that Emery intended to commit perjury. Because of this, he threatened to leave the courtroom if Emery insisted on testifying.
43 In addition, Quinn believed that Emery would not stand up well to cross-examination, that the jury would not believe him, and that his testimony would negate the defense theory of mistaken identity. Quinn's co-counsel agreed with his assessment of the wisdom of testifying but did not threaten to leave the courtroom.
44 The night before Emery would have testified, his counsel finally managed to convince him not to do so. At trial the next day, Quinn engaged in a lengthy colloquy with Emery, explaining to him that he had the right to testify regardless of counsel's advice. Emery stated on the record that he understood his rights and that he was voluntarily declining to testify.
B.
45 The state habeas court made a factual finding that Emery understood his rights and that Quinn's threats did not coerce Emery into not testifying. Absent a procedural defect in the state habeas proceeding, the state court's factual findings are presumed to be correct unless they are "not fairly supported by the record." 28 U.S.C.A. § 2254(d)(8) (West 1994). Although Emery makes the bold statement that the record is devoid of evidence that his decision about testifying was not based on Quinn's "threat," we note that this factual finding is supported not only by Quinn's affidavit but by Emery's own statements under oath.9
46 Our review of the record reveals a great deal of evidence that Emery understood his right to testify and that his decision not to do so was based on Quinn's persuasion and not his coercion. In addition to the statements of Quinn and Emery, we note that Quinn's absence during Emery's testimony would have caused him little harm, as Quinn's co-counsel intended to remain in the courtroom and perform the defense duties. There also is considerable evidence in the record that Emery was very strong-willed and unlikely to allow his decisions to be controlled by pressure from other persons.
47 Because we find sufficient support in the record, we are bound by the state court's factual findings. Considering that Emery understood his right to testify and that Quinn's actions did not coerce him into not doing so, Emery's right to testify was not violated.
V.
48 Emery makes a half-hearted argument, based on Penry v. Lynaugh, 492 U.S. 302, 109 S.Ct. 2934, 106 L.Ed.2d 256 (1989), that the Texas sentencing scheme, as applied through the jury instructions, was unconstitutional because it prevented the jury from considering evidence of the abuse he suffered as a child. Instructional error of this sort does not amount to a constitutional violation "unless there is a reasonable likelihood that the jury applied the challenged instruction in a way that prevents the consideration of constitutionally relevant mitigating evidence." Lackey v. Scott, 28 F.3d 486, 489 (5th Cir.1994) (quoting Johnson v. Texas, 509 U.S. 350, 367, 113 S.Ct. 2658, 2668-69, 125 L.Ed.2d 290 (1993)) (internal quotation marks omitted). Furthermore, the mitigating evidence "must demonstrate a 'uniquely severe permanent handicap[ ] with which the defendant was burdened through no fault of his own.' " Turner v. Johnson, 106 F.3d 1178, 1189 (5th Cir.1997) (quoting Graham v. Collins, 950 F.2d 1009, 1029 (5th Cir.1992) (en banc), aff'd, 506 U.S. 461, 113 S.Ct. 892, 122 L.Ed.2d 260 (1993)).
49 Whatever faults may have existed in the death penalty scheme that Texas maintained prior to 1991, see TEX.CODE CRIM. PROC. ANN art. 37.071(b) (Vernon 1981 & Supp.1991) (amended 1991) (current version at TEX.CODE CRIM. PROC. ANN. art. 37.071(b)-(e) (Vernon Supp.1997)),10 the trial court had the benefit of Penry and correctly modified its instruction to comport with the Supreme Court's decision. Specifically, the court instructed the jury:
50 [Y]our answers to the Special Issues, which determine the punishment to be assessed the defendant by the court, should be reflective of your finding as to the personal moral culpability of the defendant in this case.
51 When you deliberate about the questions posed in the Special Issues, you are to consider any mitigating circumstances supported by the evidence presented in both phases of the trial. A mitigating circumstance may be any aspect of the defendant's background, character, and record, or circumstances of the crime, which you believe makes a sentence of death inappropriate in this case. If you find that there are any mitigating circumstances, you must decide how much weight they deserve and give them effect when you answer the special issues. If you determine, in consideration of this evidence, that a life sentence, rather than a death sentence, is an appropriate response to the personal moral culpability of the defendant, you are instructed to answer the Special Issue under consideration "No".
52 This instruction allowed the jury to consider any appropriate mitigating circumstance, including a history of child abuse, and required the jury not to sentence Emery to death if a life sentence was appropriate in light of his moral culpability. The instruction adequately addressed the Court's concerns about Texas's death penalty scheme by giving the jury the ability to consider any appropriate mitigating circumstance.
53 Accordingly, the judgment is AFFIRMED, and the stay of execution is VACATED.
ON PETITION FOR REHEARING April 15, 1998 PER CURIAM:
54 On petition for rehearing, Emery urges us to reconsider our determination that the claims that he did not present in his first state habeas application are procedurally barred by Texas's common-law abuse-of-the-writ doctrine. In support of his contention that the common-law doctrine does not procedurally bar federal review of these claims, Emery offers a single published case, Ex Parte Fierro, 934 S.W.2d 370 (Tex.Crim.App.1996), cert. denied, --- U.S. ----, 117 S. Ct. 2517, 138 L.Ed.2d 1019 (1997), in which the Texas Court of Criminal Appeals (TCCA) addressed the merits of a successive habeas application, and a number of unpublished decisions of the TCCA in which he contends that the court addressed a habeas petitioner's claims on the merits even though the claims were presented for the first time in a successive habeas application.* We conclude that these cases do not undermine our determination that Texas's common-law abuse-of-the-writ doctrine constitutes a state ground adequate to bar federal review of the claims that Emery did not present in his first state habeas petition.
55 We note as an initial matter that Emery contends in his petition for rehearing that, in evaluating the adequacy of a state procedural rule, "the proper point in time for determining whether a procedural rule was firmly established and regularly followed is 'the time of [the] purported procedural default.' " (quoting Fields v. Calderon, 125 F.3d 757, 760 (9th Cir.1997) (internal quotation marks omitted), cert. denied, --- U.S. ----, 118 S.Ct. 1826, 140 L.Ed.2d 962 (1998)). We also note that Emery bears the burden of proving that Texas did not apply the doctrine with sufficient strictness and regularity during the relevant time period. See Stokes v. Anderson, 123 F.3d 858, 860 (5th Cir.1997), cert. denied, --- U.S. ----, 118 S.Ct. 1091, 140 L.Ed.2d 147 (1998); Martin v. Maxey, 98 F.3d 844, 847 (5th Cir.1996). Assuming arguendo that Emery's view of the law is correct, we conclude, for the reasons set forth below, that Texas strictly and regularly applied its common-law abuse-of-the-writ doctrine at the time of Emery's procedural default, that is, at the time that he failed to include all of the claims for which he seeks federal review in his first state habeas application.
56 In Fearance v. Scott, 56 F.3d 633 (5th Cir.1995), a panel of this court acknowledged that, in the past, Texas courts had not applied the common-law abuse-of-the-writ doctrine with sufficient strictness and regularity to render the doctrine an adequate ground for barring later federal habeas review of a constitutional claim. See id. at 642 (citing Lowe v. Scott, 48 F.3d 873, 876 (5th Cir.1995)). However, the panel held that, as of the TCCA's decision in Ex Parte Barber, 879 S.W.2d 889 (Tex.Crim.App.1994), the common-law abuse-of-the-writ doctrine was applied with sufficient strictness and regularity to render the doctrine an adequate state ground. Fearance, 56 F.3d at 642. Fearance thus stands for the proposition that, at least with respect to the time period between February 23, 1994, the date that the TCCA decided Barber, until June 18, 1995, the date that this court decided Fearance, Texas applied its common-law abuse-of-the-writ doctrine with sufficient strictness and regularity to render it an adequate state ground. We are bound to accept this conclusion. See Narvaiz v. Johnson, 134 F.3d 688, 694 (5th Cir.1998) ("It is more than well-established that, in this circuit, one panel may not overrule the decision, right or wrong, of a prior panel in the absence of en banc reconsideration or superseding decision of the Supreme Court." (internal quotation marks and brackets omitted)).
57 Emery filed his first state habeas application on July 5, 1995, and the TCCA denied relief on August 1, 1995. In his petition for rehearing, Emery cites no cases decided between the date that this court decided Fearance and the date that he filed his first habeas application in which the TCCA addresses the merits of an abusive application. He cites only one such case--Ex Parte Gibbs, Writ No. 23,624-02 (Tex.Crim.App. July 15, 1995)--decided between the date we decided Fearance and the date that the TCCA denied relief on his first habeas application. Even if we assume that, up until the date that the TCCA denied relief on his first habeas petition, Emery could have amended his application so as to present the claims for which he now seeks federal review, thereby avoiding a procedural default, Emery has not demonstrated that Texas failed to apply its common-law abuse-of-the-writ doctrine with sufficient strictness and regularity to render it an adequate state ground as of the time of Emery's procedural default. We have held that "an occasional act of grace by a state court in excusing or disregarding a state procedural rule does not render the rule inadequate." Amos v. Scott, 61 F.3d 333, 342 (5th Cir.1995).** As such, Emery's presentation of a single case decided between the date of Fearance and the date the TCCA denied relief on his first habeas application cannot establish the inadequacy of Texas's common-law abuse-of-the-writ doctrine during the time period that Emery contends is germane to the determination of whether federal review of his claims is barred by an adequate and independent state ground. Accordingly, we DENY Emery's petition for rehearing.
1 In Texas, all post-conviction habeas petitions are decided by the Court of Criminal Appeals. See TEX.CODE CRIM. PROC. ANN. art 11.07, § 2(a) (Vernon Supp.1994) (amended 1995) (current version at TEX.CODE CRIM. PROC. ANN. art 11.07, § 3 (Vernon Supp.1997)). When a habeas petition requires the resolution of questions of fact, the state trial court that rendered the conviction performs the fact-finding function. See id. § 2(c). The decision whether to issue the writ still remains with the Court of Criminal Appeals
2 Section 102 of the Antiterrorism and Effective Death Penalty Act ("AEDPA") of 1996, Pub.L. No. 104-132, 110 Stat. 1214, 1217-18 (1996), amended 28 U.S.C. § 2253 to require a "certificate of appealability" before a final order in a habeas proceeding can be appealed. Because Emery filed his habeas petition in 1995, well before the effective date of the AEDPA, this new requirement does not apply to him, and the grant of a CPC is sufficient to vest jurisdiction in this court. See Shute v. Texas, 117 F.3d 233, 236 n. 1 (5th Cir.1997) (on rehearing). Similarly, the new standards of review contained in § 104 of the AEDPA, 110 Stat. at 1218-19, do not apply to this petition. See Green v. Johnson, 116 F.3d 1115, 1119-20 (5th Cir.1997)
3 Article 11.071 applies only to capital cases, but TEX.CODE CRIM. PROC. ANN. art. 11.07, § 4 (Vernon Supp.1997), adopts the same rule for non-capital felony convictions
4 If the state does not plead procedural default in the district court, it is waived. See United States v. Marcello, 876 F.2d 1147, 1153 (5th Cir.1989). We have recognized a limited exception to this rule when one state implicitly waives the default of a different state's procedural rule. See Trest v. Whitley, 94 F.3d 1005, 1007-09 & n. 2 (5th Cir.1996), cert. granted sub nom. Trest v. Cain, --- U.S. ----, 117 S.Ct. 1842, 137 L.Ed.2d 1046 (1997). Although the district court did not rely on the abuse-of-the-writ doctrine in finding a procedural default, the state urged this ground both on appeal and before the district court
5 Emery filed a motion to certify to the Court of Criminal Appeals certain questions concerning the interpretation and application of article 11.071. Because our decision does not rely on that article, we deny this motion as moot
6 Although Murphy v. Johnson, 110 F.3d 10 (5th Cir.1997) and Carter were influenced by our erroneous view of the applicability of the AEDPA to cases pending when the act became effective, they remain precedent to the extent that they " 'do[ ] not conflict with Lindh 's conclusion that the chapter 153 amendments do not apply retroactively.' " Tucker, 115 F.3d 276, 280 n. 4 (quoting Green, 116 F.3d at 1120 n. 2). See Lindh v. Murphy, --- U.S. ----, 117 S.Ct. 2059, 138 L.Ed.2d 481 (1997)
7 See TEX.R.CRIM. EVID. 106 ("When a writing or recorded statement or part thereof is introduced by a party, an adverse party may at that time introduce any other part or any other writing or recorded statement which ought in fairness to be considered contemporaneously with it."); TEX.R.CRIM. EVID. 107 ("When part of an act, declaration, conversation, writing or recorded statement is given in evidence by one party, the whole on the same subject may be inquired into by the other....")
8 Cf. Romero v. Lynaugh, 884 F.2d 871, 879 (5th Cir.1989) (holding that a prisoner failed to establish prejudice from the admission of cumulative evidence)
9 Emery also argues that the state habeas court's factual finding should be disregarded because "[i]t ignores the perjury sponsored by trial counsel at trial." Emery suggests that Quinn suborned perjury by asking Emery whether anyone had coerced him into not testifying, knowing that he would say he had not been coerced. Of course, Emery's argument assumes its conclusion. If, as the state habeas court found, Quinn did not coerce Emery into testifying, Quinn did not suborn (and Emery did not commit) perjury
10 Texas modified its death penalty procedures to comply with Penry 's teachings. See TEX.CODE CRIM. PROC. ANN. art 37.071 (Vernon Supp.1997). Although the relevant amendment became effective September 1, 1991, and the charge on punishment was given November 26, 1991, the amendment applied only to offenses committed before the effective date of the act. See Act of June 16, 1991, 72d Leg., R.S., ch. 838, § 5, 1991 Tex. Sess. Law Serv. 2898, 2901 (Vernon)
* Emery cites the following cases: Ex Parte Banks, Writ No. 13,568-03 (Tex.Crim.App. Jan. 10, 1996); Ex Parte Gibbs, Writ No. 23,624-02 (Tex.Crim.App. July 15, 1995); Ex Parte Burdine, Writ No. 16,725-06 (Tex.Crim.App. Apr. 6, 1995); Ex Parte Goodwin, Writ No. 25,290-02 (Tex.Crim.App. Jan. 27, 1995); Ex Parte Mata, Writ No. 8,937-02 (Tex.Crim.App. Jan. 27, 1995); Ex Parte Marquez, Writ No. 17,898-03 (Tex.Crim.App. Jan. 13, 1995). In all of these cases, the Texas Court of Criminal Appeals summarily denied relief. We assume without deciding that such summary disposition constituted a resolution of the cases solely on the merits
** Additionally, because the Gibbs opinion merely consists of a one-page order summarily denying relief, it is unclear whether that case even involved claims similar to the ones that Emery seeks to have us review. "Because [Emery] has not demonstrated that the TCCA [did] not strictly or regularly apply the [abuse-of-the-writ doctrine] to claims identical or similar to his ... claim[s], we are convinced that the rule is an adequate state-law ground," at least with respect to the time period to which Emery urges us to look in evaluating the strictness and regularity of the rule's application. Amos, 61 F.3d at 340-41 | 04-25-2010 | [
"139 F.3d 191 Jeff EMERY, Petitioner-Appellant,v.Gary L. JOHNSON, Director, Texas Department of CriminalJustice, Institutional Division, Respondent-Appellee. No. 96-20826. United States Court of Appeals,Fifth Circuit. Sept. 10, 1997.On Petition for Rehearing April 15, 1998. Thomas Donald Moran, Leora Teicher Kahn, Schneider & McKinney, Houston, TX, for Petitioner-Appellant. Meredith Anne Martinez, Assistant Attorney General, Austin, TX, for Respondent-Appellee. Appeal from the United States District Court for the Southern District of Texas. Before KING, SMITH and BENAVIDES, Circuit Judges. JERRY E. SMITH, Circuit Judge: 1 Jeff Emery, proceeding in forma pauperis, appeals the denial of his petition for writ of habeas corpus. Concluding that several of his claims are barred by procedural default and that the others are without merit, we affirm and vacate the stay of execution.",
"I. A. 2 One day in 1979, LaShan Muhlinghaus returned to her apartment and undressed. Unbeknownst to her, Emery, an accomplished burglar, had entered her apartment using a stolen pass key. When Muhlinghaus entered the apartment, Emery hid in her roommate's closet. 3 Muhlinghaus went into her roommate's bedroom to return a dress she had borrowed. Emery attacked Muhlinghaus, stabbing her twenty-five times. After she was dead, Emery had sexual intercourse with her body. The police did not find any evidence that Emery stole anything.",
"4 Emery returned to the house where he lived with his wife, Deborah Emery (\"Deborah\"). After showering and disposing of his blood-stained knife and clothes, Emery drove to the scene of the crime with Deborah to observe the police investigation. Emery confessed his actions to his wife and later to James Smith, his foster brother, and Marie Michaeloff. 5 Emery assaulted his wife at least every other day. Although he usually hit her with his fists, he occasionally used a metal bar, ashtrays, nicknacks, and lighters. He also would pound her head on the bathtub.",
"At least once, he hit her child, who was a toddler, across the room. Finally, in July 1982, Deborah began divorce proceedings. Five months later, she reported Emery's crimes to the police. B. 6 Emery was convicted of capital murder during the commission of a burglary, see TEX. PEN.CODE ANN. § 19.03(a)(2) (Vernon 1994), and was sentenced to death in 1986. The Texas Court of Criminal Appeals reversed because portions of the trial transcript had been stolen. See Emery v. Texas, 800 S.W.2d 530 (Tex.Crim.App.1990) (en banc). 7 The state retried Emery and obtained a second conviction, whereupon the jury sentenced him to death in 1991. On appeal, Emery unsuccessfully argued, inter alia, that the jury instructions at the penalty phase were inadequate because they did not allow the jury to consider all relevant mitigating evidence. See Emery v. Texas, 881 S.W.2d 702, 711-12 (Tex.Crim.App.1994), cert. denied, 513 U.S. 1192, 115 S.Ct. 1257, 131 L.Ed.2d 137 (1995).",
"C. 8 In 1995, Emery filed his first state habeas petition, arguing, inter alia, that his right to testify on his own behalf had been denied and that his counsel rendered ineffective assistance by opening the door to the admission of his confession to Deborah and his history of burglary and by not objecting to the introduction of evidence that he slapped his wife. The state habeas trial court conducted an evidentiary hearing and issued various findings of fact.1 The Texas Court of Criminal Appeals denied the habeas petition on the merits in August 1995.",
"9 In November 1995, Emery filed a second state habeas petition, raising several new issues, including general challenges to Texas's death penalty scheme and new claims of ineffective assistance based on counsel's having convinced Emery not to testify and having not objected to a particular part of the jury charge. While that petition was pending, Emery filed the instant federal habeas petition. 10 Texas follows the rule that a state prisoner may seek habeas relief in state or federal court, but not both. Consequently, the Texas courts refuse to consider a habeas petition while a federal petition is pending. See Ex parte Green, 548 S.W.2d 914, 916 (Tex.Crim.App.1977). In February 1996, the Court of Criminal Appeals invoked this principle and dismissed Emery's second state habeas petition.",
"In August 1996, the federal district court denied Emery relief on all his claims but granted a certificate of probable cause (\"CPC\") to appeal. See Emery v. Johnson, 940 F.Supp. 1046, 1065 (S.D.Tex.1996).2 II. A. 11 Our analysis of the claims that Emery raised only in his second state habeas petition is complicated by the doctrine of procedural default. A federal court may not consider a state prisoner's constitutional claim if the state courts based their rejection of that claim on an adequate and independent state ground. See Martin v. Maxey, 98 F.3d 844, 847 (5th Cir.1996). It is not always easy, however, to determine whether a state court decision denying collateral relief is based on state procedural grounds or, instead, on the court's interpretation of federal law. The Supreme Court has supplied us with a useful default rule: We will not apply a procedural default unless the last state court to consider a particular claim \"clearly and expressly\" relied on an independent and adequate state ground.",
"Coleman v. Thompson, 501 U.S. 722, 735, 111 S.Ct. 2546, 2557, 115 L.Ed.2d 640 (1991). 12 This default rule does not apply, however, \"if the petitioner failed to exhaust state remedies and the court to which the petitioner would be required to present his claims in order to meet the exhaustion requirement would now find the claims procedurally barred.\" Id. at 735 n. 1, 111 S.Ct. at 2557 n. 1. In such a case, \"there is a procedural default for purposes of federal habeas regardless of the decision of the last state court to which the petitioner actually presented his claims.\" Id. B. 1.",
"13 The federal district court reasoned that Emery's claims were procedurally barred because, if he tried to exhaust them in a proper manner, they would be barred by TEX.CODE CRIM. PROC. ANN. art. 11.071, § 5(a) (Vernon Supp.1997), which prohibits the filing of subsequent or untimely habeas applications, absent cause or actual innocence.3 See Ex parte Davis, 947 S.W.2d 216 (Tex.Crim.App.1996) (en banc) (upholding the constitutionality of article 11.071). In a habeas context, we review the district court's determinations of law de novo and its findings of facts for clear error.",
"See Dison v. Whitley, 20 F.3d 185, 186 (5th Cir.1994). 14 Because article 11.071 is a new statute that is largely uninterpreted by state cases, we instead consider whether we should affirm on the basis of the abuse-of-the-writ doctrine. We may affirm a judgment on any ground supported by the record. See Mangaroo v. Nelson, 864 F.2d 1202, 1204 n. 2 (5th Cir.1989).4 15 A second habeas petition is an abuse of the writ if the prisoner urges grounds that could have been, but were not, raised in his first habeas petition. See Russell v. Collins, 944 F.2d 202, 205 (5th Cir.1991) (per curiam). Such a doctrine, which the federal courts recognize, encourages efficient justice by requiring a prisoner to present all claims for relief at once.",
"See McCleskey v. Zant, 499 U.S. 467, 493, 111 S.Ct. 1454, 1469-70, 113 L.Ed.2d 517 (1991). The Texas courts have recognized this doctrine for over twenty years. See, e.g., Ex parte Carr, 511 S.W.2d 523, 525-26 (Tex.Crim.App.1974). 16 An abuse of the writ can qualify as a procedural bar. See Murch v. Mottram, 409 U.S. 41, 45-46, 93 S.Ct. 71, 73-74, 34 L.Ed.2d 194 (1972) (per curiam). A procedural bar is not adequate, however, unless it is applied \"strictly or regularly\" to the \"vast majority of similar claims.\" Amos v. Scott, 61 F.3d 333, 339 (5th Cir. ), cert. denied, 516 U.S. 1005, 116 S.Ct.",
"557, 133 L.Ed.2d 458 (1995). Historically, Texas courts have failed to apply the abuse-of-the-writ-doctrine in a strict or regular manner, and, therefore, we have refused to honor it. See Lowe v. Scott, 48 F.3d 873, 876 (5th Cir.1995). 17 This changed in 1994, when the Texas Court of Criminal Appeals announced the adoption of a strict abuse-of-the-writ-doctrine, tempered only by an exception for cause. See Ex parte Barber, 879 S.W.2d 889, 891 n. 1 (Tex.Crim.App.1994) (en banc) (plurality opinion). Barber represents an adequate procedural bar for purposes of federal habeas review. See Fearance v. Scott, 56 F.3d 633, 642 (5th Cir.1995). 18 Emery has not cited any post-Barber case allowing an abusive writ, and our research has revealed none. Therefore, we are bound to follow Fearance and to hold that Emery's violation of Texas's abuse-of-the-writ-doctrine constitutes an independent and adequate procedural bar to our consideration of his barred claims.5 2. 19 A petitioner may overcome a procedural default by showing cause and prejudice for that default. See Tucker v. Johnson, No.",
"97-20101 (5th Cir. July 2, 1997) (on petition for rehearing). Emery argues that his failure to anticipate the passage of article 11.071 constitutes cause for his failure to plead all his grounds for relief in his first habeas petition. 20 Emery filed his first state habeas petition in July 1995, over one year after Barber was decided, so he cannot claim ignorance of his duty to plead all his grounds for relief during his first petition for collateral review. Therefore, he has shown no cause for his violation of Texas's abuse of the writ doctrine. III.",
"A. 21 Emery raises several ineffective-assistance-of-counsel claims. To establish ineffective assistance, he must demonstrate both deficient performance by his counsel and prejudice resulting from that deficiency. See Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 2064, 80 L.Ed.2d 674 (1984). 22 We compare counsel's performance to an objective standard of reasonableness, mindful of the strong presumption of adequacy. We will not find inadequate representation merely because, with the benefit of hindsight, we disagree with counsel's strategic choices. See Garland v. Maggio, 717 F.2d 199, 206 (5th Cir.1983) (on petition for rehearing).",
"To establish prejudice, Emery must demonstrate that counsel's errors \"render the verdict fundamentally unfair or unreliable.\" Carter v. Johnson, 110 F.3d 1098, 1110 (5th Cir.1997).6 Specifically, he must \"show a 'reasonable probability' that the jury would have otherwise harbored a reasonable doubt concerning guilt.\" Id. B. 1. 23 Emery's first ineffectiveness claim concerns his counsel's questioning Deborah about his confession, thus waiving the marital privilege, see TEX.R.CRIM. EVID. 504(1), and allowing the admission of the confession. Explaining this claim requires some exploration of its factual background. 24 Under Texas law, the marital privilege extends only to confidential communications, not observed acts. See Sterling v. Texas, 814 S.W.2d 261, 261-62 (Tex.App.--Austin 1991, writ ref'd) (per curiam). Deborah testified that Emery returned to the house shortly after the murder with a blood-stained knife and blood-stained underpants and \"had blood on his arms, smeared on his arms and his hands, on his shirt, and his pants, and some on his work boot.\"",
"She testified that Emery drove her to the site of the murder to watch the investigation and that Emery told James Smith that he had killed a man in Texas and instructed Smith to request verification from Debbie. 25 Impeaching this testimony was vital to Emery's defense of mistaken identity. John Quinn, his counsel, feared that an effective cross-examination would open the door to Deborah's testimony about Emery's confession. Furthermore, at that time, Emery still intended to testify. Quinn feared that Emery would make statements that would waive the privilege and allow the admission of the confession.",
"26 To be successful, the mistaken-identity theory required the defense to obtain a high degree of credibility with the jury. Consequently, one of counsel's strategic priorities was to be honest and straightforward. Accordingly, Quinn wanted to introduce, and lessen the impact of, any incriminating evidence that the prosecution might present. 2. 27 Emery argues that Quinn was incorrect in his belief (1) that Emery would testify and (2) that an effective cross-examination would open the door to the admission of Emery's confession. It is difficult to determine whether Quinn was correct in the latter belief. The record reveals that the most effective portion of the cross-examination was Quinn's careful and detailed analysis of the inconsistencies among Deborah's various statements to the police. Whether the Texas Rules of Criminal Evidence7 would have required the admission of Deborah's entire statement, including her report of Emery's confession, is an open question.",
"28 We need not resolve this issue of state evidentiary law. The Sixth Amendment does not guarantee criminal defendants the right to error-free representation. See Skillern v. Estelle, 720 F.2d 839, 851 (5th Cir.1983). Standing alone, counsel's erroneous judgment, if any, about the requirements of state law does not constitute deficient performance unless it is so unreasonable that it rebuts the strong presumption that counsel's performance \"falls within the wide range of reasonable professional assistance.\" Washington, 466 U.S. at 689, 104 S.Ct. at 2065. 29 Quinn's judgment that an effective cross-examination of Deborah would have been impossible without opening the door to the admission of the confession was reasonable. Similarly, as explained in more detail infra, Quinn's belief that Emery would testify and open the door to that confession also was reasonable.",
"These reasonable judgments, even if ultimately erroneous, satisfy the standard for effective assistance of counsel. 3. 30 In any event, Emery has not demonstrated prejudice. At trial, both Smith and Michaeloff testified that Emery had confessed to them. Although Emery originally told Smith that he had stabbed a man, he later identified Muhlinghaus in a picture. Michaeloff recounted a confession that was far more detailed and accurate than that reported by Deborah. 31 In short, Deborah's testimony about the confession was duplicative of testimony given by Smith and Michaeloff. Emery cannot demonstrate that a third source of the same confession would have sufficed to change the result of his trial.8 The lack of prejudice is an alternative ground for denying Emery relief on this claim. C. 32 Emery's second ineffectiveness claim is akin to the first. Quinn questioned Deborah about Emery's practice of committing pass key burglaries, opening the door to Mitchell McGrady's testimony about Emery's stealing quarters and televisions.",
"Emery argues that, by opening the door to the admission of this evidence of an extraneous act, Quinn rendered ineffective assistance. 33 According to Emery's affidavit, he intended to testify about his criminal history as a pass key burglar. His theory was that, as an experienced burglar, he would not have entered Muhlinghaus's home, as it contained nothing worth stealing. At the time that Deborah testified, Emery still intended to take the stand. 34 As mentioned above, Quinn's trial strategy required him to maintain credibility by not appearing to have anything to hide. Furthermore, Quinn reasonably believed that it was better strategy to vet damaging information himself, rather than allowing the prosecution to introduce it. It is not our province, on habeas review, to second-guess counsel's strategic choices.",
"35 Finally, Emery argues that Quinn was ineffective for not requesting a limiting instruction for this evidence. We must reject this argument, as the state trial court stated that it would not have granted such a limiting instruction, because the defense introduced the evidence. Although Emery argues that this is an incorrect interpretation of state law, \"it is not the province of a federal habeas court to reexamine state-court determinations on state-law questions.\" Estelle v. McGuire, 502 U.S. 62, 67-68, 112 S.Ct. 475, 479-80, 116 L.Ed.2d 385 (1991). D. 36 Emery's third ineffectiveness claim concerns Quinn's failure to object when the prosecution questioned McGrady about Emery's slapping Deborah. This claim is easily dismissed. 37 As we have explained, a successful defense required impeaching Deborah's testimony. Part of the cross-examination centered on Deborah's delay in reporting Emery's crime. Deborah stated that the delay was caused by her fear of Emery.",
"Consequently, Emery's slapping Deborah was admissible to show the reasonableness of her fear. Objection to its admission would have been futile, and failure to assert a meritless objection cannot be grounds for a finding of deficient performance. See Clark v. Collins, 19 F.3d 959, 966 (5th Cir.1994). 38 Regarding Quinn's failure to request a limiting instruction that this evidence not be considered for general criminal propensity, Emery has not even argued that the lack of that instruction rendered the trial fundamentally unfair or unreliable. We conclude that Emery was not prejudiced by this failure.",
"IV. A. 39 Emery alleges that he was denied the right to testify at trial. A criminal defendant has a constitutional right to testify on his own behalf. See Rock v. Arkansas, 483 U.S. 44, 49-53, 107 S.Ct. 2704, 2707-10, 97 L.Ed.2d 37 (1987). This right can be waived only by the defendant, not by his counsel. See United States v. Teague, 953 F.2d 1525, 1532 (11th Cir.1992) (en banc). A waiver of this right must be knowing and voluntary.",
"See United States v. Blum, 65 F.3d 1436, 1444 (8th Cir.1995), cert. denied, 516 U.S. 1097, 116 S.Ct. 824, 133 L.Ed.2d 767 (1996). 40 Emery did not testify at his first trial. Because he was convicted there, he was convinced that he should do everything in the second trial differently. At the beginning of the trial, he informed his counsel that he wished to testify. 41 Emery and Quinn discussed his testimony several times during the trial. Emery told Quinn radically different versions of what happened the night of the murder. For example, at one point, he told Quinn that he had stabbed a black male using a screwdriver to break into Emery's car, and that was why he was covered with blood. 42 Somewhat later, Emery informed Quinn that he had met Muhlinghaus in a bar and eventually had an affair with her. He stated that he killed her to prevent her from exposing the adultery to his wife.",
"When Quinn informed him that the jury was unlikely to believe that story, Emery suggested returning to the \"screwdriver in the parking lot story.\" Faced with these conversations, Quinn reasonably believed that Emery intended to commit perjury. Because of this, he threatened to leave the courtroom if Emery insisted on testifying. 43 In addition, Quinn believed that Emery would not stand up well to cross-examination, that the jury would not believe him, and that his testimony would negate the defense theory of mistaken identity. Quinn's co-counsel agreed with his assessment of the wisdom of testifying but did not threaten to leave the courtroom. 44 The night before Emery would have testified, his counsel finally managed to convince him not to do so.",
"At trial the next day, Quinn engaged in a lengthy colloquy with Emery, explaining to him that he had the right to testify regardless of counsel's advice. Emery stated on the record that he understood his rights and that he was voluntarily declining to testify. B. 45 The state habeas court made a factual finding that Emery understood his rights and that Quinn's threats did not coerce Emery into not testifying. Absent a procedural defect in the state habeas proceeding, the state court's factual findings are presumed to be correct unless they are \"not fairly supported by the record.\" 28 U.S.C.A. § 2254(d)(8) (West 1994). Although Emery makes the bold statement that the record is devoid of evidence that his decision about testifying was not based on Quinn's \"threat,\" we note that this factual finding is supported not only by Quinn's affidavit but by Emery's own statements under oath.9 46 Our review of the record reveals a great deal of evidence that Emery understood his right to testify and that his decision not to do so was based on Quinn's persuasion and not his coercion.",
"In addition to the statements of Quinn and Emery, we note that Quinn's absence during Emery's testimony would have caused him little harm, as Quinn's co-counsel intended to remain in the courtroom and perform the defense duties. There also is considerable evidence in the record that Emery was very strong-willed and unlikely to allow his decisions to be controlled by pressure from other persons. 47 Because we find sufficient support in the record, we are bound by the state court's factual findings.",
"Considering that Emery understood his right to testify and that Quinn's actions did not coerce him into not doing so, Emery's right to testify was not violated. V. 48 Emery makes a half-hearted argument, based on Penry v. Lynaugh, 492 U.S. 302, 109 S.Ct. 2934, 106 L.Ed.2d 256 (1989), that the Texas sentencing scheme, as applied through the jury instructions, was unconstitutional because it prevented the jury from considering evidence of the abuse he suffered as a child. Instructional error of this sort does not amount to a constitutional violation \"unless there is a reasonable likelihood that the jury applied the challenged instruction in a way that prevents the consideration of constitutionally relevant mitigating evidence.\" Lackey v. Scott, 28 F.3d 486, 489 (5th Cir.1994) (quoting Johnson v. Texas, 509 U.S. 350, 367, 113 S.Ct.",
"2658, 2668-69, 125 L.Ed.2d 290 (1993)) (internal quotation marks omitted). Furthermore, the mitigating evidence \"must demonstrate a 'uniquely severe permanent handicap[ ] with which the defendant was burdened through no fault of his own.' \" Turner v. Johnson, 106 F.3d 1178, 1189 (5th Cir.1997) (quoting Graham v. Collins, 950 F.2d 1009, 1029 (5th Cir.1992) (en banc), aff'd, 506 U.S. 461, 113 S.Ct. 892, 122 L.Ed.2d 260 (1993)). 49 Whatever faults may have existed in the death penalty scheme that Texas maintained prior to 1991, see TEX.CODE CRIM. PROC. ANN art. 37.071(b) (Vernon 1981 & Supp.1991) (amended 1991) (current version at TEX.CODE CRIM. PROC. ANN. art. 37.071(b)-(e) (Vernon Supp.1997)),10 the trial court had the benefit of Penry and correctly modified its instruction to comport with the Supreme Court's decision. Specifically, the court instructed the jury: 50 [Y]our answers to the Special Issues, which determine the punishment to be assessed the defendant by the court, should be reflective of your finding as to the personal moral culpability of the defendant in this case.",
"51 When you deliberate about the questions posed in the Special Issues, you are to consider any mitigating circumstances supported by the evidence presented in both phases of the trial. A mitigating circumstance may be any aspect of the defendant's background, character, and record, or circumstances of the crime, which you believe makes a sentence of death inappropriate in this case. If you find that there are any mitigating circumstances, you must decide how much weight they deserve and give them effect when you answer the special issues. If you determine, in consideration of this evidence, that a life sentence, rather than a death sentence, is an appropriate response to the personal moral culpability of the defendant, you are instructed to answer the Special Issue under consideration \"No\". 52 This instruction allowed the jury to consider any appropriate mitigating circumstance, including a history of child abuse, and required the jury not to sentence Emery to death if a life sentence was appropriate in light of his moral culpability. The instruction adequately addressed the Court's concerns about Texas's death penalty scheme by giving the jury the ability to consider any appropriate mitigating circumstance. 53 Accordingly, the judgment is AFFIRMED, and the stay of execution is VACATED.",
"ON PETITION FOR REHEARING April 15, 1998 PER CURIAM: 54 On petition for rehearing, Emery urges us to reconsider our determination that the claims that he did not present in his first state habeas application are procedurally barred by Texas's common-law abuse-of-the-writ doctrine. In support of his contention that the common-law doctrine does not procedurally bar federal review of these claims, Emery offers a single published case, Ex Parte Fierro, 934 S.W.2d 370 (Tex.Crim.App.1996), cert.",
"denied, --- U.S. ----, 117 S. Ct. 2517, 138 L.Ed.2d 1019 (1997), in which the Texas Court of Criminal Appeals (TCCA) addressed the merits of a successive habeas application, and a number of unpublished decisions of the TCCA in which he contends that the court addressed a habeas petitioner's claims on the merits even though the claims were presented for the first time in a successive habeas application. * We conclude that these cases do not undermine our determination that Texas's common-law abuse-of-the-writ doctrine constitutes a state ground adequate to bar federal review of the claims that Emery did not present in his first state habeas petition. 55 We note as an initial matter that Emery contends in his petition for rehearing that, in evaluating the adequacy of a state procedural rule, \"the proper point in time for determining whether a procedural rule was firmly established and regularly followed is 'the time of [the] purported procedural default.'",
"\" (quoting Fields v. Calderon, 125 F.3d 757, 760 (9th Cir.1997) (internal quotation marks omitted), cert. denied, --- U.S. ----, 118 S.Ct. 1826, 140 L.Ed.2d 962 (1998)). We also note that Emery bears the burden of proving that Texas did not apply the doctrine with sufficient strictness and regularity during the relevant time period. See Stokes v. Anderson, 123 F.3d 858, 860 (5th Cir.1997), cert. denied, --- U.S. ----, 118 S.Ct. 1091, 140 L.Ed.2d 147 (1998); Martin v. Maxey, 98 F.3d 844, 847 (5th Cir.1996). Assuming arguendo that Emery's view of the law is correct, we conclude, for the reasons set forth below, that Texas strictly and regularly applied its common-law abuse-of-the-writ doctrine at the time of Emery's procedural default, that is, at the time that he failed to include all of the claims for which he seeks federal review in his first state habeas application. 56 In Fearance v. Scott, 56 F.3d 633 (5th Cir.1995), a panel of this court acknowledged that, in the past, Texas courts had not applied the common-law abuse-of-the-writ doctrine with sufficient strictness and regularity to render the doctrine an adequate ground for barring later federal habeas review of a constitutional claim.",
"See id. at 642 (citing Lowe v. Scott, 48 F.3d 873, 876 (5th Cir.1995)). However, the panel held that, as of the TCCA's decision in Ex Parte Barber, 879 S.W.2d 889 (Tex.Crim.App.1994), the common-law abuse-of-the-writ doctrine was applied with sufficient strictness and regularity to render the doctrine an adequate state ground. Fearance, 56 F.3d at 642. Fearance thus stands for the proposition that, at least with respect to the time period between February 23, 1994, the date that the TCCA decided Barber, until June 18, 1995, the date that this court decided Fearance, Texas applied its common-law abuse-of-the-writ doctrine with sufficient strictness and regularity to render it an adequate state ground. We are bound to accept this conclusion. See Narvaiz v. Johnson, 134 F.3d 688, 694 (5th Cir.1998) (\"It is more than well-established that, in this circuit, one panel may not overrule the decision, right or wrong, of a prior panel in the absence of en banc reconsideration or superseding decision of the Supreme Court.\" (internal quotation marks and brackets omitted)). 57 Emery filed his first state habeas application on July 5, 1995, and the TCCA denied relief on August 1, 1995. In his petition for rehearing, Emery cites no cases decided between the date that this court decided Fearance and the date that he filed his first habeas application in which the TCCA addresses the merits of an abusive application.",
"He cites only one such case--Ex Parte Gibbs, Writ No. 23,624-02 (Tex.Crim.App. July 15, 1995)--decided between the date we decided Fearance and the date that the TCCA denied relief on his first habeas application. Even if we assume that, up until the date that the TCCA denied relief on his first habeas petition, Emery could have amended his application so as to present the claims for which he now seeks federal review, thereby avoiding a procedural default, Emery has not demonstrated that Texas failed to apply its common-law abuse-of-the-writ doctrine with sufficient strictness and regularity to render it an adequate state ground as of the time of Emery's procedural default. We have held that \"an occasional act of grace by a state court in excusing or disregarding a state procedural rule does not render the rule inadequate.\"",
"Amos v. Scott, 61 F.3d 333, 342 (5th Cir.1995). ** As such, Emery's presentation of a single case decided between the date of Fearance and the date the TCCA denied relief on his first habeas application cannot establish the inadequacy of Texas's common-law abuse-of-the-writ doctrine during the time period that Emery contends is germane to the determination of whether federal review of his claims is barred by an adequate and independent state ground.",
"Accordingly, we DENY Emery's petition for rehearing. 1 In Texas, all post-conviction habeas petitions are decided by the Court of Criminal Appeals. See TEX.CODE CRIM. PROC. ANN. art 11.07, § 2(a) (Vernon Supp.1994) (amended 1995) (current version at TEX.CODE CRIM. PROC. ANN. art 11.07, § 3 (Vernon Supp.1997)). When a habeas petition requires the resolution of questions of fact, the state trial court that rendered the conviction performs the fact-finding function. See id. § 2(c). The decision whether to issue the writ still remains with the Court of Criminal Appeals 2 Section 102 of the Antiterrorism and Effective Death Penalty Act (\"AEDPA\") of 1996, Pub.L. No.",
"104-132, 110 Stat. 1214, 1217-18 (1996), amended 28 U.S.C. § 2253 to require a \"certificate of appealability\" before a final order in a habeas proceeding can be appealed. Because Emery filed his habeas petition in 1995, well before the effective date of the AEDPA, this new requirement does not apply to him, and the grant of a CPC is sufficient to vest jurisdiction in this court. See Shute v. Texas, 117 F.3d 233, 236 n. 1 (5th Cir.1997) (on rehearing). Similarly, the new standards of review contained in § 104 of the AEDPA, 110 Stat. at 1218-19, do not apply to this petition.",
"See Green v. Johnson, 116 F.3d 1115, 1119-20 (5th Cir.1997) 3 Article 11.071 applies only to capital cases, but TEX.CODE CRIM. PROC. ANN. art. 11.07, § 4 (Vernon Supp.1997), adopts the same rule for non-capital felony convictions 4 If the state does not plead procedural default in the district court, it is waived. See United States v. Marcello, 876 F.2d 1147, 1153 (5th Cir.1989). We have recognized a limited exception to this rule when one state implicitly waives the default of a different state's procedural rule. See Trest v. Whitley, 94 F.3d 1005, 1007-09 & n. 2 (5th Cir.1996), cert. granted sub nom. Trest v. Cain, --- U.S. ----, 117 S.Ct. 1842, 137 L.Ed.2d 1046 (1997).",
"Although the district court did not rely on the abuse-of-the-writ doctrine in finding a procedural default, the state urged this ground both on appeal and before the district court 5 Emery filed a motion to certify to the Court of Criminal Appeals certain questions concerning the interpretation and application of article 11.071. Because our decision does not rely on that article, we deny this motion as moot 6 Although Murphy v. Johnson, 110 F.3d 10 (5th Cir.1997) and Carter were influenced by our erroneous view of the applicability of the AEDPA to cases pending when the act became effective, they remain precedent to the extent that they \" 'do[ ] not conflict with Lindh 's conclusion that the chapter 153 amendments do not apply retroactively.' \" Tucker, 115 F.3d 276, 280 n. 4 (quoting Green, 116 F.3d at 1120 n. 2). See Lindh v. Murphy, --- U.S. ----, 117 S.Ct. 2059, 138 L.Ed.2d 481 (1997) 7 See TEX.R.CRIM. EVID. 106 (\"When a writing or recorded statement or part thereof is introduced by a party, an adverse party may at that time introduce any other part or any other writing or recorded statement which ought in fairness to be considered contemporaneously with it.",
"\"); TEX.R.CRIM. EVID. 107 (\"When part of an act, declaration, conversation, writing or recorded statement is given in evidence by one party, the whole on the same subject may be inquired into by the other....\") 8 Cf. Romero v. Lynaugh, 884 F.2d 871, 879 (5th Cir.1989) (holding that a prisoner failed to establish prejudice from the admission of cumulative evidence) 9 Emery also argues that the state habeas court's factual finding should be disregarded because \"[i]t ignores the perjury sponsored by trial counsel at trial.\" Emery suggests that Quinn suborned perjury by asking Emery whether anyone had coerced him into not testifying, knowing that he would say he had not been coerced. Of course, Emery's argument assumes its conclusion. If, as the state habeas court found, Quinn did not coerce Emery into testifying, Quinn did not suborn (and Emery did not commit) perjury 10 Texas modified its death penalty procedures to comply with Penry 's teachings.",
"See TEX.CODE CRIM. PROC. ANN. art 37.071 (Vernon Supp.1997). Although the relevant amendment became effective September 1, 1991, and the charge on punishment was given November 26, 1991, the amendment applied only to offenses committed before the effective date of the act. See Act of June 16, 1991, 72d Leg., R.S., ch. 838, § 5, 1991 Tex. Sess. Law Serv. 2898, 2901 (Vernon) * Emery cites the following cases: Ex Parte Banks, Writ No. 13,568-03 (Tex.Crim.App. Jan. 10, 1996); Ex Parte Gibbs, Writ No. 23,624-02 (Tex.Crim.App. July 15, 1995); Ex Parte Burdine, Writ No. 16,725-06 (Tex.Crim.App. Apr. 6, 1995); Ex Parte Goodwin, Writ No. 25,290-02 (Tex.Crim.App. Jan. 27, 1995); Ex Parte Mata, Writ No. 8,937-02 (Tex.Crim.App. Jan. 27, 1995); Ex Parte Marquez, Writ No.",
"17,898-03 (Tex.Crim.App. Jan. 13, 1995). In all of these cases, the Texas Court of Criminal Appeals summarily denied relief. We assume without deciding that such summary disposition constituted a resolution of the cases solely on the merits ** Additionally, because the Gibbs opinion merely consists of a one-page order summarily denying relief, it is unclear whether that case even involved claims similar to the ones that Emery seeks to have us review.",
"\"Because [Emery] has not demonstrated that the TCCA [did] not strictly or regularly apply the [abuse-of-the-writ doctrine] to claims identical or similar to his ... claim[s], we are convinced that the rule is an adequate state-law ground,\" at least with respect to the time period to which Emery urges us to look in evaluating the strictness and regularity of the rule's application. Amos, 61 F.3d at 340-41"
] | https://www.courtlistener.com/api/rest/v3/opinions/14432/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Greenbaum, J. This action is brought for an annulment of the marriage of the parties herein on the ground that the defendant was an idiot at the time of the marriage. No order has been made requiring a “ copy of the summons to be also delivered, in behalf of the defendant to a person designated in the order,” as provided by section 427 of the Code of Civil Procedure. The only order that was made was one permitting service of the summons on the defendant at the insane asylum at which he was confined and upon the superintendent of the said asylum. The sufnmons was served as directed in the order. A motion is now made by the plaintiff asking that an order be granted appointing a “ .special guardian of the defendant in this action.” It is to be observed that the defendant was confined in the Central Islip State Hospital merely under an ex parte commitment. It is true that section 477a of the Code of Civil Procedure expressly provides that the Supreme Court may appoint a guardian ad litem or special guardian “ for an incompetent person, at any stage in any action or proceeding when it appears to the court necessary for the proper pro*310tection of the rights and interest of such * * * incompetent person,” etc. It is to be observed that section 427 of the Code provides that where the court has reasonable ground to believe that one “ is mentally incapable adequately to protect his rights, although not judicially declared to be incompetent to manage his affairs,” an order may be made “ requiring a copy of the summons to be also delivered, in behalf of the defendant, to a person designated in the order, and that service of the summons should not be deemed complete, until it is so delivered,” thus raising a serious doubt as to whether or not the words “ incompetent person,” referred to under section 477a, are intended to refer to one who has been “-judicially declared to be an incompetent,” the language used in section 427. That section has been construed in American Mortgage Co. v. Dewey, 106 App. Div. 389. The court there held in effect that its provisions should be liberally construed under the broad equity powers of the court, so that the person designated should also be “ required to look after the interest of the alleged incompetent defendant.” An order will not be granted as prayed for, but the plaintiff may submit a proposed order for the appointment of a person, as required by section 427 of the Code, including in the order that the person so designated shall be required to look after the interest of the incompetent, and providing that a copy of said order shall be served upon the incompetent as well as upon the superintendent of the Central Islip State Hospital, the place where the defendant is confined. Ordered accordingly. | 01-08-2022 | [
"Greenbaum, J. This action is brought for an annulment of the marriage of the parties herein on the ground that the defendant was an idiot at the time of the marriage. No order has been made requiring a “ copy of the summons to be also delivered, in behalf of the defendant to a person designated in the order,” as provided by section 427 of the Code of Civil Procedure. The only order that was made was one permitting service of the summons on the defendant at the insane asylum at which he was confined and upon the superintendent of the said asylum. The sufnmons was served as directed in the order. A motion is now made by the plaintiff asking that an order be granted appointing a “ .special guardian of the defendant in this action.” It is to be observed that the defendant was confined in the Central Islip State Hospital merely under an ex parte commitment. It is true that section 477a of the Code of Civil Procedure expressly provides that the Supreme Court may appoint a guardian ad litem or special guardian “ for an incompetent person, at any stage in any action or proceeding when it appears to the court necessary for the proper pro*310tection of the rights and interest of such * * * incompetent person,” etc.",
"It is to be observed that section 427 of the Code provides that where the court has reasonable ground to believe that one “ is mentally incapable adequately to protect his rights, although not judicially declared to be incompetent to manage his affairs,” an order may be made “ requiring a copy of the summons to be also delivered, in behalf of the defendant, to a person designated in the order, and that service of the summons should not be deemed complete, until it is so delivered,” thus raising a serious doubt as to whether or not the words “ incompetent person,” referred to under section 477a, are intended to refer to one who has been “-judicially declared to be an incompetent,” the language used in section 427. That section has been construed in American Mortgage Co. v. Dewey, 106 App.",
"Div. 389. The court there held in effect that its provisions should be liberally construed under the broad equity powers of the court, so that the person designated should also be “ required to look after the interest of the alleged incompetent defendant.” An order will not be granted as prayed for, but the plaintiff may submit a proposed order for the appointment of a person, as required by section 427 of the Code, including in the order that the person so designated shall be required to look after the interest of the incompetent, and providing that a copy of said order shall be served upon the incompetent as well as upon the superintendent of the Central Islip State Hospital, the place where the defendant is confined. Ordered accordingly."
] | https://www.courtlistener.com/api/rest/v3/opinions/5416528/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Case 2:20-cv-02250-MTM Document 13 Filed 01/21/21 Page 1 of 6
1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 David Russell Foote, No. CV-20-02250-PHX-MTM 10 Plaintiff, ORDER 11 v. 12 Stephanie Cook, 13 Defendant. 14 15 Before the Court is Defendant’s Motion to Dismiss (doc. 5), filed November 23, 16 2020. Defendant seeks dismissal of this action under Rule 12(b)(1) of the Federal Rules of 17 Civil Procedure, asserting this Court lacks jurisdiction to hear Plaintiff’s claim. The parties 18 have consented to the jurisdiction of the undersigned United States Magistrate Judge, 19 pursuant to 28 U.S.C. § 636(c). (See docs. 8, 11). For the reasons provided below, the Court 20 concludes Plaintiff has failed to establish this Court has jurisdiction to hear Plaintiff’s 21 claim. Accordingly, Defendant’s motion is granted, and Plaintiff’s Complaint (doc. 1-3, 22 Ex. 1 at 6) is dismissed with leave to amend. 23 I. Background. 24 This action was initially filed in the West Mesa Justice Court on approximately 25 October 5, 2020. (Doc. 1-3, Ex. 1 at 3). Plaintiff alleged in state court that on October 2, 26 2020 Defendant, Plaintiff’s supervisor at the United States Postal Service (“USPS”), “ran 27 her fingernails down my back” during the workday. (Id. at 6). Plaintiff further alleged that 28 he notified Postal Inspectors about what happened, and that a USPS Postal Inspector Case 2:20-cv-02250-MTM Document 13 Filed 01/21/21 Page 2 of 6
1 remained with Plaintiff for the rest of the workday. Plaintiff obtained an Injunction Against 2 Harassment against Defendant in the state proceeding that required Defendant have no 3 contact with Plaintiff except through the legal process. (Id. at 2). 4 On November 20, 2020, Defendant removed1 the state court action to federal court 5 pursuant to 28 U.S.C. § 1442(a)(1), because it is a civil action against a federal employee 6 that alleges an act conducted in the scope of Defendant’s federal employment. (Doc. 1 at 7 2). On November 23, 2020, Defendant filed a Motion to Dismiss (doc. 5) under Fed. R. 8 Civ. P. 12(b)(1). The motion argues that Plaintiff’s action, whether construed as a claim 9 under the Federal Tort Claims Act, 28 U.S.C. § 1346(b) (“FTCA”) or under Title VII of 10 the Civil Rights Act of 1964, 42 U.S.C. § 2000e-16 (“Title VII”), should be dismissed for 11 lack of jurisdiction. Specifically, Defendant argues that the Court lacks jurisdiction to hear 12 an FTCA claim because Plaintiff did not exhaust administrative remedies within USPS 13 before filing this action. (Doc. 5 at 5-6, citing United States v. Varig Airlines, 467 U.S. 14 797, 808 (1984)). Additionally, Defendant argues that the Court lacks jurisdiction to hear 15 the claim as a Title VII action because Plaintiff failed to pursue remedies at the Equal 16 Employment Opportunity Commission (“EEOC”) before proceeding to federal court. 17 (Doc. 5 at 3-4, citing Leong v. Potter, 347 F.3d 1117, 1122 (9th Cir. 2003). 18 Plaintiff received notice required by Rand v. Rowland, 154 F.3d 952 (9th Cir. 1998) 19 informing Plaintiff of the need to respond to the government’s motion, but Plaintiff did not 20 file a response. 21 II. Principles of Law. 22 A complaint survives a Rule 12(b)(6) motion only when it alleges “enough facts to 23 state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 24 544, 570 (2007). Plausibility requires factual content that permits the court to draw a 25 reasonable inference that the defendant is responsible for the misconduct alleged by the 26 1 Although 28 U.S.C. § 1446(b)(1) requires a notice of removal to be filed within thirty 27 (30) days, the clock begins to run only when the state court complaint or a legally sufficient court summons is served on the defendant. Because Plaintiff never served the Complaint 28 on Defendant in the manner prescribed by Ariz. R. Civ. P. 4.1(h)(4) and Fed. R. Civ. P. 4(i), the time limit for removal did not begin to run, and removal to this Court is timely.
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1 plaintiff. “Threadbare recitals of the elements of a cause of action, supported by mere 2 conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 3 A party challenging the Court’s jurisdiction under Rule 12(b)(1) may do so either 4 on the face of the pleadings or by presenting extrinsic evidence for the Court’s 5 consideration. American Video Duplicating, Inc. v. Royal Bank of Canada, No. CV 20- 6 4036-JFW (JPRx), 2020 WL 6882734 at *2 (C.D. Cal. Nov. 20, 2020), citing White v. Lee, 7 227 F.3d 1214, 1242 (9th Cir. 2000). As Defendant does not introduce any additional 8 evidence as part of the motion to dismiss, Defendant’s challenge is a facial attack on the 9 sufficiency of the pleadings. American Video Duplicating, 2020 WL 6882734 at *2. When 10 considering a facial attack on the complaint under Rule 12(b)(1), the Court assumes all of 11 the factual allegations in the complaint are true. Id., citing Wolf v. Strankman, 392 F.3d 12 358, 362 (9th Cir. 2004). Moreover, as Plaintiff is proceeding pro se, the allegations in 13 Plaintiff’s Complaint must be liberally construed. Erickson v. Pardus, 551 U.S. 89, 94 14 (2007). 15 III. Analysis. 16 The Court grants the motion to dismiss. Plaintiff bears the burden of proving 17 subject-matter jurisdiction exists. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 18 375, 377 (1994) (“Federal courts are courts of limited jurisdiction. … It is to be presumed 19 that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary 20 rests upon the party asserting jurisdiction.”) (internal citations omitted); Leeson v. 21 Transamerica Disability Income Plan, 671 F.3d 969, 975 n.12 (9th Cir. 2012) (“[W]hen a 22 federal court concludes that it lacks subject-matter jurisdiction, the court must dismiss the 23 complaint in its entirety.”) (internal citations omitted). 24 A. FTCA Claim. 25 Plaintiff’s claim is barred by sovereign immunity. Suits alleging tortious conduct by 26 federal employees are governed by the FTCA. However, the FTCA did not abrogate the 27 government’s sovereign immunity completely; the FTCA does not apply to claims “arising 28 out of assault, battery” or a variety of other common law torts not applicable to this action.
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1 28 U.S.C. § 2680(h); Levin v. United States, 568 U.S. 503, 506-07 (2013). 2 Plaintiff’s allegation falls into the category of suits against the government barred 3 by sovereign immunity. The claim asserted by Plaintiff is that Defendant “came up behind 4 me and ran her fingernails down my back.” (Doc. 1-3, Ex. 1 at 6). Under Arizona law, the 5 tort of battery is defined as “an intentional act by one person that results in harmful or 6 offensive contact with the person of another.” Rice v. Brakel, 310 P.3d 16, 19 (Ariz. Ct. 7 App. 2013).2 The Complaint plainly describes an intentional act: the running of 8 Defendant’s fingernails down Plaintiff’s back. Therefore, the Complaint falls into one of 9 the categories of suits the government has not waived its sovereign immunity for. 10 Plaintiff’s Complaint must therefore be dismissed. 11 B. Title VII Claim. 12 The Motion to Dismiss alternatively casts Plaintiff’s claim as a claim of workplace 13 harassment under Title VII. Construing Plaintiff’s Complaint as a Title VII hostile work 14 environment claim is of no help to Plaintiff, because the Complaint does not establish either 15 that Plaintiff sought to exhaust administrative remedies at the EEOC before pursuing this 16 action, or that the elements of a hostile work environment claim are sufficiently alleged to 17 state a claim for relief. See Day v. LSI Corp., 174 F. Supp. 3d 1130 (D. Ariz. 2016). 18 Although the Court is required to construe pro se filings liberally, it cannot supply 19 essential elements of the claim that Plaintiff did not initially plead. Pinson v. Dukett, No. 20 CV-19-00422-TUC-RM, 2020 WL 1984026 at *4 (D. Ariz. Apr. 27, 2020), citing Ivey v. 21 Bd. of Regents of the Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982). Under Title VII, 22 a plaintiff states a claim for a hostile work environment when the plaintiff alleges “(1) that 23 he was subjected to verbal or physical conduct of a harassing nature, (2) that this conduct 24 was unwelcome, and (3) that the conduct was sufficiently severe or pervasive to alter the 25 conditions of the victim's employment and create an abusive working environment.” Day, 26 174 F. Supp. 3d at 1164. 27 2 Because the Complaint alleges that Defendant actually made contact with Plaintiff, rather than merely placed Plaintiff in “imminent apprehension of the contact,” Garcia v. United 28 States, 826 F.2d 806, 809 n.9 (9th Cir. 1987), the Complaint is best characterized as alleging a tort for battery, not assault.
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1 Construing Plaintiff’s Complaint liberally, the Court could conclude that, by stating 2 that Defendant “came up behind me and ran her fingernails down my back,” Plaintiff 3 pleaded facts sufficient to satisfy the first two elements of a hostile work environment 4 claim. However, Plaintiff’s Complaint does not plead facts sufficient to satisfy the third 5 element of a Title VII hostile workplace claim. Accordingly, even setting aside the question 6 of whether Plaintiff properly exhausted remedies at the EEOC before proceeding to court, 7 Plaintiff has not stated a claim for relief under Title VII either. 8 IV. Conclusion. 9 Because Defendant argues dismissal on the basis of sovereign immunity under the 10 FTCA and failure to satisfy Title VII’s jurisdictional requirements, the Complaint is 11 dismissed under Rule 12(b)(1). See Alaska Logistics, LLC v. Newtok Village Council, 357 12 F. Supp. 3d 916, 923 (D. Alaska. 2019). Plaintiff’s claim, insofar as it is a common law 13 tort claim, is barred by sovereign immunity, and therefore cannot be revived in this Court. 14 Because Plaintiff’s Complaint also does not state a claim for a hostile work environment 15 or establish that Plaintiff’s administrative remedies were exhausted before filing suit, the 16 Complaint must be dismissed for lack of jurisdiction. 17 Accordingly, the Court grants Defendant’s motion to dismiss. But, because the 18 Court concludes it is not impossible for Plaintiff to plead facts sufficient to invoke this 19 Court’s jurisdiction under Title VII, Plaintiff shall have thirty (30) days to file an amended 20 complaint that addresses the deficiencies described in Section III of this Order. If Plaintiff 21 fails to file an amended complaint before February 22, 2021, the Court will dismiss this 22 action with prejudice, and the Clerk of Court will be directed to enter judgment 23 accordingly. 24 IT IS ORDERED: 25 (1) Defendant’s Motion to Dismiss (doc. 5) is granted. Plaintiff’s Complaint 26 (doc. 1-3, Ex. 1 at 6) is dismissed without prejudice. 27 (2) Plaintiff shall, no later than February 22, 2021, file an Amended Complaint 28 that addresses the deficiencies identified in this Order.
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1 (3) Should Plaintiff fail to file an Amended Complaint within the timeframe 2 specified, or if the Amended Complaint fails to address the deficiencies identified in this 3 Order, the Court shall dismiss the action with prejudice, and the Clerk of Court shall enter 4 judgment accordingly and close this case without further notice to Plaintiff. 5 Dated this 21st day of January, 2021. 6 7 Honorable Michael T. Morrissey 8 United States Magistrate Judge
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
-6- | 2021-01-21 | [
"Case 2:20-cv-02250-MTM Document 13 Filed 01/21/21 Page 1 of 6 1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 David Russell Foote, No. CV-20-02250-PHX-MTM 10 Plaintiff, ORDER 11 v. 12 Stephanie Cook, 13 Defendant. 14 15 Before the Court is Defendant’s Motion to Dismiss (doc. 5), filed November 23, 16 2020. Defendant seeks dismissal of this action under Rule 12(b)(1) of the Federal Rules of 17 Civil Procedure, asserting this Court lacks jurisdiction to hear Plaintiff’s claim. The parties 18 have consented to the jurisdiction of the undersigned United States Magistrate Judge, 19 pursuant to 28 U.S.C.",
"§ 636(c). (See docs. 8, 11). For the reasons provided below, the Court 20 concludes Plaintiff has failed to establish this Court has jurisdiction to hear Plaintiff’s 21 claim. Accordingly, Defendant’s motion is granted, and Plaintiff’s Complaint (doc. 1-3, 22 Ex. 1 at 6) is dismissed with leave to amend. 23 I. Background. 24 This action was initially filed in the West Mesa Justice Court on approximately 25 October 5, 2020. (Doc.",
"1-3, Ex. 1 at 3). Plaintiff alleged in state court that on October 2, 26 2020 Defendant, Plaintiff’s supervisor at the United States Postal Service (“USPS”), “ran 27 her fingernails down my back” during the workday. (Id. at 6). Plaintiff further alleged that 28 he notified Postal Inspectors about what happened, and that a USPS Postal Inspector Case 2:20-cv-02250-MTM Document 13 Filed 01/21/21 Page 2 of 6 1 remained with Plaintiff for the rest of the workday. Plaintiff obtained an Injunction Against 2 Harassment against Defendant in the state proceeding that required Defendant have no 3 contact with Plaintiff except through the legal process. (Id. at 2). 4 On November 20, 2020, Defendant removed1 the state court action to federal court 5 pursuant to 28 U.S.C. § 1442(a)(1), because it is a civil action against a federal employee 6 that alleges an act conducted in the scope of Defendant’s federal employment. (Doc. 1 at 7 2). On November 23, 2020, Defendant filed a Motion to Dismiss (doc. 5) under Fed.",
"R. 8 Civ. P. 12(b)(1). The motion argues that Plaintiff’s action, whether construed as a claim 9 under the Federal Tort Claims Act, 28 U.S.C. § 1346(b) (“FTCA”) or under Title VII of 10 the Civil Rights Act of 1964, 42 U.S.C. § 2000e-16 (“Title VII”), should be dismissed for 11 lack of jurisdiction. Specifically, Defendant argues that the Court lacks jurisdiction to hear 12 an FTCA claim because Plaintiff did not exhaust administrative remedies within USPS 13 before filing this action. (Doc. 5 at 5-6, citing United States v. Varig Airlines, 467 U.S. 14 797, 808 (1984)). Additionally, Defendant argues that the Court lacks jurisdiction to hear 15 the claim as a Title VII action because Plaintiff failed to pursue remedies at the Equal 16 Employment Opportunity Commission (“EEOC”) before proceeding to federal court.",
"17 (Doc. 5 at 3-4, citing Leong v. Potter, 347 F.3d 1117, 1122 (9th Cir. 2003). 18 Plaintiff received notice required by Rand v. Rowland, 154 F.3d 952 (9th Cir. 1998) 19 informing Plaintiff of the need to respond to the government’s motion, but Plaintiff did not 20 file a response. 21 II. Principles of Law. 22 A complaint survives a Rule 12(b)(6) motion only when it alleges “enough facts to 23 state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 24 544, 570 (2007). Plausibility requires factual content that permits the court to draw a 25 reasonable inference that the defendant is responsible for the misconduct alleged by the 26 1 Although 28 U.S.C.",
"§ 1446(b)(1) requires a notice of removal to be filed within thirty 27 (30) days, the clock begins to run only when the state court complaint or a legally sufficient court summons is served on the defendant. Because Plaintiff never served the Complaint 28 on Defendant in the manner prescribed by Ariz. R. Civ. P. 4.1(h)(4) and Fed. R. Civ. P. 4(i), the time limit for removal did not begin to run, and removal to this Court is timely. -2- Case 2:20-cv-02250-MTM Document 13 Filed 01/21/21 Page 3 of 6 1 plaintiff. “Threadbare recitals of the elements of a cause of action, supported by mere 2 conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 3 A party challenging the Court’s jurisdiction under Rule 12(b)(1) may do so either 4 on the face of the pleadings or by presenting extrinsic evidence for the Court’s 5 consideration. American Video Duplicating, Inc. v. Royal Bank of Canada, No. CV 20- 6 4036-JFW (JPRx), 2020 WL 6882734 at *2 (C.D. Cal. Nov. 20, 2020), citing White v. Lee, 7 227 F.3d 1214, 1242 (9th Cir.",
"2000). As Defendant does not introduce any additional 8 evidence as part of the motion to dismiss, Defendant’s challenge is a facial attack on the 9 sufficiency of the pleadings. American Video Duplicating, 2020 WL 6882734 at *2. When 10 considering a facial attack on the complaint under Rule 12(b)(1), the Court assumes all of 11 the factual allegations in the complaint are true. Id., citing Wolf v. Strankman, 392 F.3d 12 358, 362 (9th Cir. 2004). Moreover, as Plaintiff is proceeding pro se, the allegations in 13 Plaintiff’s Complaint must be liberally construed. Erickson v. Pardus, 551 U.S. 89, 94 14 (2007). 15 III. Analysis. 16 The Court grants the motion to dismiss. Plaintiff bears the burden of proving 17 subject-matter jurisdiction exists. Kokkonen v. Guardian Life Ins.",
"Co. of Am., 511 U.S. 18 375, 377 (1994) (“Federal courts are courts of limited jurisdiction. … It is to be presumed 19 that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary 20 rests upon the party asserting jurisdiction.”) (internal citations omitted); Leeson v. 21 Transamerica Disability Income Plan, 671 F.3d 969, 975 n.12 (9th Cir. 2012) (“[W]hen a 22 federal court concludes that it lacks subject-matter jurisdiction, the court must dismiss the 23 complaint in its entirety.”) (internal citations omitted). 24 A. FTCA Claim. 25 Plaintiff’s claim is barred by sovereign immunity. Suits alleging tortious conduct by 26 federal employees are governed by the FTCA. However, the FTCA did not abrogate the 27 government’s sovereign immunity completely; the FTCA does not apply to claims “arising 28 out of assault, battery” or a variety of other common law torts not applicable to this action.",
"-3- Case 2:20-cv-02250-MTM Document 13 Filed 01/21/21 Page 4 of 6 1 28 U.S.C. § 2680(h); Levin v. United States, 568 U.S. 503, 506-07 (2013). 2 Plaintiff’s allegation falls into the category of suits against the government barred 3 by sovereign immunity. The claim asserted by Plaintiff is that Defendant “came up behind 4 me and ran her fingernails down my back.” (Doc. 1-3, Ex. 1 at 6). Under Arizona law, the 5 tort of battery is defined as “an intentional act by one person that results in harmful or 6 offensive contact with the person of another.” Rice v. Brakel, 310 P.3d 16, 19 (Ariz. Ct. 7 App. 2013).2 The Complaint plainly describes an intentional act: the running of 8 Defendant’s fingernails down Plaintiff’s back. Therefore, the Complaint falls into one of 9 the categories of suits the government has not waived its sovereign immunity for. 10 Plaintiff’s Complaint must therefore be dismissed.",
"11 B. Title VII Claim. 12 The Motion to Dismiss alternatively casts Plaintiff’s claim as a claim of workplace 13 harassment under Title VII. Construing Plaintiff’s Complaint as a Title VII hostile work 14 environment claim is of no help to Plaintiff, because the Complaint does not establish either 15 that Plaintiff sought to exhaust administrative remedies at the EEOC before pursuing this 16 action, or that the elements of a hostile work environment claim are sufficiently alleged to 17 state a claim for relief. See Day v. LSI Corp., 174 F. Supp. 3d 1130 (D. Ariz. 2016). 18 Although the Court is required to construe pro se filings liberally, it cannot supply 19 essential elements of the claim that Plaintiff did not initially plead. Pinson v. Dukett, No. 20 CV-19-00422-TUC-RM, 2020 WL 1984026 at *4 (D. Ariz. Apr.",
"27, 2020), citing Ivey v. 21 Bd. of Regents of the Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982). Under Title VII, 22 a plaintiff states a claim for a hostile work environment when the plaintiff alleges “(1) that 23 he was subjected to verbal or physical conduct of a harassing nature, (2) that this conduct 24 was unwelcome, and (3) that the conduct was sufficiently severe or pervasive to alter the 25 conditions of the victim's employment and create an abusive working environment.” Day, 26 174 F. Supp. 3d at 1164.",
"27 2 Because the Complaint alleges that Defendant actually made contact with Plaintiff, rather than merely placed Plaintiff in “imminent apprehension of the contact,” Garcia v. United 28 States, 826 F.2d 806, 809 n.9 (9th Cir. 1987), the Complaint is best characterized as alleging a tort for battery, not assault. -4- Case 2:20-cv-02250-MTM Document 13 Filed 01/21/21 Page 5 of 6 1 Construing Plaintiff’s Complaint liberally, the Court could conclude that, by stating 2 that Defendant “came up behind me and ran her fingernails down my back,” Plaintiff 3 pleaded facts sufficient to satisfy the first two elements of a hostile work environment 4 claim. However, Plaintiff’s Complaint does not plead facts sufficient to satisfy the third 5 element of a Title VII hostile workplace claim. Accordingly, even setting aside the question 6 of whether Plaintiff properly exhausted remedies at the EEOC before proceeding to court, 7 Plaintiff has not stated a claim for relief under Title VII either.",
"8 IV. Conclusion. 9 Because Defendant argues dismissal on the basis of sovereign immunity under the 10 FTCA and failure to satisfy Title VII’s jurisdictional requirements, the Complaint is 11 dismissed under Rule 12(b)(1). See Alaska Logistics, LLC v. Newtok Village Council, 357 12 F. Supp. 3d 916, 923 (D. Alaska. 2019). Plaintiff’s claim, insofar as it is a common law 13 tort claim, is barred by sovereign immunity, and therefore cannot be revived in this Court. 14 Because Plaintiff’s Complaint also does not state a claim for a hostile work environment 15 or establish that Plaintiff’s administrative remedies were exhausted before filing suit, the 16 Complaint must be dismissed for lack of jurisdiction. 17 Accordingly, the Court grants Defendant’s motion to dismiss. But, because the 18 Court concludes it is not impossible for Plaintiff to plead facts sufficient to invoke this 19 Court’s jurisdiction under Title VII, Plaintiff shall have thirty (30) days to file an amended 20 complaint that addresses the deficiencies described in Section III of this Order. If Plaintiff 21 fails to file an amended complaint before February 22, 2021, the Court will dismiss this 22 action with prejudice, and the Clerk of Court will be directed to enter judgment 23 accordingly.",
"24 IT IS ORDERED: 25 (1) Defendant’s Motion to Dismiss (doc. 5) is granted. Plaintiff’s Complaint 26 (doc. 1-3, Ex. 1 at 6) is dismissed without prejudice. 27 (2) Plaintiff shall, no later than February 22, 2021, file an Amended Complaint 28 that addresses the deficiencies identified in this Order. -5- Case 2:20-cv-02250-MTM Document 13 Filed 01/21/21 Page 6 of 6 1 (3) Should Plaintiff fail to file an Amended Complaint within the timeframe 2 specified, or if the Amended Complaint fails to address the deficiencies identified in this 3 Order, the Court shall dismiss the action with prejudice, and the Clerk of Court shall enter 4 judgment accordingly and close this case without further notice to Plaintiff. 5 Dated this 21st day of January, 2021. 6 7 Honorable Michael T. Morrissey 8 United States Magistrate Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6-"
] | https://www.courtlistener.com/api/rest/v3/recap-documents/158411309/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division release number release date - date date uil legend contact person identification_number phone number fax number employer_identification_number i n o n o t w o o o m m e a i i dear facts g u t e t we have considered your request to reclassify b as a church described in sec_509 and sec_170 of the internal_revenue_code based on the information provided we have concluded that b does not meet the requirements for classification as a church described in sec_509 and sec_170 the basis for our conclusion is set forth below b is a nonprofit non-membership corporation under the laws of the state of d and is recognized by the internal_revenue_service as an organization described in sec_501 of the code and as a public charity described in sec_509 and sec_170 b originally applied for reclassification as a church under sec_170 in but the service denied its reclassification request by god's grace to see an indigenous biblical church movement in each people group of e evangelizing their own people and reaching out in mission to other peoples to this end we will partner with churches and missions agencies to b is organized for religious purposes in particular to glorify god by the urgent evangelization of e’s peoples its vision statement is pioneer in new places to plant new churches pastor new converts and promote new evangelistic movements b’s primary activities are establishing new churches and training church leaders and church b planters in e nearly b missionaries or members currently engage in these activities also engages in student ministry english teaching and mobilizing and equipping l churches for world missions b amended its articles of incorporation in date f to refer to itself as a church and an evangelistic agency in fellowship with local churches it is governed by a self-elected board_of directors corporation that carries on activities similar to those of b it does not have voting members b is also organized for the support of c a g c is not organized as a church b missionaries focus on establishing churches among unreached people groups’ in areas of e where the gospel has not been preached b missionaries train indigenous persons to become leaders in these local churches and assist the fledgling church in training leaders publishing literature and developing its own missionary sending ministry b believes that its role is to establish and influence such churches but not to control them it seeks to emulate the model of the ' century church which it describes as church planting coupled with autonomy and empowering of local christian leaders enclosure there are no b -controlled denominations or parachurch groups as we aim to see indigenous church and campus movements established with their own identity and leadership it also states ona web site describing b h see accordingly b oversees its missionaries but does not exercise any direct supervision or control_over its affiliate churches or their leaders nor does b exercise any administrative or financial oversight over these churches b has no structural connection with these churches which are organizationally and ecclesiastically independent although b missionaries may help leaders of newly established churches develop appropriate church structures that are appropriate for the churches’ respective cultures local churches are ultimately responsible for establishing their own church structures and governments in some cases local churches in small rural villages operate without governing documents once the churches b establishes reach sufficient levels of maturity b missionaries step out of any leadership positions they temporarily occupied in such churches many of these churches maintain an affiliation with b that is typically not formalized b’s affiliate churches generally remain affiliated with b on a relational-rather than a structural or organizational--level neither b’s affiliate churches nor their members are members of b some of these churches do not even have the concept of members or membership nor does b impose any reporting requirements on its affiliate churches these churches do not adopt b's b does not seek or receive tithes or contributions from them b name or any variation thereof seeks to influence its affiliate churches through its missionaries who often continue to provide support and guidance to the churches if any of these churches were to adopt doctrine inconsistent with b’s doctrine b would disassociate itself from such church in its literature b describes itself as a mission agency an interdenominational protestant missionary society a global network of christians and an evangelistic agency but not asa church its literature often distinguishes itself as a missions agency from churches with which b partners on a web site describing b see enclosure b states we believe the local church has a primary role in sending missionaries and our role is to connect and support them with ministry opportunities and leadership on the field b’s own web site see enclosure states missions is the responsibility of the local church b workers have been sent by we are committed to serving the local ‘their churches to serve god in e church to help it fulfill its god-given mission members missionaries are not sent without the support of their local church b requires its ministry personnel to have a strong background in biblical understanding but does not require them to be ordained ministers nor does b ordain or license any ministers b does establish standards to assess ministry candidates and requires new members missionaries to attend a week orientation course at c headquarters in g commissions or formally appoints its members for service with b-though it does not commission or appoint them as ministers it also nor does b ordain license or commission ministers of its affiliate local churches or establish uniform formal qualifications for ordination of such ministers responsible for ordaining their own ministers rather its affiliate churches are b missionaries ensure that the doctrinal b has an m that reflects its code of doctrine statements of the churches they establish are consistent with b’s statement of faith has established policies for its staff members including adherence to biblical standards of conduct commitment to prayer involvement in a local church a prohibition on sexual misconduct and a prohibition on fundraising b may discipline or even terminate an employee who violates such policies however b does not have a code of discipline to which it requires affiliate churches to subscribe b’s literature does not describe its use of any traditional means of ecclesiastical discipline eg confession withholding of sacraments excommunication utilized by churches although b missionaries assist affiliate churches in resolving disciplinary issues it is those churches-not b-that are responsible for disciplining their members b also b's staff members in its j headquarters oversee the activities of b missionaries worldwide the b headquarters hosts daily devotional services for staff members two times a year b hosts a day of prayer at its headquarters b also hosts occasional sunday morning worship services at its headquarters these meetings typically consist of prayer singing and teaching from the bible however staff members at b headquarters do not routinely refer to b as a church b does not require its missionaries to renounce their membership in other churches or religious orders to become missionaries or members of b missionaries be actively involved in a home church that is separate and distinct from b in which they become mature and seasoned in their faith are expected to maintain connected with their home church b missionaries who establish churches in fact b requires that potential b b’s affiliate churches offer regular religious instruction of the young b assists new churches in establishing programs for such instruction although b does not own or operate any schools_for the preparation of ministers it has started or helped to start bible schools and training centers in k church leaders to attend training and further their theological education b also provides funding for local sec_509 of the code provides that the term private_foundation means a domestic or foreign organization described in sec_501 other than an organization described in’ sec_170 other than in clauses vii and viii sec_170 of the code describes a church_or_convention_or_association_of_churches sec_170 of the code describes a tax-exempt_organization that normally receives a substantial part of its support from a government unit or from direct or indirect_contributions to the general_public in 195_fsupp_891 n d cal the court held that a nonprofit corporation composed of non-clerical members of a religious_order that operated schools a winery and a chapel among other activities was not a church it explained that although the corporation was closely affiliated with the roman catholic church it was separate and distinct from that church for federal tax purposes id pincite the corporation's operation of a chapel did not convert it into a church as this activity was incidental to the corporation's primary activities of operating the school and winery the court noted t he tail cannot be permitted to wag the dog the incidental activities of plaintiff cannot make plaintiff a church id pincite in 48_tc_358 an interdenominational organization sent out evangelical teams to preach throughout the world and to establish small indigenous churches these teams used dental services as the initial means by which they contacted prospective converts to christianity the court held that the organization was not a church for federal tax purposes in part because it was interdenominational and independent from the churches with which its members were affiliated the organization’s religious services and preaching though functions normally associated with a church were not its primary activities and therefore were not determinative of church status id pincite the court characterized the group as an evangelical organization and a religious_organization comprised of individual members who are already affiliated with various churches but not as a church it noted that although every religious_organization not every religious_organization is a church id pincite church may be a in 490_fsupp_304 d d c the court recognized the internal revenue service's 14-part test in determining whether a religious_organization was a church the criteria are a distinct legal existence a recognized creed and form of worship a definite and distinct ecclesiastical government a formal code of doctrine and discipline a distinct religious history a membership not associated with any other church or denomination an organization of ordained ministers ordained ministers selected after completing prescribed studies a literature of its own established places of worship regular congregations regular religious services sunday schools_for religious instruction of the young and schools_for the preparation of its ministers the court in american guidance stated that while some of these criteria are relatively minor others eg the existence of an established congregation served by an organized ministry the provision of regular worship services and religious education for the young and the __ dissemination of a doctrinal code are of central importance id pincite in 88_tc_1341 the court found that an exempt_organization that operated a radio ministry and established local congregations qualified as a church for federal tax purposes because it met most of the irs criteria for determining church status although the court found these criteria to be helpful in deciding it explained that the irs will what constitutes a church it did not adopt them as a definitive test also consider any other facts and circumstances that may bear upon the organization's claim for church status under sec_170 of the code id pincite although the organization's broadcasting and publishing functions constituted a large percentage of its total receipts and expenditures these functions did not overshadow its church activities which the court found to be more than incidental id pincite the court noted that many of the organization's followers looked upon the organization as their only church id pincite in 927_f2d_335 cir the court noted that of central importance in determining whether an organization constitutes a church for federal tax purposes is the existence of an established congregation served by an organized ministry the - court found that the organization did not have an established congregation because nothing indicates that the participants considered the organization to be their church id pincite in 758_f2d_1283 cir the fifth circuit determined that a convention or association of churches in the context of sec_6033 exemptions from filing annual information returns refers to the organizational structure of congregational churches and that congress included the phrase to treat congregational and hierarchical churches equally revrul_74_224 1974_1_cb_61 held that a cooperative undertaking of churches of different denominations that works together to carry out religious activities constitutes a convention or association of churches’ within the meaning of sec_170 of the internal_revenue_code the ruling noted that the term convention or association of churches historically referred to a cooperative undertaking by churches within the same denomination analysis b claims that it is a church as described in sec_509 and sec_170 of the code because it meets most of the criteria the irs uses in determining whether an organization qualifies as a church for federal tax purposes see american guidance foundation f_supp pincite note these criteria are helpful in deciding what constitutes a church for federal tax purposes but are not a definitive test see foundation of human understanding t c pincite b meets several of these criteria code of doctrine a recognized creed a distinct religious history and literature of its own however these are not distinctive characteristics of a church but are common to both churches and non-church religious organizations meeting these criteria is not sufficient to establish b as a church within the meaning of sec_170 of the code for instance it has a distinct legal existence a formal b’s primary activity is the establishment and support of new churches it essentially serves as an incubator for and advisor to its affiliate churches providing spiritual and practical guidance and training through its missionaries these churches are initially led by b missionaries who train indigenous leaders to assume leadership of each church which then operates independently from such missionaries although b oversees its missionaries it does not have __any formal authority over the churches or their leaders or even a formal affiliation with most of churches like the missionary e h t society in chapman supra bis interdenominational and independent from the local churches with which its missionaries are affiliated chapman id pincite thus b and its affiliate churches are not united by a definite and distinct ecclesiastical government because b’s affiliate churches are separate and distinct from b their members worship services and other church activities are also separate and distinct from those of b see de la salle institute f_supp pincite thus b does not have a regular congregation of its own that engages in regular worship services in an established place of worship b does not require its missionaries to renounce their membership in other churches or religious in fact b requires its missionaries to be members of local orders to become missionaries of b churches that are separate and distinct from b as in spiritual outreach society f 2d pincite b has failed to establish that its missionaries or staff members consider b to be their church nor do b’s affiliate churches or their members consider themselves members of b accordingly b has neither a regular congregation nor a membership not associated with any other church or denomination b has not shown evidence of having a code of discipline for its affiliate churches for instance b’s literature does not describe its use of any traditional means of ecclesiastical discipline eg confession withholding of sacraments excommunication utilized by churches either in disciplining affiliate church members or members of b’s own staff -exercise discipline over their members b's affiliate churches-not b- although b has established training requirements for and provides some training to the missionaries it appoints it does not ordain or license them as ministers and does not require them to be ordained or licensed nor does b ordain or license ministers of the local churches it establishes rather its affiliate churches are responsible for ordaining their own ministers thus b is not an organization of ordained ministers b assists its affiliate churches in establishing programs for religious instruction of the young within their churches however b has not established that it operates its own sunday schools or comparable programs for the regular religious instruction of the young within a congregation b employees are paid to engage in these activities at its headquarters incidentally b’s headquarters hosts daily devotional worship meetings and a periodic day of prayer for its office staff however these activities are incidental to the main activity of b’s headquarters which is to exercise administrative financial and operational oversight over b’s worldwide ministry most of these employees voluntarily attend worship services offered by b just as the operation of a chapel did not convert the corporation in de la salle institute supra into a church because this activity was incidental to the corporation's primary activities of operating a school and winery the conduct of devotional worship and prayer services does not convert b’s administrative office into a church within the meaning of sec_170 of the code furthermore b staff members all belong to other local churches and do not consider b to be their church further b does not identify itself publicly as a church neither b’s web site nor the literature it distributes to the public refers to b as a church rather b describes itself as a missions agency a missionary society and an evangelistic agency but not as a church literature often distinguishes b as a missions agency from churches with which b partners this undermines b’s contention that it is a church for federal tax purposes its just as b does not qualify as a church for federal tax purposes it does not qualify as an association or convention of churches b is neither a cooperative undertaking of churches within a denomination nor a cooperative undertaking of churches across denominations as described in revrul_74_224 supra the churches b establishes are independent from b and from one another b-established churches in one culture do not appear to be connected in any kind of ongoing ministry with b-established churches in other cultures although they have a common parent in b they do not share common supervision or control or a common organizational structure as referenced in lutheran social service of minnesota supra b missionaries do not bring new churches within the organizational structure of an association or convention rather they establish independent churches that function and minister within their respective cultures separate and distinct from b although some of these churches maintain an affiliation with b and b seeks to exert spiritual influence over them they do not maintain a structural or organizational relationship with b therefore b does not qualify as a convention or association of churches or its other affiliate churches conclusion b does not meet most of the criteria for classification as a church described in sec_509 and sec_170 of the code that courts have recognized as being of central importance the existence of an established congregation the provision of regular worship services and religious education for the young and the dissemination of a doctrinal code see american guidance foundation inc f_supp pincite spiritual outreach society f 2d pincite although b disseminates a doctrinal code it does not meet the other central criteria for determining church classification for federal tax purposes in particular it does not have a regular established congregation of members who meet together as a church for regular worship services and instruction of the young nor does b meet most of the other criteria the irs considers in determining whether to classify an organization as a church described in sec_509 and sec_170 of the code in particular b does not ordain ministers operate sunday schools or similar programs for religious instruction of the young or have a code of discipline a distinct ecclesiastical government an established place of worship or a membership not associated with other local churches or denominations although b's affiliate churches may meet most of the criteria for classification as a church for federal tax purposes b is separate and distinct from those churches nor do b or its affiliate churches share the interconnectedness necessary to constitute a convention or association of churches accordingly based on all the facts and circumstances b has failed to establish that it meets the requirements for classification as a church described in sec_509 and sec_170 of the code instead b will continue to be classified as a public charity under sec_509 and sec_170 you have the right to file a protest if you believe this determination is incorrect to protest you must submit a statement of your views and fully explain your reasoning you must submit the statement signed by one of your officers within days from the date of this letter we will consider your statement and decide if the information affects our determination __ you also have a right to request a conference to discuss your protest this request should be made when you file your protest statement an attorney certified_public_accountant oran individual ehrolied to practice before the internal_revenue_service may represent you if you want representation during the conference procedures you must file a proper power_of_attorney form_2848 power_of_attorney and declaration of representative if you have not already done so and power_of_attorney all forms and publications mentioned in this letter can be found at www irs gov forms and publications for more information about representation see publication practice_before_the_irs if you do not file a protest within days you will not be able to file a suit for declaratory_judgment in court because the internal_revenue_service irs will consider the failure to protest as a failure to exhaust available administrative remedies code sec_7428 provides in part that a declaratory_judgment or decree shall not be issued in any proceeding unless the tax_court the united_states court of federal claims or the district_court of the united_states for the district of columbia determines that the organization involved has exhausted all of the administrative remedies available to it within the irs if lf you do not intend to protest this determination you do not need to take any further action we do not hear from you within days we will issue a final adverse determination_letter that letter will provide information about filing tax returns and other matters please send your protest statement form_2848 and any supporting documents to this address internal_revenue_service you may also fax your statement to the person whose name and fax number are shown in the if you have any questions please contact the person whose name and heading of this letter telephone number are shown in the heading of this letter sincerely lois g lerner director exempt_organizations enclosures ce | [
"department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division release number release date - date date uil legend contact person identification_number phone number fax number employer_identification_number i n o n o t w o o o m m e a i i dear facts g u t e t we have considered your request to reclassify b as a church described in sec_509 and sec_170 of the internal_revenue_code based on the information provided we have concluded that b does not meet the requirements for classification as a church described in sec_509 and sec_170 the basis for our conclusion is set forth below b is a nonprofit non-membership corporation under the laws of the state of d and is recognized by the internal_revenue_service as an organization described in sec_501 of the code and as a public charity described in sec_509 and sec_170 b originally applied for reclassification as a church under sec_170 in but the service denied its reclassification request by god's grace to see an indigenous biblical church movement in each people group of e evangelizing their own people and reaching out in mission to other peoples to this end we will partner with churches and missions agencies to b is organized for religious purposes in particular to glorify god by the urgent evangelization of e’s peoples its vision statement is pioneer in new places to plant new churches pastor new converts and promote new evangelistic movements b’s primary activities are establishing new churches and training church leaders and church b planters in e nearly b missionaries or members currently engage in these activities also engages in student ministry english teaching and mobilizing and equipping l churches for world missions b amended its articles of incorporation in date f to refer to itself as a church and an evangelistic agency in fellowship with local churches it is governed by a self-elected board_of directors corporation that carries on activities similar to those of b it does not have voting members b is also organized for the support of c a g c is not organized as a church b missionaries focus on establishing churches among unreached people groups’ in areas of e where the gospel has not been preached b missionaries train indigenous persons to become leaders in these local churches and assist the fledgling church in training leaders publishing literature and developing its own missionary sending ministry b believes that its role is to establish and influence such churches but not to control them it seeks to emulate the model of the ' century church which it describes as church planting coupled with autonomy and empowering of local christian leaders enclosure there are no b -controlled denominations or parachurch groups as we aim to see indigenous church and campus movements established with their own identity and leadership it also states ona web site describing b h see accordingly b oversees its missionaries but does not exercise any direct supervision or control_over its affiliate churches or their leaders nor does b exercise any administrative or financial oversight over these churches b has no structural connection with these churches which are organizationally and ecclesiastically independent although b missionaries may help leaders of newly established churches develop appropriate church structures that are appropriate for the churches’ respective cultures local churches are ultimately responsible for establishing their own church structures and governments in some cases local churches in small rural villages operate without governing documents once the churches b establishes reach sufficient levels of maturity b missionaries step out of any leadership positions they temporarily occupied in such churches many of these churches maintain an affiliation with b that is typically not formalized b’s affiliate churches generally remain affiliated with b on a relational-rather than a structural or organizational--level neither b’s affiliate churches nor their members are members of b some of these churches do not even have the concept of members or membership nor does b impose any reporting requirements on its affiliate churches these churches do not adopt b's b does not seek or receive tithes or contributions from them b name or any variation thereof seeks to influence its affiliate churches through its missionaries who often continue to provide support and guidance to the churches if any of these churches were to adopt doctrine inconsistent with b’s doctrine b would disassociate itself from such church in its literature b describes itself as a mission agency an interdenominational protestant missionary society a global network of christians and an evangelistic agency but not asa church its literature often distinguishes itself as a missions agency from churches with which b partners on a web site describing b see enclosure b states we believe the local church has a primary role in sending missionaries and our role is to connect and support them with ministry opportunities and leadership on the field b’s own web site see enclosure states missions is the responsibility of the local church b workers have been sent by we are committed to serving the local ‘their churches to serve god in e church to help it fulfill its god-given mission members missionaries are not sent without the support of their local church b requires its ministry personnel to have a strong background in biblical understanding but does not require them to be ordained ministers nor does b ordain or license any ministers b does establish standards to assess ministry candidates and requires new members missionaries to attend a week orientation course at c headquarters in g commissions or formally appoints its members for service with b-though it does not commission or appoint them as ministers it also nor does b ordain license or commission ministers of its affiliate local churches or establish uniform formal qualifications for ordination of such ministers responsible for ordaining their own ministers rather its affiliate churches are b missionaries ensure that the doctrinal b has an m that reflects its code of doctrine statements of the churches they establish are consistent with b’s statement of faith has established policies for its staff members including adherence to biblical standards of conduct commitment to prayer involvement in a local church a prohibition on sexual misconduct and a prohibition on fundraising b may discipline or even terminate an employee who violates such policies however b does not have a code of discipline to which it requires affiliate churches to subscribe b’s literature does not describe its use of any traditional means of ecclesiastical discipline eg confession withholding of sacraments excommunication utilized by churches although b missionaries assist affiliate churches in resolving disciplinary issues it is those churches-not b-that are responsible for disciplining their members b also b's staff members in its j headquarters oversee the activities of b missionaries worldwide the b headquarters hosts daily devotional services for staff members two times a year b hosts a day of prayer at its headquarters b also hosts occasional sunday morning worship services at its headquarters these meetings typically consist of prayer singing and teaching from the bible however staff members at b headquarters do not routinely refer to b as a church b does not require its missionaries to renounce their membership in other churches or religious orders to become missionaries or members of b missionaries be actively involved in a home church that is separate and distinct from b in which they become mature and seasoned in their faith are expected to maintain connected with their home church b missionaries who establish churches in fact b requires that potential b b’s affiliate churches offer regular religious instruction of the young b assists new churches in establishing programs for such instruction although b does not own or operate any schools_for the preparation of ministers it has started or helped to start bible schools and training centers in k church leaders to attend training and further their theological education b also provides funding for local sec_509 of the code provides that the term private_foundation means a domestic or foreign organization described in sec_501 other than an organization described in’ sec_170 other than in clauses vii and viii sec_170 of the code describes a church_or_convention_or_association_of_churches sec_170 of the code describes a tax-exempt_organization that normally receives a substantial part of its support from a government unit or from direct or indirect_contributions to the general_public in 195_fsupp_891 n d cal the court held that a nonprofit corporation composed of non-clerical members of a religious_order that operated schools a winery and a chapel among other activities was not a church it explained that although the corporation was closely affiliated with the roman catholic church it was separate and distinct from that church for federal tax purposes id pincite the corporation's operation of a chapel did not convert it into a church as this activity was incidental to the corporation's primary activities of operating the school and winery the court noted t he tail cannot be permitted to wag the dog the incidental activities of plaintiff cannot make plaintiff a church id pincite in 48_tc_358 an interdenominational organization sent out evangelical teams to preach throughout the world and to establish small indigenous churches these teams used dental services as the initial means by which they contacted prospective converts to christianity the court held that the organization was not a church for federal tax purposes in part because it was interdenominational and independent from the churches with which its members were affiliated the organization’s religious services and preaching though functions normally associated with a church were not its primary activities and therefore were not determinative of church status id pincite the court characterized the group as an evangelical organization and a religious_organization comprised of individual members who are already affiliated with various churches but not as a church it noted that although every religious_organization not every religious_organization is a church id pincite church may be a in 490_fsupp_304 d d c the court recognized the internal revenue service's 14-part test in determining whether a religious_organization was a church the criteria are a distinct legal existence a recognized creed and form of worship a definite and distinct ecclesiastical government a formal code of doctrine and discipline a distinct religious history a membership not associated with any other church or denomination an organization of ordained ministers ordained ministers selected after completing prescribed studies a literature of its own established places of worship regular congregations regular religious services sunday schools_for religious instruction of the young and schools_for the preparation of its ministers the court in american guidance stated that while some of these criteria are relatively minor others eg the existence of an established congregation served by an organized ministry the provision of regular worship services and religious education for the young and the __ dissemination of a doctrinal code are of central importance id pincite in 88_tc_1341 the court found that an exempt_organization that operated a radio ministry and established local congregations qualified as a church for federal tax purposes because it met most of the irs criteria for determining church status although the court found these criteria to be helpful in deciding it explained that the irs will what constitutes a church it did not adopt them as a definitive test also consider any other facts and circumstances that may bear upon the organization's claim for church status under sec_170 of the code id pincite although the organization's broadcasting and publishing functions constituted a large percentage of its total receipts and expenditures these functions did not overshadow its church activities which the court found to be more than incidental id pincite the court noted that many of the organization's followers looked upon the organization as their only church id pincite in 927_f2d_335 cir the court noted that of central importance in determining whether an organization constitutes a church for federal tax purposes is the existence of an established congregation served by an organized ministry the - court found that the organization did not have an established congregation because nothing indicates that the participants considered the organization to be their church id pincite in 758_f2d_1283 cir the fifth circuit determined that a convention or association of churches in the context of sec_6033 exemptions from filing annual information returns refers to the organizational structure of congregational churches and that congress included the phrase to treat congregational and hierarchical churches equally revrul_74_224 1974_1_cb_61 held that a cooperative undertaking of churches of different denominations that works together to carry out religious activities constitutes a convention or association of churches’ within the meaning of sec_170 of the internal_revenue_code the ruling noted that the term convention or association of churches historically referred to a cooperative undertaking by churches within the same denomination analysis b claims that it is a church as described in sec_509 and sec_170 of the code because it meets most of the criteria the irs uses in determining whether an organization qualifies as a church for federal tax purposes see american guidance foundation f_supp pincite note these criteria are helpful in deciding what constitutes a church for federal tax purposes but are not a definitive test see foundation of human understanding t c pincite b meets several of these criteria code of doctrine a recognized creed a distinct religious history and literature of its own however these are not distinctive characteristics of a church but are common to both churches and non-church religious organizations meeting these criteria is not sufficient to establish b as a church within the meaning of sec_170 of the code for instance it has a distinct legal existence a formal b’s primary activity is the establishment and support of new churches it essentially serves as an incubator for and advisor to its affiliate churches providing spiritual and practical guidance and training through its missionaries these churches are initially led by b missionaries who train indigenous leaders to assume leadership of each church which then operates independently from such missionaries although b oversees its missionaries it does not have __any formal authority over the churches or their leaders or even a formal affiliation with most of churches like the missionary e h t society in chapman supra bis interdenominational and independent from the local churches with which its missionaries are affiliated chapman id pincite thus b and its affiliate churches are not united by a definite and distinct ecclesiastical government because b’s affiliate churches are separate and distinct from b their members worship services and other church activities are also separate and distinct from those of b see de la salle institute f_supp pincite thus b does not have a regular congregation of its own that engages in regular worship services in an established place of worship b does not require its missionaries to renounce their membership in other churches or religious in fact b requires its missionaries to be members of local orders to become missionaries of b churches that are separate and distinct from b as in spiritual outreach society f 2d pincite b has failed to establish that its missionaries or staff members consider b to be their church nor do b’s affiliate churches or their members consider themselves members of b accordingly b has neither a regular congregation nor a membership not associated with any other church or denomination b has not shown evidence of having a code of discipline for its affiliate churches for instance b’s literature does not describe its use of any traditional means of ecclesiastical discipline eg confession withholding of sacraments excommunication utilized by churches either in disciplining affiliate church members or members of b’s own staff -exercise discipline over their members b's affiliate churches-not b- although b has established training requirements for and provides some training to the missionaries it appoints it does not ordain or license them as ministers and does not require them to be ordained or licensed nor does b ordain or license ministers of the local churches it establishes rather its affiliate churches are responsible for ordaining their own ministers thus b is not an organization of ordained ministers b assists its affiliate churches in establishing programs for religious instruction of the young within their churches however b has not established that it operates its own sunday schools or comparable programs for the regular religious instruction of the young within a congregation b employees are paid to engage in these activities at its headquarters incidentally b’s headquarters hosts daily devotional worship meetings and a periodic day of prayer for its office staff however these activities are incidental to the main activity of b’s headquarters which is to exercise administrative financial and operational oversight over b’s worldwide ministry most of these employees voluntarily attend worship services offered by b just as the operation of a chapel did not convert the corporation in de la salle institute supra into a church because this activity was incidental to the corporation's primary activities of operating a school and winery the conduct of devotional worship and prayer services does not convert b’s administrative office into a church within the meaning of sec_170 of the code furthermore b staff members all belong to other local churches and do not consider b to be their church further b does not identify itself publicly as a church neither b’s web site nor the literature it distributes to the public refers to b as a church rather b describes itself as a missions agency a missionary society and an evangelistic agency but not as a church literature often distinguishes b as a missions agency from churches with which b partners this undermines b’s contention that it is a church for federal tax purposes its just as b does not qualify as a church for federal tax purposes it does not qualify as an association or convention of churches b is neither a cooperative undertaking of churches within a denomination nor a cooperative undertaking of churches across denominations as described in revrul_74_224 supra the churches b establishes are independent from b and from one another b-established churches in one culture do not appear to be connected in any kind of ongoing ministry with b-established churches in other cultures although they have a common parent in b they do not share common supervision or control or a common organizational structure as referenced in lutheran social service of minnesota supra b missionaries do not bring new churches within the organizational structure of an association or convention rather they establish independent churches that function and minister within their respective cultures separate and distinct from b although some of these churches maintain an affiliation with b and b seeks to exert spiritual influence over them they do not maintain a structural or organizational relationship with b therefore b does not qualify as a convention or association of churches or its other affiliate churches conclusion b does not meet most of the criteria for classification as a church described in sec_509 and sec_170 of the code that courts have recognized as being of central importance the existence of an established congregation the provision of regular worship services and religious education for the young and the dissemination of a doctrinal code see american guidance foundation inc f_supp pincite spiritual outreach society f 2d pincite although b disseminates a doctrinal code it does not meet the other central criteria for determining church classification for federal tax purposes in particular it does not have a regular established congregation of members who meet together as a church for regular worship services and instruction of the young nor does b meet most of the other criteria the irs considers in determining whether to classify an organization as a church described in sec_509 and sec_170 of the code in particular b does not ordain ministers operate sunday schools or similar programs for religious instruction of the young or have a code of discipline a distinct ecclesiastical government an established place of worship or a membership not associated with other local churches or denominations although b's affiliate churches may meet most of the criteria for classification as a church for federal tax purposes b is separate and distinct from those churches nor do b or its affiliate churches share the interconnectedness necessary to constitute a convention or association of churches accordingly based on all the facts and circumstances b has failed to establish that it meets the requirements for classification as a church described in sec_509 and sec_170 of the code instead b will continue to be classified as a public charity under sec_509 and sec_170 you have the right to file a protest if you believe this determination is incorrect to protest you must submit a statement of your views and fully explain your reasoning you must submit the statement signed by one of your officers within days from the date of this letter we will consider your statement and decide if the information affects our determination __ you also have a right to request a conference to discuss your protest this request should be made when you file your protest statement an attorney certified_public_accountant oran individual ehrolied to practice before the internal_revenue_service may represent you if you want representation during the conference procedures you must file a proper power_of_attorney form_2848 power_of_attorney and declaration of representative if you have not already done so and power_of_attorney all forms and publications mentioned in this letter can be found at www irs gov forms and publications for more information about representation see publication practice_before_the_irs if you do not file a protest within days you will not be able to file a suit for declaratory_judgment in court because the internal_revenue_service irs will consider the failure to protest as a failure to exhaust available administrative remedies code sec_7428 provides in part that a declaratory_judgment or decree shall not be issued in any proceeding unless the tax_court the united_states court of federal claims or the district_court of the united_states for the district of columbia determines that the organization involved has exhausted all of the administrative remedies available to it within the irs if lf you do not intend to protest this determination you do not need to take any further action we do not hear from you within days we will issue a final adverse determination_letter that letter will provide information about filing tax returns and other matters please send your protest statement form_2848 and any supporting documents to this address internal_revenue_service you may also fax your statement to the person whose name and fax number are shown in the if you have any questions please contact the person whose name and heading of this letter telephone number are shown in the heading of this letter sincerely lois g lerner director exempt_organizations enclosures ce"
] | https://archive.data.jhu.edu/file.xhtml?persistentId=doi:10.7281/T1/N1X6I4/D5CQ0Y&version=2.0 | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
|
C. A. 2d Cir. Certiorari denied. Mr. Justice Goldberg took no part in the consideration or decision of this petition. | 11-27-2022 | [
"C. A. 2d Cir. Certiorari denied. Mr. Justice Goldberg took no part in the consideration or decision of this petition."
] | https://www.courtlistener.com/api/rest/v3/opinions/8945785/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Petition for writ of certiorari to North Carolina Court of Appeals denied 4 February 1975. | 07-20-2022 | [
"Petition for writ of certiorari to North Carolina Court of Appeals denied 4 February 1975."
] | https://www.courtlistener.com/api/rest/v3/opinions/6702993/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
DETAILED ACTION Reasons for Allowance The following is an examiner’s statement of reasons for allowance: The objections to claims 3-7 are withdrawn following the applicant’s amendment to claim 3. The rejection of claims 1-7 and 9-13 under 35 U.S.C. 103 as being unpatentable over Sunada et al. (US 2016/0043356) in view of Kim (US 2005/0118499) is withdrawn following the applicant’s amendment to claim 1. Sunada et al. (US 2016/0043356) and Cho et al. (US 2006/0204842) fail to teach the button cells in claims 1 and 8. There are no prior art teachings that would motivate one of ordinary skill to modify Sunada et al. or Cho et al. and obtain the button cells in claims 1 and 8 of the instant application. Therefore, claims -8 and 10-16 are allowed. Claim 9 has been canceled. Any comments considered necessary by applicant must be submitted no later than the payment of the issue fee and, to avoid processing delays, should preferably accompany the issue fee. Such submissions should be clearly labeled “Comments on Statement of Reasons for Allowance.” Any inquiry concerning this communication or earlier communications from the examiner should be directed to ANCA EOFF whose telephone number is (571)272-9810. The examiner can normally be reached Mon-Fri 10am-6:30pm. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Cynthia H. Kelly can be reached on 571-272-1526. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of published or unpublished applications may be obtained from Patent Center. Unpublished application information in Patent Center is available to registered users. To file and manage patent submissions in Patent Center, visit: https://patentcenter.uspto.gov. Visit https://www.uspto.gov/patents/apply/patent-center for more information about Patent Center and https://www.uspto.gov/patents/docx for information about filing in DOCX format. For additional questions, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.
/ANCA EOFF/Primary Examiner, Art Unit 1722 | 2022-07-29T02:17:30 | [
"DETAILED ACTION Reasons for Allowance The following is an examiner’s statement of reasons for allowance: The objections to claims 3-7 are withdrawn following the applicant’s amendment to claim 3. The rejection of claims 1-7 and 9-13 under 35 U.S.C. 103 as being unpatentable over Sunada et al. (US 2016/0043356) in view of Kim (US 2005/0118499) is withdrawn following the applicant’s amendment to claim 1. Sunada et al. (US 2016/0043356) and Cho et al. (US 2006/0204842) fail to teach the button cells in claims 1 and 8.",
"There are no prior art teachings that would motivate one of ordinary skill to modify Sunada et al. or Cho et al. and obtain the button cells in claims 1 and 8 of the instant application. Therefore, claims -8 and 10-16 are allowed. Claim 9 has been canceled. Any comments considered necessary by applicant must be submitted no later than the payment of the issue fee and, to avoid processing delays, should preferably accompany the issue fee. Such submissions should be clearly labeled “Comments on Statement of Reasons for Allowance.” Any inquiry concerning this communication or earlier communications from the examiner should be directed to ANCA EOFF whose telephone number is (571)272-9810. The examiner can normally be reached Mon-Fri 10am-6:30pm. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice.",
"If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Cynthia H. Kelly can be reached on 571-272-1526. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of published or unpublished applications may be obtained from Patent Center. Unpublished application information in Patent Center is available to registered users. To file and manage patent submissions in Patent Center, visit: https://patentcenter.uspto.gov. Visit https://www.uspto.gov/patents/apply/patent-center for more information about Patent Center and https://www.uspto.gov/patents/docx for information about filing in DOCX format. For additional questions, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.",
"/ANCA EOFF/Primary Examiner, Art Unit 1722"
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2022-07-31.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
EXAMINER'S AMENDMENT
1. An examiner’s amendment to the record appears below. Should the changes and/or additions be unacceptable to applicant, an amendment may be filed as provided by 37 CFR 1.312. To ensure consideration of such an amendment, it MUST be submitted no later than the payment of the issue fee. The application has been amended as follows: because the election of claims 1-10 was made without traverse in the filing of 5/17/2021, the non-
elected claims 11-20 are cancelled by the examiner. This places claims 1-7, 9 and 10 in condition for
allowance. 2. Any inquiry concerning this communication or earlier communications from the examiner should be directed to Davis Hwu whose telephone number is (571)272-4904. Examiner interviews are available via telephone. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Len Tran can be reached on 571-272-1184. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.
/DAVIS D HWU/Primary Examiner, Art Unit 3763 | 2021-08-05T14:59:36 | [
"EXAMINER'S AMENDMENT 1. An examiner’s amendment to the record appears below. Should the changes and/or additions be unacceptable to applicant, an amendment may be filed as provided by 37 CFR 1.312. To ensure consideration of such an amendment, it MUST be submitted no later than the payment of the issue fee. The application has been amended as follows: because the election of claims 1-10 was made without traverse in the filing of 5/17/2021, the non- elected claims 11-20 are cancelled by the examiner. This places claims 1-7, 9 and 10 in condition for allowance. 2. Any inquiry concerning this communication or earlier communications from the examiner should be directed to Davis Hwu whose telephone number is (571)272-4904. Examiner interviews are available via telephone. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Len Tran can be reached on 571-272-1184. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.",
"Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000. /DAVIS D HWU/Primary Examiner, Art Unit 3763"
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2021-08-08.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
Response to Arguments Applicant’s arguments, see response, filed 1/24/22, with respect to claims 1, 8, 11-14, 16-17, 19-20, 22, 24, 28-31 have been fully considered and are persuasive. The previous rejection of these claims has been withdrawn, in view of the amendments and arguments, and a notice of allowance has been issued below.
Allowable Subject Matter Claims 1, 8, 11-14, 16-17, 19-20, 22, 24, 28-31 are allowed. The following is an examiner’s statement of reasons for allowance: Regarding independent claims 1, 13, and 17, the prior art of record does not teach or suggest a display panel comprising a first substrate, a second substrate, a subpixel formed between the first substrate and the second substrate, the subpixel comprising at least two non-overlapping transmissive areas and a plurality of liquid crystal materials injected into the respective transmissive areas, wherein a transmittance of each of the liquid crystal materials injected into the respective transmissive areas is different, wherein the plurality of liquid crystal materials comprise a first liquid crystal material, a second liquid crystal material, and a third liquid crystal material; wherein the non-overlapping transmissive areas comprise a first, second, and third transmissive area, and the first liquid crystal material is injected into the first transmissive area, the second liquid crystal material is injected into the second transmissive area, and the third liquid crystal material is injected into the third transmissive area, wherein the subpixel is driven by a combination of a single scanning line, a single data line, wherein the subpixel is a red subpixel, a green subpixel, or a blue subpixel, in combination with the remaining features recited in the claim.
Therefore, Claims 1, 13, and 17 are allowed. Claims 8, 11-12, 14, 16, 19-20, 22, 24, 28-31 are allowed by virtue of their dependence on the allowed claims. Any comments considered necessary by applicant must be submitted no later than the payment of the issue fee and, to avoid processing delays, should preferably accompany the issue fee. Such submissions should be clearly labeled “Comments on Statement of Reasons for Allowance.”
Conclusion Any inquiry concerning this communication or earlier communications from the examiner should be directed to MARIAM QURESHI whose telephone number is (571)272-4434. The examiner can normally be reached 9AM-5PM EST M-F. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Michael Caley can be reached on 571-272-2286. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
/MARIAM QURESHI/Examiner, Art Unit 2871 | 2022-02-27T15:39:39 | [
"DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Response to Arguments Applicant’s arguments, see response, filed 1/24/22, with respect to claims 1, 8, 11-14, 16-17, 19-20, 22, 24, 28-31 have been fully considered and are persuasive. The previous rejection of these claims has been withdrawn, in view of the amendments and arguments, and a notice of allowance has been issued below. Allowable Subject Matter Claims 1, 8, 11-14, 16-17, 19-20, 22, 24, 28-31 are allowed.",
"The following is an examiner’s statement of reasons for allowance: Regarding independent claims 1, 13, and 17, the prior art of record does not teach or suggest a display panel comprising a first substrate, a second substrate, a subpixel formed between the first substrate and the second substrate, the subpixel comprising at least two non-overlapping transmissive areas and a plurality of liquid crystal materials injected into the respective transmissive areas, wherein a transmittance of each of the liquid crystal materials injected into the respective transmissive areas is different, wherein the plurality of liquid crystal materials comprise a first liquid crystal material, a second liquid crystal material, and a third liquid crystal material; wherein the non-overlapping transmissive areas comprise a first, second, and third transmissive area, and the first liquid crystal material is injected into the first transmissive area, the second liquid crystal material is injected into the second transmissive area, and the third liquid crystal material is injected into the third transmissive area, wherein the subpixel is driven by a combination of a single scanning line, a single data line, wherein the subpixel is a red subpixel, a green subpixel, or a blue subpixel, in combination with the remaining features recited in the claim.",
"Therefore, Claims 1, 13, and 17 are allowed. Claims 8, 11-12, 14, 16, 19-20, 22, 24, 28-31 are allowed by virtue of their dependence on the allowed claims. Any comments considered necessary by applicant must be submitted no later than the payment of the issue fee and, to avoid processing delays, should preferably accompany the issue fee. Such submissions should be clearly labeled “Comments on Statement of Reasons for Allowance.” Conclusion Any inquiry concerning this communication or earlier communications from the examiner should be directed to MARIAM QURESHI whose telephone number is (571)272-4434. The examiner can normally be reached 9AM-5PM EST M-F. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Michael Caley can be reached on 571-272-2286. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. /MARIAM QURESHI/Examiner, Art Unit 2871"
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2022-03-06.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Title: [Diary entry: 22 November 1773] From: Washington, George To:
22. Clear warm and pleast. with but little Wind. | 11-22-1773 | [
"Title: [Diary entry: 22 November 1773] From: Washington, George To: 22. Clear warm and pleast. with but little Wind."
] | https://founders.archives.gov/API/docdata/Washington/01-03-02-0003-0023-0022 | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Exhibit 10.24 Lease Agreement (English Translation)
Note: This is an English translation of an agreement originally drafted in Chinese, and accordingly this translation is not legally effective or binding on the parties. This translation is being furnished for disclosure purposes.
Lessor (Party A): Jiangsu Ever-Glory International Group Co.
Lessee (Party B): Nanjing New-Tailun Garments Co., Ltd.
Whereas, in accordance with the rules and regulations stipulated in the Contract Law of the People's Republic of China, the parties are freely entering into this agreement regarding the land and building leased by Party A to Party B, and the parties have prepare this agreement through negotiations mutual agreement, in order to define rights and obligations of both parties under the lease.
Article One
Party A represents that all the buildings leased are owned by Party A in conformity with national regulations concerning building ownership.
Article Two
Location, Acreage, Decoration, and Facilities
1. Party A agrees to lease the plot of land and the buildings on the plot to Party B, which is located at No. 58 Chenling Road, Shangfang Township, Jiangning District, Nanjing.
2. The National Land Rights Certificate for this plot is numbered Jiangning National Rights 2004 Number 0020, and encompasses an area sized 8053.33 square meters, and a floor area of 10,000 square meters (subject to Party A's measurements).
Article Three
Party B is required to show its identity certificate. The two parties shall have the certificates of each other copied for future reference.
Article Four
Term and Purpose of the Lease
1. The term shall be for 2 years commencing from April 1, 2006 and ending March 31, 2008.
2. Party B promises to Party A that the buildings shall only used for office purposes.
3. Upon expiration of the term, Party A has the right to recover possession of the building, and Party B agrees to return possession in a timely manner.
4. If the parties wish to extend the term of this lease, Party B should give Party A three-months' notice before the expiration, and this lease contract shall be renewable upon consent by Party A.
--------------------------------------------------------------------------------
Article Five
Rent and Payments
1. Yearly rent of the land and buildings is RMB 200,000 (Two Hundred Thousand RMB Yuan).
2. The rent shall be paid in the following manner: Party B will pay annual rent applicable for the year on April 10 of such year, and promises to properly maintain the building and use it (walls, floors and windows, etc.) in a reasonable manner.
Article Six
Party B shall pay fees and utilities related to operation of the building during the lease term including: water expenses, electricity charges, estate maintenance and related expenditures.
Article Seven
Maintenance and Usage of the Building
1. During the term of lease, Party B promises to ensure the safe use of the building, and bears the responsibility of repairing the buildings and all the facilities if and when they require repair. If the repairing necessitates cooperation from Party A, Party B will give Party A seven-days’ advance notice and Party A agrees to actively cooperate.
2. Party A shall use the leased premises in a reasonable manner. If any damage should occur that is caused by improper usage, Party B shall repair the facilities immediately or make a timely and appropriate compensation to Party A. Any alterations of the interior structure, decor, or installation of any equipment or fixtures within the building, shall require approval in writing from Party A prior to buildout in relation to the designed scale, construction scope, process and material. Upon expiration of the lease term or termination of the lease due to Party B's violation of any term of this lease, except as provided by written agreement made by both parties, Party A shall have the right to do any the following:
(1) take possession and ownership of any modifications to the premises, including décor, improvements, fixtures, etc.;
(2) have the building restored to its previous condition by Party B;
(3) charge Party B for the cost of restoring the premises to its original state prior to the modifications made by Party B.
3. The fixtures and equipment installed by Party B which can be removed (such as air conditioners) shall be removed by Party B. However, any materials which cannot be removed (such as floors, tiles, partitions) shall be taken over by Party A.
--------------------------------------------------------------------------------
Article Eight
The Transfer and Sub-lease of the Land and Buildings
1. During the term of lease, Party A has the right to transfer the land and building according to the required legal formalities and after the transfer, this contract shall continue to be effective as between the new owner and Party B.
2. Without Party As consent, Party B is not allowed to sub-lease the premises to any third party.
3. In case Party A sells the property, Party A shall give Party B two months notice in advance. Party B shall have a right of first refusal to purchase the land and buildings on the same terms and conditions as it is proposed to be sold by Party A.
Article Nine
Modification, Dissolving, and Termination of the Contract
1. The two parties can modify or terminate the contract through negotiations.
2. If Party A assigns this agreement to another party, Party B has the right to dissolve the contract if:
(1) the new party to this agreement fails to provide the land and buildings or those provided are not up to the contracted conditions and seriously affects normal usage.
(2) the new party fails to do its duty in repairing the buildings and this seriously affects normal usage.
3. During the lease term, Party A has the right to dissolve the contract and repossess the leased buildings if any of the following actions are taken by Party B:
(1) Party B sub-leases or lends the leased buildings without Party A's written permission.
(2) Party B demolishes or changes the structure of the buildings without Party A's written permission.
(3) Party B causes damage the leased buildings, and fails to repair such damage within a reasonable period provided by Party A.
(4) Party B uses the buildings in a way other than that stipulated in this agreement without Party A's written permission.
(5) Party B uses the leased buildings to store perilous goods or have illegal activities in it.
(6) Party B delays the payment of fees and expenses stipulated in this agreement.
(7) Party B is more than one month delinquent with the payment of rent due.
--------------------------------------------------------------------------------
4. For an extended term, Party B shall give Party A written notice three months in advance of the expiration. In case Party A continues to lease the buildings, Party B shall have a right of first refusal to obtain a lease from Party A under same terms and conditions.
5. This lease automatically terminates upon the expiration date unless extended according to the terms of this agreement.
6. This lease shall terminate if it cannot be implemented due to a force majeure event.
Article Ten
Examinations Upon Repossession of the Leased Property
1. Party A shall inspect the premises to ensure that the building is in a normal usable state.
2. The two parties collectively shall take part in the examination and inspection, and shall agree on issues such as decoration, hardware and facilities.
3. Party B shall turn over possession of the buildings and facilities to Party A upon the expiration of this agreement.
4. Upon the above turn-over of possession, Party B shall maintain the buildings and facilities in good condition, and shall not leave any articles in it or do anything to adversely affect the building's normal usage. Party A has the right to dispose of anything left by Party B without the approval of Party A.
Article Eleven
Responsibilities in the Event of Default by Party A
1. If this agreement is terminated due to Party As failure to provide the land and building stipulated in this agreement, Party A shall be obligated to pay Party B 20% of the total amount of this agreement as a penalty. In addition, Party A shall compensate Party B for any losses suffered by Party B as a result of such failure.
2. If Party A breaches the agreement and repossess to the land and buildings prior to the termination or expiration of this Agreement, Party A shall pay Party B 10% of the total amount of this agreement as a penalty. If this payment does not sufficiently compensation Party B for the actual losses sustained by Party B, Party A shall have the responsibility of compensating Party B by any means necessary in order to make Party B whole.
--------------------------------------------------------------------------------
Article Twelve
Responsibilities in the Event of Default by Party B
1. During the lease term, Party A has the right to dissolve the agreement and repossess the leased buildings in the event that Party B takes any of the following actions. Party B shall pay 10% of the total amount of this agreement to Party A as a penalty. If this payment cannot make up for the actual losses suffered by Party A, Party B shall have the responsibility of compensating Party A by any means necessary in order to make Party A whole.
(1) Party B sub-leases or lends the leased buildings without Party A’s written permission.
(2) Party B demolishes or changes the structure of the buildings without Party A’s written permission.
(3) Party B unilaterally dissolves this agreement without Party A’s written permission.
(4) Party B uses the buildings in a way other than that stipulated in this agreement or conducts illegal activities in it.
(5) Party B fails to pay rent timely for over one month.
2. For every day of overdue payment by Party B, Party B should pay a penalty of two times of the amount calculated as daily rent.
3. Upon expiration of the contract, Party B shall return possession of the building in a timely manner. For every day of the delay of repossession of the property, Party B should pay find five times of the amount calculated as daily rent.
Article Thirteen
Exemption from Liabilities
1. In the event this contract cannot be fulfilled and any losses are sustained by either of the parties due to a force majeure event, Party A and Party B shall not have any obligations the other party for any resulting losses.
2. In the event that any demolition or rebuilding of the leased properties is required by government action, neither party shall have any liability to the other party for resulting damages.
3. In the event the agreement is terminated due any of the above-mentioned causes, the rent shall be calculated by actual length of time when the property is used, and for any deficient month, the rent is calculated day by day, with credit back for any surplus and charge back for any deficiency.
4. Force Majeure means a disruptive event or condition which is unforeseen and beyond the reasonable control of the parties.
Article Fourteen
This agreement may be amended or supplemented in writing signed by both parties. Any supplementary clauses appended to this agreement shall form a part of this agreement, and shall be enforceable as such.
Article Fifteen
Dispute Resolution
All disputes in connection with this agreement or the execution thereof shall be settled through amicable negotiations by the contracting parties. If no settlement can be reached through negotiations, the case may then be submitted as a lawsuit to the People's Law Court in the jurisdiction in which Party A is located.
--------------------------------------------------------------------------------
Article Sixteen
This agreement takes effect when both parties execute and deliver it with each parties’ respective corporate seal.
Article Seventeen
This agreement and its attachments have been executed in multiple counterparts, and each counterpart shall have equal force and effect as if it were an original.
Lessor (Party A): Jiangsu Ever-Glory International Group Co.
(seal) Lessee (Party B): Nanjing New-Tailun Garments Co., Ltd. (seal)
-------------------------------------------------------------------------------- | [
"Exhibit 10.24 Lease Agreement (English Translation) Note: This is an English translation of an agreement originally drafted in Chinese, and accordingly this translation is not legally effective or binding on the parties. This translation is being furnished for disclosure purposes. Lessor (Party A): Jiangsu Ever-Glory International Group Co. Lessee (Party B): Nanjing New-Tailun Garments Co., Ltd. Whereas, in accordance with the rules and regulations stipulated in the Contract Law of the People's Republic of China, the parties are freely entering into this agreement regarding the land and building leased by Party A to Party B, and the parties have prepare this agreement through negotiations mutual agreement, in order to define rights and obligations of both parties under the lease. Article One Party A represents that all the buildings leased are owned by Party A in conformity with national regulations concerning building ownership.",
"Article Two Location, Acreage, Decoration, and Facilities 1. Party A agrees to lease the plot of land and the buildings on the plot to Party B, which is located at No. 58 Chenling Road, Shangfang Township, Jiangning District, Nanjing. 2. The National Land Rights Certificate for this plot is numbered Jiangning National Rights 2004 Number 0020, and encompasses an area sized 8053.33 square meters, and a floor area of 10,000 square meters (subject to Party A's measurements). Article Three Party B is required to show its identity certificate. The two parties shall have the certificates of each other copied for future reference. Article Four Term and Purpose of the Lease 1. The term shall be for 2 years commencing from April 1, 2006 and ending March 31, 2008. 2. Party B promises to Party A that the buildings shall only used for office purposes.",
"3. Upon expiration of the term, Party A has the right to recover possession of the building, and Party B agrees to return possession in a timely manner. 4. If the parties wish to extend the term of this lease, Party B should give Party A three-months' notice before the expiration, and this lease contract shall be renewable upon consent by Party A. -------------------------------------------------------------------------------- Article Five Rent and Payments 1. Yearly rent of the land and buildings is RMB 200,000 (Two Hundred Thousand RMB Yuan). 2. The rent shall be paid in the following manner: Party B will pay annual rent applicable for the year on April 10 of such year, and promises to properly maintain the building and use it (walls, floors and windows, etc.) in a reasonable manner. Article Six Party B shall pay fees and utilities related to operation of the building during the lease term including: water expenses, electricity charges, estate maintenance and related expenditures. Article Seven Maintenance and Usage of the Building 1. During the term of lease, Party B promises to ensure the safe use of the building, and bears the responsibility of repairing the buildings and all the facilities if and when they require repair.",
"If the repairing necessitates cooperation from Party A, Party B will give Party A seven-days’ advance notice and Party A agrees to actively cooperate. 2. Party A shall use the leased premises in a reasonable manner. If any damage should occur that is caused by improper usage, Party B shall repair the facilities immediately or make a timely and appropriate compensation to Party A. Any alterations of the interior structure, decor, or installation of any equipment or fixtures within the building, shall require approval in writing from Party A prior to buildout in relation to the designed scale, construction scope, process and material. Upon expiration of the lease term or termination of the lease due to Party B's violation of any term of this lease, except as provided by written agreement made by both parties, Party A shall have the right to do any the following: (1) take possession and ownership of any modifications to the premises, including décor, improvements, fixtures, etc. ; (2) have the building restored to its previous condition by Party B; (3) charge Party B for the cost of restoring the premises to its original state prior to the modifications made by Party B.",
"3. The fixtures and equipment installed by Party B which can be removed (such as air conditioners) shall be removed by Party B. However, any materials which cannot be removed (such as floors, tiles, partitions) shall be taken over by Party A. -------------------------------------------------------------------------------- Article Eight The Transfer and Sub-lease of the Land and Buildings 1. During the term of lease, Party A has the right to transfer the land and building according to the required legal formalities and after the transfer, this contract shall continue to be effective as between the new owner and Party B. 2. Without Party As consent, Party B is not allowed to sub-lease the premises to any third party. 3.",
"In case Party A sells the property, Party A shall give Party B two months notice in advance. Party B shall have a right of first refusal to purchase the land and buildings on the same terms and conditions as it is proposed to be sold by Party A. Article Nine Modification, Dissolving, and Termination of the Contract 1. The two parties can modify or terminate the contract through negotiations. 2. If Party A assigns this agreement to another party, Party B has the right to dissolve the contract if: (1) the new party to this agreement fails to provide the land and buildings or those provided are not up to the contracted conditions and seriously affects normal usage. (2) the new party fails to do its duty in repairing the buildings and this seriously affects normal usage. 3. During the lease term, Party A has the right to dissolve the contract and repossess the leased buildings if any of the following actions are taken by Party B: (1) Party B sub-leases or lends the leased buildings without Party A's written permission. (2) Party B demolishes or changes the structure of the buildings without Party A's written permission. (3) Party B causes damage the leased buildings, and fails to repair such damage within a reasonable period provided by Party A.",
"(4) Party B uses the buildings in a way other than that stipulated in this agreement without Party A's written permission. (5) Party B uses the leased buildings to store perilous goods or have illegal activities in it. (6) Party B delays the payment of fees and expenses stipulated in this agreement. (7) Party B is more than one month delinquent with the payment of rent due. -------------------------------------------------------------------------------- 4. For an extended term, Party B shall give Party A written notice three months in advance of the expiration. In case Party A continues to lease the buildings, Party B shall have a right of first refusal to obtain a lease from Party A under same terms and conditions. 5. This lease automatically terminates upon the expiration date unless extended according to the terms of this agreement.",
"6. This lease shall terminate if it cannot be implemented due to a force majeure event. Article Ten Examinations Upon Repossession of the Leased Property 1. Party A shall inspect the premises to ensure that the building is in a normal usable state. 2. The two parties collectively shall take part in the examination and inspection, and shall agree on issues such as decoration, hardware and facilities. 3. Party B shall turn over possession of the buildings and facilities to Party A upon the expiration of this agreement. 4.",
"Upon the above turn-over of possession, Party B shall maintain the buildings and facilities in good condition, and shall not leave any articles in it or do anything to adversely affect the building's normal usage. Party A has the right to dispose of anything left by Party B without the approval of Party A. Article Eleven Responsibilities in the Event of Default by Party A 1. If this agreement is terminated due to Party As failure to provide the land and building stipulated in this agreement, Party A shall be obligated to pay Party B 20% of the total amount of this agreement as a penalty.",
"In addition, Party A shall compensate Party B for any losses suffered by Party B as a result of such failure. 2. If Party A breaches the agreement and repossess to the land and buildings prior to the termination or expiration of this Agreement, Party A shall pay Party B 10% of the total amount of this agreement as a penalty. If this payment does not sufficiently compensation Party B for the actual losses sustained by Party B, Party A shall have the responsibility of compensating Party B by any means necessary in order to make Party B whole.",
"-------------------------------------------------------------------------------- Article Twelve Responsibilities in the Event of Default by Party B 1. During the lease term, Party A has the right to dissolve the agreement and repossess the leased buildings in the event that Party B takes any of the following actions. Party B shall pay 10% of the total amount of this agreement to Party A as a penalty. If this payment cannot make up for the actual losses suffered by Party A, Party B shall have the responsibility of compensating Party A by any means necessary in order to make Party A whole. (1) Party B sub-leases or lends the leased buildings without Party A’s written permission.",
"(2) Party B demolishes or changes the structure of the buildings without Party A’s written permission. (3) Party B unilaterally dissolves this agreement without Party A’s written permission. (4) Party B uses the buildings in a way other than that stipulated in this agreement or conducts illegal activities in it. (5) Party B fails to pay rent timely for over one month. 2. For every day of overdue payment by Party B, Party B should pay a penalty of two times of the amount calculated as daily rent. 3. Upon expiration of the contract, Party B shall return possession of the building in a timely manner. For every day of the delay of repossession of the property, Party B should pay find five times of the amount calculated as daily rent. Article Thirteen Exemption from Liabilities 1.",
"In the event this contract cannot be fulfilled and any losses are sustained by either of the parties due to a force majeure event, Party A and Party B shall not have any obligations the other party for any resulting losses. 2. In the event that any demolition or rebuilding of the leased properties is required by government action, neither party shall have any liability to the other party for resulting damages. 3. In the event the agreement is terminated due any of the above-mentioned causes, the rent shall be calculated by actual length of time when the property is used, and for any deficient month, the rent is calculated day by day, with credit back for any surplus and charge back for any deficiency.",
"4. Force Majeure means a disruptive event or condition which is unforeseen and beyond the reasonable control of the parties. Article Fourteen This agreement may be amended or supplemented in writing signed by both parties. Any supplementary clauses appended to this agreement shall form a part of this agreement, and shall be enforceable as such. Article Fifteen Dispute Resolution All disputes in connection with this agreement or the execution thereof shall be settled through amicable negotiations by the contracting parties. If no settlement can be reached through negotiations, the case may then be submitted as a lawsuit to the People's Law Court in the jurisdiction in which Party A is located. -------------------------------------------------------------------------------- Article Sixteen This agreement takes effect when both parties execute and deliver it with each parties’ respective corporate seal. Article Seventeen This agreement and its attachments have been executed in multiple counterparts, and each counterpart shall have equal force and effect as if it were an original. Lessor (Party A): Jiangsu Ever-Glory International Group Co. (seal) Lessee (Party B): Nanjing New-Tailun Garments Co., Ltd. (seal) --------------------------------------------------------------------------------"
] | https://github.com/TheAtticusProject/cuad | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
|
DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Allowable Subject Matter Claims 1, 4, and 12-29 are allowed. The prior art of record does not fairly teach or suggest performing the claimed process which further includes using such a seal assembly with a leak-proof clamp around a portion of the fabric in the flow cell to supply the electroless plating coating solution along with air to the fabric. Formal Matter This application is in condition for allowance except for the presence of claims 2, and 5-11 directed to an invention non-elected with traverse in the reply filed on 06-18-2018. Applicant is given TWO (2) MONTHS from the date of this letter to cancel the noted claims or take other appropriate action (37 CFR 1.144). Failure to take action during this period will be treated as authorization to cancel the noted claims by Examiner’s Amendment and pass the case to issue. Extensions of time under 37 CFR 1.136(a) will not be permitted since this application will be passed to issue. The prosecution of this case is closed except for consideration of the above matter.
Conclusion This application is in condition for allowance except for the following formal matters: The presence of claims 2, and 5-11 directed to an invention non-elected with traverse in the reply filed on 06-18-2018. Prosecution on the merits is closed in accordance with the practice under Ex parte Quayle, 25 USPQ 74, 453 O.G. 213, (Comm’r Pat. 1935). A shortened statutory period for reply to this action is set to expire TWO (2) MONTHS from the mailing date of this letter. Extensions of time may be granted under 37 CFR 1.136 but in no case can any extension carry the date for reply to this Office action beyond the maximum period of SIX MONTHS set by statute (35 U.S.C. 133). Any inquiry concerning this communication or earlier communications from the examiner should be directed to JOEL G HORNING whose telephone number is (571)270-5357. The examiner can normally be reached on Generally Monday - Friday 8:30-5pm PST. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Michael Cleveland can be reached on 5712721418. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.
/JOEL G HORNING/Primary Examiner, Art Unit 1712 | 2021-03-17T10:41:11 | [
"DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Allowable Subject Matter Claims 1, 4, and 12-29 are allowed. The prior art of record does not fairly teach or suggest performing the claimed process which further includes using such a seal assembly with a leak-proof clamp around a portion of the fabric in the flow cell to supply the electroless plating coating solution along with air to the fabric. Formal Matter This application is in condition for allowance except for the presence of claims 2, and 5-11 directed to an invention non-elected with traverse in the reply filed on 06-18-2018. Applicant is given TWO (2) MONTHS from the date of this letter to cancel the noted claims or take other appropriate action (37 CFR 1.144). Failure to take action during this period will be treated as authorization to cancel the noted claims by Examiner’s Amendment and pass the case to issue.",
"Extensions of time under 37 CFR 1.136(a) will not be permitted since this application will be passed to issue. The prosecution of this case is closed except for consideration of the above matter. Conclusion This application is in condition for allowance except for the following formal matters: The presence of claims 2, and 5-11 directed to an invention non-elected with traverse in the reply filed on 06-18-2018. Prosecution on the merits is closed in accordance with the practice under Ex parte Quayle, 25 USPQ 74, 453 O.G. 213, (Comm’r Pat. 1935). A shortened statutory period for reply to this action is set to expire TWO (2) MONTHS from the mailing date of this letter. Extensions of time may be granted under 37 CFR 1.136 but in no case can any extension carry the date for reply to this Office action beyond the maximum period of SIX MONTHS set by statute (35 U.S.C. 133).",
"Any inquiry concerning this communication or earlier communications from the examiner should be directed to JOEL G HORNING whose telephone number is (571)270-5357. The examiner can normally be reached on Generally Monday - Friday 8:30-5pm PST. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Michael Cleveland can be reached on 5712721418. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only.",
"For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000. /JOEL G HORNING/Primary Examiner, Art Unit 1712"
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2021-03-21.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Case: 14-20141 Document: 00512871144 Page: 1 Date Filed: 12/16/2014
IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
No. 14-20141 Conference Calendar United States Court of Appeals Fifth Circuit
FILED December 16, 2014 UNITED STATES OF AMERICA, Lyle W. Cayce Clerk Plaintiff-Appellee
v.
JONATHON EARL MARSHALL,
Defendant-Appellant
Appeal from the United States District Court for the Southern District of Texas USDC No. 4:08-CR-748-1
Before KING, DENNIS, and SOUTHWICK, Circuit Judges. PER CURIAM: * The Federal Public Defender appointed to represent Jonathon Earl Marshall has moved for leave to withdraw and has filed a brief in accordance with Anders v. California, 386 U.S. 738 (1967), and United States v. Flores, 632 F.3d 229 (5th Cir. 2011). Marshall has not filed a response. During the pendency of this appeal, Marshall completed the sentence imposed upon revocation of supervised release and was released from custody.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. Case: 14-20141 Document: 00512871144 Page: 2 Date Filed: 12/16/2014
No. 14-20141
Because no additional term of supervised release was imposed, this appeal is moot. See Spencer v. Kemna, 523 U.S. 1, 7 (1998); Bailey v. Southerland, 821 F.2d 277, 278 (5th Cir. 1987). Accordingly, the appeal is DISMISSED as moot, and counsel’s motion for leave to withdraw is DENIED as unnecessary.
2 | 12-16-2014 | [
"Case: 14-20141 Document: 00512871144 Page: 1 Date Filed: 12/16/2014 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 14-20141 Conference Calendar United States Court of Appeals Fifth Circuit FILED December 16, 2014 UNITED STATES OF AMERICA, Lyle W. Cayce Clerk Plaintiff-Appellee v. JONATHON EARL MARSHALL, Defendant-Appellant Appeal from the United States District Court for the Southern District of Texas USDC No. 4:08-CR-748-1 Before KING, DENNIS, and SOUTHWICK, Circuit Judges. PER CURIAM: * The Federal Public Defender appointed to represent Jonathon Earl Marshall has moved for leave to withdraw and has filed a brief in accordance with Anders v. California, 386 U.S. 738 (1967), and United States v. Flores, 632 F.3d 229 (5th Cir.",
"2011). Marshall has not filed a response. During the pendency of this appeal, Marshall completed the sentence imposed upon revocation of supervised release and was released from custody. * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. Case: 14-20141 Document: 00512871144 Page: 2 Date Filed: 12/16/2014 No. 14-20141 Because no additional term of supervised release was imposed, this appeal is moot.",
"See Spencer v. Kemna, 523 U.S. 1, 7 (1998); Bailey v. Southerland, 821 F.2d 277, 278 (5th Cir. 1987). Accordingly, the appeal is DISMISSED as moot, and counsel’s motion for leave to withdraw is DENIED as unnecessary. 2"
] | https://www.courtlistener.com/api/rest/v3/opinions/2761237/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Main, J. — The defendant was charged by an amended information with what is generally called criminal syndicalism, though it is not so named in the statute defining the crime. A demurrer to the information was overruled, the trial resulted in a verdict of guilty, and the defendant appeals. The charging part of the information is as follows: “That he, the said Mike Hennessy, ‘on or about the 15th day of November, 1919, in the county of Clarke and state of Washington, then and there being, did then and there wilfully, unlawfully and feloniously organize, help to organize, give aid to, and voluntarily assemble with or be a member of ‘The Industrial Workers of the World,’ ‘in a voluntary assembly and group of persons formed to unlawfully, feloniously, and anarchistically advocate, advise, and teach crime, sedition, violence, intimidation and injury as a means of effecting industrial, economic, social and political change,’ and the said defendant, Mike Hennessy, did then and there print, publish, circulate, distribute, and display books, pamphlets, handbills, documents and other written and printed matter, advising’, advocating, teaching and justifying crime, sedition, violence, intimidation and injury as a means and way of effecting industrial, economic, social and political change, contrary to the statutes in such cases made and provided and against the peace and dignity of the State of Washington.” The statute (Laws of 1919, p. 518, ch. 174), upon which the information is based is as follows: “§1. Whoever shall “(1) Advocate, advise, teach or justify crime, sedition, violence, intimidation or injury as a means or way of effecting or resisting any industrial, economic, social or political change, or “(2) Print, publish, edit, issue or knowingly sell, circulate, distribute or display any book, pamphlet, paper, handbill, document, or written or printed matter of any form, advocating, advising, teaching or jus*354tifying crime, sedition, violence, intimidation or injury as a means or way of effecting or resisting any industrial, economic, social or political change, or “(3) Organize or help to organize, give aid to, he a member of or voluntarily assemble.with any group of persons formed to advocate, advise or teach crime, sedition, violence, intimidation or injury as a means or way of effecting or resisting any industrial, economic, social or political change, “Shall be guilty of a felony.” Comparing the information with the statute, it will be seen that the charge is substantially in the language of subdivisions two and three of the statute. The statute makes it a felony for a person to do any of the things specified therein “as a means or way of effecting or resisting* any industrial, economic, social or political change.” The crime defined in the act, speaking generally, is one. against the present social order and may be committed in any of the ways therein set out. It is first contended that the information was duplicitous in that it charged more than one crime and that for this reason the demurrer thereto should have been sustained. The information does charge the appellant with helping to organize, voluntarily assembling with, giving aid to and being a member of the Industrial Workers of the World and that he did print, publish, circulate and distribute certain books, pamphlets and so forth. It is the general rule that where a single offense may be committed in different ways or by different means, it may be charged in the information to have been committed by more than one of the ways or means. State v. Pettit, 74 Wash. 510, 133 Pac. 1014; State v. Gaul, 88 Wash. 295, 152 Pac. 1029; State v. Wingard, 92 Wash. 219, 158 Pac. 725; State v. Klein, 94 Wash. 212, 162 Pac. 52; State v. Brummett, 98 Wash. 182, 167 Pac. 120. *355On the other hand, if the statute defining the crime charges separate and distinct offenses arising out of disconnected transactions, an information which charges more than one of the offenses would be duplicitous. State v. Dodd, 84 Wash. 436, 147 Pac. 9; Seattle v. Molin, 99 Wash. 210, 169 Pac. 318. While the general rule is plain enough, it is not always easy to determine whether the information, based upon a particular statute and in substantially the language thereof, charges separate and distinct offenses or whether it charges one offense and sets out the various ways or means by which that offense may be committed. The appellant in this case contends that the information charges separate and distinct offenses. If this be true, then the statute upon which it is based defines not one offense and specifies the ways in which it may be committed, but defines a number, of separate and distinct offenses. The chief reliance of the appellant is upon the Dodd and Molin cases just cited. In the Dodd case, the defendant was charged under a statute which made it an offense to place a female in charge of another person for an immoral purpose or, being the husband of a woman, conniving and consenting to her leading a life of prostitution, or soliciting persons to go to a house of prostitution for an immoral purpose. It was there held that the information was duplicitous because the act of the husband in placing Ms wife in custody of another person for an immoral purpose and with intent that she shall lead a life of prostitution had no readily perceived connection with the act of soliciting persons to go to a house of prostitution for an immoral purpose. In the Molin case, the defendant was charged with violating the general liquor ordinance of the city of Seattle, and it was claimed that the complaint was bad for duplicity. The defendant there was charged *356with manufacturing liquor, selling, bartering and disposing of liquor, buying, receiving and giving liquor for an unlawful purpose, buying liquor contrary to law and having a prohibited amount of liquor in his possession. It was there held that the complaint charged at least five separate and distinct offenses arising out of disconnected transactions based upon wholly different provisions of the ordinance. It is easy to see that the ordinance which defines manufacturing liquor, buying liquor contrary to the law, and so forth, charges separate and distinct offenses. There was no major crime which could be committed in each of the specified ways as defined in the ordinance under consideration in that case. The test, applied by these two cases, to determine whether the act charges and the statute defines more than one crime or whether it defines a single crime which may be committed in a number of different ways is whether there is a readily perceived connection between the things charged. If there is no reasonable connection, one with the other, and they are disconnected transactions, the information is duplicitous. Applying this test to the present case, it appears as already indicated, that the crime defined by the statute and of which the appellant is charged was that of “effecting or resisting any industrial, economic, social or political change” in any of the ways specified in the act. It was not made criminal to do the things there mentioned for any other purpose. It would seem that there is a direct and immediate connection between organizing, helping to organize, giving aid to and so forth, and voluntarily assembling which has a definite object to accomplish and the printing,' publishing, circulating, and so forth, of books, pamphlets and other printed matter having for its object the same purpose. One is the organizing, the other the propaganda put *357forth and the result to be accomplished is the same, each having the common object as defined by the statute of effecting or resisting any industrial, economic, social or political change. The information upon which the appellant was tried in this case does not fall within the rule of the Dodd and Molin cases, but comes within the general rule above stated, where a single offense may be committed in different ways it may be charged in the information to be committed in more than one of the ways. There is another reason why the trial court was correct in overruling the demurrer, and that is that the ways and means specified in the statute by which the crime may be committed are not repugnant to each other. State v. Pettit, and State v. Wingard, supra. In the Wingard case it was said: “But this court has held, and the general rule is, that ‘where a single offense may be committed in different ways or by different means, it may be charged in the information to have been committed by more than one of the ways or means, provided the ways or means charged be not repugnant to each other.’ ” Citing the Pettit and the Gaul cases'. In the Klein case it was said: • “In other words, the defining statute enumerates disjunctively a series of acts, either of which separately, or all together, so far as they are not in their nature inconsistent, may constitute the single offense of larceny. In such a ease it is thoroughly settled that the information may charge in a single count the commission of the offense in any, or, by conjunctive allegation, in all of the enumerated and not inconsistent ways.” Other cases from this court might be cited and reviewed but a detailed consideration, of how the court has held in each specific case, would greatly extend this opinion and would add nothing to the general rule. Each case must depend to a considerable extent upon *358the statute presented for construction and whether the information drawn thereon is duplicitous may be determined by the tests above indicated. The information was not duplicitous and the demurrer thereto was properly overruled. The second point is that the information is indefinite and uncertain and therefore did not sufficiently advise the appellant as to the charge which he was required to meet. The statute (Rem. Code, § 2065) provides that an information to be sufficient must distinctly set forth in ordinary and concise language, without repetition and in such a manner as will enable a person of common understanding to know what is intended to be charged. The holding in State v. Lowery, 104 Wash. 520, 177 Pac. 355, is controlling on this point. There the defendant was charged in the substantial language of the statute with the crime of criminal anarchy. The statute in some respects is similar to the statute here under consideration. There the information alleged the time and place of the alleged crime, the connection of the defendant with the Industrial Workers of the World, and the purpose of that organization. It was there said: “The information, surely, is sufficient to notify the defendant of the charge which he is called upon to defend against; it specifies the time, the place, and the means by which the crime is alleged to have been committed, and it so charges it that a person of common understanding cannot mistake its meaning. Had the defendant not been satisfied that the facts had been plead with sufficient elaboration to fully apprise him of the charge, he could have demanded that this enlightenment be furnished him by means of a bill of particulars, but he did not seek that source of information, being content to demur to the information, which charges the crime substantially in the language of the statute, and states the acts which constitute the offense in ordinary and concise language.” *359The information in question alleges the time and place, the connection of the defendant with the Industrial Workers of the World, and the purpose of that organization. As pointed out in the Lowery case, no bill of particulars was demanded there and none was demanded in this case. The information was not bad for indefiniteness and uncertainty. The third point is that the syndicalism statute amounts to an attempt to punish constructive treason and is unconstitutional. The argument in the appellant’s brief on this question takes a wide range, during the course of which the provision of the Federal constitution which provides that no law shall be made abridging the freedom of speech is quoted. Also the provision of the same constitution which provides that no law shall be passed which abridges the privileges and immunities of the citizens of the United States, and § 3, art. 3, which is: “Treason against the United States shall consist only in levying war against them, or in adhering to their enemies, giving them aid and comfort.” Section 5, art 1, of the constitution of this state provides: “Every person may freely speak, write and publish on all subjects, being responsible for the abuse of that right.” In State v. Fox, 71 Wash. 185, 127 Pac. 1111, the defendant was convicted under the statute which provided that every person who prints, publishes or circulates any written or printed matter advocating or encouraging a breach of the peace or violence which would tend to encourage less respect for law, should be guilty of misdemeanor. The law was sustained and in the course of the opinion it was said: “While the constitutions of the United States and of this state guarantee the right to freely speak, write and publish upon all subjects, it is not meant thereby that persons may with impunity advocate disregard of *360law; or, as said in People v. Most, 171 N. Y. 423, 64 N. E. 175, 58 L. R. A. 509: ‘While the right to publish is thus sanctioned and secured, the abuse of that right is excepted from the protection of the constitution, and authority to provide for and punish such abuse is left to the legislature. The punishment of those who publish articles which tend to corrupt morals, induce crime or destroy organized society, is essential to the security of freedom and the stability of the state.’ ” That case was taken to the United States supreme court and the holding of this court was affirmed. Fox v. Washington, 236 U. S. 273. In State v. Moilen, 140 Minn. 112, 167 N. W. 345, the court sustained an act similar to the one here in question. The fact that treason is defined in the Federal constitution does not deprive the state legislature of the power to enact the statute which is intended to prevent the teaching of crime, sedition, violence or intimidation as a means of overcoming or destroying the present social order. In Ex parte Bollman, 8 U. S. 74, during the course of the opinion it was said: “Crimes so atrocious as those which have for their object the subversion by violence of those laws and those institutions which have been ordained in order to secure the peace and happiness of society, are not to escape punishment, because they have not ripened into treason. The wisdom of the legislature is competent to provide for the case; and the framers of our constitution, who not only defined and limited the crime, but with jealous circumspection attempted to protect their limitation, by providing that no person should be convicted of it,' unless on the testimony of two witnesses to the same overt act, or on confession in open court, must have conceived it more safe, that punishment in such cases, should be ordained by general laws, formed upon deliberation, under the influence of no resentments, and without knowing on whom they were to operate, than that it should be inflicted under the influence of those passions which the occa*361sion seldom fails to excite, and which a flexible definition of the crime, or a construction which would render it flexible, might bring into operation. It is, therefore, more safe, as well as more consonant to the principles of our constitution, that the crime of treason should not be extended by construction to doubtful cases; and that crimes not clearly within the constitutional definition, should receive such punishment as the legislature in its wisdom may provide.” While the Federal government undoubtedly has ample power to protect its sovereignty, it does not necessarily follow from this that the legislature of a state may not pass laws for the purpose of aiding or assisting’ the national government. The state is one of the component parts of the Federal government and what affects the latter affects the former. State ex rel. Hart v. Clausen, 113 Wash. 570, 194 Pac. 793. The fourth point is that the statute is class legislation. The argument here seems to be based on the assumption that it was- “intended to restrict the discussion of economic and industrial questions among labor organizations.” There is nothing, however, on the face of the act to justify this assumption and the court in considering the question is governed by its terms. The legislature has power to pass all needful police regulations and so long as such regulations bear with equal weight upon all in like situation or of the same class, they are upheld by the courts. State v. Fraternal Knights & Ladies, 35 Wash. 338, 77 Pac. 500; State v. Nichols, 28 Wash. 628, 69 Pac. 372; State v. Nichols, 61 Wash. 142, 112 Pac. 269, Ann. Cas. 1912B 1088. The act is general in its terms and provides that “whoever” shall do the things there prohibited, shall be guilty of a felony. Under this language anyone, no matter what his business association or professional calling might be, who did the things prohibited by the act, would be subject to its provisions. *362The fifth point is that the statute violates the constitutional prohibition against cruel and unusual punishments. It will be observed that the act makes the doing of the prohibited things a felony but does not fix a penalty. No penalty being fixed in the act the punishment would be that prescribed for a felony but not fixed by the statute defining the crime. Remington’s Code, §2265, provides that every person convicted of a felony for which no punishment is specifically prescribed by any statutory provision in force at the time of the conviction “shall be punished by imprisonment in the state penitentiary for not more than ten years or by a fine of not more than five thousand dollars, or both.” Under this statute the trial court had the power to fix the term of imprisonment for any period not exceeding* ten years or for any sum as a fine not exceeding five thousand dollars, or by both such imprisonment and fine. There is no merit in the contention that the statute violates the constitutional provision against cruel and unusual punishments. State v. Feilen, 70 Wash. 65, 126 Pac. 75, Ann. Cas. 1914 B 512, 41 L. R. A. (N. S.) 418. The sixth point is that the statute is void for indefiniteness. In State v. Fox, supra, the same objection was made to the statute there being construed. In answering the objection it was said: “The appellant also argues, and cites numerous cases to the effect, that a statute creating an offense must be certain, and that, where the law is uncertain, there is no law. This is no doubt the rule. We are satisfied it has no application to the statute under consideration. The statute provides: ‘Every person who shall willfully . . . edit . . . any . . . paper . . . or printed matter . . . advocating . . . the commission of any crime ... or which shall tend to encourage disrespect for law . . . shall be guilty of a gross misdemeanor.’ It is argued that *363the phrase ‘ or which shall tend to encourage disrespect for law’ is entirely uncertain. But it has been held that a criminal statute is not void for uncertainty because it denounces acts which ‘tend,’ or are ‘reasonably calculated,’ to bring about prohibited results. Waters-Pierce Oil Co. v. Texas, 212 U. S. 86.” In State v. Brown, 108 Wash. 205, 182 Pac. 944, one of the questions was whether the statute which made it a misdemeanor for any person to drive or propel a vehicle upon any public street or highway which with or without its load should be of such weight as to destroy or permanently injure such street or highway was void for indefiniteness. It was there said: “The objection to the statute is that it does not definitely and clearly define the offense intended to be denounced by it. It is argued that a statute to be free from the objection of indefiniteness and uncertainty must be so far specific that a person may know in advance whether his act will or will not be a violation of the statute, and that this statute is not thus specific, since the operator of the vehicle cannot know until he actually makes the trial whether the load will or will not permanently injure the highway. In other words, the contention is that a statute, to be free from the objection that it is indefinite and uncertain, must specifically point out the acts which constitute the crime, not merely prohibit results produced by acts. But such is not the rule. The legislation in creating an offense may define it by a particular description of the acts constituting it, or it may define it as an act which produces, or is reasonably calculated to produce, a certain defined or described result. 16 C. J. 67. If this were not so, it would be easy to find many statutes now upon the books which are open to the objection of uncertainty, but which have heretofore never been suspected of that fault. As illustrations; the statutes making it an offense to willfully disturb any religious meeting (Bern. Code, § 2499), any assembly or meeting not unlawful in its character (Id., §2547), or any school meeting (Id., § 4697), or the legislature, or either house *364thereof (Id., §2337), are all statutes which do not specify the particular acts which will constitute the disturbance; yet no case can be found where they have been held invalid for that reason, while there are many which have allowed convictions thereunder to stand. Other illustrations, without specifically enumerating them, can be found in the statutes against malicious mischief, injury to public utilities, injuries to property, the statutes defining and punishing vagrancy, obstructing an officer in the discharge of his duty, publishing articles tending to excite crime or a breach of the peace, and the like, all of which define the crime by the result it produces rather than by the specific acts constituting the offense.” The act now before us is no more indefinite than were the statutes which were before the court in those cases; to hold that the syndicalism act is void for indefiniteness would require a modification of the holding in the cases just cited and especially in the Brown case. The act is not void for indefiniteness. The seventh point is that the title of the statute is insufficient because it does not specifically refer to doing the prohibited things for the purpose of effecting any industrial or economic change, and for the further reason that the language used “is too general for any purpose. ’ ’ It has frequently been held by this court that it is enough if the title of an act'is sufficient to indicate to a person making inquiry that the act may cover a particular subject. It is not necessary that the title be an index to the body of the act. In State v. George, 84 Wash. 113, 146 Pac. 378, it was claimed that the title of the act which was “An act relating to crimes and punishment and the rights and custody of persons accused or convicted of crime and repealing certain acts” (Laws of 1909, p.-890, ch. 249), was not sufficient. It was held, however, that the language used was broad enough to cover the subject-matter of the act. Upon the authority of that case and *365others that might he assembled the title of the act was sufficient. It has become the settled doctrine of this court that no act will be held unconstitutional on the ground that the title is not sufficient unless it clearly appears that such title does not meet the constitutional requirement. The eighth point is that subdivision 3 of the act infringes upon the personal liberties of the citizen and is therefore unconstitutional. This point is more particularly directed to that portion of subdivision 3 which makes it unlawful for anyone to become a member of any group of persons formed to advocate, and so forth, the things prohibited by the act. In support of his contention on this point the appellant cites a line of cases like Ex parte Smith, 135 Mo. 223, 36 S. W. 629, 58 Am. St. 576, 33 L. R. A. 606, which holds that an ordinance forbidding anyone to associate with persons having the reputation of being thieves, burglars and so forth with intent to commit an offense is unconstitutional and that it invades the rights of personal liberty. Without either approving or disapproving the rule of the cases cited, it seems to us that there is a distinction between them and the present case. An ordinance or act which makes it unlawful to associate with persons having the reputation of being thieves, and so forth, is different from an act which makes it unlawful for anyone to organize or help to organize a group of persons to advocate and teach crime, and so forth, for the purpose which is specified in the syndicalism act. If it were in the legislative province, as we have found, to make it a penal offense to do the prohibited things in the act, including the organization of a group of persons, it would seem to follow that it' were likewise within the power of the legislature to make it a penal offense for anyone to become a member of such group of persons or organization. The legis*366lature, in defining and providing for the punishment of crime, is exercising only one phase of the broad police power of the state. It did not exceed its power when it made it a penal offense for anyone to become a member of a group of persons organized for the purposes prohibited by the statute. , The ninth point is that the court erred in not submitting to the jury the question of the defendant’s knowledge or intent to commit the crime with which he was charged. The court was requested to instruct the jury that, before they could find the appellant guilty, it was necessary for them to find that he had knowledge of the unlawful purposes and objects of the-organization. This request was refused. The question, therefore, is presented as to whether, under the statute, criminal intent is a necessary element of the crime. The general rule upon this subject as stated in 8 R. O. L. 62, is as follows: ‘ ‘ The maxim actus non facit reutn, nisi mens sit rea, does not always apply to crimes created by statute, and therefore if a criminal intent is not an essential element of a statutory crime, it is not necessary to prove any intent in order to justify a conviction. Whether a criminal intent or guilty knowledge is a necessary element of a statutory offense is a matter of construction to be determined from the language of the statute, in view of its manifest purpose and design. There are many instances in recent times where the legislature in the exercise of the police power has prohibited, under penalty, the performance of a specific act. The doing of the inhibited act constitutes the crime, and the moral turpitude or purity of the motive by which it was prompted and knowledge or ignorance of its criminal character are immaterial circumstances . on the question of guilt. The only fact to be determined in these cases is whether the defendant did the act. In the interest of the public the burden is placed upon the actor of ascertaining at his peril whether his deed is within the prohibition of any criminal statute.” *367Tn Ellis v. United States, 206 U. S. 246, the accused had been convicted, while a contractor on certain public work, of requiring or permitting certain laborers “to work more than eight hours in any calendar day except in case of extraordinary emergency.” This was an act of Congress and one violating it was made guilty of a misdemeanor. Upon the trial, the jury were instructed that if the accused intended to permit the man to work more than eight hours on a calendar day named, he intended to violate the statute. The effect of this instruction was to make the defendant guilty if he intended to do the thing complained of regardless of whether he intended to violate the law. It was there said: “It is admitted that he was -a contractor within the meaning of the act and that the workmen permitted to work more than eight hours a day were employed upon ‘public work’, and it is not denied that these workmen were ‘mechanics’. The jury were instructed, subject to exception, that if the defendant intended to permit the men to work over eight hours on the calendar day named he intended to violate the statute. The argument against the instruction is that the word ‘intentionally’ in the statute requires knowledge of the law, or at least that to be convicted Ellis must not have supposed, even mistakenly, that there was an emergency extraordinary enough to justify his conduct. The latter proposition is only the former a little disguised. Both are without foundation. If a man intentionally adopts certain conduct in certain circumstances known to him, and that conduct is forbidden by the law under those circumstances, he intentionally breaks the law in the only sense in which the law ever considers intent.” In the present case the defendant voluntarily became a member of a group of persons prohibited by statute, and in doing this act, he became guilty of the offense whether he intended to violate the law or not. As was stated in the Ellis case, *368“If a man intentionally adopts certain conduct in certain circumstances known to him, and that conduct is forbidden by the law under those circumstances, he intentionally breaks the law in the only sense in which the law ever considers intent.” Whether intent or guilty knowledge is an essential element of a statutory crime depends upon the intent of the legislature. There are statutes which, in defining a crime, expressly provide that guilty knowledge shall be an element thereof. There are other statutes, which the courts have construed to the effect that the legislature intended by the language used to make guilty knowledge or intent an element of the crime. In the syndicalism act, there is no provision making guilty knowledge or intent an element of crime, neither can it be said from the language used that the legislature had such intent. To sustain the appellant’s contention upon this question, it would be necessary to write into the statute a proviso which the legislature did not place there. The case, of the State v. Strasburg, 60 Wash. 106, 110 Pac. 1020, Ann. Cas. 1912B 917, 32 L. R. A. (N. S.) 1216, is not controlling. There the act which took away from a man, charged with certain crimes, the right to plead insanity in defense was held unconstitutional. That case differs from the present in this, that if the accused were insane he could not have formed the intent to do the particular act. The tenth point is that the superior court of Clarke county had no jurisdiction because the appellant became a member of the Industrial Workers of the World in Yakima county and the evidence failed to show that there was any group of persons organized in Clarke county which was prohibited by the act of which the appellant was a member. In support of this contention, reliance is placed upon § 22, art. 1, of the constitution of this state which provides that, in criminal *369prosecutions, the accused shall have the right to be tried in the county in which “the offense is alleged to have been committed. ’ ’ The argument is that, since the appellant became a member in Yakima county, under the statute he was not subject to be charged with being a member in Clarke county. The act reads upon this question in effect that, whoever shall “be a member of” any group of persons formed to advocate, advise and so forth, shall be guilty of a felony. Under the terms of the act, the appellant was a member whether he be in Yakima county or Clarke county, and it is the being a member which the statutes make penal. The superior court of Clarke county had jurisdiction. The eleventh point is that the introduction in evidence of state’s exhibit No. 1 was error because it is claimed that the appellant’s rights under, §§ 7 and 9, art. 1, of the constitution of this state, and of articles 4 and 5 of the amendments to the constitution of the United States, had been invaded when it was obtained from him. The state’s exhibit No. 1 was of‘appellant’s membership card in the Industrial Workers of the World. To the contention on this point, there are two answers: First, the exhibit was not wrongfully or unlawfully obtained from the accused; and second, if it had been so obtained, the question was not raised until after the trial of the action had begun, and consequently came too late. Adams v. New York, 192 U. S. 585; Weeks v. United States, 232 U. S. 383. The amendments to the constitution of the United States relied upon contain no restrictions on the power of the state and are not applicable in the present case. Brown v. New Jersey, 175 U. S. 172. The manner in which the card was obtained in no way violated the rights of the accused under the state constitution. *370The twelfth point is that the court erred in its rulings upon the receipt and the rejection of evidence. As to the evidence received, of which complaint is made, it was admissible under the holding in State v. Lowery, supra. As to the evidence offered and rejected, it was either incompetent, or not relevant to any issue to be determined by the jury. To discuss this evidence in detail, would greatly prolong this opinion. The final point is that there was no evidence to sustain the information. This point has been covered by what has been previously said and requires no further discussion. There was sufficient evidence to carry the question of the appellant’s innocence or guilt to the jury. The judgment will be affirmed. All' concur. | 08-12-2021 | [
"Main, J. — The defendant was charged by an amended information with what is generally called criminal syndicalism, though it is not so named in the statute defining the crime. A demurrer to the information was overruled, the trial resulted in a verdict of guilty, and the defendant appeals. The charging part of the information is as follows: “That he, the said Mike Hennessy, ‘on or about the 15th day of November, 1919, in the county of Clarke and state of Washington, then and there being, did then and there wilfully, unlawfully and feloniously organize, help to organize, give aid to, and voluntarily assemble with or be a member of ‘The Industrial Workers of the World,’ ‘in a voluntary assembly and group of persons formed to unlawfully, feloniously, and anarchistically advocate, advise, and teach crime, sedition, violence, intimidation and injury as a means of effecting industrial, economic, social and political change,’ and the said defendant, Mike Hennessy, did then and there print, publish, circulate, distribute, and display books, pamphlets, handbills, documents and other written and printed matter, advising’, advocating, teaching and justifying crime, sedition, violence, intimidation and injury as a means and way of effecting industrial, economic, social and political change, contrary to the statutes in such cases made and provided and against the peace and dignity of the State of Washington.” The statute (Laws of 1919, p. 518, ch.",
"174), upon which the information is based is as follows: “§1. Whoever shall “(1) Advocate, advise, teach or justify crime, sedition, violence, intimidation or injury as a means or way of effecting or resisting any industrial, economic, social or political change, or “(2) Print, publish, edit, issue or knowingly sell, circulate, distribute or display any book, pamphlet, paper, handbill, document, or written or printed matter of any form, advocating, advising, teaching or jus*354tifying crime, sedition, violence, intimidation or injury as a means or way of effecting or resisting any industrial, economic, social or political change, or “(3) Organize or help to organize, give aid to, he a member of or voluntarily assemble.with any group of persons formed to advocate, advise or teach crime, sedition, violence, intimidation or injury as a means or way of effecting or resisting any industrial, economic, social or political change, “Shall be guilty of a felony.” Comparing the information with the statute, it will be seen that the charge is substantially in the language of subdivisions two and three of the statute.",
"The statute makes it a felony for a person to do any of the things specified therein “as a means or way of effecting or resisting* any industrial, economic, social or political change.” The crime defined in the act, speaking generally, is one. against the present social order and may be committed in any of the ways therein set out. It is first contended that the information was duplicitous in that it charged more than one crime and that for this reason the demurrer thereto should have been sustained. The information does charge the appellant with helping to organize, voluntarily assembling with, giving aid to and being a member of the Industrial Workers of the World and that he did print, publish, circulate and distribute certain books, pamphlets and so forth. It is the general rule that where a single offense may be committed in different ways or by different means, it may be charged in the information to have been committed by more than one of the ways or means.",
"State v. Pettit, 74 Wash. 510, 133 Pac. 1014; State v. Gaul, 88 Wash. 295, 152 Pac. 1029; State v. Wingard, 92 Wash. 219, 158 Pac. 725; State v. Klein, 94 Wash. 212, 162 Pac. 52; State v. Brummett, 98 Wash. 182, 167 Pac. 120. *355On the other hand, if the statute defining the crime charges separate and distinct offenses arising out of disconnected transactions, an information which charges more than one of the offenses would be duplicitous. State v. Dodd, 84 Wash. 436, 147 Pac. 9; Seattle v. Molin, 99 Wash. 210, 169 Pac. 318. While the general rule is plain enough, it is not always easy to determine whether the information, based upon a particular statute and in substantially the language thereof, charges separate and distinct offenses or whether it charges one offense and sets out the various ways or means by which that offense may be committed.",
"The appellant in this case contends that the information charges separate and distinct offenses. If this be true, then the statute upon which it is based defines not one offense and specifies the ways in which it may be committed, but defines a number, of separate and distinct offenses. The chief reliance of the appellant is upon the Dodd and Molin cases just cited. In the Dodd case, the defendant was charged under a statute which made it an offense to place a female in charge of another person for an immoral purpose or, being the husband of a woman, conniving and consenting to her leading a life of prostitution, or soliciting persons to go to a house of prostitution for an immoral purpose.",
"It was there held that the information was duplicitous because the act of the husband in placing Ms wife in custody of another person for an immoral purpose and with intent that she shall lead a life of prostitution had no readily perceived connection with the act of soliciting persons to go to a house of prostitution for an immoral purpose. In the Molin case, the defendant was charged with violating the general liquor ordinance of the city of Seattle, and it was claimed that the complaint was bad for duplicity. The defendant there was charged *356with manufacturing liquor, selling, bartering and disposing of liquor, buying, receiving and giving liquor for an unlawful purpose, buying liquor contrary to law and having a prohibited amount of liquor in his possession. It was there held that the complaint charged at least five separate and distinct offenses arising out of disconnected transactions based upon wholly different provisions of the ordinance. It is easy to see that the ordinance which defines manufacturing liquor, buying liquor contrary to the law, and so forth, charges separate and distinct offenses. There was no major crime which could be committed in each of the specified ways as defined in the ordinance under consideration in that case.",
"The test, applied by these two cases, to determine whether the act charges and the statute defines more than one crime or whether it defines a single crime which may be committed in a number of different ways is whether there is a readily perceived connection between the things charged. If there is no reasonable connection, one with the other, and they are disconnected transactions, the information is duplicitous. Applying this test to the present case, it appears as already indicated, that the crime defined by the statute and of which the appellant is charged was that of “effecting or resisting any industrial, economic, social or political change” in any of the ways specified in the act. It was not made criminal to do the things there mentioned for any other purpose. It would seem that there is a direct and immediate connection between organizing, helping to organize, giving aid to and so forth, and voluntarily assembling which has a definite object to accomplish and the printing,' publishing, circulating, and so forth, of books, pamphlets and other printed matter having for its object the same purpose. One is the organizing, the other the propaganda put *357forth and the result to be accomplished is the same, each having the common object as defined by the statute of effecting or resisting any industrial, economic, social or political change.",
"The information upon which the appellant was tried in this case does not fall within the rule of the Dodd and Molin cases, but comes within the general rule above stated, where a single offense may be committed in different ways it may be charged in the information to be committed in more than one of the ways. There is another reason why the trial court was correct in overruling the demurrer, and that is that the ways and means specified in the statute by which the crime may be committed are not repugnant to each other. State v. Pettit, and State v. Wingard, supra. In the Wingard case it was said: “But this court has held, and the general rule is, that ‘where a single offense may be committed in different ways or by different means, it may be charged in the information to have been committed by more than one of the ways or means, provided the ways or means charged be not repugnant to each other.’ ” Citing the Pettit and the Gaul cases'. In the Klein case it was said: • “In other words, the defining statute enumerates disjunctively a series of acts, either of which separately, or all together, so far as they are not in their nature inconsistent, may constitute the single offense of larceny. In such a ease it is thoroughly settled that the information may charge in a single count the commission of the offense in any, or, by conjunctive allegation, in all of the enumerated and not inconsistent ways.” Other cases from this court might be cited and reviewed but a detailed consideration, of how the court has held in each specific case, would greatly extend this opinion and would add nothing to the general rule.",
"Each case must depend to a considerable extent upon *358the statute presented for construction and whether the information drawn thereon is duplicitous may be determined by the tests above indicated. The information was not duplicitous and the demurrer thereto was properly overruled. The second point is that the information is indefinite and uncertain and therefore did not sufficiently advise the appellant as to the charge which he was required to meet. The statute (Rem. Code, § 2065) provides that an information to be sufficient must distinctly set forth in ordinary and concise language, without repetition and in such a manner as will enable a person of common understanding to know what is intended to be charged. The holding in State v. Lowery, 104 Wash. 520, 177 Pac. 355, is controlling on this point. There the defendant was charged in the substantial language of the statute with the crime of criminal anarchy. The statute in some respects is similar to the statute here under consideration. There the information alleged the time and place of the alleged crime, the connection of the defendant with the Industrial Workers of the World, and the purpose of that organization. It was there said: “The information, surely, is sufficient to notify the defendant of the charge which he is called upon to defend against; it specifies the time, the place, and the means by which the crime is alleged to have been committed, and it so charges it that a person of common understanding cannot mistake its meaning.",
"Had the defendant not been satisfied that the facts had been plead with sufficient elaboration to fully apprise him of the charge, he could have demanded that this enlightenment be furnished him by means of a bill of particulars, but he did not seek that source of information, being content to demur to the information, which charges the crime substantially in the language of the statute, and states the acts which constitute the offense in ordinary and concise language.” *359The information in question alleges the time and place, the connection of the defendant with the Industrial Workers of the World, and the purpose of that organization. As pointed out in the Lowery case, no bill of particulars was demanded there and none was demanded in this case. The information was not bad for indefiniteness and uncertainty. The third point is that the syndicalism statute amounts to an attempt to punish constructive treason and is unconstitutional.",
"The argument in the appellant’s brief on this question takes a wide range, during the course of which the provision of the Federal constitution which provides that no law shall be made abridging the freedom of speech is quoted. Also the provision of the same constitution which provides that no law shall be passed which abridges the privileges and immunities of the citizens of the United States, and § 3, art. 3, which is: “Treason against the United States shall consist only in levying war against them, or in adhering to their enemies, giving them aid and comfort.” Section 5, art 1, of the constitution of this state provides: “Every person may freely speak, write and publish on all subjects, being responsible for the abuse of that right.” In State v. Fox, 71 Wash. 185, 127 Pac. 1111, the defendant was convicted under the statute which provided that every person who prints, publishes or circulates any written or printed matter advocating or encouraging a breach of the peace or violence which would tend to encourage less respect for law, should be guilty of misdemeanor.",
"The law was sustained and in the course of the opinion it was said: “While the constitutions of the United States and of this state guarantee the right to freely speak, write and publish upon all subjects, it is not meant thereby that persons may with impunity advocate disregard of *360law; or, as said in People v. Most, 171 N. Y. 423, 64 N. E. 175, 58 L. R. A. 509: ‘While the right to publish is thus sanctioned and secured, the abuse of that right is excepted from the protection of the constitution, and authority to provide for and punish such abuse is left to the legislature. The punishment of those who publish articles which tend to corrupt morals, induce crime or destroy organized society, is essential to the security of freedom and the stability of the state.’ ” That case was taken to the United States supreme court and the holding of this court was affirmed. Fox v. Washington, 236 U. S. 273. In State v. Moilen, 140 Minn. 112, 167 N. W. 345, the court sustained an act similar to the one here in question. The fact that treason is defined in the Federal constitution does not deprive the state legislature of the power to enact the statute which is intended to prevent the teaching of crime, sedition, violence or intimidation as a means of overcoming or destroying the present social order. In Ex parte Bollman, 8 U. S. 74, during the course of the opinion it was said: “Crimes so atrocious as those which have for their object the subversion by violence of those laws and those institutions which have been ordained in order to secure the peace and happiness of society, are not to escape punishment, because they have not ripened into treason.",
"The wisdom of the legislature is competent to provide for the case; and the framers of our constitution, who not only defined and limited the crime, but with jealous circumspection attempted to protect their limitation, by providing that no person should be convicted of it,' unless on the testimony of two witnesses to the same overt act, or on confession in open court, must have conceived it more safe, that punishment in such cases, should be ordained by general laws, formed upon deliberation, under the influence of no resentments, and without knowing on whom they were to operate, than that it should be inflicted under the influence of those passions which the occa*361sion seldom fails to excite, and which a flexible definition of the crime, or a construction which would render it flexible, might bring into operation. It is, therefore, more safe, as well as more consonant to the principles of our constitution, that the crime of treason should not be extended by construction to doubtful cases; and that crimes not clearly within the constitutional definition, should receive such punishment as the legislature in its wisdom may provide.” While the Federal government undoubtedly has ample power to protect its sovereignty, it does not necessarily follow from this that the legislature of a state may not pass laws for the purpose of aiding or assisting’ the national government. The state is one of the component parts of the Federal government and what affects the latter affects the former. State ex rel.",
"Hart v. Clausen, 113 Wash. 570, 194 Pac. 793. The fourth point is that the statute is class legislation. The argument here seems to be based on the assumption that it was- “intended to restrict the discussion of economic and industrial questions among labor organizations.” There is nothing, however, on the face of the act to justify this assumption and the court in considering the question is governed by its terms. The legislature has power to pass all needful police regulations and so long as such regulations bear with equal weight upon all in like situation or of the same class, they are upheld by the courts. State v. Fraternal Knights & Ladies, 35 Wash. 338, 77 Pac. 500; State v. Nichols, 28 Wash. 628, 69 Pac.",
"372; State v. Nichols, 61 Wash. 142, 112 Pac. 269, Ann. Cas. 1912B 1088. The act is general in its terms and provides that “whoever” shall do the things there prohibited, shall be guilty of a felony. Under this language anyone, no matter what his business association or professional calling might be, who did the things prohibited by the act, would be subject to its provisions. *362The fifth point is that the statute violates the constitutional prohibition against cruel and unusual punishments. It will be observed that the act makes the doing of the prohibited things a felony but does not fix a penalty. No penalty being fixed in the act the punishment would be that prescribed for a felony but not fixed by the statute defining the crime. Remington’s Code, §2265, provides that every person convicted of a felony for which no punishment is specifically prescribed by any statutory provision in force at the time of the conviction “shall be punished by imprisonment in the state penitentiary for not more than ten years or by a fine of not more than five thousand dollars, or both.” Under this statute the trial court had the power to fix the term of imprisonment for any period not exceeding* ten years or for any sum as a fine not exceeding five thousand dollars, or by both such imprisonment and fine.",
"There is no merit in the contention that the statute violates the constitutional provision against cruel and unusual punishments. State v. Feilen, 70 Wash. 65, 126 Pac. 75, Ann. Cas. 1914 B 512, 41 L. R. A. (N. S.) 418. The sixth point is that the statute is void for indefiniteness. In State v. Fox, supra, the same objection was made to the statute there being construed. In answering the objection it was said: “The appellant also argues, and cites numerous cases to the effect, that a statute creating an offense must be certain, and that, where the law is uncertain, there is no law. This is no doubt the rule. We are satisfied it has no application to the statute under consideration.",
"The statute provides: ‘Every person who shall willfully . . . edit . . . any . . . paper . . . or printed matter . . . advocating . . . the commission of any crime ... or which shall tend to encourage disrespect for law . . . shall be guilty of a gross misdemeanor.’ It is argued that *363the phrase ‘ or which shall tend to encourage disrespect for law’ is entirely uncertain. But it has been held that a criminal statute is not void for uncertainty because it denounces acts which ‘tend,’ or are ‘reasonably calculated,’ to bring about prohibited results. Waters-Pierce Oil Co. v. Texas, 212 U. S. 86.” In State v. Brown, 108 Wash. 205, 182 Pac. 944, one of the questions was whether the statute which made it a misdemeanor for any person to drive or propel a vehicle upon any public street or highway which with or without its load should be of such weight as to destroy or permanently injure such street or highway was void for indefiniteness.",
"It was there said: “The objection to the statute is that it does not definitely and clearly define the offense intended to be denounced by it. It is argued that a statute to be free from the objection of indefiniteness and uncertainty must be so far specific that a person may know in advance whether his act will or will not be a violation of the statute, and that this statute is not thus specific, since the operator of the vehicle cannot know until he actually makes the trial whether the load will or will not permanently injure the highway. In other words, the contention is that a statute, to be free from the objection that it is indefinite and uncertain, must specifically point out the acts which constitute the crime, not merely prohibit results produced by acts. But such is not the rule. The legislation in creating an offense may define it by a particular description of the acts constituting it, or it may define it as an act which produces, or is reasonably calculated to produce, a certain defined or described result.",
"16 C. J. 67. If this were not so, it would be easy to find many statutes now upon the books which are open to the objection of uncertainty, but which have heretofore never been suspected of that fault. As illustrations; the statutes making it an offense to willfully disturb any religious meeting (Bern. Code, § 2499), any assembly or meeting not unlawful in its character (Id., §2547), or any school meeting (Id., § 4697), or the legislature, or either house *364thereof (Id., §2337), are all statutes which do not specify the particular acts which will constitute the disturbance; yet no case can be found where they have been held invalid for that reason, while there are many which have allowed convictions thereunder to stand.",
"Other illustrations, without specifically enumerating them, can be found in the statutes against malicious mischief, injury to public utilities, injuries to property, the statutes defining and punishing vagrancy, obstructing an officer in the discharge of his duty, publishing articles tending to excite crime or a breach of the peace, and the like, all of which define the crime by the result it produces rather than by the specific acts constituting the offense.” The act now before us is no more indefinite than were the statutes which were before the court in those cases; to hold that the syndicalism act is void for indefiniteness would require a modification of the holding in the cases just cited and especially in the Brown case. The act is not void for indefiniteness. The seventh point is that the title of the statute is insufficient because it does not specifically refer to doing the prohibited things for the purpose of effecting any industrial or economic change, and for the further reason that the language used “is too general for any purpose.",
"’ ’ It has frequently been held by this court that it is enough if the title of an act'is sufficient to indicate to a person making inquiry that the act may cover a particular subject. It is not necessary that the title be an index to the body of the act. In State v. George, 84 Wash. 113, 146 Pac. 378, it was claimed that the title of the act which was “An act relating to crimes and punishment and the rights and custody of persons accused or convicted of crime and repealing certain acts” (Laws of 1909, p.-890, ch. 249), was not sufficient. It was held, however, that the language used was broad enough to cover the subject-matter of the act. Upon the authority of that case and *365others that might he assembled the title of the act was sufficient. It has become the settled doctrine of this court that no act will be held unconstitutional on the ground that the title is not sufficient unless it clearly appears that such title does not meet the constitutional requirement.",
"The eighth point is that subdivision 3 of the act infringes upon the personal liberties of the citizen and is therefore unconstitutional. This point is more particularly directed to that portion of subdivision 3 which makes it unlawful for anyone to become a member of any group of persons formed to advocate, and so forth, the things prohibited by the act. In support of his contention on this point the appellant cites a line of cases like Ex parte Smith, 135 Mo. 223, 36 S. W. 629, 58 Am. St. 576, 33 L. R. A. 606, which holds that an ordinance forbidding anyone to associate with persons having the reputation of being thieves, burglars and so forth with intent to commit an offense is unconstitutional and that it invades the rights of personal liberty. Without either approving or disapproving the rule of the cases cited, it seems to us that there is a distinction between them and the present case. An ordinance or act which makes it unlawful to associate with persons having the reputation of being thieves, and so forth, is different from an act which makes it unlawful for anyone to organize or help to organize a group of persons to advocate and teach crime, and so forth, for the purpose which is specified in the syndicalism act.",
"If it were in the legislative province, as we have found, to make it a penal offense to do the prohibited things in the act, including the organization of a group of persons, it would seem to follow that it' were likewise within the power of the legislature to make it a penal offense for anyone to become a member of such group of persons or organization. The legis*366lature, in defining and providing for the punishment of crime, is exercising only one phase of the broad police power of the state.",
"It did not exceed its power when it made it a penal offense for anyone to become a member of a group of persons organized for the purposes prohibited by the statute. , The ninth point is that the court erred in not submitting to the jury the question of the defendant’s knowledge or intent to commit the crime with which he was charged. The court was requested to instruct the jury that, before they could find the appellant guilty, it was necessary for them to find that he had knowledge of the unlawful purposes and objects of the-organization. This request was refused. The question, therefore, is presented as to whether, under the statute, criminal intent is a necessary element of the crime. The general rule upon this subject as stated in 8 R. O. L. 62, is as follows: ‘ ‘ The maxim actus non facit reutn, nisi mens sit rea, does not always apply to crimes created by statute, and therefore if a criminal intent is not an essential element of a statutory crime, it is not necessary to prove any intent in order to justify a conviction. Whether a criminal intent or guilty knowledge is a necessary element of a statutory offense is a matter of construction to be determined from the language of the statute, in view of its manifest purpose and design.",
"There are many instances in recent times where the legislature in the exercise of the police power has prohibited, under penalty, the performance of a specific act. The doing of the inhibited act constitutes the crime, and the moral turpitude or purity of the motive by which it was prompted and knowledge or ignorance of its criminal character are immaterial circumstances . on the question of guilt. The only fact to be determined in these cases is whether the defendant did the act. In the interest of the public the burden is placed upon the actor of ascertaining at his peril whether his deed is within the prohibition of any criminal statute.” *367Tn Ellis v. United States, 206 U. S. 246, the accused had been convicted, while a contractor on certain public work, of requiring or permitting certain laborers “to work more than eight hours in any calendar day except in case of extraordinary emergency.” This was an act of Congress and one violating it was made guilty of a misdemeanor. Upon the trial, the jury were instructed that if the accused intended to permit the man to work more than eight hours on a calendar day named, he intended to violate the statute.",
"The effect of this instruction was to make the defendant guilty if he intended to do the thing complained of regardless of whether he intended to violate the law. It was there said: “It is admitted that he was -a contractor within the meaning of the act and that the workmen permitted to work more than eight hours a day were employed upon ‘public work’, and it is not denied that these workmen were ‘mechanics’. The jury were instructed, subject to exception, that if the defendant intended to permit the men to work over eight hours on the calendar day named he intended to violate the statute. The argument against the instruction is that the word ‘intentionally’ in the statute requires knowledge of the law, or at least that to be convicted Ellis must not have supposed, even mistakenly, that there was an emergency extraordinary enough to justify his conduct. The latter proposition is only the former a little disguised. Both are without foundation. If a man intentionally adopts certain conduct in certain circumstances known to him, and that conduct is forbidden by the law under those circumstances, he intentionally breaks the law in the only sense in which the law ever considers intent.” In the present case the defendant voluntarily became a member of a group of persons prohibited by statute, and in doing this act, he became guilty of the offense whether he intended to violate the law or not.",
"As was stated in the Ellis case, *368“If a man intentionally adopts certain conduct in certain circumstances known to him, and that conduct is forbidden by the law under those circumstances, he intentionally breaks the law in the only sense in which the law ever considers intent.” Whether intent or guilty knowledge is an essential element of a statutory crime depends upon the intent of the legislature. There are statutes which, in defining a crime, expressly provide that guilty knowledge shall be an element thereof. There are other statutes, which the courts have construed to the effect that the legislature intended by the language used to make guilty knowledge or intent an element of the crime. In the syndicalism act, there is no provision making guilty knowledge or intent an element of crime, neither can it be said from the language used that the legislature had such intent. To sustain the appellant’s contention upon this question, it would be necessary to write into the statute a proviso which the legislature did not place there.",
"The case, of the State v. Strasburg, 60 Wash. 106, 110 Pac. 1020, Ann. Cas. 1912B 917, 32 L. R. A. (N. S.) 1216, is not controlling. There the act which took away from a man, charged with certain crimes, the right to plead insanity in defense was held unconstitutional. That case differs from the present in this, that if the accused were insane he could not have formed the intent to do the particular act. The tenth point is that the superior court of Clarke county had no jurisdiction because the appellant became a member of the Industrial Workers of the World in Yakima county and the evidence failed to show that there was any group of persons organized in Clarke county which was prohibited by the act of which the appellant was a member. In support of this contention, reliance is placed upon § 22, art. 1, of the constitution of this state which provides that, in criminal *369prosecutions, the accused shall have the right to be tried in the county in which “the offense is alleged to have been committed.",
"’ ’ The argument is that, since the appellant became a member in Yakima county, under the statute he was not subject to be charged with being a member in Clarke county. The act reads upon this question in effect that, whoever shall “be a member of” any group of persons formed to advocate, advise and so forth, shall be guilty of a felony. Under the terms of the act, the appellant was a member whether he be in Yakima county or Clarke county, and it is the being a member which the statutes make penal. The superior court of Clarke county had jurisdiction. The eleventh point is that the introduction in evidence of state’s exhibit No. 1 was error because it is claimed that the appellant’s rights under, §§ 7 and 9, art. 1, of the constitution of this state, and of articles 4 and 5 of the amendments to the constitution of the United States, had been invaded when it was obtained from him.",
"The state’s exhibit No. 1 was of‘appellant’s membership card in the Industrial Workers of the World. To the contention on this point, there are two answers: First, the exhibit was not wrongfully or unlawfully obtained from the accused; and second, if it had been so obtained, the question was not raised until after the trial of the action had begun, and consequently came too late. Adams v. New York, 192 U. S. 585; Weeks v. United States, 232 U. S. 383. The amendments to the constitution of the United States relied upon contain no restrictions on the power of the state and are not applicable in the present case. Brown v. New Jersey, 175 U. S. 172. The manner in which the card was obtained in no way violated the rights of the accused under the state constitution. *370The twelfth point is that the court erred in its rulings upon the receipt and the rejection of evidence. As to the evidence received, of which complaint is made, it was admissible under the holding in State v. Lowery, supra. As to the evidence offered and rejected, it was either incompetent, or not relevant to any issue to be determined by the jury. To discuss this evidence in detail, would greatly prolong this opinion.",
"The final point is that there was no evidence to sustain the information. This point has been covered by what has been previously said and requires no further discussion. There was sufficient evidence to carry the question of the appellant’s innocence or guilt to the jury. The judgment will be affirmed. All' concur."
] | https://www.courtlistener.com/api/rest/v3/opinions/4720332/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Case 1:20-cr-00036-RJA-MJR Document 48 Filed 07/01/20 Page 1 of 3
UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK
UNITED STATES OF AMERICA,
v. ORDER 20-CR-36-A
DAJON WOODS,
Defendant.
The defendant, Dajon Woods, who is charged in an Indictment with serious
narcotics-trafficking offenses, appeals the denial of a motion for pretrial release by
Magistrate Judge Michael J. Roemer. Defendant Woods’ argues pursuant to 18 U.S.C.
§ 3145 that posting his mother’s residence as security for his pretrial release, which she
owns free and clear of any liens, will adequately assure his appearances as required
and the safety of the community. The Court assumes the familiarity of the parties with
the prior proceedings before the Magistrate Judge and the issues before the Court on
appeal.
For the reasons stated by Magistrate Judge Roemer, Dkt. No. 35, and the
additional reasons that follow, the Court denies defendant Woods’ appeal. The Court
finds that the defendant has not overcome the statutory presumptions at 18 U.S.C.
§ 3142(e)(3) that no conditions or combination of conditions of release will reasonably
assure the appearance of the defendant and safety of the community that arise from the
serious narcotics-trafficking offenses that are alleged in the Indictment against him.
During the last approximately 11 years, it appears the defendant has sustained three
felony convictions and two firearms arrests. During that period, the defendant has had
1 Case 1:20-cr-00036-RJA-MJR Document 48 Filed 07/01/20 Page 2 of 3
three rearrests while under supervision; two prior probation violations; at least one
bench warrant; an arrest for unlawfully fleeing a police officer in a motor vehicle; a
conviction for attempted assault of an officer; and, an extensive history of substance
abuse. Considering this record and the serious charges that the defendant faces, the
Court finds the defendant’s mother’s residence is not sufficient security for his pretrial
release. Unfortunately, the defendant’s record shows he is unlikely to abide by any
available condition or combination of conditions of release that can be set by the Court.
Defendant Woods faces a mandatory-minimum sentence of five years
imprisonment if convicted of the alleged conspiracy to distribute 28 grams or more of
cocaine base with which he is charged, and it appears that the evidence against him,
which includes an undercover sale of cocaine base and heroin, is strong. Under these
circumstances, the defendant has a correspondingly strong incentive to flee, and
although his counsel correctly points out that it would be foolish for the defendant to
flee, his past record and history of substance abuse give the Court no reason to find the
defendant will behave rationally if he is granted pretrial released.
Moreover, even if the Court were to require stringent electronic monitoring of
defendant Woods and home incarceration in his mother’s residence (which the
defendant has not proposed), it remains feasible for him to attempt to earn money by
illegally distributing controlled substances. The § 3142(e)(3) presumptions were
adopted because “[i]t is well known that drug trafficking is carried on to an unusual
degree by persons engaged in continuing patterns of criminal activity. Persons charged
with major drug felonies are often in the business of importing and distributing
dangerous drugs, and thus, because of the nature of the criminal activity with which
2 Case 1:20-cr-00036-RJA-MJR Document 48 Filed 07/01/20 Page 3 of 3
they are charged, they pose a significant risk of pretrial recidivism.” S.Rep. No. 225,
98th Cong., 2d Sess. 20, reprinted in 1984 U.S.Code Cong. & Admin. News 3182,
3203. The defendant has not shown that home incarceration in his mother’s residence
while subject to electronic monitoring, and upon pain of her forfeiture of the residence,
reasonably will mitigate the particular risk of pretrial recidivism that he poses. For these
reasons, and for the reasons stated by the Magistrate Judge, see Dkt. No. 35, the
defendant’s appeal of the denial of his motion for pretrial release, Dkt. No. 36, is denied.
IT IS SO ORDERED.
___s/Richard J, Arcara________ HONORABLE RICHARD J. ARCARA UNITED STATES DISTRICT COURT
Dated: July 1, 2020
3 | 2020-07-01 | [
"Case 1:20-cr-00036-RJA-MJR Document 48 Filed 07/01/20 Page 1 of 3 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK UNITED STATES OF AMERICA, v. ORDER 20-CR-36-A DAJON WOODS, Defendant. The defendant, Dajon Woods, who is charged in an Indictment with serious narcotics-trafficking offenses, appeals the denial of a motion for pretrial release by Magistrate Judge Michael J. Roemer. Defendant Woods’ argues pursuant to 18 U.S.C. § 3145 that posting his mother’s residence as security for his pretrial release, which she owns free and clear of any liens, will adequately assure his appearances as required and the safety of the community. The Court assumes the familiarity of the parties with the prior proceedings before the Magistrate Judge and the issues before the Court on appeal. For the reasons stated by Magistrate Judge Roemer, Dkt. No. 35, and the additional reasons that follow, the Court denies defendant Woods’ appeal.",
"The Court finds that the defendant has not overcome the statutory presumptions at 18 U.S.C. § 3142(e)(3) that no conditions or combination of conditions of release will reasonably assure the appearance of the defendant and safety of the community that arise from the serious narcotics-trafficking offenses that are alleged in the Indictment against him. During the last approximately 11 years, it appears the defendant has sustained three felony convictions and two firearms arrests. During that period, the defendant has had 1 Case 1:20-cr-00036-RJA-MJR Document 48 Filed 07/01/20 Page 2 of 3 three rearrests while under supervision; two prior probation violations; at least one bench warrant; an arrest for unlawfully fleeing a police officer in a motor vehicle; a conviction for attempted assault of an officer; and, an extensive history of substance abuse. Considering this record and the serious charges that the defendant faces, the Court finds the defendant’s mother’s residence is not sufficient security for his pretrial release. Unfortunately, the defendant’s record shows he is unlikely to abide by any available condition or combination of conditions of release that can be set by the Court. Defendant Woods faces a mandatory-minimum sentence of five years imprisonment if convicted of the alleged conspiracy to distribute 28 grams or more of cocaine base with which he is charged, and it appears that the evidence against him, which includes an undercover sale of cocaine base and heroin, is strong. Under these circumstances, the defendant has a correspondingly strong incentive to flee, and although his counsel correctly points out that it would be foolish for the defendant to flee, his past record and history of substance abuse give the Court no reason to find the defendant will behave rationally if he is granted pretrial released.",
"Moreover, even if the Court were to require stringent electronic monitoring of defendant Woods and home incarceration in his mother’s residence (which the defendant has not proposed), it remains feasible for him to attempt to earn money by illegally distributing controlled substances. The § 3142(e)(3) presumptions were adopted because “[i]t is well known that drug trafficking is carried on to an unusual degree by persons engaged in continuing patterns of criminal activity. Persons charged with major drug felonies are often in the business of importing and distributing dangerous drugs, and thus, because of the nature of the criminal activity with which 2 Case 1:20-cr-00036-RJA-MJR Document 48 Filed 07/01/20 Page 3 of 3 they are charged, they pose a significant risk of pretrial recidivism.” S.Rep.",
"No. 225, 98th Cong., 2d Sess. 20, reprinted in 1984 U.S.Code Cong. & Admin. News 3182, 3203. The defendant has not shown that home incarceration in his mother’s residence while subject to electronic monitoring, and upon pain of her forfeiture of the residence, reasonably will mitigate the particular risk of pretrial recidivism that he poses. For these reasons, and for the reasons stated by the Magistrate Judge, see Dkt. No. 35, the defendant’s appeal of the denial of his motion for pretrial release, Dkt. No. 36, is denied.",
"IT IS SO ORDERED. ___s/Richard J, Arcara________ HONORABLE RICHARD J. ARCARA UNITED STATES DISTRICT COURT Dated: July 1, 2020 3"
] | https://www.courtlistener.com/api/rest/v3/recap-documents/138219878/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Decker, Judge Alston and Senior Judge Frank Argued at Norfolk, Virginia PUBLISHED
JOSHUA SAQUAN MAURICE ELEY OPINION BY v. Record No. 0625-18-1 CHIEF JUDGE MARLA GRAFF DECKER APRIL 16, 2019 COMMONWEALTH OF VIRGINIA
FROM THE CIRCUIT COURT OF THE CITY OF NEWPORT NEWS Gary A. Mills, Judge
Catherine A. Tatum, Assistant Public Defender, for appellant.
Victoria Johnson, Assistant Attorney General (Mark R. Herring, Attorney General, on brief), for appellee.
Joshua Saquan Maurice Eley appeals his misdemeanor conviction for carrying a loaded
firearm equipped with a high-capacity magazine in public in violation of Code § 18.2-287.4. On
appeal, he suggests that he was entitled to the statutory exemption in Code § 18.2-308(C)(8) for a
firearm carried in “a personal, private motor vehicle” and that the circuit court erred in ruling to
the contrary. We hold that the exemption does not apply because the record establishes that the
appellant knew that the truck in which he secured the firearm was stolen and, thus, it was not “a
personal, private motor vehicle” within the meaning of the statutory exemption. Consequently,
we affirm the challenged conviction.
I. BACKGROUND
On the evening of October 10, 2017, two detectives with the City of Newport News
Police Department were patrolling within the city when they saw the appellant and another man
sitting in a parking lot open to the public in a pickup truck that had been reported stolen. As the
detectives approached, the appellant “quickly” got out of the driver’s side of the vehicle and “tr[ied] to go away from it.” They detained and questioned him. The appellant said that he “had
gotten the vehicle from someone . . . that he . . . did not know very well.” He “admitted having a
feeling that . . . something [was] wrong with the vehicle,” but he “never admitted . . . knowing
that the vehicle was stolen.”
One of the detectives asked the appellant whether any firearms were in the truck. The
appellant said yes and directed him to the center console, which was “secured with a latch.”
Upon opening the console, the detective found and seized a “center fire” .357-caliber,
semiautomatic handgun. The weapon, which was loaded, “had an extended magazine with a
31-cartridge capacity.”
The appellant was charged with grand larceny of the pickup truck in violation of Code
§ 18.2-95 and misdemeanor possession of a firearm with a magazine capacity of twenty or more
rounds in violation of Code § 18.2-287.4. By agreement with the Commonwealth, the appellant
entered a guilty plea to the lesser charge of receiving stolen property, based on his possession of
the truck, in violation of Code § 18.2-108. He entered a plea of not guilty to the misdemeanor
firearm charge.
Following presentation of the Commonwealth’s evidence related to the firearm offense,
the appellant made a motion to strike. He argued that he was entitled to possess the loaded
firearm pursuant to a statutory exemption because the gun was secured within the stolen truck in
a specified fashion. The prosecutor argued that the plain language of the statutory exemption
showed that the General Assembly did not intend for the exemption to cover firearms secured in
stolen vehicles. The trial court accepted the Commonwealth’s reading of the statute and denied
the motion to strike. The court reasoned that this interpretation “comports with our sense of
privacy” because no “right to privacy [exists] in a personal, private stolen motor vehicle.”
-2- (Emphasis added). The appellant was found guilty and sentenced to twelve months of
incarceration for the firearm offense, with all twelve months suspended, and a $250 fine.
II. ANALYSIS
Where the “appellant argues that the trial court, under the facts adduced at trial,
misapplied a statutory exception to the prohibition on carrying a concealed weapon[,] . . . the
argument presents a mixed question of law and fact, which we review de novo on appeal.”
Hodges v. Commonwealth, 64 Va. App. 687, 693 (2015). The facts in this case are not in
dispute. Consequently, the issue is one of pure statutory interpretation, “a question of law . . .
review[ed] de novo.” Doulgerakis v. Commonwealth, 61 Va. App. 417, 419 (2013) (quoting
Wright v. Commonwealth, 278 Va. 754, 759 (2009)).
Code § 18.2-287.4(a) provides in relevant part that it is unlawful “to carry a loaded . . .
semi-automatic center-fire rifle or pistol that expels . . . projectiles by action of an explosion of a
combustible material and is equipped . . . with a magazine that will hold more than 20 rounds of
ammunition . . . on or about his person” in any place “open to the public” in various jurisdictions
within the Commonwealth, including the City of Newport News. The statute incorporates
exemptions set out in two other provisions, Code §§ 18.2-308 and -308.016. Code § 18.2-287.4.
As pertinent here, Code § 18.2-308(C)(8) provides an exemption for “[a]ny person who may
lawfully possess a firearm and is carrying a handgun while in a personal, private motor vehicle
or vessel and such handgun is secured in a container or compartment in the vehicle or vessel.”
See generally Doulgerakis, 61 Va. App. at 420 (recognizing enactment of the exemption in 2010
under a different subsection of the statute). “[T]he Commonwealth bears the burden of
establishing that the exemption . . . does not apply.” Hodges, 64 Va. App. at 694, 699.
It is undisputed here that possession of the type of loaded firearm that the appellant
carried in the center console of the pickup truck was proscribed by Code § 18.2-287.4(a). The
-3- challenge concerns whether the appellant is entitled to invoke the exemption contained in Code
§ 18.2-308(C)(8). The Commonwealth concedes the sufficiency of the evidence to prove two of
the three elements required for the exemption—that the appellant was “lawfully [permitted to]
possess a firearm” and the firearm was “secured in a container or compartment” in a vehicle.
See Code § 18.2-308(C)(8). See generally Logan v. Commonwealth, 47 Va. App. 168, 172
(2005) (en banc) (“On purely factual questions . . . , we can and do rely on the adversarial
process to sort out the contested and the uncontested aspects of the case before we begin our
responsibility of applying de novo the correct legal principles.”). The only part of entitlement to
the exemption that is in dispute concerns whether the appellant, who was in the driver’s seat of a
stolen pickup truck and pleaded guilty to possessing the truck with knowledge that it was stolen,
possessed the secured handgun “while in a personal, private motor vehicle” in the context of the
statute. We conduct our analysis taking into account well-established principles of statutory
construction.
“The Virginia Supreme Court has long held that ‘when analyzing a statute, we must
assume that “the legislature chose, with care, the words it used . . . and we are bound by those
words as we [examine] the statute.”’” Doulgerakis, 61 Va. App. at 420 (first alteration in
original) (quoting City of Va. Beach v. ESG Enters., 243 Va. 149, 153 (1992)). “[C]ourts ‘are
required to ascertain and give effect to the intention of the legislature, which is usually
self-evident from the statutory language.’” Armstead v. Commonwealth, 55 Va. App. 354, 360
(2009) (quoting Johnson v. Commonwealth, 53 Va. App. 608, 612 (2009)).
Consequently, we “apply[] the plain meaning of the words unless they are ambiguous or
[doing so] would lead to an absurd result.” Wright, 278 Va. at 759. A statute is ambiguous if
“the text can be understood in more than one way or refers to two or more things simultaneously
[or] [if] the language is difficult to comprehend, is of doubtful import, or lacks clearness or
-4- definiteness.” Blake v. Commonwealth, 288 Va. 375, 381 (2014) (first alteration in original)
(quoting Boynton v. Kilgore, 271 Va. 220, 227 n.8 (2006)). Only if a statute is found to be
ambiguous may the Court consider other factors such as the purpose, reason, and spirit of the
law, including any legislative history. See, e.g., Thomas v. Commonwealth, 256 Va. 38, 41
(1998); Simpson v. Simpson, 162 Va. 621, 635 (1934); Auer v. Commonwealth, 46 Va. App.
637, 647-48 (2005).
In considering the meaning of particular language in context, “[w]ords in a statute should
be interpreted, if possible, to avoid rendering [other] words superfluous.” Cook v.
Commonwealth, 268 Va. 111, 114 (2004); see Epps v. Commonwealth, 47 Va. App. 687, 714
(2006) (en banc) (requiring a court to “giv[e] to every word and every part of the statute, if
possible, its due effect and meaning” (quoting Posey v. Commonwealth, 123 Va. 551, 553
(1918))), aff’d, 273 Va. 410 (2007). If the meaning of a word is clear “in context,” it is not
ambiguous merely because it “has a variety of different definitions.” Blake, 288 Va. at 382.
Finally, penal statutes are to be construed “strictly against the Commonwealth,” giving
defendants “the benefit of any reasonable doubt about the[ir] construction.” Foley v.
Commonwealth, 63 Va. App. 186, 192, 198 (2014) (quoting Harris v. Commonwealth, 274 Va.
409, 415 (2007)). “[N]evertheless[,] a defendant is not entitled to . . . an ‘unreasonably
restrictive interpretation of [the law].’” Grimes v. Commonwealth, 62 Va. App. 470, 480 (2013)
(quoting Holloman v. Commonwealth, 221 Va. 196, 198 (1980)), aff’d, 288 Va. 314 (2014).
With regard to the statutory exemption at issue, neither the phrase “a personal, private
motor vehicle” nor the individual words “personal” or “private” is defined in any of the relevant
code sections. Where a “statute’s terms are undefined” by the legislature, we give those terms
“their ‘ordinary meaning,’ in light of ‘the context in which [they are] used.’” Va. Marine Res.
Comm’n v. Chincoteague Inn, 287 Va. 371, 384 (2014) (alteration in original) (quoting Lawlor
-5- v. Commonwealth, 285 Va. 187, 237 (2013)). In ascertaining such meaning, dictionary
definitions and pertinent analysis in prior case law may be consulted. See, e.g., Jones v.
Commonwealth, 296 Va. 412, 415 (2018) (relying on the statutory language and a standard
dictionary definition); Joseph v. Commonwealth, 64 Va. App. 332, 338-39 (2015) (relying upon
multiple legal and non-legal dictionary definitions and citing Bateman v. Commonwealth, 205
Va. 595, 599-600 (1964), in which the Court “rel[ied] exclusively” on a dictionary definition);
Auer, 46 Va. App. at 645-47 (relying in part on definitions in prior case decisions).
In determining the meaning of the phrase “a personal, private motor vehicle,” we look
first to the definition of “private,” the closest modifier to the noun “vehicle.” “Private” is
defined in pertinent part as follows:
1a: intended for or restricted to the use of a particular person or group or class of persons: not freely available to the public
1b: belonging to or concerning an individual person, company, or interest
Private, Webster’s Third New International Dictionary (2002); see City of Morgantown v. W.
Va. Bd. of Regents, 354 S.E.2d 616, 618-19 (W. Va. 1987).
The appellant agrees with the first of these definitions, quoting Merriam-Webster’s
College Dictionary (11th ed. 2005), to assert that “private” means “intended for or restricted to
the use of a particular person, group, or class.” However, he further argues that “personal” is
“[s]imilarly” defined by that dictionary as “‘of, relating to, or affecting a particular person.’”
(Emphasis added). He contends that both words mean merely that the statutory exemption
applies “to vehicles driven by individuals for their own travel purposes, as opposed to forms of
public transportation.” Accordingly, the appellant asserts that the statutory exemption does not
apply to “forms of public transportation . . . like city buses” but includes any “car, pickup truck,
-6- van, or other type of motor vehicle” being driven by an individual “for [his] own purposes.” The
critical piece of his argument is his claim that the exemption applies without regard to whether
the individual operating the vehicle owns it or is in lawful possession of it.
The appellant’s analysis, however, by virtually equating the meaning of “personal” with
“private,” does not take into consideration the principle that “[w]ords in a statute should be
interpreted, if possible, to avoid rendering [other] words superfluous.” See Cook, 268 Va. at
114. “[T]he legislature chooses statutory language with care, and ‘[w]hen the General Assembly
uses two different terms, [we must] presume[] the terms . . . mean two different things.’”
Spratley v. Commonwealth, 69 Va. App. 314, 319-20 (2018) (quoting Brown v. Commonwealth,
284 Va. 538, 545 (2012)). In order to give this important principle full effect, the word
“personal” in the phrase “a personal, private motor vehicle” must mean something different from
the word “private.” These are common words that should be read in light of their common
meanings.
A dictionary definition of the word “personal” that goes beyond the mere equivalent of
“private” means “exclusively for a given individual,” as in “a [personal] letter.” Webster’s Third
New International Dictionary, supra. Additionally, Virginia law defines “personal property” in
part as that which is “subject to ownership.” See Henry v. Commonwealth, 63 Va. App. 30, 43
(2014) (quoting Property, Black’s Law Dictionary (9th ed. 2009) (“personal property”
subheading)). These definitions support the determination that the legislature did not intend to
permit one to lawfully secure a dangerous firearm in a vehicle subject to personal ownership
without consideration of who the owner or authorized user of that vehicle is. Consequently, we
conclude that the General Assembly, by using the adjective “personal,” meant at the very least to
require that the vehicle in which one secures a firearm, in addition to being a “private” or
non-public one, must also be one that the person claiming the exemption lawfully possesses or
-7- occupies.1 See Braddock v. State, 194 S.E.2d 317, 320 (Ga. Ct. App. 1972) (holding that where
a truck’s owner and his employee were riding together in the vehicle, the employee “could not
reasonably think of [the truck’s glove compartment] as a personal, private place” in which he
had a reasonable expectation of privacy (emphasis added)); Villanova v. Innovative
Investigations, Inc., 21 A.3d 650, 652 (N.J. Super. Ct. App. Div. 2011) (noting the trial judge’s
observation that “it is standard practice for law enforcement officers, while engaged in police
activities, to avoid use of their personal private vehicles or to display any other personal
identifiers” (emphasis added)); cf. Byrd v. United States, 138 S. Ct. 1518, 1529 (2018) (holding
that “[a] car thief would not have a reasonable expectation of privacy in a stolen car” regardless
of “the degree of possession and control”).
We need not decide whether one who is merely an authorized user of a vehicle qualifies
for the exemption. Cf. Morris v. City of Va. Beach, 58 Va. App. 173, 180 (2011) (applying “best
and narrowest ground” principles to hold that where one legal theory legitimized a warrantless
search, the Court would not consider whether a second legal theory might also do so (quoting
Armstead v. Commonwealth, 56 Va. App. 569, 576 (2010))). Here, the appellant was not an
authorized user under the facts of this case. To the contrary, by entering a plea of guilty to
receiving stolen property, the appellant admitted that he knew the pickup truck was stolen. See
1 The Virginia case decisions cited by the appellant, which employ the adjectives “personal” and “private” jointly to modify a noun referencing a vehicle, use the terms in wholly different contexts. See Carlton v. Boudar, 118 Va. 521, 525 (1916) (in analyzing whether a taxi company was a common carrier for purposes of tort liability, noting that “[a]n automobile may be used as a common carrier, a private carrier, or a personal private conveyance” without discussing this third term (quoting Xenophon P. Huddy, The Law of Automobiles 38 (2d ed. 1909))); Thorne v. Va. Emp’t Comm’n, 5 Va. Cir. 441, 443 (1972) (in considering whether a taxi driver was an employee or independent contractor, noting that “the only fringe benefit available to [the] driver [of a taxi for Thorne’s company] is the use of [the vehicle] for personal private transportation on occasion,” leaving open the inference that the term implies at least authorized use); see also McGinnis v. McGinnis, 69 Va. App. 572, 580 (2018) (noting that circuit court decisions are not binding on the Court of Appeals). Consequently, these decisions are not instructive. -8- Code § 18.2-108(A). Accordingly, under the plain meaning of “personal” as used in the
statutory exemption, the stolen vehicle was certainly not one intended “exclusively” for the
appellant or one subject to his authorized use.
III. CONCLUSION
We hold that the exemption in Code § 18.2-308(C)(8) did not apply because the appellant
knew that the truck in which he secured the firearm was stolen and, thus, it was not “a personal,
private motor vehicle” within the meaning of the exemption. Consequently, we affirm the
appellant’s conviction for violating Code § 18.2-287.4.
Affirmed.
-9- | 04-16-2019 | [
"COURT OF APPEALS OF VIRGINIA Present: Chief Judge Decker, Judge Alston and Senior Judge Frank Argued at Norfolk, Virginia PUBLISHED JOSHUA SAQUAN MAURICE ELEY OPINION BY v. Record No. 0625-18-1 CHIEF JUDGE MARLA GRAFF DECKER APRIL 16, 2019 COMMONWEALTH OF VIRGINIA FROM THE CIRCUIT COURT OF THE CITY OF NEWPORT NEWS Gary A. Mills, Judge Catherine A. Tatum, Assistant Public Defender, for appellant. Victoria Johnson, Assistant Attorney General (Mark R. Herring, Attorney General, on brief), for appellee. Joshua Saquan Maurice Eley appeals his misdemeanor conviction for carrying a loaded firearm equipped with a high-capacity magazine in public in violation of Code § 18.2-287.4. On appeal, he suggests that he was entitled to the statutory exemption in Code § 18.2-308(C)(8) for a firearm carried in “a personal, private motor vehicle” and that the circuit court erred in ruling to the contrary. We hold that the exemption does not apply because the record establishes that the appellant knew that the truck in which he secured the firearm was stolen and, thus, it was not “a personal, private motor vehicle” within the meaning of the statutory exemption.",
"Consequently, we affirm the challenged conviction. I. BACKGROUND On the evening of October 10, 2017, two detectives with the City of Newport News Police Department were patrolling within the city when they saw the appellant and another man sitting in a parking lot open to the public in a pickup truck that had been reported stolen. As the detectives approached, the appellant “quickly” got out of the driver’s side of the vehicle and “tr[ied] to go away from it.” They detained and questioned him. The appellant said that he “had gotten the vehicle from someone . .",
". that he . . . did not know very well.” He “admitted having a feeling that . . . something [was] wrong with the vehicle,” but he “never admitted . . . knowing that the vehicle was stolen.” One of the detectives asked the appellant whether any firearms were in the truck. The appellant said yes and directed him to the center console, which was “secured with a latch.” Upon opening the console, the detective found and seized a “center fire” .357-caliber, semiautomatic handgun. The weapon, which was loaded, “had an extended magazine with a 31-cartridge capacity.” The appellant was charged with grand larceny of the pickup truck in violation of Code § 18.2-95 and misdemeanor possession of a firearm with a magazine capacity of twenty or more rounds in violation of Code § 18.2-287.4. By agreement with the Commonwealth, the appellant entered a guilty plea to the lesser charge of receiving stolen property, based on his possession of the truck, in violation of Code § 18.2-108. He entered a plea of not guilty to the misdemeanor firearm charge.",
"Following presentation of the Commonwealth’s evidence related to the firearm offense, the appellant made a motion to strike. He argued that he was entitled to possess the loaded firearm pursuant to a statutory exemption because the gun was secured within the stolen truck in a specified fashion. The prosecutor argued that the plain language of the statutory exemption showed that the General Assembly did not intend for the exemption to cover firearms secured in stolen vehicles. The trial court accepted the Commonwealth’s reading of the statute and denied the motion to strike.",
"The court reasoned that this interpretation “comports with our sense of privacy” because no “right to privacy [exists] in a personal, private stolen motor vehicle.” -2- (Emphasis added). The appellant was found guilty and sentenced to twelve months of incarceration for the firearm offense, with all twelve months suspended, and a $250 fine. II. ANALYSIS Where the “appellant argues that the trial court, under the facts adduced at trial, misapplied a statutory exception to the prohibition on carrying a concealed weapon[,] .",
". . the argument presents a mixed question of law and fact, which we review de novo on appeal.” Hodges v. Commonwealth, 64 Va. App. 687, 693 (2015). The facts in this case are not in dispute. Consequently, the issue is one of pure statutory interpretation, “a question of law . . . review[ed] de novo.” Doulgerakis v. Commonwealth, 61 Va. App. 417, 419 (2013) (quoting Wright v. Commonwealth, 278 Va. 754, 759 (2009)). Code § 18.2-287.4(a) provides in relevant part that it is unlawful “to carry a loaded . . . semi-automatic center-fire rifle or pistol that expels .",
". . projectiles by action of an explosion of a combustible material and is equipped . . . with a magazine that will hold more than 20 rounds of ammunition . . . on or about his person” in any place “open to the public” in various jurisdictions within the Commonwealth, including the City of Newport News. The statute incorporates exemptions set out in two other provisions, Code §§ 18.2-308 and -308.016. Code § 18.2-287.4. As pertinent here, Code § 18.2-308(C)(8) provides an exemption for “[a]ny person who may lawfully possess a firearm and is carrying a handgun while in a personal, private motor vehicle or vessel and such handgun is secured in a container or compartment in the vehicle or vessel.” See generally Doulgerakis, 61 Va. App.",
"at 420 (recognizing enactment of the exemption in 2010 under a different subsection of the statute). “[T]he Commonwealth bears the burden of establishing that the exemption . . . does not apply.” Hodges, 64 Va. App. at 694, 699. It is undisputed here that possession of the type of loaded firearm that the appellant carried in the center console of the pickup truck was proscribed by Code § 18.2-287.4(a).",
"The -3- challenge concerns whether the appellant is entitled to invoke the exemption contained in Code § 18.2-308(C)(8). The Commonwealth concedes the sufficiency of the evidence to prove two of the three elements required for the exemption—that the appellant was “lawfully [permitted to] possess a firearm” and the firearm was “secured in a container or compartment” in a vehicle. See Code § 18.2-308(C)(8). See generally Logan v. Commonwealth, 47 Va. App. 168, 172 (2005) (en banc) (“On purely factual questions . .",
". , we can and do rely on the adversarial process to sort out the contested and the uncontested aspects of the case before we begin our responsibility of applying de novo the correct legal principles.”). The only part of entitlement to the exemption that is in dispute concerns whether the appellant, who was in the driver’s seat of a stolen pickup truck and pleaded guilty to possessing the truck with knowledge that it was stolen, possessed the secured handgun “while in a personal, private motor vehicle” in the context of the statute. We conduct our analysis taking into account well-established principles of statutory construction. “The Virginia Supreme Court has long held that ‘when analyzing a statute, we must assume that “the legislature chose, with care, the words it used .",
". . and we are bound by those words as we [examine] the statute.”’” Doulgerakis, 61 Va. App. at 420 (first alteration in original) (quoting City of Va. Beach v. ESG Enters., 243 Va. 149, 153 (1992)). “[C]ourts ‘are required to ascertain and give effect to the intention of the legislature, which is usually self-evident from the statutory language.’” Armstead v. Commonwealth, 55 Va. App. 354, 360 (2009) (quoting Johnson v. Commonwealth, 53 Va. App. 608, 612 (2009)). Consequently, we “apply[] the plain meaning of the words unless they are ambiguous or [doing so] would lead to an absurd result.” Wright, 278 Va. at 759. A statute is ambiguous if “the text can be understood in more than one way or refers to two or more things simultaneously [or] [if] the language is difficult to comprehend, is of doubtful import, or lacks clearness or -4- definiteness.” Blake v. Commonwealth, 288 Va. 375, 381 (2014) (first alteration in original) (quoting Boynton v. Kilgore, 271 Va. 220, 227 n.8 (2006)).",
"Only if a statute is found to be ambiguous may the Court consider other factors such as the purpose, reason, and spirit of the law, including any legislative history. See, e.g., Thomas v. Commonwealth, 256 Va. 38, 41 (1998); Simpson v. Simpson, 162 Va. 621, 635 (1934); Auer v. Commonwealth, 46 Va. App. 637, 647-48 (2005). In considering the meaning of particular language in context, “[w]ords in a statute should be interpreted, if possible, to avoid rendering [other] words superfluous.” Cook v. Commonwealth, 268 Va. 111, 114 (2004); see Epps v. Commonwealth, 47 Va. App. 687, 714 (2006) (en banc) (requiring a court to “giv[e] to every word and every part of the statute, if possible, its due effect and meaning” (quoting Posey v. Commonwealth, 123 Va. 551, 553 (1918))), aff’d, 273 Va. 410 (2007). If the meaning of a word is clear “in context,” it is not ambiguous merely because it “has a variety of different definitions.” Blake, 288 Va. at 382.",
"Finally, penal statutes are to be construed “strictly against the Commonwealth,” giving defendants “the benefit of any reasonable doubt about the[ir] construction.” Foley v. Commonwealth, 63 Va. App. 186, 192, 198 (2014) (quoting Harris v. Commonwealth, 274 Va. 409, 415 (2007)). “[N]evertheless[,] a defendant is not entitled to . . . an ‘unreasonably restrictive interpretation of [the law].’” Grimes v. Commonwealth, 62 Va. App. 470, 480 (2013) (quoting Holloman v. Commonwealth, 221 Va. 196, 198 (1980)), aff’d, 288 Va. 314 (2014). With regard to the statutory exemption at issue, neither the phrase “a personal, private motor vehicle” nor the individual words “personal” or “private” is defined in any of the relevant code sections.",
"Where a “statute’s terms are undefined” by the legislature, we give those terms “their ‘ordinary meaning,’ in light of ‘the context in which [they are] used.’” Va. Marine Res. Comm’n v. Chincoteague Inn, 287 Va. 371, 384 (2014) (alteration in original) (quoting Lawlor -5- v. Commonwealth, 285 Va. 187, 237 (2013)). In ascertaining such meaning, dictionary definitions and pertinent analysis in prior case law may be consulted. See, e.g., Jones v. Commonwealth, 296 Va. 412, 415 (2018) (relying on the statutory language and a standard dictionary definition); Joseph v. Commonwealth, 64 Va. App. 332, 338-39 (2015) (relying upon multiple legal and non-legal dictionary definitions and citing Bateman v. Commonwealth, 205 Va. 595, 599-600 (1964), in which the Court “rel[ied] exclusively” on a dictionary definition); Auer, 46 Va. App. at 645-47 (relying in part on definitions in prior case decisions). In determining the meaning of the phrase “a personal, private motor vehicle,” we look first to the definition of “private,” the closest modifier to the noun “vehicle.” “Private” is defined in pertinent part as follows: 1a: intended for or restricted to the use of a particular person or group or class of persons: not freely available to the public 1b: belonging to or concerning an individual person, company, or interest Private, Webster’s Third New International Dictionary (2002); see City of Morgantown v. W. Va. Bd. of Regents, 354 S.E.2d 616, 618-19 (W. Va. 1987).",
"The appellant agrees with the first of these definitions, quoting Merriam-Webster’s College Dictionary (11th ed. 2005), to assert that “private” means “intended for or restricted to the use of a particular person, group, or class.” However, he further argues that “personal” is “[s]imilarly” defined by that dictionary as “‘of, relating to, or affecting a particular person.’” (Emphasis added). He contends that both words mean merely that the statutory exemption applies “to vehicles driven by individuals for their own travel purposes, as opposed to forms of public transportation.” Accordingly, the appellant asserts that the statutory exemption does not apply to “forms of public transportation . . . like city buses” but includes any “car, pickup truck, -6- van, or other type of motor vehicle” being driven by an individual “for [his] own purposes.” The critical piece of his argument is his claim that the exemption applies without regard to whether the individual operating the vehicle owns it or is in lawful possession of it. The appellant’s analysis, however, by virtually equating the meaning of “personal” with “private,” does not take into consideration the principle that “[w]ords in a statute should be interpreted, if possible, to avoid rendering [other] words superfluous.” See Cook, 268 Va. at 114. “[T]he legislature chooses statutory language with care, and ‘[w]hen the General Assembly uses two different terms, [we must] presume[] the terms .",
". . mean two different things.’” Spratley v. Commonwealth, 69 Va. App. 314, 319-20 (2018) (quoting Brown v. Commonwealth, 284 Va. 538, 545 (2012)). In order to give this important principle full effect, the word “personal” in the phrase “a personal, private motor vehicle” must mean something different from the word “private.” These are common words that should be read in light of their common meanings. A dictionary definition of the word “personal” that goes beyond the mere equivalent of “private” means “exclusively for a given individual,” as in “a [personal] letter.” Webster’s Third New International Dictionary, supra. Additionally, Virginia law defines “personal property” in part as that which is “subject to ownership.” See Henry v. Commonwealth, 63 Va. App. 30, 43 (2014) (quoting Property, Black’s Law Dictionary (9th ed. 2009) (“personal property” subheading)).",
"These definitions support the determination that the legislature did not intend to permit one to lawfully secure a dangerous firearm in a vehicle subject to personal ownership without consideration of who the owner or authorized user of that vehicle is. Consequently, we conclude that the General Assembly, by using the adjective “personal,” meant at the very least to require that the vehicle in which one secures a firearm, in addition to being a “private” or non-public one, must also be one that the person claiming the exemption lawfully possesses or -7- occupies.1 See Braddock v. State, 194 S.E.2d 317, 320 (Ga. Ct. App. 1972) (holding that where a truck’s owner and his employee were riding together in the vehicle, the employee “could not reasonably think of [the truck’s glove compartment] as a personal, private place” in which he had a reasonable expectation of privacy (emphasis added)); Villanova v. Innovative Investigations, Inc., 21 A.3d 650, 652 (N.J. Super. Ct. App.",
"Div. 2011) (noting the trial judge’s observation that “it is standard practice for law enforcement officers, while engaged in police activities, to avoid use of their personal private vehicles or to display any other personal identifiers” (emphasis added)); cf. Byrd v. United States, 138 S. Ct. 1518, 1529 (2018) (holding that “[a] car thief would not have a reasonable expectation of privacy in a stolen car” regardless of “the degree of possession and control”). We need not decide whether one who is merely an authorized user of a vehicle qualifies for the exemption. Cf. Morris v. City of Va. Beach, 58 Va. App.",
"173, 180 (2011) (applying “best and narrowest ground” principles to hold that where one legal theory legitimized a warrantless search, the Court would not consider whether a second legal theory might also do so (quoting Armstead v. Commonwealth, 56 Va. App. 569, 576 (2010))). Here, the appellant was not an authorized user under the facts of this case. To the contrary, by entering a plea of guilty to receiving stolen property, the appellant admitted that he knew the pickup truck was stolen. See 1 The Virginia case decisions cited by the appellant, which employ the adjectives “personal” and “private” jointly to modify a noun referencing a vehicle, use the terms in wholly different contexts. See Carlton v. Boudar, 118 Va. 521, 525 (1916) (in analyzing whether a taxi company was a common carrier for purposes of tort liability, noting that “[a]n automobile may be used as a common carrier, a private carrier, or a personal private conveyance” without discussing this third term (quoting Xenophon P. Huddy, The Law of Automobiles 38 (2d ed.",
"1909))); Thorne v. Va. Emp’t Comm’n, 5 Va. Cir. 441, 443 (1972) (in considering whether a taxi driver was an employee or independent contractor, noting that “the only fringe benefit available to [the] driver [of a taxi for Thorne’s company] is the use of [the vehicle] for personal private transportation on occasion,” leaving open the inference that the term implies at least authorized use); see also McGinnis v. McGinnis, 69 Va. App. 572, 580 (2018) (noting that circuit court decisions are not binding on the Court of Appeals). Consequently, these decisions are not instructive. -8- Code § 18.2-108(A). Accordingly, under the plain meaning of “personal” as used in the statutory exemption, the stolen vehicle was certainly not one intended “exclusively” for the appellant or one subject to his authorized use. III. CONCLUSION We hold that the exemption in Code § 18.2-308(C)(8) did not apply because the appellant knew that the truck in which he secured the firearm was stolen and, thus, it was not “a personal, private motor vehicle” within the meaning of the exemption.",
"Consequently, we affirm the appellant’s conviction for violating Code § 18.2-287.4. Affirmed. -9-"
] | https://www.courtlistener.com/api/rest/v3/opinions/4387636/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Claim Rejections - 35 USC § 103 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
The factual inquiries for establishing a background for determining obviousness under 35 U.S.C. 103 are summarized as follows: 1. Determining the scope and contents of the prior art. 2. Ascertaining the differences between the prior art and the claims at issue. 3. Resolving the level of ordinary skill in the pertinent art. 4. Considering objective evidence present in the application indicating obviousness or nonobviousness. This application currently names joint inventors. In considering patentability of the claims the examiner presumes that the subject matter of the various claims was Claims 1-7 is/are rejected under 35 U.S.C. 103 as being unpatentable over Whiteford in 7267875 in view of Peng in US20030173541 and further in view of Liu in their publication entitled Thiol-Ene Click Reaction as a Facile and General Approach for Surface Functionalization of Colloidal Nanocrystals”.
Whiteford teaches the creation of inorganic particles having coating formed from a ligand containing a moiety including a silsesquioxane structure (See Table 1). The inorganic particles of Whiteford are chosen from various semiconducting nanocrystals including Group II-VI, Group III-V and Group IV semiconductors (See Column 28, Lines 31-55). The nanocrystals are made through a conventional means (See Column 29, Lines 50-67) and the ligands on the surface are exchanged for the rigid ligands comprising a silsesquioxane structure (See Column 30, Lines 14-37). The silsesquioxane structure may include a ‘second moiety’ including a silsesquioxane connected to a ‘second ligand’ having a polar nature (alkyl thiol). The claimed elements are shown in the below Figure, wherein the silsesquioxane is marked as feature B, PNG media_image1.png 477 534 media_image1.png Greyscale
Whiteford does not teach the presence of a first non-polar ligand combined to a surface of the particle and connected to the second ligand and is silent regarding of the luminous or emitting nature of the material.
However, Whiteford does note that the ligands exchanged are generally associated with the growth ligands of the quantum dots and may be in the form of unsaturated lipid-like structures attached to the nanocrystal surface (See Column 30, Lines 15-40). Whiteford explicitly notes Peng’s teachings in terms of the creation of these nanoparticles (See
Whiteford in view of Peng are silent regarding connecting the claimed “first ligand” (oleic acid) with the second ligand (alkyl thiol).
Thus Whiteford in view of Peng and Liu obviate the creation of a luminous body (semiconductor nanocrystal) comprising a first moiety including a plurality of first ligands (oleic acid ligands) combined to a surface of an inorganic emitting particle (quantum dot) and a second moiety including silsesquioxanes connected to a second ligand (ligand of Whiteford including silsesquioxane bonded to alkyl thiol). The first and second ligands are connected to one another through a thiol-ene click reaction. The
Regarding Claim 2: Whiteford teaches that the semiconductor nanocrystals may have a singular structure in terms of CdSe, CdTe, Zns, and CdS, amongst others (See Colum 29, Lines 50-67). Core/shell (heterologous structures) are also taught (See Paragraph bridging Columns 28 and 29).
Regarding Claim 3-4: Whiteford teaches that the silsesquioxane may have a T-type unit and may have a cage or incomplete cage structure (See Table 1).
Regarding Claim 5: The first ligand, oleic acid, represents a non-polar ligand and alkyl thiol represents a polar ligand (See discussion of claim 1).
Regarding Claim 6: Oleic acid is the first ligand and contains a C18 alkylene group (See Peng paragraph 39).
Regarding Claim 7: Whiteford teaches that the second ligand may be a C3 thiol (alkyl sulfide) (See Compound 13, Table 1).
Claim 8-13 is/are rejected under 35 U.S.C. 103 as being unpatentable over Whiteford in view of Peng and Liu as applied to claim 1 above, and further in view of Li in US20120287381. Regarding Claim 8: Whiteford in view of Peng and Liu obviate the creation of a luminous body (semiconductor nanocrystal) comprising a first moiety including a plurality of first ligands (oleic acid ligands) combined to a surface of an inorganic emitting particle (quantum dot) and a second moiety including silsesquioxanes connected to a second ligand (ligand of Whiteford including silsesquioxane bonded to alkyl thiol). The first and second ligands are connected to one another through a thiol-ene click reaction. The first ligand, oleic acid, represents a non-polar ligand and alkyl thiol represents a polar ligand (See 103 Rejection above). Thus Whiteford in view of Peng and Liu teach the luminous body as set forth in the claim.
Whiteford teaches the use of the semiconductor nanocrystals in light emitting applications, such as LEDs, back light lighting for LCDs and generally as phosphors, but is silent as to the architecture of these devices (See Column 34, Lines 51-67).
However, Li teaches the creation of an LCD device including a backlighting panel. The device includes a lower substrate in terms of a reflective film (956), a UV excitation source (906), and a color conversion element (928). The device includes other an upper glass plate as an upper substrate (916) (See Figure 9). The UV excitation source may be a light emitting diode (See Paragraph 78) and is located between at least two substrates. The color conversion element (928) contains green and red quantum dots corresponding to red pixel areas and green pixel areas and are operative to emit said light in response to excitation (See Paragraph 39-41). The quantum dots may be chosen from the group comprising materials such as CdSe, CdS, InP, etc (See
Regarding Claim 9: The light converting layer is disposed between the upper substrate and the light emitting diode (See Figure 9).
Regarding Claim 10-11: The light converting material contains red and green pixel regions as is shown in Figure 9. The substrates as set forth would have planar regions associated with these pixels as the red and green pixels have dimensions above or below regions of said substrates. The red and green pixels are disposed as a layer comprising pixels representing red light converting layers and green light converting layers. The layers contain quantum dots capable of emitting light of these colors when excited by the light emitting diode source. It would have been obvious to use the luminous body of Whiteman in such a capacity as they are also quantum dots.
Regarding Claim 12: The quantum dots of Li may be incorporated into a matrix resin such as an acrylic resin and be disposed as a film in the light converting layer (See Paragraph 75, Figure 9 and the rejection of claim 8 above). It would have been obvious to use the luminous body (semiconductor nanocrystals in this manner.
Regarding Claim 13: The device of Li is a liquid crystal display device. The liquid crystal matrix panel is labeled LC (item 914). The LC is placed above the backlight unit (item 904) and the color conversion film comprising the luminous bodies of Whiteman is disposed between the backlight and the liquid crystal panel. The quantum dots may be disposed in a film (See Paragraph 75, Figure 9 and the rejection of claim 8 above).
Claims 14-15 is/are rejected under 35 U.S.C. 103 as being unpatentable over Whiteford in view of Peng and Liu as applied to claim 1 above and further in view of Park in US20090213296.
Regarding Claim 14: Whiteford in view of Peng and Liu obviate the creation of a luminous body (semiconductor nanocrystal) comprising a first moiety including a plurality of first ligands (oleic acid ligands) combined to a surface of an inorganic emitting particle (quantum dot) and a second moiety including silsesquioxanes connected to a second ligand (ligand of Whiteford including silsesquioxane bonded to alkyl thiol). The first and second ligands are connected to one another through a thiol-ene click reaction. The first ligand, oleic acid, represents a non-polar ligand and alkyl
Whiteford teaches the use of the semiconductor nanocrystals in light emitting applications, such as LEDs, back light lighting for LCDs and generally as phosphors, but is silent as to the architecture of these devices (See Column 34, Lines 51-67).
However, Park teaches the construction of LED packages incorporating quantum dots and liquid crystal displays using these packages. Park teaches that the LED is created according to Figure 2, wherein an LED chip (C) is disposed on the bottom of the device and is encapsulated by resin containing quantum dots (luminous bodies; Item P). See Paragraphs 24-29. It would have been obvious to use the semiconductor nanocrystals of Whiteford in such a device as it represents an application for those quantum dots and the use in such a device is explicitly taught by Whiteford. Those of ordinary skill in the art would be motivated to apply the quantum dots of Whiteford in a variety of applicants in which they are useful. Conversely, it would have been obvious to use the quantum dots of Whiteford to replace the conventional quantum dots taught as they are better isolated and do not experience charge diffusion or transmission between adjacent dots (See Column 4, Lines 43-55). The semiconductor nanocrystals would have better light transmission properties based on these minimized energy losses, which would motivate those of ordinary skill in the art to use them in the device of Li.
Regarding Claim 15: Whiteford in view of Peng and Liu obviate the creation of a luminous body (semiconductor nanocrystal) comprising a first moiety including a plurality of first ligands (oleic acid ligands) combined to a surface of an inorganic emitting particle (quantum dot) and a second moiety including silsesquioxanes connected to a second ligand (ligand of Whiteford including silsesquioxane bonded to alkyl thiol). The first and second ligands are connected to one another through a thiol-ene click reaction. The first ligand, oleic acid, represents a non-polar ligand and alkyl thiol represents a polar ligand (See 103 Rejection above). Thus Whiteford in view of Peng and Liu teach the luminous body as set forth in the claim.
Whiteford teaches the use of the semiconductor nanocrystals in light emitting applications, such as LEDs, back light lighting for LCDs and generally as phosphors, but is silent as to the architecture of these devices (See Column 34, Lines 51-67).
However, Park teaches the construction of a liquid crystal display device comprising a backlight unit. The backlight unit and liquid display panel are shown in Figure 12, wherein the LCD panel is item 30 and the backlight unit is item 100. The LCD panel is over said backlight unit. Park teaches that the backlight unit is made up of LED’s. The LED is created according to Figure 2, wherein an LED chip (C) is disposed on the bottom of the device and is encapsulated by resin containing quantum dots (luminous bodies; Item P). See Paragraphs 24-29. It would have been obvious to use the semiconductor nanocrystals of Whiteford in such a device as it represents an .
Claims 16-17 is/are rejected under 35 U.S.C. 103 as being unpatentable over Whiteford in view of Peng and Liu as applied to claim 1 above, and further in view of Boe in US20160218141.
Whiteford in view of Peng and Liu obviate the creation of a luminous body (semiconductor nanocrystal) comprising a first moiety including a plurality of first ligands (oleic acid ligands) combined to a surface of an inorganic emitting particle (quantum dot) and a second moiety including silsesquioxanes connected to a second ligand (ligand of Whiteford including silsesquioxane bonded to alkyl thiol). The first and second ligands are connected to one another through a thiol-ene click reaction. The first ligand, oleic acid, represents a non-polar ligand and alkyl thiol represents a polar ligand (See 103 Rejection above). Thus Whiteford in view of Peng and Liu teach the luminous body as set forth in the claim.
However, Boe teaches the creation of an inorganic light emitting device comprising an inorganic light emitting diode.
Boe teaches that the device contains a diode comprising a first electrode (20), a second electrode facing the first electrode (3), and a light emitting layer disposed between the first and second electrode (40). The light emitting diode is disposed on a substrate (10) with a driving element (transistor; 60) disposed between the substrate and the light emitting diode to create said device (See Figure 5-6 and Paragraph 30). Boe teaches that the light emitting layer portion contains ZnS quantum dots as a luminous body (See Paragraph 38-39). It would have been obvious to use the semiconductor nanocrystals of Whiteford in such a device as it represents an application for those quantum dots and the use in such a device is explicitly taught by Whiteford, who also teaches the creation of isolated ZnS quantum dots (See Paragraph 28, Lines 31-55). Those of ordinary skill in the art would be motivated to apply the quantum dots of Whiteford in a variety of applicants in which they are useful. Conversely, it would have been obvious to use the quantum dots of Whiteford to replace the conventional quantum dots taught as they are better isolated and do not experience charge diffusion or transmission between adjacent dots (See Column 4, Lines 43-55). The semiconductor nanocrystals would have better
Any inquiry concerning this communication or earlier communications from the examiner should be directed to MATTHEW E HOBAN whose telephone number is (571)270-3585. The examiner can normally be reached on M-F 9:30am-6:00pm. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Jonathan Johnson can be reached on 571-272-1177. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access
/Matthew E. Hoban/Primary Examiner, Art Unit 1734 | 2021-03-22T06:35:48 | [
"Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Claim Rejections - 35 USC § 103 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status.",
"The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.",
"The factual inquiries for establishing a background for determining obviousness under 35 U.S.C. 103 are summarized as follows: 1. Determining the scope and contents of the prior art. 2. Ascertaining the differences between the prior art and the claims at issue. 3. Resolving the level of ordinary skill in the pertinent art. 4. Considering objective evidence present in the application indicating obviousness or nonobviousness.",
"This application currently names joint inventors. In considering patentability of the claims the examiner presumes that the subject matter of the various claims was Claims 1-7 is/are rejected under 35 U.S.C. 103 as being unpatentable over Whiteford in 7267875 in view of Peng in US20030173541 and further in view of Liu in their publication entitled Thiol-Ene Click Reaction as a Facile and General Approach for Surface Functionalization of Colloidal Nanocrystals”. Whiteford teaches the creation of inorganic particles having coating formed from a ligand containing a moiety including a silsesquioxane structure (See Table 1). The inorganic particles of Whiteford are chosen from various semiconducting nanocrystals including Group II-VI, Group III-V and Group IV semiconductors (See Column 28, Lines 31-55). The nanocrystals are made through a conventional means (See Column 29, Lines 50-67) and the ligands on the surface are exchanged for the rigid ligands comprising a silsesquioxane structure (See Column 30, Lines 14-37). The silsesquioxane structure may include a ‘second moiety’ including a silsesquioxane connected to a ‘second ligand’ having a polar nature (alkyl thiol). The claimed elements are shown in the below Figure, wherein the silsesquioxane is marked as feature B, PNG media_image1.png 477 534 media_image1.png Greyscale Whiteford does not teach the presence of a first non-polar ligand combined to a surface of the particle and connected to the second ligand and is silent regarding of the luminous or emitting nature of the material. However, Whiteford does note that the ligands exchanged are generally associated with the growth ligands of the quantum dots and may be in the form of unsaturated lipid-like structures attached to the nanocrystal surface (See Column 30, Lines 15-40).",
"Whiteford explicitly notes Peng’s teachings in terms of the creation of these nanoparticles (See Whiteford in view of Peng are silent regarding connecting the claimed “first ligand” (oleic acid) with the second ligand (alkyl thiol). Thus Whiteford in view of Peng and Liu obviate the creation of a luminous body (semiconductor nanocrystal) comprising a first moiety including a plurality of first ligands (oleic acid ligands) combined to a surface of an inorganic emitting particle (quantum dot) and a second moiety including silsesquioxanes connected to a second ligand (ligand of Whiteford including silsesquioxane bonded to alkyl thiol). The first and second ligands are connected to one another through a thiol-ene click reaction. The Regarding Claim 2: Whiteford teaches that the semiconductor nanocrystals may have a singular structure in terms of CdSe, CdTe, Zns, and CdS, amongst others (See Colum 29, Lines 50-67). Core/shell (heterologous structures) are also taught (See Paragraph bridging Columns 28 and 29).",
"Regarding Claim 3-4: Whiteford teaches that the silsesquioxane may have a T-type unit and may have a cage or incomplete cage structure (See Table 1). Regarding Claim 5: The first ligand, oleic acid, represents a non-polar ligand and alkyl thiol represents a polar ligand (See discussion of claim 1). Regarding Claim 6: Oleic acid is the first ligand and contains a C18 alkylene group (See Peng paragraph 39). Regarding Claim 7: Whiteford teaches that the second ligand may be a C3 thiol (alkyl sulfide) (See Compound 13, Table 1). Claim 8-13 is/are rejected under 35 U.S.C. 103 as being unpatentable over Whiteford in view of Peng and Liu as applied to claim 1 above, and further in view of Li in US20120287381. Regarding Claim 8: Whiteford in view of Peng and Liu obviate the creation of a luminous body (semiconductor nanocrystal) comprising a first moiety including a plurality of first ligands (oleic acid ligands) combined to a surface of an inorganic emitting particle (quantum dot) and a second moiety including silsesquioxanes connected to a second ligand (ligand of Whiteford including silsesquioxane bonded to alkyl thiol).",
"The first and second ligands are connected to one another through a thiol-ene click reaction. The first ligand, oleic acid, represents a non-polar ligand and alkyl thiol represents a polar ligand (See 103 Rejection above). Thus Whiteford in view of Peng and Liu teach the luminous body as set forth in the claim. Whiteford teaches the use of the semiconductor nanocrystals in light emitting applications, such as LEDs, back light lighting for LCDs and generally as phosphors, but is silent as to the architecture of these devices (See Column 34, Lines 51-67). However, Li teaches the creation of an LCD device including a backlighting panel. The device includes a lower substrate in terms of a reflective film (956), a UV excitation source (906), and a color conversion element (928).",
"The device includes other an upper glass plate as an upper substrate (916) (See Figure 9). The UV excitation source may be a light emitting diode (See Paragraph 78) and is located between at least two substrates. The color conversion element (928) contains green and red quantum dots corresponding to red pixel areas and green pixel areas and are operative to emit said light in response to excitation (See Paragraph 39-41). The quantum dots may be chosen from the group comprising materials such as CdSe, CdS, InP, etc (See Regarding Claim 9: The light converting layer is disposed between the upper substrate and the light emitting diode (See Figure 9). Regarding Claim 10-11: The light converting material contains red and green pixel regions as is shown in Figure 9.",
"The substrates as set forth would have planar regions associated with these pixels as the red and green pixels have dimensions above or below regions of said substrates. The red and green pixels are disposed as a layer comprising pixels representing red light converting layers and green light converting layers. The layers contain quantum dots capable of emitting light of these colors when excited by the light emitting diode source. It would have been obvious to use the luminous body of Whiteman in such a capacity as they are also quantum dots. Regarding Claim 12: The quantum dots of Li may be incorporated into a matrix resin such as an acrylic resin and be disposed as a film in the light converting layer (See Paragraph 75, Figure 9 and the rejection of claim 8 above).",
"It would have been obvious to use the luminous body (semiconductor nanocrystals in this manner. Regarding Claim 13: The device of Li is a liquid crystal display device. The liquid crystal matrix panel is labeled LC (item 914). The LC is placed above the backlight unit (item 904) and the color conversion film comprising the luminous bodies of Whiteman is disposed between the backlight and the liquid crystal panel. The quantum dots may be disposed in a film (See Paragraph 75, Figure 9 and the rejection of claim 8 above). Claims 14-15 is/are rejected under 35 U.S.C. 103 as being unpatentable over Whiteford in view of Peng and Liu as applied to claim 1 above and further in view of Park in US20090213296. Regarding Claim 14: Whiteford in view of Peng and Liu obviate the creation of a luminous body (semiconductor nanocrystal) comprising a first moiety including a plurality of first ligands (oleic acid ligands) combined to a surface of an inorganic emitting particle (quantum dot) and a second moiety including silsesquioxanes connected to a second ligand (ligand of Whiteford including silsesquioxane bonded to alkyl thiol). The first and second ligands are connected to one another through a thiol-ene click reaction.",
"The first ligand, oleic acid, represents a non-polar ligand and alkyl Whiteford teaches the use of the semiconductor nanocrystals in light emitting applications, such as LEDs, back light lighting for LCDs and generally as phosphors, but is silent as to the architecture of these devices (See Column 34, Lines 51-67). However, Park teaches the construction of LED packages incorporating quantum dots and liquid crystal displays using these packages. Park teaches that the LED is created according to Figure 2, wherein an LED chip (C) is disposed on the bottom of the device and is encapsulated by resin containing quantum dots (luminous bodies; Item P). See Paragraphs 24-29. It would have been obvious to use the semiconductor nanocrystals of Whiteford in such a device as it represents an application for those quantum dots and the use in such a device is explicitly taught by Whiteford.",
"Those of ordinary skill in the art would be motivated to apply the quantum dots of Whiteford in a variety of applicants in which they are useful. Conversely, it would have been obvious to use the quantum dots of Whiteford to replace the conventional quantum dots taught as they are better isolated and do not experience charge diffusion or transmission between adjacent dots (See Column 4, Lines 43-55). The semiconductor nanocrystals would have better light transmission properties based on these minimized energy losses, which would motivate those of ordinary skill in the art to use them in the device of Li. Regarding Claim 15: Whiteford in view of Peng and Liu obviate the creation of a luminous body (semiconductor nanocrystal) comprising a first moiety including a plurality of first ligands (oleic acid ligands) combined to a surface of an inorganic emitting particle (quantum dot) and a second moiety including silsesquioxanes connected to a second ligand (ligand of Whiteford including silsesquioxane bonded to alkyl thiol).",
"The first and second ligands are connected to one another through a thiol-ene click reaction. The first ligand, oleic acid, represents a non-polar ligand and alkyl thiol represents a polar ligand (See 103 Rejection above). Thus Whiteford in view of Peng and Liu teach the luminous body as set forth in the claim. Whiteford teaches the use of the semiconductor nanocrystals in light emitting applications, such as LEDs, back light lighting for LCDs and generally as phosphors, but is silent as to the architecture of these devices (See Column 34, Lines 51-67). However, Park teaches the construction of a liquid crystal display device comprising a backlight unit. The backlight unit and liquid display panel are shown in Figure 12, wherein the LCD panel is item 30 and the backlight unit is item 100. The LCD panel is over said backlight unit. Park teaches that the backlight unit is made up of LED’s. The LED is created according to Figure 2, wherein an LED chip (C) is disposed on the bottom of the device and is encapsulated by resin containing quantum dots (luminous bodies; Item P).",
"See Paragraphs 24-29. It would have been obvious to use the semiconductor nanocrystals of Whiteford in such a device as it represents an . Claims 16-17 is/are rejected under 35 U.S.C. 103 as being unpatentable over Whiteford in view of Peng and Liu as applied to claim 1 above, and further in view of Boe in US20160218141. Whiteford in view of Peng and Liu obviate the creation of a luminous body (semiconductor nanocrystal) comprising a first moiety including a plurality of first ligands (oleic acid ligands) combined to a surface of an inorganic emitting particle (quantum dot) and a second moiety including silsesquioxanes connected to a second ligand (ligand of Whiteford including silsesquioxane bonded to alkyl thiol).",
"The first and second ligands are connected to one another through a thiol-ene click reaction. The first ligand, oleic acid, represents a non-polar ligand and alkyl thiol represents a polar ligand (See 103 Rejection above). Thus Whiteford in view of Peng and Liu teach the luminous body as set forth in the claim. However, Boe teaches the creation of an inorganic light emitting device comprising an inorganic light emitting diode. Boe teaches that the device contains a diode comprising a first electrode (20), a second electrode facing the first electrode (3), and a light emitting layer disposed between the first and second electrode (40). The light emitting diode is disposed on a substrate (10) with a driving element (transistor; 60) disposed between the substrate and the light emitting diode to create said device (See Figure 5-6 and Paragraph 30).",
"Boe teaches that the light emitting layer portion contains ZnS quantum dots as a luminous body (See Paragraph 38-39). It would have been obvious to use the semiconductor nanocrystals of Whiteford in such a device as it represents an application for those quantum dots and the use in such a device is explicitly taught by Whiteford, who also teaches the creation of isolated ZnS quantum dots (See Paragraph 28, Lines 31-55). Those of ordinary skill in the art would be motivated to apply the quantum dots of Whiteford in a variety of applicants in which they are useful. Conversely, it would have been obvious to use the quantum dots of Whiteford to replace the conventional quantum dots taught as they are better isolated and do not experience charge diffusion or transmission between adjacent dots (See Column 4, Lines 43-55).",
"The semiconductor nanocrystals would have better Any inquiry concerning this communication or earlier communications from the examiner should be directed to MATTHEW E HOBAN whose telephone number is (571)270-3585. The examiner can normally be reached on M-F 9:30am-6:00pm. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Jonathan Johnson can be reached on 571-272-1177.",
"The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access /Matthew E. Hoban/Primary Examiner, Art Unit 1734"
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2021-03-07.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
CHATFIELD, District Judge. The bankrupt, James McKane, has applied for a discharge, to which objections have been filed. The specifications of those objections have been referred to a special commissioner, to hear and report -his opinion thereon. This special commissioner has reported his opinion to be “that the specifications have not been sustained and that the bankrupt’s discharge should be granted.” The specifications alleged that the bankrupt was not entitled to a discharge, on the ground that at some time subsequent to ,the first day of the four months immediately preceding the filing of the petition, which was upon November 29, 1905, the bankrupt, with intent to' hinder, delay, and defraud his creditors, transferred two pieces of real estate, and within the same period, transferred certain personal property, concealed certain property from his trustee, did not keep books of account, and made a false oath as to his property. Upon all of these specifications the special commissioner has found in favor of the bankrupt, and upon the motion to confirm the special commissioner's report exception is principally taken to the finding upon the allegation that subsequent to the first day of the four months prior to the filing of his petitipn the. bankrupt had transferred real property. This objection is based upon the provisions of the bankruptcy law. *675Section 4, subd. "b,” par. 4, (Act February 5, 1903, c. 487, 32 Stat. 797 [U. S. Comp. St. Supp. 1905, p. 684]), provides that the application for the discharge of a bankrupt shall not be granted where it appears that the bankrupt has “at any time subsequent to the first day of the four months immediately preceding the filing of the petition transferred, removed, destroyed, or concealed, or permitted to be removed, destroyed, or concealed any of his property with intent to hinder, delay, or defraud his creditors.” Section 3, subd. “b” (Bankr. Act July 1, 1898, c. 541, 30 St. 546 [U. S. Comp. St. 1901, p. 3422]), in defining acts of bankruptcy which have occurred within four months prior to the filing of the petition, uses the following language: “Such time shall not expire until four months after (1) the date of the recording or registering of the transfer or assignment when the act consists in having made a transfer of any of his property with intent to hinder, delay, or defraud his creditors or for the purpose of giving a preference as hereinbefore provided, or a general assignment for the benefit of his creditors, if by law such recording or registering is required or permitted, or, if it is not, from the date when the beneficiary takes notorious, exclusive, or continuous possession of the property unless the petitioning creditors have received actual notice of such transfer or assignment.” Section 60 says: “(a) Where the preference consists in a transfer, such period of four months shall not expire until four months after the date of the recording or registering of the transfer, if by law such recording or registering is required. “(b) If a bankrupt shall have given a preference, and the person receiving it, or to be benefited thereby, or his agent acting therein, shall have had reasonable cause to believe that it was intended thereby to give a preference, it shall be voidable by the trustee, and he may recover the property or its value from such person.” Section 67, par. “e,” is as follows: “All conveyances, transfers, assignments, or incumbrances of his property, or any part thereof, made or given by a person adjudged a bankrupt under the provisions of this act subsequent to the passage of this act and within four months prior to the filing of the petition, with the intent and purpose on his part to hinder, delay, or defraud his creditors, or any of them, shall be null and void as against the creditors of such debtor, except as to purchasers in good faith and for a present fair consideration.” Attention is called by the opposing creditor to the fact that section 241, c. 547, p. 607, Laws of 1896, known as the “Real Property Law,” of New York, provides as follows: “A conveyance of real property, within the state, on being duly acknowledged by the person executing the same * * * may be recorded in the office of the clerk of the county where said real property is situated.” And chapter 572, p. 652, Laws of 1896, amending section 1, tit. 5, c. 3, pt. 2 (1st Ed.) of the Revised Statutes, is as follows: “Every conveyance of real estate within this state shall be recorded in the office of the clerk of the county where said real estate shall be situated. * * * ” By chapter 83, p. 77, of the Laws of 1852, the register of Kings county takes the place of and has entire charge of the matter of recording deeds, in lieu of the county clerk. The objecting creditor claims that the transfers objected to by him are such as must be re*676corded, under the laws of New York, in order to have them valid as against the creditors, and that they were recorded within the period within which the transfer of property, with intent to hinder or defraud creditors, is declared void under the bankruptcy law. The point seems to be well taken that the'bankruptcy law contemplates making a transfer, recorded within the period of four months prior to the act' of bankruptcy, such a transfer as may be attacked by creditors. A transfer of property, of such a character that it may be held fraudulent, can be vacated both as against the bankrupt and as against the grantee, and, if the grantee does not record the instrument, his delay in so doing gives to the creditors of the bankrupt an opportunity to show the character of the transaction. In a fraudulent transaction, the grantee is presumed to be a party to the fraud, and does not occupy the position of an innocent holder for value. If, therefore, an instrument has been made by a bankrupt and recorded within the statutory period, it is a question of fact whether it was done with intent to defraud, hinder, or delay his creditors, or to give a preference to any one of them. A transfer made with this intent in view can be set aside, if recorded within the prescribed period. The special commissioner has held in the present case that the actual transfer, as shown by the evidence, occurred long prior to the date of record. He has decided the issue of fact in favor of the bankrupt, holding that the transfers were not with intent to hinder, ■ delay, or defraud creditors, and his decision of this issue of fact should be followed, unless there is no evidence shown supporting the bankrupt’s contention. The report will be confirmed. | 11-26-2022 | [
"CHATFIELD, District Judge. The bankrupt, James McKane, has applied for a discharge, to which objections have been filed. The specifications of those objections have been referred to a special commissioner, to hear and report -his opinion thereon. This special commissioner has reported his opinion to be “that the specifications have not been sustained and that the bankrupt’s discharge should be granted.” The specifications alleged that the bankrupt was not entitled to a discharge, on the ground that at some time subsequent to ,the first day of the four months immediately preceding the filing of the petition, which was upon November 29, 1905, the bankrupt, with intent to' hinder, delay, and defraud his creditors, transferred two pieces of real estate, and within the same period, transferred certain personal property, concealed certain property from his trustee, did not keep books of account, and made a false oath as to his property. Upon all of these specifications the special commissioner has found in favor of the bankrupt, and upon the motion to confirm the special commissioner's report exception is principally taken to the finding upon the allegation that subsequent to the first day of the four months prior to the filing of his petitipn the.",
"bankrupt had transferred real property. This objection is based upon the provisions of the bankruptcy law. *675Section 4, subd. \"b,” par. 4, (Act February 5, 1903, c. 487, 32 Stat. 797 [U. S. Comp. St. Supp. 1905, p. 684]), provides that the application for the discharge of a bankrupt shall not be granted where it appears that the bankrupt has “at any time subsequent to the first day of the four months immediately preceding the filing of the petition transferred, removed, destroyed, or concealed, or permitted to be removed, destroyed, or concealed any of his property with intent to hinder, delay, or defraud his creditors.” Section 3, subd. “b” (Bankr. Act July 1, 1898, c. 541, 30 St. 546 [U. S. Comp. St. 1901, p. 3422]), in defining acts of bankruptcy which have occurred within four months prior to the filing of the petition, uses the following language: “Such time shall not expire until four months after (1) the date of the recording or registering of the transfer or assignment when the act consists in having made a transfer of any of his property with intent to hinder, delay, or defraud his creditors or for the purpose of giving a preference as hereinbefore provided, or a general assignment for the benefit of his creditors, if by law such recording or registering is required or permitted, or, if it is not, from the date when the beneficiary takes notorious, exclusive, or continuous possession of the property unless the petitioning creditors have received actual notice of such transfer or assignment.” Section 60 says: “(a) Where the preference consists in a transfer, such period of four months shall not expire until four months after the date of the recording or registering of the transfer, if by law such recording or registering is required.",
"“(b) If a bankrupt shall have given a preference, and the person receiving it, or to be benefited thereby, or his agent acting therein, shall have had reasonable cause to believe that it was intended thereby to give a preference, it shall be voidable by the trustee, and he may recover the property or its value from such person.” Section 67, par. “e,” is as follows: “All conveyances, transfers, assignments, or incumbrances of his property, or any part thereof, made or given by a person adjudged a bankrupt under the provisions of this act subsequent to the passage of this act and within four months prior to the filing of the petition, with the intent and purpose on his part to hinder, delay, or defraud his creditors, or any of them, shall be null and void as against the creditors of such debtor, except as to purchasers in good faith and for a present fair consideration.” Attention is called by the opposing creditor to the fact that section 241, c. 547, p. 607, Laws of 1896, known as the “Real Property Law,” of New York, provides as follows: “A conveyance of real property, within the state, on being duly acknowledged by the person executing the same * * * may be recorded in the office of the clerk of the county where said real property is situated.” And chapter 572, p. 652, Laws of 1896, amending section 1, tit.",
"5, c. 3, pt. 2 (1st Ed.) of the Revised Statutes, is as follows: “Every conveyance of real estate within this state shall be recorded in the office of the clerk of the county where said real estate shall be situated. * * * ” By chapter 83, p. 77, of the Laws of 1852, the register of Kings county takes the place of and has entire charge of the matter of recording deeds, in lieu of the county clerk. The objecting creditor claims that the transfers objected to by him are such as must be re*676corded, under the laws of New York, in order to have them valid as against the creditors, and that they were recorded within the period within which the transfer of property, with intent to hinder or defraud creditors, is declared void under the bankruptcy law. The point seems to be well taken that the'bankruptcy law contemplates making a transfer, recorded within the period of four months prior to the act' of bankruptcy, such a transfer as may be attacked by creditors. A transfer of property, of such a character that it may be held fraudulent, can be vacated both as against the bankrupt and as against the grantee, and, if the grantee does not record the instrument, his delay in so doing gives to the creditors of the bankrupt an opportunity to show the character of the transaction.",
"In a fraudulent transaction, the grantee is presumed to be a party to the fraud, and does not occupy the position of an innocent holder for value. If, therefore, an instrument has been made by a bankrupt and recorded within the statutory period, it is a question of fact whether it was done with intent to defraud, hinder, or delay his creditors, or to give a preference to any one of them. A transfer made with this intent in view can be set aside, if recorded within the prescribed period. The special commissioner has held in the present case that the actual transfer, as shown by the evidence, occurred long prior to the date of record. He has decided the issue of fact in favor of the bankrupt, holding that the transfers were not with intent to hinder, ■ delay, or defraud creditors, and his decision of this issue of fact should be followed, unless there is no evidence shown supporting the bankrupt’s contention. The report will be confirmed."
] | https://www.courtlistener.com/api/rest/v3/opinions/8764750/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . This is in response to Applicant’s amendment in which claims 1 and 16 have been amended, claim 3 has been canceled, claims 1, 2, and 4-20 remain pending, and claims 11, 15, and 17-20 are withdrawn from consideration. Claim Rejections - 35 USC § 103 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The text of those sections of Title 35, U.S. Code not included in this action can be found in a prior Office action. Claims 1, 4-10, 12, 13, and 16 is/are rejected under 35 U.S.C. 103 as being unpatentable over Byrne (US 8,919,011) in view of Helwig (US 2,010,151). Regarding claims 1 and 4, Byrne discloses a ventilated boot, comprising: an outsole (outsole 42) having a bottom surface configured to contact the ground and an opposing top surface; a midsole (midsole 44) having a bottom surface secured to the top surface of the outsole and an opposing top surface; a ventilation mechanism comprising an intake reservoir (pumping chamber 50), an exhaust reservoir (channels 90; which may be located in the midsole), and a connecting channel (passageway 66) connecting the intake reservoir and the exhaust reservoir, wherein the exhaust reservoir comprises a directional flow channel (channels 90 within midsole) configured to facilitate air flow in a direction from the exhaust reservoir to an outside environment; and an upper (upper 20) comprising an air flow Byrne does not specifically disclose that the directional flow channel is configured to inhibit air flow in a direction from the exhaust reservoir to the intake reservoir. Helwig teaches a ventilation mechanism for a shoe including an intake reservoir (slot 13) and an exhaust reservoir. The exhaust reservoir comprises a directional flow channel (slots 15, 16) configured to facilitate air flow in a direction from the exhaust reservoir to an outside environment, and configured to inhibit air flow in a direction from the exhaust reservoir to the intake reservoir (wherein at least some of the branch slots 16 are angled back from the slot 15). The directional flow channel comprises a main channel (slot 15) extending in a longitudinal direction and a plurality of angled conduits (branch slots 16) extending from longitudinal edges of the main channel (column 3, lines 25-39; Fig. 1, 2). It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to provide a main channel and angled conduits, as taught Helwig, to the directional flow channel of Byrne in order to facilitate air flow throughout the length of the sole, providing adequate ventilation along the length of the user’s foot. Regarding claim 5, Helwig appears to show that the angled conduits each have a length that is about 10% to about 40% a length of the main channel (Fig. 2), but does not disclose the specific ratio. It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to make the angled conduits each have a length that is about 10% to about 40% a length of the main channel in order to provide adequate air flow throughout the channel and conduits, maximizing ventilation throughout the shoe. The claimed values are merely an optimum or workable range. It has been held that where the general conditions of a claim are disclosed in the prior art, Regarding claim 6, Byrne does not disclose the specific percentage of air flow by volume. It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to make the directional flow channel provide about 65% to about 90% air flow by volume, based on a total volume of air flow into the intake reservoir, in a direction from the intake reservoir to the exhaust reservoir, in order to provide adequate air flow and ventilation to the entire shoe, improving the comfort of the wearer. The claimed values are merely an optimum or workable range. It has been held that where the general conditions of a claim are disclosed in the prior art, discovering the optimum or workable ranges involves only routine skill in the art. In re Aller, 105 USPQ 233. Regarding claim 7, Byrne does not disclose the volume of the intake reservoir. It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to make a volume of the intake reservoir is within a range of about 5 cm3 to about 40 cm3, in order to provide adequate air volume and ventilation to the entire shoe, improving the comfort of the wearer. The claimed values are merely an optimum or workable range. It has been held that where the general conditions of a claim are disclosed in the prior art, discovering the optimum or workable ranges involves only routine skill in the art. In re Aller, 105 USPQ 233. Regarding claim 8, Byrne does not disclose the volume of the exhaust reservoir. It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to make a volume of the exhaust reservoir is within a range of about 2.8 cm3 to about 28 cm3, in order to provide adequate air flow and ventilation to the entire shoe, improving the comfort of the wearer. The claimed values are merely an optimum or workable range. It has been held that where the general conditions of a claim are disclosed in the prior art, discovering the optimum or workable ranges involves only routine skill in the art. In re Aller, 105 USPQ 233.
Regarding claim 10, Byrne discloses that the ventilation mechanism comprises a hollow insert which is a separate component from the midsole (Fig. 2). Regarding claim 12, Byrne discloses an insole having a top surface configured to receive a wearer's foot and an opposing bottom surface, wherein the bottom surface of the insole defines an intake pattern (recesses housing pumping chamber 50; Fig. 2) configured to channel air flow to the intake reservoir, and an exhaust pattern (channels 90 within insole and air distribution pad 70) configured to channel air flow from the exhaust reservoir to a wearer's foot. Regarding claim 13, Byrne discloses that the intake pattern comprises a hollow depression and a channel which engages with the air flow channel of the upper to channel air from the outside environment to the depression (Fig. 2). Regarding claim 16, Byrne discloses one or more ankle pads (middle layer 24) secured to the upper inside the boot and protruding from the upper so that adjacent areas of the upper are spaced away from the foot or ankle of a wearer to define air-flow channels (Fig. 9).
Claim 2 is/are rejected under 35 U.S.C. 103 as being unpatentable over Byrne and Helwig, as applied to claim 1, in view of Ferretti (US 2008/0229623). Byrne discloses that the upper may be made of a variety of materials (column 3, lines 12-15), but does not specifically disclose that it is waterproof. Ferretti teaches a ventilated shoe having a sole, an upper, and a ventilation mechanism. The upper may be made from a waterproof material (paragraph 0049). It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to make the upper waterproof, in order to prevent unwanted moisture from entering .
Claim 14 is/are rejected under 35 U.S.C. 103 as being unpatentable over Byrne and Helwig, as applied to claims 1 and 12, in view of Huang et al. (US 2007/0011908), herein Huang. Byrne does not disclose that the exhaust pattern comprises raised lugs and depressed channels extending between the raised lugs, wherein each of the raised lugs defines a perforation extending entirely though the insole. Huang teaches an insole for a ventilated shoe which is located above an exhaust reservoir (recesses 8) in the shoe sole and has an exhaust pattern configured to channel air flow from the exhaust reservoir to a wearer’s foot. The exhaust pattern comprises raised lugs (insole between recesses 12) and depressed channels (recesses 12) extending between the raised lugs, wherein each of the raised lugs defines a perforation (through holes) extending entirely though the insole (paragraph 0016; Fig. 1). It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to make the exhaust pattern of the insole with raised lugs, depressed channels, and perforations, as taught by Huang, in order to provide a more structured air flow pattern from the exhaust reservoir to the foot. Response to Arguments Applicant's arguments filed 05/04/2021 have been fully considered but they are not persuasive. Applicant argues that the Office has not provided an adequate reasoned rationale for why the slots 15, 16 of Helwig would inhibit air flow in an exhaust to intake direction. However, as stated in the rejection, some of the branch slots 16 are angled back from the slot 15, therefore inhibiting airflow back to slot 15. Applicant argues that the Office fails to provide any explanation for why or how the angled slots relate to inhibiting air flow. However, Applicant’s own specification clearly teaches that an angled conduit . Applicant argues that it is impossible to ascertain what the Office would consider to be an exhaust to intake direction. However, the Office Action clearly states that the intake reservoir is at slot 13, and Helwig clearly shows the direction of flow from intake to exhaust (see Fig. 2). The exhaust to intake direction is the opposite direction. Applicant argues that the Office failed to provide a rationale for why it would be obvious to provide 65-90% airflow in the intake to exhaust direction. However, the Office Action clearly states that it would be obvious “in order to provide adequate air flow and ventilation to the entire shoe, improving the comfort of the wearer.” Applicant argues that it is not obvious to optimize a parameter unless the parameter is first recognized as a results-effective variable, and the air flow percentages are not mentioned in the prior art, so cannot be recognized as a results-effective variable. However, Helwig clearly teaches that the amount of air which flows in a direction from the intake reservoir to the exhaust reservoir is a results-effective variable, wherein the directional flow channels requires a suitable supply of air to provide adequate ventilation (see at least column 1, lines 23-26; column 2, lines 27-35; column 4, lines 50-72). Specifically, Helwig teaches that “most of the air in the bellows will be transmitted through the various slots”, and that “because of the arrangement of the graduated holes … will be able to obtain a suitable supply of pumped air” (column 4, lines 56-68). Conclusion Applicant's amendment necessitated the new ground(s) of rejection presented in this Office action. Accordingly, THIS ACTION IS MADE FINAL. See MPEP § 706.07(a). Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a). A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within TWO MONTHS of the mailing date of this final action and the advisory action is not mailed until after the end of the THREE-MONTH shortened statutory period, then the shortened statutory period will expire on the date the advisory Any inquiry concerning this communication or earlier communications from the examiner should be directed to SHARON M PRANGE whose telephone number is (571)270-5280. The examiner can normally be reached on M-F 8:30-5 EST. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Khoa Huynh can be reached on (571) 272-4888. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.
/SHARON M PRANGE/ Primary Examiner, Art Unit 3732 | 2021-08-08T11:04:10 | [
"DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . This is in response to Applicant’s amendment in which claims 1 and 16 have been amended, claim 3 has been canceled, claims 1, 2, and 4-20 remain pending, and claims 11, 15, and 17-20 are withdrawn from consideration. Claim Rejections - 35 USC § 103 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The text of those sections of Title 35, U.S. Code not included in this action can be found in a prior Office action. Claims 1, 4-10, 12, 13, and 16 is/are rejected under 35 U.S.C. 103 as being unpatentable over Byrne (US 8,919,011) in view of Helwig (US 2,010,151). Regarding claims 1 and 4, Byrne discloses a ventilated boot, comprising: an outsole (outsole 42) having a bottom surface configured to contact the ground and an opposing top surface; a midsole (midsole 44) having a bottom surface secured to the top surface of the outsole and an opposing top surface; a ventilation mechanism comprising an intake reservoir (pumping chamber 50), an exhaust reservoir (channels 90; which may be located in the midsole), and a connecting channel (passageway 66) connecting the intake reservoir and the exhaust reservoir, wherein the exhaust reservoir comprises a directional flow channel (channels 90 within midsole) configured to facilitate air flow in a direction from the exhaust reservoir to an outside environment; and an upper (upper 20) comprising an air flow Byrne does not specifically disclose that the directional flow channel is configured to inhibit air flow in a direction from the exhaust reservoir to the intake reservoir.",
"Helwig teaches a ventilation mechanism for a shoe including an intake reservoir (slot 13) and an exhaust reservoir. The exhaust reservoir comprises a directional flow channel (slots 15, 16) configured to facilitate air flow in a direction from the exhaust reservoir to an outside environment, and configured to inhibit air flow in a direction from the exhaust reservoir to the intake reservoir (wherein at least some of the branch slots 16 are angled back from the slot 15). The directional flow channel comprises a main channel (slot 15) extending in a longitudinal direction and a plurality of angled conduits (branch slots 16) extending from longitudinal edges of the main channel (column 3, lines 25-39; Fig. 1, 2). It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to provide a main channel and angled conduits, as taught Helwig, to the directional flow channel of Byrne in order to facilitate air flow throughout the length of the sole, providing adequate ventilation along the length of the user’s foot. Regarding claim 5, Helwig appears to show that the angled conduits each have a length that is about 10% to about 40% a length of the main channel (Fig.",
"2), but does not disclose the specific ratio. It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to make the angled conduits each have a length that is about 10% to about 40% a length of the main channel in order to provide adequate air flow throughout the channel and conduits, maximizing ventilation throughout the shoe.",
"The claimed values are merely an optimum or workable range. It has been held that where the general conditions of a claim are disclosed in the prior art, Regarding claim 6, Byrne does not disclose the specific percentage of air flow by volume. It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to make the directional flow channel provide about 65% to about 90% air flow by volume, based on a total volume of air flow into the intake reservoir, in a direction from the intake reservoir to the exhaust reservoir, in order to provide adequate air flow and ventilation to the entire shoe, improving the comfort of the wearer.",
"The claimed values are merely an optimum or workable range. It has been held that where the general conditions of a claim are disclosed in the prior art, discovering the optimum or workable ranges involves only routine skill in the art. In re Aller, 105 USPQ 233. Regarding claim 7, Byrne does not disclose the volume of the intake reservoir. It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to make a volume of the intake reservoir is within a range of about 5 cm3 to about 40 cm3, in order to provide adequate air volume and ventilation to the entire shoe, improving the comfort of the wearer.",
"The claimed values are merely an optimum or workable range. It has been held that where the general conditions of a claim are disclosed in the prior art, discovering the optimum or workable ranges involves only routine skill in the art. In re Aller, 105 USPQ 233. Regarding claim 8, Byrne does not disclose the volume of the exhaust reservoir. It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to make a volume of the exhaust reservoir is within a range of about 2.8 cm3 to about 28 cm3, in order to provide adequate air flow and ventilation to the entire shoe, improving the comfort of the wearer. The claimed values are merely an optimum or workable range.",
"It has been held that where the general conditions of a claim are disclosed in the prior art, discovering the optimum or workable ranges involves only routine skill in the art. In re Aller, 105 USPQ 233. Regarding claim 10, Byrne discloses that the ventilation mechanism comprises a hollow insert which is a separate component from the midsole (Fig. 2). Regarding claim 12, Byrne discloses an insole having a top surface configured to receive a wearer's foot and an opposing bottom surface, wherein the bottom surface of the insole defines an intake pattern (recesses housing pumping chamber 50; Fig. 2) configured to channel air flow to the intake reservoir, and an exhaust pattern (channels 90 within insole and air distribution pad 70) configured to channel air flow from the exhaust reservoir to a wearer's foot. Regarding claim 13, Byrne discloses that the intake pattern comprises a hollow depression and a channel which engages with the air flow channel of the upper to channel air from the outside environment to the depression (Fig. 2).",
"Regarding claim 16, Byrne discloses one or more ankle pads (middle layer 24) secured to the upper inside the boot and protruding from the upper so that adjacent areas of the upper are spaced away from the foot or ankle of a wearer to define air-flow channels (Fig. 9). Claim 2 is/are rejected under 35 U.S.C. 103 as being unpatentable over Byrne and Helwig, as applied to claim 1, in view of Ferretti (US 2008/0229623). Byrne discloses that the upper may be made of a variety of materials (column 3, lines 12-15), but does not specifically disclose that it is waterproof. Ferretti teaches a ventilated shoe having a sole, an upper, and a ventilation mechanism. The upper may be made from a waterproof material (paragraph 0049). It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to make the upper waterproof, in order to prevent unwanted moisture from entering . Claim 14 is/are rejected under 35 U.S.C. 103 as being unpatentable over Byrne and Helwig, as applied to claims 1 and 12, in view of Huang et al. (US 2007/0011908), herein Huang. Byrne does not disclose that the exhaust pattern comprises raised lugs and depressed channels extending between the raised lugs, wherein each of the raised lugs defines a perforation extending entirely though the insole.",
"Huang teaches an insole for a ventilated shoe which is located above an exhaust reservoir (recesses 8) in the shoe sole and has an exhaust pattern configured to channel air flow from the exhaust reservoir to a wearer’s foot. The exhaust pattern comprises raised lugs (insole between recesses 12) and depressed channels (recesses 12) extending between the raised lugs, wherein each of the raised lugs defines a perforation (through holes) extending entirely though the insole (paragraph 0016; Fig. 1). It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to make the exhaust pattern of the insole with raised lugs, depressed channels, and perforations, as taught by Huang, in order to provide a more structured air flow pattern from the exhaust reservoir to the foot.",
"Response to Arguments Applicant's arguments filed 05/04/2021 have been fully considered but they are not persuasive. Applicant argues that the Office has not provided an adequate reasoned rationale for why the slots 15, 16 of Helwig would inhibit air flow in an exhaust to intake direction. However, as stated in the rejection, some of the branch slots 16 are angled back from the slot 15, therefore inhibiting airflow back to slot 15.",
"Applicant argues that the Office fails to provide any explanation for why or how the angled slots relate to inhibiting air flow. However, Applicant’s own specification clearly teaches that an angled conduit . Applicant argues that it is impossible to ascertain what the Office would consider to be an exhaust to intake direction. However, the Office Action clearly states that the intake reservoir is at slot 13, and Helwig clearly shows the direction of flow from intake to exhaust (see Fig.",
"2). The exhaust to intake direction is the opposite direction. Applicant argues that the Office failed to provide a rationale for why it would be obvious to provide 65-90% airflow in the intake to exhaust direction. However, the Office Action clearly states that it would be obvious “in order to provide adequate air flow and ventilation to the entire shoe, improving the comfort of the wearer.” Applicant argues that it is not obvious to optimize a parameter unless the parameter is first recognized as a results-effective variable, and the air flow percentages are not mentioned in the prior art, so cannot be recognized as a results-effective variable. However, Helwig clearly teaches that the amount of air which flows in a direction from the intake reservoir to the exhaust reservoir is a results-effective variable, wherein the directional flow channels requires a suitable supply of air to provide adequate ventilation (see at least column 1, lines 23-26; column 2, lines 27-35; column 4, lines 50-72). Specifically, Helwig teaches that “most of the air in the bellows will be transmitted through the various slots”, and that “because of the arrangement of the graduated holes … will be able to obtain a suitable supply of pumped air” (column 4, lines 56-68). Conclusion Applicant's amendment necessitated the new ground(s) of rejection presented in this Office action. Accordingly, THIS ACTION IS MADE FINAL. See MPEP § 706.07(a).",
"Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a). A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within TWO MONTHS of the mailing date of this final action and the advisory action is not mailed until after the end of the THREE-MONTH shortened statutory period, then the shortened statutory period will expire on the date the advisory Any inquiry concerning this communication or earlier communications from the examiner should be directed to SHARON M PRANGE whose telephone number is (571)270-5280. The examiner can normally be reached on M-F 8:30-5 EST. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice.",
"If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Khoa Huynh can be reached on (571) 272-4888. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR.",
"Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000. /SHARON M PRANGE/ Primary Examiner, Art Unit 3732"
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2021-08-01.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
PER CURIAM Claimant seeks review of a Workers’ Compensation Board order upholding employer’s denial of his current low back condition. The statutes pertinent to this review have been amended by Oregon Laws 1995, chapter 332. Because the amended version of the statutes is applicable here, we remand for reconsideration in the light of the new law. Volk v. America West Airlines, 135 Or App 565, 899 P2d 746 (1995). Reversed and remanded for reconsideration. | 07-24-2022 | [
"PER CURIAM Claimant seeks review of a Workers’ Compensation Board order upholding employer’s denial of his current low back condition. The statutes pertinent to this review have been amended by Oregon Laws 1995, chapter 332. Because the amended version of the statutes is applicable here, we remand for reconsideration in the light of the new law. Volk v. America West Airlines, 135 Or App 565, 899 P2d 746 (1995). Reversed and remanded for reconsideration."
] | https://www.courtlistener.com/api/rest/v3/opinions/6942138/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Citation Nr: 1747204
Decision Date: 10/20/17 Archive Date: 10/31/17
DOCKET NO. 11-11 150 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in St. Petersburg, Florida
THE ISSUE
Entitlement to an increased rating in excess of 10 percent for right shoulder impingement syndrome with rotator cuff tear and slap lesion status post arthroscopic surgery (right shoulder disability) from December 30, 2008 to July 27, 2009; December 1, 2009 to February 10, 2010; and since April 1, 2010.
REPRESENTATION
Veteran represented by: Disabled American Veterans
ATTORNEY FOR THE BOARD
S. Sorathia, Counsel
INTRODUCTION
The Veteran served on active duty from June 1992 to May 1996.
This matter comes before the Board of Veterans' Appeals (Board) on appeal from a January 2009 rating decision by the Department of Veterans Affairs (VA) Regional Office (RO) in St. Petersburg, Florida.
This claim was remanded by the Board in August 2015 and March 2017 in order to associate outstanding VA treatment records with the claims file, to afford the Veteran the opportunity to identify private treatment records, to associate the May 2011 VA examination report with the claims file, and to afford the Veteran a contemporaneous VA examination. The May 2011 VA examination report, as well as updated VA treatment records, have been associated with the claims file. The Veteran was notified that he could submit or identify additional private treatment records but no additional records were submitted or identified. Moreover, the Veteran was scheduled for a VA examination in April 2017 but he failed to report for the VA examination and he did not provide any reason for the failure to report. Accordingly, the AOJ substantially complied with the Board's remand instructions and the Board can proceed to adjudicate the appeal. Stegall v. West, 11 Vet. App. 268 (1998).
FINDINGS OF FACT
1. The Veteran is right hand dominant; therefore, his right shoulder is his major upper extremity.
2. From December 30, 2008 to July 27, 2009, the Veteran had flexion and abduction of the right shoulder to 180 degrees, without ankylosis, impairment of the humerus, or dislocation or nonunion with loose movement of the clavicle or scapula.
3. From December 1, 2009 to February 10, 2010, the Veteran had abduction of the right shoulder to 85 degrees, without ankylosis, impairment of the humerus, or dislocation or nonunion with loose movement of the clavicle or scapula.
4. From April 1, 2010, the Veteran had flexion of the right shoulder to 165 degrees and abduction of the right shoulder to 160 degrees, without ankylosis, impairment of the humerus, or dislocation or nonunion with loose movement of the clavicle or scapula.
CONCLUSIONS OF LAW
1. From December 30, 2008 to July 27, 2009, the criteria for a rating in excess of 10 percent for right shoulder disability have not been met. 38 U.S.C.A. § 1155; 38 C.F.R. § 4.71a, Diagnostic Code 5200-5203.
2. From December 1, 2009 to February 10, 2010, the criteria for a 30 percent rating have been met. 38 U.S.C.A. § 1155; 38 C.F.R. § 4.71a, Diagnostic Code 5201.
3. From April 1, 2010, the criteria for a rating in excess of 10 percent for right shoulder disability have not been met. 38 U.S.C.A. § 1155; 38 C.F.R. § 4.71a, Diagnostic Code 5200-5203.
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
The Veteran contends that his right shoulder disability is more severe than the 10 percent rating currently assigned and that he is entitled to a higher rating.
By way of background, the Veteran submitted an increased rating claim in December 2008. A January 2009 rating decision assigned a 10 percent rating for the right shoulder disability effective December 30, 2008. In February 2010 and April 2010 rating decisions, the RO assigned temporary 100 percent evaluations for periods of convalescence due to right shoulder surgeries from July 28, 2009 to November 30, 2009 and from February 11, 2010 to March 31, 2010.
Disability evaluations are determined by the application of a schedule of ratings that is based on the average impairment of earning capacity. Separate diagnostic codes (DCs) identify the various disabilities. 38 U.S.C.A. § 1155; 38 C.F.R., Part 4. Where there is a question as to which of two disability evaluations shall be applied, the higher evaluation is to be assigned if the disability picture more nearly approximates the criteria required for that rating. Otherwise, the lower rating is to be assigned. 38 C.F.R. § 4.7. After careful consideration of the evidence, any reasonable doubt remaining is resolved in favor of the Veteran. 38 C.F.R. § 4.3.
Where the evidence contains factual findings that demonstrate distinct time periods in which the service-connected disability exhibits symptoms that would warrant different evaluations during the course of the appeal, the assignment of staged ratings is appropriate.
When evaluating joint disabilities rated on the basis of limitation of motion, VA may consider granting a higher rating in cases in which functional loss due to pain, weakness, excess fatigability, or incoordination is demonstrated, and those factors are not contemplated in the relevant rating criteria. 38 C.F.R. §§ 4.40, 4.45, 4.59; DeLuca v. Brown, 8 Vet. App. 202, 204-7 (1995).
Disabilities of the shoulder and arm are rated under 38 C.F.R. § 4.71a, DCs 5200 through 5203. For rating purposes, a distinction is made between major (dominant) and minor musculoskeletal groups. Handedness for the purpose of a dominant rating will be determined by the evidence of record, or by testing on VA examination. 38 C.F.R. § 4.69. Here, the evidence of record has revealed that the Veteran is right hand dominant; thus, the right shoulder is his major shoulder for rating purposes.
DC 5200 addresses ankylosis of the scapulohumeral articulation. A higher rating under DC 5200 is not applicable as the evidence of record reveals that his right shoulder is not ankylosed. See January 2009, December 2009, and May 2011 VA examination reports.
DC 5202 addresses impairments of the humerus. An 80 percent rating is warranted for flail shoulder, a 60 percent rating is warranted for a false flail joint, and a 50 percent rating is warranted for a fibrous union of the humerus. Where there is recurrent dislocation at the scapulohumeral joint, a 30 percent rating is warranted when there is frequent episodes and guarding of all arm movements and a 20 percent rating is warranted when there is infrequent episodes and guarding of movement only at shoulder level. When there is malunion of the humerus, a 30 percent rating is warranted for marked deformity and a 20 percent rating is warranted for a moderate deformity. Here, the medical evidence of record does not indicate that the Veteran has flail shoulder, false flail joint, fibrous union of the humerus or malunion of the humerus. See January 2009, December 2009, and May 2011 VA examination reports.
DC 5203 addresses impairment of the clavicle or scapula. A 20 percent rating is warranted for dislocation of the clavicle or scapula or nonunion of the clavicle or scapula with loose movement. A 10 percent rating is warranted for nonunion of the clavicle or scapula without loose movement or malunion of the clavicle or scapula. A rating in excess of 10 percent under DC 5203 is not warranted as VA treatment records do not provide an indication of dislocation and the January 2009, December 2009, and May 2011 VA examination reports specifically state that the Veteran does not have dislocation of the shoulder joint. Moreover, the VA examination reports, as well as the VA treatment records, do not provide an indication that the Veteran has nonunion of the clavicle or scapula with loose movement. Accordingly, a higher rating under DC 5203 is not warranted.
DC 5201 addresses limitation of motion of the arm. Under DC 5201, limitation of motion to shoulder level (e.g., flexion to 90 degrees) warrants a 20 percent evaluation. Limitation of motion to midway between side and shoulder level (e.g., flexion from 25 to 90 degrees) warrants a 30 percent evaluation. Limitation of motion to 25 degrees from the side warrants a 40 percent evaluation.
From December 30, 2008 to July 27, 2009, the preponderance of the evidence is against a finding of a rating in excess of 10 percent under DC 5201. During a January 2009 VA examination, the Veteran reported that he is "very active" and that he works out and goes canoeing. He reported pain associated with the shoulder with no flare-ups. He had active and passive flexion to 180 degrees with painful motion beginning at 120 degrees with no additional loss of motion after repetitive use testing. He had active and passive abduction to 180 degrees with painful motion beginning at 110 degrees with no additional loss of motion after repetitive use testing.
VA treatment records from this time period reveal tenderness and pain of the right shoulder. A December 2008 VA treatment record noted full range of motion and a January 2009 VA treatment record noted decreased range of motion.
The Board acknowledges the Veteran's reports of painful motion of the right shoulder and his receipt of cortisone injections. However, given that the Veteran had active and passive flexion and abduction to 180 degrees with painful motion beginning after 100 degrees, the Board finds the preponderance of the evidence is against a finding for a rating in excess of 10 percent for the period from December 30, 2008 to July 27, 2009. DeLuca v. Brown, 8 Vet. App. 202, 204-7 (1995).
The Veteran underwent surgery of the right shoulder on July 28, 2009 and he is in receipt of a temporary 100 percent rating through November 2009. A 10 percent rating was assigned from December 1, 2009.
A December 2009 VA examination report reveals that the Veteran reported pain, weakness, and stiffness after the right shoulder surgery but denied instability, subluxation or dislocation. He reported moderate flare-ups which could last several hours. He reported that he had difficulty with yard work and that he was not able to hang Christmas lights. He had flexion to 115 degrees with pain beginning at 90 degrees. He had abduction to 85 degrees with pain beginning at 60 degrees. There was no additional limitation due to painful motion, fatigue, weakness, or incoordination after repetitive use testing. In light of these range of motion limitations, and after consideration of the Veteran's reports of flare-ups, the Board finds that a 30 percent rating for the period from December 1, 2009 to February 10, 2010 is warranted. However, the preponderance of the evidence is against a finding that the Veteran had less than 25 degrees of flexion or abduction so as to warrant a rating in excess of 30 percent even after consideration of the Veteran's reports of flare-ups and painful motion.
The Veteran underwent an additional surgery of the right shoulder on February 11, 2010 and he is in receipt of a temporary 100 percent rating through March 2010. A 10 percent rating was assigned from April 1, 2010.
The Veteran's doctor indicated that after the February 2010 surgery, he could return to light duty work after four weeks with no reaching overhead, at desk level or below the waist and with no lifting.
An April 2011 VA treatment record noted that the Veteran had limited range of motion. During a May 2011 VA examination, the Veteran reported no flare-ups. He had flexion to 165 degrees with pain beginning at 100 degrees and abduction to 160 degrees with pain beginning at 100 degrees. There were no additional limitations after repetitive use testing. A July 2012 VA treatment record noted painful but full range of motion.
The Board acknowledges the Veteran's reports of painful motion of the right shoulder. However, the Veteran had flexion and abduction to at least 160 degrees with painful motion beginning at 100 degrees. Additionally, the Veteran did not report flare-ups during the May 2011 VA examination and he did not have additional limitations after repetitive use testing. In light of these findings, the preponderance of the evidence is against a rating in excess of 10 percent for the period on and after April 1, 2010. DeLuca v. Brown, 8 Vet. App. 202, 204-7 (1995). As the preponderance of the evidence is against the claim, the benefit of the doubt doctrine is not applicable. 38 U.S.C.A. § 5107(b); 38 C.F.R. § 3.102; Gilbert v. Derwinski, 1 Vet. App. 49, 53-56 (1990).
ORDER
From December 30, 2008 to July 27, 2009, a rating in excess of 10 percent for right shoulder disability is denied.
From December 1, 2009 to February 10, 2010, a 30 percent rating for right shoulder disability is granted, subject to the rules and regulations governing the payment of VA monetary benefits.
From April 1, 2010, a rating in excess of 10 percent for right shoulder disability is denied.
____________________________________________
Cynthia M. Bruce
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs | 10-20-2017 | [
"Citation Nr: 1747204 Decision Date: 10/20/17 Archive Date: 10/31/17 DOCKET NO. 11-11 150 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in St. Petersburg, Florida THE ISSUE Entitlement to an increased rating in excess of 10 percent for right shoulder impingement syndrome with rotator cuff tear and slap lesion status post arthroscopic surgery (right shoulder disability) from December 30, 2008 to July 27, 2009; December 1, 2009 to February 10, 2010; and since April 1, 2010. REPRESENTATION Veteran represented by: Disabled American Veterans ATTORNEY FOR THE BOARD S. Sorathia, Counsel INTRODUCTION The Veteran served on active duty from June 1992 to May 1996.",
"This matter comes before the Board of Veterans' Appeals (Board) on appeal from a January 2009 rating decision by the Department of Veterans Affairs (VA) Regional Office (RO) in St. Petersburg, Florida. This claim was remanded by the Board in August 2015 and March 2017 in order to associate outstanding VA treatment records with the claims file, to afford the Veteran the opportunity to identify private treatment records, to associate the May 2011 VA examination report with the claims file, and to afford the Veteran a contemporaneous VA examination. The May 2011 VA examination report, as well as updated VA treatment records, have been associated with the claims file. The Veteran was notified that he could submit or identify additional private treatment records but no additional records were submitted or identified.",
"Moreover, the Veteran was scheduled for a VA examination in April 2017 but he failed to report for the VA examination and he did not provide any reason for the failure to report. Accordingly, the AOJ substantially complied with the Board's remand instructions and the Board can proceed to adjudicate the appeal. Stegall v. West, 11 Vet. App. 268 (1998). FINDINGS OF FACT 1. The Veteran is right hand dominant; therefore, his right shoulder is his major upper extremity. 2. From December 30, 2008 to July 27, 2009, the Veteran had flexion and abduction of the right shoulder to 180 degrees, without ankylosis, impairment of the humerus, or dislocation or nonunion with loose movement of the clavicle or scapula. 3. From December 1, 2009 to February 10, 2010, the Veteran had abduction of the right shoulder to 85 degrees, without ankylosis, impairment of the humerus, or dislocation or nonunion with loose movement of the clavicle or scapula. 4. From April 1, 2010, the Veteran had flexion of the right shoulder to 165 degrees and abduction of the right shoulder to 160 degrees, without ankylosis, impairment of the humerus, or dislocation or nonunion with loose movement of the clavicle or scapula.",
"CONCLUSIONS OF LAW 1. From December 30, 2008 to July 27, 2009, the criteria for a rating in excess of 10 percent for right shoulder disability have not been met. 38 U.S.C.A. § 1155; 38 C.F.R. § 4.71a, Diagnostic Code 5200-5203. 2. From December 1, 2009 to February 10, 2010, the criteria for a 30 percent rating have been met. 38 U.S.C.A. § 1155; 38 C.F.R. § 4.71a, Diagnostic Code 5201. 3. From April 1, 2010, the criteria for a rating in excess of 10 percent for right shoulder disability have not been met. 38 U.S.C.A. § 1155; 38 C.F.R. § 4.71a, Diagnostic Code 5200-5203. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran contends that his right shoulder disability is more severe than the 10 percent rating currently assigned and that he is entitled to a higher rating.",
"By way of background, the Veteran submitted an increased rating claim in December 2008. A January 2009 rating decision assigned a 10 percent rating for the right shoulder disability effective December 30, 2008. In February 2010 and April 2010 rating decisions, the RO assigned temporary 100 percent evaluations for periods of convalescence due to right shoulder surgeries from July 28, 2009 to November 30, 2009 and from February 11, 2010 to March 31, 2010. Disability evaluations are determined by the application of a schedule of ratings that is based on the average impairment of earning capacity. Separate diagnostic codes (DCs) identify the various disabilities. 38 U.S.C.A. § 1155; 38 C.F.R., Part 4. Where there is a question as to which of two disability evaluations shall be applied, the higher evaluation is to be assigned if the disability picture more nearly approximates the criteria required for that rating. Otherwise, the lower rating is to be assigned. 38 C.F.R.",
"§ 4.7. After careful consideration of the evidence, any reasonable doubt remaining is resolved in favor of the Veteran. 38 C.F.R. § 4.3. Where the evidence contains factual findings that demonstrate distinct time periods in which the service-connected disability exhibits symptoms that would warrant different evaluations during the course of the appeal, the assignment of staged ratings is appropriate. When evaluating joint disabilities rated on the basis of limitation of motion, VA may consider granting a higher rating in cases in which functional loss due to pain, weakness, excess fatigability, or incoordination is demonstrated, and those factors are not contemplated in the relevant rating criteria. 38 C.F.R. §§ 4.40, 4.45, 4.59; DeLuca v. Brown, 8 Vet. App. 202, 204-7 (1995). Disabilities of the shoulder and arm are rated under 38 C.F.R.",
"§ 4.71a, DCs 5200 through 5203. For rating purposes, a distinction is made between major (dominant) and minor musculoskeletal groups. Handedness for the purpose of a dominant rating will be determined by the evidence of record, or by testing on VA examination. 38 C.F.R. § 4.69. Here, the evidence of record has revealed that the Veteran is right hand dominant; thus, the right shoulder is his major shoulder for rating purposes. DC 5200 addresses ankylosis of the scapulohumeral articulation. A higher rating under DC 5200 is not applicable as the evidence of record reveals that his right shoulder is not ankylosed. See January 2009, December 2009, and May 2011 VA examination reports. DC 5202 addresses impairments of the humerus. An 80 percent rating is warranted for flail shoulder, a 60 percent rating is warranted for a false flail joint, and a 50 percent rating is warranted for a fibrous union of the humerus. Where there is recurrent dislocation at the scapulohumeral joint, a 30 percent rating is warranted when there is frequent episodes and guarding of all arm movements and a 20 percent rating is warranted when there is infrequent episodes and guarding of movement only at shoulder level. When there is malunion of the humerus, a 30 percent rating is warranted for marked deformity and a 20 percent rating is warranted for a moderate deformity.",
"Here, the medical evidence of record does not indicate that the Veteran has flail shoulder, false flail joint, fibrous union of the humerus or malunion of the humerus. See January 2009, December 2009, and May 2011 VA examination reports. DC 5203 addresses impairment of the clavicle or scapula. A 20 percent rating is warranted for dislocation of the clavicle or scapula or nonunion of the clavicle or scapula with loose movement. A 10 percent rating is warranted for nonunion of the clavicle or scapula without loose movement or malunion of the clavicle or scapula. A rating in excess of 10 percent under DC 5203 is not warranted as VA treatment records do not provide an indication of dislocation and the January 2009, December 2009, and May 2011 VA examination reports specifically state that the Veteran does not have dislocation of the shoulder joint. Moreover, the VA examination reports, as well as the VA treatment records, do not provide an indication that the Veteran has nonunion of the clavicle or scapula with loose movement.",
"Accordingly, a higher rating under DC 5203 is not warranted. DC 5201 addresses limitation of motion of the arm. Under DC 5201, limitation of motion to shoulder level (e.g., flexion to 90 degrees) warrants a 20 percent evaluation. Limitation of motion to midway between side and shoulder level (e.g., flexion from 25 to 90 degrees) warrants a 30 percent evaluation. Limitation of motion to 25 degrees from the side warrants a 40 percent evaluation. From December 30, 2008 to July 27, 2009, the preponderance of the evidence is against a finding of a rating in excess of 10 percent under DC 5201.",
"During a January 2009 VA examination, the Veteran reported that he is \"very active\" and that he works out and goes canoeing. He reported pain associated with the shoulder with no flare-ups. He had active and passive flexion to 180 degrees with painful motion beginning at 120 degrees with no additional loss of motion after repetitive use testing. He had active and passive abduction to 180 degrees with painful motion beginning at 110 degrees with no additional loss of motion after repetitive use testing. VA treatment records from this time period reveal tenderness and pain of the right shoulder. A December 2008 VA treatment record noted full range of motion and a January 2009 VA treatment record noted decreased range of motion.",
"The Board acknowledges the Veteran's reports of painful motion of the right shoulder and his receipt of cortisone injections. However, given that the Veteran had active and passive flexion and abduction to 180 degrees with painful motion beginning after 100 degrees, the Board finds the preponderance of the evidence is against a finding for a rating in excess of 10 percent for the period from December 30, 2008 to July 27, 2009. DeLuca v. Brown, 8 Vet. App. 202, 204-7 (1995). The Veteran underwent surgery of the right shoulder on July 28, 2009 and he is in receipt of a temporary 100 percent rating through November 2009. A 10 percent rating was assigned from December 1, 2009. A December 2009 VA examination report reveals that the Veteran reported pain, weakness, and stiffness after the right shoulder surgery but denied instability, subluxation or dislocation. He reported moderate flare-ups which could last several hours. He reported that he had difficulty with yard work and that he was not able to hang Christmas lights.",
"He had flexion to 115 degrees with pain beginning at 90 degrees. He had abduction to 85 degrees with pain beginning at 60 degrees. There was no additional limitation due to painful motion, fatigue, weakness, or incoordination after repetitive use testing. In light of these range of motion limitations, and after consideration of the Veteran's reports of flare-ups, the Board finds that a 30 percent rating for the period from December 1, 2009 to February 10, 2010 is warranted. However, the preponderance of the evidence is against a finding that the Veteran had less than 25 degrees of flexion or abduction so as to warrant a rating in excess of 30 percent even after consideration of the Veteran's reports of flare-ups and painful motion.",
"The Veteran underwent an additional surgery of the right shoulder on February 11, 2010 and he is in receipt of a temporary 100 percent rating through March 2010. A 10 percent rating was assigned from April 1, 2010. The Veteran's doctor indicated that after the February 2010 surgery, he could return to light duty work after four weeks with no reaching overhead, at desk level or below the waist and with no lifting. An April 2011 VA treatment record noted that the Veteran had limited range of motion.",
"During a May 2011 VA examination, the Veteran reported no flare-ups. He had flexion to 165 degrees with pain beginning at 100 degrees and abduction to 160 degrees with pain beginning at 100 degrees. There were no additional limitations after repetitive use testing. A July 2012 VA treatment record noted painful but full range of motion. The Board acknowledges the Veteran's reports of painful motion of the right shoulder. However, the Veteran had flexion and abduction to at least 160 degrees with painful motion beginning at 100 degrees. Additionally, the Veteran did not report flare-ups during the May 2011 VA examination and he did not have additional limitations after repetitive use testing. In light of these findings, the preponderance of the evidence is against a rating in excess of 10 percent for the period on and after April 1, 2010. DeLuca v. Brown, 8 Vet.",
"App. 202, 204-7 (1995). As the preponderance of the evidence is against the claim, the benefit of the doubt doctrine is not applicable. 38 U.S.C.A. § 5107(b); 38 C.F.R. § 3.102; Gilbert v. Derwinski, 1 Vet. App. 49, 53-56 (1990). ORDER From December 30, 2008 to July 27, 2009, a rating in excess of 10 percent for right shoulder disability is denied. From December 1, 2009 to February 10, 2010, a 30 percent rating for right shoulder disability is granted, subject to the rules and regulations governing the payment of VA monetary benefits. From April 1, 2010, a rating in excess of 10 percent for right shoulder disability is denied. ____________________________________________ Cynthia M. Bruce Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs"
] | https://drive.google.com/drive/folders/12lAd8Os7VFeqbTKi4wcqJqODjHIn0-yQ?usp=sharing | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-12-00677-CV
Office of the Attorney General of Texas, Appellant
v.
Charles Trask Dix, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT NO. D-1-AG-12-000271, HONORABLE RHONDA HURLEY, JUDGE PRESIDING
MEMORANDUM OPINION
The Office of the Attorney General of Texas (OAG) filed a notice of appeal from
the district court’s order of June 8, 2012, granting summary judgment in favor of appellee
Charles Trask Dix. OAG has now filed an agreed motion to set aside the judgment. In the motion,
OAG represents that “[s]ince the filing of the notice of appeal, the parties have reached an agreement
in the cause and have filed an agreed order with the trial court.” OAG asks that we set aside the
district court’s judgment without regard to the merits and remand the cause to the district court
with instructions to render a judgment in accordance with the parties’ agreement, as we are
authorized to do pursuant to Texas Rule of Appellate Procedure 42.1(a)(2)(B). The motion contains
a certificate of conference verifying that the attorney for OAG has conferred with the attorney for
Dix and that the attorney for Dix agrees to this motion. The agreed order, a copy of which is
attached to the motion, has been signed by both parties. We grant the motion, set aside the district court’s judgment without regard to the
merits, and remand the cause to the district court for rendition of judgment in accordance with the
parties’ agreement. See Tex. R. App. P. 42.1(a)(2)(B).
_____________________________________________
Bob Pemberton, Justice
Before Justices Puryear, Pemberton and Rose
Vacated and Remanded
Filed: January 25, 2013
2 | 09-17-2015 | [
"TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN NO. 03-12-00677-CV Office of the Attorney General of Texas, Appellant v. Charles Trask Dix, Appellee FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT NO. D-1-AG-12-000271, HONORABLE RHONDA HURLEY, JUDGE PRESIDING MEMORANDUM OPINION The Office of the Attorney General of Texas (OAG) filed a notice of appeal from the district court’s order of June 8, 2012, granting summary judgment in favor of appellee Charles Trask Dix. OAG has now filed an agreed motion to set aside the judgment. In the motion, OAG represents that “[s]ince the filing of the notice of appeal, the parties have reached an agreement in the cause and have filed an agreed order with the trial court.” OAG asks that we set aside the district court’s judgment without regard to the merits and remand the cause to the district court with instructions to render a judgment in accordance with the parties’ agreement, as we are authorized to do pursuant to Texas Rule of Appellate Procedure 42.1(a)(2)(B).",
"The motion contains a certificate of conference verifying that the attorney for OAG has conferred with the attorney for Dix and that the attorney for Dix agrees to this motion. The agreed order, a copy of which is attached to the motion, has been signed by both parties. We grant the motion, set aside the district court’s judgment without regard to the merits, and remand the cause to the district court for rendition of judgment in accordance with the parties’ agreement. See Tex. R. App. P. 42.1(a)(2)(B). _____________________________________________ Bob Pemberton, Justice Before Justices Puryear, Pemberton and Rose Vacated and Remanded Filed: January 25, 2013 2"
] | https://www.courtlistener.com/api/rest/v3/opinions/2957641/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Title: Can someone explain what this means like I'm five? NY state. Question:[deleted] Answer #1: I think what it means is whoever wrote it is a moron.
EDIT: I see you edited your original post. Now it kinda makes more sense. Sounds like there may be a typo somewhere, but they plan to deduct your rent from your pay every other Friday, totaling $650/month. | 11-10-2015 | [
"Title: Can someone explain what this means like I'm five? NY state. Question:[deleted] Answer #1: I think what it means is whoever wrote it is a moron. EDIT: I see you edited your original post. Now it kinda makes more sense. Sounds like there may be a typo somewhere, but they plan to deduct your rent from your pay every other Friday, totaling $650/month."
] | https://www.reddit.com/r/legaladvice/comments/3scoql/can_someone_explain_what_this_means_like_im_five/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]MEMORANDUM OF DECISION ON SIKORSKY MOTION TO STRIKE, I. The court can at least say with assurance that it must decide a motion to strike but the wording of the complaint and the issues raised by the motion to strike especially in light of the defendant's memorandum to the motion at least for the court have created difficult issues. There had been a previous motion to strike by the defendant which the court granted and the defendant then filed a revised complaint which the court feels it has to refer to in some detail. The complaint identifies the defendant company and refers to the plaintiff's length of employment with the defendant. The third paragraph of the one count complaint states the CT Page 10719 plaintiff's job "involved inspecting helicopter parts provided by various supplier subcontractors to the defendant." Paragraph 4 alleges the plaintiff inspected "parts supplied by subcontractors for helicopters provided under government contract by Sikorsky." Paragraph 5 states the plaintiff rejected parts "despite pressure from subcontractors and from his superiors at Sikorsky to accept parts which violated engineering standards." Paragraph 6 goes on to allege the defective parts were nonetheless used in construction of the army helicopters and that the plaintiff was warned by his superiors that rejection of defective parts could result in his discipline. Paragraph 7 notes that in fact the plaintiff was terminated and paragraph 8 claims the defendant company's actions which resulted in his termination: . . . "were in violation of public policy and violated the covenants of good faith and fair dealing existing between the parties, in that said termination was motivated in whole or in party by the plaintiff's actions in refusing to accept substandard and defective helicopter parts from defense subcontractors, and his refusal to participate in knowingly using defective parts in producing helicopters under government contract violating the public policy against government contract fraud set forth in 18 U.S.C. § 1031(a) et seq." 2. Both sides seem to assume that what was involved here was an at-will employment relationship. A breach of implied covenant action after termination will only lie where the reason for it involves an "impropriety . . . derived from some important violation of public policy." Magnan v. AnacondaIndus., Inc., 193 Conn. 558, 578 (1984), see also Sheets v.Teddy's Frosted Foods, Inc., 179 Conn. 171, 475 (1980). What is "public policy" under the terms of this doctrine? One court has said that the public policy exception to the usual rule that does not permit a cause of action upon terminating an at-will employment situation . . . "must guard against a potential flood of unwarranted disputes and litigation that might CT Page 10720 result from such a doctrine, based on vague notions of public policy. Hence, if there is to be such an exception to the at will employment rule, it must be tightly circumscribed so as to apply only in cases involving truly significant matters of clear and well-defined public policy and substantial violations thereof. If it is to be established at all, its development must be on a case-to-case basis. For these reasons the adoption of any such new doctrine must be grounded in a specific factual and legal context resulting from a plenary hearing, at which the proofs and public policy considerations involved will be fully developed and taken into account in the final determination," Pierce v. Ortho Pharmaceutical Corp., 399 A.2d 1023, 1026 (N.J., 1979). This case was cited in Sheets at page 479. It raises the question as to whether for the public policy exception to apply the plaintiff employee has to allege termination resulted from refusal to violate a state statute. The Pierce court left open the possibility that the plaintiff doctor in that case could rely on the exception where she claimed she was terminated after refusing to do something which violated the Hippocratic oath. All our court has said is the following: "We need not decide whether violation of a state statute is invariably a prerequisite to the conclusion that a challenged discharge violates public policy," Sheets v. Teddy's Frosted Foods, Inc., 179 Conn. at page 480. In granting a motion to strike the court in a later case said: "The plaintiff has failed to identify any particular public policy affronted by his termination. Given the inherent vagueness of the concept of public policy, it is often difficult to define precisely the contours of the exception. Nevertheless the plaintiff has not alleged that his discharge violated any explicit statutory or constitutional provision. CT Page 10721 Nor has he alleged that his dismissal contravened any judicially conceived notion of public policy. Under the allegations of the present complaint it is unnecessary for us to articulate the limits of the public policy exception any more definitely than we have done previously." Morris v. Hartford Courant Co., 200 Conn. 676, 680 (1986)1 Reading the language of the complaint here, it is the court's understanding that the plaintiff is basing his claim with reference to the federal statute and not requesting the court to fashion any "judicially conceived notion of public policy." That request would involve the fact based inquiry suggested in Pierce and would not be amenable to a motion to strike procedure. Throughout the complaint, the plaintiff refers to the role of subcontractors in supplying the parts and the pressure put upon him by subcontractors to accept substandard parts. In the paragraph setting forth his legal claim he refers to his termination being based on his refusal to accept and knowingly use defective parts supplied by contractors under government contractors "violating the public policy against government contract fraud set forth in 18 U.S.C. § 1301(a) et seq." In his reply memorandum, the plaintiff says he is not bringing a cause of action for violation of the federal act, he is merely "pointing to the Major Fraud Act as the proof of the importance of the public policy involved . . . The public policy involved is that the government should not pay for defective helicopter parts which risk the life and limb of its servicemen and invade the public treasury." It is obvious the plaintiff is not suing under the federal statute but he is referring to it to provide the public policy nexus which he claims makes his termination violative of public policy. That is further evidenced by the concluding remarks in the plaintiff's memorandum which assume what is in issue — the legal termination claim is based on what the plaintiff perceives is a violation of public policy set forth in the federal statute. Thus the plaintiff argues that even though a federal not a state statute is involved there is sufficient impact on our citizens to apply the public policy exception to terminations in at-will situations, citing Wheeler v.Catipillar Tractors Co., 485 N.E.2d 372 (Ill., 1985). CT Page 10722 For the purposes of the following discussion the court will in fact assume that a public policy exception to the usual law governing termination can be based on a violation of federal law. The validity of such an assumption will be discussed later in this decision. 3. Since he has explicitly chosen to base his claim of unlawful termination based on the "impropriety" of the employer in firing him for refusing to accept substandard parts in violation of 18 U.S.C. § 1-31(a) et seq., the plaintiff must show that his termination would affect the policy goals expressed in that act. Thus in Sheets: "the plaintiff alleged that he had been dismissed in retaliation for his insistence that the defendant comply with the requirements of a state statute, the Food, Drug and Cosmetic Act", 179 Conn. at 480. In Antinerella v.Rioux, 229 Conn. 479 (1994) the court noted that the "application of (the Sheets) doctrine is particularly appropriate . . . when . . . the defendant has acted to accomplish what statutes specifically prohibited from doing" id. at p. 493, referring to Sections 6-45 and 6-46 of the General Statutes. The relevant portions of 18 U.S.C. § 1031 reads as follows: "§ 1031. Major fraud against the United States (a) Whoever knowingly executes, or attempts execute, any scheme or artifice with the intent — (1) to defraud the United States; or (2) to obtain money or property by means of false or fraudulent pretenses, representations, or promises, in any procurement of property or services as a prime contractor with the United States or as a subcontractor or supplier on a contract in which there is a prime contract with the United States, if the value of the contract, subcontract, or any constituent part thereof, for CT Page 10723 such property or services is $1,000,000 or more shall, subject to the applicability of subsection (c) of this section, be fined not more than . . . ." The difficulty presented by this motion is that two themes are constantly referred to by both sides that have nothing to do with the precise question of what the "public policy" issue question is under Sheets. The public policy behind the Major Fraud Act is to protect the federal government against fraud by contractors and suppliers to the government. Defective ashtrays could have been supplied and used by Sikorsky and the precise legal question before the court would have been the same. That defective parts to a helicopter may have been supplied and used certainly raises the specter of crashes endangering life and property but has nothing to do with the propriety of any Sheets claim in this case leaving aside for now the issue of whether a federal statute can be used to make such a claim. I believe the defendant reads both the statute and the complaint too narrowly. In discussing the act the defendant conveniently reads subsection (a)(1) and (a)(2) together and argues that there is no allegation of fraud regarding "procurement" nor of a "scheme or artifice" under 18 U.S.C. § 1031(a). Rather, the plaintiff's claim is that helicopters were assembled with parts that did not meet specifications so he has "failed to allege a violation of the very public policy on which he purports to rely." Giving the complaint its most favorable reading as the court must, it seems clear that the allegation is that a scheme existed between Sikorsky and the subcontractor to countenance the supply and use of defective parts for which the government was footing the bill. Both sides allegedly knew the parts were defective because the plaintiff said he told his superiors and the fifth paragraph said the subcontractors pressured him to use defective parts. Although it is unstated, I suppose it can be assumed that the government would and should not pay for defective parts and if supplier and manufacturer knowingly use such parts, they would certainly seem to be involved in a "scheme or artifice with the intent — (1) to defraud the United States." CT Page 10724 The defendant also appears to the court to confuse theSheets issue by proposing two different and not necessarily related definitions of "public policy" which it claims stand for the same thing. That is to go back to the basic description of a Sheets claim — the discharged employee must show his or her termination was rooted in an impropriety based on a violation of a public policy as here evidenced by a federal statute. The public policy behind the Major Fraud Act is that the federal government should not be defrauded by schemes between suppliers and manufacturers to use defective parts or equipment in government contracts. The defendant argues that the plaintiff "falls outside" the protections of the policy expressed by the federal statute because he does not meet all the statutory requirements for civil relief provided to employees who are punished for assisting in prosecutions under the act and does not qualify for the monetary reward permitted in the act because as the act spells out, he did not furnish information on the fraud to his employer (the act itself leaves a loophole in the latter situation if the court determines the employee had a justifiable reason for non-disclosure). But these matters are not concerned with the basic public policy underlying the act — prevention of fraud but rather with remedial steps which it was thought would encourage the accomplishment of that policy goal. It is an entirely different question as to whether, since the statute sets out certain remedial provisions, even including re-instatement to a fired worker, this would preclude the use of that statute for a Sheets argument when the worker does not otherwise qualify for reinstatement as provided for in the particular statute. That is, has the legislature precluded use of a public policy argument based on this statute which might have been appropriate absent the legislative provisions for relief. I am not prepared to answer this much more difficult question on a short calendar motion to strike. It requires analysis of legislative history, perhaps industry and prosecutorial practice and a further factual development of what exactly was involved in this case so that a court could consider that protections beyond what is specifically provided for in the federal statute are appropriate. CT Page 10725 4. The motion to strike, however, is appropriate for another reason. As noted by the courts the public policy exception to the employment at-will doctrine must be "narrowly construed to serve a limited purpose." Battista, 10 Conn. App. at page 497. Although this issue has not yet been addressed by our courts, I believe the better view is that the mere allegation that a defendant has violated the public policy expressed in a federal law is not legally sufficient to set forth a Sheets claim. There must be an allegation that such a violation interferes with some important state interest sufficient to raise a public policy concern that would form an exception to the employment at-will doctrine with regard to employee termination. Where the state public policy is based on federal law there must be a substantial connection between the federal law that is violated and the state's own public policies. The federal law must protect an interest that has a substantial impact on state concerns Wheeler v. CaterpillarTractor Co., 485 N.E.2d 372, 376-377 (Ill. 1985), Peterson v.Browning, 832 P.2d 1280, 1282 (Vt., 1992), contra Olquin v.Inspiration Consolidated Copper Co., 740 F.2d 1468, 1475 (1984) (interpreting Arizona law, even though case, perhaps, does not preclude reliance on federal law if its violation involved substantial impact on state, issue not presented by federal statute in that case. As noted, in this complaint there is no allegation that state public policy concerns are implicated, just a reference to a purported violation of policies enshrined in federal law. If proper allegations are made along these lines, I do not necessarily believe as the defendant seems to suggest that the question of reliance on federal statutory law for a Sheets claim could be resolved by a motion to strike. The plaintiff might have a difficult task showing the necessary impact on state interests given the specific purpose of this federal statute but that is not now before the court and can best be resolved after discovery by a motion for summary judgment or perhaps at trial. Corradino, J. CT Page 10726 | 07-05-2016 | [
"[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court. ]MEMORANDUM OF DECISION ON SIKORSKY MOTION TO STRIKE, I. The court can at least say with assurance that it must decide a motion to strike but the wording of the complaint and the issues raised by the motion to strike especially in light of the defendant's memorandum to the motion at least for the court have created difficult issues. There had been a previous motion to strike by the defendant which the court granted and the defendant then filed a revised complaint which the court feels it has to refer to in some detail. The complaint identifies the defendant company and refers to the plaintiff's length of employment with the defendant. The third paragraph of the one count complaint states the CT Page 10719 plaintiff's job \"involved inspecting helicopter parts provided by various supplier subcontractors to the defendant.\" Paragraph 4 alleges the plaintiff inspected \"parts supplied by subcontractors for helicopters provided under government contract by Sikorsky.\" Paragraph 5 states the plaintiff rejected parts \"despite pressure from subcontractors and from his superiors at Sikorsky to accept parts which violated engineering standards.\" Paragraph 6 goes on to allege the defective parts were nonetheless used in construction of the army helicopters and that the plaintiff was warned by his superiors that rejection of defective parts could result in his discipline.",
"Paragraph 7 notes that in fact the plaintiff was terminated and paragraph 8 claims the defendant company's actions which resulted in his termination: . . . \"were in violation of public policy and violated the covenants of good faith and fair dealing existing between the parties, in that said termination was motivated in whole or in party by the plaintiff's actions in refusing to accept substandard and defective helicopter parts from defense subcontractors, and his refusal to participate in knowingly using defective parts in producing helicopters under government contract violating the public policy against government contract fraud set forth in 18 U.S.C. § 1031(a) et seq.\"",
"2. Both sides seem to assume that what was involved here was an at-will employment relationship. A breach of implied covenant action after termination will only lie where the reason for it involves an \"impropriety . . . derived from some important violation of public policy.\" Magnan v. AnacondaIndus., Inc., 193 Conn. 558, 578 (1984), see also Sheets v.Teddy's Frosted Foods, Inc., 179 Conn. 171, 475 (1980). What is \"public policy\" under the terms of this doctrine? One court has said that the public policy exception to the usual rule that does not permit a cause of action upon terminating an at-will employment situation . . . \"must guard against a potential flood of unwarranted disputes and litigation that might CT Page 10720 result from such a doctrine, based on vague notions of public policy. Hence, if there is to be such an exception to the at will employment rule, it must be tightly circumscribed so as to apply only in cases involving truly significant matters of clear and well-defined public policy and substantial violations thereof.",
"If it is to be established at all, its development must be on a case-to-case basis. For these reasons the adoption of any such new doctrine must be grounded in a specific factual and legal context resulting from a plenary hearing, at which the proofs and public policy considerations involved will be fully developed and taken into account in the final determination,\" Pierce v. Ortho Pharmaceutical Corp., 399 A.2d 1023, 1026 (N.J., 1979). This case was cited in Sheets at page 479. It raises the question as to whether for the public policy exception to apply the plaintiff employee has to allege termination resulted from refusal to violate a state statute. The Pierce court left open the possibility that the plaintiff doctor in that case could rely on the exception where she claimed she was terminated after refusing to do something which violated the Hippocratic oath. All our court has said is the following: \"We need not decide whether violation of a state statute is invariably a prerequisite to the conclusion that a challenged discharge violates public policy,\" Sheets v. Teddy's Frosted Foods, Inc., 179 Conn. at page 480.",
"In granting a motion to strike the court in a later case said: \"The plaintiff has failed to identify any particular public policy affronted by his termination. Given the inherent vagueness of the concept of public policy, it is often difficult to define precisely the contours of the exception. Nevertheless the plaintiff has not alleged that his discharge violated any explicit statutory or constitutional provision. CT Page 10721 Nor has he alleged that his dismissal contravened any judicially conceived notion of public policy. Under the allegations of the present complaint it is unnecessary for us to articulate the limits of the public policy exception any more definitely than we have done previously.\" Morris v. Hartford Courant Co., 200 Conn. 676, 680 (1986)1 Reading the language of the complaint here, it is the court's understanding that the plaintiff is basing his claim with reference to the federal statute and not requesting the court to fashion any \"judicially conceived notion of public policy.\"",
"That request would involve the fact based inquiry suggested in Pierce and would not be amenable to a motion to strike procedure. Throughout the complaint, the plaintiff refers to the role of subcontractors in supplying the parts and the pressure put upon him by subcontractors to accept substandard parts. In the paragraph setting forth his legal claim he refers to his termination being based on his refusal to accept and knowingly use defective parts supplied by contractors under government contractors \"violating the public policy against government contract fraud set forth in 18 U.S.C. § 1301(a) et seq.\" In his reply memorandum, the plaintiff says he is not bringing a cause of action for violation of the federal act, he is merely \"pointing to the Major Fraud Act as the proof of the importance of the public policy involved . . . The public policy involved is that the government should not pay for defective helicopter parts which risk the life and limb of its servicemen and invade the public treasury.\" It is obvious the plaintiff is not suing under the federal statute but he is referring to it to provide the public policy nexus which he claims makes his termination violative of public policy. That is further evidenced by the concluding remarks in the plaintiff's memorandum which assume what is in issue — the legal termination claim is based on what the plaintiff perceives is a violation of public policy set forth in the federal statute.",
"Thus the plaintiff argues that even though a federal not a state statute is involved there is sufficient impact on our citizens to apply the public policy exception to terminations in at-will situations, citing Wheeler v.Catipillar Tractors Co., 485 N.E.2d 372 (Ill., 1985). CT Page 10722 For the purposes of the following discussion the court will in fact assume that a public policy exception to the usual law governing termination can be based on a violation of federal law. The validity of such an assumption will be discussed later in this decision. 3. Since he has explicitly chosen to base his claim of unlawful termination based on the \"impropriety\" of the employer in firing him for refusing to accept substandard parts in violation of 18 U.S.C.",
"§ 1-31(a) et seq., the plaintiff must show that his termination would affect the policy goals expressed in that act. Thus in Sheets: \"the plaintiff alleged that he had been dismissed in retaliation for his insistence that the defendant comply with the requirements of a state statute, the Food, Drug and Cosmetic Act\", 179 Conn. at 480. In Antinerella v.Rioux, 229 Conn. 479 (1994) the court noted that the \"application of (the Sheets) doctrine is particularly appropriate . . . when . . .",
"the defendant has acted to accomplish what statutes specifically prohibited from doing\" id. at p. 493, referring to Sections 6-45 and 6-46 of the General Statutes. The relevant portions of 18 U.S.C. § 1031 reads as follows: \"§ 1031. Major fraud against the United States (a) Whoever knowingly executes, or attempts execute, any scheme or artifice with the intent — (1) to defraud the United States; or (2) to obtain money or property by means of false or fraudulent pretenses, representations, or promises, in any procurement of property or services as a prime contractor with the United States or as a subcontractor or supplier on a contract in which there is a prime contract with the United States, if the value of the contract, subcontract, or any constituent part thereof, for CT Page 10723 such property or services is $1,000,000 or more shall, subject to the applicability of subsection (c) of this section, be fined not more than . . . .\"",
"The difficulty presented by this motion is that two themes are constantly referred to by both sides that have nothing to do with the precise question of what the \"public policy\" issue question is under Sheets. The public policy behind the Major Fraud Act is to protect the federal government against fraud by contractors and suppliers to the government. Defective ashtrays could have been supplied and used by Sikorsky and the precise legal question before the court would have been the same. That defective parts to a helicopter may have been supplied and used certainly raises the specter of crashes endangering life and property but has nothing to do with the propriety of any Sheets claim in this case leaving aside for now the issue of whether a federal statute can be used to make such a claim. I believe the defendant reads both the statute and the complaint too narrowly.",
"In discussing the act the defendant conveniently reads subsection (a)(1) and (a)(2) together and argues that there is no allegation of fraud regarding \"procurement\" nor of a \"scheme or artifice\" under 18 U.S.C. § 1031(a). Rather, the plaintiff's claim is that helicopters were assembled with parts that did not meet specifications so he has \"failed to allege a violation of the very public policy on which he purports to rely.\" Giving the complaint its most favorable reading as the court must, it seems clear that the allegation is that a scheme existed between Sikorsky and the subcontractor to countenance the supply and use of defective parts for which the government was footing the bill. Both sides allegedly knew the parts were defective because the plaintiff said he told his superiors and the fifth paragraph said the subcontractors pressured him to use defective parts. Although it is unstated, I suppose it can be assumed that the government would and should not pay for defective parts and if supplier and manufacturer knowingly use such parts, they would certainly seem to be involved in a \"scheme or artifice with the intent — (1) to defraud the United States.\"",
"CT Page 10724 The defendant also appears to the court to confuse theSheets issue by proposing two different and not necessarily related definitions of \"public policy\" which it claims stand for the same thing. That is to go back to the basic description of a Sheets claim — the discharged employee must show his or her termination was rooted in an impropriety based on a violation of a public policy as here evidenced by a federal statute. The public policy behind the Major Fraud Act is that the federal government should not be defrauded by schemes between suppliers and manufacturers to use defective parts or equipment in government contracts. The defendant argues that the plaintiff \"falls outside\" the protections of the policy expressed by the federal statute because he does not meet all the statutory requirements for civil relief provided to employees who are punished for assisting in prosecutions under the act and does not qualify for the monetary reward permitted in the act because as the act spells out, he did not furnish information on the fraud to his employer (the act itself leaves a loophole in the latter situation if the court determines the employee had a justifiable reason for non-disclosure). But these matters are not concerned with the basic public policy underlying the act — prevention of fraud but rather with remedial steps which it was thought would encourage the accomplishment of that policy goal.",
"It is an entirely different question as to whether, since the statute sets out certain remedial provisions, even including re-instatement to a fired worker, this would preclude the use of that statute for a Sheets argument when the worker does not otherwise qualify for reinstatement as provided for in the particular statute. That is, has the legislature precluded use of a public policy argument based on this statute which might have been appropriate absent the legislative provisions for relief. I am not prepared to answer this much more difficult question on a short calendar motion to strike. It requires analysis of legislative history, perhaps industry and prosecutorial practice and a further factual development of what exactly was involved in this case so that a court could consider that protections beyond what is specifically provided for in the federal statute are appropriate. CT Page 10725 4.",
"The motion to strike, however, is appropriate for another reason. As noted by the courts the public policy exception to the employment at-will doctrine must be \"narrowly construed to serve a limited purpose.\" Battista, 10 Conn. App. at page 497. Although this issue has not yet been addressed by our courts, I believe the better view is that the mere allegation that a defendant has violated the public policy expressed in a federal law is not legally sufficient to set forth a Sheets claim. There must be an allegation that such a violation interferes with some important state interest sufficient to raise a public policy concern that would form an exception to the employment at-will doctrine with regard to employee termination. Where the state public policy is based on federal law there must be a substantial connection between the federal law that is violated and the state's own public policies. The federal law must protect an interest that has a substantial impact on state concerns Wheeler v. CaterpillarTractor Co., 485 N.E.2d 372, 376-377 (Ill. 1985), Peterson v.Browning, 832 P.2d 1280, 1282 (Vt., 1992), contra Olquin v.Inspiration Consolidated Copper Co., 740 F.2d 1468, 1475 (1984) (interpreting Arizona law, even though case, perhaps, does not preclude reliance on federal law if its violation involved substantial impact on state, issue not presented by federal statute in that case. As noted, in this complaint there is no allegation that state public policy concerns are implicated, just a reference to a purported violation of policies enshrined in federal law. If proper allegations are made along these lines, I do not necessarily believe as the defendant seems to suggest that the question of reliance on federal statutory law for a Sheets claim could be resolved by a motion to strike.",
"The plaintiff might have a difficult task showing the necessary impact on state interests given the specific purpose of this federal statute but that is not now before the court and can best be resolved after discovery by a motion for summary judgment or perhaps at trial. Corradino, J. CT Page 10726"
] | https://www.courtlistener.com/api/rest/v3/opinions/3353404/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
891 N.E.2d 41 (2008) SOUTHERN v. STATE. Supreme Court of Indiana. February 28, 2008. Transfer denied. All Justices concur, except Dickson and Sullivan, JJ., who vote to grant transfer. | 10-30-2013 | [
"891 N.E.2d 41 (2008) SOUTHERN v. STATE. Supreme Court of Indiana. February 28, 2008. Transfer denied. All Justices concur, except Dickson and Sullivan, JJ., who vote to grant transfer."
] | https://www.courtlistener.com/api/rest/v3/opinions/2214985/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Argued December 10, 1945. The appeal is from an entry of judgment by the learned court below on the pleadings in an action of assumpsit. The controversy arises over the application of the Act of June 28, 1935, P.L. 477, § 1, as amended and clarified by the Act of May 14, 1937, P.L. 632, § 1, 53 P. S. § 327, to the facts upon which the case is based. On February 22, 1943, Howard D. White, the appellant, while engaged in the performance of his duties as a salaried policeman of West Norriton Township, the appellee, sustained an accidental injury, which temporarily incapacitated him. He did not work for a long time, but he gradually improved so that for a period of several months immediately preceding January 31, 1945, according to his averment, he "was performing a great many but not all of his duties as policeman of the Township of West Norriton." For reasons which do not appear in this record the township authorities on January 23, 1945, dismissed the appellant from the police force, effective as of January 31, 1945, and up to and including that date his full salary was paid. Since then the township has declined to make any payments and as a result this suit was brought. The Act of 1937, supra, provides that "any policeman or fireman of any city (except of the second class A), *Page 377 borough, town or township, who is injured in the performance of his duties and by reason thereof is temporarily incapacitated from performing his duties, shall be paid by the municipality, by which he is employed, his full rate of salary, as fixed by ordinance or resolution, until the disability arising therefrom has ceased." During the time of the temporary incapacity any sum received by the injured person under the Workmen's Compensation Act shall be turned over to the township. White complied with that requirement. The appellant contends that although he has not been a township policeman since his dismissal, he is nevertheless entitled under the foregoing statute to be paid his full salary until there is a "complete disappearance of any degree of incapacity." The appellee, on the other hand, argues that the act has no application to a policeman injured in the line of his duty and temporarily incapacitated, who returned to uninterrupted active duty and thereafter was dismissed. Prior to the Act of 1935 and its amendment, a policeman, if he became physically disabled and could not perform his duties, was entitled to his full rate of salary so long as he remained a policeman, unless there was an agreement, ordinance, rule, or regulation providing otherwise. The Supreme Court said in TheCity of Wilkes-Barre v. Meyers, 113 Pa. 395, 400, 6 A. 110: "If there be no law or regulation authorizing the discontinuance of the compensation during the disability, the only remedy is his removal." Our statute gave legislative sanction to the rule formerly enunciated by the Supreme Court, but modified it so that no ordinance, rule, or regulation could authorize the discontinuance of the full rate of salary to a policeman or fireman during temporary incapacitation as a result of injury sustained in the performance of his duties. In the case of Iben v. Monaca Borough, 158 Pa. Super. 46,43 A.2d 425, we had occasion to construe the Act of 1937, supra. Speaking through Judge HIRT, *Page 378 we held that the act was intended as a compensation measure that whatever money was paid during the period of temporary disability was not salary, but rather to make good the temporary loss resulting from injury sustained while in the service of the municipality. It will be noted that the act applies to a policeman or fireman "temporarily incapacitated from performinghis duties" (Italics supplied). When his incapacity ceases to an extent that the injured person returns to work, performs such duties as are assigned to him and is paid his regular salary, he is no longer suffering any temporary financial loss. This court is convinced that the appellant has failed to bring himself within the provisions of the statute we have been considering. Judgment entered by the court below is affirmed. | 07-06-2016 | [
"Argued December 10, 1945. The appeal is from an entry of judgment by the learned court below on the pleadings in an action of assumpsit. The controversy arises over the application of the Act of June 28, 1935, P.L. 477, § 1, as amended and clarified by the Act of May 14, 1937, P.L. 632, § 1, 53 P. S. § 327, to the facts upon which the case is based. On February 22, 1943, Howard D. White, the appellant, while engaged in the performance of his duties as a salaried policeman of West Norriton Township, the appellee, sustained an accidental injury, which temporarily incapacitated him. He did not work for a long time, but he gradually improved so that for a period of several months immediately preceding January 31, 1945, according to his averment, he \"was performing a great many but not all of his duties as policeman of the Township of West Norriton.\" For reasons which do not appear in this record the township authorities on January 23, 1945, dismissed the appellant from the police force, effective as of January 31, 1945, and up to and including that date his full salary was paid. Since then the township has declined to make any payments and as a result this suit was brought.",
"The Act of 1937, supra, provides that \"any policeman or fireman of any city (except of the second class A), *Page 377 borough, town or township, who is injured in the performance of his duties and by reason thereof is temporarily incapacitated from performing his duties, shall be paid by the municipality, by which he is employed, his full rate of salary, as fixed by ordinance or resolution, until the disability arising therefrom has ceased.\"",
"During the time of the temporary incapacity any sum received by the injured person under the Workmen's Compensation Act shall be turned over to the township. White complied with that requirement. The appellant contends that although he has not been a township policeman since his dismissal, he is nevertheless entitled under the foregoing statute to be paid his full salary until there is a \"complete disappearance of any degree of incapacity.\"",
"The appellee, on the other hand, argues that the act has no application to a policeman injured in the line of his duty and temporarily incapacitated, who returned to uninterrupted active duty and thereafter was dismissed. Prior to the Act of 1935 and its amendment, a policeman, if he became physically disabled and could not perform his duties, was entitled to his full rate of salary so long as he remained a policeman, unless there was an agreement, ordinance, rule, or regulation providing otherwise. The Supreme Court said in TheCity of Wilkes-Barre v. Meyers, 113 Pa. 395, 400, 6 A.",
"110: \"If there be no law or regulation authorizing the discontinuance of the compensation during the disability, the only remedy is his removal.\" Our statute gave legislative sanction to the rule formerly enunciated by the Supreme Court, but modified it so that no ordinance, rule, or regulation could authorize the discontinuance of the full rate of salary to a policeman or fireman during temporary incapacitation as a result of injury sustained in the performance of his duties. In the case of Iben v. Monaca Borough, 158 Pa. Super. 46,43 A.2d 425, we had occasion to construe the Act of 1937, supra. Speaking through Judge HIRT, *Page 378 we held that the act was intended as a compensation measure that whatever money was paid during the period of temporary disability was not salary, but rather to make good the temporary loss resulting from injury sustained while in the service of the municipality. It will be noted that the act applies to a policeman or fireman \"temporarily incapacitated from performinghis duties\" (Italics supplied).",
"When his incapacity ceases to an extent that the injured person returns to work, performs such duties as are assigned to him and is paid his regular salary, he is no longer suffering any temporary financial loss. This court is convinced that the appellant has failed to bring himself within the provisions of the statute we have been considering. Judgment entered by the court below is affirmed."
] | https://www.courtlistener.com/api/rest/v3/opinions/3854686/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
v. Case No: 8:19-cv-780-T-60JSS
MELISSA KELLEY,
Defendant. ___________________________________
DEFAULT JUDGMENT IN A CIVIL CASE
Decision by Court. This action came before the Court and a decision has been rendered.
IT IS ORDERED AND ADJUDGED that final default judgment is entered in favor of
Plaintiff and against Defendant Melissa Kelley in the amount of $896,933.42, plus statutory
interest pursuant to 26 U.S.C. §§ 6621, 6622 and 28 U.S.C. § 1961(c), accruing from July 8, 2019,
until paid for which sum let execution issue.
ELIZABETH M. WARREN, CLERK
s/JB, Deputy Clerk CIVIL APPEALS JURISDICTION CHECKLIST
1. Appealable Orders: Courts of Appeals have jurisdiction conferred and strictly limited by statute:
(a) Appeals from final orders pursuant to 28 U.S.C. Section 1291: Only final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under 28 U.S.C. Section 158, generally are appealable. A final decision is one that “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Pitney Bowes, Inc. V. Mestre, 701 F.2d 1365, 1368 (11th Cir. 1983). A magistrate judge’s report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. 28 U.S.C. Section 636(c).
(b) In cases involving multiple parties or multiple claims, a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. 54(b), Williams v. Bishop, 732 F.2d 885, 885-86 (11th Cir. 1984). A judgment which resolves all issues except matters, such as attorneys’ fees and costs, that are collateral to the merits, is immediately appealable. Budinich v. Becton Dickinson & Co., 486 U.S. 196, 201, 108 S. Ct. 1717, 1721-22, 100 L.Ed.2d 178 (1988); LaChance v. Duffy’s Draft House, Inc., 146 F.3d 832, 837 (11th Cir. 1998).
(c) Appeals pursuant to 28 U.S.C. Section 1292(a): Appeals are permitted from orders “granting, continuing, modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions...” and from “[i]nterlocutory decrees...determining the rights and liabilities of parties to admiralty cases in which appeals from final decrees are allowed.” Interlocutory appeals from orders denying temporary restraining orders are not permitted.
(d) Appeals pursuant to 28 U.S.C. Section 1292(b) and Fed.R.App.P.5: The certification specified in 28 U.S.C. Section 1292(b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court’s denial of a motion for certification is not itself appealable.
(e) Appeals pursuant to judicially created exceptions to the finality rule: Limited exceptions are discussed in cases including, but not limited to: Cohen V. Beneficial Indus. Loan Corp., 337 U.S. 541,546,69 S.Ct. 1221, 1225-26, 93 L.Ed. 1528 (1949); Atlantic Fed. Sav. & Loan Ass’n v. Blythe Eastman Paine Webber, Inc., 890 F. 2d 371, 376 (11th Cir. 1989); Gillespie v. United States Steel Corp., 379 U.S. 148, 157, 85 S. Ct. 308, 312, 13 L.Ed.2d 199 (1964).
2. Time for Filing: The timely filing of a notice of appeal is mandatory and jurisdictional. Rinaldo v. Corbett, 256 F.3d 1276, 1278 (11th Cir. 2001). In civil cases, Fed.R.App.P.4(a) and (c) set the following time limits:
(a) Fed.R.App.P. 4(a)(1): A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. 3 must be filed in the district court within 30 days after the entry of the order or judgment appealed from. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD - no additional days are provided for mailing. Special filing provisions for inmates are discussed below.
(b) Fed.R.App.P. 4(a)(3): “If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later.”
(c) Fed.R.App.P.4(a)(4): If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion.
(d) Fed.R.App.P.4(a)(5) and 4(a)(6): Under certain limited circumstances, the district court may extend the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension.
(e) Fed.R.App.P.4(c): If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution’s internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with 28 U.S.C. Section 1746 or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid.
3. Format of the notice of appeal: Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. See also Fed.R.App.P. 3(c). A pro se notice of appeal must be signed by the appellant.
4. Effect of a notice of appeal: A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. 4(a)(4).
-2- | 2020-02-14 | [
"UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION UNITED STATES OF AMERICA, Plaintiff, v. Case No: 8:19-cv-780-T-60JSS MELISSA KELLEY, Defendant. ___________________________________ DEFAULT JUDGMENT IN A CIVIL CASE Decision by Court. This action came before the Court and a decision has been rendered. IT IS ORDERED AND ADJUDGED that final default judgment is entered in favor of Plaintiff and against Defendant Melissa Kelley in the amount of $896,933.42, plus statutory interest pursuant to 26 U.S.C. §§ 6621, 6622 and 28 U.S.C. § 1961(c), accruing from July 8, 2019, until paid for which sum let execution issue. ELIZABETH M. WARREN, CLERK s/JB, Deputy Clerk CIVIL APPEALS JURISDICTION CHECKLIST 1. Appealable Orders: Courts of Appeals have jurisdiction conferred and strictly limited by statute: (a) Appeals from final orders pursuant to 28 U.S.C. Section 1291: Only final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under 28 U.S.C. Section 158, generally are appealable.",
"A final decision is one that “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Pitney Bowes, Inc. V. Mestre, 701 F.2d 1365, 1368 (11th Cir. 1983). A magistrate judge’s report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. 28 U.S.C. Section 636(c). (b) In cases involving multiple parties or multiple claims, a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. 54(b), Williams v. Bishop, 732 F.2d 885, 885-86 (11th Cir. 1984). A judgment which resolves all issues except matters, such as attorneys’ fees and costs, that are collateral to the merits, is immediately appealable.",
"Budinich v. Becton Dickinson & Co., 486 U.S. 196, 201, 108 S. Ct. 1717, 1721-22, 100 L.Ed.2d 178 (1988); LaChance v. Duffy’s Draft House, Inc., 146 F.3d 832, 837 (11th Cir. 1998). (c) Appeals pursuant to 28 U.S.C. Section 1292(a): Appeals are permitted from orders “granting, continuing, modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions...” and from “[i]nterlocutory decrees...determining the rights and liabilities of parties to admiralty cases in which appeals from final decrees are allowed.” Interlocutory appeals from orders denying temporary restraining orders are not permitted. (d) Appeals pursuant to 28 U.S.C. Section 1292(b) and Fed.R.App.P.5: The certification specified in 28 U.S.C. Section 1292(b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court’s denial of a motion for certification is not itself appealable.",
"(e) Appeals pursuant to judicially created exceptions to the finality rule: Limited exceptions are discussed in cases including, but not limited to: Cohen V. Beneficial Indus. Loan Corp., 337 U.S. 541,546,69 S.Ct. 1221, 1225-26, 93 L.Ed. 1528 (1949); Atlantic Fed. Sav. & Loan Ass’n v. Blythe Eastman Paine Webber, Inc., 890 F. 2d 371, 376 (11th Cir. 1989); Gillespie v. United States Steel Corp., 379 U.S. 148, 157, 85 S. Ct. 308, 312, 13 L.Ed.2d 199 (1964). 2. Time for Filing: The timely filing of a notice of appeal is mandatory and jurisdictional. Rinaldo v. Corbett, 256 F.3d 1276, 1278 (11th Cir. 2001). In civil cases, Fed.R.App.P.4(a) and (c) set the following time limits: (a) Fed.R.App.P. 4(a)(1): A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. 3 must be filed in the district court within 30 days after the entry of the order or judgment appealed from.",
"However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD - no additional days are provided for mailing. Special filing provisions for inmates are discussed below. (b) Fed.R.App.P. 4(a)(3): “If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later.” (c) Fed.R.App.P.4(a)(4): If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion.",
"(d) Fed.R.App.P.4(a)(5) and 4(a)(6): Under certain limited circumstances, the district court may extend the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension.",
"(e) Fed.R.App.P.4(c): If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution’s internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with 28 U.S.C. Section 1746 or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid. 3. Format of the notice of appeal: Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. See also Fed.R.App.P. 3(c). A pro se notice of appeal must be signed by the appellant. 4. Effect of a notice of appeal: A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. 4(a)(4). -2-"
] | https://www.courtlistener.com/api/rest/v3/recap-documents/124004777/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Per Curiam:
The appeal herein is dismissed for the want of a properly presented substantial federal question. El Paso & South Western R. Co. v. Eichel & Weikel, 226 U. S. 590; Reinman v. Little Rock, 237 U. S. 171; Standard Oil Co. v. City of Marysville, 279 U. S. 582. | 09-09-2022 | [
"Per Curiam: The appeal herein is dismissed for the want of a properly presented substantial federal question. El Paso & South Western R. Co. v. Eichel & Weikel, 226 U. S. 590; Reinman v. Little Rock, 237 U. S. 171; Standard Oil Co. v. City of Marysville, 279 U. S. 582."
] | https://www.courtlistener.com/api/rest/v3/opinions/8148459/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
EXHIBIT 21 Subsidiaries of the Registrant CIS Financial Services, Inc., an Alabama corporation Cavalier Home Builders, LLC, a Delaware limited liability company Cavalier Real Estate Co., Inc., a Delaware corporation Quality Housing Supply, LLC, a Delaware limited liability company Ridge Pointe Manufacturing, LLC, an Alabama limited liability company The Home Place of Nashville, Inc., a Delaware corporation | [
"EXHIBIT 21 Subsidiaries of the Registrant CIS Financial Services, Inc., an Alabama corporation Cavalier Home Builders, LLC, a Delaware limited liability company Cavalier Real Estate Co., Inc., a Delaware corporation Quality Housing Supply, LLC, a Delaware limited liability company Ridge Pointe Manufacturing, LLC, an Alabama limited liability company The Home Place of Nashville, Inc., a Delaware corporation"
] | https://applica-public.s3-eu-west-1.amazonaws.com/contract-discovery/edgar.txt.xz | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
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Motion to dismiss petition as a matter of law, pursuant to section 1293 of the Civil Practice Act, on the ground that it fails to state facts sufficient to entitle petitioner to the relief demanded. Motion granted, without costs. Beldock, Acting P. J., Kleinfeld, Christ, Pette and Brennan, JJ., concur. | 01-12-2022 | [
"Motion to dismiss petition as a matter of law, pursuant to section 1293 of the Civil Practice Act, on the ground that it fails to state facts sufficient to entitle petitioner to the relief demanded. Motion granted, without costs. Beldock, Acting P. J., Kleinfeld, Christ, Pette and Brennan, JJ., concur."
] | https://www.courtlistener.com/api/rest/v3/opinions/5717374/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
b'DEPARTMENT OF HOMELAND SECURITY\n\n Office of Inspector General\n\n\n Audit of DHS\' Corrective Action Plan\n Process for Financial Reporting \n-\n Report No. 2 \n\n\n\n\n\n Office of Audits\n\n September 2006\n\x0c Ofice of Inspector General\n\n U.S. Department of Homeland Security\n Washington, DC 20528\n\n\n Homeland \n\n Security\n September 8,2006\n\n\n Preface\n\nThe Department of Homeland Security (DHS) Office of Inspector General (OIG) was established by\nthe Homeland Security Act of 2002 (Public Law 107-296) by amendment to the Inspector General\nAct of 1978. This is one of a series of audit, inspection, and special reports published by our office\nas part of our oversight responsibility to promote economy, efficiency, and effectiveness within the\ndepartment.\n\nThis report is the second of a series of OIG performance audit reports intended to provide an\nassessment of planned DHS corrective actions to improve internal control. Improving internal\ncontrol is a critical objective of the DHS Financial Accountability Act (Public Law 108-330). The\nreport is based on interviews with employees and officials of relevant agencies and institutions,\ndirect observations, and a review of applicable documents. We contracted with the independent\npublic accounting firm KPMG LLP to perform the audit. KPMG is responsible for the attached\nauditor\'s report and the conclusions expressed in it.\n\nThe recommendations herein have been discussed in draft with those responsible for\nimplementation. It is our hope that this report will result in more effective, efficient, and economical\noperations. We express our appreciation to all of those who contribute$ to the preparation of this\nreport.\n WKRichard L. Skinner\n Inspector General\n\x0c KPMG LLP\n 2001 M Street, NW\n Washington, DC 20036\n\n\n\n\nJuly 7,2006\n\n\nMr. David Zavada\nAssistant Inspector General for Audit\nDepartment of Homeland Security\n245 Murray Drive, SW Bldg. 410\nWashington, DC 20258\n\nMr. David Norquist\nChief Financial Officer\nDepartment of Homeland Security\n245 Murray Drive, SW Bldg. 410\nWashington, DC 20258\n\n\nKPMG is pleased to submit this performance audit report related to the Department of Homeland\nSecurity\'s (the Department\'s) corrective action plans developed to address the Financial\nManagement Oversight, Financial Reporting, Fund Balance with Treasury, and Actuarial Liabilities\nmaterial weaknesses at the Office of the Chief Financial Officer, United States Coast Guard, and\nImmigration and Customs Enforcement components as reported in the Department\'s independent\nauditors\' report in the FY 2005 Performance and Accotlntability Report. This performance audit is\nthe second of a series of performance audits that the Department of Homeland Security Office of\nInspector General has engaged us to perform for fiscal year 2006. This performance audit is\ndesigned to meet the objectives identified in the Background, Objectives, and Scope section of this\nreport.\nWe conducted our second performance audit from June 12, 2006 through July 7, 2006, in\naccordance with Government Auditing Standards issued by the Comptroller General of the United\nStates. The purpose of this report is to communicate the results of our performance audit and the\nrelated findings and recommendations. Management concurred with our recommendations and\nprepared a response which is presented at the end of this report.\nSince July 7, 2006, we have not performed any additional procedures with respect to this\nperformance audit and have no obligation to update this report or to revise the information\ncontained herein to reflect events occurring subsequent to July 7,2006.\nThe Department of Homeland Security Office of Inspector General has authorized this report to be\nsent electronically for the convenience of the Department. However, only the final hard-copy report\nshould be deemed our work product.\n\n\n\n\n I<PII.iG LLP, a u S !,ai1-0 ivabllly p6ilnlisillp ti Ins U S\n maq,bei ilrm uCKP!.!G ;?lern.i!lonal a S ~ s rooysinl~ve\n s\n\x0cExecutive Summary\nOverall, the Department of Homeland Security (the Department) is working to identify and develop\neffective Corrective Action Plans (CAPs) to address the four material weaknesses at the Office of\nthe Chief Financial Officer (OCFO), United States Coast Guard (Coast Guard), and Immigration\nand Customs Enforcement (ICE) over Financial Management Oversight, Financial Reporting, Fund\nBalance with Treasury, and Actuarial Liabilities (herein referred to as the "material weaknesses"),\nas reported in the Department\'s independent auditors\' report included in the FY 2005 Performance\nand Accountability Report (herein referred to as the "FY 2005 independent auditors\' report"). The\nOCFO, Coast Guard, and ICE have drafted CAPs intended to address their respective sections of the\nmaterial weaknesses. The Department deems these CAPs as critical steps towards its objective of\nobtaining an unqualified audit opinion on its consolidated financial statements, as well as on its\ninternal controls over financial reporting. Our performance audit was limited to a review of the\nCAPs themselves and not the outcomes achieved as a result of the execution of the procedures\noutlined in the CAPs.\n\n\nFindings and Recommendations\nKPMG identified several opportunities for management\'s consideration to improve the\neffectiveness of the Department\'s CAPs. KPMG has classified each of these observations into one\nof the following four broad categories representing phases which are generally performed to\ndevelop and implement an effective CAP:\n Identification of the underlying root cause,\n Development of an effective remediation plan,\n Accountabilitv for establishment and successful implementation of the CAP, and\n Validation of the successhl implementation of the CAP.\nThe recommendations needed, which we identified in relation to the CAPs for these material\nweaknesses, vary depending on the component, and in some cases on the material weakness itself.\n\x0cBackground, Objectives, and Scope\nBackground\nOffice of Management and Budget (OMB) Circular A-123, Management\'s Responsibility for\nInternal Control, states "Federal agencies are subject to numerous legislative and regulatory\nrequirements that promote and support effective internal control. Effective internal control is a key\nfactor in achieving agency missions and program results through improved accountability.\nIdentifying internal control weaknesses and taking related corrective actions are critically important\nto creating and maintaining a strong internal control infrastructure that supports the achievement of\nagency objectives."\nOMB Circular A-123 builds upon the internal control framework within the Standards for Internal\nControl in the Federal Government (Green Book), issued by the Government Accountability Office\n(GAO), which defines internal control as "an integral component of an organization\'s management\nthat provides reasonable assurance that the following objectives are being achieved:\n effectiveness and efficiency of operations,\n reliability of financial reporting, and\n compliance with applicable laws and regulations."\nTen material weaknesses associated with internal controls were reported in the Department\'s\nindependent auditors\' report included in the FY 2005 Performance and Accountability Report. The\nDepartment has undertaken an initiative to develop and implement a formal corrective action plan\nprocess. Under this initiative, the Department issued various guidance and also deployed a web-\nbased software application, Electronic Program Management Office (ePMO), to manage the\ncollection and reporting of CAP information for the Department and its components. Under this\ninitiative, the Department\'s intent is to develop effective CAPs and position itself to move forward\nin its objective of obtaining an unqualified audit opinion on its consolidated financial statements, as\nwell as on its internal controls over financial reporting.\nThe first key milestone in the Department\'s CAP process was May 31, 2006, whereby all\ncomponents were required to develop CAPs for each material weakness under the new format for\ninput into ePMO by the Department\'s OCFO. The second key milestone will be the submission of\nrevised CAPs as of June 30,2006, by July 12,2006. The revised CAPs are outside the scope of this\nperformance audit.\n\n\nObjectives\nThe objective of this performance audit is to report and evaluate the status and effectiveness of the\nCAPs for four of the ten material weaknesses that the Department has identified as their areas of\nCAP focus for FY 2006. The four material weaknesses are: Financial Management Oversight,\nFinancial Reporting, Fund Balance with Treasury, and Actuarial Liabilities. Our audit was\nconducted in accordance with Government Auditing Standards issued by the Comptroller General\nof the United States, specifically, the standards for performance audits.\nOur objective is to report on the status of CAP implementation, as of May 31, 2006, and evaluate\nthe effectiveness of the Department\'s CAPs developed by the OCFO, Coast Guard, and ICE to\naddress their respective sections of the four material weaknesses.\n\x0cScope\nThe scope of this performance audit includes the Department\'s CAPs, as of May 31, 2006,\ndeveloped to address the Financial Management Oversight, Financial Reporting, Fund Balance with\nTreasury, and Actuarial Liabilities material weaknesses at the OCFO, Coast Guard, and ICE\ncomponents as reported in the FY 2005 independent auditors\' report. Our scope did not include\nprocedures on any of the CAPS associated with the remaining six material weaknesses cited in the\nDepartment\'s FY 2005 independent auditors\' report.\nThe Department is in the early stages of its CAP development and implementation process, and\naccordingly, management has represented that its CAPS will continue to be modified throughout the\nyear. Our performance audit was limited to a review of the CAPS noted above as of May 3 1, 2006.\nRevised CAPs as of June 30,2006, due by July 12, 2006, to the OCFO are outside the scope of this\nperformance audit. Furthermore, our performance audit was limited to a review of the CAPs\nthemselves and not the outcome being achieved as a result of the procedures outlined in the CAPs.\nThe timeline for this performance audit was as follows:\n FieldworkIReporting - June 12,2006 through July 7,2006\n Draft Report - July 17,2006\n Final Report - September 6,2006\n\n\nPerformance Audit Approach\nWe performed a variety of performance audit procedures over the CAPs for the four material\nweaknesses. Our methodology consisted of the following four-phased approach:\n\n\nPhase I - Project Initiation and Planning\nTo initiate and focus the performance audit approach, we conducted a kick-off meeting with the\nDepartment\'s OIG, OCFO, Coast Guard, and ICE components to review the objectives, scope of the\nproject, and the collaboration among participants.\n\n\nPhase I1 - Determine the CAP Status of the Four Material Weaknesses\n OCFO, Coast Guard and ICE Interviews\n We interviewed personnel from the OCFO, Coast Guard and ICE components on their\n understanding and implementation of their respective components\' CAPs as of May 31, 2006,\n including, but not limited to, the root cause analysis performed, the critical milestones chosen\n for measurement, and mechanisms to monitor progress in meeting the milestones.\n CAPs and Related Supporting Documentation Reviews\n - The CAPs (i.e., the detail and summary report) contained within ePMO.\n - The underlying Excel and Word templates submitted to the Department\'s OCFO to\n populate ePMO.\n - If applicable, the CAPS prepared prior to the implementation of the Department\'s fiscal\n year 2006 CAP process (i.e. ICE Financial Action Plans (FAPS)).\n\x0c - Notice of Findings and Recommendations (NFRs) issued during the fiscal year 2005\n financial statement audit utilized to generate the FY 2005 independent auditors\' report.\n\n\nPhase 111- Evaluate CAP Effectiveness\nWe reviewed the DHS Corrective Action Plan Process Guide (CAP Guide), dated April 28, 2006,\nand existing internal control monitoring practices and guidance for practices that would serve as our\nevaluation criteria. We then compared our understanding of the Department\'s existing CAPS to\nthese practices to identify potential areas for improvement. These findings reflect situations that\ncould negatively impact the Department\'s remediation of the material weaknesses if additional\ncorrective action is not taken.\nThe internal control monitoring practices and guidance we reviewed included:\n OMB Circular A-123.\n CAP guides published by other Federal agencies.\n OMB Executive Branch Management Scorecard.\nWe categorized the areas for improvement into one of the four broad phases generally found in an\neffective CAP process:\n Identification of the underlying root cause is an important action step in the CAP process.\n Accurate identification of the root cause mitigates the chances of recurrence. Often merely the\n symptoms of the deficiency are identified rather than the root cause. By identifying only the\n symptoms, it is difficult to develop an effective CAP that will successfully resolve the\n deficiency.\n Development of an effective remediation plan is an appropriate way to cure an internal control\n deficiency. A key component of an effective plan is the inclusion of both attainable and\n measurable milestones to allow both the Department and the component to effectively monitor\n the remediation process.\n Accountability is vital to the CAP process because it necessitates the establishment of an\n individual CAP owner who is responsible for its successful implementation. The owner\'s\n responsibilities include ensuring that milestones are achieved and that the validation phase is\n completed.\n Validation is important in order to verify that the CAP has been successfully completed. The\n CAP should include activities that will provide evidence to support the closure of the CAP.\n These activities should include documentation reviews, work observations, and performance\n testing.\n\n\nPhase IV - Conclusions and Recommendations\nAfter conducting our analysis in Phase 111, we formulated our findings and recommendations for\neach potential area of improvement identified.\n\x0cFindings and Recommendations\nOffice of the Chief Financial Officer (OCFO)\nThe OCFO has drafted CAPS intended to address its respective sections of the two material\nweaknesses on Financial Management Oversight and Financial Reporting reported in the FY 2005\nindependent auditors\' report.\nFinancial Management Oversight\nBackground:\nThe Financial Management Oversight material weakness relates to the overall management,\npersonnel, and infrastructure of the OCFO. The OCFO initiated the Department-wide CAP process\nin early 2006. A crucial step in remediation of this material weakness was the successful\nconfirmation by the U.S. Senate of the Department\'s Chief Financial Officer in May 2006. As part\nof the CAP process, the OCFO has led the Department in drafting guidance and providing the DHS\ncomponents with tools to utilize during their respective CAP implementations. The OCFO has led\n\'CAP Workshops\' with representatives from the Department components so that an adequate,\nuniform approach to performing root cause analyses and implementing corrective actions is taken\nDepartment-wide. The OCFO also developed the Electronic Program Management Office (ePMO)\nsystem enabling the Department and the components to track the corrective actions being\nundertaken at the component level to ensure a coordinated Department-wide response to auditor\nfindings and recommendations. The OCFO has issued a CAP Guide and is currently in the\ndevelopmental stages of creating an Internal Controls over Financial Reporting (ICOFR) Playbook\nfor the components. Furthermore, these actions reflect the OCFO\'s recognition that the CAP\nprocess at DHS is an integral part of its preparation for OMB A-123 implementation.\nThe leadership provided by the Department in setting a positive \'tone-at-the-top,\' and actively\nmonitoring progress in implementing the CAP process has shown to be integral to the success\nachieved at the Department thus far and will be critical to resolving the material weaknesses at the\nDepartment.\nIdentification:\nThe OCFO has drafted a CAP to address the material weakness on Financial Management\nOversight, as it relates to the OCFO. The CAP includes an analysis of root cause issues, key success\nfactors and performance measures, resources required, and an analysis of the risks and impediments\nas seen by management. In addition, management has developed a timetable for corrective actions,\nand assigned specific tasks with due dates to individuals. Management emphasizes the evolutionary\nnature of the CAP, including their intent to modify andlor add actions as needed to fully correct the\nidentified internal control weaknesses in financial management oversight, within the timetable\nspecified by Department leadership (September 30, 2006). As the work progresses, management\nmay identify additional root causes and will update the CAP accordingly in order to keep the CAP\ncurrent and a useful management plan.\nOne of the key inputs used by the Department in the development of the OCFO CAP addressing the\nFinancial Management Oversight internal control weaknesses was a self assessment using the GAO\nInternal Control Management and Evaluation Tool (GAO Evaluation Tool). Completion of a self\nassessment using the GAO Evaluation Tool was a Departmental mandate to support compliance\nwith the Department of Homeland Security Financial Accountability Act, the Federal Managers\'\nFinancial Integrity Act (FMFIA), and implementation of OMB Circular A-123, Management\'s\nResponsibility for Internal Controls in FY 2006.\n\x0cThe OCFO, under the direction of the Acting Chief Financial Officer (CFO), began its self\nassessment of its control environment in FY 2006, and completed a thorough introspective review\nover several months. Department management views the control environment as the foundation for\ngood financial management.\nThe GAO Evaluation Tool is intended to help managers determine how well the Department\'s\ncontrol environment is designed and fbnctioning and to help identify and develop actions to\nimprove internal controls. Many of the financial management oversight weaknesses, as highlighted\nin the FY 2005 independent auditors\' report, are synonymous with weaknesses in the overall control\nenvironment, and consequently, the GAO Evaluation Tool provided a starting point for\nidentification and analysis of the root causes of the weakness.\nThe OCFO concluded that only two of the seven control environment objectives from the GAO\nEvaluation Tool are fully met by the Department. Commitment to competence, management\nphilosophy, organizational structure, assignment of responsibilities and human resource practices\nare aspects of the control environment that require improvement. This self-assessment served as the\nDepartment\'s principle source of information to identify the root cause of the OCFO\'s contribution\nto the material weakness on financial management oversight and as input to the CAP. By itself,\nhowever, completion of the GAO Evaluation Tool does not substitute for a comprehensive root\ncause analysis.\nDevelopment:\nUsing the information gathered through the self-assessment, the OCFO prepared its CAP to address\nweaknesses in the control environment. The CAP is in the early stages of development and\napproval, yet several significant steps have already been taken. One such step is the drafting and\nrelease of the CAP Guide, and a formal process of reporting and monitoring (using ePMO) of\ncorrective actions planned by the Department and its components. Another recent action is\nmanagement\'s approval to initiate a workforce study to identi% human resource gaps and skill sets\nneeded to perform the financial reporting functions of the OCFO.\nThe initial draft of the CAP, based on the results of the self assessment of the control environment,\nincluding the assigned tasks and timetable for completion, was recently completed - within the past\n45 days. Management will require more time to hlly develop all of the corrective tasks and critical\nmilestones; specifically, further developing certain missing elements (described below), to make the\nplan comprehensive. Until management addresses the missing elements, the effectiveness of the\nCAP is diminished.\nThe OCFO also sponsors periodic "CAP Workshops" attended by the Department\'s components, to\nhelp ensure continued progress is made in regards to CAPs throughout the Department. In addition,\nthe OCFO is developing an Internal Control Over Financial Reporting (ICOFR) Playbook which,\nwhen completed, is intended to link the component CAPs to management\'s implementation of\nOMB A-123 and ultimately with management\'s assertions related to internal controls over financial\nreporting.\nThe OCFO presented us with several updates, not yet incorporated into the CAP, that are currently\nunder development and review by Department leadership, which partially address some of our\nfindings presented below:\n The Department has a limited number of employees, with necessary skill sets, particularly in\n OCFO financial management positions, which causes the current managers to prioritize\n workload, and postpone or defer work on critical projects such as policies, procedures, internal\n control improvements, etc. As a result, management has hired three full-time employees in\n fiscal year 2006 and has budgeted for an additional 13 full time equivalents over the next two\n\x0c years. In addition, management has identified the need for an organizational staffing and\n human resource needs study. A summary level document of the objectives for such a study has\n been prepared and approval for further development and engagement of a contractor to perform\n the study was recently obtained from the Department\'s Deputy CFO. Management, however,\n has not yet hlly developed and documented a detailed approach to the organizational needs\n assessment in the CAP, or prepared a Statement of Work, or engaged a contractor with the\n necessary expertise.\n The Department must overcome organizational structure issues that may impede the\n effectiveness of the Department\'s CFO and those in the OCFO for two primary reasons: (1)\n since its inception, the Department has operated under a matrix management philosophy\n Istmcture, with Chief (e.g., CFO, Chief Information Officer, Chief Procurement Officer, etc...)\n management and administrative responsibilities that cross-cut component operation at a\n Department level. Historically, the Department\'s CFO has seldom exercised his authority to\n implement policy and procedures, including, and most importantly, financial reporting controls\n across the Department.\n The CAP does not include a review of position descriptions for all current OCFO management\n and staff, to identify corrective actions necessary to better align job responsibilities with\n available human resources. In addition, the CAP does not address the linkage of annual goal\n setting and performance appraisals for managers and staff in the OCFO with specific OCFO\n objectives, e.g., implementation of CAPS, improvement in internal controls, etc.\n The Department has identified the need for an additional senior management official in the area\n of financial management,, however, a CAP has not been developed to include steps to actively\n recruit for this position (e.g., posting the job announcement or advertising I interviewing for the\n position).\n The CAP lacks procedures to identify weaknesses in management and staff training\n requirements. For example, the training programs attended by managers and staff have not been\n identified based on a critical needs and core competency assessment of training programs to\n improve essential skills.\n Clear internal reporting relationships within the Department have not been established, defining\n OCFO and component responsibilities for CAP development and implementation especially in\n areas of overlap.\nAccountability:\nUntil the matters mentioned above are fully developed and addressed, key areas of authority and\nresponsibility for the CAP implementation cannot be adequately defined and communicated\nthroughout the Department, especially as they relate to the interaction between the OCFO and\ncomponent financial and reporting operations. The assignment of accountability for improvements\nhas occurred, but due to the pace of CAP development the improvements brought about by the\nassignment have yet to take full effect.\n\x0cFinancial Reporting\nBackground:\nThe Financial Reporting material weakness is focused specifically on the reliability and timeliness\nof the interim and year-end consolidated financial statements. The OCFO, and in particular the\nfinancial reporting functions, have undergone substantial change in FY 2006, due to staff turnover,\nrestructuring of the office, and a reallocation of roles and responsibilities. The OCFO lost one key\nmanager to an internal transfer in FY 2006. The office was restructured into four functional areas\neach lead by a Director - Financial Reporting, Financial Systems and Administration, Policy, and\nInternal Control. Three staff personnel have been hired to fill vacancies identified at the beginning\nof the year, which has helped with the distribution of workload. However, some accounting\npersonnel vacancies still remain, and management asserts that at least one key managerial position\nremains unfilled. To supplement expertise and distribute workload, the OCFO has hired an outside\ncontractor to assist with the preparation of periodic financial statements and the FY 2006\nPerformance and Accountability Report, and performance of CAPs. The Policy branch is in the\nvery early stages of development, e.g., has a target date of August 2006, for issuance of its own\nCharter and assignments to working group members.\nIdentification:\nUpon review of the financial reporting CAP, we observed an analysis of root cause issues, key\nsuccess factors and performance measures, resources required, and an analysis of the risks and\nimpediments as seen by management. However, as explained below, the CAP is a mixture of typical\nfinancial reporting roles and responsibilities and corrective actions. It is not clearly written to focus\non the information necessary to identify root causes, detailed listings of task, and assignments of\nresponsibility that will ultimately lead to the correction of the Financial Reporting material\nweakness. The CAP is designed to accommodate periodic updates/modifications as necessary to\nkeep the CAP current and a useful management plan. As the work progresses, management may\nidentify additional root causes and will update accordingly.\nManagement\'s root cause analysis, conducted in FY 2006, shows that many of the conditions\nidentified and reported by the independent auditor stem from challenges associated with the set-up\nof a new Federal department. Staffing decisions, allocation of limited resources, the need for new\npolicies and procedures, internal controls, integration of financial processes and systems, to name a\nfew conditions noted in the FY 2005 independent auditors\' report, are typically multi-year projects\nto set-up organizations the size of the Department.\nDevelopment:\nWhen the OCFO completes its identification of the underlying root causes of the financial reporting\nweakness, including management\'s response to the findings noted above, CAPs will need to be\ndeveloped and implemented, together with specific milestones and assignment tasks and oversight\nto individuals.\nThe development and implementation of the CAP tasks have not been coordinated with the CAPs\nfrom the other Department components or with the Department\'s OMB Circular A-123\nimplementation - two closely related aspects of financial reporting and internal control\nimprovements.\nSince the CAP was only recently drafted and management has not had enough time to fully and\ncompletely identify and develop the CAP tasks, we noted several critical elements missing from the\nCAP that should be considered for inclusion. Without the addition of the critical missing elements\n(described below), the plan is not comprehensive, which could diminish the ultimate effectiveness\n\x0cof the CAP. In some cases, the OCFO was able to demonstrate that the missing elements are\ndependent on the outcome of the Financial Management Oversight CAP, e.g., organizational and\nworkforce study, and consequently there is a natural lag in the identification and development of the\nFinancial Reporting CAP. The critical missing elements are as follows:\n The list of critical milestones and detailed tasks in the CAP are not comprehensive, and do not\n clearly show linkage to the weaknesses being corrected or the root cause issues. For example,\n management\'s root cause analysis indicates that OFM roles and responsibilities are not clearly\n defined, including insufficient back-up role planning. It is not clear which, if any, of the detailed\n tasks will address this issue.\n Many of the tasks listed in the CAP appear to be ordinary, routine responsibilities of the OCFO,\n rather than tasks meant to investigate and correct the root cause issues (i.e., "compile a hard-\n close June 30, 2006 PAR Section 3," "compile MD&A Section of the PAR," and to "compile\n September 30 financial statements"). All of these tasks are normal operational responsibilities\n of the OCFO and are not corrective actions. In addition, a disproportionate number of tasks\n appear to be administrative tasks that are not substantial actions to correct issues (i.e., "establish\n Department FMPIP subcommittee of working groups to evaluate policy and directives (an\n action with a due date of June 15, 2006, and labeled as "not started")).\n The CAP lacks procedures to identify the root cause underlying the reason why polices and\n procedures require excessive time to develop, approve and issue. In some cases, draft OCFO\n policies have been pending approval for more than a year - with no clear time-line for\n management approval and issuance. Despite the establishment of a Policy branch, no policies\n and procedures (by official Management Directive) have been issued in FY 2006. Policy\n issuance has been hindered by limited resources and a lack of coordination between the\n Department\'s operating components. For example, seven policies are in process but all have\n stalled or been held up from issuance, in some cases for more than a year.\nAccountability:\nWe observed that the OCFO has hired a reputable outside contractor to assist with financial\nreporting functions and CAP related tasks, as needed. However, as of May 31, 2006, the contractor\nhired to support the OCFO is limited to only two full-time professionals, and consequently, is\ndedicated to important, but narrowly focused, periodic financial reporting roles.\nImplementation of the financial reporting CAP has been divided among several OCFO managers\nwho do not have sufficient time to commit to the project, and therefore must delegate most of the\ntasks. Accountability for the financial reporting CAP is not clearly defined or tracked. Further, the\nfinancial reporting CAP is not managed or monitored by a senior executive, and other priorities of\nthe OCFO have slowed progress. These conditions appear to have slowed progress - only 9 of the\n55 tasks are shown as complete (many of which are routine operations or administrative functions\nas mentioned above).\n\n\nRecommendations\nOCFO - Financial Management Oversight\nWe recommend that:\n1. \t Corrective actions be added to the CAP to identify weaknesses in management and staff\n training policies, and to then develop and document corrective actions in the CAP.\n\x0c2. \t Management should engage an outside independent contractor that specializes in this subject\n matter to perform its recently approved organizational workforce and human resource needs\n study. When the study is complete, CAPS will need to be developed and implemented, together\n with specific milestones and assignment of tasks and accountability to individuals. The study\n should provide management with:\n A critical assessment of the knowledge, skills, and abilities needed to perform the functions\n of the OCFO, and identify technical and experience gaps, so that recruiting, hiring, training\n and role definition can be adjusted if necessary; and\n A review of position descriptions for all current OCFO management and staff, to identify\n corrective actions necessary to better align job responsibilities with skill sets and available\n human resources, and to clarify reporting responsibilities that overlap within the OCFO, and\n to make recommendations to better align annual goal setting and performance appraisals\n with OCFO objectives.\n3. \t The agency continue its recruitment of an additional senior manager who has extensive\n experience with department level consolidated financial reporting, to serve in a senior\n management position in the area of financial management (i.e., posting or advertising the job\n announcement, interviewing and hiring for the position).\n4. \t Define the exact criteria which will be used to ascertain when the corrective action has been\n successfully completed, as well as the method for testing against such criteria as part of OMB\n A-123 implementation steps (i.e. tests of design and tests of operating effectiveness of internal\n controls). Additionally, integrate the CAPs with the OCFO\'s plan for OMB A-123\n implementation and annual FMFIA assurance statement. Management\'s plan for validation of\n corrective actions should be closely integrated with their controls test work conducted to\n comply with OMB A-123.\n\n\nOCFO - Financial Reporting\nWe recommend that management:\n5. \t Identify a list of detailed tasks and critical milestones in the CAP to identify the root causes of\n the material weakness. When the OCFO completes its identification of the underlying root\n cause of the financial reporting weakness, including management\'s response to the conditions\n noted in the FY 2005 independent auditors\' report, management should develop and implement\n CAPs that include specific milestones and assignment of tasks and oversight to appropriate\n individuals.\n6. \t Amend the CAP to include only root cause investigation, or corrective actions, designed to\n mitigate or eliminate the financial reporting material weakness. Ordinary, routine,\n responsibilities of the OCFO, such as "compiling September 30 financial statements", should be\n removed as they are not corrective actions developed in response to a root cause analysis.\n7. \t Include procedures in the CAP to assess the reasonableness of the time to develop, approve and\n issue appropriate corrective actions regarding policies and procedures. This recommendation\n may be dependent on the outcome of improvements to the control environment, discussed\n previously.\n8. \t Coordinate the development and implementation of the CAP tasks with the corrective actions\n from the other Department components and with the Department\'s OMB Circular A-123\n implementation.\n\x0c9. \t Assign the implementation of the financial reporting CAP to a manager who is principally\n responsible and accountable for fulfillment of the CAP. Presently, the tasks are split between\n managers who may not have sufficient time to commit to the project, and are delegating most of\n the tasks. Management should clearly define and track accountability. In addition, a senior\n executive should routinely monitor and manage the progress on the financial reporting CAP.\n10. Define the exact criteria which will be used to ascertain when the corrective action has been\n successfully completed, as well as the method for testing against such criteria as part of OMB\n A-123 implementation steps (i.e. tests of design and tests of operating effectiveness of internal\n controls). Additionally, integrate the CAPs with the OCFO\'s plan for OMB A-123\n implementation and annual FMFIA assurance statement. Management\'s plan for validation of\n corrective actions should be closely integrated with their controls test work conducted to\n comply with OMB A-123.\n\n\nUnited States Coast Guard (Coast Guard)\nThe Coast Guard has drafted CAPs intended to address its respective sections of the four material\nweaknesses on Financial Management Oversight, Financial Reporting, Fund Balance with Treasury,\nand Actuarial Liabilities, reported in the FY 2005 independent auditors\' report.\nBackground:\nThe CAPs contain a description of the known issues and root causes, management\'s key success\nfactors and performance measures, general resources required, and in some cases, time milestones\nfor corrective actions. It is acknowledged that the Coast Guard has attended a CAP workshop\nsponsored by the OCFO on June 26, 2006, where the CAP approach, future actions and milestones\nwere discussed. Additionally, the Coast Guard was instrumental in assisting the Department in the\nePMO pilot implementation.\n\n\nThe CAPs for the four material weaknesses consist primarily OF known conditions, previously\nidentified by the financial statement auditors, and lack evidence of a detailed review to identify the\nunderlying root cause of the four material weaknesses.\nIn order to develop a meaningful actionable CAP that includes identification of resource needs,\nmilestones, performance indicators and accountability, the root cause(s) of the issue must be\ndetermined. As written, the CAPs do not extend beyond a general discussion of the problems or\napproach to correction, and the underlying causes of the conditions are not described in sufficient\ndetail to allow development of specific actions and milestones. For example, the Coast Guard cites a\nlack of investment in \tpersonnelttraining as a root cause in the Financial Management Oversight\nCAP. However, the CAP does not contain any further analysis of personnel deficiencies - such as\nwhich positions, roles and responsibilities, processes, locations, number of personnel, etc.\nConsequently, the associated action plan is limited to a general statement that "adequate personnel\nand financial resources must be made available in order to address root-cause issues and help ensure\nlong-term sustainable success."\nThe causes that have been identified have not been categorized, cross-referenced to problems\nidentified by management, and prioritized for correction. In addition, the CAPs lack specific\nidentification of financial systems and processes that require corrective actions, and an approach to\ncorrection.\n\x0cLikewise, the key success factors and performance measures identified consist primarily of an array\nof policies and procedures typically found in a reliable financial reporting process, without specific\napplication to the Coast Guard financial reporting systems and processes. In some cases, possible\ncorrective actions have been deferred, pending hrther review to identify issues and develop a full\nCAP at a future date. For example, the Financial Management Oversight CAP contains a critical\nmilestone of "not later than February 15, 2007, issue report from the financial management\ntransformation team containing a comprehensive, integrated plan and milestones.. ." The CAP is a\nplan to develop a plan, and is, therefore, incomplete, and would be ineffective without further\ndevelopment.\nThe CAPs focus almost exclusively on audit finding recommendations categorized by material\nweakness in outline format with columns displaying status, percent complete, due date and\nindividuals responsible for action. However, the reports do not contain a rationale for the due date,\nthe detail steps planned or executed or how percentage of completion was determined or tested.\nThe CAPs are incomplete as they only include audit recommendations which are only a small\nfraction of the total number of issues or root causes that Coast Guard must identify and address. The\nhigh level root causes identified in the CAPs appear to be the initial steps in that effort.\nIn addition, the CAPs contain errors. For example, the resources required to correct Fund Balance\nwith Treasury and Financial Reporting material weaknesses are identical, and the auditor\nrecommendations in the CAP do not match the auditors\' recommendation in the FY 2005\nindependent auditors\' report.\nDevelopment and Accountability:\nFinancial Management Oversight\nManagement has identified four broad categories of issues that cause the Financial Management\nOversight material weakness; (1) personnel I training, (2) organization, (3) [financial] systems, and\n(4) [personnel and budget] resources. The CAP, as written, is evidence that management recognizes\nthe deep-rooted structural (organization, personnel and system) issues, and that full correction is a\nmulti-year effort, and that a restructuring of the Coast Guard\'s financial management function may\nbe needed to realign financial reporting processes with the optimal mix of civilian vs. military and\ncentralized vs. decentralized responsibilities. In addition, the Coast Guard has vacant key financial\npositions. The Financial Management Oversight CAP, which is currently under review by the Coast\nGuard\'s interim CFO, calls for the creation of a "Financial Management Transformation Team,"\nand for a "comprehensive, integrated plan of action and milestones..." by February 15, 2007. The\nFinancial Management Oversight CAP is therefore incomplete, pending further development as\nplanned by Coast Guard management.\nFinancial Reporting\nThe Financial Reporting CAP states that "There are many errors within the general ledger posting\nlogic. Most of these are due to inherent systems\' deficiencies.. ." However, it is not clear from the\nFinancial Reporting CAP what steps will be taken to investigate these systems issues or when\nmanagement expects to have the problem(s) resolved. In addition to financial systems problems, the\nFinancial Reporting CAP identifies many hndamental I structural issues that are preventing the\nCoast Guard from preparing reliable financial data for submission to the OCFO, e.g., lack of\npolicies, procedures, controls, personnel, training, inefficient and error prone processes. The\nFinancial Reporting CAP lacks a detailed listing of tasks to investigate these fundamental issues,\nidentify the root cause, and then develop corrective actions and assign responsibilities. Regarding\nresource requirements, management\'s assessment of the resources required to investigate and\nresolve these issues is limited to five staff (GS-12) personnel and unspecified funding for\n\x0c"modifications to the Core Accounting System". Yet full implementation of an auditor\nrecommendation to "conduct an assessment of the current financial reporting process, including a\nreview of the three general ledger systems.. ." will require the commitment of considerably more\nexperienced supervisors, as well as expert systems personnel and/or contractors for identification\nand correction of posting logic problems.\nFund Balance with Treasury\nManagement has identified a number of issues that led to the material weakness in Fund Balance\nwith Treasury accounts. Some issues appear to identify potential root causes, such as\n"cumbersome/complex systems and processes and poor process design and systems integration".\nHowever, most of the issues are symptomatic in nature, i.e., "inability to provide audit\ndisbursement, collection, and adjustment populations, number of suspense transactions is excessive,\nmissing some signed backup obligation documents," etc. The Fund Balance with Treasury CAP\nlacks evidence of a detailed investigation to identify the root cause and then to develop specific\ncorrective actions. Further, the extent of IT system deficiencies that may be causing or contributing\nto the material weakness is not clear in the Fund Balance with Treasury CAP. Some steps could be\ntaken immediately to improve the reliability of the Fund Balance with Treasury account balances.\nHowever, the Fund Balance with Treasury CAP lacks a separation of short and long term actions\nand a time-line for correction.\nActuarial Liabilities\nThe CAP includes a description of the underlying issues causing the material weakness in actuarial\nliabilities, and the majority of the issues appear to be potential root causes, e.g.,\nmultiple/inadequate/non-unified financial accounting systems, weak program oversight\naccountability, organizational structure, poor data integrity, etc. The due date for correction is\nDecember 2007. The Actuarial Liabilities CAP lacks interim milestones to make / measure\nincremental temporary improvements that will allow actuarial balances to be accurately stated in the\nfinancial statements in FY 2006. The resources required do not address the cost for system\nupgrades, reorganization, or process changes. For example, the Actuarial Liabilities CAP states that\nit lacks "input from CG-842 (FINCEN) and CG-841 (IT systems)" and is therefore not fully\ndeveloped.\n\n\nOverall, the CAPs for each of the four material weaknesses lack important details necessary to be an\neffective plan. Specifically, we found that the Coast Guard CAPs lack:\nQ Linkage or cross-reference to the material weakness conditions being corrected. Presently, the\n CAPs refer generally to the group of auditor findings by area, and it is difficult to determine if\n all of the conditions identified by the auditor are adequately addressed in the CAP;\nQ Evidence of review and approval by management, together with a description of periodic\n progress reports to be provided to Coast Guard and OCFO management on progress;\n A fully developed / detailed listing of the tasks to be performed, and identification of system\n deficiencies and corrective actions and who is accountable for their completion;\n The detailed time-frame (milestones) that corrective actions are to occur, other than general\n months / years for a few actions, including the protocol of correction, e.g. systems before\n processes, etc.;\n Performance metrics / measures for use by management to determine that corrective actions are\n on track or require modification, and to assign accountability;\n\x0c A thorough evaluation of the resources needed - both personnel and funding, and the source of\n those resources once determined;\n Identification and dedication of resources including supervisors and contract assistance.\n Presently, everyone associated with the CAP process already has other full-time job\n responsibilities within the Coast Guard. The corrective actions are of a scale that dedicated\n personnel, including management, are necessary for the plan to be effective in the near-term;\n A description of how the Coast Guard will verify and validate that corrective actions are\n complete and effective in correcting the conditions that lead to material weaknesses; and\n Integration with the Coast Guard\'s OMB A-123 implementation process.\n\n\nRecommendations:\nWe recommend that Coast Guard:\n11. Perform a thorough root cause analysis to identify the underlying causes of the four material\n weaknesses, including a review of financial IT systems, processes and human resources. Coast\n Guard should not rely on the financial statement audit to identify all of the significant causes of\n control weaknesses, and should only use the audit to corroborate management\'s findings.\n12. Develop CAPs to mitigate and ultimately correct control deficiencies, based on management\'s\n own assessment of the issues. The CAPs should include a description of the detailed tasks and\n milestones, key success and performance metrics, and a designated person who is primarily\n accountable for completion of the effort. The identified root causes should be cross-referenced\n to the weakness identified by management (as well as those identified by the financial statement\n auditor). The CAPs should be prioritized for correction, to minimize duplication of effort where\n corrective actions overlap (i.e., correction of IT system posting logic errors may resolve\n multiple issues, or mitigate the need for process changes).\n13. Make a realistic assessment of the resource requirements, i.e., human and financial, needed to\n perform the investigations to identify the root causes of material weaknesses, develop and\n execute thorough CAPs, and then to verify correction. This assessment should include input\n from all affected areas, i.e., CG-842 (FINCEN) and CG-841 (IT systems). In filling key\n financial management vacancies, the Coast Guard should ensure that the position holders have\n the necessary skills and experience to successfully execute the CAPs.\n14. Obtain support from executive leadership, since effective correction will at times compete with\n other mission priorities, and progress could falter without continuous reinforcement from\n leadership.\n15. Define the exact criteria which will be used to ascertain when the corrective action has been\n successfully completed, as well as the method for testing against such criteria as part of OMB\n A-123 implementation steps (i.e. tests of design and tests of operating effectiveness of internal\n controls). Additionally, integrate the CAPs with the Coast Guard\'s plan for OMB A-123\n implementation and annual FMFIA assurance statement. Management\'s plan for validation of\n corrective actions should be closely integrated with their controls test work conducted to comply\n with OMB A-123.\n\x0cImmigration and Customs Enforcement (ICE)\nICE has drafted CAPs intended to address their sections of the three material weaknesses on\nFinancial Management Oversight, Financial Reporting, and Fund Balance with Treasury, reported\nin the FY 2005 independent auditors\' report.\nBackground:\nICE established the Program Management Office (PMO), which reports to ICE\'S CFO, to develop\nand implement a three-year Financial Action Plan (FAP) to manage and monitor efforts to improve\nICE\'s financial management. The FAP addresses the material weaknesses as they relate to ICE\nwhich includes the material weaknesses in Financial Management Oversight, Financial Reporting\nand Fund Balance with Treasury.\nIn the establishment of the PMO, ICE contracted with a consulting firm to not only provide\nexpertise but also manpower. The primary responsibilities of the PMO are to (1) provide program\nmanagement infrastructure to ensure successful FAP execution, (2) provide guidance and support to\nstaff developing initiative project plans and implementing them, and (3) resolve issues and mitigate\nrisks that may hinder the FAP implementation effort. By February 2006, ICE issued its FAP and the\nprocess of implementing the corrective actions was launched. Each initiative in the FAP is\nsupported by a Detailed Project Plan that outlines the tasks and milestones to be achieved.\nWhen the Department initiated its Department-wide CAP process in April 2006, ICE was already in\nthe midst of its FAP implementation. In order to comply with the Department\'s CAP process, ICE\nfashioned its CAPs based on the information in its existing FAP. These CAPS summarizing the FAP\ninitiatives were provided to the Department for uploading to the Department\'s ePMO database.\nWhile the CAPS and the FAP are similar, the FAP contains information regarding ICE\'S corrective\nactions in much greater detail than the summary-level information provided in the CAPs. For\npurposes of this performance audit, KPMG evaluated the corrective actions as detailed in ICE\'s\nFAP and supporting documentation. However, the FAP data was also compared with the\ninformation in ICE\'s CAPs within ePMO for consistency purposes.\nThe FAP includes an analysis of root cause issues, potential effects of the deficiency, corrective\nactions and their foreseen impact. In addition, management has developed a timetable for corrective\nactions, and assigned specific tasks with due dates to specific individuals.\nWhen developing the FAP, ICE management indicated that it considered the FAP to be an\nevolutionary document that would be periodically updated as needed to consider new facts and\ncircumstances, and to ensure continuous progress is made. Further, a decision was made to focus on\ndeploying ICE\'s resources on the area of Fund Balance with Treasury with the goal of resolving this\nmaterial weakness in FY 2006. Management decided that this measured, focused approach was the\nbest way to fully rectify the issue, as opposed to attempting to work on all deficiencies\nsimultaneously and spreading its resources too thin. While ICE wants to see positive progress in the\nremediation for each of the material weaknesses, it has only committed to fully remediate the Fund\nBalance with Treasury material weakness during FY 2006.\nThe leadership provided by the ICE CFO in setting a positive \'tone-at-the-top,\' and actively\nmonitoring ICE\'s progress in implementing the FAP has shown to be integral to the success\nachieved at ICE thus far. The ICE\'s CFO continued commitment to the FAP effort is instrumental\nto resolving the material weaknesses at ICE.\n\x0cFinancial Management Oversight\n\n\nManagement has segregated the Financial Management Oversight material weakness into three\nprimary areas: Workforce Strategy, Financial Systems, and Management Oversight. When\ndeveloping the FAP, the PMO performed a root cause analysis which consisted primarily of\nconducting interviews with personnel and leveraging institutional knowledge of the ICE personnel\nin the PMO. The root cause analysis initially focused on the conditions cited by the auditors during\nthe FY 2005 audit. The PMO categorized Financial Management Oversight within the FAP into\ntwo primary areas: Workforce Strategy and Financial Systems. Subsequent to the development of\nthe FAP, the PMO expanded its initial root cause analysis which resulted in Management Oversight\nalso being identified as one of three primary areas. To ensure that the FAP, at a minimum,\naddressed each of the auditor findings cited during the FY 2005 audit, the FAP contains an\nappendix which crosswalks each of the auditor findings to the task within each initiative designed to\ncorrect the material weakness. Additionally, as the work progresses, management may identify\nadditional root causes and will update accordingly.\nDevelopment:\nICE developed and documented its corrective actions in a two-tiered approach. The first tier is the\nFAP itself which is at the highest level and can be described as more of a summary level. Each\ninitiative within the FAP contains a brief background section as well as the following sections:\nCause, Effect, Corrective Actions, and Impact of Corrective Actions. Within the Corrective Actions\nsection, the primary tasks to be completed are listed along with a task description, milestone, and\nestimated date of completion (month and year). The second tier is the Detailed Project Plan which is\nat a more detailed level. The Detailed Project Plan contains the following sections: Project\nSummary, Key Team Roles and Responsibilities, Business Issues and Challenges, Project Plan, and\nKey Outputs. Within the Key Outputs section, the primary tasks to be completed are listed along\nwith the key output description and the estimated date of completion (month, day, and year).\nThe Project Plan, maintained in Microsoft Project, lists the primary tasks and the subtasks along\nwith the number of days the tasklsubtask should take to complete as well as the start date and the\nend date for the tasklsubtask. The intent is that the FAP would be a static document while the\nDetailed Project Plan and the accompanying Microsoft Project Plan would be updated as needed.\nThe information contained in the Corrective Action section of the FAP should be consistent with the\ninformation in the Key Outputs section of the Detailed Project Plan which, in turn, should be\nconsistent with the Critical Milestones in the CAP within ePMO.\nUpon comparison of the tasks/critical milestones and the corresponding due dates in the FAP, dated\nFebruary 2006; the Detailed Project Plan for Workforce Strategy and the Detailed Project Plan\nFinancial Systems, dated May 31, 2006 and April 18, 2006, respectively; and the CAP Detail\nReport as of May 3 1, 2006 from ePMO; we noted a couple of minor inconsistencies (i.e., due dates,\ndescription of tasks, and number of tasks) between the various documents. In addition, we noted\nthat the CAP within ePMO did not contain information on the Key Performance Measures, Risks\nand Impediments, and Resources Required. All of the inconsistencies between the various\ndocuments appear to be attributable to timing (i.e., the date each of the documents was prepared and\nthe frequency with which ePMO was updated).\nICE attended the Department\'s OCFO-sponsored CAP Workshop for Financial Management\nOversight where the corrective action approach, future actions and milestones were discussed. ICE\nrepresented that the CAP Workshop was beneficial and provided ideas for revisions to its FAP. We\nunderstand that revised CAPs are due to the Department by July 12, 2006. These CAPs are outside\n\x0cthe scope of this performance audit. ICE further represented that the revisions would not be\nconsidered significant but would be adding specificity to the existing data (e.g., tasks and\nmilestones) and revising expected completion dates for select milestones, as well as providing\ninformation for the sections of the CAP which were not previously submitted for input into ePMO.\nWithin the Management Oversight area, none of the taskslcritical milestones, with the exception of\nthe task to "Establish Financial Action Plan Program Management Office", is considered to have a\n\'true\' completion date as the tasks are considered to be on-going. Other tasks lack exact criteria\nwhich will be used to ascertain when the corrective action has been successfully completed, as well\nas the method for testing against such criteria. Similarly, within Workforce Strategy, the PMO\nrepresented that the success criteria and validation criteria cannot be determined until the Workforce\nTransition Plan has been developed and implemented.\nThe PMO has established a FAP Executive Dashboard which is updated at least monthly to provide\na snapshot of the progress and status of each FAP Initiative. For each task/critical milestone within\neach FAP Initiative, a color coding is used to identify whether the task is complete (blue), on track\n(green), moderately delayed (yellow), significantly delayed (red) or not started (white). The FAP\nDashboard does not reflect and track the progress for the area of Management Oversight and most\nof the tasks in this area are all considered to be on-going tasks as only one of the taskslcritical\nmilestones in this area has a \'true\' completion date.\nOf the ten and six tasks/critical milestones within the areas of Workforce Strategy and Financial\nSystems, respectively, ICE indicated in its FAP Dashboard as of June 30, 2006, that five and one,\nrespectively, have been completed.\nAccountability:\nAs previously mentioned, the PMO has established a FAP Executive Dashboard, which is updated\nat least monthly and provides a snapshot of the progress and status of each FAP Initiative.\nAdditionally, the percentage of completion is presented at the overall FAP Initiative level.\nFor each material weakness initiative included in the FAP, an ICE initiative owner has been\nassigned, as well as a PMO liaison. Additionally, ICE senior leadership also has a role in the FAP\ninitiative.\nThe PMO, in conjunction with the initiative owner, completed a resource template for each FAP\nInitiative which identified the resource name, skill set needed by the resource, and the number of\nhours per week by month for each resource. The resources were categorized as Executive Sponsor,\nInitiative Owner, or Staff. We noted that the resource template included both ICE employees and\ncontracted personnel.\nAs represented to us by the PMO, the responsibility for reporting on the task status and\ndocumenting evidence to support such status rests with the ICE initiative owner and not the PMO.\nHowever, we were informed that the PMO is in the process of gathering such evidence for\ncompleted tasks from each of the ICE initiative owners for its own records.\n\n\nFinancial Reporting\n\n\nWhen developing the FAP, the PMO performed a root cause analysis which consisted primarily of\nconducting interviews with personnel and leveraging the institutional knowledge of the ICE\npersonnel in the PMO. The root cause analysis initially focused on the conditions cited by the\nauditors during the FY 2005 audit. The analysis performed by the PMO team resulted in two\n\x0ccategories being identified: Lack of Policies and Process Needs Improvement. To ensure that the\nFAP, at a minimum, addressed each of the auditor findings cited during the FY 2005 audit, the FAP\ncontains an appendix which crosswalks each of the auditor findings to the task within each initiative\ndesigned to correct the material weakness. Subsequent to the development of the FAP, the PMO\nexpanded its initial root cause analysis which resulted in additional causes being identified.\nDevelopment:\nAs previously discussed under the corresponding section under Financial Management Oversight,\nICE developed and documented its corrective actions in a two-tiered approach.\nUpon comparison of the tasks/critical milestones and the corresponding due dates in the FAP, dated\nFebruary 2006, the Detailed Project Plan dated June 15, 2006, and the CAP Detail Report as of May\n31, 2006 from ePMO, we noted a couple of minor inconsistencies (i.e., due dates, description of\ntasks, and number of tasks) between the various documents. In addition, we noted that the CAP\nwithin ePMO did not contain information on Key Performance Measures, Risks and Impediments,\nand Resources Required. Furthermore, all of the inconsistencies between the various documents\nappear to be attributable to timing (i.e., the date each of the documents was prepared and the\nfrequency with which ePMO was updated).\nWe understand that revised CAPs as of June 30, 2006, are due to the Department by July 12, 2006.\nICE represented that it would be submitting a revised CAP to the Department. These revised CAPs\nare outside the scope of this performance audit. ICE further represented that the revisions would not\nbe considered significant but would be adding specificity to the existing data (i.e., tasks and\nmilestones) and revising expected completion dates for select milestones, as well as providing\ninformation in the sections of the CAP that were not previously submitted for input into ePMO.\nAbnormal balances, \'free-form\' general journal entries, and accurate and timely submission of\nfinancial reports are considered to be significant problem areas within Financial Reporting.\nAlthough the PMO developed a metric to track and monitor the total amount and number of\nabnormal balances over $1 million, as well as the categorization (i.e., researched transactions\ncausing abnormal balances, identified root cause, and identified datalprocess owner) of the amount\nand number of these abnormal balances, we noted no such similar metric to monitor and track the\nvolume and reason of \'free-form\' general journal entries. As such, it would appear that ICE w-ill be\nrelying on the occurrence of high-level (i.e., branch director) approval of \'free-form\' general\nentries, as required by the newly developed standard operating procedures, to test the success in this\narea. Further, we noted no mechanism to track and monitor the volume and type of \'warning\' errors\nreceived upon submission of the monthly financial data into TIER. As such, it would appear that\nICE will be relying only on the fact that the monthly financial data is submitted to the Department\nby its stipulated deadlines and that the financial data is accepted and processed in TIER without\n\'fatal\' errors.\nOf the eight tasks/critical milestones within Financial Reporting ICE indicated it its FAP Dashboard\nas of June 30,2006, three tasks/critical milestones have been completed.\nBased on the progress being made on the task related to the research and resolution of abnormal\nbalances, ICE updated the Detailed Project Plan for Financial Reporting on June 15,2006 which\nextended the estimated completion dates for this task.\nLastly, ICE is scheduled to attend the Department\'s OCFO-sponsored CAP Workshop for Financial\nReporting on August 7,2006.\n\x0cAccountability:\nRefer to the corresponding section under Financial Management Oversight for a discussion of the\nroles of personnel with ICE, the completion of resource templates, the responsibility for supporting\nthe progress made and the reporting of corrective action status via the FAP Dashboard.\n\n\nFund Balance with Treasury (FBWT)\nIdentification:\nWhen developing the FAP, the PMO performed a root cause analysis which consisted primarily of\nconducting interviews with personnel and leveraging the institutional knowledge of the ICE\npersonnel in the PMO. The root cause analysis initially focused on the conditions cited by the\nauditors during the FY 2005 audit. The analysis performed by the PMO team resulted in three\ncategories being identified: Untimely Clearing and Recording of Items, Lack of Policies, and\nProcess Needs Improvement. The PMO categorized Fund Balance with Treasury within the FAP\ninto four primary areas as follows:\n Cash Reconciliation\n Statement of Differences\n Suspense\n Non-224 Transactions\nTo ensure that the FAP, at a minimum, addressed each of the auditor findings cited during the FY\n2005 audit, the FAP contains an appendix which crosswalks each of the auditor findings to the task\nwithin each initiative designed to correct the material weakness. Subsequent to the development of\nthe FAP, the PMO expanded its initial root cause analysis which resulted in additional causes being\nidentified. Additionally, as the work progresses management may identify additional root causes\nand will update accordingly.\nDevelopment:\nAs previously discussed under the corresponding section under Financial Management Oversight,\nICE developed and documented its corrective actions in a two-tiered approach.\nUpon comparison of the tasks/critical milestones and the corresponding due dates in the FAP, dated\nFebruary 2006, the Detailed Project Plan dated April 4, 2006, and the CAP Detail Report as of May\n31, 2006 from ePMO, we noted a couple of minor inconsistencies (i.e., due dates, description of\ntasks, and number of tasks) between the various documents. In addition, we noted that the CAP\nwithin ePMO did not contain information on Key Performance Measures, Risks and Impediments,\nand Resources Required. Furthermore, all of the inconsistencies between the various documents\nappear to be attributable to timing (i.e., the date each of the documents was prepared and the\nfrequency with which ePMO was updated).\nWe understand that revised CAPs as of June 30, 2006, are due to the Department by July 12, 2006.\nICE represented that it would be submitting a revised CAP to the Department. These revised CAPs\nare outside the scope of this performance audit. ICE further represented that the revisions would not\nbe considered significant but would be adding specificity to the existing data (i.e., tasks and\nmilestones) and revising expected completion dates for select milestones, as well as providing\ninformation in the sections of the CAP that were not previously submitted for input into ePMO.\n\x0cStandard operating procedures were issued for each of the identified four areas. In addition, within\nthe areas of Statement of Differences and Suspense, the tasks reflected as complete include the\nreconciling and clearing of all FY 2005 transactions and FY 2006 transactions greater than 60 days\nfor both ICE and each of the Components.\nICE is scheduled to attend the Department\'s OCFO-sponsored CAP Workshop for Fund Balance\nwith Treasury on August 16,2006.\nAccountability:\nRefer to the corresponding section under Financial Management Oversight for a discussion of the\nroles of personnel with ICE, the completion of resource templates, the responsibility for supporting\nthe progress made and the reporting of corrective action status via the FAP Dashboard.\n\n\nRecommendations:\nWe recommend that ICE:\n16. Ensure that revisions and updates to the FAP and supporting documentation are made to ICE\'S\n CAPs maintained in ePMO. Since the CAPs maintained in ePMO are the basis for the\n Department-wide CAP and ePMO is the system of record for the Department for corrective\n actions, it is imperative that the CAP data in ePMO be current.\n17. Within the area of Management Oversight, define the exact criteria which will be used to\n ascertain when the corrective action has been successfully completed, as well as the method for\n testing against such criteria as part of OMB A-123 implementation steps (i.e. tests of design and\n tests of operating effectiveness of internal controls). Additionally, integrate the CAPs with\n ICE\'s plan for OMB A-123 implementation and annual FMFIA assurance statement.\n Management\'s plan for validation of corrective actions should be closely integrated with their\n controls test work conducted to comply with OMB A-123.\n18. Include completion of the GAO Evaluation Tool as a critical milestone in its Financial\n Reporting CAP.\n19. Within the area of Workforce Strategy, define the success and validation criteria in conjunction\n with the development and implementation of the Workforce Transition Plan.\n20. Enhance its understanding and working knowledge of ePMO to ensure that ICE\'s CAP data in\n ePMO is portraying an accurate picture. As previously stated, the CAPs maintained in ePMO\n are the basis for the Department-wide CAP and ePMO is the system of record for the\n Department for corrective actions.\n21. Reduce the volume of \'free-form\' general journal entries that are recurring in nature. This would\n reduce the need for the entry to be made as a \'free-form\' general journal entry which in turn\n would reduce the risk of an inappropriate entry being recorded.\n22. Develop a mechanism to track and monitor the volume and type of \'warning\' errors received\n upon submission of the monthly financial data into TIER. This would effectively limit the\n number of \'warning\' errors received by being proactive in researching and resolving the\n underlying cause.\n\x0c U.S. Departn~cstof tlomelitnd\n Security\n Washington, DC 20528\n\n\n\n\n ifCA Homeland\n %\n SEP 7 2006\n "P\n -.C?5~\n s\xe2\x82\xac\' Security \n\nMEMORANDUM FOR: Richard L. Skinner, Inspector General\n\nFROM: David L. Norquist, Chief Financial 0 f f i c W\n\nSUBJECT: Audit of DHS\' Corrective Action Plan Process for Financial\n Reporting - Report No. 2\n\n\nThank you for the opportunity to comment upon the Audit of DHS\' Corrective Action Plan\nProcess for Financial Reporting - Report No. 2. We concur with the report\'s recommendations\nand are pleased to report that actions are already undemay to address the issues raised in the\nreport. The report highlights valuable best practices and lessons learned. For example, ICE is\nimproving the internal control environment through establishing a strong "tone at the top" and\nCoast Guard is piloting an automated corrective action planning tracking system for managing\nDepartment-wide corrective action plans (CAPs). Most significantly, throughout the summer the\nDepartment sponsored a series of CAP workshops designed to help identify crosscutting root\ncauses of internal control deficiencies focusing on the areas of people, policies, processes, and\nsystems. The workshops set clear expectations for integrating test of design and operating\neffectiveness requirements of DHS policy and OMB Circular No. A-123, Management\'s\nResponsibility for Internal Controls into our corrective action plans. The workshops were well\nattended and supported by all DHS Components and we are developing stronger corrective\nactioils as a result.\n\nAfter the CAPs are updated, the next step will be the implementation of the DHS Internal\nControls over Financial Reporting (ICOFR) Playbook. The ICOFR Playbook will act as a\nsingle, comprehensive, and integrated plan to organize and focus corrective action and\nassessment efforts across the Department.\n\nWe appreciate the positive comments about our developing corrective action planning process.\nIn closing, we look forward to continue our partnership in implementing corrective actions and\nmost importantly the DHS Financial Accountability Act.\n\x0cReport Distribution\n\n\n\n\n Department of Homeland Securitv\n\n Secretary\n Deputy Secretary\n Chief of Staff\n Deputy Chief of Staff\n General Counsel\n Executive Secretary\n Chief Privacy Officer\n Under Secretary for Management\n Assistant Secretary for Policy\n Assistant Secretary for Public Affairs\n Assistant Secretary for Legislative and Intergovernmental Affairs\n Chief Financial Officer\n Chief Information Officer\n DHS GAOtOIG Audit Liaison\n\n Office of Management and Budget\n Chief, Homeland Security Branch\n DHS OIG Budget Examiner\n\n Congress\n Congressional Oversight and Appropriations Committees, as appropriate\n\x0cAdditional Information and Copies\n\nTo obtain additional copies of this report, call the Office of Inspector General (OIG) at\n(202) 254-4100, fax your request to (202) 254-4285, or visit the OIG web site at\nwww.dhs.gov/oig.\n\n\nOIG \nHotline\n\nTo report alleged fraud, waste, abuse or mismanagement, or any other kind of criminal\nor noncriminal misconduct relative to department programs or operations, call the\nOIG Hotline at 1-800-323-8603; write to DHS Office of Inspector GeneraljMAIL\nSTOP 2600, Attention. Office of Investigations - Hotline, 245 Murray Drive, SW,\nBuilding 410, Washington, DC 20528, fax the complaint to (202) 254-4292; or email\nDHSOIGHOTLINE@dhs.gov The OIG seeks to protect the identity of each writer\nand caller.\n\x0c' | 2006 | [
"b'DEPARTMENT OF HOMELAND SECURITY\\n\\n Office of Inspector General\\n\\n\\n Audit of DHS\\' Corrective Action Plan\\n Process for Financial Reporting \\n-\\n Report No. 2 \\n\\n\\n\\n\\n\\n Office of Audits\\n\\n September 2006\\n\\x0c Ofice of Inspector General\\n\\n U.S. Department of Homeland Security\\n Washington, DC 20528\\n\\n\\n Homeland \\n\\n Security\\n September 8,2006\\n\\n\\n Preface\\n\\nThe Department of Homeland Security (DHS) Office of Inspector General (OIG) was established by\\nthe Homeland Security Act of 2002 (Public Law 107-296) by amendment to the Inspector General\\nAct of 1978. This is one of a series of audit, inspection, and special reports published by our office\\nas part of our oversight responsibility to promote economy, efficiency, and effectiveness within the\\ndepartment.\\n\\nThis report is the second of a series of OIG performance audit reports intended to provide an\\nassessment of planned DHS corrective actions to improve internal control.",
"Improving internal\\ncontrol is a critical objective of the DHS Financial Accountability Act (Public Law 108-330). The\\nreport is based on interviews with employees and officials of relevant agencies and institutions,\\ndirect observations, and a review of applicable documents. We contracted with the independent\\npublic accounting firm KPMG LLP to perform the audit. KPMG is responsible for the attached\\nauditor\\'s report and the conclusions expressed in it.\\n\\nThe recommendations herein have been discussed in draft with those responsible for\\nimplementation. It is our hope that this report will result in more effective, efficient, and economical\\noperations. We express our appreciation to all of those who contribute$ to the preparation of this\\nreport.\\n WKRichard L. Skinner\\n Inspector General\\n\\x0c KPMG LLP\\n 2001 M Street, NW\\n Washington, DC 20036\\n\\n\\n\\n\\nJuly 7,2006\\n\\n\\nMr. David Zavada\\nAssistant Inspector General for Audit\\nDepartment of Homeland Security\\n245 Murray Drive, SW Bldg.",
"410\\nWashington, DC 20258\\n\\nMr. David Norquist\\nChief Financial Officer\\nDepartment of Homeland Security\\n245 Murray Drive, SW Bldg. 410\\nWashington, DC 20258\\n\\n\\nKPMG is pleased to submit this performance audit report related to the Department of Homeland\\nSecurity\\'s (the Department\\'s) corrective action plans developed to address the Financial\\nManagement Oversight, Financial Reporting, Fund Balance with Treasury, and Actuarial Liabilities\\nmaterial weaknesses at the Office of the Chief Financial Officer, United States Coast Guard, and\\nImmigration and Customs Enforcement components as reported in the Department\\'s independent\\nauditors\\' report in the FY 2005 Performance and Accotlntability Report. This performance audit is\\nthe second of a series of performance audits that the Department of Homeland Security Office of\\nInspector General has engaged us to perform for fiscal year 2006. This performance audit is\\ndesigned to meet the objectives identified in the Background, Objectives, and Scope section of this\\nreport.\\nWe conducted our second performance audit from June 12, 2006 through July 7, 2006, in\\naccordance with Government Auditing Standards issued by the Comptroller General of the United\\nStates. The purpose of this report is to communicate the results of our performance audit and the\\nrelated findings and recommendations.",
"Management concurred with our recommendations and\\nprepared a response which is presented at the end of this report.\\nSince July 7, 2006, we have not performed any additional procedures with respect to this\\nperformance audit and have no obligation to update this report or to revise the information\\ncontained herein to reflect events occurring subsequent to July 7,2006.\\nThe Department of Homeland Security Office of Inspector General has authorized this report to be\\nsent electronically for the convenience of the Department. However, only the final hard-copy report\\nshould be deemed our work product.\\n\\n\\n\\n\\n I<PII.iG LLP, a u S !,ai1-0 ivabllly p6ilnlisillp ti Ins U S\\n maq,bei ilrm uCKP!.",
"!G ;?lern.i!lonal a S ~ s rooysinl~ve\\n s\\n\\x0cExecutive Summary\\nOverall, the Department of Homeland Security (the Department) is working to identify and develop\\neffective Corrective Action Plans (CAPs) to address the four material weaknesses at the Office of\\nthe Chief Financial Officer (OCFO), United States Coast Guard (Coast Guard), and Immigration\\nand Customs Enforcement (ICE) over Financial Management Oversight, Financial Reporting, Fund\\nBalance with Treasury, and Actuarial Liabilities (herein referred to as the \"material weaknesses\"),\\nas reported in the Department\\'s independent auditors\\' report included in the FY 2005 Performance\\nand Accountability Report (herein referred to as the \"FY 2005 independent auditors\\' report\").",
"The\\nOCFO, Coast Guard, and ICE have drafted CAPs intended to address their respective sections of the\\nmaterial weaknesses. The Department deems these CAPs as critical steps towards its objective of\\nobtaining an unqualified audit opinion on its consolidated financial statements, as well as on its\\ninternal controls over financial reporting. Our performance audit was limited to a review of the\\nCAPs themselves and not the outcomes achieved as a result of the execution of the procedures\\noutlined in the CAPs.\\n\\n\\nFindings and Recommendations\\nKPMG identified several opportunities for management\\'s consideration to improve the\\neffectiveness of the Department\\'s CAPs. KPMG has classified each of these observations into one\\nof the following four broad categories representing phases which are generally performed to\\ndevelop and implement an effective CAP:\\n Identification of the underlying root cause,\\n Development of an effective remediation plan,\\n Accountabilitv for establishment and successful implementation of the CAP, and\\n Validation of the successhl implementation of the CAP.\\nThe recommendations needed, which we identified in relation to the CAPs for these material\\nweaknesses, vary depending on the component, and in some cases on the material weakness itself.\\n\\x0cBackground, Objectives, and Scope\\nBackground\\nOffice of Management and Budget (OMB) Circular A-123, Management\\'s Responsibility for\\nInternal Control, states \"Federal agencies are subject to numerous legislative and regulatory\\nrequirements that promote and support effective internal control.",
"Effective internal control is a key\\nfactor in achieving agency missions and program results through improved accountability.\\nIdentifying internal control weaknesses and taking related corrective actions are critically important\\nto creating and maintaining a strong internal control infrastructure that supports the achievement of\\nagency objectives. \"\\nOMB Circular A-123 builds upon the internal control framework within the Standards for Internal\\nControl in the Federal Government (Green Book), issued by the Government Accountability Office\\n(GAO), which defines internal control as \"an integral component of an organization\\'s management\\nthat provides reasonable assurance that the following objectives are being achieved:\\n effectiveness and efficiency of operations,\\n reliability of financial reporting, and\\n compliance with applicable laws and regulations.",
"\"\\nTen material weaknesses associated with internal controls were reported in the Department\\'s\\nindependent auditors\\' report included in the FY 2005 Performance and Accountability Report. The\\nDepartment has undertaken an initiative to develop and implement a formal corrective action plan\\nprocess. Under this initiative, the Department issued various guidance and also deployed a web-\\nbased software application, Electronic Program Management Office (ePMO), to manage the\\ncollection and reporting of CAP information for the Department and its components.",
"Under this\\ninitiative, the Department\\'s intent is to develop effective CAPs and position itself to move forward\\nin its objective of obtaining an unqualified audit opinion on its consolidated financial statements, as\\nwell as on its internal controls over financial reporting.\\nThe first key milestone in the Department\\'s CAP process was May 31, 2006, whereby all\\ncomponents were required to develop CAPs for each material weakness under the new format for\\ninput into ePMO by the Department\\'s OCFO. The second key milestone will be the submission of\\nrevised CAPs as of June 30,2006, by July 12,2006. The revised CAPs are outside the scope of this\\nperformance audit.\\n\\n\\nObjectives\\nThe objective of this performance audit is to report and evaluate the status and effectiveness of the\\nCAPs for four of the ten material weaknesses that the Department has identified as their areas of\\nCAP focus for FY 2006.",
"The four material weaknesses are: Financial Management Oversight,\\nFinancial Reporting, Fund Balance with Treasury, and Actuarial Liabilities. Our audit was\\nconducted in accordance with Government Auditing Standards issued by the Comptroller General\\nof the United States, specifically, the standards for performance audits.\\nOur objective is to report on the status of CAP implementation, as of May 31, 2006, and evaluate\\nthe effectiveness of the Department\\'s CAPs developed by the OCFO, Coast Guard, and ICE to\\naddress their respective sections of the four material weaknesses.\\n\\x0cScope\\nThe scope of this performance audit includes the Department\\'s CAPs, as of May 31, 2006,\\ndeveloped to address the Financial Management Oversight, Financial Reporting, Fund Balance with\\nTreasury, and Actuarial Liabilities material weaknesses at the OCFO, Coast Guard, and ICE\\ncomponents as reported in the FY 2005 independent auditors\\' report.",
"Our scope did not include\\nprocedures on any of the CAPS associated with the remaining six material weaknesses cited in the\\nDepartment\\'s FY 2005 independent auditors\\' report.\\nThe Department is in the early stages of its CAP development and implementation process, and\\naccordingly, management has represented that its CAPS will continue to be modified throughout the\\nyear. Our performance audit was limited to a review of the CAPS noted above as of May 3 1, 2006.\\nRevised CAPs as of June 30,2006, due by July 12, 2006, to the OCFO are outside the scope of this\\nperformance audit. Furthermore, our performance audit was limited to a review of the CAPs\\nthemselves and not the outcome being achieved as a result of the procedures outlined in the CAPs.\\nThe timeline for this performance audit was as follows:\\n FieldworkIReporting - June 12,2006 through July 7,2006\\n Draft Report - July 17,2006\\n Final Report - September 6,2006\\n\\n\\nPerformance Audit Approach\\nWe performed a variety of performance audit procedures over the CAPs for the four material\\nweaknesses. Our methodology consisted of the following four-phased approach:\\n\\n\\nPhase I - Project Initiation and Planning\\nTo initiate and focus the performance audit approach, we conducted a kick-off meeting with the\\nDepartment\\'s OIG, OCFO, Coast Guard, and ICE components to review the objectives, scope of the\\nproject, and the collaboration among participants.\\n\\n\\nPhase I1 - Determine the CAP Status of the Four Material Weaknesses\\n OCFO, Coast Guard and ICE Interviews\\n We interviewed personnel from the OCFO, Coast Guard and ICE components on their\\n understanding and implementation of their respective components\\' CAPs as of May 31, 2006,\\n including, but not limited to, the root cause analysis performed, the critical milestones chosen\\n for measurement, and mechanisms to monitor progress in meeting the milestones.\\n CAPs and Related Supporting Documentation Reviews\\n - The CAPs (i.e., the detail and summary report) contained within ePMO.\\n - The underlying Excel and Word templates submitted to the Department\\'s OCFO to\\n populate ePMO.\\n - If applicable, the CAPS prepared prior to the implementation of the Department\\'s fiscal\\n year 2006 CAP process (i.e.",
"ICE Financial Action Plans (FAPS)).\\n\\x0c - Notice of Findings and Recommendations (NFRs) issued during the fiscal year 2005\\n financial statement audit utilized to generate the FY 2005 independent auditors\\' report.\\n\\n\\nPhase 111- Evaluate CAP Effectiveness\\nWe reviewed the DHS Corrective Action Plan Process Guide (CAP Guide), dated April 28, 2006,\\nand existing internal control monitoring practices and guidance for practices that would serve as our\\nevaluation criteria. We then compared our understanding of the Department\\'s existing CAPS to\\nthese practices to identify potential areas for improvement. These findings reflect situations that\\ncould negatively impact the Department\\'s remediation of the material weaknesses if additional\\ncorrective action is not taken.\\nThe internal control monitoring practices and guidance we reviewed included:\\n OMB Circular A-123.\\n CAP guides published by other Federal agencies.\\n OMB Executive Branch Management Scorecard.\\nWe categorized the areas for improvement into one of the four broad phases generally found in an\\neffective CAP process:\\n Identification of the underlying root cause is an important action step in the CAP process.\\n Accurate identification of the root cause mitigates the chances of recurrence.",
"Often merely the\\n symptoms of the deficiency are identified rather than the root cause. By identifying only the\\n symptoms, it is difficult to develop an effective CAP that will successfully resolve the\\n deficiency.\\n Development of an effective remediation plan is an appropriate way to cure an internal control\\n deficiency. A key component of an effective plan is the inclusion of both attainable and\\n measurable milestones to allow both the Department and the component to effectively monitor\\n the remediation process.\\n Accountability is vital to the CAP process because it necessitates the establishment of an\\n individual CAP owner who is responsible for its successful implementation. The owner\\'s\\n responsibilities include ensuring that milestones are achieved and that the validation phase is\\n completed.\\n Validation is important in order to verify that the CAP has been successfully completed.",
"The\\n CAP should include activities that will provide evidence to support the closure of the CAP.\\n These activities should include documentation reviews, work observations, and performance\\n testing.\\n\\n\\nPhase IV - Conclusions and Recommendations\\nAfter conducting our analysis in Phase 111, we formulated our findings and recommendations for\\neach potential area of improvement identified.\\n\\x0cFindings and Recommendations\\nOffice of the Chief Financial Officer (OCFO)\\nThe OCFO has drafted CAPS intended to address its respective sections of the two material\\nweaknesses on Financial Management Oversight and Financial Reporting reported in the FY 2005\\nindependent auditors\\' report.\\nFinancial Management Oversight\\nBackground:\\nThe Financial Management Oversight material weakness relates to the overall management,\\npersonnel, and infrastructure of the OCFO. The OCFO initiated the Department-wide CAP process\\nin early 2006. A crucial step in remediation of this material weakness was the successful\\nconfirmation by the U.S. Senate of the Department\\'s Chief Financial Officer in May 2006. As part\\nof the CAP process, the OCFO has led the Department in drafting guidance and providing the DHS\\ncomponents with tools to utilize during their respective CAP implementations.",
"The OCFO has led\\n\\'CAP Workshops\\' with representatives from the Department components so that an adequate,\\nuniform approach to performing root cause analyses and implementing corrective actions is taken\\nDepartment-wide. The OCFO also developed the Electronic Program Management Office (ePMO)\\nsystem enabling the Department and the components to track the corrective actions being\\nundertaken at the component level to ensure a coordinated Department-wide response to auditor\\nfindings and recommendations. The OCFO has issued a CAP Guide and is currently in the\\ndevelopmental stages of creating an Internal Controls over Financial Reporting (ICOFR) Playbook\\nfor the components. Furthermore, these actions reflect the OCFO\\'s recognition that the CAP\\nprocess at DHS is an integral part of its preparation for OMB A-123 implementation.\\nThe leadership provided by the Department in setting a positive \\'tone-at-the-top,\\' and actively\\nmonitoring progress in implementing the CAP process has shown to be integral to the success\\nachieved at the Department thus far and will be critical to resolving the material weaknesses at the\\nDepartment.\\nIdentification:\\nThe OCFO has drafted a CAP to address the material weakness on Financial Management\\nOversight, as it relates to the OCFO.",
"The CAP includes an analysis of root cause issues, key success\\nfactors and performance measures, resources required, and an analysis of the risks and impediments\\nas seen by management. In addition, management has developed a timetable for corrective actions,\\nand assigned specific tasks with due dates to individuals. Management emphasizes the evolutionary\\nnature of the CAP, including their intent to modify andlor add actions as needed to fully correct the\\nidentified internal control weaknesses in financial management oversight, within the timetable\\nspecified by Department leadership (September 30, 2006). As the work progresses, management\\nmay identify additional root causes and will update the CAP accordingly in order to keep the CAP\\ncurrent and a useful management plan.\\nOne of the key inputs used by the Department in the development of the OCFO CAP addressing the\\nFinancial Management Oversight internal control weaknesses was a self assessment using the GAO\\nInternal Control Management and Evaluation Tool (GAO Evaluation Tool). Completion of a self\\nassessment using the GAO Evaluation Tool was a Departmental mandate to support compliance\\nwith the Department of Homeland Security Financial Accountability Act, the Federal Managers\\'\\nFinancial Integrity Act (FMFIA), and implementation of OMB Circular A-123, Management\\'s\\nResponsibility for Internal Controls in FY 2006.\\n\\x0cThe OCFO, under the direction of the Acting Chief Financial Officer (CFO), began its self\\nassessment of its control environment in FY 2006, and completed a thorough introspective review\\nover several months.",
"Department management views the control environment as the foundation for\\ngood financial management.\\nThe GAO Evaluation Tool is intended to help managers determine how well the Department\\'s\\ncontrol environment is designed and fbnctioning and to help identify and develop actions to\\nimprove internal controls. Many of the financial management oversight weaknesses, as highlighted\\nin the FY 2005 independent auditors\\' report, are synonymous with weaknesses in the overall control\\nenvironment, and consequently, the GAO Evaluation Tool provided a starting point for\\nidentification and analysis of the root causes of the weakness.\\nThe OCFO concluded that only two of the seven control environment objectives from the GAO\\nEvaluation Tool are fully met by the Department. Commitment to competence, management\\nphilosophy, organizational structure, assignment of responsibilities and human resource practices\\nare aspects of the control environment that require improvement. This self-assessment served as the\\nDepartment\\'s principle source of information to identify the root cause of the OCFO\\'s contribution\\nto the material weakness on financial management oversight and as input to the CAP.",
"By itself,\\nhowever, completion of the GAO Evaluation Tool does not substitute for a comprehensive root\\ncause analysis.\\nDevelopment:\\nUsing the information gathered through the self-assessment, the OCFO prepared its CAP to address\\nweaknesses in the control environment. The CAP is in the early stages of development and\\napproval, yet several significant steps have already been taken. One such step is the drafting and\\nrelease of the CAP Guide, and a formal process of reporting and monitoring (using ePMO) of\\ncorrective actions planned by the Department and its components. Another recent action is\\nmanagement\\'s approval to initiate a workforce study to identi% human resource gaps and skill sets\\nneeded to perform the financial reporting functions of the OCFO.\\nThe initial draft of the CAP, based on the results of the self assessment of the control environment,\\nincluding the assigned tasks and timetable for completion, was recently completed - within the past\\n45 days.",
"Management will require more time to hlly develop all of the corrective tasks and critical\\nmilestones; specifically, further developing certain missing elements (described below), to make the\\nplan comprehensive. Until management addresses the missing elements, the effectiveness of the\\nCAP is diminished.\\nThe OCFO also sponsors periodic \"CAP Workshops\" attended by the Department\\'s components, to\\nhelp ensure continued progress is made in regards to CAPs throughout the Department. In addition,\\nthe OCFO is developing an Internal Control Over Financial Reporting (ICOFR) Playbook which,\\nwhen completed, is intended to link the component CAPs to management\\'s implementation of\\nOMB A-123 and ultimately with management\\'s assertions related to internal controls over financial\\nreporting.\\nThe OCFO presented us with several updates, not yet incorporated into the CAP, that are currently\\nunder development and review by Department leadership, which partially address some of our\\nfindings presented below:\\n The Department has a limited number of employees, with necessary skill sets, particularly in\\n OCFO financial management positions, which causes the current managers to prioritize\\n workload, and postpone or defer work on critical projects such as policies, procedures, internal\\n control improvements, etc.",
"As a result, management has hired three full-time employees in\\n fiscal year 2006 and has budgeted for an additional 13 full time equivalents over the next two\\n\\x0c years. In addition, management has identified the need for an organizational staffing and\\n human resource needs study. A summary level document of the objectives for such a study has\\n been prepared and approval for further development and engagement of a contractor to perform\\n the study was recently obtained from the Department\\'s Deputy CFO.",
"Management, however,\\n has not yet hlly developed and documented a detailed approach to the organizational needs\\n assessment in the CAP, or prepared a Statement of Work, or engaged a contractor with the\\n necessary expertise.\\n The Department must overcome organizational structure issues that may impede the\\n effectiveness of the Department\\'s CFO and those in the OCFO for two primary reasons: (1)\\n since its inception, the Department has operated under a matrix management philosophy\\n Istmcture, with Chief (e.g., CFO, Chief Information Officer, Chief Procurement Officer, etc...)\\n management and administrative responsibilities that cross-cut component operation at a\\n Department level. Historically, the Department\\'s CFO has seldom exercised his authority to\\n implement policy and procedures, including, and most importantly, financial reporting controls\\n across the Department.\\n The CAP does not include a review of position descriptions for all current OCFO management\\n and staff, to identify corrective actions necessary to better align job responsibilities with\\n available human resources.",
"In addition, the CAP does not address the linkage of annual goal\\n setting and performance appraisals for managers and staff in the OCFO with specific OCFO\\n objectives, e.g., implementation of CAPS, improvement in internal controls, etc.\\n The Department has identified the need for an additional senior management official in the area\\n of financial management,, however, a CAP has not been developed to include steps to actively\\n recruit for this position (e.g., posting the job announcement or advertising I interviewing for the\\n position).\\n The CAP lacks procedures to identify weaknesses in management and staff training\\n requirements. For example, the training programs attended by managers and staff have not been\\n identified based on a critical needs and core competency assessment of training programs to\\n improve essential skills.\\n Clear internal reporting relationships within the Department have not been established, defining\\n OCFO and component responsibilities for CAP development and implementation especially in\\n areas of overlap.\\nAccountability:\\nUntil the matters mentioned above are fully developed and addressed, key areas of authority and\\nresponsibility for the CAP implementation cannot be adequately defined and communicated\\nthroughout the Department, especially as they relate to the interaction between the OCFO and\\ncomponent financial and reporting operations. The assignment of accountability for improvements\\nhas occurred, but due to the pace of CAP development the improvements brought about by the\\nassignment have yet to take full effect.\\n\\x0cFinancial Reporting\\nBackground:\\nThe Financial Reporting material weakness is focused specifically on the reliability and timeliness\\nof the interim and year-end consolidated financial statements.",
"The OCFO, and in particular the\\nfinancial reporting functions, have undergone substantial change in FY 2006, due to staff turnover,\\nrestructuring of the office, and a reallocation of roles and responsibilities. The OCFO lost one key\\nmanager to an internal transfer in FY 2006. The office was restructured into four functional areas\\neach lead by a Director - Financial Reporting, Financial Systems and Administration, Policy, and\\nInternal Control. Three staff personnel have been hired to fill vacancies identified at the beginning\\nof the year, which has helped with the distribution of workload.",
"However, some accounting\\npersonnel vacancies still remain, and management asserts that at least one key managerial position\\nremains unfilled. To supplement expertise and distribute workload, the OCFO has hired an outside\\ncontractor to assist with the preparation of periodic financial statements and the FY 2006\\nPerformance and Accountability Report, and performance of CAPs. The Policy branch is in the\\nvery early stages of development, e.g., has a target date of August 2006, for issuance of its own\\nCharter and assignments to working group members.\\nIdentification:\\nUpon review of the financial reporting CAP, we observed an analysis of root cause issues, key\\nsuccess factors and performance measures, resources required, and an analysis of the risks and\\nimpediments as seen by management. However, as explained below, the CAP is a mixture of typical\\nfinancial reporting roles and responsibilities and corrective actions. It is not clearly written to focus\\non the information necessary to identify root causes, detailed listings of task, and assignments of\\nresponsibility that will ultimately lead to the correction of the Financial Reporting material\\nweakness.",
"The CAP is designed to accommodate periodic updates/modifications as necessary to\\nkeep the CAP current and a useful management plan. As the work progresses, management may\\nidentify additional root causes and will update accordingly.\\nManagement\\'s root cause analysis, conducted in FY 2006, shows that many of the conditions\\nidentified and reported by the independent auditor stem from challenges associated with the set-up\\nof a new Federal department. Staffing decisions, allocation of limited resources, the need for new\\npolicies and procedures, internal controls, integration of financial processes and systems, to name a\\nfew conditions noted in the FY 2005 independent auditors\\' report, are typically multi-year projects\\nto set-up organizations the size of the Department.\\nDevelopment:\\nWhen the OCFO completes its identification of the underlying root causes of the financial reporting\\nweakness, including management\\'s response to the findings noted above, CAPs will need to be\\ndeveloped and implemented, together with specific milestones and assignment tasks and oversight\\nto individuals.\\nThe development and implementation of the CAP tasks have not been coordinated with the CAPs\\nfrom the other Department components or with the Department\\'s OMB Circular A-123\\nimplementation - two closely related aspects of financial reporting and internal control\\nimprovements.\\nSince the CAP was only recently drafted and management has not had enough time to fully and\\ncompletely identify and develop the CAP tasks, we noted several critical elements missing from the\\nCAP that should be considered for inclusion.",
"Without the addition of the critical missing elements\\n(described below), the plan is not comprehensive, which could diminish the ultimate effectiveness\\n\\x0cof the CAP. In some cases, the OCFO was able to demonstrate that the missing elements are\\ndependent on the outcome of the Financial Management Oversight CAP, e.g., organizational and\\nworkforce study, and consequently there is a natural lag in the identification and development of the\\nFinancial Reporting CAP. The critical missing elements are as follows:\\n The list of critical milestones and detailed tasks in the CAP are not comprehensive, and do not\\n clearly show linkage to the weaknesses being corrected or the root cause issues.",
"For example,\\n management\\'s root cause analysis indicates that OFM roles and responsibilities are not clearly\\n defined, including insufficient back-up role planning. It is not clear which, if any, of the detailed\\n tasks will address this issue.\\n Many of the tasks listed in the CAP appear to be ordinary, routine responsibilities of the OCFO,\\n rather than tasks meant to investigate and correct the root cause issues (i.e., \"compile a hard-\\n close June 30, 2006 PAR Section 3,\" \"compile MD&A Section of the PAR,\" and to \"compile\\n September 30 financial statements\"). All of these tasks are normal operational responsibilities\\n of the OCFO and are not corrective actions.",
"In addition, a disproportionate number of tasks\\n appear to be administrative tasks that are not substantial actions to correct issues (i.e., \"establish\\n Department FMPIP subcommittee of working groups to evaluate policy and directives (an\\n action with a due date of June 15, 2006, and labeled as \"not started\")).\\n The CAP lacks procedures to identify the root cause underlying the reason why polices and\\n procedures require excessive time to develop, approve and issue. In some cases, draft OCFO\\n policies have been pending approval for more than a year - with no clear time-line for\\n management approval and issuance. Despite the establishment of a Policy branch, no policies\\n and procedures (by official Management Directive) have been issued in FY 2006. Policy\\n issuance has been hindered by limited resources and a lack of coordination between the\\n Department\\'s operating components. For example, seven policies are in process but all have\\n stalled or been held up from issuance, in some cases for more than a year.\\nAccountability:\\nWe observed that the OCFO has hired a reputable outside contractor to assist with financial\\nreporting functions and CAP related tasks, as needed. However, as of May 31, 2006, the contractor\\nhired to support the OCFO is limited to only two full-time professionals, and consequently, is\\ndedicated to important, but narrowly focused, periodic financial reporting roles.\\nImplementation of the financial reporting CAP has been divided among several OCFO managers\\nwho do not have sufficient time to commit to the project, and therefore must delegate most of the\\ntasks. Accountability for the financial reporting CAP is not clearly defined or tracked. Further, the\\nfinancial reporting CAP is not managed or monitored by a senior executive, and other priorities of\\nthe OCFO have slowed progress.",
"These conditions appear to have slowed progress - only 9 of the\\n55 tasks are shown as complete (many of which are routine operations or administrative functions\\nas mentioned above).\\n\\n\\nRecommendations\\nOCFO - Financial Management Oversight\\nWe recommend that:\\n1. \\t Corrective actions be added to the CAP to identify weaknesses in management and staff\\n training policies, and to then develop and document corrective actions in the CAP.\\n\\x0c2. \\t Management should engage an outside independent contractor that specializes in this subject\\n matter to perform its recently approved organizational workforce and human resource needs\\n study.",
"When the study is complete, CAPS will need to be developed and implemented, together\\n with specific milestones and assignment of tasks and accountability to individuals. The study\\n should provide management with:\\n A critical assessment of the knowledge, skills, and abilities needed to perform the functions\\n of the OCFO, and identify technical and experience gaps, so that recruiting, hiring, training\\n and role definition can be adjusted if necessary; and\\n A review of position descriptions for all current OCFO management and staff, to identify\\n corrective actions necessary to better align job responsibilities with skill sets and available\\n human resources, and to clarify reporting responsibilities that overlap within the OCFO, and\\n to make recommendations to better align annual goal setting and performance appraisals\\n with OCFO objectives.\\n3. \\t The agency continue its recruitment of an additional senior manager who has extensive\\n experience with department level consolidated financial reporting, to serve in a senior\\n management position in the area of financial management (i.e., posting or advertising the job\\n announcement, interviewing and hiring for the position).\\n4.",
"\\t Define the exact criteria which will be used to ascertain when the corrective action has been\\n successfully completed, as well as the method for testing against such criteria as part of OMB\\n A-123 implementation steps (i.e. tests of design and tests of operating effectiveness of internal\\n controls). Additionally, integrate the CAPs with the OCFO\\'s plan for OMB A-123\\n implementation and annual FMFIA assurance statement. Management\\'s plan for validation of\\n corrective actions should be closely integrated with their controls test work conducted to\\n comply with OMB A-123.\\n\\n\\nOCFO - Financial Reporting\\nWe recommend that management:\\n5. \\t Identify a list of detailed tasks and critical milestones in the CAP to identify the root causes of\\n the material weakness.",
"When the OCFO completes its identification of the underlying root\\n cause of the financial reporting weakness, including management\\'s response to the conditions\\n noted in the FY 2005 independent auditors\\' report, management should develop and implement\\n CAPs that include specific milestones and assignment of tasks and oversight to appropriate\\n individuals.\\n6. \\t Amend the CAP to include only root cause investigation, or corrective actions, designed to\\n mitigate or eliminate the financial reporting material weakness. Ordinary, routine,\\n responsibilities of the OCFO, such as \"compiling September 30 financial statements\", should be\\n removed as they are not corrective actions developed in response to a root cause analysis.\\n7. \\t Include procedures in the CAP to assess the reasonableness of the time to develop, approve and\\n issue appropriate corrective actions regarding policies and procedures. This recommendation\\n may be dependent on the outcome of improvements to the control environment, discussed\\n previously.\\n8. \\t Coordinate the development and implementation of the CAP tasks with the corrective actions\\n from the other Department components and with the Department\\'s OMB Circular A-123\\n implementation.\\n\\x0c9. \\t Assign the implementation of the financial reporting CAP to a manager who is principally\\n responsible and accountable for fulfillment of the CAP.",
"Presently, the tasks are split between\\n managers who may not have sufficient time to commit to the project, and are delegating most of\\n the tasks. Management should clearly define and track accountability. In addition, a senior\\n executive should routinely monitor and manage the progress on the financial reporting CAP.\\n10. Define the exact criteria which will be used to ascertain when the corrective action has been\\n successfully completed, as well as the method for testing against such criteria as part of OMB\\n A-123 implementation steps (i.e. tests of design and tests of operating effectiveness of internal\\n controls). Additionally, integrate the CAPs with the OCFO\\'s plan for OMB A-123\\n implementation and annual FMFIA assurance statement.",
"Management\\'s plan for validation of\\n corrective actions should be closely integrated with their controls test work conducted to\\n comply with OMB A-123.\\n\\n\\nUnited States Coast Guard (Coast Guard)\\nThe Coast Guard has drafted CAPs intended to address its respective sections of the four material\\nweaknesses on Financial Management Oversight, Financial Reporting, Fund Balance with Treasury,\\nand Actuarial Liabilities, reported in the FY 2005 independent auditors\\' report.\\nBackground:\\nThe CAPs contain a description of the known issues and root causes, management\\'s key success\\nfactors and performance measures, general resources required, and in some cases, time milestones\\nfor corrective actions. It is acknowledged that the Coast Guard has attended a CAP workshop\\nsponsored by the OCFO on June 26, 2006, where the CAP approach, future actions and milestones\\nwere discussed. Additionally, the Coast Guard was instrumental in assisting the Department in the\\nePMO pilot implementation.\\n\\n\\nThe CAPs for the four material weaknesses consist primarily OF known conditions, previously\\nidentified by the financial statement auditors, and lack evidence of a detailed review to identify the\\nunderlying root cause of the four material weaknesses.\\nIn order to develop a meaningful actionable CAP that includes identification of resource needs,\\nmilestones, performance indicators and accountability, the root cause(s) of the issue must be\\ndetermined. As written, the CAPs do not extend beyond a general discussion of the problems or\\napproach to correction, and the underlying causes of the conditions are not described in sufficient\\ndetail to allow development of specific actions and milestones. For example, the Coast Guard cites a\\nlack of investment in \\tpersonnelttraining as a root cause in the Financial Management Oversight\\nCAP.",
"However, the CAP does not contain any further analysis of personnel deficiencies - such as\\nwhich positions, roles and responsibilities, processes, locations, number of personnel, etc.\\nConsequently, the associated action plan is limited to a general statement that \"adequate personnel\\nand financial resources must be made available in order to address root-cause issues and help ensure\\nlong-term sustainable success. \"\\nThe causes that have been identified have not been categorized, cross-referenced to problems\\nidentified by management, and prioritized for correction. In addition, the CAPs lack specific\\nidentification of financial systems and processes that require corrective actions, and an approach to\\ncorrection.\\n\\x0cLikewise, the key success factors and performance measures identified consist primarily of an array\\nof policies and procedures typically found in a reliable financial reporting process, without specific\\napplication to the Coast Guard financial reporting systems and processes. In some cases, possible\\ncorrective actions have been deferred, pending hrther review to identify issues and develop a full\\nCAP at a future date. For example, the Financial Management Oversight CAP contains a critical\\nmilestone of \"not later than February 15, 2007, issue report from the financial management\\ntransformation team containing a comprehensive, integrated plan and milestones.. .\" The CAP is a\\nplan to develop a plan, and is, therefore, incomplete, and would be ineffective without further\\ndevelopment.\\nThe CAPs focus almost exclusively on audit finding recommendations categorized by material\\nweakness in outline format with columns displaying status, percent complete, due date and\\nindividuals responsible for action.",
"However, the reports do not contain a rationale for the due date,\\nthe detail steps planned or executed or how percentage of completion was determined or tested.\\nThe CAPs are incomplete as they only include audit recommendations which are only a small\\nfraction of the total number of issues or root causes that Coast Guard must identify and address. The\\nhigh level root causes identified in the CAPs appear to be the initial steps in that effort.\\nIn addition, the CAPs contain errors. For example, the resources required to correct Fund Balance\\nwith Treasury and Financial Reporting material weaknesses are identical, and the auditor\\nrecommendations in the CAP do not match the auditors\\' recommendation in the FY 2005\\nindependent auditors\\' report.\\nDevelopment and Accountability:\\nFinancial Management Oversight\\nManagement has identified four broad categories of issues that cause the Financial Management\\nOversight material weakness; (1) personnel I training, (2) organization, (3) [financial] systems, and\\n(4) [personnel and budget] resources. The CAP, as written, is evidence that management recognizes\\nthe deep-rooted structural (organization, personnel and system) issues, and that full correction is a\\nmulti-year effort, and that a restructuring of the Coast Guard\\'s financial management function may\\nbe needed to realign financial reporting processes with the optimal mix of civilian vs. military and\\ncentralized vs. decentralized responsibilities. In addition, the Coast Guard has vacant key financial\\npositions.",
"The Financial Management Oversight CAP, which is currently under review by the Coast\\nGuard\\'s interim CFO, calls for the creation of a \"Financial Management Transformation Team,\"\\nand for a \"comprehensive, integrated plan of action and milestones...\" by February 15, 2007. The\\nFinancial Management Oversight CAP is therefore incomplete, pending further development as\\nplanned by Coast Guard management.\\nFinancial Reporting\\nThe Financial Reporting CAP states that \"There are many errors within the general ledger posting\\nlogic. Most of these are due to inherent systems\\' deficiencies.. .\" However, it is not clear from the\\nFinancial Reporting CAP what steps will be taken to investigate these systems issues or when\\nmanagement expects to have the problem(s) resolved. In addition to financial systems problems, the\\nFinancial Reporting CAP identifies many hndamental I structural issues that are preventing the\\nCoast Guard from preparing reliable financial data for submission to the OCFO, e.g., lack of\\npolicies, procedures, controls, personnel, training, inefficient and error prone processes. The\\nFinancial Reporting CAP lacks a detailed listing of tasks to investigate these fundamental issues,\\nidentify the root cause, and then develop corrective actions and assign responsibilities.",
"Regarding\\nresource requirements, management\\'s assessment of the resources required to investigate and\\nresolve these issues is limited to five staff (GS-12) personnel and unspecified funding for\\n\\x0c\"modifications to the Core Accounting System\". Yet full implementation of an auditor\\nrecommendation to \"conduct an assessment of the current financial reporting process, including a\\nreview of the three general ledger systems.. .\" will require the commitment of considerably more\\nexperienced supervisors, as well as expert systems personnel and/or contractors for identification\\nand correction of posting logic problems.\\nFund Balance with Treasury\\nManagement has identified a number of issues that led to the material weakness in Fund Balance\\nwith Treasury accounts. Some issues appear to identify potential root causes, such as\\n\"cumbersome/complex systems and processes and poor process design and systems integration\".\\nHowever, most of the issues are symptomatic in nature, i.e., \"inability to provide audit\\ndisbursement, collection, and adjustment populations, number of suspense transactions is excessive,\\nmissing some signed backup obligation documents,\" etc.",
"The Fund Balance with Treasury CAP\\nlacks evidence of a detailed investigation to identify the root cause and then to develop specific\\ncorrective actions. Further, the extent of IT system deficiencies that may be causing or contributing\\nto the material weakness is not clear in the Fund Balance with Treasury CAP. Some steps could be\\ntaken immediately to improve the reliability of the Fund Balance with Treasury account balances.\\nHowever, the Fund Balance with Treasury CAP lacks a separation of short and long term actions\\nand a time-line for correction.\\nActuarial Liabilities\\nThe CAP includes a description of the underlying issues causing the material weakness in actuarial\\nliabilities, and the majority of the issues appear to be potential root causes, e.g.,\\nmultiple/inadequate/non-unified financial accounting systems, weak program oversight\\naccountability, organizational structure, poor data integrity, etc. The due date for correction is\\nDecember 2007. The Actuarial Liabilities CAP lacks interim milestones to make / measure\\nincremental temporary improvements that will allow actuarial balances to be accurately stated in the\\nfinancial statements in FY 2006.",
"The resources required do not address the cost for system\\nupgrades, reorganization, or process changes. For example, the Actuarial Liabilities CAP states that\\nit lacks \"input from CG-842 (FINCEN) and CG-841 (IT systems)\" and is therefore not fully\\ndeveloped.\\n\\n\\nOverall, the CAPs for each of the four material weaknesses lack important details necessary to be an\\neffective plan. Specifically, we found that the Coast Guard CAPs lack:\\nQ Linkage or cross-reference to the material weakness conditions being corrected. Presently, the\\n CAPs refer generally to the group of auditor findings by area, and it is difficult to determine if\\n all of the conditions identified by the auditor are adequately addressed in the CAP;\\nQ Evidence of review and approval by management, together with a description of periodic\\n progress reports to be provided to Coast Guard and OCFO management on progress;\\n A fully developed / detailed listing of the tasks to be performed, and identification of system\\n deficiencies and corrective actions and who is accountable for their completion;\\n The detailed time-frame (milestones) that corrective actions are to occur, other than general\\n months / years for a few actions, including the protocol of correction, e.g.",
"systems before\\n processes, etc. ;\\n Performance metrics / measures for use by management to determine that corrective actions are\\n on track or require modification, and to assign accountability;\\n\\x0c A thorough evaluation of the resources needed - both personnel and funding, and the source of\\n those resources once determined;\\n Identification and dedication of resources including supervisors and contract assistance.\\n Presently, everyone associated with the CAP process already has other full-time job\\n responsibilities within the Coast Guard. The corrective actions are of a scale that dedicated\\n personnel, including management, are necessary for the plan to be effective in the near-term;\\n A description of how the Coast Guard will verify and validate that corrective actions are\\n complete and effective in correcting the conditions that lead to material weaknesses; and\\n Integration with the Coast Guard\\'s OMB A-123 implementation process.\\n\\n\\nRecommendations:\\nWe recommend that Coast Guard:\\n11.",
"Perform a thorough root cause analysis to identify the underlying causes of the four material\\n weaknesses, including a review of financial IT systems, processes and human resources. Coast\\n Guard should not rely on the financial statement audit to identify all of the significant causes of\\n control weaknesses, and should only use the audit to corroborate management\\'s findings.\\n12. Develop CAPs to mitigate and ultimately correct control deficiencies, based on management\\'s\\n own assessment of the issues. The CAPs should include a description of the detailed tasks and\\n milestones, key success and performance metrics, and a designated person who is primarily\\n accountable for completion of the effort.",
"The identified root causes should be cross-referenced\\n to the weakness identified by management (as well as those identified by the financial statement\\n auditor). The CAPs should be prioritized for correction, to minimize duplication of effort where\\n corrective actions overlap (i.e., correction of IT system posting logic errors may resolve\\n multiple issues, or mitigate the need for process changes).\\n13. Make a realistic assessment of the resource requirements, i.e., human and financial, needed to\\n perform the investigations to identify the root causes of material weaknesses, develop and\\n execute thorough CAPs, and then to verify correction. This assessment should include input\\n from all affected areas, i.e., CG-842 (FINCEN) and CG-841 (IT systems). In filling key\\n financial management vacancies, the Coast Guard should ensure that the position holders have\\n the necessary skills and experience to successfully execute the CAPs.\\n14. Obtain support from executive leadership, since effective correction will at times compete with\\n other mission priorities, and progress could falter without continuous reinforcement from\\n leadership.\\n15.",
"Define the exact criteria which will be used to ascertain when the corrective action has been\\n successfully completed, as well as the method for testing against such criteria as part of OMB\\n A-123 implementation steps (i.e. tests of design and tests of operating effectiveness of internal\\n controls). Additionally, integrate the CAPs with the Coast Guard\\'s plan for OMB A-123\\n implementation and annual FMFIA assurance statement. Management\\'s plan for validation of\\n corrective actions should be closely integrated with their controls test work conducted to comply\\n with OMB A-123.\\n\\x0cImmigration and Customs Enforcement (ICE)\\nICE has drafted CAPs intended to address their sections of the three material weaknesses on\\nFinancial Management Oversight, Financial Reporting, and Fund Balance with Treasury, reported\\nin the FY 2005 independent auditors\\' report.\\nBackground:\\nICE established the Program Management Office (PMO), which reports to ICE\\'S CFO, to develop\\nand implement a three-year Financial Action Plan (FAP) to manage and monitor efforts to improve\\nICE\\'s financial management.",
"The FAP addresses the material weaknesses as they relate to ICE\\nwhich includes the material weaknesses in Financial Management Oversight, Financial Reporting\\nand Fund Balance with Treasury.\\nIn the establishment of the PMO, ICE contracted with a consulting firm to not only provide\\nexpertise but also manpower. The primary responsibilities of the PMO are to (1) provide program\\nmanagement infrastructure to ensure successful FAP execution, (2) provide guidance and support to\\nstaff developing initiative project plans and implementing them, and (3) resolve issues and mitigate\\nrisks that may hinder the FAP implementation effort. By February 2006, ICE issued its FAP and the\\nprocess of implementing the corrective actions was launched. Each initiative in the FAP is\\nsupported by a Detailed Project Plan that outlines the tasks and milestones to be achieved.\\nWhen the Department initiated its Department-wide CAP process in April 2006, ICE was already in\\nthe midst of its FAP implementation.",
"In order to comply with the Department\\'s CAP process, ICE\\nfashioned its CAPs based on the information in its existing FAP. These CAPS summarizing the FAP\\ninitiatives were provided to the Department for uploading to the Department\\'s ePMO database.\\nWhile the CAPS and the FAP are similar, the FAP contains information regarding ICE\\'S corrective\\nactions in much greater detail than the summary-level information provided in the CAPs. For\\npurposes of this performance audit, KPMG evaluated the corrective actions as detailed in ICE\\'s\\nFAP and supporting documentation. However, the FAP data was also compared with the\\ninformation in ICE\\'s CAPs within ePMO for consistency purposes.\\nThe FAP includes an analysis of root cause issues, potential effects of the deficiency, corrective\\nactions and their foreseen impact. In addition, management has developed a timetable for corrective\\nactions, and assigned specific tasks with due dates to specific individuals.\\nWhen developing the FAP, ICE management indicated that it considered the FAP to be an\\nevolutionary document that would be periodically updated as needed to consider new facts and\\ncircumstances, and to ensure continuous progress is made.",
"Further, a decision was made to focus on\\ndeploying ICE\\'s resources on the area of Fund Balance with Treasury with the goal of resolving this\\nmaterial weakness in FY 2006. Management decided that this measured, focused approach was the\\nbest way to fully rectify the issue, as opposed to attempting to work on all deficiencies\\nsimultaneously and spreading its resources too thin. While ICE wants to see positive progress in the\\nremediation for each of the material weaknesses, it has only committed to fully remediate the Fund\\nBalance with Treasury material weakness during FY 2006.\\nThe leadership provided by the ICE CFO in setting a positive \\'tone-at-the-top,\\' and actively\\nmonitoring ICE\\'s progress in implementing the FAP has shown to be integral to the success\\nachieved at ICE thus far.",
"The ICE\\'s CFO continued commitment to the FAP effort is instrumental\\nto resolving the material weaknesses at ICE.\\n\\x0cFinancial Management Oversight\\n\\n\\nManagement has segregated the Financial Management Oversight material weakness into three\\nprimary areas: Workforce Strategy, Financial Systems, and Management Oversight. When\\ndeveloping the FAP, the PMO performed a root cause analysis which consisted primarily of\\nconducting interviews with personnel and leveraging institutional knowledge of the ICE personnel\\nin the PMO. The root cause analysis initially focused on the conditions cited by the auditors during\\nthe FY 2005 audit. The PMO categorized Financial Management Oversight within the FAP into\\ntwo primary areas: Workforce Strategy and Financial Systems. Subsequent to the development of\\nthe FAP, the PMO expanded its initial root cause analysis which resulted in Management Oversight\\nalso being identified as one of three primary areas.",
"To ensure that the FAP, at a minimum,\\naddressed each of the auditor findings cited during the FY 2005 audit, the FAP contains an\\nappendix which crosswalks each of the auditor findings to the task within each initiative designed to\\ncorrect the material weakness. Additionally, as the work progresses, management may identify\\nadditional root causes and will update accordingly.\\nDevelopment:\\nICE developed and documented its corrective actions in a two-tiered approach. The first tier is the\\nFAP itself which is at the highest level and can be described as more of a summary level. Each\\ninitiative within the FAP contains a brief background section as well as the following sections:\\nCause, Effect, Corrective Actions, and Impact of Corrective Actions. Within the Corrective Actions\\nsection, the primary tasks to be completed are listed along with a task description, milestone, and\\nestimated date of completion (month and year).",
"The second tier is the Detailed Project Plan which is\\nat a more detailed level. The Detailed Project Plan contains the following sections: Project\\nSummary, Key Team Roles and Responsibilities, Business Issues and Challenges, Project Plan, and\\nKey Outputs. Within the Key Outputs section, the primary tasks to be completed are listed along\\nwith the key output description and the estimated date of completion (month, day, and year).\\nThe Project Plan, maintained in Microsoft Project, lists the primary tasks and the subtasks along\\nwith the number of days the tasklsubtask should take to complete as well as the start date and the\\nend date for the tasklsubtask. The intent is that the FAP would be a static document while the\\nDetailed Project Plan and the accompanying Microsoft Project Plan would be updated as needed.\\nThe information contained in the Corrective Action section of the FAP should be consistent with the\\ninformation in the Key Outputs section of the Detailed Project Plan which, in turn, should be\\nconsistent with the Critical Milestones in the CAP within ePMO.\\nUpon comparison of the tasks/critical milestones and the corresponding due dates in the FAP, dated\\nFebruary 2006; the Detailed Project Plan for Workforce Strategy and the Detailed Project Plan\\nFinancial Systems, dated May 31, 2006 and April 18, 2006, respectively; and the CAP Detail\\nReport as of May 3 1, 2006 from ePMO; we noted a couple of minor inconsistencies (i.e., due dates,\\ndescription of tasks, and number of tasks) between the various documents.",
"In addition, we noted\\nthat the CAP within ePMO did not contain information on the Key Performance Measures, Risks\\nand Impediments, and Resources Required. All of the inconsistencies between the various\\ndocuments appear to be attributable to timing (i.e., the date each of the documents was prepared and\\nthe frequency with which ePMO was updated).\\nICE attended the Department\\'s OCFO-sponsored CAP Workshop for Financial Management\\nOversight where the corrective action approach, future actions and milestones were discussed. ICE\\nrepresented that the CAP Workshop was beneficial and provided ideas for revisions to its FAP. We\\nunderstand that revised CAPs are due to the Department by July 12, 2006. These CAPs are outside\\n\\x0cthe scope of this performance audit. ICE further represented that the revisions would not be\\nconsidered significant but would be adding specificity to the existing data (e.g., tasks and\\nmilestones) and revising expected completion dates for select milestones, as well as providing\\ninformation for the sections of the CAP which were not previously submitted for input into ePMO.\\nWithin the Management Oversight area, none of the taskslcritical milestones, with the exception of\\nthe task to \"Establish Financial Action Plan Program Management Office\", is considered to have a\\n\\'true\\' completion date as the tasks are considered to be on-going.",
"Other tasks lack exact criteria\\nwhich will be used to ascertain when the corrective action has been successfully completed, as well\\nas the method for testing against such criteria. Similarly, within Workforce Strategy, the PMO\\nrepresented that the success criteria and validation criteria cannot be determined until the Workforce\\nTransition Plan has been developed and implemented.\\nThe PMO has established a FAP Executive Dashboard which is updated at least monthly to provide\\na snapshot of the progress and status of each FAP Initiative.",
"For each task/critical milestone within\\neach FAP Initiative, a color coding is used to identify whether the task is complete (blue), on track\\n(green), moderately delayed (yellow), significantly delayed (red) or not started (white). The FAP\\nDashboard does not reflect and track the progress for the area of Management Oversight and most\\nof the tasks in this area are all considered to be on-going tasks as only one of the taskslcritical\\nmilestones in this area has a \\'true\\' completion date.\\nOf the ten and six tasks/critical milestones within the areas of Workforce Strategy and Financial\\nSystems, respectively, ICE indicated in its FAP Dashboard as of June 30, 2006, that five and one,\\nrespectively, have been completed.\\nAccountability:\\nAs previously mentioned, the PMO has established a FAP Executive Dashboard, which is updated\\nat least monthly and provides a snapshot of the progress and status of each FAP Initiative.\\nAdditionally, the percentage of completion is presented at the overall FAP Initiative level.\\nFor each material weakness initiative included in the FAP, an ICE initiative owner has been\\nassigned, as well as a PMO liaison.",
"Additionally, ICE senior leadership also has a role in the FAP\\ninitiative.\\nThe PMO, in conjunction with the initiative owner, completed a resource template for each FAP\\nInitiative which identified the resource name, skill set needed by the resource, and the number of\\nhours per week by month for each resource. The resources were categorized as Executive Sponsor,\\nInitiative Owner, or Staff. We noted that the resource template included both ICE employees and\\ncontracted personnel.\\nAs represented to us by the PMO, the responsibility for reporting on the task status and\\ndocumenting evidence to support such status rests with the ICE initiative owner and not the PMO.\\nHowever, we were informed that the PMO is in the process of gathering such evidence for\\ncompleted tasks from each of the ICE initiative owners for its own records.\\n\\n\\nFinancial Reporting\\n\\n\\nWhen developing the FAP, the PMO performed a root cause analysis which consisted primarily of\\nconducting interviews with personnel and leveraging the institutional knowledge of the ICE\\npersonnel in the PMO.",
"The root cause analysis initially focused on the conditions cited by the\\nauditors during the FY 2005 audit. The analysis performed by the PMO team resulted in two\\n\\x0ccategories being identified: Lack of Policies and Process Needs Improvement. To ensure that the\\nFAP, at a minimum, addressed each of the auditor findings cited during the FY 2005 audit, the FAP\\ncontains an appendix which crosswalks each of the auditor findings to the task within each initiative\\ndesigned to correct the material weakness. Subsequent to the development of the FAP, the PMO\\nexpanded its initial root cause analysis which resulted in additional causes being identified.\\nDevelopment:\\nAs previously discussed under the corresponding section under Financial Management Oversight,\\nICE developed and documented its corrective actions in a two-tiered approach.\\nUpon comparison of the tasks/critical milestones and the corresponding due dates in the FAP, dated\\nFebruary 2006, the Detailed Project Plan dated June 15, 2006, and the CAP Detail Report as of May\\n31, 2006 from ePMO, we noted a couple of minor inconsistencies (i.e., due dates, description of\\ntasks, and number of tasks) between the various documents.",
"In addition, we noted that the CAP\\nwithin ePMO did not contain information on Key Performance Measures, Risks and Impediments,\\nand Resources Required. Furthermore, all of the inconsistencies between the various documents\\nappear to be attributable to timing (i.e., the date each of the documents was prepared and the\\nfrequency with which ePMO was updated).\\nWe understand that revised CAPs as of June 30, 2006, are due to the Department by July 12, 2006.\\nICE represented that it would be submitting a revised CAP to the Department. These revised CAPs\\nare outside the scope of this performance audit. ICE further represented that the revisions would not\\nbe considered significant but would be adding specificity to the existing data (i.e., tasks and\\nmilestones) and revising expected completion dates for select milestones, as well as providing\\ninformation in the sections of the CAP that were not previously submitted for input into ePMO.\\nAbnormal balances, \\'free-form\\' general journal entries, and accurate and timely submission of\\nfinancial reports are considered to be significant problem areas within Financial Reporting.\\nAlthough the PMO developed a metric to track and monitor the total amount and number of\\nabnormal balances over $1 million, as well as the categorization (i.e., researched transactions\\ncausing abnormal balances, identified root cause, and identified datalprocess owner) of the amount\\nand number of these abnormal balances, we noted no such similar metric to monitor and track the\\nvolume and reason of \\'free-form\\' general journal entries.",
"As such, it would appear that ICE w-ill be\\nrelying on the occurrence of high-level (i.e., branch director) approval of \\'free-form\\' general\\nentries, as required by the newly developed standard operating procedures, to test the success in this\\narea. Further, we noted no mechanism to track and monitor the volume and type of \\'warning\\' errors\\nreceived upon submission of the monthly financial data into TIER. As such, it would appear that\\nICE will be relying only on the fact that the monthly financial data is submitted to the Department\\nby its stipulated deadlines and that the financial data is accepted and processed in TIER without\\n\\'fatal\\' errors.\\nOf the eight tasks/critical milestones within Financial Reporting ICE indicated it its FAP Dashboard\\nas of June 30,2006, three tasks/critical milestones have been completed.\\nBased on the progress being made on the task related to the research and resolution of abnormal\\nbalances, ICE updated the Detailed Project Plan for Financial Reporting on June 15,2006 which\\nextended the estimated completion dates for this task.\\nLastly, ICE is scheduled to attend the Department\\'s OCFO-sponsored CAP Workshop for Financial\\nReporting on August 7,2006.\\n\\x0cAccountability:\\nRefer to the corresponding section under Financial Management Oversight for a discussion of the\\nroles of personnel with ICE, the completion of resource templates, the responsibility for supporting\\nthe progress made and the reporting of corrective action status via the FAP Dashboard.\\n\\n\\nFund Balance with Treasury (FBWT)\\nIdentification:\\nWhen developing the FAP, the PMO performed a root cause analysis which consisted primarily of\\nconducting interviews with personnel and leveraging the institutional knowledge of the ICE\\npersonnel in the PMO.",
"The root cause analysis initially focused on the conditions cited by the\\nauditors during the FY 2005 audit. The analysis performed by the PMO team resulted in three\\ncategories being identified: Untimely Clearing and Recording of Items, Lack of Policies, and\\nProcess Needs Improvement. The PMO categorized Fund Balance with Treasury within the FAP\\ninto four primary areas as follows:\\n Cash Reconciliation\\n Statement of Differences\\n Suspense\\n Non-224 Transactions\\nTo ensure that the FAP, at a minimum, addressed each of the auditor findings cited during the FY\\n2005 audit, the FAP contains an appendix which crosswalks each of the auditor findings to the task\\nwithin each initiative designed to correct the material weakness.",
"Subsequent to the development of\\nthe FAP, the PMO expanded its initial root cause analysis which resulted in additional causes being\\nidentified. Additionally, as the work progresses management may identify additional root causes\\nand will update accordingly.\\nDevelopment:\\nAs previously discussed under the corresponding section under Financial Management Oversight,\\nICE developed and documented its corrective actions in a two-tiered approach.\\nUpon comparison of the tasks/critical milestones and the corresponding due dates in the FAP, dated\\nFebruary 2006, the Detailed Project Plan dated April 4, 2006, and the CAP Detail Report as of May\\n31, 2006 from ePMO, we noted a couple of minor inconsistencies (i.e., due dates, description of\\ntasks, and number of tasks) between the various documents. In addition, we noted that the CAP\\nwithin ePMO did not contain information on Key Performance Measures, Risks and Impediments,\\nand Resources Required.",
"Furthermore, all of the inconsistencies between the various documents\\nappear to be attributable to timing (i.e., the date each of the documents was prepared and the\\nfrequency with which ePMO was updated).\\nWe understand that revised CAPs as of June 30, 2006, are due to the Department by July 12, 2006.\\nICE represented that it would be submitting a revised CAP to the Department. These revised CAPs\\nare outside the scope of this performance audit. ICE further represented that the revisions would not\\nbe considered significant but would be adding specificity to the existing data (i.e., tasks and\\nmilestones) and revising expected completion dates for select milestones, as well as providing\\ninformation in the sections of the CAP that were not previously submitted for input into ePMO.\\n\\x0cStandard operating procedures were issued for each of the identified four areas. In addition, within\\nthe areas of Statement of Differences and Suspense, the tasks reflected as complete include the\\nreconciling and clearing of all FY 2005 transactions and FY 2006 transactions greater than 60 days\\nfor both ICE and each of the Components.\\nICE is scheduled to attend the Department\\'s OCFO-sponsored CAP Workshop for Fund Balance\\nwith Treasury on August 16,2006.\\nAccountability:\\nRefer to the corresponding section under Financial Management Oversight for a discussion of the\\nroles of personnel with ICE, the completion of resource templates, the responsibility for supporting\\nthe progress made and the reporting of corrective action status via the FAP Dashboard.\\n\\n\\nRecommendations:\\nWe recommend that ICE:\\n16. Ensure that revisions and updates to the FAP and supporting documentation are made to ICE\\'S\\n CAPs maintained in ePMO.",
"Since the CAPs maintained in ePMO are the basis for the\\n Department-wide CAP and ePMO is the system of record for the Department for corrective\\n actions, it is imperative that the CAP data in ePMO be current.\\n17. Within the area of Management Oversight, define the exact criteria which will be used to\\n ascertain when the corrective action has been successfully completed, as well as the method for\\n testing against such criteria as part of OMB A-123 implementation steps (i.e. tests of design and\\n tests of operating effectiveness of internal controls). Additionally, integrate the CAPs with\\n ICE\\'s plan for OMB A-123 implementation and annual FMFIA assurance statement.\\n Management\\'s plan for validation of corrective actions should be closely integrated with their\\n controls test work conducted to comply with OMB A-123.\\n18. Include completion of the GAO Evaluation Tool as a critical milestone in its Financial\\n Reporting CAP.\\n19. Within the area of Workforce Strategy, define the success and validation criteria in conjunction\\n with the development and implementation of the Workforce Transition Plan.\\n20.",
"Enhance its understanding and working knowledge of ePMO to ensure that ICE\\'s CAP data in\\n ePMO is portraying an accurate picture. As previously stated, the CAPs maintained in ePMO\\n are the basis for the Department-wide CAP and ePMO is the system of record for the\\n Department for corrective actions.\\n21. Reduce the volume of \\'free-form\\' general journal entries that are recurring in nature. This would\\n reduce the need for the entry to be made as a \\'free-form\\' general journal entry which in turn\\n would reduce the risk of an inappropriate entry being recorded.\\n22. Develop a mechanism to track and monitor the volume and type of \\'warning\\' errors received\\n upon submission of the monthly financial data into TIER. This would effectively limit the\\n number of \\'warning\\' errors received by being proactive in researching and resolving the\\n underlying cause.\\n\\x0c U.S. Departn~cstof tlomelitnd\\n Security\\n Washington, DC 20528\\n\\n\\n\\n\\n ifCA Homeland\\n %\\n SEP 7 2006\\n \"P\\n -.C?5~\\n s\\xe2\\x82\\xac\\' Security \\n\\nMEMORANDUM FOR: Richard L. Skinner, Inspector General\\n\\nFROM: David L. Norquist, Chief Financial 0 f f i c W\\n\\nSUBJECT: Audit of DHS\\' Corrective Action Plan Process for Financial\\n Reporting - Report No. 2\\n\\n\\nThank you for the opportunity to comment upon the Audit of DHS\\' Corrective Action Plan\\nProcess for Financial Reporting - Report No. 2.",
"We concur with the report\\'s recommendations\\nand are pleased to report that actions are already undemay to address the issues raised in the\\nreport. The report highlights valuable best practices and lessons learned. For example, ICE is\\nimproving the internal control environment through establishing a strong \"tone at the top\" and\\nCoast Guard is piloting an automated corrective action planning tracking system for managing\\nDepartment-wide corrective action plans (CAPs). Most significantly, throughout the summer the\\nDepartment sponsored a series of CAP workshops designed to help identify crosscutting root\\ncauses of internal control deficiencies focusing on the areas of people, policies, processes, and\\nsystems. The workshops set clear expectations for integrating test of design and operating\\neffectiveness requirements of DHS policy and OMB Circular No. A-123, Management\\'s\\nResponsibility for Internal Controls into our corrective action plans. The workshops were well\\nattended and supported by all DHS Components and we are developing stronger corrective\\nactioils as a result.\\n\\nAfter the CAPs are updated, the next step will be the implementation of the DHS Internal\\nControls over Financial Reporting (ICOFR) Playbook. The ICOFR Playbook will act as a\\nsingle, comprehensive, and integrated plan to organize and focus corrective action and\\nassessment efforts across the Department.\\n\\nWe appreciate the positive comments about our developing corrective action planning process.\\nIn closing, we look forward to continue our partnership in implementing corrective actions and\\nmost importantly the DHS Financial Accountability Act.\\n\\x0cReport Distribution\\n\\n\\n\\n\\n Department of Homeland Securitv\\n\\n Secretary\\n Deputy Secretary\\n Chief of Staff\\n Deputy Chief of Staff\\n General Counsel\\n Executive Secretary\\n Chief Privacy Officer\\n Under Secretary for Management\\n Assistant Secretary for Policy\\n Assistant Secretary for Public Affairs\\n Assistant Secretary for Legislative and Intergovernmental Affairs\\n Chief Financial Officer\\n Chief Information Officer\\n DHS GAOtOIG Audit Liaison\\n\\n Office of Management and Budget\\n Chief, Homeland Security Branch\\n DHS OIG Budget Examiner\\n\\n Congress\\n Congressional Oversight and Appropriations Committees, as appropriate\\n\\x0cAdditional Information and Copies\\n\\nTo obtain additional copies of this report, call the Office of Inspector General (OIG) at\\n(202) 254-4100, fax your request to (202) 254-4285, or visit the OIG web site at\\nwww.dhs.gov/oig.\\n\\n\\nOIG \\nHotline\\n\\nTo report alleged fraud, waste, abuse or mismanagement, or any other kind of criminal\\nor noncriminal misconduct relative to department programs or operations, call the\\nOIG Hotline at 1-800-323-8603; write to DHS Office of Inspector GeneraljMAIL\\nSTOP 2600, Attention.",
"Office of Investigations - Hotline, 245 Murray Drive, SW,\\nBuilding 410, Washington, DC 20528, fax the complaint to (202) 254-4292; or email\\nDHSOIGHOTLINE@dhs.gov The OIG seeks to protect the identity of each writer\\nand caller.\\n\\x0c'"
] | https://archive.org/download/us-inspectors-general.bulk/us-inspectors-general.bulk.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
646 F.2d 563 U. S.v.Lee 80-1363 UNITED STATES COURT OF APPEALS Second Circuit 12/1/80
1 S.D.N.Y.
AFFIRMED | 08-23-2011 | [
"646 F.2d 563 U. S.v.Lee 80-1363 UNITED STATES COURT OF APPEALS Second Circuit 12/1/80 1 S.D.N.Y. AFFIRMED"
] | https://www.courtlistener.com/api/rest/v3/opinions/389414/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
333 P.2d 1013 (1959) Erma McCUTCHEON, Plaintiff and Respondent, v. Ervin J. LARSEN, as Administrator of the Estate of George Sturm, Jr., Defendant and Appellant. No. 9628. Supreme Court of Montana. Submitted July 1, 1958. Decided January 9, 1959. Rehearing Denied January 30, 1959. *1014 Sanders, Cresap & June, Sidney, for appellant. Paul H. Cresap, Sidney, argued orally for appellant. Brattin, Habedank & Cummings, Sidney, Joe Hill Jones, Dallas, Texas, for respondent. Joe Hill Jones, Dallas, Texas, argued orally for respondent. ANGSTMAN, Justice. This action is one to recover damages for the death of plaintiff's husband who was killed in an airplane crash on June 28, 1952. Plaintiff charges negligence on the part of the pilot, George E. Sturm, Jr., who was also killed in the same crash. At the time of the tragedy there were four persons riding in the airplane, which was a Beechcraft Bonanza, and they were returning to Sidney from Miles City. Upon approaching the landing strip at Sidney another airplane was landing and by reason thereof, Sturm was compelled to circle the airport and come in for a second approach to the landing strip. While doing so the airplane crashed to the ground killing all of the occupants. The complaint charged negligence on the part of the pilot: (1) In making a right rather than a left handed approach to the landing field; (2) In having the propeller of the airplane in high rather than low pitch in approaching the landing and having the landing gear lowered before ascertaining whether a landing could be made, and before learning whether other planes were about to land and thereby causing the plane to stall and fall to the ground; (3) In failing to have the motor overhauled after 650 hours of flight; (4) In failing to keep a proper lookout for the planes lawfully using the landing strip; (5) In failing to raise the landing gear after discovering that the landing strip was occupied by another plane; (6) In making a sharp turn when the propeller was in high pitch and while traveling at a low flying speed at an altitude of approximately 200 feet; (7) In attempting to raise the nose of the plane when it was in a stalled position; (8) In piloting the plane when he was inexperienced in the operation of that type of a plane. These allegations of negligence were put in issue by the answer and the answer contained three affirmative defenses as follows: (1) That all the occupants of the plane were engaged in a joint enterprise at the time of the crash; (2) That the crash was the result of unavoidable circumstances; (3) That plaintiff's husband assumed all of the risk incident to the operation of the plane. Plaintiff denied the allegation of the affirmative defenses. The jury returned a verdict for plaintiff in the sum of $35,000. Judgment was entered on the verdict. Defendant's motion for new trial was denied and he has appealed from the judgment. The first assignment of error relied on by defendant is that court erred in receiving in evidence the deposition of P.K. McKlveen, Civil Aeronautics Administration Inspector, and that defendant was *1015 deprived of the right of cross-examination of this witness. It appears that when this witness was asked to give his opinion on any matter which might have been of assistance in arriving at the conclusion as to what caused the crash of the airplane his reply was: "A. In consideration of instructions from the Chief of the International and Rules Division, Civil Aeronautics Board, Washington, D.C., under memorandum dated February 23, 1955, and signed by G. Nathan Calkins, Jr., I am not permitted to answer this question as answering it would constitute expressing an opinion or conclusion." Defendant contends that when the witness was permitted to answer in this fashion he was deprived of the right of proper cross-examination. A complete answer to this contention is that defendant had no right to cross-examine the witness on matters not touched upon on direct examination. It should be noted that the witness did not give any opinion as an expert. He simply stated what he saw in examining the wreckage after the crash. He testified that he found the propeller in high pitch at that time. That question and answer did not involve any opinion on the part of the witness and defendant was not permitted to bring out on cross-examination matters not touched upon on direct examination. While liberality should be exercised in allowing the right of cross-examination, Cobban v. Hecklen, 27 Mont. 245, 70 P. 805, yet this does not mean that cross-examination should be allowed on matters not touched upon on direct examination. This case is not comparable to that of Herzig v. Sandberg, 54 Mont. 538, 172 P. 132, relied on by defendant, for in that case the witness, unlike the case before us here, had on direct examination given his opinion on a certain matter and hence cross-examination on that subject was properly held should be allowed, to test the accuracy of knowledge of the witness and his acquaintanceship with the subject about which he gave his opinion on direct examination. It is the policy of this state that an officer and employee of the State Aeronautical Commission may not be required "to testify as an expert witness in any suit, action, or proceeding involving any aircraft." R.C.M. 1947, sec. 1-204, subd. (l). This is in line with the Rules of the Civil Aeronautics Board, Washington, D.C., which the courts hold properly prohibit an investigator from testifying regarding his opinions or conclusions. Universal Airline, Inc. v. Eastern Airlines, 1951, 88 U.S. App. D.C. 219, 188 F. (2d) 993; Lobel v. American Airlines, 2 Cir., 1951, 192 F. (2d) 217. By several specifications of error defendant contends that the evidence is insufficient to support the verdict in that it fails to show negligence proximately causing the accident without indulging in speculation and conjecture. In considering this question it should be pointed out that it is not necessary that plaintiff prove all of the acts of negligence alleged. It is sufficient to sustain the verdict and judgment if one or more of the acts of negligence was proven and that such negligence was the proximate cause of the death of plaintiff's husband. Ashley v. Safeway Stores, Inc., 100 Mont. 312, 47 Pac. (2d) 53; Pierce v. Safeway Stores, Inc., 93 Mont. 560, 20 Pac. (2d) 253; Smith v. Bonner, 63 Mont. 571, 208 P. 603; Hume v. Fresno Irr. Dist., 21 Cal. App. (2d) 348, 69 Pac. (2d) 483; Mitchell v. Towne, 31 Cal. App. (2d) 259, 87 Pac. (2d) 908; McMahon v. Schindler, 38 Cal. App. (2d) 642, 102 Pac. (2d) 378. In fact the jury was so instructed. We shall not therefore undertake to determine whether the evidence was sufficient to sustain all the acts of negligence charged. There was evidence that the pilot attempted to make an improper landing when he observed another airplane on the landing strip, by making a 360 degree circle to the left; that a proper landing would have been to parallel the landing on the *1016 right hand side and at the proper time turn to the right and return to the proper point to again approach the landing strip. The proper landing when another airplane is using the landing strip is what is known as an "emergency recovery pattern." Mr. Sturm did not use the emergency landing pattern but instead made a 360 degree circle to the left. Because the left wing of the plane is lower than the right wing in making a circle to the left the plane loses lift and the plane loses altitude if the speed is not increased. In making the turn the evidence discloses that the plane was banked at a 75 to 80 degree angle thereby causing it to lose a great amount of lift. One witness who observed the plane fall testified: "The movements of the aircraft which I feel were characteristic of a stalled condition movements which I observed the aircraft in question to make, were a dropping of the left wing, followed almost immediately by a sudden dropping of the nose of the aircraft to an angle of about 45-degrees below the horizon. These movements in this sequence are characteristic of a stall induced during a left turn." The evidence warranted a finding that the pilot Sturm approached the landing strip with the propeller in high rather than low pitch; that a pilot has more control of his plane in low pitch rather than in high pitch; that low pitch is much the same as an automobile in low gear; that a pilot has more power at his disposal when the propeller is in low pitch and can make an immediate takeoff more easily. The witness McKlveen, the civil aeronautics investigator, testified: "Q. Did you find that the propeller was in high pitch when you examined it? A. Yes." There was ample evidence to sustain a finding that the pilot Sturm did not shift his propeller from high to low pitch when landing, and to sustain a finding of negligence in this regard and that such negligence was the proximate cause of the crash. Whether the evidence was sufficient to sustain other charges of negligence need not be determined. Defendant contends that the court erred in refusing to give his offered instruction numbered 36 1/2 which advised the jury that it could not find negligence by mere conjecture. Other instructions given made it clear that the jury's function was to weigh the evidence and that before it could find for plaintiff it must find from the evidence that there was negligence on the part of the pilot which proximately caused the crash of the plane. There was no prejudicial error in refusing to give this offered instruction. Defendant assigns error in the refusal to give his offered instruction numbered 26 reading: "You are instructed, in your consideration of the evidence presented in this case, that accidents may be unavoidable and that any accident that happens is not necessarily due to some negligent or careless act, and that if you find from a preponderance of the evidence that the airplane accident herein was proximately caused by some external motivating force, other than the lack of due care on the part of the operator of this airplane, the plaintiff is not entitled to recover damages of any kind." There was no error in this respect because the court by other instructions covered this same matter. Thus by instruction numbered 23, the jury was advised: "By the term `unavoidable accident' as used in this charge is meant an event which occurs without negligence on the part of any party to it proximately causing same." And by Instruction No. 26, the jury was told: "You are instructed that if you find, by the preponderance of the evidence, that the crash was caused by any factor or factors over which the pilot or operator had no control then you will *1017 find that no actionable negligence, or any negligence at all, is chargeable to the operator of this airplane and that the Plaintiff is not entitled to recover damages of any kind." Complaint is made of the court's refusal to give defendant's offered instruction numbered 28 reading: "You are instructed that a person who takes an airplane ride for pleasure and as a guest of the pilot, without paying for his passage, assumes a greater risk than one traveling by other means of locomotion and if you find by a preponderance of the evidence that McCutcheon was a guest passenger riding in the airplane for pleasure, the element of risk assumed should be considered in your verdict." This was covered by instruction numbered 13 reading: "You are instructed that a person who takes an airplane ride for pleasure and as the guest of the pilot assumes all ordinary risks incident to the undertaking except the negligence of the pilot." The last assignment of error raises the question of the excessiveness of the verdict. The court instructed the jury that in assessing damages it should award such sum as would represent the fair and reasonable value of subsistence, support, care and comfort, protection, society and comfort of plaintiff, the widow, which she would have received from her husband had he not been killed. Deceased was 43 years of age at the time of his death. He had a life expectancy of 26.8 years. During the first six months of 1952, he had earned $3,124. His earnings in 1951 amounted to $4,915. We cannot say that the verdict is so excessive as to be based upon passion and prejudice rather than upon the evidence. The jury was better able than are we to assess damages. The trial judge also approved of the verdict in denying the motion for new trial. We find no justification for disturbing the verdict and judgment. The judgment is affirmed. BOTTOMLY, Acting C. J., and CASTLES and ADAIR, JJ., concur. HARRISON, C. J., not participating. | 10-30-2013 | [
"333 P.2d 1013 (1959) Erma McCUTCHEON, Plaintiff and Respondent, v. Ervin J. LARSEN, as Administrator of the Estate of George Sturm, Jr., Defendant and Appellant. No. 9628. Supreme Court of Montana. Submitted July 1, 1958. Decided January 9, 1959. Rehearing Denied January 30, 1959. *1014 Sanders, Cresap & June, Sidney, for appellant. Paul H. Cresap, Sidney, argued orally for appellant. Brattin, Habedank & Cummings, Sidney, Joe Hill Jones, Dallas, Texas, for respondent. Joe Hill Jones, Dallas, Texas, argued orally for respondent. ANGSTMAN, Justice. This action is one to recover damages for the death of plaintiff's husband who was killed in an airplane crash on June 28, 1952. Plaintiff charges negligence on the part of the pilot, George E. Sturm, Jr., who was also killed in the same crash.",
"At the time of the tragedy there were four persons riding in the airplane, which was a Beechcraft Bonanza, and they were returning to Sidney from Miles City. Upon approaching the landing strip at Sidney another airplane was landing and by reason thereof, Sturm was compelled to circle the airport and come in for a second approach to the landing strip. While doing so the airplane crashed to the ground killing all of the occupants. The complaint charged negligence on the part of the pilot: (1) In making a right rather than a left handed approach to the landing field; (2) In having the propeller of the airplane in high rather than low pitch in approaching the landing and having the landing gear lowered before ascertaining whether a landing could be made, and before learning whether other planes were about to land and thereby causing the plane to stall and fall to the ground; (3) In failing to have the motor overhauled after 650 hours of flight; (4) In failing to keep a proper lookout for the planes lawfully using the landing strip; (5) In failing to raise the landing gear after discovering that the landing strip was occupied by another plane; (6) In making a sharp turn when the propeller was in high pitch and while traveling at a low flying speed at an altitude of approximately 200 feet; (7) In attempting to raise the nose of the plane when it was in a stalled position; (8) In piloting the plane when he was inexperienced in the operation of that type of a plane.",
"These allegations of negligence were put in issue by the answer and the answer contained three affirmative defenses as follows: (1) That all the occupants of the plane were engaged in a joint enterprise at the time of the crash; (2) That the crash was the result of unavoidable circumstances; (3) That plaintiff's husband assumed all of the risk incident to the operation of the plane. Plaintiff denied the allegation of the affirmative defenses. The jury returned a verdict for plaintiff in the sum of $35,000. Judgment was entered on the verdict.",
"Defendant's motion for new trial was denied and he has appealed from the judgment. The first assignment of error relied on by defendant is that court erred in receiving in evidence the deposition of P.K. McKlveen, Civil Aeronautics Administration Inspector, and that defendant was *1015 deprived of the right of cross-examination of this witness. It appears that when this witness was asked to give his opinion on any matter which might have been of assistance in arriving at the conclusion as to what caused the crash of the airplane his reply was: \"A. In consideration of instructions from the Chief of the International and Rules Division, Civil Aeronautics Board, Washington, D.C., under memorandum dated February 23, 1955, and signed by G. Nathan Calkins, Jr., I am not permitted to answer this question as answering it would constitute expressing an opinion or conclusion.\" Defendant contends that when the witness was permitted to answer in this fashion he was deprived of the right of proper cross-examination.",
"A complete answer to this contention is that defendant had no right to cross-examine the witness on matters not touched upon on direct examination. It should be noted that the witness did not give any opinion as an expert. He simply stated what he saw in examining the wreckage after the crash. He testified that he found the propeller in high pitch at that time. That question and answer did not involve any opinion on the part of the witness and defendant was not permitted to bring out on cross-examination matters not touched upon on direct examination. While liberality should be exercised in allowing the right of cross-examination, Cobban v. Hecklen, 27 Mont.",
"245, 70 P. 805, yet this does not mean that cross-examination should be allowed on matters not touched upon on direct examination. This case is not comparable to that of Herzig v. Sandberg, 54 Mont. 538, 172 P. 132, relied on by defendant, for in that case the witness, unlike the case before us here, had on direct examination given his opinion on a certain matter and hence cross-examination on that subject was properly held should be allowed, to test the accuracy of knowledge of the witness and his acquaintanceship with the subject about which he gave his opinion on direct examination. It is the policy of this state that an officer and employee of the State Aeronautical Commission may not be required \"to testify as an expert witness in any suit, action, or proceeding involving any aircraft.\"",
"R.C.M. 1947, sec. 1-204, subd. (l). This is in line with the Rules of the Civil Aeronautics Board, Washington, D.C., which the courts hold properly prohibit an investigator from testifying regarding his opinions or conclusions. Universal Airline, Inc. v. Eastern Airlines, 1951, 88 U.S. App. D.C. 219, 188 F. (2d) 993; Lobel v. American Airlines, 2 Cir., 1951, 192 F. (2d) 217. By several specifications of error defendant contends that the evidence is insufficient to support the verdict in that it fails to show negligence proximately causing the accident without indulging in speculation and conjecture. In considering this question it should be pointed out that it is not necessary that plaintiff prove all of the acts of negligence alleged.",
"It is sufficient to sustain the verdict and judgment if one or more of the acts of negligence was proven and that such negligence was the proximate cause of the death of plaintiff's husband. Ashley v. Safeway Stores, Inc., 100 Mont. 312, 47 Pac. (2d) 53; Pierce v. Safeway Stores, Inc., 93 Mont. 560, 20 Pac. (2d) 253; Smith v. Bonner, 63 Mont. 571, 208 P. 603; Hume v. Fresno Irr. Dist., 21 Cal. App. (2d) 348, 69 Pac. (2d) 483; Mitchell v. Towne, 31 Cal. App.",
"(2d) 259, 87 Pac. (2d) 908; McMahon v. Schindler, 38 Cal. App. (2d) 642, 102 Pac. (2d) 378. In fact the jury was so instructed. We shall not therefore undertake to determine whether the evidence was sufficient to sustain all the acts of negligence charged. There was evidence that the pilot attempted to make an improper landing when he observed another airplane on the landing strip, by making a 360 degree circle to the left; that a proper landing would have been to parallel the landing on the *1016 right hand side and at the proper time turn to the right and return to the proper point to again approach the landing strip. The proper landing when another airplane is using the landing strip is what is known as an \"emergency recovery pattern.\" Mr. Sturm did not use the emergency landing pattern but instead made a 360 degree circle to the left. Because the left wing of the plane is lower than the right wing in making a circle to the left the plane loses lift and the plane loses altitude if the speed is not increased.",
"In making the turn the evidence discloses that the plane was banked at a 75 to 80 degree angle thereby causing it to lose a great amount of lift. One witness who observed the plane fall testified: \"The movements of the aircraft which I feel were characteristic of a stalled condition movements which I observed the aircraft in question to make, were a dropping of the left wing, followed almost immediately by a sudden dropping of the nose of the aircraft to an angle of about 45-degrees below the horizon. These movements in this sequence are characteristic of a stall induced during a left turn.\"",
"The evidence warranted a finding that the pilot Sturm approached the landing strip with the propeller in high rather than low pitch; that a pilot has more control of his plane in low pitch rather than in high pitch; that low pitch is much the same as an automobile in low gear; that a pilot has more power at his disposal when the propeller is in low pitch and can make an immediate takeoff more easily.",
"The witness McKlveen, the civil aeronautics investigator, testified: \"Q. Did you find that the propeller was in high pitch when you examined it? A. Yes.\" There was ample evidence to sustain a finding that the pilot Sturm did not shift his propeller from high to low pitch when landing, and to sustain a finding of negligence in this regard and that such negligence was the proximate cause of the crash. Whether the evidence was sufficient to sustain other charges of negligence need not be determined. Defendant contends that the court erred in refusing to give his offered instruction numbered 36 1/2 which advised the jury that it could not find negligence by mere conjecture. Other instructions given made it clear that the jury's function was to weigh the evidence and that before it could find for plaintiff it must find from the evidence that there was negligence on the part of the pilot which proximately caused the crash of the plane.",
"There was no prejudicial error in refusing to give this offered instruction. Defendant assigns error in the refusal to give his offered instruction numbered 26 reading: \"You are instructed, in your consideration of the evidence presented in this case, that accidents may be unavoidable and that any accident that happens is not necessarily due to some negligent or careless act, and that if you find from a preponderance of the evidence that the airplane accident herein was proximately caused by some external motivating force, other than the lack of due care on the part of the operator of this airplane, the plaintiff is not entitled to recover damages of any kind.\" There was no error in this respect because the court by other instructions covered this same matter. Thus by instruction numbered 23, the jury was advised: \"By the term `unavoidable accident' as used in this charge is meant an event which occurs without negligence on the part of any party to it proximately causing same.\"",
"And by Instruction No. 26, the jury was told: \"You are instructed that if you find, by the preponderance of the evidence, that the crash was caused by any factor or factors over which the pilot or operator had no control then you will *1017 find that no actionable negligence, or any negligence at all, is chargeable to the operator of this airplane and that the Plaintiff is not entitled to recover damages of any kind.\" Complaint is made of the court's refusal to give defendant's offered instruction numbered 28 reading: \"You are instructed that a person who takes an airplane ride for pleasure and as a guest of the pilot, without paying for his passage, assumes a greater risk than one traveling by other means of locomotion and if you find by a preponderance of the evidence that McCutcheon was a guest passenger riding in the airplane for pleasure, the element of risk assumed should be considered in your verdict.\" This was covered by instruction numbered 13 reading: \"You are instructed that a person who takes an airplane ride for pleasure and as the guest of the pilot assumes all ordinary risks incident to the undertaking except the negligence of the pilot.\"",
"The last assignment of error raises the question of the excessiveness of the verdict. The court instructed the jury that in assessing damages it should award such sum as would represent the fair and reasonable value of subsistence, support, care and comfort, protection, society and comfort of plaintiff, the widow, which she would have received from her husband had he not been killed. Deceased was 43 years of age at the time of his death. He had a life expectancy of 26.8 years. During the first six months of 1952, he had earned $3,124. His earnings in 1951 amounted to $4,915.",
"We cannot say that the verdict is so excessive as to be based upon passion and prejudice rather than upon the evidence. The jury was better able than are we to assess damages. The trial judge also approved of the verdict in denying the motion for new trial. We find no justification for disturbing the verdict and judgment. The judgment is affirmed. BOTTOMLY, Acting C. J., and CASTLES and ADAIR, JJ., concur. HARRISON, C. J., not participating."
] | https://www.courtlistener.com/api/rest/v3/opinions/1299519/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
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] | https://www.courtlistener.com/api/rest/v3/recap-documents/145320140/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Petrie, J. Before us are cross appeals from an order on summary judgment dismissing plaintiffs' claims for damages under all theories presented and dismissing defendants' counterclaim for malicious prosecution. We dismiss both appeals. Because both parties have appealed from an order allegedly entered on March 6, 1981, we accept as a fact that an order was entered on that date. No such order has been presented to us as a part of the clerk's papers. See RAP 9.1, 9.6 and 9.7. In response to a letter request from the clerk of this court, however, counsel for appellant did forward to us an unsigned and undated document bearing Pierce County cause 296489 and entitled "Order On Defendants' Motion for Summary Judgment." That document specifies on its face the several files and records which the trial court considered in reaching its decision. Those items include five specifically identified affidavits, three of which have not been made part of the record on appeal; one motion of defendant Hess Furniture, Inc., and one motion of defendant Alice Farber, neither of which has been made part of the record on appeal; one memorandum of authorities on motion for summary judgment, which has not been made a part of the record on appeal; Pierce County cause 250603, a previous action between these parties, selected portions only of which have been made a part of the record on appeal; and the bankruptcy proceedings of Harold and Anneliese House in Bankruptcy Court for the Western District of Washington, only selected portions of which have been made a part of the record on appeal. At oral argument on appeal counsel for appellant acknowledged candidly that he did not order up all the material which the trial judge said he considered. In order to review an order on summary judgment "[w]e must have before us the precise record—no more and no less—considered by the trial court." American Universal Ins. Co. v. Ranson, 59 Wn.2d 811, 816, 370 P.2d 867 (1962). In the absence of a properly certified and complete *859record appellate courts have dismissed appeals. Kataisto v. Low, 73 Wn.2d 341, 438 P.2d 623 (1968); Sinclair v. Betlach, 1 Wn. App. 1033, 467 P.2d 344 (1970). We are urged now, however, to interpret the rules on appeal liberally in order to promote justice and facilitate a decision of the case on its merits in order to best serve the ends of justice. RAP 1.2(a) and (c). Millikan v. Board of Directors, 92 Wn.2d 213, 595 P.2d 533 (1979); see LeBeuf v. Atkins, 93 Wn.2d 34, 604 P.2d 1287 (1980). In the case at bench, however, the contending parties, both feeling aggrieved, have requested us to review an order of the Superior Court and neither party has presented to us the appropriate documents by which we can reasonably and logically review that order—assuming, of course, that it has ever been validly executed and entered by the trial court. We are not inclined in the case at bench to waive any of the rules by which we are obliged to pass upon matters before us. Both appeals are dismissed. Worswick, A.C.J., and Reed, J., concur. | 07-23-2022 | [
"Petrie, J. Before us are cross appeals from an order on summary judgment dismissing plaintiffs' claims for damages under all theories presented and dismissing defendants' counterclaim for malicious prosecution. We dismiss both appeals. Because both parties have appealed from an order allegedly entered on March 6, 1981, we accept as a fact that an order was entered on that date. No such order has been presented to us as a part of the clerk's papers. See RAP 9.1, 9.6 and 9.7. In response to a letter request from the clerk of this court, however, counsel for appellant did forward to us an unsigned and undated document bearing Pierce County cause 296489 and entitled \"Order On Defendants' Motion for Summary Judgment.\" That document specifies on its face the several files and records which the trial court considered in reaching its decision. Those items include five specifically identified affidavits, three of which have not been made part of the record on appeal; one motion of defendant Hess Furniture, Inc., and one motion of defendant Alice Farber, neither of which has been made part of the record on appeal; one memorandum of authorities on motion for summary judgment, which has not been made a part of the record on appeal; Pierce County cause 250603, a previous action between these parties, selected portions only of which have been made a part of the record on appeal; and the bankruptcy proceedings of Harold and Anneliese House in Bankruptcy Court for the Western District of Washington, only selected portions of which have been made a part of the record on appeal. At oral argument on appeal counsel for appellant acknowledged candidly that he did not order up all the material which the trial judge said he considered.",
"In order to review an order on summary judgment \"[w]e must have before us the precise record—no more and no less—considered by the trial court.\" American Universal Ins. Co. v. Ranson, 59 Wn.2d 811, 816, 370 P.2d 867 (1962). In the absence of a properly certified and complete *859record appellate courts have dismissed appeals. Kataisto v. Low, 73 Wn.2d 341, 438 P.2d 623 (1968); Sinclair v. Betlach, 1 Wn. App. 1033, 467 P.2d 344 (1970). We are urged now, however, to interpret the rules on appeal liberally in order to promote justice and facilitate a decision of the case on its merits in order to best serve the ends of justice. RAP 1.2(a) and (c). Millikan v. Board of Directors, 92 Wn.2d 213, 595 P.2d 533 (1979); see LeBeuf v. Atkins, 93 Wn.2d 34, 604 P.2d 1287 (1980). In the case at bench, however, the contending parties, both feeling aggrieved, have requested us to review an order of the Superior Court and neither party has presented to us the appropriate documents by which we can reasonably and logically review that order—assuming, of course, that it has ever been validly executed and entered by the trial court.",
"We are not inclined in the case at bench to waive any of the rules by which we are obliged to pass upon matters before us. Both appeals are dismissed. Worswick, A.C.J., and Reed, J., concur."
] | https://www.courtlistener.com/api/rest/v3/opinions/6852621/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Exhibit 10.1 AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT
This Amendment No. 1 to Loan and Security Agreement (this “Amendment”) is dated as of June 17, 2015 (the “First Amendment Date”) and is entered into by and among CHROMADEX CORPORATION, a Delaware corporation, and each of its subsidiaries (hereinafter collectively referred to as the “Borrower”), the several banks and other financial institutions or other entities from time to time party hereto (collectively, “Lender”) and HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation, in its capacity as administrative agent and itself and Lender (“Agent”). Capitalized terms used herein without definition shall have the same meanings given them in the Loan Agreement (as defined below).
Recitals A. Borrower, Agent and Lender have entered into that certain Loan and Security Agreement dated as of September 29, 2014 (as may be amended, restated, or otherwise modified, the “Loan Agreement”), pursuant to which Lender has extended and made available to Borrower certain advances of money. B. Borrower, Agent and Lender have agreed to amend certain provisions as set forth herein. Agreement NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be legally bound, the parties hereto agree as follows: 1. Amendment. (a) The definition of “Amortization Date” in Section 1.1 is hereby amended and restated in its entirety as follows: “Amortization Date” means April 1, 2016; provided however, if Agent has received evidence that Borrower’s consolidated revenue (in accordance with GAAP) is equal to or in excess of $11,500,000 for the trailing six month ending December 31, 2015, then July 1, 2016. (b) Section 2.2(b) is hereby amended and restated in its entirety as follows: “Advance Request. To obtain a Term Loan Advance, Borrower shall complete, sign and deliver an Advance Request (at least one (1) Business Day before the Advance Date) to Agent. Lender shall fund the Term Loan Advance in the manner requested by the Advance Request provided that each of the applicable conditions precedent to such Term Loan Advance (Section 4.1 and Section 4.3 with respect to an initial Advance Request and Section 4.2 and Section 4.3 with respect to any subsequent Advance Request) is satisfied as of the requested Advance Date.” 2. Borrower’s Representations And Warranties. Borrower represents and warrants that: 2.1 Immediately upon giving effect to this Amendment (i) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (ii) no Event of Default has occurred and is continuing with respect to which Borrower has not been notified in writing by Agent or Lender. 2.2 Borrower has the corporate power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment. 2.3 The certificate of incorporation, bylaws and other organizational documents of Borrower delivered to Lender on the Closing Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect. 2.4 This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights; and 2.5 As of the date hereof, it has no defenses against the obligations to pay any amounts under the Obligations. Borrower acknowledges that Lender and Agent have acted in good faith and has conducted in a commercially reasonable manner its relationships with Borrower in connection with this Amendment and in connection with the Loan Documents.
--------------------------------------------------------------------------------
Borrower understands and acknowledges that Lender is entering into this Amendment in reliance upon, and in partial consideration for, the above representations and warranties, and agrees that such reliance is reasonable and appropriate. 3. Limitation. The amendments set forth in this Amendment shall be limited precisely as written and shall not be deemed (a) to be a waiver or modification of any other term or condition of the Loan Agreement or of any other instrument or agreement referred to therein or to prejudice any right or remedy which Agent or Lender may now have or may have in the future under or in connection with the Loan Agreement (as amended hereby) or any instrument or agreement referred to therein; or (b) to be a consent to any future amendment or modification or waiver to any instrument or agreement the execution and delivery of which is consented to hereby, or to any waiver of any of the provisions thereof. Except as expressly amended hereby, the Loan Agreement shall continue in full force and effect. 4. Effectiveness. This Amendment shall become effective upon (a) the satisfaction of Borrower, Agent and Lender having duly executed and delivered this Amendment to Agent, (b) Borrower fully drawing down the Second Advance on or prior to June 20, 2015 and (c) Agent’s receipt of a non-renewable facility fee equal to $15,000. 5. Counterparts. This Amendment may be signed in any number of counterparts, and by different parties hereto in separate counterparts, with the same effect as if the signatures to each such counterpart were upon a single instrument. All counterparts shall be deemed an original of this Amendment. This Amendment may be executed by facsimile, portable document format (.pdf) or similar technology signature, and such signature shall constitute an original for all purposes. 6. Incorporation By Reference. The provisions of Section 11 of the Agreement shall be deemed incorporated herein by reference, mutatis mutandis.
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In Witness Whereof, the parties have duly authorized and caused this Amendment to be executed as of the date first written above. BORROWER: CHROMADEX CORPORATION Signature: /s/ Frank Jaksch Print Name: Frank Jaksch Title: Chief Executive Officer CHROMADEX, INC. Signature: /s/ Frank Jaksch Print Name: Frank Jaksch Title: Chief Executive Officer CHROMADEX ANALYTICS, INC. Signature: /s/ Frank Jaksch Print Name: Frank Jaksch Title: Chief Executive Officer SPHERIX CONSULTING, INC. Signature: /s/ Frank Jaksch Print Name: Frank Jaksch Title: Chief Executive Officer
Accepted in Palo Alto, California:
AGENT: HERCULES TECHNOLOGY GROWTH CAPITAL, INC. By: /s/ Ben Bang Ben Bang, Associate General Counsel LENDER: HERCULES TECHNOLOGY II, L.P., a Delaware limited partnership By: Hercules Technology SBIC Management, LLC, its General Partner By: Hercules Technology Growth Capital, Inc., its Manager By: /s/ Ben Bang Ben Bang, Associate General Counsel | [
"Exhibit 10.1 AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT This Amendment No. 1 to Loan and Security Agreement (this “Amendment”) is dated as of June 17, 2015 (the “First Amendment Date”) and is entered into by and among CHROMADEX CORPORATION, a Delaware corporation, and each of its subsidiaries (hereinafter collectively referred to as the “Borrower”), the several banks and other financial institutions or other entities from time to time party hereto (collectively, “Lender”) and HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation, in its capacity as administrative agent and itself and Lender (“Agent”). Capitalized terms used herein without definition shall have the same meanings given them in the Loan Agreement (as defined below). Recitals A. Borrower, Agent and Lender have entered into that certain Loan and Security Agreement dated as of September 29, 2014 (as may be amended, restated, or otherwise modified, the “Loan Agreement”), pursuant to which Lender has extended and made available to Borrower certain advances of money. B. Borrower, Agent and Lender have agreed to amend certain provisions as set forth herein. Agreement NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be legally bound, the parties hereto agree as follows: 1. Amendment.",
"(a) The definition of “Amortization Date” in Section 1.1 is hereby amended and restated in its entirety as follows: “Amortization Date” means April 1, 2016; provided however, if Agent has received evidence that Borrower’s consolidated revenue (in accordance with GAAP) is equal to or in excess of $11,500,000 for the trailing six month ending December 31, 2015, then July 1, 2016. (b) Section 2.2(b) is hereby amended and restated in its entirety as follows: “Advance Request. To obtain a Term Loan Advance, Borrower shall complete, sign and deliver an Advance Request (at least one (1) Business Day before the Advance Date) to Agent.",
"Lender shall fund the Term Loan Advance in the manner requested by the Advance Request provided that each of the applicable conditions precedent to such Term Loan Advance (Section 4.1 and Section 4.3 with respect to an initial Advance Request and Section 4.2 and Section 4.3 with respect to any subsequent Advance Request) is satisfied as of the requested Advance Date.” 2. Borrower’s Representations And Warranties. Borrower represents and warrants that: 2.1 Immediately upon giving effect to this Amendment (i) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (ii) no Event of Default has occurred and is continuing with respect to which Borrower has not been notified in writing by Agent or Lender. 2.2 Borrower has the corporate power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment. 2.3 The certificate of incorporation, bylaws and other organizational documents of Borrower delivered to Lender on the Closing Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect.",
"2.4 This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights; and 2.5 As of the date hereof, it has no defenses against the obligations to pay any amounts under the Obligations. Borrower acknowledges that Lender and Agent have acted in good faith and has conducted in a commercially reasonable manner its relationships with Borrower in connection with this Amendment and in connection with the Loan Documents.",
"-------------------------------------------------------------------------------- Borrower understands and acknowledges that Lender is entering into this Amendment in reliance upon, and in partial consideration for, the above representations and warranties, and agrees that such reliance is reasonable and appropriate. 3. Limitation. The amendments set forth in this Amendment shall be limited precisely as written and shall not be deemed (a) to be a waiver or modification of any other term or condition of the Loan Agreement or of any other instrument or agreement referred to therein or to prejudice any right or remedy which Agent or Lender may now have or may have in the future under or in connection with the Loan Agreement (as amended hereby) or any instrument or agreement referred to therein; or (b) to be a consent to any future amendment or modification or waiver to any instrument or agreement the execution and delivery of which is consented to hereby, or to any waiver of any of the provisions thereof.",
"Except as expressly amended hereby, the Loan Agreement shall continue in full force and effect. 4. Effectiveness. This Amendment shall become effective upon (a) the satisfaction of Borrower, Agent and Lender having duly executed and delivered this Amendment to Agent, (b) Borrower fully drawing down the Second Advance on or prior to June 20, 2015 and (c) Agent’s receipt of a non-renewable facility fee equal to $15,000. 5. Counterparts. This Amendment may be signed in any number of counterparts, and by different parties hereto in separate counterparts, with the same effect as if the signatures to each such counterpart were upon a single instrument. All counterparts shall be deemed an original of this Amendment.",
"This Amendment may be executed by facsimile, portable document format (.pdf) or similar technology signature, and such signature shall constitute an original for all purposes. 6. Incorporation By Reference. The provisions of Section 11 of the Agreement shall be deemed incorporated herein by reference, mutatis mutandis. -------------------------------------------------------------------------------- In Witness Whereof, the parties have duly authorized and caused this Amendment to be executed as of the date first written above. BORROWER: CHROMADEX CORPORATION Signature: /s/ Frank Jaksch Print Name: Frank Jaksch Title: Chief Executive Officer CHROMADEX, INC. Signature: /s/ Frank Jaksch Print Name: Frank Jaksch Title: Chief Executive Officer CHROMADEX ANALYTICS, INC. Signature: /s/ Frank Jaksch Print Name: Frank Jaksch Title: Chief Executive Officer SPHERIX CONSULTING, INC. Signature: /s/ Frank Jaksch Print Name: Frank Jaksch Title: Chief Executive Officer Accepted in Palo Alto, California: AGENT: HERCULES TECHNOLOGY GROWTH CAPITAL, INC. By: /s/ Ben Bang Ben Bang, Associate General Counsel LENDER: HERCULES TECHNOLOGY II, L.P., a Delaware limited partnership By: Hercules Technology SBIC Management, LLC, its General Partner By: Hercules Technology Growth Capital, Inc., its Manager By: /s/ Ben Bang Ben Bang, Associate General Counsel"
] | https://github.com/TheAtticusProject/cuad | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
|
By JUDGE CLIFFORD R. WECKSTEIN The plaintiff (Dominion Leasing) has sued the defendants (collectively, Thompson) on written lease and guaranty documents. Thompson has filed a third-party claim against the third-party defendants (collectively, Lee). Dominion Leasing’s motion to sever the third-party claims has been taken under advisement. Lee has moved to dismiss the third-party claims and has objected to discovery proceedings initiated by Thompson. The Court has reviewed the voluminous documents, including memoranda of authorities, filed in this case. On April 7, 1989, counsel argued orally the motion to dismiss the third-party claim, and I announced the rulings that are memorialized in this opinion letter. Upon consideration of the pleadings, exhibits, memoranda, authorities, and argument, the Court dismisses with prejudice the third-party claims. These claims are barred by res judicata, estoppel by judgment and collateral estoppel. The questions raised in the instant third-party action were raised, however inartfully, in pleadings filed by Thompson in a prior action among the same parties in the *447United States District Court for the District of Columbia. To the point, the claims now asserted are matters "which the parties might have litigated in the case" in the District of Columbia federal court, Jones v. Morris Plan Bank, 168 Va. 284, 291, 191 S.E.2d 608 (1937). The federal case was dismissed with prejudice. See generally, Flora, Flora & Montague, Inc. v. Saunders, 235 Va. 306, 367 S.E.2d 493 (1988). Thompson’s written response to Lee’s motion to dismiss is, in some parts, disingenuous. In one respect, it is more. It is deceitful. Thompson advances authorities for the general proposition that, under the Federal Rules of Civil Procedure, an action voluntarily dismissed is dismissed without prejudice; that res judicata does not apply to a voluntary nonsuit taken without prejudice. Thompson’s argument deliberately ignores the fact that the District of Columbia action was, upon stipulation of the parties, dismissed with prejudice. Furthermore, Thompson’s memorandum filed January 24, 1989, makes clear the fact that, in opposing dismissal of the third-party claim, he wishes to litigate in this Court matters which, in the written agreement setting the federal case, he contracted to arbitrate. Judge Harold Greene, in a memorandum and order filed August 19, 1988, in the United States District Court for the District of Columbia, imposed Rule 11 sanctions against Thompson for similarly trying to litigate (on contempt motions) claims that appear to be the same or similar to those Thompson makes in his current pleadings and memoranda. Still further, Thompson has attempted to engage in discovery in this case in a manner that is totally foreign to permissible procedures under the Rules of the Supreme Court of Virginia. In the proceedings held on April 7, 1989, it was disclosed that, on April 5, a judge of the Superior Court for the District of Columbia had dismissed what Lee asserted (and Thompson did not dispute) was a similar third-party action filed by Thompson against Lee in that court, on the same basis (Lee stated without contradiction) that this Court dismisses the third-party claim. Nonetheless, Thompson continued to pursue his action against Lee in this Court. *448For all of these reasons and because an attorney who had made any reasoned inquiry would have concluded that the third-party claims are barred by law, this Court will impose sanctions under Virginia Code § 8.01-271.1 against counsel, W. Edward Thompson, and against clients, W. Edward Thompson and W. Edward Thompson & Associates, P.C. Judge Greene, in imposing sanctions against Mr. Thompson and his counsel, wrote that, "It would be difficult to construct a better case for the imposition of Rule 11 sanctions." Judge Greene has not had the opportunity to see Mr. Thompson’s filings in the case at bar. This is a better sanction case than the one Judge Greene had. The pleadings and memoranda filed by Thompson in the third-party action are outrageous and egregious violations of Section 8.01-271.1. They evidence little but desire to vex and harass Lee and to unnecessarily delay Dominion Leasing’s case. See generally, Sanctions: Rule 11 and Other Powers, 2d ed., American Bar Assn. 1988, and cases therein cited. The Court will fix the sanctions after counsel for Lee have had the opportunity to submit statements of their attorney fees and costs. Dismissal of the third party claim moots Lee’s objection to Thompson’s discovery requests and likewise moots Dominion Leasing’s motion to sever. The Court has examined the pleadings filed by Thompson in response to the motion for judgment. Especially when these pleadings are stripped of their allegations against Lee, they constitute an admission of liability on the causes of action plead in the motion for judgment. The Court, on its own motion, will enter summary judgment for Dominion Leasing on liability and set the matter down for trial on damages. | 11-24-2022 | [
"By JUDGE CLIFFORD R. WECKSTEIN The plaintiff (Dominion Leasing) has sued the defendants (collectively, Thompson) on written lease and guaranty documents. Thompson has filed a third-party claim against the third-party defendants (collectively, Lee). Dominion Leasing’s motion to sever the third-party claims has been taken under advisement. Lee has moved to dismiss the third-party claims and has objected to discovery proceedings initiated by Thompson. The Court has reviewed the voluminous documents, including memoranda of authorities, filed in this case. On April 7, 1989, counsel argued orally the motion to dismiss the third-party claim, and I announced the rulings that are memorialized in this opinion letter. Upon consideration of the pleadings, exhibits, memoranda, authorities, and argument, the Court dismisses with prejudice the third-party claims. These claims are barred by res judicata, estoppel by judgment and collateral estoppel. The questions raised in the instant third-party action were raised, however inartfully, in pleadings filed by Thompson in a prior action among the same parties in the *447United States District Court for the District of Columbia. To the point, the claims now asserted are matters \"which the parties might have litigated in the case\" in the District of Columbia federal court, Jones v. Morris Plan Bank, 168 Va. 284, 291, 191 S.E.2d 608 (1937).",
"The federal case was dismissed with prejudice. See generally, Flora, Flora & Montague, Inc. v. Saunders, 235 Va. 306, 367 S.E.2d 493 (1988). Thompson’s written response to Lee’s motion to dismiss is, in some parts, disingenuous. In one respect, it is more. It is deceitful. Thompson advances authorities for the general proposition that, under the Federal Rules of Civil Procedure, an action voluntarily dismissed is dismissed without prejudice; that res judicata does not apply to a voluntary nonsuit taken without prejudice. Thompson’s argument deliberately ignores the fact that the District of Columbia action was, upon stipulation of the parties, dismissed with prejudice. Furthermore, Thompson’s memorandum filed January 24, 1989, makes clear the fact that, in opposing dismissal of the third-party claim, he wishes to litigate in this Court matters which, in the written agreement setting the federal case, he contracted to arbitrate. Judge Harold Greene, in a memorandum and order filed August 19, 1988, in the United States District Court for the District of Columbia, imposed Rule 11 sanctions against Thompson for similarly trying to litigate (on contempt motions) claims that appear to be the same or similar to those Thompson makes in his current pleadings and memoranda. Still further, Thompson has attempted to engage in discovery in this case in a manner that is totally foreign to permissible procedures under the Rules of the Supreme Court of Virginia.",
"In the proceedings held on April 7, 1989, it was disclosed that, on April 5, a judge of the Superior Court for the District of Columbia had dismissed what Lee asserted (and Thompson did not dispute) was a similar third-party action filed by Thompson against Lee in that court, on the same basis (Lee stated without contradiction) that this Court dismisses the third-party claim. Nonetheless, Thompson continued to pursue his action against Lee in this Court. *448For all of these reasons and because an attorney who had made any reasoned inquiry would have concluded that the third-party claims are barred by law, this Court will impose sanctions under Virginia Code § 8.01-271.1 against counsel, W. Edward Thompson, and against clients, W. Edward Thompson and W. Edward Thompson & Associates, P.C. Judge Greene, in imposing sanctions against Mr. Thompson and his counsel, wrote that, \"It would be difficult to construct a better case for the imposition of Rule 11 sanctions.\"",
"Judge Greene has not had the opportunity to see Mr. Thompson’s filings in the case at bar. This is a better sanction case than the one Judge Greene had. The pleadings and memoranda filed by Thompson in the third-party action are outrageous and egregious violations of Section 8.01-271.1. They evidence little but desire to vex and harass Lee and to unnecessarily delay Dominion Leasing’s case. See generally, Sanctions: Rule 11 and Other Powers, 2d ed., American Bar Assn. 1988, and cases therein cited. The Court will fix the sanctions after counsel for Lee have had the opportunity to submit statements of their attorney fees and costs. Dismissal of the third party claim moots Lee’s objection to Thompson’s discovery requests and likewise moots Dominion Leasing’s motion to sever. The Court has examined the pleadings filed by Thompson in response to the motion for judgment.",
"Especially when these pleadings are stripped of their allegations against Lee, they constitute an admission of liability on the causes of action plead in the motion for judgment. The Court, on its own motion, will enter summary judgment for Dominion Leasing on liability and set the matter down for trial on damages."
] | https://www.courtlistener.com/api/rest/v3/opinions/8661937/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
506 S.E.2d 101 (1998) 270 Ga. 14 POTTS et al. v. UAP-GA. AG. CHEM., INC. et al. No. S97G1889. Supreme Court of Georgia. September 14, 1998. Reconsideration Denied October 23, 1998. *102 John Michael Brown, Augusta, Stephen L. Ivie, Ashburn, for Kenneth Potts, Jr., Admr., at al. Donald A. Sweat, Gardner, Willis, Sweat & Goldsmith, Albany, Todd S. Handelman, J. Kevin Buster, Carmen R. Toledo, Atlanta, for UAP-Ga. Ag. Chem., Inc., et al. CARLEY, Justice. Rusty LeBlanc became ill after cleaning chemicals for his employer, UAP-GA. AG. CHEM., INC. (UAP). During stays at two hospitals, LeBlanc was treated for chemical poisoning and for other possible conditions. One doctor, as part of the explanation for his decision to discontinue the treatment for chemical poisoning, stated that he had been reassured by David Register, the branch manager for UAP, that LeBlanc could not possibly have been exposed to any chemicals. LeBlanc eventually died and Potts, as administrator, and LeBlanc's widow, on behalf of herself and LeBlanc's minor child, (Appellants) brought this wrongful death and survival action against UAP and Register (Appellees), alleging fraud and intentional infliction of emotional distress. The trial court granted summary judgment in favor of Appellees, holding that they are immune from suit pursuant to the exclusive remedy provision of the Workers' Compensation Act (Act), OCGA § 34-9-11. The Court of Appeals affirmed on the basis that there was no showing of any personal animosity between Register and LeBlanc unrelated to the conduct of UAP's business. Potts v. UAP-GA AG Chem, 227 Ga.App. 841, 846, 490 S.E.2d 432 (1997). We granted certiorari to consider whether the intentional torts allegedly committed off the worksite and at a time when LeBlanc was not engaged in any work activity can be considered to have arisen "out of and in the course of" his employment such that the exclusive remedy provision of OCGA § 34-9-11 applies. Tort immunity is dependent upon the compensability of the injury under the Act. If the willful act of a third person is directed against an employee for reasons personal to such employee, then there is not a covered injury and, consequently, no tort immunity. OCGA §§ 34-9-1(4), 34-9-11(a); Hennly v. Richardson, 264 Ga. 355, 356(1), 444 S.E.2d 317 (1994). Whether an injury is compensable or only a non-compensable occurrence due to "reasons personal to" the employee is dependent upon whether the injury arose out of and in the course of the employment. Hennly v. Richardson, supra at 356(1), 444 S.E.2d 317. See also Helton v. Interstate Brands Corp., 155 Ga.App. 607, 608, 271 S.E.2d 739 (1980). It has long been established that the statutory requirements that the injury arise "out of" the employment and "in the course of" the employment both "`must concur before the work(ers') compensation act can apply to an injury to an employee. (Cit.)' [Cit.]" Garrett v. K-Mart Corp., 197 Ga.App. 374, 375, 398 S.E.2d 302 (1990). Thus, unless the alleged injury to LeBlanc arose "out of" and "in the course of" his employment with UAP, it arose from "reasons personal to" him and Appellees *103 have no tort immunity for that non-compensable injury. An injury arises "in the course of" employment when it occurs within the period of the employment, at a place where the employee may be in performance of [his or] her duties and while [he or] she is fulfilling or doing something incidental to those duties. [Cit.] Hennly v. Richardson, supra at 356(1), 444 S.E.2d 317. "This statutory requirement relates to the time, place and circumstances under which the injury takes place. [Cit.]" Murphy v. ARA Services, 164 Ga.App. 859, 861, 298 S.E.2d 528 (1982). Therefore, the Court of Appeals erred by considering only evidence of personal animosity between Register and LeBlanc which was unrelated to the conduct of UAP's business. The record shows that the alleged fraud did not occur during the period of LeBlanc's employment, the hospital clearly was not a place where he performed employment duties, and he was not fulfilling or doing anything incidental to his employment duties. See Lee v. Middleton Logging Co., 198 Ga.App. 585, 402 S.E.2d 536 (1991). Compare Hennly v. Richardson, supra at 356(1), 444 S.E.2d 317. Thus, any damages resulting from the alleged fraud "do not arise `out of or in the course of the employment,' but rather, result from the intentional misconduct of the defendants subsequent to the physical injuries which gave rise to the original workers' compensation claim." Griggs v. All-Steel Bldgs., 209 Ga.App. 253, 256, 433 S.E.2d 89 (1993). Georgia law provides a common law cause of action for fraud and other intentional torts committed by an employer or co-employee where the tortious "act is not an accident arising out of and in the course of employment and where a reasonable remedy for such conduct is not provided by the Workers' Compensation Act." Griggs v. All-Steel Bldgs., supra at 257, 433 S.E.2d 89. The Act does provide penalties for false or misleading statements made for the purpose of obtaining or denying benefits. However, those penalties are deposited in the general fund of the state treasury and, thus, do not constitute a reasonable remedy for the defrauded employee. OCGA §§ 34-9-18(b), (f), 34-9-19. Even if the Act permitted an employee to recover for the employer's or co-employee's fraud which exacerbates an initial compensable injury, such an award would not include exemplary damages. Johns-Manville &c. v. Contra Costa, &c., 27 Cal. 3d 465, 165 Cal. Rptr. 858, 866, fn. 12, 612 P.2d 948 (Cal.1980). "Exemplary damages for fraud are not within the power of the Workers' Compensation Board to award." Griggs v. All-Steel Bldgs., supra at 255, 433 S.E.2d 89. However, an employer's or co-employee's fraudulent act can be so egregious and the societal interest in deterring such conduct so great that there is justification for awarding the employee punitive damages. See Johns-Manville &c. v. Contra Costa, &c., supra at 866, 612 P.2d 948. The absence of any reasonable remedy in this case readily distinguishes it from those which involve an action for mere delay in payment for or authorization of medical treatment. Doss v. Food Lion, 267 Ga. 312, 477 S.E.2d 577 (1996); Bright v. Nimmo, 253 Ga. 378, 320 S.E.2d 365 (1984). Also distinguishable is Southwire Co. v. Benefield, 184 Ga.App. 418, 361 S.E.2d 525 (1987), which stands for the correct proposition that the exclusive remedy provision of the Act bars an employee's tort action for a compensable injury allegedly resulting from intentional misconduct. Southwire does not hold that an employee cannot bring a tort action for a non-compensable injury allegedly resulting from the employer's or co-employee's intentional misconduct. The Act provides an employee with no reasonable remedy for the employer's or co-employee's fraud or intentional infliction of emotional distress which does not arise "in the course of" employment. Since the evidence, when construed most favorably for Appellants, shows that the alleged torts did not arise "in the course of" LeBlanc's employment, we hold that the Court of Appeals erred in affirming the trial court's grant of summary judgment in favor of Appellees. Judgment reversed. All the Justices concur, except FLETCHER, P.J., who dissents. *104 FLETCHER, Presiding Justice, dissenting. I would affirm the grant of summary judgment to the employer. The facts show that Rusty LeBlanc's death flows from a work-related incident. Since any statements by the employer's branch manager arose in the course of LeBlanc's employment, the exclusive remedy provision of the Georgia Workers' Compensation Act applies. By denying tort immunity in this case, we are encouraging employers to refuse to talk to health care providers concerning on-the-job activities. For these reasons, I dissent. | 10-30-2013 | [
"506 S.E.2d 101 (1998) 270 Ga. 14 POTTS et al. v. UAP-GA. AG. CHEM., INC. et al. No. S97G1889. Supreme Court of Georgia. September 14, 1998. Reconsideration Denied October 23, 1998. *102 John Michael Brown, Augusta, Stephen L. Ivie, Ashburn, for Kenneth Potts, Jr., Admr., at al. Donald A. Sweat, Gardner, Willis, Sweat & Goldsmith, Albany, Todd S. Handelman, J. Kevin Buster, Carmen R. Toledo, Atlanta, for UAP-Ga. Ag. Chem., Inc., et al. CARLEY, Justice. Rusty LeBlanc became ill after cleaning chemicals for his employer, UAP-GA. AG. CHEM., INC. (UAP). During stays at two hospitals, LeBlanc was treated for chemical poisoning and for other possible conditions. One doctor, as part of the explanation for his decision to discontinue the treatment for chemical poisoning, stated that he had been reassured by David Register, the branch manager for UAP, that LeBlanc could not possibly have been exposed to any chemicals. LeBlanc eventually died and Potts, as administrator, and LeBlanc's widow, on behalf of herself and LeBlanc's minor child, (Appellants) brought this wrongful death and survival action against UAP and Register (Appellees), alleging fraud and intentional infliction of emotional distress. The trial court granted summary judgment in favor of Appellees, holding that they are immune from suit pursuant to the exclusive remedy provision of the Workers' Compensation Act (Act), OCGA § 34-9-11. The Court of Appeals affirmed on the basis that there was no showing of any personal animosity between Register and LeBlanc unrelated to the conduct of UAP's business.",
"Potts v. UAP-GA AG Chem, 227 Ga.App. 841, 846, 490 S.E.2d 432 (1997). We granted certiorari to consider whether the intentional torts allegedly committed off the worksite and at a time when LeBlanc was not engaged in any work activity can be considered to have arisen \"out of and in the course of\" his employment such that the exclusive remedy provision of OCGA § 34-9-11 applies. Tort immunity is dependent upon the compensability of the injury under the Act. If the willful act of a third person is directed against an employee for reasons personal to such employee, then there is not a covered injury and, consequently, no tort immunity. OCGA §§ 34-9-1(4), 34-9-11(a); Hennly v. Richardson, 264 Ga. 355, 356(1), 444 S.E.2d 317 (1994). Whether an injury is compensable or only a non-compensable occurrence due to \"reasons personal to\" the employee is dependent upon whether the injury arose out of and in the course of the employment. Hennly v. Richardson, supra at 356(1), 444 S.E.2d 317. See also Helton v. Interstate Brands Corp., 155 Ga.App.",
"607, 608, 271 S.E.2d 739 (1980). It has long been established that the statutory requirements that the injury arise \"out of\" the employment and \"in the course of\" the employment both \"`must concur before the work(ers') compensation act can apply to an injury to an employee. (Cit.)' [Cit.]\" Garrett v. K-Mart Corp., 197 Ga.App. 374, 375, 398 S.E.2d 302 (1990). Thus, unless the alleged injury to LeBlanc arose \"out of\" and \"in the course of\" his employment with UAP, it arose from \"reasons personal to\" him and Appellees *103 have no tort immunity for that non-compensable injury. An injury arises \"in the course of\" employment when it occurs within the period of the employment, at a place where the employee may be in performance of [his or] her duties and while [he or] she is fulfilling or doing something incidental to those duties. [Cit.]",
"Hennly v. Richardson, supra at 356(1), 444 S.E.2d 317. \"This statutory requirement relates to the time, place and circumstances under which the injury takes place. [Cit.]\" Murphy v. ARA Services, 164 Ga.App. 859, 861, 298 S.E.2d 528 (1982). Therefore, the Court of Appeals erred by considering only evidence of personal animosity between Register and LeBlanc which was unrelated to the conduct of UAP's business. The record shows that the alleged fraud did not occur during the period of LeBlanc's employment, the hospital clearly was not a place where he performed employment duties, and he was not fulfilling or doing anything incidental to his employment duties. See Lee v. Middleton Logging Co., 198 Ga.App. 585, 402 S.E.2d 536 (1991). Compare Hennly v. Richardson, supra at 356(1), 444 S.E.2d 317. Thus, any damages resulting from the alleged fraud \"do not arise `out of or in the course of the employment,' but rather, result from the intentional misconduct of the defendants subsequent to the physical injuries which gave rise to the original workers' compensation claim.\"",
"Griggs v. All-Steel Bldgs., 209 Ga.App. 253, 256, 433 S.E.2d 89 (1993). Georgia law provides a common law cause of action for fraud and other intentional torts committed by an employer or co-employee where the tortious \"act is not an accident arising out of and in the course of employment and where a reasonable remedy for such conduct is not provided by the Workers' Compensation Act.\" Griggs v. All-Steel Bldgs., supra at 257, 433 S.E.2d 89. The Act does provide penalties for false or misleading statements made for the purpose of obtaining or denying benefits. However, those penalties are deposited in the general fund of the state treasury and, thus, do not constitute a reasonable remedy for the defrauded employee. OCGA §§ 34-9-18(b), (f), 34-9-19. Even if the Act permitted an employee to recover for the employer's or co-employee's fraud which exacerbates an initial compensable injury, such an award would not include exemplary damages. Johns-Manville &c. v. Contra Costa, &c., 27 Cal.",
"3d 465, 165 Cal. Rptr. 858, 866, fn. 12, 612 P.2d 948 (Cal.1980). \"Exemplary damages for fraud are not within the power of the Workers' Compensation Board to award.\" Griggs v. All-Steel Bldgs., supra at 255, 433 S.E.2d 89. However, an employer's or co-employee's fraudulent act can be so egregious and the societal interest in deterring such conduct so great that there is justification for awarding the employee punitive damages. See Johns-Manville &c. v. Contra Costa, &c., supra at 866, 612 P.2d 948. The absence of any reasonable remedy in this case readily distinguishes it from those which involve an action for mere delay in payment for or authorization of medical treatment.",
"Doss v. Food Lion, 267 Ga. 312, 477 S.E.2d 577 (1996); Bright v. Nimmo, 253 Ga. 378, 320 S.E.2d 365 (1984). Also distinguishable is Southwire Co. v. Benefield, 184 Ga.App. 418, 361 S.E.2d 525 (1987), which stands for the correct proposition that the exclusive remedy provision of the Act bars an employee's tort action for a compensable injury allegedly resulting from intentional misconduct. Southwire does not hold that an employee cannot bring a tort action for a non-compensable injury allegedly resulting from the employer's or co-employee's intentional misconduct. The Act provides an employee with no reasonable remedy for the employer's or co-employee's fraud or intentional infliction of emotional distress which does not arise \"in the course of\" employment. Since the evidence, when construed most favorably for Appellants, shows that the alleged torts did not arise \"in the course of\" LeBlanc's employment, we hold that the Court of Appeals erred in affirming the trial court's grant of summary judgment in favor of Appellees.",
"Judgment reversed. All the Justices concur, except FLETCHER, P.J., who dissents. *104 FLETCHER, Presiding Justice, dissenting. I would affirm the grant of summary judgment to the employer. The facts show that Rusty LeBlanc's death flows from a work-related incident. Since any statements by the employer's branch manager arose in the course of LeBlanc's employment, the exclusive remedy provision of the Georgia Workers' Compensation Act applies. By denying tort immunity in this case, we are encouraging employers to refuse to talk to health care providers concerning on-the-job activities. For these reasons, I dissent."
] | https://www.courtlistener.com/api/rest/v3/opinions/1329779/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
The issue of the defendant's fault was for the jury. Having undertaken to use in his business a substance admittedly known by him to be poisonous, the defendant owed to the plaintiff a duty to use reasonable care to warn and instruct him with reference to the dangers incident to such use and to furnish him with a reasonably safe place in which to work. There was enough evidence to justify the conclusion that the defendant failed to perform either of these duties. It was conceded that no warning as to the danger of oxalic acid poisoning was given to the plaintiff and that he was not instructed to take any precautions in using the material furnished to him. It might also be found that the means adopted by the defendant to carry off the vapors which resulted from the boiling process were inadequate. The argument that the defendant had no actual knowledge as to the physiological effect of oxalic acid fumes, if well founded in fact, is not effective in law to absolve him from liability. Being under a positive duty to exercise care for the safety of his servant, he was bound to make reasonable inquiry for the purpose of informing himself of the natural consequences of using the material which he furnished. A master "must take into account the properties of such substances as he employs for the purposes of his business, and the operation of familiar physical laws upon these substances." 3 *Page 74 Labatt, Master Servant, s. 1041; 39 C.J. tit, M. S., s. 604. Therefore he is chargeable with knowledge of the fact "that the fumes given off by various substances used in industrial processes are poisonous to persons who inhale them." 3 Labatt, M. S., s. 1041 and cases cited; Note to Pinkley v. Railroad (246 Ill. 370) in 35 L.R.A. (N.S.) 679; Note to Zajkowski v. Company (258 F. 9) in 6 A.L.R. 348, 355; Gobrecht v. Beckwith, 82 N.H. 415, 420; Thompson v. Company, 221 Mass. 276, 280; Mooney v. Company, 317 Mo. 1255; Baumgartner v. Railroad, 292 Pa. 106. Although the defendant was chargeable with knowledge of the, possible deleterious effects of oxalic acid vapors, the plaintiff was not. He was entitled to assume that the instrumentalities and materials furnished by the defendant were reasonably safe to use. Whitcher v. Railroad,70 N.H. 242, 247; Thompson v. Company, 71 N.H. 174, 176; Kruger v. Company,84 N.H. 290, 297. Hence it cannot be held as a matter of law that the plaintiff assumed the risk of injury from this cause. The defendant argues that the plaintiff learned early in May, 1929, that he was suffering from the effects of oxalic acid poisoning and that he was guilty of contributory negligence in continuing his work after that time. This argument finds no basis in the testimony. Although a physician testified that upon May 7, 1929, he made a diagnosis of oxalic acid poisoning, he did not say that he informed the plaintiff of his conclusions, and the plaintiff, in his testimony, denied that he had any knowledge as to the cause of his trouble. The extent of the plaintiff's knowledge and the reasonableness of his conduct in the light thereof were matters for the jury to pass upon. From the foregoing conclusions it follows that the motions for a nonsuit and directed verdict were properly denied. There was evidence that before the defendant embarked upon the business of cleaning radiators, he sent his foreman, Mr. Young, to. Boston for the purpose of familiarizing himself with the methods used for that purpose in the factory branch of the United Motors Service. There was also evidence that the cartons in which oxalic acid was delivered at the defendant's plant in Portsmouth were marked "poison." In his argument to the jury, plaintiff's counsel asserted that "Mr. Young testified under oath that while he was there that week he knew that that material where those men were working was marked poison." To this statement the defendant claimed an exception, plaintiff's counsel then continued: "That is the evidence in this case, gentlemen." The assertion that Mr. Young saw that the material *Page 75 used in Boston "was marked poison" was later repeated subject to exception, and returning to the subject a third time, plaintiff's counsel said, ". . . as I recall it in refreshing my mind a little upon it, that Harold Young testified that he went to the United Motors Service place down there to Boston and that he was there a week and that the cartons were marked `poison' down in Boston." Counsel also stressed the rule that "the employer of labor cannot delegate a duty to furnish a safe work place; he can't throw the responsibility off," and argued that if the defendant "relied on Harvey and Harvey failed to do something that should have been done and it is a positive duty, why then as a matter of law he was negligent just the same." Here counsel obviously fell into the error of using the name Harvey when he meant to say Young, a mistake which occurred repeatedly in other portions of his argument. It therefore appears that plaintiff's counsel vigorously asserted that the actual knowledge possessed by Young was, in law, the knowledge of the defendant and that Young admitted in his testimony that he acquired in Boston knowledge of the poisonous character of the material used. This was a complete perversion of Young's testimony. He repeatedly denied upon the stand that he learned anything about the poisonous nature of oxalic acid while he was in Boston, and testified that he did not "recall of seeing the carton they took the oxalic acid from" in Boston. Here we have a palpable misstatement of evidence upon a vital point in the case reiterated by counsel after exception had been taken and impliedly sanctioned by the action of the court in allowing an exception. Salvas v. Cantin,85 N.H. 489; State v. Wargo, 83 N.H. 532, 535. Under these circumstances the verdict must be set aside. Haselton v. Maser, 83 N.H. 498, 500 and cases cited. The other exceptions argued by the defendant are not likely to arise at another trial and have not, therefore, been considered. New trial. All concurred. *Page 76 | 07-05-2016 | [
"The issue of the defendant's fault was for the jury. Having undertaken to use in his business a substance admittedly known by him to be poisonous, the defendant owed to the plaintiff a duty to use reasonable care to warn and instruct him with reference to the dangers incident to such use and to furnish him with a reasonably safe place in which to work. There was enough evidence to justify the conclusion that the defendant failed to perform either of these duties. It was conceded that no warning as to the danger of oxalic acid poisoning was given to the plaintiff and that he was not instructed to take any precautions in using the material furnished to him.",
"It might also be found that the means adopted by the defendant to carry off the vapors which resulted from the boiling process were inadequate. The argument that the defendant had no actual knowledge as to the physiological effect of oxalic acid fumes, if well founded in fact, is not effective in law to absolve him from liability. Being under a positive duty to exercise care for the safety of his servant, he was bound to make reasonable inquiry for the purpose of informing himself of the natural consequences of using the material which he furnished.",
"A master \"must take into account the properties of such substances as he employs for the purposes of his business, and the operation of familiar physical laws upon these substances.\" 3 *Page 74 Labatt, Master Servant, s. 1041; 39 C.J. tit, M. S., s. 604. Therefore he is chargeable with knowledge of the fact \"that the fumes given off by various substances used in industrial processes are poisonous to persons who inhale them.\"",
"3 Labatt, M. S., s. 1041 and cases cited; Note to Pinkley v. Railroad (246 Ill. 370) in 35 L.R.A. (N.S.) 679; Note to Zajkowski v. Company (258 F. 9) in 6 A.L.R. 348, 355; Gobrecht v. Beckwith, 82 N.H. 415, 420; Thompson v. Company, 221 Mass. 276, 280; Mooney v. Company, 317 Mo. 1255; Baumgartner v. Railroad, 292 Pa. 106. Although the defendant was chargeable with knowledge of the, possible deleterious effects of oxalic acid vapors, the plaintiff was not. He was entitled to assume that the instrumentalities and materials furnished by the defendant were reasonably safe to use. Whitcher v. Railroad,70 N.H. 242, 247; Thompson v. Company, 71 N.H. 174, 176; Kruger v. Company,84 N.H. 290, 297. Hence it cannot be held as a matter of law that the plaintiff assumed the risk of injury from this cause.",
"The defendant argues that the plaintiff learned early in May, 1929, that he was suffering from the effects of oxalic acid poisoning and that he was guilty of contributory negligence in continuing his work after that time. This argument finds no basis in the testimony. Although a physician testified that upon May 7, 1929, he made a diagnosis of oxalic acid poisoning, he did not say that he informed the plaintiff of his conclusions, and the plaintiff, in his testimony, denied that he had any knowledge as to the cause of his trouble. The extent of the plaintiff's knowledge and the reasonableness of his conduct in the light thereof were matters for the jury to pass upon. From the foregoing conclusions it follows that the motions for a nonsuit and directed verdict were properly denied. There was evidence that before the defendant embarked upon the business of cleaning radiators, he sent his foreman, Mr. Young, to.",
"Boston for the purpose of familiarizing himself with the methods used for that purpose in the factory branch of the United Motors Service. There was also evidence that the cartons in which oxalic acid was delivered at the defendant's plant in Portsmouth were marked \"poison.\" In his argument to the jury, plaintiff's counsel asserted that \"Mr. Young testified under oath that while he was there that week he knew that that material where those men were working was marked poison.\" To this statement the defendant claimed an exception, plaintiff's counsel then continued: \"That is the evidence in this case, gentlemen.\" The assertion that Mr. Young saw that the material *Page 75 used in Boston \"was marked poison\" was later repeated subject to exception, and returning to the subject a third time, plaintiff's counsel said, \". .",
". as I recall it in refreshing my mind a little upon it, that Harold Young testified that he went to the United Motors Service place down there to Boston and that he was there a week and that the cartons were marked `poison' down in Boston.\" Counsel also stressed the rule that \"the employer of labor cannot delegate a duty to furnish a safe work place; he can't throw the responsibility off,\" and argued that if the defendant \"relied on Harvey and Harvey failed to do something that should have been done and it is a positive duty, why then as a matter of law he was negligent just the same.\" Here counsel obviously fell into the error of using the name Harvey when he meant to say Young, a mistake which occurred repeatedly in other portions of his argument. It therefore appears that plaintiff's counsel vigorously asserted that the actual knowledge possessed by Young was, in law, the knowledge of the defendant and that Young admitted in his testimony that he acquired in Boston knowledge of the poisonous character of the material used.",
"This was a complete perversion of Young's testimony. He repeatedly denied upon the stand that he learned anything about the poisonous nature of oxalic acid while he was in Boston, and testified that he did not \"recall of seeing the carton they took the oxalic acid from\" in Boston. Here we have a palpable misstatement of evidence upon a vital point in the case reiterated by counsel after exception had been taken and impliedly sanctioned by the action of the court in allowing an exception. Salvas v. Cantin,85 N.H. 489; State v. Wargo, 83 N.H. 532, 535. Under these circumstances the verdict must be set aside. Haselton v. Maser, 83 N.H. 498, 500 and cases cited.",
"The other exceptions argued by the defendant are not likely to arise at another trial and have not, therefore, been considered. New trial. All concurred. *Page 76"
] | https://www.courtlistener.com/api/rest/v3/opinions/3553213/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
IN THE SUPREME COURT OF PENNSYLVANIA MIDDLE DISTRICT
JOHN BAILEY, : No. 360 MAL 2016 : Petitioner : Petition for Allowance of Appeal from : the Order of the Commonwealth Court : v. : : : WORKERS' COMPENSATION APPEAL : BOARD (COMMONWEALTH OF PA/ SCI : CAMP HILL), : : Respondent :
ORDER
PER CURIAM
AND NOW, this 1st day of November, 2016, the Petition for Allowance of Appeal
is DENIED. | 11-01-2016 | [
"IN THE SUPREME COURT OF PENNSYLVANIA MIDDLE DISTRICT JOHN BAILEY, : No. 360 MAL 2016 : Petitioner : Petition for Allowance of Appeal from : the Order of the Commonwealth Court : v. : : : WORKERS' COMPENSATION APPEAL : BOARD (COMMONWEALTH OF PA/ SCI : CAMP HILL), : : Respondent : ORDER PER CURIAM AND NOW, this 1st day of November, 2016, the Petition for Allowance of Appeal is DENIED."
] | https://www.courtlistener.com/api/rest/v3/opinions/4094628/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
IN THE SUPREME COURT OF PENNSYLVANIA MIDDLE DISTRICT
COMMONWEALTH OF PENNSYLVANIA, : No. 557 MAL 2017 : Respondent : Petition for Allowance of Appeal from : the Order of the Superior Court : v. : : : JESSE RAY BUSH, : : Petitioner :
ORDER
PER CURIAM
AND NOW, this 27th day of December, 2017, the Petition for Allowance of
Appeal is DENIED. | 12-27-2017 | [
"IN THE SUPREME COURT OF PENNSYLVANIA MIDDLE DISTRICT COMMONWEALTH OF PENNSYLVANIA, : No. 557 MAL 2017 : Respondent : Petition for Allowance of Appeal from : the Order of the Superior Court : v. : : : JESSE RAY BUSH, : : Petitioner : ORDER PER CURIAM AND NOW, this 27th day of December, 2017, the Petition for Allowance of Appeal is DENIED."
] | https://www.courtlistener.com/api/rest/v3/opinions/4232863/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Exhibit 10.86
HIGHLY CONFIDENTIAL & TRADE SECRET
BLACKSTONE REAL ESTATE DEBT STRATEGIES ASSOCIATES II L.P.
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
Dated February 15, 2018
Effective as of April 17, 2013
THE LIMITED PARTNERSHIP INTERESTS (THE “INTERESTS”) OF BLACKSTONE REAL ESTATE DEBT STRATEGIES ASSOCIATES II L.P. (THE “PARTNERSHIP”) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS, AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS AND CONDITIONS OF THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP. THE INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP. THEREFORE, PURCHASERS OF SUCH INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
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Table of Contents
ARTICLE I DEFINITIONS
1
Section 1.1. Definitions
1
Section 1.2. Terms Generally
22
ARTICLE II GENERAL PROVISIONS
22
Section 2.1. General Partner and Limited Partners
22
Section 2.2. Formation; Name; Foreign Jurisdictions
22
Section 2.3. Term
23
Section 2.4. Purpose; Powers
23
Section 2.5. Registered Office; Place of Business
26
Section 2.6. Withdrawal of Initial Limited Partner
26
ARTICLE III MANAGEMENT
26
Section 3.1. General Partners
26
Section 3.2. Limitations on Limited Partners
26
Section 3.3. Partner Voting
26
Section 3.4. Management
26
Section 3.5. Responsibilities of Partners
29
Section 3.6. Exculpation and Indemnification
29
Section 3.7. Representations of Limited Partners
31
Section 3.8. Tax Representation and Further Assurances
32
ARTICLE IV CAPITAL OF THE PARTNERSHIP
33
Section 4.1. Capital Contributions by Partners
33
Section 4.2. Interest
41
Section 4.3. Withdrawals of Capital
41
ARTICLE V PARTICIPATION IN PROFITS AND LOSSES
41
Section 5.1. General Accounting Matters
41
Section 5.2. GP-Related Capital Accounts
43
Section 5.3. GP-Related Profit Sharing Percentages
43
Section 5.4. Allocations of GP-Related Net Income (Loss)
44
Section 5.5. Liability of General Partners
45
Section 5.6. Liability of Limited Partners
45
Section 5.7. Repurchase Rights, etc.
46
Section 5.8. Distributions
46
Section 5.9. Business Expenses
53
Section 5.10. Tax Capital Accounts; Tax Allocations
53
ARTICLE VI ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS; SATISFACTION AND DISCHARGE OF PARTNERSHIP INTERESTS; TERMINATION
54
Section 6.1. Additional Partners
54
Section 6.2. Withdrawal of Partners
55
Section 6.3. GP-Related Partner Interests Not Transferable
57
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Section 6.4. General Partner Withdrawal; Transfer of General Partner’s Interest
57
Section 6.5. Satisfaction and Discharge of a Withdrawn Partner’s GP-Related Partner Interest
58
Section 6.6. Termination of the Partnership
63
Section 6.7. Certain Tax Matters
63
Section 6.8. Special Basis Adjustments
65
ARTICLE VII CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS
65
Section 7.1. Capital Commitment Interests, etc.
65
Section 7.2. Capital Commitment Capital Accounts
66
Section 7.3. Allocations
67
Section 7.4. Distributions
67
Section 7.5. Valuations
72
Section 7.6. Disposition Election
72
Section 7.7. Capital Commitment Special Distribution Election
73
ARTICLE VIII WITHDRAWAL; ADMISSION OF NEW PARTNERS
73
Section 8.1. Limited Partner Withdrawal; Repurchase of Capital Commitment Interests
73
Section 8.2. Transfer of Limited Partner’s Capital Commitment Interest
79
Section 8.3. Compliance with Law
79
ARTICLE IX DISSOLUTION
79
Section 9.1. Dissolution
80
Section 9.2. Final Distribution
80
Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests
81
ARTICLE X MISCELLANEOUS
82
Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial
82
Section 10.2. Ownership and Use of the Firm Name
83
Section 10.3. Written Consent
83
Section 10.4. Letter Agreements; Schedules
83
Section 10.5. Governing Law
84
Section 10.6. Successors and Assigns; Third Party Beneficiaries
84
Section 10.7. Partner’s Will
85
Section 10.8. Confidentiality
85
Section 10.9. Notices
86
Section 10.10. Counterparts
86
Section 10.11. Power of Attorney
86
Section 10.12. Cumulative Remedies
86
Section 10.13. Legal Fees
86
Section 10.14. Modifications
87
Section 10.15. Entire Agreement
87
3
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BLACKSTONE REAL ESTATE DEBT STRATEGIES ASSOCIATES II L.P.
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated February 15, 2018 and effective as of April 17, 2013 of Blackstone Real Estate Debt Strategies Associates II L.P., a Delaware limited partnership (the “Partnership”), by and between BREDS II GP L.L.C., a Delaware limited liability company (the “General Partner”), Christopher J. James (the “Initial Limited Partner”), as initial limited partner, and the limited partners listed in the books and records of the Partnership, as limited partners.
WITNESSETH
WHEREAS, Blackstone Real Estate Debt Strategies Associates II L.P. was formed as a Delaware limited partnership on September 4, 2012;
WHEREAS, the General Partner and the Initial Limited Partner entered into a Limited Partnership Agreement dated as of September 4, 2012 (the “Original Agreement”);
WHEREAS, the parties hereto now wish to amend and restate the Original Agreement in its entirety as hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein made and intending to be legally bound, the parties hereto hereby agree that the Original Agreement shall be amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for purposes of this Agreement:
“Adjustment Amount” has the meaning set forth in Section 8.1(b)(iii).
“Advancing Party” has the meaning set forth in Section 7.1(b).
“Affiliate” when used with reference to another person means any person (other than the Partnership), directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with, such other person, which may include, for greater certainty, endowment funds, charitable programs and other similar and/or related vehicles or accounts associated with or established by Blackstone and/or its affiliates, partners and current and/or former employees.
“Agreement” means this Amended and Restated Agreement of Limited Partnership, as it may be further amended, supplemented, restated or otherwise modified from time to time.
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“Alternative Vehicle” means any investment vehicle or structure formed pursuant to paragraph 2.7 of the BREDS II Partnership Agreement or any other “Alternative Vehicle” (as defined in any other BREDS II Agreements).
“Applicable Collateral Percentage,” with respect to any Firm Collateral or Special Firm Collateral, has the meaning set forth in the books and records of the Partnership with respect thereto.
“Bankruptcy” means, with respect to any person, the occurrence of any of the following events: (i) the filing of an application by such person for, or a consent to, the appointment of a trustee or custodian of his or her assets; (ii) the filing by such person of a voluntary petition in Bankruptcy or the seeking of relief under Title 11 of the United States Code, as now constituted or hereafter amended, or the filing of a pleading in any court of record admitting in writing his or her inability to pay his or her debts as they become due; (iii) the failure of such person to pay his or her debts as such debts become due; (iv) the making by such person of a general assignment for the benefit of creditors; (v) the filing by such person of an answer admitting the material allegations of, or his or her consenting to, or defaulting in answering, a Bankruptcy petition filed against him or her in any Bankruptcy proceeding or petition seeking relief under Title 11 of the United States Code, as now constituted or as hereafter amended; or (vi) the entry of an order, judgment or decree by any court of competent jurisdiction adjudicating such person a bankrupt or insolvent or for relief in respect of such person or appointing a trustee or custodian of his or her assets and the continuance of such order, judgment or decree unstayed and in effect for a period of 60 consecutive days.
“BCE Agreement” means the limited partnership agreement, limited liability company agreement or other governing document of any limited partnership, limited liability company or other entity named or referred to in the definition of any of “BFREP,” “BFIP,” “BFGSO,” “BFCOMP” or “Other Blackstone Collateral Entity,” as such limited partnership agreement, limited liability company agreement or other governing document may be amended, supplemented, restated or otherwise modified to date, and as such limited partnership agreement, limited liability company agreement or other governing document may be further amended, supplemented, restated or otherwise modified from time to time, and any Other Blackstone Collateral Entity limited partnership agreement, limited liability company agreement or other governing document.
“BCE Investment” means any direct or indirect investment by any Blackstone Collateral Entity.
“BCEP” means the collective reference to (i) Blackstone Core Equity Partners L.P., a Delaware limited partnership and (ii) any Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreement for the partnership referred to in clause (i) above).
“BCOM” is the collective reference to (i) Blackstone Communications Partners I L.P., a Delaware limited partnership and (ii) any other investment vehicle established pursuant to Article 2 of the partnership agreement for the partnership referred to in clause (i) above.
2
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“BCP Asia” is the collective reference to (i) Blackstone Capital Partners Asia L.P., a Cayman Islands exempted limited partnership and (ii) any Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreement for the partnership referred to in clause (i) above).
“BCP VI” is the collective reference to (i) Blackstone Capital Partners VI L.P., a Delaware limited partnership and (ii) any Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreement for the partnership referred to in clause (i) above).
“BCP VII” is the collective reference to (i) Blackstone Capital Partners VII L.P. and Blackstone Capital Partners VII.2 L.P, each a Delaware limited partnership and (ii) any Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreements for the partnerships referred to in clause (i) above).
“BCTP” means (i) Blackstone Clean Technology Partners L.P., a Delaware limited partnership and (ii) any other Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreement for the partnership referred to in clause (i) above).
“BEP” means (i) Blackstone Energy Partners L.P. and Blackstone Energy Partners Q L.P., each a Delaware limited partnership and (ii) any other Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreement for the partnership referred to in clause (i) above).
“BEP II” means (i) Blackstone Energy Partners II L.P. and Blackstone Energy Partners II.F L.P., each a Delaware limited partnership and (ii) any other Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreement for the partnership referred to in clause (i) above).
“BFCOMP” means Blackstone Family Communications Partnership I L.P., Blackstone Family Communications Partnership I-SMD L.P. and any other entity that is an Affiliate thereof and has terms substantially similar to those of the foregoing partnerships and is formed in connection with the participation by one or more partners thereof directly or indirectly in investments in securities also purchased by BCOM or any other funds with substantially similar investment objectives to BCOM and that are sponsored or managed by an Affiliate of the General Partner (which includes serving as general partner of such funds).
“BFGSO” means any entity formed to invest side-by-side with any GSO Fund and any other entity that is an Affiliate thereof and that has terms substantially similar to those of the foregoing partnerships or other entities and is formed in connection with the participation by one or more partners or other equity owners thereof directly or indirectly in investments in securities also purchased by any GSO Fund or any other funds with substantially similar investment objectives to any GSO Fund and that are sponsored or managed by an Affiliate of the General Partner (which includes serving as general partner of such funds).
3
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“BFIP” means Blackstone Capital Associates II L.P., Blackstone Capital Associates III L.P., Blackstone Family Investment Partnership II L.P., Blackstone Family Investment Partnership III L.P., Blackstone Family Investment Partnership IV-A L.P., Blackstone Family Investment Partnership IV-A - SMD L.P., Blackstone Family Investment Partnership V L.P., Blackstone Family Investment Partnership V- SMD L.P., Blackstone Family Investment Partnership VI L.P., Blackstone Family Investment Partnership VI-SMD L.P., Blackstone Family Investment Partnership VII - ESC L.P., Blackstone Family Cleantech Investment Partnership L.P., Blackstone Family Cleantech Investment Partnership—SMD L.P., Blackstone Energy Family Investment Partnership L.P., Blackstone Energy Family Investment Partnership—SMD L.P., Blackstone Family Tactical Opportunities Investment Partnership L.P., Blackstone Family Tactical Opportunities Investment Partnership - SMD L.P., Blackstone Family Tactical Opportunities Investment Partnership (Cayman) L.P., Blackstone Family Tactical Opportunities Investment Partnership (Cayman)—SMD L.P., Blackstone Energy Family Investment Partnership II L.P., and any other entity that is an Affiliate thereof and has terms similar to those of the foregoing partnerships and is formed in connection with the participation by one or more of the partners thereof in investments in securities also purchased by BCP VI, BCP VII, BCP Asia, BCEP, BCTP, BEP, BEP II, BTO, BTORO, BUMO or any other fund with substantially similar investment objectives to BCP VI, BCP VII, BCP Asia, BCEP, BCTP, BEP, BEP II, BTO, BTORO or BUMO and that are sponsored or managed by an Affiliate of the General Partner (which includes serving as general partner of such funds).
“BFREP” means Blackstone Real Estate Capital Associates L.P., Blackstone Real Estate Capital Associates II L.P., Blackstone Real Estate Capital Associates III L.P., Blackstone Family Real Estate Partnership L.P., Blackstone Family Real Estate Partnership II L.P., Blackstone Family Real Estate Partnership III L.P., Blackstone Family Real Estate Partnership International-A-SMD L.P., Blackstone Family Real Estate Partnership IV-SMD L.P., Blackstone Family Real Estate Partnership International II-SMD L.P., Blackstone Family Real Estate Partnership V-SMD L.P., Blackstone Family Real Estate Partnership VI-SMD L.P., Blackstone Family Real Estate Partnership VII-SMD L.P., Blackstone Family Real Estate Partnership VIII-SMD L.P., Blackstone Family Real Estate Partnership Europe III-SMD L.P., Blackstone Family Real Estate Special Situations Partnership - SMD L.P., Blackstone Family Real Estate Special Situations Partnership Europe - SMD L.P., Blackstone Real Estate Holdings L.P., Blackstone Real Estate Holdings II L.P., Blackstone Real Estate Holdings III L.P., Blackstone Real Estate Holdings International - A L.P., Blackstone Real Estate Holdings IV L.P., Blackstone Real Estate Holdings International II L.P., Blackstone Real Estate Holdings V L.P., Blackstone Real Estate Holdings VI L.P., Blackstone Real Estate Holdings VII L.P., Blackstone Real Estate Holdings Europe III L.P., Blackstone Real Estate Holdings Europe IV L.P., Blackstone Real Estate Special Situations Holdings II L.P., Blackstone Real Estate Special Situations Holdings Europe L.P., Blackstone Family Real Estate Partnership Europe IV SMD L.P., Blackstone Real Estate Holdings Europe IV ESC L.P., Blackstone Family Real Estate Partnership Europe V SMD L.P.,
4
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Blackstone Real Estate Holdings Europe V ESC L.P., Blackstone Family Real Estate Partnership Asia—SMD L.P., Blackstone Real Estate Holdings Asia—ESC L.P., Blackstone Real Estate Holdings VII-ESC L.P., Blackstone Real Estate Holdings VIII-ESC L.P., and any other entity that is an Affiliate thereof and that has terms substantially similar to those of the foregoing partnerships and is formed in connection with the participation by one or more partners thereof in real estate and real estate-related investments also purchased by BREP VII, BREP VIII, the BREDS Funds, BREP Europe IV, BREP Europe V or BREP Asia and any other funds with substantially similar investment objectives to BREP VII, BREP VIII, the BREDS Funds, BREP Europe IV, BREP Europe V, BREP Asia or BPP and that are sponsored or managed by an Affiliate of the General Partner (which includes serving as general partner of such funds).
“Blackstone” means collectively, The Blackstone Group L.P., a Delaware limited partnership, and any Affiliate thereof (excluding any natural persons and any portfolio companies of any Blackstone-sponsored fund).
“Blackstone Capital Commitment” has the meaning set forth in the BREDS II Partnership Agreement.
“Blackstone Collateral Entity” means any limited partnership, limited liability company or other entity named or referred to in the definition of any of “BFREP,” “BFIP,” “BFGSO,” “BFCOMP” or “Other Blackstone Collateral Entity.”
“Blackstone Entity” means any partnership, limited liability company or other entity (excluding any natural persons and any portfolio companies of any Blackstone-sponsored fund) that is an Affiliate of The Blackstone Group L.P.
“BPP” means (i) Blackstone Property Partners L.P., a Delaware limited partnership, and Blackstone Property Partners Europe L.P., a Cayman Islands exempted limited partnership, (ii) any other Alternative Vehicles or Parallel Funds (each as defined in the partnership agreements for the partnerships referred to in clause (i) above) or (iii) any other investment vehicle established pursuant to Article 2 of the partnership agreements for the partnerships referred to in clause (i) above.
“BREDS Funds” means the investment funds, vehicles and/or managed accounts managed on a day-to-day basis primarily by personnel in the Blackstone Real Estate Debt Strategies Group (including, without limitation, Blackstone Real Estate Special Situations Fund II L.P., Blackstone Real Estate Special Situations Fund II.1 L.P., Blackstone Real Estate Special Situations Fund II.2 L.P., Blackstone Real Estate Debt Strategies II L.P. Blackstone Real Estate Debt Strategies II – AC L.P., Blackstone Real Estate Debt Strategies II – Gaussian L.P., Blackstone Real Estate Debt Strategies III – Gaussian L.P., Blackstone Real Estate Debt Strategies III L.P., Blackstone Real Estate Debt Strategies II – A L.P., Blackstone Real Estate Debt Strategies III – N L.P., Blackstone Real Estate CMBS Fund L.P., Blackstone Real Estate Special Situations Europe L.P., Blackstone Real Estate Special Situations Europe 1 L.P., Blackstone Real Estate Special Situations Europe 2 L.P., Blackstone Commercial Real Estate Debt Fund L.P., Blackstone Real Estate Special Situations Fund L.P. and, in each case, any alternative vehicles, feeder
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vehicles or subsidiaries formed in connection therewith, any successor funds, any supplemental capital vehicles or other vehicles formed in connection therewith (or are otherwise related thereto) or in connection with any investments made thereby, and, in each case, any vehicles formed in connection with Blackstone’s side-by-side or additional general partner investments relating thereto).
“BREDS II” means (i) Blackstone Real Estate Debt Strategies II L.P., a Delaware limited partnership, (ii) any other Alternative Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the respective partnership agreements for the partnerships referred to in clause (i) above) and/or related vehicles, or (iii) any other investment vehicle established pursuant to Article 2 of the respective partnership agreements for any of the partnerships referred to in clause (i) above.
“BREDS II Agreements” is the collective reference to the BREDS II Partnership Agreement and any governing agreement of any of the partnerships or other entities referred to in clauses (ii) or (iii) of the definition of “BREDS II.”
“BREDS II Partnership Agreement” means the Amended and Restated Agreement of Limited Partnership of BREDS II, dated as of the respective dates set forth therein, as each may be amended, supplemented, restated or otherwise modified from time to time.
“BREP VII” means (i) Blackstone Real Estate Partners VII L.P., Blackstone Real Estate Partners VII.TE.1 L.P., Blackstone Real Estate Partners VII.TE.2 L.P., Blackstone Real Estate Partners VII.TE.3 L.P., Blackstone Real Estate Partners VII.TE.4 L.P., Blackstone Real Estate Partners VII.TE.5 L.P., Blackstone Real Estate Partners VII.TE.6 L.P., Blackstone Real Estate Partners VII.TE.7 L.P., Blackstone Real Estate Partners VII.TE.8 L.P. and Blackstone Real Estate Partners VII.F L.P., each a Delaware limited partnership, (ii) any other Alternative Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the respective partnership agreements for the partnerships referred to in clause (i) above) or (iii) any other investment vehicle established pursuant to Article 2 of the respective partnership agreements for any of the partnerships referred to in clause (i) above.
“BREP VIII” means (i) Blackstone Real Estate Partners VIII L.P., Blackstone Real Estate Partners VIII.TE.1 L.P., Blackstone Real Estate Partners VIII.TE.2 L.P. and Blackstone Real Estate Partners VIII.F L.P., each a Delaware limited partnership, (ii) any other Alternative Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the respective partnership agreements for the partnerships referred to in clause (i) above), or (iii) any other investment vehicle established pursuant to Article 2 of the respective partnership agreements for any of the partnerships referred to in clause (i) above.
“BREP Asia” is the collective reference to (i) Blackstone Real Estate Partners Asia L.P., a Cayman Islands exempted limited partnership, Blackstone Real Estate Partners Asia.F L.P., a Delaware limited partnership, and Blackstone Real Estate Partners Asia II L.P., a Cayman Islands exempted limited partnership, (ii) any other Alternative Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the partnership agreement for the partnership referred to in clause (i) above) or (iii) any other investment vehicle established pursuant to Article 2 of the partnership agreement for the partnership referred to in clause (i) above.
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“BREP Europe IV” is the collective reference to (i) Blackstone Real Estate Partners Europe IV L.P. and Blackstone Real Estate Partners Europe IV.2 L.P., each a Cayman Islands exempted limited partnership, (ii) Blackstone Real Estate Partners Europe IV.F L.P., a Delaware limited partnership, (iii) any other Alternative Investment Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the partnership agreements for the partnerships referred to in clause (i) or (ii) above), or (iv) any other investment vehicle established pursuant to Article 2 of the partnership agreements for the partnerships referred to in clause (i) or (ii) above.
“BREP Europe V” is the collective reference to (i) Blackstone Real Estate Partners Europe V L.P., a Cayman Islands exempted limited partnership, (ii) any other Alternative Investment Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the partnership agreement for the partnership referred to in clause (i) above) or (iii) any other investment vehicle established pursuant to Article 2 of the partnership agreement for the partnership referred to in clause (i) above.
“BTO” means (i) the investment funds, vehicles and/or managed accounts managed on a day-to-day basis primarily by personnel in the Blackstone Tactical Opportunities Program (including, without limitation, Blackstone Tactical Opportunities Fund L.P. and Blackstone Tactical Opportunities Fund II L.P., each a Delaware limited partnership, and Blackstone Tactical Opportunities Fund II.F L.P., a Cayman Islands exempted limited partnership), (ii) any alternative investment vehicles relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition, (iii) any parallel fund, managed account or other capital vehicle relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition and (iv) any other limited partnership, limited liability company or other entity (in each case, whether now or hereafter established) of which the Blackstone Tactical Opportunities Program (including, without limitation, Blackstone Tactical Opportunities Associates L.L.C., Blackstone Tactical Opportunities Associates II L.L.C., BTOA L.L.C. and BTOA II L.L.C.) or its personnel serves, directly or indirectly, as the general partner, manager or managing member or in a similar capacity.
“BTORO” means (i) the investment funds, vehicles and/or managed accounts managed on a day-to-day basis primarily by personnel in the Tac Opps Residential Program (including, without limitation, Blackstone TORO Fund-A L.P., a Delaware limited partnership, and TORO Holdings, L.P. a Delaware limited partnership), (ii) any alternative investment vehicles relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition, (iii) any parallel fund, managed account or other capital vehicle relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition, and (iv) any other limited partnership, limited liability company or other entity (in each case, whether now or hereafter established) of which the Tac Opps Residential Program (including, without limitation, Blackstone TORO Fund-A L.P. and TORO Holdings, L.P.) or its personnel serves, directly or indirectly, as the general partner, manager or managing member or in a similar capacity.
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“BUMO” means (i) the investment funds, vehicles and/or managed accounts managed on a day-to-day basis primarily by personnel in the Blackstone UK Mortgage Opportunities Program (including, without limitation, Blackstone UK Mortgage Opportunities Fund L.P., a Cayman exempted limited partnership), (ii) any alternative investment vehicles relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition, (iii) any parallel fund, managed account or other capital vehicle relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition, and (iv) any other exempted limited partnership, limited liability company or other entity (in each case, whether now or hereafter established) of which the Blackstone UK Mortgage Opportunities Program (including, without limitation, Blackstone UK Mortgage Opportunities Fund L.P.) or its personnel serves, directly or indirectly, as the general partner, manager or managing member or in a similar capacity.
“Business Day” means any day other than a Saturday, Sunday or other day on which banks are authorized or required by law to be closed in New York, New York, United States.
“Capital Commitment BREDS II Commitment” means the Capital Commitment (as defined in the BREDS II Partnership Agreement), if any, of the Partnership to BREDS II that relates solely to the Capital Commitment BREDS II Interest, if any.
“Capital Commitment BREDS II Interest” means the Interest (as defined in the BREDS II Partnership Agreement), if any, of the Partnership as a capital partner (and, if applicable, a limited partner and/or a general partner) of BREDS II.
“Capital Commitment BREDS II Investment” means the Partnership’s interest in a specific investment of BREDS II held by the Partnership through the Capital Commitment BREDS II Interest.
“Capital Commitment Capital Account” means, with respect to each Capital Commitment Investment for each Partner, the account maintained for such Partner to which are credited such Partner’s contributions to the Partnership with respect to such Capital Commitment Investment and any net income allocated to such Partner pursuant to Section 7.3 with respect to such Capital Commitment Investment and from which are debited any distributions with respect to such Capital Commitment Investment to such Partner and any net losses allocated to such Partner with respect to such Capital Commitment Investment pursuant to Section 7.3. In the case of any such distribution in kind, the Capital Commitment Capital Accounts for the related Capital Commitment Investment shall be adjusted as if the asset distributed had been sold in a taxable transaction and the proceeds distributed in cash, and any resulting gain or loss on such sale shall be allocated to the Partners participating in such Capital Commitment Investment pursuant to Section 7.3.
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“Capital Commitment Class A Interest” has the meaning set forth in Section 7.4(f).
“Capital Commitment Class B Interest” has the meaning set forth in Section 7.4(f).
“Capital Commitment Defaulting Party” has the meaning specified in Section 7.4(g)(ii)(A).
“Capital Commitment Deficiency Contribution” has the meaning specified in Section 7.4(g)(ii)(A).
“Capital Commitment Disposable Investment” has the meaning set forth in Section 7.4(f).
“Capital Commitment Distributions” means, with respect to each Capital Commitment Investment, all amounts of distributions, received by the Partnership with respect to such Capital Commitment Investment solely in respect of the Capital Commitment BREDS II Interest, if any, less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of such Capital Commitment Investment as it may determine in good faith is appropriate.
“Capital Commitment Giveback Amount” has the meaning set forth in Section 7.4(g)(i).
“Capital Commitment Interest” means the interest of a Partner in a specific Capital Commitment Investment as provided herein.
“Capital Commitment Investment” means any Capital Commitment BREDS II Investment, but shall exclude any GP-Related Investment.
“Capital Commitment Liquidating Share” with respect to each Capital Commitment Investment means, in the case of dissolution of the Partnership, the related Capital Commitment Capital Account of a Partner (less amounts reserved in accordance with Section 9.3) immediately prior to dissolution.
“Capital Commitment Net Income (Loss)” with respect to each Capital Commitment Investment means all amounts of income received by the Partnership with respect to such Capital Commitment Investment, including without limitation gain or loss in respect of the disposition, in whole or in part, of such Capital Commitment Investment, less any costs, fees and expenses of the Partnership allocated thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership anticipated to be allocated thereto; provided, that any income received in respect of the Capital Commitment BREDS II Interest that is unrelated to any Capital Commitment Investment (as determined by the General Partner in its sole discretion) shall be allocated to the Partners in accordance with their Capital Commitment Profit Sharing Percentage.
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“Capital Commitment Partner Interest” means a Partner’s limited partnership interest in the Partnership with respect to the Capital Commitment BREDS II Interest.
“Capital Commitment Profit Sharing Percentage” with respect to each Capital Commitment Investment means the percentage interest of a Partner in Capital Commitment Net Income (Loss) from such Capital Commitment Investment set forth in the books and records of the Partnership.
“Capital Commitment Recontribution Amount” has the meaning set forth in Section 7.4(g)(i).
“Capital Commitment-Related Capital Contributions” has the meaning set forth in Section 7.1(a)(ii).
“Capital Commitment-Related Commitment”, with respect to any Partner, means such Partner’s commitment to the Partnership relating to such Partner’s Capital Commitment Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any.
“Capital Commitment Special Distribution” has the meaning set forth in Section 7.7(a).
“Capital Commitment Value” has the meaning set forth in Section 7.5.
“Carried Interest” means (i) “Carried Interest Distributions,” as defined in the BREDS II Partnership Agreement, and (ii) any other carried interest distribution to a Fund GP pursuant to any BREDS II Agreement. In the case of each of (i) and (ii) above, except as determined by the General Partner, the amount shall not be less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto (in each case which the General Partner may allocate among all or any portion of the GP-Related Investments as it determines in good faith is appropriate).
“Carried Interest Give Back Percentage” means, for any Partner or Withdrawn Partner, subject to Section 5.8(e), the percentage determined by dividing (A) the aggregate amount of distributions received by such Partner or Withdrawn Partner from the Partnership or any Other Fund GPs or their Affiliates in respect of Carried Interest by (B) the aggregate amount of distributions made to all Partners, Withdrawn Partners or any other person by the Partnership or any Other Fund GP or any of their Affiliates (in any capacity) in respect of Carried Interest. For purposes of determining any “Carried Interest Give Back Percentage” hereunder, all Trust Amounts contributed to the Trust by the Partnership or any Other Fund GPs on behalf of a Partner or Withdrawn Partner (but not the Trust Income thereon) shall be deemed to have been initially distributed or paid to the Partners and Withdrawn Partners as members, partners or other equity owners of the Partnership or any of the Other Fund GPs or their Affiliates.
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“Carried Interest Sharing Percentage” means, with respect to each GP-Related Investment, the percentage interest of a Partner in Carried Interest from such GP-Related Investment set forth in the books and records of the Partnership.
“Cause” means the occurrence or existence of any of the following with respect to any Partner, as determined fairly, reasonably, on an informed basis and in good faith by the General Partner: (i) (w) any breach by any Partner of any provision of any non-competition agreement, (x) any material breach of this Agreement or any rules or regulations applicable to such Partner that are established by the General Partner, (y) such Partner’s deliberate failure to perform his or her duties to the Partnership or any of its Affiliates or (z) such Partner’s committing to or engaging in any conduct or behavior that is or may be harmful to the Partnership or any of its Affiliates in a material way as determined by the General Partner; provided, that in the case of any of the foregoing clauses (w), (x), (y) and (z), the General Partner has given such Partner written notice (a “Notice of Breach”) within fifteen days after the General Partner becomes aware of such action and such Partner fails to cure such breach, failure to perform or conduct or behavior within fifteen days after receipt of such Notice of Breach from the General Partner (or such longer period, not to exceed an additional fifteen days, as shall be reasonably required for such cure; provided, that such Partner is diligently pursuing such cure); (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Partnership or any of its Affiliates; (iii) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony or crime (including any misdemeanor charge involving moral turpitude, false statements or misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations of the applicable securities industry, that such Partner individually has violated any applicable securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) such Partner’s ability to function as a Partner of the Partnership, taking into account the services required of such Partner and the nature of the business of the Partnership and its Affiliates or (B) the business of the Partnership and its Affiliates or (iv) becoming subject to an event described in Rule 506(d)(1)(i)-(viii) of Regulation D under the Securities Act.
“CC Carried Interest” means, with respect to any Partner, the aggregate amount of distributions or payments received by such Partner (in any capacity) from Affiliates of the Partnership in respect of or relating to “carried interest”, including the amount of any bonuses received by a Partner as an employee of an Affiliate of the Partnership that relate to the amount of “carried interest” received by an Affiliate of the Partnership. “CC Carried Interest” includes any amount initially received by an Affiliate of the Partnership from any fund (including BREDS II, any similar funds formed after the date hereof, and any other private equity merchant banking, real estate or mezzanine funds, whether or not in existence as of the date hereof) to which such Affiliate serves as general partner (or other similar capacity) that exceeds such Affiliate’s pro rata share of distributions from such fund based upon capital contributions thereto (or the capital contributions to make the investment of such fund giving rise to such “carried interest”).
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“Clawback Adjustment Amount” has the meaning set forth in Section 5.8(e).
“Clawback Amount” means the “Clawback Amount” and (to the extent applicable to any limited partnership, limited liability company or other entity named or referred to in the definition of BREDS II) the “Interim Clawback Amount,” both as defined in Article One of the BREDS II Partnership Agreement, and any other clawback amount payable to the limited partners of BREDS II or to BREDS II pursuant to any BREDS II Agreement, as applicable.
“Clawback Provisions” means paragraphs 4.2.9 and 9.2.8 of the BREDS II Partnership Agreement and any other similar provisions in any other BREDS II Partnership Agreement existing heretofore or hereafter entered into.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any reference herein to a particular provision of the Code means, where appropriate, the corresponding provision in any successor statute.
“Commitment Agreement” means the agreement between the Partnership or an Affiliate thereof and a Partner, pursuant to which such Partner undertakes certain obligations, including the obligation to make capital contributions pursuant to Section 4.1 and/or Section 7.1. Each Commitment Agreement is hereby incorporated by reference as between the Partnership and the relevant Partner.
“Contingent” means subject to repurchase rights and/or other requirements.
The term “control” when used with reference to any person means the power to direct the management and policies of such person, directly or indirectly, by or through stock or other equity ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral) with one or more other persons by or through stock or other equity ownership, agency or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.
“Controlled Entity” when used with reference to another person means any person controlled by such other person.
“Covered Person” has the meaning set forth in Section 3.6(a).
“Deceased Partner” means any Partner or Withdrawn Partner who has died or who suffers from Incompetence. For purposes hereof, references to a Deceased Partner shall refer collectively to the Deceased Partner and the estate and heirs or legal representative of such Deceased Partner, as the case may be, that have received such Deceased Partner’s interest in the Partnership.
“Default Interest Rate” means the lower of (i) the sum of (a) the Prime Rate and (b) 5% or (ii) the highest rate of interest permitted under applicable law.
“Delaware Arbitration Act” has the meaning set forth in Section 10.1(d).
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“Disabling Event” means (a) the Withdrawal of the General Partner, other than in accordance with Section 6.4(a) or (b) the General Partner (i) makes an assignment for the benefit of its creditors, (ii) files a voluntary petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent or has entered against it an order for relief in any bankruptcy or insolvency proceeding, (iv) files a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in a proceeding described in clause (iv) or (vi) seeks, consents to, or acquiesces in, the appointment of a trustee, receiver or liquidator of the General Partner or of all or substantially all of its properties.
“Estate Planning Vehicle” has the meaning set forth in Section 6.3(a).
“Excess Holdback” has the meaning set forth in Section 4.1(d)(v)(A).
“Excess Holdback Percentage” has the meaning set forth in Section 4.1(d)(v)(A).
“Excess Tax-Related Amount” has the meaning set forth in Section 5.8(e).
“Existing Partner” means any Partner who is neither a Retaining Withdrawn Partner nor a Deceased Partner.
“Final Event” means the death, Total Disability, Incompetence, Bankruptcy, liquidation, dissolution or Withdrawal from the Partnership of any person who is a Partner.
“Firm Advances” has the meaning set forth in Section 7.1(b).
“Firm Collateral” means a Partner’s or Withdrawn Partner’s interest in one or more partnerships or limited liability companies, in either case affiliated with the Partnership, and certain other assets of such Partner or Withdrawn Partner, in each case that has been pledged or made available to the Trustee(s) to satisfy all or any portion of the Excess Holdback of such Partner or Withdrawn Partner as more fully described in the books and records of the Partnership; provided, that for all purposes hereof (and any other agreement (e.g., the Trust Agreement) that incorporates the meaning of the term “Firm Collateral” by reference), references to “Firm Collateral” shall include “Special Firm Collateral”, excluding references to “Firm Collateral” in Section 4.1(d)(v) and Section 4.1(d)(viii).
“Firm Collateral Realization” has the meaning set forth in Section 4.1(d)(v)(B).
“Fiscal Year” means a calendar year, or any other period chosen by the General Partner.
“Fund GP” means the Partnership (only with respect to the GP-Related BREDS II Interest) and the Other Fund GPs.
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“GAAP” means U.S. generally accepted accounting principles.
“General Partner” means BREDS II GP L.L.C. and any person admitted to the Partnership as an additional or substitute general partner of the Partnership in accordance with the provisions of this Agreement (until such time as such person ceases to be a general partner of the Partnership as provided herein or in the Partnership Act).
“Giveback Amount” means the “Investment Specific Giveback Amount,” as such term is defined in the BREDS II Partnership Agreement.
“Giveback Provisions” means paragraph 3.4.3 of the BREDS II Partnership Agreement and any other similar provisions in any other BREDS II Agreement existing heretofore or hereafter entered into.
“Governmental Entity” has the meaning set forth in Section 10.8(b).
“GP-Related BREDS II Interest” means the interest held by the Partnership in BREDS II in the Partnership’s capacity as general partner of BREDS II, excluding any Capital Commitment BREDS II Interest.
“GP-Related BREDS II Investment” means the Partnership’s interest in an Investment (for purposes of this definition, as defined in the BREDS II Partnership Agreement) in the Partnership’s capacity as the general partner of BREDS II, but does not include any Capital Commitment Investment.
“GP-Related Capital Account” has the meaning set forth in Section 5.2(a).
“GP-Related Capital Contributions” has the meaning set forth in Section 4.1(a).
“GP-Related Class A Interest” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Class B Interest” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Commitment”, with respect to any Partner, means such Partner’s commitment to the Partnership relating to such Partner’s GP-Related Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any.
“GP-Related Defaulting Party” has the meaning set forth in Section 5.8(d)(ii)(A).
“GP-Related Deficiency Contribution” has the meaning set forth in Section 5.8(d)(ii)(A).
“GP-Related Disposable Investment” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Giveback Amount” has the meaning set forth in Section 5.8(d)(i)(A).
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“GP-Related Investment” means any investment (direct or indirect) of the Partnership in respect of the GP-Related BREDS II Interest (including, without limitation, any GP-Related BREDS II Investment, but excluding any Capital Commitment Investment).
“GP-Related Net Income (Loss)” has the meaning set forth in Section 5.1(b).
“GP-Related Partner Interest” of a Partner means all interests of such Partner in the Partnership (other than such Partner’s Capital Commitment Partner Interest), including, without limitation, such Partner’s interest in the Partnership with respect to the GP-Related BREDS II Interest and with respect to all GP-Related Investments.
“GP-Related Profit Sharing Percentage” means the “Carried Interest Sharing Percentage” and “Non-Carried Interest Sharing Percentage” of each Partner; provided, that any references in this Agreement to GP-Related Profit Sharing Percentages made (i) in connection with voting or voting rights or (ii) GP-Related Capital Contributions with respect to GP-Related Investments (including Section 5.3(b)) means the “Non-Carried Interest Sharing Percentage” of each Partner; provided further, that the term “GP-Related Profit Sharing Percentage” shall not include any Capital Commitment Profit Sharing Percentage.
“GP-Related Recontribution Amount” has the meaning set forth in Section 5.8(d)(i)(A).
“GP-Related Required Amounts” has the meaning set forth in Section 4.1(a).
“GP-Related Unallocated Percentage” has the meaning set forth in Section 5.3(b).
“GP-Related Unrealized Net Income (Loss)” attributable to any GP-Related BREDS II Investment as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related BREDS II Investment if BREDS II’s entire portfolio of investments were sold on such date for cash in an amount equal to their aggregate value on such date (determined in accordance with Section 5.1(e)) and all distributions payable by BREDS II to the Partnership (indirectly through the general partner of BREDS II) pursuant to any BREDS II Agreement with respect to such GP-Related BREDS II Investment were made on such date. “GP-Related Unrealized Net Income (Loss)” attributable to any other GP-Related Investment (other than any Capital Commitment Investment) as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related Investment if such GP-Related Investment were sold on such date for cash in an amount equal to its value on such date (determined in accordance with Section 5.1(h)).
“GSO Fund” means (i) any of GSO Capital Opportunities Fund LP, GSO Capital Opportunities Overseas Fund L.P., GSO Capital Opportunities Overseas Master Fund L.P., GSO Liquidity Partners LP, GSO Liquidity Overseas Partners LP, Blackstone / GSO Capital Solutions Fund LP, Blackstone / GSO Capital Solutions Overseas Fund L.P., Blackstone / GSO Capital Solutions Overseas Master Fund L.P., GSO Capital
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Solutions Fund II LP, GSO Capital Solutions Overseas Feeder Fund II LP, GSO European Senior Debt Fund LP, GSO European Senior Debt Feeder Fund LP, GSO Targeted Opportunity Partners LP, GSO Targeted Opportunity Overseas Partners L.P., GSO Targeted Opportunity Overseas Intermediate Partners L.P., GSO Targeted Opportunity Master Partners L.P., GSO SJ Partners LP, GSO Capital Opportunities Fund II LP, GSO Capital Opportunities Cayman Overseas Fund II LP, GSO NMERB LP, GSO Energy Partners-A LP, GSO Palmetto Opportunistic Investment Partners LP, GSO Foreland Co-Invest Holdings LP, GSO Bakken Holdings I LP or GSO Churchill Partners LP, or (ii) any alternative vehicle or parallel fund relating to any of the partnerships referred to in clause (i) above.
“Holdback” has the meaning set forth in Section 4.1(d)(i).
“Holdback Percentage” has the meaning set forth in Section 4.1(d)(i).
“Holdback Vote” has the meaning set forth in Section 4.1(d)(iv)(A).
“Holdings” means Blackstone Holdings III L.P., a Québec société en commandite.
“Incompetence” means, with respect to any Partner, the determination by the General Partner in its sole discretion, after consultation with a qualified medical doctor, that such Partner is incompetent to manage his or her person or his or her property.
“Initial Holdback Percentages” has the meaning set forth in Section 4.1(d)(i).
“Initial Limited Partner” has the meaning set forth in the recitals.
“Interest” means a Partner’s interest in the Partnership, including any interest that is held by a Retaining Withdrawn Partner, and including any Partner’s GP-Related Partner Interest and Capital Commitment Partner Interest.
“Investment” means any investment (direct or indirect) of the Partnership designated by the General Partner from time to time as an investment in which the Partners’ respective interests shall be established and accounted for on a basis separate from the Partnership’s other businesses, activities and investments, including (a) GP-Related Investments and (b) Capital Commitment Investments.
“Investor Note” means a promissory note of a Partner evidencing indebtedness incurred by such Partner to purchase a Capital Commitment Interest, the terms of which were or are approved by the General Partner and which is secured by such Capital Commitment Interest, all other Capital Commitment Interests of such Partner and all other interests of such Partner in Blackstone Collateral Entities; provided, that such promissory note may also evidence indebtedness relating to other interests of such Partner in Blackstone Collateral Entities, and such indebtedness shall be prepayable with Capital Commitment Net Income (whether or not such indebtedness relates to Capital Commitment Investments) as set forth in this Agreement, the Investor Note, the other BCE Agreements and any documentation relating to Other Sources; provided further, that
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references to “Investor Notes” herein refer to multiple loans made pursuant to such note, whether made with respect to Capital Commitment Investments or other BCE Investments, and references to an “Investor Note” refer to one such loan as the context requires. In no way shall any indebtedness incurred to acquire Capital Commitment Interests or other interests in Blackstone Collateral Entities be considered part of the Investor Notes for purposes hereof if the Lender or Guarantor is not the lender or guarantor with respect thereto.
“Investor Special Limited Partner” means any Limited Partner so designated at the time of its admission as a partner of the Partnership.
“Issuer” means the issuer of any Security comprising part of an Investment.
“L/C” has the meaning set forth in Section 4.1(d)(vi).
“L/C Partner” has the meaning set forth in Section 4.1(d)(vi).
“Lender or Guarantor” means Blackstone Holdings I L.P. in its capacity as lender or guarantor under the Investor Notes, or any other Affiliate of the Partnership that makes or guarantees loans to enable a Partner to acquire Capital Commitment Interests or other interests in Blackstone Collateral Entities.
“Limited Partner” means any person who is shown on the books and records of the Partnership as a Limited Partner of the Partnership, including any Special Limited Partner, any Investor Special Limited Partner and any Nonvoting Limited Partner.
“Liquidator” has the meaning set forth in Section 9.1(b).
“Loss Amount” has the meaning set forth in Section 5.8(e)(i)(A).
“Loss Investment” has the meaning set forth in Section 5.8(e).
“Majority in Interest of the Partners” on any date (a “vote date”) means one or more persons who are Partners (including the General Partner and the Limited Partners but excluding Nonvoting Limited Partners) on the vote date and who, as of the last day of the most recent accounting period ending on or prior to the vote date (or as of such later date on or prior to the vote date selected by the General Partner as of which the Partners’ capital account balances can be determined), have aggregate capital account balances representing at least a majority in amount of the total capital account balances of all the persons who are Partners (including the General Partner and the Limited Partners but excluding Nonvoting Limited Partners) on the vote date.
“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.
“Net Carried Interest Distribution” has the meaning set forth in Section 5.8(e)(i)(C).
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“Net Carried Interest Distribution Recontribution Amount” has the meaning set forth in Section 5.8(e)(i)(C).
“Net GP-Related Recontribution Amount” has the meaning set forth in Section 5.8(d)(i)(A).
“Non-Carried Interest” means, with respect to each GP-Related Investment (including any GP-Related BREDS II Investment), all amounts of distributions, other than Carried Interest (and other than Capital Commitment Distributions) received by the Partnership with respect to such GP-Related Investment (including any GP-Related BREDS II Investment), less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of the GP-Related Investments (including any GP-Related BREDS II Investment) as it may determine in good faith is appropriate.
“Non-Carried Interest Sharing Percentage” means, with respect to each GP-Related Investment (including any GP-Related BREDS II Investments), the percentage interest of a Partner in Non-Carried Interest from such GP-Related Investment (including any GP-Related BREDS II Investments) set forth in the books and records of the Partnership.
“Non-Contingent” means generally not subject to repurchase rights or other requirements.
“Nonvoting Limited Partner” has the meaning set forth in Section 6.1(a).
“Original Agreement” has the meaning set forth in the recitals.
“Other Blackstone Collateral Entity” means any Blackstone Entity (other than any limited partnership, limited liability company or other entity named or referred to in the definition of any of “BFIP,” “BFREP,” “BFGSO” or “BFCOMP”) in which any limited partner interest, limited liability company interest, unit or other interest is pledged to secure any Investor Note.
“Other Fund GPs” means the General Partner (only with respect to the General Partner’s GP-Related Partner Interest in the Partnership) and any other entity (other than the Partnership) through which any Partner, Withdrawn Partner or any other person directly receives any amounts of Carried Interest, and any successor thereto; provided, that this includes any other entity which has in its organizational documents a provision which indicates that it is a “Fund GP” or an “Other Fund GP”; provided further, that notwithstanding any of the foregoing, neither Holdings nor any Estate Planning Vehicle established for the benefit of family members of any Partner or of any member or partner of any Other Fund GP shall be considered an “Other Fund GP” for purposes hereof.
“Other Sources” means (i) distributions or payments of CC Carried Interest (which shall include amounts of CC Carried Interest which are not distributed or paid to a Partner but are instead contributed to a trust (or similar arrangement) to satisfy any “holdback” obligation with respect thereto) and (ii) distributions from Blackstone Collateral Entities (other than the Partnership) to such Partner.
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“Parallel Fund” means any additional collective investment vehicle (or other similar arrangement) formed pursuant to paragraph 2.8 of the BREDS II Partnership Agreement.
“Partner” means any person who is a partner of the Partnership, whether a General Partner or a Limited Partner in whatsoever Partner Category.
“Partner Category” means the Existing Partners, Retaining Withdrawn Partners or Deceased Partners, each referred to as a group for purposes hereof.
“Partnership” means Blackstone Real Estate Debt Strategies Associates II L.P., a Delaware limited partnership.
“Partnership Act” means the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. §§ 17-101, et seq., as it may be amended from time to time, and any successor to such statute.
“Partnership Affiliate” has the meaning set forth in Section 3.4(c).
“Partnership Affiliate Governing Agreement” has the meaning set forth in Section 3.4(c).
“Pledgable Blackstone Interests” has the meaning set forth in Section 4.1(d)(v)(A).
“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate.
“Qualifying Fund” means any fund designated by the General Partner as a “Qualifying Fund.”
“Repurchase Period” has the meaning set forth in Section 5.8(c).
“Required Rating” has the meaning set forth in Section 4.1(d)(vi).
“Retained Portion” has the meaning set forth in Section 7.6(a).
“Retaining Withdrawn Partner” means a Withdrawn Partner who has retained a GP-Related Partner Interest, pursuant to Section 6.5(f) or otherwise. A Retaining Withdrawn Partner shall be considered a Nonvoting Limited Partner for all purposes hereof.
“Securities” means any debt or equity securities of an Issuer and its subsidiaries and other Controlled Entities constituting part of an Investment, including without limitation common and preferred stock, interests in limited partnerships and interests in
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limited liability companies (including warrants, rights, put and call options and other options relating thereto or any combination thereof), notes, bonds, debentures, trust receipts and other obligations, instruments or evidences of indebtedness, choses in action, other property or interests commonly regarded as securities, interests in real property, whether improved or unimproved, interests in oil and gas properties and mineral properties, short-term investments commonly regarded as money-market investments, bank deposits and interests in personal property of all kinds, whether tangible or intangible.
“Securities Act” means the U.S. Securities Act of 1933, as amended from time to time, or any successor statute.
“Settlement Date” has the meaning set forth in Section 6.5(a).
“SMD Agreements” means the agreements between the Partnership and/or one or more of its Affiliates and certain of the Partners, entered into in accordance with Section 10.4 and pursuant to which each such Partner undertakes certain obligations with respect to the Partnership and/or its Affiliates. The SMD Agreements are hereby incorporated by reference as between the Partnership and the relevant Partner.
“Special Firm Collateral” means interests in a Qualifying Fund or other assets that have been pledged to the Trustee(s) to satisfy all or any portion of a Partner’s or Withdrawn Partner’s Holdback obligation (excluding any Excess Holdback) as more fully described in the books and records of the Partnership.
“Special Firm Collateral Realization” has the meaning set forth in Section 4.1(d)(viii)(B).
“Special Limited Partner” means any of the persons shown in the books and records of the Partnership as a Special Limited Partner and any person admitted to the Partnership as an additional Special Limited Partner in accordance with the provisions of this Agreement.
“S&P” means Standard & Poor’s Ratings Group, and any successor thereto.
“Subject Investment” has the meaning set forth in Section 5.8(e)(i).
“Subject Partner” has the meaning set forth in Section 4.1(d)(iv)(A).
“Successor in Interest” means any (i) shareholder of; (ii) trustee, custodian, receiver or other person acting in any Bankruptcy or reorganization proceeding with respect to; (iii) assignee for the benefit of the creditors of; (iv) officer, director or partner of; (v) trustee or receiver, or former officer, director or partner, or other fiduciary acting for or with respect to the dissolution, liquidation or termination of; or (vi) other executor, administrator, committee, legal representative or other successor or assign of, any Partner, whether by operation of law or otherwise.
“Tax Advances” has the meaning set forth in Section 6.7(d).
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“Tax Matters Partner” has the meaning set forth in Section 6.7(b).
“TM” has the meaning set forth in Section 10.2.
“Total Disability” means the inability of a Limited Partner substantially to perform the services required of such Limited Partner (in its capacity as such or in any other capacity with respect to any Affiliate of the Partnership) for a period of six consecutive months by reason of physical or mental illness or incapacity and whether arising out of sickness, accident or otherwise.
“Transfer” has the meaning set forth in Section 8.2.
“Trust Account” has the meaning set forth in the Trust Agreement.
“Trust Agreement” means the Trust Agreement dated as of the date set forth therein, as amended, supplemented, restated or otherwise modified from time to time, among the Partners, the Trustee(s) and certain other persons that may receive distributions in respect of or relating to Carried Interest from time to time.
“Trust Amount” has the meaning set forth in the Trust Agreement.
“Trust Income” has the meaning set forth in the Trust Agreement.
“Trustee(s)” has the meaning set forth in the Trust Agreement.
“Unadjusted Carried Interest Distributions” has the meaning set forth in Section 5.8(e)(i)(B).
“Unallocated Capital Commitment Interests” has the meaning set forth in Section 8.1(f).
“Withdraw” or “Withdrawal” with respect to a Partner means a Partner ceasing to be a partner of the Partnership (except as a Retaining Withdrawn Partner) for any reason (including death, disability, removal, resignation or retirement, whether such is voluntary or involuntary), unless the context shall limit the type of withdrawal to a specific reason, and “Withdrawn” with respect to a Partner means, as aforesaid, a Partner who has ceased to be a partner of the Partnership.
“Withdrawal Date” means the date of the Withdrawal from the Partnership of a Withdrawn Partner.
“Withdrawn Partner” means a Limited Partner whose GP-Related Partner Interest or Capital Commitment Partner Interest in the Partnership has been terminated for any reason, including the occurrence of an event specified in Section 6.2, and shall include, unless the context requires otherwise, the estate or legal representatives of any such Partner.
“W-8BEN” has the meaning set forth in Section 3.8.
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“W-8BEN-E” has the meaning set forth in Section 3.8.
“W-8IMY” has the meaning set forth in Section 3.8.
“W-9” has the meaning set forth in Section 3.8.
Section 1.2. Terms Generally. The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The term “person” includes individuals, partnerships (including limited liability partnerships), companies (including limited liability companies), joint ventures, corporations, trusts, governments (or agencies or political subdivisions thereof) and other associations and entities. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.
ARTICLE II
GENERAL PROVISIONS
Section 2.1. General Partner and Limited Partners. The Partners may be General Partners or Limited Partners. The General Partner as of the date hereof is BREDS II GP L.L.C. The Limited Partners shall be as shown on the books and records of the Partnership. The books and records of the Partnership contain the GP-Related Profit Sharing Percentage and GP-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to the GP-Related Investments of the Partnership as of the date hereof. The books and records of the Partnership contain the Capital Commitment Profit Sharing Percentage and Capital Commitment-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to the Capital Commitment Investments of the Partnership as of the date hereof. The books and records of the Partnership shall be amended by the General Partner from time to time to reflect additional GP-Related Investments, additional Capital Commitment Investments, dispositions by the Partnership of GP-Related Investments, dispositions by the Partnership of Capital Commitment Investments, the GP-Related Profit Sharing Percentages of the Partners (including, without limitation, the General Partner) as modified from time to time, the Capital Commitment Profit Sharing Percentages of the Partners (including, without limitation, the General Partner) as modified from time to time, the admission of additional Partners, the Withdrawal of Partners, and the transfer or assignment of interests in the Partnership pursuant to the terms of this Agreement. At the time of admission of each additional Partner, the General Partner shall determine in its sole discretion the GP-Related Investments and Capital Commitment Investments in which such Partner shall participate and such Partner’s GP-Related Commitment, Capital Commitment-Related Commitment, GP-Related Profit Sharing Percentage with respect to each such GP-Related Investment and Capital Commitment Profit Sharing Percentage with respect to each such Capital Commitment Investment. Each Partner may have a GP-Related Partner Interest and/or a Capital Commitment Partner Interest.
Section 2.2. Formation; Name; Foreign Jurisdictions. The Partnership is hereby continued as a limited partnership pursuant to the Partnership Act and shall conduct its activities on and after the date hereof under the name of Blackstone Real Estate Debt Strategies Associates
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II L.P. The certificate of limited partnership of the Partnership may be amended and/or restated from time to time by the General Partner. The General Partner is further authorized to execute and deliver and file any other certificates (and any amendments and/or restatements thereof) necessary for the Partnership to qualify to do business in a jurisdiction in which the Partnership may wish to conduct business.
Section 2.3. Term. The term of the Partnership shall continue until December 31, 2066, unless earlier dissolved and terminated in accordance with this Agreement and the Partnership Act.
Section 2.4. Purpose; Powers. (a) The purposes of the Partnership shall be, directly or indirectly through subsidiaries or Affiliates:
(i) to serve as the general partner of BREDS II (including any Alternative Vehicle and any Parallel Fund) and perform the functions of a general partner of BREDS II (including any Alternative Vehicle and any Parallel Fund) specified in the BREDS II Agreements;
(ii) to serve as, and hold the Capital Commitment BREDS II Interest as, a capital partner (and, if applicable, a limited partner and/or a general partner) of BREDS II (including any Alternative Vehicle and any Parallel Fund) and perform the functions of a capital partner (and, if applicable, a limited partner and/or a general partner) of BREDS II (including any Alternative Vehicle and any Parallel Fund) specified in the BREDS II Agreements;
(iii) to make the Blackstone Capital Commitment or a portion thereof, directly or indirectly, and to invest in GP-Related Investments, Capital Commitment Investments and other Investments and acquire and invest in Securities or other property either directly or indirectly through another entity;
(iv) to serve as a general or limited partner, member, shareholder or other equity interest owner of any Other Fund GP and perform the functions of a general or limited partner, member, shareholder or other equity interest owner specified in any such Fund’s GP’s respective partnership agreement, limited liability company agreement, charter or other governing documents, as amended, supplemented, restated or otherwise modified from time to time;
(v) to serve as a member, shareholder or other equity interest owner of limited liability companies, other companies, corporations or other entities and perform the functions of a member, shareholder or other equity interest owner specified in the respective limited liability company agreement, charter or other governing documents, as amended, supplemented, restated or otherwise modified from time to time, of any such limited liability company, company, corporation or other entity;
(vi) to invest in Capital Commitment Investments and/or GP-Related Investments and acquire and invest in Securities or other property (directly or indirectly through BREDS II (including any Alternative Vehicle and any Parallel Fund)), including, without limitation, in connection with any action referred to in any of clauses (i) through (v) above;
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(vii) to carry on such other businesses, perform such other services and make such other investments as are deemed desirable by the General Partner and as are permitted under the Partnership Act, the BREDS II Agreements, and any applicable partnership agreement, limited liability company agreement, charter or other governing document referred to in clause (iv) or (v) above, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time;
(viii) any other lawful purpose; and (ix) to do all things necessary, desirable, convenient or incidental thereto.
(b) In furtherance of its purposes, the General Partner on behalf of the Partnership shall have all powers necessary, suitable or convenient for the accomplishment of its purposes, alone or with others, as principal or agent, including the following:
(i) to be and become a general partner or limited partner of partnerships, a member of limited liability companies, a holder of common and preferred stock of corporations and/or an investor in the foregoing entities or other entities, in connection with the making of Investments or the acquisition, holding or disposition of Securities or other property or as otherwise deemed appropriate by the General Partner in the conduct of the Partnership’s business, and to take any action in connection therewith;
(ii) to acquire and invest in general partner or limited partner interests, in limited liability company interests, in common and preferred stock of corporations and/or in other interests in or obligations of the foregoing entities or other entities and in Investments and Securities or other property or direct or indirect interests therein, whether such Investments and Securities or other property are readily marketable or not, and to receive, hold, sell, dispose of or otherwise transfer any such partner interests, limited liability company interests, stock, interests, obligations, Investments or Securities or other property and any dividends and distributions thereon and to purchase and sell, on margin, and be long or short, futures contracts and to purchase and sell, and be long or short, options on futures contracts;
(iii) to buy, sell and otherwise acquire investments, whether such investments are readily marketable or not;
(iv) to invest and reinvest the cash assets of the Partnership in money-market or other short-term investments;
(v) to hold, receive, mortgage, pledge, grant security interests over, lease, transfer, exchange or otherwise dispose of, grant options with respect to, and otherwise deal in and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, all property held or owned by the Partnership;
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(vi) to borrow or raise money from time to time and to issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable and non-negotiable instruments and evidences of indebtedness, to secure payment of the principal of any such indebtedness and the interest thereon by mortgage, pledge, conveyance or assignment in trust of, or the granting of a security interest in, the whole or any part of the property of the Partnership, whether at the time owned or thereafter acquired, to guarantee the obligations of others and to buy, sell, pledge or otherwise dispose of any such instrument or evidence of indebtedness;
(vii) to lend any of its property or funds, either with or without security, at any legal rate of interest or without interest;
(viii) to have and maintain one or more offices within or without the State of Delaware, and in connection therewith, to rent or acquire office space, engage personnel and compensate them and do such other acts and things as may be advisable or necessary in connection with the maintenance of such office or offices;
(ix) to open, maintain and close accounts, including margin accounts, with brokers;
(x) to open, maintain and close bank accounts and draw checks and other orders for the payment of moneys;
(xi) to engage accountants, auditors, custodians, investment advisers, attorneys and any and all other agents and assistants, both professional and nonprofessional, and to compensate any of them as may be necessary or advisable;
(xii) to form or cause to be formed and to own the stock of one or more corporations, whether foreign or domestic, to form or cause to be formed and to participate in partnerships and joint ventures, whether foreign or domestic, and to form or cause to be formed and be a member or manager or both of one or more limited liability companies;
(xiii) to enter into, make and perform all contracts, agreements and other undertakings as may be necessary, convenient or advisable or incident to carrying out its purposes;
(xiv) to sue and be sued, to prosecute, settle or compromise all claims against third parties, to compromise, settle or accept judgment to claims against the Partnership, and to execute all documents and make all representations, admissions and waivers in connection therewith;
(xv) to distribute, subject to the terms of this Agreement, at any time and from time to time to the Partners cash or investments or other property of the Partnership, or any combination thereof; and (xvi) to take such other actions necessary, desirable, convenient or incidental thereto and to engage in such other businesses as may be permitted under Delaware and other applicable law.
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Section 2.5. Registered Office; Place of Business. The Partnership shall maintain a registered office at c/o Intertrust Corporate Services Delaware Ltd., 200 Bellevue Parkway, Suite 210, Bellevue Park Corporate Center, Wilmington, Delaware 19809. The Partnership shall maintain an office and principal place of business at such place or places as the General Partner specifies from time to time and as set forth in the books and records of the Partnership. The name and address of the Partnership’s registered agent is Intertrust Corporate Services Delaware Ltd., 200 Bellevue Parkway, Suite 210, Bellevue Park Corporate Center, Wilmington, Delaware 19809. The General Partner may from time to time change the registered agent or office by an amendment to the certificate of limited partnership of the Partnership.
Section 2.6. Withdrawal of Initial Limited Partner. Upon the admission of one or more additional Limited Partners to the Partnership, the Initial Limited Partner shall (a) receive a return of any capital contribution made by it to the Partnership, (b) Withdraw as the Initial Limited Partner of the Partnership and (c) have no further right, interest or obligation of any kind whatsoever as a Partner in the Partnership; provided, that the effective date of such Withdrawal shall be deemed as between the parties hereto to be April 17, 2013.
ARTICLE III
MANAGEMENT
Section 3.1. General Partners. The General Partner shall be the general partner of the Partnership. The General Partner may not be removed without its consent.
Section 3.2. Limitations on Limited Partners. Except as may be expressly required or permitted by the Partnership Act, Limited Partners as such shall have no right to, and shall not, take part in the management, conduct or control of the Partnership’s business or act for or bind the Partnership, and shall have only the rights and powers granted to Limited Partners herein.
Section 3.3. Partner Voting.
(a) To the extent a Partner is entitled to vote with respect to any matter relating to the Partnership, such Partner shall not be obligated to abstain from voting on any matter (or vote in any particular manner) because of any interest (or conflict of interest) of such Partner (or any Affiliate thereof) in such matter.
(b) Meetings of the Partners may be called only by the General Partner.
(c) Notwithstanding any other provision of this Agreement, any Limited Partner or Withdrawn Partner that fails to respond to a notice provided by the General Partner requesting the consent, approval or vote (including, without limitation, with respect to any amendments pursuant to Section 10.14) of such Limited Partner or Withdrawn Partner within fourteen (14) days after such notice is sent to such Limited Partner or Withdrawn Partner shall be deemed to have given its affirmative consent or approval thereto.
Section 3.4. Management. (a) The management, control and operation of the Partnership and the formulation and execution of business and investment policy shall be vested in the General Partner, and the General Partner shall have full control over the business and affairs of the Partnership. The General Partner shall, in the General Partner’s discretion, exercise
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all powers necessary and convenient for the purposes of the Partnership, including those enumerated in Section 2.4, on behalf and in the name of the Partnership. All decisions and determinations (howsoever described herein) to be made by the General Partner pursuant to this Agreement shall be made in the General Partner’s discretion, subject only to the express terms and conditions of this Agreement.
(b) All outside business or investment activities of the Partners (including outside directorships or trusteeships) shall be subject to such rules and regulations as are established by the General Partner from time to time.
(c) Notwithstanding any provision in this Agreement to the contrary, the General Partner on behalf of the Partnership is hereby authorized, without the need for any further act, vote or consent of any person directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as a general partner, capital partner and/or limited partner of BREDS II, or in the Partnership’s capacity as a general partner or limited partner, member or other equity owner of any Partnership Affiliate (as hereinafter defined), (i) to execute and deliver, and to perform the Partnership’s obligations under, the BREDS II Agreements, including, without limitation, serving as a general partner of BREDS II, (ii) to execute and deliver, and to perform the Partnership’s obligations under, the governing agreement, as amended, supplemented, restated or otherwise modified (each a “Partnership Affiliate Governing Agreement”), of any other partnership, limited liability company, other company, corporation or other entity (each a “Partnership Affiliate”) of which the Partnership is to become a general partner or limited partner, member, shareholder or other equity interest owner, including, without limitation, serving as a general partner or limited partner, member, shareholder or other equity interest owner of each Partnership Affiliate and (iii) to take any action, in the applicable capacity, contemplated by or arising out of this Agreement, the BREDS II Agreements or any Partnership Affiliate Governing Agreement (and any amendment, supplement, restatement and/or other modification of any of the foregoing).
(d) The General Partner and any other person designated by the General Partner, each acting individually, is hereby authorized and empowered, as an authorized representative of the Partnership or as an authorized person of the General Partner (within the meaning of the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., as amended, or otherwise) (the General Partner hereby authorizing and ratifying any of the following actions):
(i) to prepare or cause to be prepared and to execute and deliver and/or file (including any such action, directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as general partner, capital partner and/or limited partner of BREDS II, or in the Partnership’s capacity as general partner or limited partner, member, shareholder or other equity owner of any Partnership Affiliate, any of the following):
(A) any agreement, certificate, instrument or other document of the Partnership, BREDS II or any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications thereof), including, without limitation, the following: (I) the BREDS II Agreements and each Partnership
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Affiliate Governing Agreement, (II) subscription agreements and documents on behalf of BREDS II and/or the Partnership, (III) side letters issued in connection with investments in BREDS II on behalf of BREDS II and/or the Partnership and (IV) such other agreements, certificates, instruments and other documents as may be necessary or desirable in furtherance of the purposes of the Partnership, BREDS II or any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing referred to in (I) through (IV) hereof);
(B) the certificates of formation, certificates of limited partnership and/or other organizational documents of the Partnership, BREDS II or any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications thereof); and
(C) any other certificates, notices, applications or other documents (and any amendments, supplements, restatements and/or other modifications thereof) to be filed with any government or governmental or regulatory body, including, without limitation, any such document that may be necessary for the Partnership, BREDS II or any Partnership Affiliate to qualify to do business in a jurisdiction in which the Partnership, BREDS II or such Partnership Affiliate desires to do business;
(ii) to prepare or cause to be prepared, and to sign, execute and deliver and/or file (including any such action, directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as a general partner, capital partner and/or limited partner of BREDS II or in the Partnership’s capacity as a general partner or limited partner, member, shareholder or other equity owner of any Partnership Affiliate): (A) any certificates, forms, notices, applications or other documents to be filed with any government or governmental or regulatory body on behalf of the Partnership, BREDS II and/or any Partnership Affiliate, (B) any certificates, forms, notices, applications or other documents that may be necessary or advisable in connection with any bank account of the Partnership, BREDS II or any Partnership Affiliate or any banking facilities or services that may be utilized by the Partnership, BREDS II or any Partnership Affiliate, and all checks, notes, drafts or other documents of the Partnership, BREDS II or any Partnership Affiliate that may be required in connection with any such bank account, banking facilities or services and (C) resolutions with respect to any of the foregoing matters (which resolutions, when executed by any person authorized as provided in this Section 3.4(d), each acting individually, shall be deemed to have been duly adopted by the General Partner, the Partnership, BREDS II or any Partnership Affiliate, as applicable, for all purposes).
The authority granted to any person (other than the General Partner) in this Section 3.4(d) may be revoked at any time by the General Partner by an instrument in writing signed by the General Partner.
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Section 3.5. Responsibilities of Partners.
(a) Unless otherwise determined by the General Partner in a particular case, each Limited Partner shall devote substantially all his or her time and attention to the businesses of the Partnership and its Affiliates.
(b) All outside business or investment activities of the Partners (including outside directorships or trusteeships), shall be subject to such rules and regulations as are established by the General Partner from time to time.
(c) The General Partner may from time to time establish such other rules and regulations applicable to Partners or other employees as the General Partner deems appropriate, including rules governing the authority of Partners or other employees to bind the Partnership to financial commitments or other obligations.
Section 3.6. Exculpation and Indemnification.
(a) Liability to Partners. Notwithstanding any other provision of this Agreement, whether express or implied, to the fullest extent permitted by law, no Partner nor any of such Partner’s representatives, agents or advisors nor any partner, member, officer, employee, representative, agent or advisor of the Partnership or any of its Affiliates (individually, a “Covered Person” and collectively, the “Covered Persons”) shall be liable to the Partnership or any other Partner for any act or omission (in relation to the Partnership, this Agreement, any related document or any transaction or investment contemplated hereby or thereby) taken or omitted by a Covered Person (other than any act or omission constituting Cause), unless there is a final and non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interests of the Partnership and within the authority granted to such Covered Person by this Agreement, and, with respect to any criminal act or proceeding, had reasonable cause to believe that such Covered Person’s conduct was unlawful. Each Covered Person shall be entitled to rely in good faith on the advice of legal counsel to the Partnership, accountants and other experts or professional advisors, and no action taken by any Covered Person in reliance on such advice shall in any event subject such person to any liability to any Partner or the Partnership. To the extent that, at law or in equity, a Partner has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or to another Partner, to the fullest extent permitted by law, such Partner acting under this Agreement shall not be liable to the Partnership or to any such other Partner for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of a Partner otherwise existing at law or in equity, are agreed by the Partners, to the fullest extent permitted by law, to modify to that extent such other duties and liabilities of such Partner. To the fullest extent permitted by law, the parties hereto agree that the General Partner shall be held to have acted in good faith for the purposes of this Agreement and its duties under the Partnership Act if it acts honestly and in accordance with the specific terms of this Agreement.
(b) Indemnification. (i) To the fullest extent permitted by law, the Partnership shall indemnify and hold harmless (but only to the extent of the Partnership’s assets (including, without limitation, the remaining GP-Related Commitments and Capital Commitment-Related Commitments of the Partners)) each Covered Person from and against any
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and all claims, damages, losses, costs, expenses and liabilities (including, without limitation, amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against any claim or alleged claim), joint and several, of any nature whatsoever, known or unknown, liquidated or unliquidated (collectively, for purposes of this Section 3.6, “Losses”), arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of such Covered Person’s management of the affairs of the Partnership or which relate to or arise out of or in connection with the Partnership, its property, its business or affairs (other than claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, arising out of any act or omission of such Covered Person constituting Cause); provided, that a Covered Person shall not be entitled to indemnification under this Section 3.6(b) with respect to any claim, issue or matter if there is a final and non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interest of the Partnership and within the authority granted to such Covered Person by this Agreement, and, with respect to any criminal act or proceeding, had reasonable cause to believe that such Covered Person’s conduct was unlawful; provided further, that if such Covered Person is a Partner or a Withdrawn Partner, such Covered Person shall bear its share of such Losses in accordance with such Covered Person’s GP-Related Profit Sharing Percentage in the Partnership as of the time of the actions or omissions that gave rise to such Losses. To the fullest extent permitted by law, expenses (including legal fees) incurred by a Covered Person (including, without limitation, the General Partner) in defending any claim, demand, action, suit or proceeding may, with the approval of the General Partner, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of a written undertaking by or on behalf of the Covered Person to repay such amount to the extent that it shall be subsequently determined that the Covered Person is not entitled to be indemnified as authorized in this Section 3.6(b), and the Partnership and its Affiliates shall have a continuing right of offset against such Covered Person’s interests/investments in the Partnership and such Affiliates and shall have the right to withhold amounts otherwise distributable to such Covered Person to satisfy such repayment obligation. If a Partner institutes litigation against a Covered Person which gives rise to an indemnity obligation hereunder, such Partner shall be responsible, up to the amount of such Partner’s Interests and remaining GP-Related Commitments and Capital Commitment-Related Commitments, for such Partner’s pro rata share of the Partnership’s expenses related to such indemnity obligation, as determined by the General Partner. The Partnership may purchase insurance, to the extent available at reasonable cost, to cover losses, claims, damages or liabilities covered by the foregoing indemnification provisions. Partners will not be personally obligated with respect to indemnification pursuant to this Section 3.6(b). The General Partner shall have the authority to enter into separate agreements with any Covered Person in order to give effect to the obligations to indemnify pursuant to this Section 3.6(b).
(ii) (A) Notwithstanding anything to the contrary herein, for greater certainty, it is understood and/or agreed that the Partnership’s obligations hereunder are not intended to render the Partnership as a primary indemnitor for purposes of the indemnification, advancement of expenses and related provisions under applicable law governing BREDS II and/or a particular portfolio entity through which an Investment is
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indirectly held. It is further understood and/or agreed that a Covered Person shall first seek to be so indemnified and have such expenses advanced in the following order of priority: first, out of proceeds available in respect of applicable insurance policies maintained by the applicable portfolio entity and/or BREDS II; second, by the applicable portfolio entity through which such investment is indirectly held and third, by BREDS II (only to the extent the foregoing sources have been exhausted).
(B) The Partnership’s obligation, if any, to indemnify or advance expenses to any Covered Person shall be reduced by any amount that such Covered Person may collect as indemnification or advancement from BREDS II and/or the applicable portfolio entity (including by virtue of any applicable insurance policies maintained thereby), and to the extent the Partnership (or any Affiliate thereof) pays or causes to be paid any amounts that should have been paid by BREDS II and/or the applicable portfolio entity (including by virtue of any applicable insurance policies maintained thereby), it is agreed among the Partners that the Partnership shall have a subrogation claim against BREDS II and/or such portfolio entity in respect of such advancement or payments. The General Partner and the Partnership shall be specifically empowered to structure any such advancement or payment as a loan or other arrangement (except for a loan to an executive officer of The Blackstone Group L.P. or any of its Affiliates, which shall not be permitted) as the General Partner may determine necessary or advisable to give effect to or otherwise implement the foregoing.
Section 3.7. Representations of Limited Partners.
(a) Each Limited Partner by execution of this Agreement (or by otherwise becoming bound by the terms and conditions hereof as provided herein or in the Partnership Act) represents and warrants to every other Partner and to the Partnership, except as may be waived by the General Partner, that such Limited Partner is acquiring each of such Limited Partner’s Interests for such Limited Partner’s own account for investment and not with a view to resell or distribute the same or any part hereof, and that no other person has any interest in any such Interest or in the rights of such Limited Partner hereunder; provided, that a Partner may choose to make transfers for estate and charitable planning purposes (pursuant to Section 6.3(a) and otherwise in accordance with the terms of this Agreement). Each Limited Partner represents and warrants that such Limited Partner understands that the Interests have not been registered under the Securities Act, and therefore such Interests may not be resold without registration under the Securities Act or exemption from such registration, and that accordingly such Limited Partner must bear the economic risk of an investment in the Partnership for an indefinite period of time. Each Limited Partner represents that such Limited Partner has such knowledge and experience in financial and business matters that such Limited Partner is capable of evaluating the merits and risks of an investment in the Partnership, and that such Limited Partner is able to bear the economic risk of such investment. Each Limited Partner represents that such Limited Partner’s overall commitment to the Partnership and other investments which are not readily marketable is not disproportionate to the Limited Partner’s net worth and the Limited Partner has no need for liquidity in the Limited Partner’s investment in Interests. Each Limited Partner represents that to the full satisfaction of the Limited Partner, the Limited Partner has been furnished any materials that such Limited Partner has requested relating to the Partnership, any Investment and the
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offering of Interests and has been afforded the opportunity to ask questions of representatives of the Partnership concerning the terms and conditions of the offering of Interests and any matters pertaining to each Investment and to obtain any other additional information relating thereto. Each Limited Partner represents that the Limited Partner has consulted to the extent deemed appropriate by the Limited Partner with the Limited Partner’s own advisers as to the financial, tax, legal and related matters concerning an investment in Interests and on that basis believes that an investment in the Interests is suitable and appropriate for the Limited Partner.
(b) Each Partner agrees that the representations and warranties contained in paragraph (a) above shall be true and correct as of any date that such Partner (1) makes a capital contribution to the Partnership (whether as a result of Firm Advances made to such Partner or otherwise) with respect to any Investment, and such Partner hereby agrees that such capital contribution shall serve as confirmation thereof and/or (2) repays any portion of the principal amount of a Firm Advance, and such Partner hereby agrees that such repayment shall serve as confirmation thereof.
Section 3.8. Tax Representation and Further Assurances. (a) Each Limited Partner, upon the request of the General Partner, agrees to perform all further acts and to execute, acknowledge and deliver any documents that may be reasonably necessary to comply with the General Partner’s or the Partnership’s obligations under applicable law or to carry out the provisions of this Agreement.
(b) Each Limited Partner certifies that (A) if the Limited Partner is a United States person (as defined in the Code) (x) (i) the Limited Partner’s name, social security number (or, if applicable, employer identification number) and address provided to the Partnership and its Affiliates pursuant to an IRS Form W-9, Request for Taxpayer Identification Number Certification (“W-9”) or otherwise are correct and (ii) the Limited Partner will complete and return a W-9 and (y) (i) the Limited Partner is a United States person (as defined in the Code) and (ii) the Limited Partner will notify the Partnership within 60 days of a change to foreign (non-United States) status or (B) if the Limited Partner is not a United States person (as defined in the Code) (x) (i) the information on the completed IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) (“W-8BEN”), IRS Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) (“W-8BEN-E”), or other applicable form, including but not limited to IRS Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting (“W-8IMY”), or otherwise is correct and (ii) the Limited Partner will complete and return the applicable IRS form, including but not limited to a W-8BEN, W-8BEN-E or W-8IMY and (y) (i) the Limited Partner is not a United States person (as defined in the Code) and (ii) the Limited Partner will notify the Partnership within 60 days of any change of such status. The Limited Partner agrees to provide such cooperation and assistance, including but not limited to properly executing and providing to the Partnership in a timely manner any tax or other information reporting documentation or information that may be reasonably requested by the Partnership or the General Partner.
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(c) Each Limited Partner acknowledges and agrees that the Partnership and the General Partner may release confidential information or other information about the Limited Partner or related to such Limited Partner’s investment in the Partnership if the Partnership or the General Partner, in its or their sole discretion, determines that such disclosure is required by applicable law or regulation or in order to comply for an exception from, or reduced tax rate of, tax or other tax benefit. Any such disclosure shall not be treated as a breach of any restriction upon the disclosure of information imposed on any such person by law or otherwise, and a Limited Partner shall have no claim against the Partnership, the General Partner or any of their Affiliates for any form of damages or liability as a result of actions taken by the foregoing in order to comply with any disclosure obligations that the foregoing reasonably believe are required by law, regulation or otherwise.
(d) Each Limited Partner acknowledges and agrees that if it provides information that is in anyway materially misleading, or if it fails to provide the Partnership or its agents with any information requested hereunder, in either case in order to satisfy the Partnership’s obligations, the General Partner reserves the right to take any action and pursue any remedies at its disposal, including (i) requiring such Limited Partner to Withdraw for Cause and (ii) withholding or deducting any costs caused by such Limited Partner’s action or inaction from amounts otherwise distributable to such Limited Partner from the Partnership and its Affiliates.
ARTICLE IV
CAPITAL OF THE PARTNERSHIP
Section 4.1. Capital Contributions by Partners. (a) Each Partner shall be required to make capital contributions to the Partnership (“GP-Related Capital Contributions”) at such times and in such amounts (the “GP-Related Required Amounts”) as are required to satisfy the Partnership’s obligation to make capital contributions to BREDS II in respect of the GP-Related BREDS II Interest with respect to any GP-Related BREDS II Investment and as are otherwise determined by the General Partner from time to time or as may be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any, or otherwise; provided, that additional GP-Related Capital Contributions in excess of the GP-Related Required Amounts may be made pro rata among the Partners based upon each Partner’s Carried Interest Sharing Percentage. GP-Related Capital Contributions in excess of the GP-Related Required Amounts which are to be used for ongoing business operations as distinct from financing, legal or other specific liabilities of the Partnership (including those specifically set forth in Section 4.1(d) and Section 5.8(d)) shall be determined by the General Partner. Limited Partners shall not be required to make additional GP-Related Capital Contributions to the Partnership in excess of the GP-Related Required Amounts, except (i) as a condition of an increase in such Limited Partner’s GP-Related Profit Sharing Percentage or (ii) as specifically set forth in this Agreement; provided, however, that the General Partner and any Limited Partner may agree from time to time that such Limited Partner shall make an additional GP-Related Capital Contribution to the Partnership; and provided, further, that each Investor Special Limited Partner shall maintain its GP-Related Capital Accounts at an aggregate level equal to the product of (i) its GP-Related Profit Sharing Percentage from time to time and (ii) the total capital of the Partnership related to the GP-Related BREDS II Interest.
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(b) The General Partner may elect on a case by case basis to (i) cause the Partnership to loan any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group L.P. or any Affiliate thereof) the amount of any GP-Related Capital Contribution required to be made by such Partner or (ii) permit any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group L.P. or any Affiliate thereof) to make a required GP-Related Capital Contribution to the Partnership in installments, in each case on terms determined by the General Partner.
(c) Each GP-Related Capital Contribution by a Partner shall be credited to the appropriate GP-Related Capital Account of such Partner in accordance with Section 5.2, subject to Section 5.10.
(d) (i) The Partners and the Withdrawn Partners have entered into the Trust Agreement, pursuant to which certain amounts of the distributions relating to the Carried Interest will be paid to the Trustee(s) for deposit in the Trust Account (such amounts to be paid to the Trustee(s) for deposit in the Trust Account constituting a “Holdback”). The General Partner shall determine, as set forth below, the percentage of each distribution of Carried Interest that shall be withheld for any General Partner (including, without limitation, the General Partner) and each Partner Category (such withheld percentage constituting a General Partner’s and such Partner Category’s “Holdback Percentage”). The applicable Holdback Percentages initially shall be 0% for any General Partner, 15% for Existing Partners (other than any General Partner), 21% for Retaining Withdrawn Partners (other than any General Partner) and 24% for Deceased Partners (the “Initial Holdback Percentages”). Any provision of this Agreement to the contrary notwithstanding, the Holdback Percentage for any General Partner (including, without limitation, the General Partner) shall not be subject to change pursuant to clause (ii), (iii) or (iv) of this Section 4.1(d).
(ii) The Holdback Percentage may not be reduced for any individual Partner as compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may only reduce the Holdback Percentages among the Partner Categories on a proportionate basis. For example, if the Holdback Percentage for Existing Partners is decreased to 12.5%, the Holdback Percentage for Retaining Withdrawn Partners and Deceased Partners shall be reduced to 17.5% and 20%, respectively. Any reduction in the Holdback Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such reduction.
(iii) The Holdback Percentage may not be increased for any individual Partner as compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may not increase the Retaining Withdrawn Partners’ Holdback Percentage beyond 21% unless the General Partner concurrently increases the Existing Partners’ Holdback Percentage to 21%. The General Partner may not increase the Deceased Partners’ Holdback Percentage beyond 24% unless the General Partner increases the Holdback Percentage for both Existing Partners and Retaining Withdrawn Partners to 24%. The General Partner may not increase the
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Holdback Percentage of any Partner Category beyond 24% unless such increase applies equally to all Partner Categories. Any increase in the Holdback Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such increase. The foregoing shall in no way prevent the General Partner from proportionately increasing the Holdback Percentage of any Partner Category (following a reduction of the Holdback Percentages below the Initial Holdback Percentages), if the resulting Holdback Percentages are consistent with the above. For example, if the General Partner reduces the Holdback Percentages for Existing Partners, Retaining Withdrawn Partners and Deceased Partners to 12.5%, 17.5% and 20%, respectively, the General Partner shall have the right to subsequently increase the Holdback Percentages to the Initial Holdback Percentages.
(iv) (A) Notwithstanding anything contained herein to the contrary, the General Partner may increase or decrease the Holdback Percentage for any Partner in any Partner Category (in such capacity, the “Subject Partner”) pursuant to the vote of a majority in interest of the Special Limited Partners and the General Partner (a “Holdback Vote”); provided, that, notwithstanding anything to the contrary contained herein, the Holdback Percentage applicable to any General Partner shall not be increased or decreased without its prior written consent; provided further, that a Subject Partner’s Holdback Percentage shall not be (I) increased prior to such time as such Subject Partner (x) is notified by the Partnership of the decision to increase such Subject Partner’s Holdback Percentage and (y) has, if requested by such Subject Partner, been given 30 days to gather and provide information to the Partnership for consideration before a second Holdback Vote (requested by the Subject Partner) or (II) decreased unless such decrease occurs subsequent to an increase in a Subject Partner’s Holdback Percentage pursuant to a Holdback Vote under this clause (iv); provided further, that such decrease shall not exceed an amount such that such Subject Partner’s Holdback Percentage is less than the prevailing Holdback Percentage for such Subject Partner’s Partner Category; provided further, that a Partner shall not vote to increase a Subject Partner’s Holdback Percentage unless such voting Partner determines, in such Partner’s good faith judgment, that the facts and circumstances indicate that it is reasonably likely that such Subject Partner, or any of such Subject Partner’s successors or assigns (including such Subject Partner’s estate or heirs) who at the time of such vote holds the GP-Related Partner Interest or otherwise has the right to receive distributions relating thereto, will not be capable of satisfying any GP-Related Recontribution Amounts that may become due.
(B) A Holdback Vote shall take place at a Partnership meeting. Each of the Special Limited Partners and the General Partner shall be entitled to cast one vote with respect to the Holdback Vote regardless of such Partner’s interest in the Partnership. Such vote may be cast by any such Partner in person or by proxy.
(C) If the result of the second Holdback Vote is an increase in a Subject Partner’s Holdback Percentage, such Subject Partner may submit the decision to an arbitrator, the identity of which is mutually agreed upon by both the Subject Partner and the Partnership; provided, that if the Partnership and the Subject Partner cannot agree upon a mutually satisfactory arbitrator within 10
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days of the second Holdback Vote, each of the Partnership and the Subject Partner shall request its candidate for arbitrator to select a third arbitrator satisfactory to such candidates; provided further, that if such candidates fail to agree upon a mutually satisfactory arbitrator within 30 days of such request, the then sitting President of the American Arbitration Association shall unilaterally select the arbitrator. Each Subject Partner that submits the decision of the Partnership pursuant to the second Holdback Vote to arbitration and the Partnership shall estimate their reasonably projected out-of-pocket expenses relating thereto and each such party shall, to the satisfaction of the arbitrator and prior to any determination being made by the arbitrator, pay the total of such estimated expenses (i.e., both the Subject Partner’s and the Partnership’s expenses) into an escrow account to be controlled by Simpson Thacher & Bartlett LLP, as escrow agent (or such other comparable law firm as the Partnership and the Subject Partner shall agree). The arbitrator shall direct the escrow agent to pay out of such escrow account all expenses associated with such arbitration (including costs leading thereto) and to return to the “victorious” party the entire amount of funds such party paid into such escrow account. If the amount contributed to the escrow account by the losing party is insufficient to cover the expenses of such arbitration, such “losing” party shall then provide any additional funds necessary to cover such costs to such “victorious” party. For purposes hereof, the “victorious” party shall be the Partnership, if the Holdback Percentage ultimately determined by the arbitrator is closer to the percentage determined in the second Holdback Vote than it is to the prevailing Holdback Percentage for the Subject Partner’s Partner Category; otherwise, the Subject Partner shall be the “victorious” party. The party that is not the “victorious” party shall be the “losing” party.
(D) In the event of a decrease in a Subject Partner’s Holdback Percentage (1) pursuant to a Holdback Vote under this clause (iv) or (2) pursuant to a decision of an arbitrator under paragraph (C) of this clause (iv), the Partnership shall release and distribute to such Subject Partner any Trust Amounts (and the Trust Income thereon (except as expressly provided herein with respect to using Trust Income as Firm Collateral)) which exceed the required Holdback of such Subject Partner (in accordance with such Subject Partner’s reduced Holdback Percentage) as though such reduced Holdback Percentage had applied since the increase of the Subject Partner’s Holdback Percentage pursuant to a previous Holdback Vote under this clause (iv).
(v) (A) If a Partner’s Holdback Percentage exceeds 15% (such percentage in excess of 15% constituting the “Excess Holdback Percentage”), such Partner may satisfy the portion of his or her Holdback obligation in respect of his or her Excess Holdback Percentage (such portion constituting such Partner’s “Excess Holdback”), and such Partner (or a Withdrawn Partner with respect to amounts contributed to the Trust Account while he or she was a Partner), to the extent his or her Excess Holdback obligation has previously been satisfied in cash, may obtain the release of the Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) satisfying such Partner’s or
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Withdrawn Partner’s Excess Holdback obligation, by pledging, granting a security interest or otherwise making available to the General Partner, on a first priority basis (except as provided below), all or any portion of his or her Firm Collateral in satisfaction of his or her Excess Holdback obligation. Any Partner seeking to satisfy all or any portion of the Excess Holdback utilizing Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Partnership to realize on (if required), such Firm Collateral; provided, that in the case of entities listed in the books and records of the Partnership, in which Partners/members are permitted to pledge or grant a security interest over their interests therein to finance all or a portion of their capital contributions thereto (“Pledgable Blackstone Interests”), to the extent a first priority security interest is unavailable because of an existing lien on such Firm Collateral, the Partner or Withdrawn Partner seeking to utilize such Firm Collateral shall grant the General Partner a second priority security interest therein in the manner provided above; provided further, that (x) in the case of Pledgable Blackstone Interests, to the extent that neither a first priority nor a second priority security interest is available or (y) if the General Partner otherwise determines in its good faith judgment that a security interest in Firm Collateral (and the corresponding documents and actions) are not necessary or appropriate, the Partner or Withdrawn Partner shall (in the case of either clause (x) or (y) above) irrevocably instruct in writing the relevant partnership, limited liability company or other entity listed in the books and records of the Partnership to remit any and all net proceeds resulting from a Firm Collateral Realization on such Firm Collateral to the Trustee(s) as more fully provided in clause (B) below. The Partnership shall, at the request of any Partner or Withdrawn Partner, assist such Partner or Withdrawn Partner in taking such action as is necessary to enable such Partner or Withdrawn Partner to use Firm Collateral as provided hereunder.
(B) If upon a sale or other realization of all or any portion of any Firm Collateral (a “Firm Collateral Realization”), the remaining Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement, then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Firm Collateral Realization (including distributions subject to the repayment of financing sources as in the case of Pledgable Blackstone Interests) shall be paid into the Trust Account to fully satisfy such Excess Holdback requirement (allocated to such Partner or Withdrawn Partner) and shall be deemed to be Trust Amounts for purposes hereunder. Any net proceeds from such Firm Collateral Realization in excess of the amount necessary to satisfy such Excess Holdback requirement shall be distributed to such Partner or Withdrawn Partner.
(C) Upon any valuation or revaluation of Firm Collateral that results in a decreased valuation of such Firm Collateral so that such Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement (including upon a Firm Collateral Realization, if net proceeds therefrom and the remaining Firm Collateral are insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement), the Partnership
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shall provide notice of the foregoing to such Partner or Withdrawn Partner and such Partner or Withdrawn Partner shall, within 30 days of receiving such notice, contribute cash (or additional Firm Collateral) to the Trust Account in an amount necessary to satisfy his or her Excess Holdback requirement. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that clause (A) of Section 5.8(d)(ii) shall be deemed inapplicable to a default under this clause (C); provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term “GP-Related Defaulting Party” where such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).
(vi) Any Limited Partner or Withdrawn Partner may (A) obtain the release of any Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) or Firm Collateral, in each case, held in the Trust Account for the benefit of such Partner or Withdrawn Partner or (B) require the Partnership to distribute all or any portion of amounts otherwise required to be placed in the Trust Account (whether cash or Firm Collateral), by obtaining a letter of credit (an “L/C”) for the benefit of the Trustee(s) in such amounts. Any Partner or Withdrawn Partner choosing to furnish an L/C to the Trustee(s) (in such capacity, an “L/C Partner”) shall deliver to the Trustee(s) an unconditional and irrevocable L/C from a commercial bank whose (x) short-term deposits are rated at least A-1 by S&P and P-1 by Moody’s (if the L/C is for a term of 1 year or less) or (y) long-term deposits are rated at least A+ by S&P or A1 by Moody’s (if the L/C is for a term of 1 year or more) (each a “Required Rating”). If the relevant rating of the commercial bank issuing such L/C drops below the relevant Required Rating, the L/C Partner shall supply to the Trustee(s), within 30 days of such occurrence, a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, in lieu of the insufficient L/C. In addition, if the L/C has a term expiring on a date earlier than the latest possible termination date of BREDS II, the Trustee(s) shall be permitted to drawdown on such L/C if the L/C Partner fails to provide a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, at least 30 days prior to the stated expiration date of such existing L/C. The Trustee(s) shall notify an L/C Partner 10 days prior to drawing on any L/C. The Trustee(s) may (as directed by the Partnership in the case of clause (I) below) draw down on an L/C only if (I) such a drawdown is necessary to satisfy an L/C Partner’s obligation relating to the Partnership’s obligations under the Clawback Provisions or (II) an L/C Partner has not provided a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating (or the requisite amount of cash and/or Firm Collateral (to the extent permitted hereunder)), at least 30 days prior to the stated expiration of an existing L/C in accordance with this clause (vi). The Trustee(s), as directed by the Partnership, shall return to any L/C Partner his or her L/C upon (1) the termination of the Trust Account and satisfaction of the Partnership’s obligations, if any, in respect of the Clawback Provisions, (2) an L/C Partner satisfying his or her entire Holdback obligation in cash and Firm Collateral (to the extent permitted hereunder) or (3) the release, by the Trustee(s), as
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directed by the Partnership, of all amounts in the Trust Account to the Partners or Withdrawn Partners. If an L/C Partner satisfies a portion of his or her Holdback obligation in cash and/or Firm Collateral (to the extent permitted hereunder) or if the Trustee(s), as directed by the Partnership, release a portion of the amounts in the Trust Account to the Partners or Withdrawn Partners in the Partner Category of such L/C Partner, the L/C of an L/C Partner may be reduced by an amount corresponding to such portion satisfied in cash and/or Firm Collateral (to the extent permitted hereunder) or such portion released by the Trustee(s), as directed by the Partnership; provided, that in no way shall the general release of any Trust Income cause an L/C Partner to be permitted to reduce the amount of an L/C by any amount.
(vii) (A) Any in-kind distributions by the Partnership relating to Carried Interest shall be made in accordance herewith as though such distributions consisted of cash. The Partnership may direct the Trustee(s) to dispose of any in-kind distributions held in the Trust Account at any time. The net proceeds therefrom shall be treated as though initially contributed to the Trust Account.
(B) In lieu of the foregoing, any Existing Partner may pledge with respect to any in-kind distribution the Special Firm Collateral referred to in the applicable category in the books and records of the Partnership; provided, that the initial contribution of such Special Firm Collateral shall initially equal 130% of the required Holdback Amount for a period of 90 days, and thereafter shall equal at least 115% of the required Holdback Amount. Paragraphs 4.1(d)(viii)(C) and (D) shall apply to such Special Firm Collateral. To the extent such Special Firm Collateral exceeds the applicable minimum percentage of the required Holdback Amount specified in the first sentence of this clause (vii)(B), the related Partner may obtain a release of such excess amount from the Trust Account.
(viii) (A) Any Limited Partner or Withdrawn Partner may satisfy all or any portion of his or her Holdback (excluding any Excess Holdback), and such Partner or a Withdrawn Partner may, to the extent his or her Holdback (excluding any Excess Holdback) has been previously satisfied in cash or by the use of an L/C as provided herein, obtain a release of Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) that satisfy such Partner’s or Withdrawn Partner’s Holdback (excluding any Excess Holdback) by pledging or granting a security interest to the Trustee(s) on a first priority basis all of his or her Special Firm Collateral in a particular Qualifying Fund, which at all times must equal or exceed the amount of the Holdback distributed to the Partner or Withdrawn Partner (as more fully set forth below). Any Partner seeking to satisfy such Partner’s Holdback utilizing Special Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Trustee(s) to realize on (if required), such Special Firm Collateral.
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(B) If upon a distribution, withdrawal, sale, liquidation or other realization of all or any portion of any Special Firm Collateral (a “Special Firm Collateral Realization”), the remaining Special Firm Collateral (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund and is being used in connection with an Excess Holdback) is insufficient to cover any Partner’s or Withdrawn Partner’s Holdback (when taken together with other means of satisfying the Holdback as provided herein (i.e., cash contributed to the Trust Account or an L/C in the Trust Account)), then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Special Firm Collateral Realization (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund or other asset and is being used in connection with an Excess Holdback) shall be paid into the Trust (and allocated to such Partner or Withdrawn Partner) to fully satisfy such Holdback and shall be deemed thereafter to be Trust Amounts for purposes hereunder. Any net proceeds from such Special Firm Collateral Realization in excess of the amount necessary to satisfy such Holdback (excluding any Excess Holdback) shall be distributed to such Partner or Withdrawn Partner. To the extent a Qualifying Fund distributes Securities to a Partner or Withdrawn Partner in connection with a Special Firm Collateral Realization, such Partner or Withdrawn Partner shall be required to promptly fund such Partner’s or Withdrawn Partner’s deficiency with respect to his or her Holdback in cash or an L/C.
(C) Upon any valuation or revaluation of the Special Firm Collateral and/or any adjustment in the Applicable Collateral Percentage applicable to a Qualifying Fund (as provided in the books and records of the Partnership), if such Partner’s or Withdrawn Partner’s Special Firm Collateral is valued at less than such Partner’s Holdback (excluding any Excess Holdback) as provided in the books and records of the Partnership, taking into account other permitted means of satisfying the Holdback hereunder, the Partnership shall provide notice of the foregoing to such Partner or Withdrawn Partner and, within 10 Business Days of receiving such notice, such Partner or Withdrawn Partner shall contribute cash or additional Special Firm Collateral to the Trust Account in an amount necessary to make up such deficiency. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that clause (A) of Section 5.8(d)(ii) shall be deemed inapplicable to such default; provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term “GP-Related Defaulting Party” where such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).
(D) Upon a Partner becoming a Withdrawn Partner, at any time thereafter the General Partner may revoke the ability of such Withdrawn Partner to use Special Firm Collateral as set forth in this Section 4.1(d)(viii), notwithstanding anything else in this Section 4.1(d)(viii). In that case the provisions of clause (C) above shall apply to the Withdrawn Partner’s obligation to satisfy the Holdback (except that 30 days’ notice of such revocation shall be given), given that the Special Firm Collateral is no longer available to satisfy any portion of the Holdback (excluding any Excess Holdback).
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(E) Nothing in this Section 4.1(d)(viii) shall prevent any Partner or Withdrawn Partner from using any amount of such Partner’s interest in a Qualifying Fund as Firm Collateral; provided, that at all times Section 4.1(d)(v) and this Section 4.1(d)(viii) are each satisfied.
Section 4.2. Interest. Interest on the balances of the Partners’ capital related to the Partners’ GP-Related Partner Interests (excluding capital invested in GP-Related Investments and, if deemed appropriate by the General Partner, capital invested in any other investment of the Partnership) shall be credited to the Partners’ GP-Related Capital Accounts at the end of each accounting period pursuant to Section 5.2, or at any other time as determined by the General Partner, at rates determined by the General Partner from time to time, and shall be charged as an expense of the Partnership.
Section 4.3. Withdrawals of Capital. No Partner may withdraw capital related to such Partner’s GP-Related Partner Interests from the Partnership except (i) for distributions of cash or other property pursuant to Section 5.8, (ii) as otherwise expressly provided in this Agreement or (iii) as determined by the General Partner.
ARTICLE V
PARTICIPATION IN PROFITS AND LOSSES
Section 5.1. General Accounting Matters.
(a) GP-Related Net Income (Loss) shall be determined by the General Partner at the end of each accounting period and shall be allocated as described in Section 5.4.
(b) “GP-Related Net Income (Loss)” from any activity of the Partnership related to the GP-Related BREDS II Interest for any accounting period (other than GP-Related Net Income (Loss) from GP-Related Investments described below) means (i) the gross income realized by the Partnership from such activity during such accounting period less (ii) all expenses of the Partnership, and all other items that are deductible from gross income, for such accounting period that are allocable to such activity (determined as provided below).
(c) “GP-Related Net Income (Loss)” from any GP-Related Investment for any accounting period in which such GP-Related Investment has not been sold or otherwise disposed of means (i) the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period less (ii) all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment (determined as provided below).
(d) “GP-Related Net Income (Loss)” from any GP-Related Investment for the accounting period in which such GP-Related Investment is sold or otherwise disposed of means (i) the sum of the gross proceeds from the sale or other disposition of such GP-Related Investment and the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period less (ii) the sum of the cost or other basis to the Partnership of such GP-Related Investment and all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment.
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GP-Related Net Income (Loss) shall be determined in accordance with the accounting method used by the Partnership for federal income tax purposes with the following adjustments: (i) any income of the Partnership that is exempt from federal income taxation and not otherwise taken into account in computing GP-Related Net Income (Loss) shall be added to such taxable income or loss; (ii) if any asset has a value on the books of the Partnership that differs from its adjusted tax basis for federal income tax purposes, any depreciation, amortization or gain resulting from a disposition of such asset shall be calculated with reference to such value; (iii) upon an adjustment to the value of any asset on the books of the Partnership pursuant to Treasury Regulations Section 1.704-1(b)(2), the amount of the adjustment shall be included as gain or loss in computing such taxable income or loss; (iv) any expenditures of the Partnership not deductible in computing taxable income or loss, not properly capitalizable and not otherwise taken into account in computing GP-Related Net Income (Loss) pursuant to this definition shall be treated as deductible items; (v) any income from a GP-Related Investment that is payable to Partnership employees in respect of “phantom interests” in such GP-Related Investment awarded by the General Partner to employees shall be included as an expense in the calculation of GP-Related Net Income (Loss) from such GP-Related Investment and (vi) items of income and expense (including interest income and overhead and other indirect expenses) of the Partnership and Affiliates of the Partnership shall be allocated among the Partnership and such Affiliates, among various Partnership activities and GP-Related Investments and between accounting periods, in each case as determined by the General Partner. Any adjustments to GP-Related Net Income (Loss) by the General Partner, including adjustments for items of income accrued but not yet received, unrealized gains, items of expense accrued but not yet paid, unrealized losses, reserves (including reserves for taxes, bad debts, actual or threatened litigation, or any other expenses, contingencies or obligations) and other appropriate items, shall be made in accordance with GAAP; provided, that the General Partner shall not be required to make any such adjustment.
(e) An accounting period shall be a Fiscal Year except that, at the option of the General Partner, an accounting period will terminate and a new accounting period will begin on the admission date of an additional Partner or the Settlement Date of a Withdrawn Partner, if any such date is not the first day of a Fiscal Year. If any event referred to in the preceding sentence occurs and the General Partner does not elect to terminate an accounting period and begin a new accounting period, then the General Partner may make such adjustments as it deems appropriate to the Partners’ GP-Related Profit Sharing Percentages for the accounting period in which such event occurs (prior to any allocations of GP-Related Unallocated Percentages or adjustments to GP-Related Profit Sharing Percentages pursuant to Section 5.3) to reflect the Partners’ average GP-Related Profit Sharing Percentages during such accounting period; provided, that the GP-Related Profit Sharing Percentages of Partners in GP-Related Net Income (Loss) from GP-Related Investments acquired during such accounting period will be based on GP-Related Profit Sharing Percentages in effect when each such GP-Related Investment was acquired.
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(f) In establishing GP-Related Profit Sharing Percentages and allocating GP-Related Unallocated Percentages pursuant to Section 5.3, the General Partner may consider such factors as it deems appropriate.
(g) All determinations, valuations and other matters of judgment required to be made for accounting purposes under this Agreement shall be made by the General Partner and approved by the Partnership’s independent accountants. Such approved determinations, valuations and other accounting matters shall be conclusive and binding on all Partners, all Withdrawn Partners, their successors, heirs, estates or legal representatives and any other person, and to the fullest extent permitted by law no such person shall have the right to an accounting or an appraisal of the assets of the Partnership or any successor thereto.
Section 5.2. GP-Related Capital Accounts.
(a) There shall be established for each Partner on the books of the Partnership, to the extent and at such times as may be appropriate, one or more capital accounts as the General Partner may deem to be appropriate for purposes of accounting for such Partner’s interests in the capital of the Partnership related to the GP-Related BREDS II Interest and the GP-Related Net Income (Loss) of the Partnership (each a “GP-Related Capital Account”).
(b) As of the end of each accounting period or, in the case of a contribution to the Partnership by one or more of the Partners with respect to such Partner or Partners’ GP-Related Partner Interests or a distribution by the Partnership to one or more of the Partners with respect to such Partner or Partners’ GP-Related Partner Interests, at the time of such contribution or distribution, (i) the appropriate GP-Related Capital Accounts of each Partner shall be credited with the following amounts: (A) the amount of cash and the value of any property contributed by such Partner to the capital of the Partnership related to the GP-Related BREDS II Interest during such accounting period, (B) the GP-Related Net Income allocated to such Partner for such accounting period and (C) the interest credited on the balance of such Partner’s capital related to such Partner’s GP-Related Partner Interest for such accounting period pursuant to Section 4.2; and (ii) the appropriate GP-Related Capital Accounts of each Partner shall be debited with the following amounts: (x) the amount of cash, the principal amount of any subordinated promissory note of the Partnership referred to in Section 6.5 (as such amount is paid) and the value of any property distributed to such Partner during such accounting period with respect to such Partner’s GP-Related Partner Interest and (y) the GP-Related Net Loss allocated to such Partner for such accounting period.
Section 5.3. GP-Related Profit Sharing Percentages.
(a) Prior to the beginning of each annual accounting period, the General Partner shall establish the profit sharing percentage (the “GP-Related Profit Sharing Percentage”) of each Partner in each category of GP-Related Net Income (Loss) for such annual accounting period pursuant to Section 5.1(a) taking into account such factors as the General Partner deems appropriate; provided, however, that (i) the General Partner may elect to establish GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment acquired by the Partnership during such accounting period at the time such GP-Related Investment is acquired in accordance with paragraph (b) below and (ii) GP-Related Net
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Income (Loss) for such accounting period from any GP-Related Investment shall be allocated in accordance with the GP-Related Profit Sharing Percentages in such GP-Related Investment established in accordance with paragraph (b) below. The General Partner may establish different GP-Related Profit Sharing Percentages for any Partner in different categories of GP-Related Net Income (Loss). In the case of the Withdrawal of a Partner, such former Partner’s GP-Related Profit Sharing Percentages shall be allocated by the General Partner to one or more of the remaining Partners as the General Partner shall determine. In the case of the admission of any Partner to the Partnership as an additional Partner, the GP-Related Profit Sharing Percentages of the other Partners shall be reduced by an amount equal to the GP-Related Profit Sharing Percentage allocated to such new Partner pursuant to Section 6.1(b); such reduction of each other Partner’s GP-Related Profit Sharing Percentage shall be pro rata based upon such Partner’s GP-Related Profit Sharing Percentage as in effect immediately prior to the admission of the new Partner. Notwithstanding the foregoing, the General Partner may also adjust the GP-Related Profit Sharing Percentage of any Partner for any annual accounting period at the end of such annual accounting period in its sole discretion.
(b) The General Partner may elect to allocate to the Partners less than 100% of the GP-Related Profit Sharing Percentages of any category for any annual accounting period at the time specified in Section 5.3(a) for the annual fixing of GP-Related Profit Sharing Percentages (any remainder of such GP-Related Profit Sharing Percentages being called a “GP-Related Unallocated Percentage”); provided, that any GP-Related Unallocated Percentage in any category of GP-Related Net Income (Loss) for any annual accounting period that is not allocated by the General Partner within 90 days after the end of such accounting period shall be deemed to be allocated among all the Partners (including the General Partner) in the manner determined by the General Partner in its sole discretion.
(c) Unless otherwise determined by the General Partner in a particular case, (i) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment shall be allocated in proportion to the Partners’ respective GP-Related Capital Contributions in respect of such GP-Related Investment and (ii) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from each GP-Related Investment shall be fixed at the time such GP-Related Investment is acquired and shall not thereafter change, subject to any repurchase rights established by the General Partner pursuant to Section 5.7.
Section 5.4. Allocations of GP-Related Net Income (Loss).
(a) Except as provided in Section 5.4(d), GP-Related Net Income of the Partnership for each GP-Related Investment shall be allocated to the GP-Related Capital Accounts related to such GP-Related Investment of all the Partners participating in such GP-Related Investment (including the General Partner): first, in proportion to and to the extent of the amount of Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest distributed to the Partners, second, to Partners that received Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest in years prior to the years such GP-Related Net Income is being allocated to the extent such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest exceeded GP-Related Net Income allocated to such Partners in such earlier years; and third, to the Partners in the same manner that such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest would have been distributed if cash were available to distribute with respect thereto.
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(b) GP-Related Net Loss of the Partnership shall be allocated as follows: (i) GP-Related Net Loss relating to realized losses suffered by BREDS II and allocated to the Partnership with respect to its pro rata share thereof (based on capital contributions made by the Partnership to BREDS II with respect to the GP-Related BREDS II Interest) shall be allocated to the Partners in accordance with each Partner’s Non-Carried Interest Sharing Percentage with respect to the GP-Related Investment giving rise to such loss suffered by BREDS II and (ii) GP-Related Net Loss relating to realized losses suffered by BREDS II and allocated to the Partnership with respect to the Carried Interest shall be allocated in accordance with a Partner’s (including a Withdrawn Partner’s) Carried Interest Give Back Percentage (as of the date of such loss) (subject to adjustment pursuant to Section 5.8(e)). Withdrawn Partners shall remain Partners for purposes of allocating such GP-Related Net Loss with respect to Carried Interest.
(c) Notwithstanding Section 5.4(a) above, GP-Related Net Income relating to Carried Interest allocated after the allocation of a GP-Related Net Loss pursuant to clause (ii) of Section 5.4(b) shall be allocated in accordance with such Carried Interest Give Back Percentages until such time as the Partners have been allocated GP-Related Net Income relating to Carried Interest equal to the aggregate amount of GP-Related Net Loss previously allocated in accordance with clause (ii) of Section 5.4(b).
(d) To the extent the Partnership has any GP-Related Net Income (Loss) for any accounting period unrelated to BREDS II, such GP-Related Net Income (Loss) will be allocated in accordance with GP-Related Profit Sharing Percentages prevailing at the beginning of such accounting period.
(e) The General Partner may authorize from time to time advances to Partners (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group L.P. or any Affiliate thereof) against their allocable shares of GP-Related Net Income (Loss).
(f) Notwithstanding the foregoing, the General Partner may make such allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 5.5. Liability of General Partners. General Partners shall have unlimited liability for the satisfaction and discharge of all losses, liabilities and expenses of the Partnership.
Section 5.6. Liability of Limited Partners. Each Limited Partner (including each Special Limited Partner) and former Limited Partner shall be liable for the satisfaction and discharge of all losses, liabilities and expenses of the Partnership allocable to him or her pursuant to Section 5.4 or Section 7.3, but only to the extent required by applicable law. Except as otherwise provided in the following sentence, in no event shall any Limited Partner (including each Special Limited Partner) or former Limited Partner be obligated to make any additional
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capital contribution to the Partnership in excess of his or her aggregate GP-Related Capital Contributions and Capital Commitment-Related Capital Contributions pursuant to Section 4.1 and Section 7.1, or have any liability in excess of such aggregate GP-Related Capital Contributions and Capital Commitment-Related Capital Contributions for the satisfaction and discharge of the losses, liabilities and expenses of the Partnership. In no way does any of the foregoing limit any Partner’s obligations under Section 4.1(d), Section 5.8(d) or Section 7.4(g) or otherwise to make capital contributions as provided hereunder.
Section 5.7. Repurchase Rights, etc. The General Partner may from time to time establish such repurchase rights and/or other requirements with respect to the Partners’ GP-Related Partner Interests relating to GP-Related BREDS II Investments as the General Partner may determine. The General Partner shall have authority to (a) withhold any distribution otherwise payable to any Partner until any such repurchase rights have lapsed or any such requirements have been satisfied, (b) pay any distribution to any Partner that is Contingent as of the distribution date and require the refund of any portion of such distribution that is Contingent as of the Withdrawal Date of such Partner, (c) amend any previously established repurchase rights or other requirements from time to time and (d) make such exceptions thereto as it may determine on a case by case basis.
Section 5.8. Distributions.
(a) (i) The Partnership shall make distributions of available cash (subject to reserves and other adjustments as provided herein) or other property to Partners with respect to such Partners’ GP-Related Partner Interests at such times and in such amounts as are determined by the General Partner. The General Partner shall, if it deems it appropriate, determine the availability for distribution of, and distribute, cash or other property separately for each category of GP-Related Net Income (Loss) established pursuant to Section 5.1(a). Distributions of cash or other property with respect to Non-Carried Interest shall be made among the Partners in accordance with their respective Non-Carried Interest Sharing Percentages, and, subject to Section 4.1(d) and Section 5.8(e), distributions of cash or other property with respect to Carried Interest shall be made among Partners in accordance with their respective Carried Interest Sharing Percentages.
(ii) At any time that a sale, exchange, transfer or other disposition by BREDS II of a portion of a GP-Related Investment is being considered by the Partnership (a “GP-Related Disposable Investment”), at the election of the General Partner each Partner’s GP-Related Partner Interest with respect to such GP-Related Investment shall be vertically divided into two separate GP-Related Partner Interests, a GP-Related Partner Interest attributable to the GP-Related Disposable Investment (a Partner’s “GP-Related Class B Interest”), and a GP-Related Partner Interest attributable to such GP-Related Investment excluding the GP-Related Disposable Investment (a Partner’s “GP-Related Class A Interest”). Distributions (including those resulting from a sale, transfer, exchange or other disposition by BREDS II) relating to a GP-Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class B Interests with respect to such GP-Related Investment in accordance with their GP-Related Profit Sharing Percentages relating to such GP-Related Class B Interests, and distributions (including those resulting from the
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sale, transfer, exchange or other disposition by BREDS II) relating to a GP-Related Investment excluding such GP-Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class A Interests with respect to such GP-Related Investment in accordance with their respective GP-Related Profit Sharing Percentages relating to such GP-Related Class A Interests. Except as provided above, distributions of cash or other property with respect to each category of GP-Related Net Income (Loss) shall be allocated among the Partners in the same proportions as the allocations of GP-Related Net Income (Loss) of each such category.
(b) Subject to the Partnership’s having sufficient available cash in the reasonable judgment of the General Partner, the Partnership shall make cash distributions to each Partner with respect to each Fiscal Year of the Partnership in an aggregate amount at least equal to the total federal, New York State and New York City income and other taxes that would be payable by such Partner with respect to all categories of GP-Related Net Income (Loss) allocated to such Partner for such Fiscal Year, the amount of which shall be calculated (i) on the assumption that each Partner is an individual subject to the then prevailing maximum rate of federal, New York State, New York City and other income taxes (including, without limitation, taxes under Section 1411 of the Code), (ii) taking into account the deductibility of state and local income and other taxes for federal income tax purposes and (iii) taking into account any differential in applicable rates due to the type and character of GP-Related Net Income (Loss) allocated to such Partner. Notwithstanding the provisions of the foregoing sentence, the General Partner may refrain from making any distribution if, in the reasonable judgment of the General Partner, such distribution is prohibited by the Partnership Act.
(c) The General Partner may provide that the GP-Related Partner Interest of any Partner or employee (including such Partner’s or employee’s right to distributions and investments of the Partnership related thereto) may be subject to repurchase by the Partnership during such period as the General Partner shall determine (a “Repurchase Period”). Any Contingent distributions from GP-Related Investments subject to repurchase rights will be withheld by the Partnership and will be distributed to the recipient thereof (together with interest thereon at rates determined by the General Partner from time to time) as the recipient’s rights to such distributions become Non-Contingent (by virtue of the expiration of the applicable Repurchase Period or otherwise). The General Partner may elect in an individual case to have the Partnership distribute any Contingent distribution to the applicable recipient thereof irrespective of whether the applicable Repurchase Period has lapsed. If a Partner Withdraws from the Partnership for any reason other than his or her death, Total Disability or Incompetence, the undistributed share of any GP-Related Investment that remains Contingent as of the applicable Withdrawal Date shall be repurchased by the Partnership at a purchase price determined at such time by the General Partner. Unless determined otherwise by the General Partner, the repurchased portion thereof will be allocated among the remaining Partners with interests in such GP-Related Investment in proportion to their respective percentage interests in such GP-Related Investment, or if no other Partner has a percentage interest in such specific GP-Related Investment, to the General Partner; provided, that the General Partner may allocate the Withdrawn Partner’s share of unrealized investment income from a repurchased GP-Related Investment attributable to the period after the Withdrawn Partner’s Withdrawal Date on any basis it may determine, including to existing or new Partners who did not previously have interests in such GP-Related Investment, except that, in any event, each Investor Special Limited Partner shall be allocated a share of such unrealized investment income equal to its respective GP-Related Profit Sharing Percentage of such unrealized investment income.
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(d) (i) (A) If the Partnership is obligated under the Clawback Provisions or Giveback Provisions to contribute to BREDS II a Clawback Amount or a Giveback Amount (other than a Capital Commitment Giveback Amount) in respect of the GP-Related BREDS II Interest (the amount of any such obligation of the Partnership with respect to such a Giveback Amount being herein called a “GP-Related Giveback Amount”), the General Partner shall call for such amounts as are necessary to satisfy such obligations of the Partnership, as determined by the General Partner, in which case each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions by the Partnership (and the Other Fund GPs) with respect to Carried Interest (and/or Non-Carried Interest in the case of a GP-Related Giveback Amount) (the “GP-Related Recontribution Amount”) which equals (I) the product of (a) a Partner’s or Withdrawn Partner’s Carried Interest Give Back Percentage and (b) the aggregate Clawback Amount payable by the Partnership, in the case of Clawback Amounts and (II) with respect to a GP-Related Giveback Amount, such Partner’s pro rata share of prior distributions of Carried Interest and/or Non-Carried Interest in connection with (a) the GP-Related BREDS II Investment giving rise to the GP-Related Giveback Amount, (b) if the amounts contributed pursuant to clause (II)(a) above are insufficient to satisfy such GP-Related Giveback Amount, GP-Related BREDS II Investments other than the one giving rise to such obligation, but only those amounts received by the Partners with an interest in the GP-Related BREDS II Investment referred to in clause (II)(a) above and (c) if the GP-Related Giveback Amount is unrelated to a specific GP-Related BREDS II Investment, all GP-Related BREDS II Investments. Each Partner and Withdrawn Partner shall promptly contribute to the Partnership, along with satisfying his or her comparable obligations to the Other Fund GPs, if any, upon such call, such Partner’s or Withdrawn Partner’s GP-Related Recontribution Amount, less the amount paid out of the Trust Account on behalf of such Partner or Withdrawn Partner by the Trustee(s) pursuant to written instructions from the General Partner, or if applicable, any of the Other Fund GPs with respect to Carried Interest (and/or Non-Carried Interest in the case of GP-Related Giveback Amounts) (the “Net GP-Related Recontribution Amount”), irrespective of the fact that the amounts in the Trust Account may be sufficient on an aggregate basis to satisfy the Partnership’s and the Other Fund GPs’ obligation under the Clawback Provisions and/or Giveback Provisions; provided, that to the extent a Partner’s or Withdrawn Partner’s share of the amount paid with respect to the Clawback Amount and/or the GP-Related Giveback Amount exceeds his or her GP-Related Recontribution Amount, such excess shall be repaid to such Partner or Withdrawn Partner as promptly as reasonably practicable, subject to clause (ii) below; provided further, that such written instructions from the General Partner shall specify each Partner’s and Withdrawn Partner’s GP-Related Recontribution Amount. Prior to such time, the General Partner may, in its discretion (but shall be under no obligation to), provide notice that in the General Partner’s judgment, the potential obligations in respect of the Clawback Provisions or the Giveback Provisions will probably materialize (and an estimate of the aggregate amount of such obligations); provided further, that any amount from a Partner’s Trust Account used to pay any part of any GP-Related Giveback Amount (or such lesser amount as may be required by the General Partner) shall be contributed by such Partner to such Partner’s Trust Account no later than 30 days after the Net GP-Related Recontribution Amount is paid with respect to such GP-Related Giveback Amount. Solely to the extent
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required by the BREDS II Agreements, each member of the General Partner shall have the same obligations as a Partner (which obligations shall be subject to the same limitations as the obligations of a Partner) under this Section 5.8(d)(i)(A) and under Section 5.8(d)(ii)(A) solely with respect to such member’s pro rata share of any Clawback Amount (for purposes of this sentence, as defined in the BREDS II Partnership Agreement) and solely to the extent that the Partnership has insufficient funds to meet the Partnership’s obligations under the BREDS II Partnership Agreements (and/or the corresponding provisions under any other BREDS II Agreement).
(B) To the extent any Partner or Withdrawn Partner has satisfied any Holdback obligation with Firm Collateral, such Partner or Withdrawn Partner shall, within 10 days of the General Partner’s call for GP-Related Recontribution Amounts, make a cash payment into the Trust Account in an amount equal to the amount of the Holdback obligation satisfied with such Firm Collateral, or such lesser amount such that the amount in the Trust Account allocable to such Partner or Withdrawn Partner equals the sum of (I) such Partner’s or Withdrawn Partner’s GP-Related Recontribution Amount and (II) any similar amounts payable to any of the Other Fund GPs. Immediately upon receipt of such cash, the Trustee(s) shall take such steps as are necessary to release such Firm Collateral of such Partner or Withdrawn Partner equal to the amount of such cash payment. If the amount of such cash payment is less than the amount of Firm Collateral of such Partner or Withdrawn Partner, the balance of such Firm Collateral if any, shall be retained to secure the payment of GP-Related Deficiency Contributions, if any, and shall be fully released upon the satisfaction of the Partnership’s and the Other Fund GPs’ obligation to pay the Clawback Amount. The failure of any Partner or Withdrawn Partner to make a cash payment in accordance with this clause (B) (to the extent applicable) shall constitute a default under Section 5.8(d)(ii) as if such cash payment hereunder constitutes a Net GP-Related Recontribution Amount under Section 5.8(d)(ii).
(ii) (A) In the event any Partner or Withdrawn Partner (a “GP-Related Defaulting Party”) fails to recontribute all or any portion of such GP-Related Defaulting Party’s Net GP-Related Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Carried Interest Give Back Percentages in the case of Clawback Amounts, and GP-Related Profit Sharing Percentages in the case of GP-Related Giveback Amounts (as more fully described in clause (II) of Section 5.8(d)(i)(A) above)), such amounts as are necessary to fulfill the GP-Related Defaulting Party’s obligation to pay such GP-Related Defaulting Party’s Net GP-Related Recontribution Amount (a “GP-Related Deficiency Contribution”) if the General Partner determines in its good faith judgment that the Partnership (or an Other Fund GP) will be unable to collect such amount in cash from such GP-Related Defaulting Party for payment of the Clawback Amount or GP-Related Giveback Amount, as the case may be, at least 20 Business Days prior to the latest date that the Partnership, and the Other Fund GPs, if applicable, are permitted to pay the Clawback Amount or GP-Related Giveback Amount, as the case may be; provided, that, subject to Section 5.8(e), no Partner or Withdrawn Partner shall as a result of such GP-Related Deficiency Contribution be required to contribute an amount in excess of 167% of the amount of the Net GP-Related Recontribution Amount initially requested from such Partner or Withdrawn Partner in respect of such default.
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(B) Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the GP-Related Defaulting Party, the cost of which shall be a Partnership expense to the extent not ultimately reimbursed by the GP-Related Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such GP-Related Defaulting Party becoming a GP-Related Defaulting Party) to set-off as appropriate and apply against such GP-Related Defaulting Party’s Net GP-Related Recontribution Amount any amounts otherwise payable to the GP-Related Defaulting Party by the Partnership or any Affiliate thereof (including amounts unrelated to Carried Interest, such as returns of capital and profit thereon). Each Partner and Withdrawn Partner hereby grants to the General Partner a security interest, effective upon such Partner or Withdrawn Partner becoming a GP-Related Defaulting Party, in all accounts receivable and other rights to receive payment from any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner and Withdrawn Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and authority, in the name of such Partner or Withdrawn Partner or in the name of the General Partner, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the Net GP-Related Recontribution Amount of a GP-Related Defaulting Party from the date such Net GP-Related Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
(C) Any Partner’s or Withdrawn Partner’s failure to make a GP-Related Deficiency Contribution shall cause such Partner or Withdrawn Partner to be a GP-Related Defaulting Party with respect to such amount. The Partnership shall first seek any remaining Trust Amounts (and Trust Income thereon) allocated to such Partner or Withdrawn Partner to satisfy such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency Contribution before seeking cash contributions from such Partner or Withdrawn Partner in satisfaction of such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency Contribution.
(iii) In the event any Partner or Withdrawn Partner initially fails to recontribute all or any portion of such Partner or Withdrawn Partner’s pro rata share of any Clawback Amount pursuant to Section 5.8(d)(i)(A), the General Partner shall use its reasonable efforts to collect the amount which such Partner or Withdrawn Partner so fails to recontribute.
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(iv) A Partner’s or Withdrawn Partner’s obligation to make contributions to the Partnership under this Section 5.8(d) shall survive the termination of the Partnership.
(e) The Partners acknowledge that the General Partner will (and is hereby authorized to) take such steps as it deems appropriate, in its good faith judgment, to further the objective of providing for the fair and equitable treatment of all Partners, including by allocating Net Losses on Writedowns and Losses (each as defined in the BREDS II Agreements) on GP-Related BREDS II Investments that have been the subject of a Writedown and/or Losses (each, a “Loss Investment”) to those Partners who participated in such Loss Investments based on their Carried Interest Sharing Percentage therein to the extent that such Partners receive or have received Carried Interest distributions from other GP-Related BREDS II Investments. Consequently and notwithstanding anything herein to the contrary, adjustments to Carried Interest distributions shall be made as set forth in this Section 5.8(e).
(i) At the time the Partnership is making Carried Interest distributions in connection with a GP-Related BREDS II Investment (the “Subject Investment”) that have been reduced under any BREDS II Agreement as a result of one or more Loss Investments, the General Partner shall calculate amounts distributable to or due from each such Partner as follows:
(A) determine each Partner’s share of each such Loss Investment based on his or her Carried Interest Sharing Percentage in each such Loss Investment (which may be zero) to the extent such Loss Investment has reduced the Carried Interest distributions otherwise available for distribution to all Partners (indirectly through the Partnership from BREDS II) from the Subject Investment (such reduction, the “Loss Amount”);
(B) determine the amount of Carried Interest distributions otherwise distributable to such Partner with respect to the Subject Investment (indirectly through the Partnership from BREDS II) before any reduction in respect of the amount determined in clause (A) above (the “Unadjusted Carried Interest Distributions”); and
(C) subtract (I) the Loss Amounts relating to all Loss Investments from (II) the Unadjusted Carried Interest Distributions for such Partner, to determine the amount of Carried Interest distributions to actually be paid to such Partner (“Net Carried Interest Distribution”).
To the extent that the Net Carried Interest Distribution for a Partner as calculated in this clause (i) is a negative number, the General Partner shall (I) notify such Partner, at or prior to the time such Carried Interest distributions are actually made to the Partners, of his or her obligation to recontribute to the Partnership prior Carried Interest distributions (a “Net Carried Interest Distribution Recontribution Amount”), up to the amount of such negative Net Carried Interest
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Distribution and (II) to the extent amounts recontributed pursuant to clause (I) are insufficient to satisfy such negative Net Carried Interest Distribution amount, reduce future Carried Interest distributions otherwise due such Partner, up to the amount of such remaining negative Net Carried Interest Distribution. If a Partner’s (x) Net Carried Interest Distribution Recontribution Amount exceeds (y) the aggregate amount of prior Carried Interest distributions less the amount of tax thereon, calculated based on the Assumed Tax Rate (as defined in the BREDS II Partnership Agreement) in effect in the Fiscal Years of such distributions (the “Excess Tax-Related Amount”), then such Partner may, in lieu of paying such Partner’s Excess Tax-Related Amount, defer such amounts as set forth below. Such deferred amount shall accrue interest at the Prime Rate. Such deferred amounts shall be reduced and repaid by the amount of Carried Interest otherwise distributable to such Partner in connection with future Carried Interest distributions until such balance is reduced to zero. Any deferred amounts shall be payable in full upon the earlier of (i) such time as the Clawback Amount is determined (as provided herein) and (ii) such time as the Partner becomes a Withdrawn Partner.
To the extent there is an amount of negative Net Carried Interest Distribution with respect to a Partner remaining after the application of this clause (i), notwithstanding clause (II) of the preceding paragraph, such remaining amount of negative Net Carried Interest Distribution shall be allocated to the other Partners pro rata based on each of their Carried Interest Sharing Percentages in the Subject Investment.
A Partner who fails to pay a Net Carried Interest Distribution Recontribution Amount promptly upon notice from the General Partner (as provided above) shall be deemed a GP-Related Defaulting Party for all purposes hereof.
A Partner may satisfy in part any Net Carried Interest Distribution Recontribution Amount from cash that is then subject to a Holdback, to the extent that the amounts that remain subject to a Holdback satisfy the Holdback requirements hereof as they relate to the reduced amount of aggregate Carried Interest distributions received by such Partner (taking into account any Net Carried Interest Distribution Recontribution Amount contributed to the Partnership by such Partner).
Any Net Carried Interest Distribution Recontribution Amount contributed by a Partner, including amounts of cash subject to a Holdback as provided above, shall increase the amount available for distribution to the other Partners as Carried Interest distributions with respect to the Subject Investment; provided, that any such amounts then subject to a Holdback may be so distributed to the other Partners to the extent a Partner receiving such distribution has satisfied the Holdback requirements with respect to such distribution (taken together with the other Carried Interest distributions received by such Partner to date).
(ii) In the case of Clawback Amounts which are required to be contributed to the Partnership as otherwise provided herein, the obligation of the Partners with respect to any Clawback Amount shall be adjusted by the General Partner as follows:
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(A) determine each Partner’s share of any Losses in any GP-Related BREDS II Investments which gave rise to the Clawback Amount (i.e., the Losses that followed the last GP-Related BREDS II Investment with respect to which Carried Interest distributions were made), based on such Partner’s Carried Interest Sharing Percentage in such GP-Related BREDS II Investments;
(B) determine each Partner’s obligation with respect to the Clawback Amount based on such Partner’s Carried Interest Give Back Percentage as otherwise provided herein; and
(C) subtract the amount determined in clause (B) above from the amount determined in clause (A) above with respect to each Partner to determine the amount of adjustment to each Partner’s share of the Clawback Amount (a Partner’s “Clawback Adjustment Amount”).
A Partner’s share of the Clawback Amount shall for all purposes hereof be decreased by such Partner’s Clawback Adjustment Amount, to the extent it is a negative number (except to the extent expressly provided below). A Partner’s share of the Clawback Amount shall for all purposes hereof be increased by such Partner’s Clawback Adjustment Amount (to the extent it is a positive number); provided, that in no way shall a Partner’s aggregate obligation to satisfy a Clawback Amount as a result of this clause (ii) exceed the aggregate Carried Interest distributions received by such Partner. To the extent a positive Clawback Adjustment Amount remains after the application of this clause (ii) with respect to a Partner, such remaining Clawback Adjustment Amount shall be allocated to the Partners (including any Partner whose Clawback Amount was increased pursuant to this clause (ii)) pro rata based on their Carried Interest Give Back Percentages (determined without regard to this clause (ii)).
Any distribution or contribution adjustments pursuant to this Section 5.8(e) by the General Partner shall be based on its good faith judgment, and no Partner shall have any claim against the Partnership, the General Partner or any other Partners as a result of any adjustment made as set forth above. This Section 5.8(e) applies to all Partners, including Withdrawn Partners.
It is agreed and acknowledged that this Section 5.8(e) is an agreement among the Partners and in no way modifies the obligations of each Partner regarding the Clawback Amount as provided in the BREDS II Agreements.
Section 5.9. Business Expenses. The Partnership shall reimburse the Partners for reasonable travel, entertainment and miscellaneous expenses incurred by them in the conduct of the Partnership’s business in accordance with rules and regulations established by the General Partner from time to time.
Section 5.10. Tax Capital Accounts; Tax Allocations.
(a) For federal income tax purposes, there shall be established for each Partner a single capital account combining such Partner’s Capital Commitment Capital Account and GP-Related Capital Account, with such adjustments as the General Partner determines are appropriate so that such single capital account is maintained in compliance with the principles and requirements of Section 704(b) of the Code and the Treasury Regulations thereunder.
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(b) All items of income, gain, loss, deduction and credit of the Partnership shall be allocated among the Partners for federal, state and local income tax purposes in the same manner as such items of income, gain, loss, deduction and credit shall be allocated among the Partners pursuant to this Agreement, except as may otherwise be provided herein or by the Code or other applicable law. In the event there is a net decrease in partnership minimum gain or partner nonrecourse debt minimum gain (determined in accordance with the principles of Treasury Regulations Sections 1.704-2(d) and 1.704-2(i)) during any taxable year of the Partnership, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to its respective share of such net decrease during such year, determined pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5). The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(f). In addition, this Agreement shall be considered to contain a “qualified income offset” as provided in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). Notwithstanding the foregoing, the General Partner in its sole discretion shall make allocations for tax purposes as may be needed to ensure that allocations are in accordance with the interests of the Partners within the meaning of the Code and the Treasury Regulations.
(c) For federal, state and local income tax purposes only, Partnership income, gain, loss, deduction or expense (or any item thereof) for each Fiscal Year shall be allocated to and among the Partners in a manner corresponding to the manner in which corresponding items are allocated among the Partners pursuant to the other provisions of this Section 5.10; provided, that the General Partner may in its sole discretion make such allocations for tax purposes as it determines are appropriate so that allocations have substantial economic effect or are in accordance with the interests of the Partners, within the meaning of the Code and the Treasury Regulations thereunder.
ARTICLE VI
ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS;
SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION
Section 6.1. Additional Partners.
(a) Effective on the first day of any month (or on such other date as shall be determined by the General Partner in its sole discretion), the General Partner shall have the right to admit one or more additional or substitute persons into the Partnership as General Partners or Limited Partners. Each such person shall make the representations and certifications with respect to itself set forth in Section 3.7 and Section 3.8. The General Partner shall determine and negotiate with the additional Partner (which term, for the avoidance of doubt, shall include, without limitation, any substitute Partner) all terms of such additional Partner’s participation in the Partnership, including the additional Partner’s initial GP-Related Capital Contribution, Capital Commitment-Related Capital Contribution, GP-Related Profit Sharing Percentage and Capital Commitment Profit Sharing Percentage. Each additional Partner shall have such voting rights as may be determined by the General Partner from time to time unless, upon the admission to the Partnership of any Limited Partner, the General Partner shall designate that such Limited Partner shall not have such voting rights (any such Limited Partner being called a “Nonvoting
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Limited Partner”). Any additional Partner shall, as a condition to becoming a Partner, agree to become a party to, and be bound by the terms and conditions of, the Trust Agreement. If Blackstone or another or subsequent holder of an Investor Note approved by the General Partner for purposes of this Section 6.1(a) shall foreclose upon a Limited Partner’s Investor Note issued to finance such Limited Partner’s purchase of his or her Capital Commitment Interests, Blackstone or such other or subsequent holder shall succeed to such Limited Partner’s Capital Commitment Interests and shall be deemed to have become a Limited Partner to such extent. Any additional Partner may have a GP-Related Partner Interest or a Capital Commitment Partner Interest, without having the other such interest. Notwithstanding any provision in this Agreement to the contrary, the General Partner is authorized, without the need for any further act, vote or consent of any person, to make adjustments to the GP-Related Profit Sharing Percentages as it determines necessary in its sole discretion in connection with any additional Partners admitted to the Partnership, adjustments with respect to other Partners of the Partnership and to give effect to other matters set forth herein, as applicable.
(b) The GP-Related Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners’ GP-Related Profit Sharing Percentages as of such date, shall be established by the General Partner pursuant to Section 5.3. The Capital Commitment Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners’ Capital Commitment Profit Sharing Percentages as of such date, shall be established by the General Partner.
(c) An additional Partner shall be required to contribute to the Partnership his or her pro rata share of the Partnership’s total capital, excluding capital in respect of GP-Related Investments and Capital Commitment Investments in which such Partner does not acquire any interests, at such times and in such amounts as shall be determined by the General Partner in accordance with Section 4.1 and Section 7.1.
(d) The admission of an additional Partner will be evidenced by (i) the execution of a counterpart copy of, or counter-signature page with respect to, this Agreement by such additional Partner, (ii) the execution of an amendment to this Agreement by the General Partner and the additional Partner, as determined by the General Partner or (iii) the execution by such additional Partner of any other writing evidencing the intent of such person to become a substitute or additional Limited Partner and to be bound by the terms of this Agreement and such writing being accepted by the General Partner on behalf of the Partnership. In addition, each additional Partner shall sign a counterpart copy of the Trust Agreement or any other writing evidencing the intent of such person to become a party to the Trust Agreement that is acceptable to the General Partner.
Section 6.2. Withdrawal of Partners.
(a) Any Partner may Withdraw voluntarily from the Partnership subject to the prior written consent of the General Partner. The General Partner generally intends to permit voluntary Withdrawals on the last day of any calendar month (or on such other date as shall be determined by the General Partner in its sole discretion), on not less than 15 days’ prior written
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notice by such Partner to the General Partner (or on such shorter notice period as may be mutually agreed upon between such Partner and the General Partner); provided, that a Partner may not voluntarily Withdraw without the consent of the General Partner if such Withdrawal would (i) cause the Partnership to be in default under any of its contractual obligations or (ii) in the reasonable judgment of the General Partner, have a material adverse effect on the Partnership or its business; provided further, that a Partner may Withdraw from the Partnership with respect to such Partner’s GP-Related Partner Interest without Withdrawing from the Partnership with respect to such Partner’s Capital Commitment Partner Interest, and a Partner may Withdraw from the Partnership with respect to such Partner’s Capital Commitment Partner Interest without Withdrawing from the Partnership with respect to such Partner’s GP-Related Partner Interest.
(b) Upon the Withdrawal of any Partner, including by the occurrence of any withdrawal event under the Partnership Act with respect to any Partner, such Partner shall thereupon cease to be a Partner, except as expressly provided herein.
(c) Upon the Total Disability of a Limited Partner, such Partner shall thereupon cease to be a Limited Partner with respect to such Partner’s GP-Related Partner Interest; provided, however, that the General Partner may elect to admit such Withdrawn Partner to the Partnership as a Nonvoting Limited Partner with respect to such Partner’s GP-Related Partner Interest, with such GP-Related Partner Interest as the General Partner may determine. The determination of whether any Partner has suffered a Total Disability shall be made by the General Partner in its sole discretion after consultation with a qualified medical doctor. In the absence of agreement between the General Partner and such Partner, each party shall nominate a qualified medical doctor and the two doctors shall select a third doctor, who shall make the determination as to Total Disability.
(d) If the General Partner determines that it shall be in the best interests of the Partnership for any Partner (including any Partner who has given notice of voluntary Withdrawal pursuant to paragraph (a) above) to Withdraw from the Partnership (whether or not Cause exists) with respect to such Partner’s GP-Related Partner Interest and/or with respect to such Partner’s Capital Commitment Partner Interest, such Partner, upon written notice by the General Partner to such Partner, shall be required to Withdraw with respect to such Partner’s GP-Related Partner Interest and/or with respect to such Partner’s Capital Commitment Partner Interest, as of a date specified in such notice, which date shall be on or after the date of such notice. If the General Partner requires any Partner to Withdraw for Cause with respect to such Partner’s GP-Related Partner Interest and/or with respect to such Partner’s Capital Commitment Partner Interest, such notice shall state that it has been given for Cause and shall describe the particulars thereof in reasonable detail.
(e) The Withdrawal from the Partnership of any Partner shall not, in and of itself, affect the obligations of the other Partners to continue the Partnership during the remainder of its term. A Withdrawn General Partner shall remain liable for all obligations of the Partnership incurred while it was a General Partner and resulting from its acts or omissions as a General Partner to the fullest extent provided by law.
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Section 6.3. GP-Related Partner Interests Not Transferable.
(a) No Partner may sell, assign, pledge, grant a security interest over or otherwise transfer or encumber all or any portion of such Partner’s GP-Related Partner Interest without the prior written consent of the General Partner; provided, that, subject to the Partnership Act, this Section 6.3 shall not impair transfers by operation of law, transfers by will or by other testamentary instrument occurring by virtue of the death or dissolution of a Partner, or transfers required by trust agreements; provided further, that, subject to the prior written consent of the General Partner, which shall not be unreasonably withheld, a Limited Partner may transfer, for estate planning purposes, up to 25% of his or her GP-Related Profit Sharing Percentage to any estate planning trust, limited partnership or limited liability company with respect to which such Limited Partner controls investments related to any interest in the Partnership held therein (an “Estate Planning Vehicle”). Each Estate Planning Vehicle will be a Nonvoting Limited Partner. Such Limited Partner and the Nonvoting Limited Partner shall be jointly and severally liable for all obligations of both such Limited Partner and such Nonvoting Limited Partner with respect to the interest transferred (including the obligation to make additional GP-Related Capital Contributions). The General Partner may at its sole option exercisable at any time require such Estate Planning Vehicle to Withdraw from the Partnership on the terms of this Article VI. Except as provided in the second proviso to the first sentence of this Section 6.3(a), no assignee, legatee, distributee, heir or transferee (by conveyance, operation of law or otherwise) of the whole or any portion of any Partner’s GP-Related Partner Interest shall have any right to be a General Partner or Limited Partner without the prior written consent of the General Partner (which consent may be given or withheld in its sole discretion without giving any reason therefor). Notwithstanding the granting of a security interest in the entire partnership interest of any Partner, such Partner shall continue to be a partner of the Partnership.
(b) Notwithstanding any provision hereof to the contrary, no sale or transfer of any GP-Related Partner Interest in the Partnership may be made except in compliance with all federal, state and other applicable laws, including federal and state securities laws.
Section 6.4. General Partner Withdrawal; Transfer of General Partner’s Interest.
(a) The General Partner may not transfer or assign its interest as a General Partner in the Partnership or its right to manage the affairs of the Partnership, except that the General Partner may, with the prior written approval of a Majority in Interest of the Partners, admit another person as an additional or substitute General Partner who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law or otherwise); provided, however, that the General Partner may, in its sole discretion, transfer all or part of its interest in the Partnership to a person who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law or otherwise) and who owns, directly or indirectly, the principal part of the business then conducted by the General Partner in connection with any liquidation, dissolution or reorganization of the General Partner, and, upon the assumption by such person of liability for all the obligations of the General Partner under this Agreement, such person shall be admitted as the General Partner. A person who is so admitted as an additional or substitute General Partner shall thereby become a General Partner and shall have the right to manage the affairs of the Partnership and to vote as a Partner to the extent of the interest in the Partnership so acquired. The General Partner shall not cease to be the general partner of the Partnership upon the collateral assignment of or the pledging or granting of a security interest in its entire Interest in the Partnership.
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(b) Except as contemplated by Section 6.4(a) above, Withdrawal by a General Partner is not permitted. The Withdrawal of a General Partner shall not dissolve the Partnership if at the time of such Withdrawal there are one or more remaining General Partners, and any one or more of such remaining General Partners continue the business of the Partnership (any and all such remaining General Partners being hereby authorized to continue the business of the Partnership without dissolution and hereby agreeing to do so). If upon the Withdrawal of a General Partner there shall be no remaining General Partner, the Partnership nonetheless shall not be dissolved and shall not be required to be wound up if, within 90 days of the occurrence of such event of Withdrawal, all remaining Limited Partners (excluding Withdrawn Partners) agree in writing to continue the business of the Partnership and to the appointment, effective as of the date of such Withdrawal, of one or more General Partners.
Section 6.5. Satisfaction and Discharge of a Withdrawn Partner’s GP-Related Partner Interest.
(a) The terms of this Section 6.5 shall apply to the GP-Related Partner Interest of a Withdrawn Partner, but, except as otherwise expressly provided in this Section 6.5, shall not apply to the Capital Commitment Partner Interest of a Withdrawn Partner. For purposes of this Section 6.5, the term “Settlement Date” means the date as of which a Withdrawn Partner’s GP-Related Partner Interest in the Partnership is settled as determined under paragraph (b) below. Notwithstanding the foregoing, any Limited Partner who Withdraws from the Partnership, and all or any portion of whose GP-Related Partner Interest is retained as a Limited Partner, shall be considered a Withdrawn Partner for all purposes hereof.
(b) Except where a later date for the settlement of a Withdrawn Partner’s GP-Related Partner Interest in the Partnership may be agreed to by the General Partner and a Withdrawn Partner, a Withdrawn Partner’s Settlement Date shall be his or her Withdrawal Date; provided, that if a Withdrawn Partner’s Withdrawal Date is not the last day of a month, then the General Partner may elect for such Withdrawn Partner’s Settlement Date to be the last day of the month in which his or her Withdrawal Date occurs. During the interval, if any, between a Withdrawn Partner’s Withdrawal Date and Settlement Date, such Withdrawn Partner shall have the same rights and obligations with respect to GP-Related Capital Contributions, interest on capital, allocations of GP-Related Net Income (Loss) and distributions as would have applied had such Withdrawn Partner remained a Partner of the Partnership during such period.
(c) In the event of the Withdrawal of a Partner with respect to such Withdrawn Partner’s GP-Related Partner Interest, the General Partner shall, promptly after such Withdrawn Partner’s Settlement Date, (i) determine and allocate to the Withdrawn Partner’s GP-Related Capital Accounts such Withdrawn Partner’s allocable share of the GP-Related Net Income (Loss) of the Partnership for the period ending on such Settlement Date in accordance with Article V and (ii) credit the Withdrawn Partner’s GP-Related Capital Accounts with interest in accordance with Section 5.2. In making the foregoing calculations, the General Partner shall be entitled to establish such reserves (including reserves for taxes, bad debts, unrealized losses, actual or threatened litigation or any other expenses, contingencies or obligations) as it deems
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appropriate. Unless otherwise determined by the General Partner in a particular case, a Withdrawn Partner shall not be entitled to receive any GP-Related Unallocated Percentage in respect of the accounting period during which such Partner Withdraws from the Partnership (whether or not previously awarded or allocated) or any GP-Related Unallocated Percentage in respect of prior accounting periods that have not been paid or allocated (whether or not previously awarded) as of such Withdrawn Partner’s Withdrawal Date.
(d) From and after the Settlement Date of the Withdrawn Partner, the Withdrawn Partner’s GP-Related Profit Sharing Percentages shall, unless otherwise allocated by the General Partner pursuant to Section 5.3(a), be deemed to be GP-Related Unallocated Percentages (except for GP-Related Profit Sharing Percentages with respect to GP-Related Investments as provided in paragraph (f) below).
(e) (i) Upon the Withdrawal from the Partnership of a Partner with respect to such Partner’s GP-Related Partner Interest, such Withdrawn Partner thereafter shall not, except as expressly provided in this Section 6.5, have any rights of a Partner (including voting rights) with respect to such Partner’s GP-Related Partner Interest, and, except as expressly provided in this Section 6.5, such Withdrawn Partner shall not have any interest in the Partnership’s GP-Related Net Income (Loss) or in distributions related to such Partner’s GP-Related Partner Interest, GP-Related Investments or other assets related to such Partner’s GP-Related Partner Interest. If a Partner Withdraws from the Partnership with respect to such Partner’s GP-Related Partner Interest for any reason other than for Cause pursuant to Section 6.2, then the Withdrawn Partner shall be entitled to receive, at the time or times specified in Section 6.5(i) below, in satisfaction and discharge in full of the Withdrawn Partner’s GP-Related Partner Interest in the Partnership, (x) payment equal to the aggregate credit balance, if any, as of the Settlement Date of the Withdrawn Partner’s GP-Related Capital Accounts, (excluding any GP-Related Capital Account or portion thereof attributable to any GP-Related Investment) and (y) the Withdrawn Partner’s percentage interest attributable to each GP-Related Investment in which the Withdrawn Partner has an interest as of the Settlement Date as provided in paragraph (f) below (which shall be settled in accordance with paragraph (f) below), subject to all the terms and conditions of paragraphs (a)-(p) of this Section 6.5. If the amount determined pursuant to clause (x) above is an aggregate negative balance, the Withdrawn Partner shall pay the amount thereof to the Partnership upon demand by the General Partner on or after the date of the statement referred to in Section 6.5(i) below; provided, that if the Withdrawn Partner was solely a Limited Partner (other than a Special Limited Partner) on his or her Withdrawal Date, such payment shall be required only to the extent of any amounts payable to such Withdrawn Partner pursuant to this Section 6.5. Any aggregate negative balance in the GP-Related Capital Accounts of a Withdrawn Partner who was solely a Limited Partner (other than a Special Limited Partner), upon the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, shall be allocated among the other Partners’ GP-Related Capital Accounts in accordance with their respective GP-Related Profit Sharing Percentages in the categories of GP-Related Net Income (Loss) giving rise to such negative balance as determined by the General Partner as of such Withdrawn Partner’s Settlement Date. In the settlement of any Withdrawn Partner’s GP-Related Partner Interest in the Partnership, no value shall be ascribed to goodwill, the Partnership name or the anticipation of any value the Partnership or any successor thereto might have in the event the Partnership or any interest therein were to be sold in whole or in part.
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(ii) Notwithstanding clause (i) of this Section 6.5(e), in the case of a Partner whose Withdrawal with respect to such Partner’s GP-Related Partner Interest resulted from such Partner’s death or Incompetence, such Partner’s estate or legal representative, as the case may be, may elect, at the time described below, to receive a Nonvoting Limited Partner GP-Related Partner Interest and retain such Partner’s GP-Related Profit Sharing Percentage in all (but not less than all) illiquid investments of the Partnership in lieu of a cash payment (or Investor Note) in settlement of that portion of the Withdrawn Partner’s GP-Related Partner Interest. The election referred to above shall be made within 60 days after the Withdrawn Partner’s Settlement Date, based on a statement of the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5.
(f) For purposes of clause (y) of paragraph (e)(i) above, a Withdrawn Partner’s “percentage interest” means his or her GP-Related Profit Sharing Percentage as of the Settlement Date in the relevant GP-Related Investment. The Withdrawn Partner shall retain his or her percentage interest in such GP-Related Investment and shall retain his or her GP-Related Capital Account or portion thereof attributable to such GP-Related Investment, in which case such Withdrawn Partner (a “Retaining Withdrawn Partner”) shall become and remain a Special Limited Partner for such purpose (and, if the General Partner so designates, such Special Limited Partner shall be a Nonvoting Limited Partner). The GP-Related Partner Interest of a Retaining Withdrawn Partner pursuant to this paragraph (f) shall be subject to the terms and conditions applicable to GP-Related Partner Interests of any kind hereunder and such other terms and conditions as are established by the General Partner. At the option of the General Partner in its sole discretion, the General Partner and the Retaining Withdrawn Partner may agree to have the Partnership acquire such GP-Related Partner Interest without the approval of the other Partners; provided, that the General Partner shall reflect in the books and records of the Partnership the terms of any acquisition pursuant to this sentence.
(g) The General Partner may elect, in lieu of payment in cash of any amount payable to a Withdrawn Partner pursuant to paragraph (e) above, (i) to have the Partnership issue to the Withdrawn Partner a subordinated promissory note and/or (ii) to distribute in kind to the Withdrawn Partner such Withdrawn Partner’s pro rata share (as determined by the General Partner) of any securities or other investments of the Partnership in relation to such Partner’s GP-Related Partner Interest. If any securities or other investments are distributed in kind to a Withdrawn Partner under this paragraph (g), the amount described in clause (x) of paragraph (e)(i) shall be reduced by the value of such distribution as valued on the latest balance sheet of the Partnership in accordance with generally accepted accounting principles or, if not appearing on such balance sheet, as reasonably determined by the General Partner.
(h) [Intentionally omitted].
(i) Within 120 days after each Settlement Date, the General Partner shall submit to the Withdrawn Partner a statement of the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5 together with any cash payment, subordinated promissory note and in kind distributions to be made to such Partner as shall be determined by the General Partner. The General Partner shall submit to the Withdrawn Partner supplemental statements with respect to additional amounts payable to or by the
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Withdrawn Partner in respect of the settlement of his or her GP-Related Partner Interest in the Partnership (e.g., payments in respect of GP-Related Investments pursuant to paragraph (f) above or adjustments to reserves pursuant to paragraph (j) below) promptly after such amounts are determined by the General Partner. To the fullest extent permitted by law, such statements and the valuations on which they are based shall be accepted by the Withdrawn Partner without examination of the accounting books and records of the Partnership or other inquiry. Any amounts payable by the Partnership to a Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject to the prior payment or provision for payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to the applicable date of payment or distribution; provided, that such Withdrawn Partner shall otherwise rank pari passu in right of payment (x) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year before the Withdrawal Date of the Withdrawn Partner in question and (y) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year after the Withdrawal Date of the Withdrawn Partner in question.
(j) If the aggregate reserves established by the General Partner as of the Settlement Date in making the foregoing calculations should prove, in the determination of the General Partner, to be excessive or inadequate, the General Partner may elect, but shall not be obligated, to pay the Withdrawn Partner or his or her estate such excess, or to charge the Withdrawn Partner or his or her estate such deficiency, as the case may be.
(k) Any amounts owed by the Withdrawn Partner to the Partnership at any time on or after the Settlement Date (e.g., outstanding Partnership loans or advances to such Withdrawn Partner) shall be offset against any amounts payable or distributable by the Partnership to the Withdrawn Partner at any time on or after the Settlement Date or shall be paid by the Withdrawn Partner to the Partnership, in each case as determined by the General Partner. All cash amounts payable by a Withdrawn Partner to the Partnership under this Section 6.5 shall bear interest from the due date to the date of payment at a floating rate equal to the lesser of (x) the Prime Rate or (y) the maximum rate of interest permitted by applicable law. The “due date” of amounts payable by a Withdrawn Partner pursuant to Section 6.5(i) above shall be 120 days after a Withdrawn Partner’s Settlement Date. The “due date” of amounts payable to or by a Withdrawn Partner in respect of GP-Related Investments for which the Withdrawn Partner has retained a percentage interest in accordance with paragraph (f) above shall be 120 days after realization with respect to such GP-Related Investment. The “due date” of any other amounts payable by a Withdrawn Partner shall be 60 days after the date such amounts are determined to be payable.
(l) At the time of the settlement of any Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, the General Partner may, to the fullest extent permitted by applicable law, impose any restrictions it deems appropriate on the assignment, pledge, grant of a security interest, encumbrance or other transfer by such Withdrawn Partner of any interest in any GP-Related Investment retained by such Withdrawn Partner, any securities or other investments distributed in kind to such Withdrawn Partner or such Withdrawn Partner’s right to any payment from the Partnership.
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(m) If a Partner is required to Withdraw from the Partnership with respect to such Partner’s GP-Related Partner Interest for Cause pursuant to Section 6.2(d), then his or her GP-Related Partner Interest shall be settled in accordance with paragraphs (a)-(q) of this Section 6.5; provided, however, that the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such settlement:
(i) In settling the Withdrawn Partner’s interest in any GP-Related Investment in which he or she has an interest as of his or her Settlement Date, the General Partner may elect to (A) determine the GP-Related Unrealized Net Income (Loss) attributable to each such GP-Related Investment as of the Settlement Date and allocate to the appropriate GP-Related Capital Account of the Withdrawn Partner his or her allocable share of such GP-Related Unrealized Net Income (Loss) for purposes of calculating the aggregate balance of such Withdrawn Partner’s GP-Related Capital Account pursuant to clause (x) of paragraph (e)(i) above, (B) credit or debit, as applicable, the Withdrawn Partner with the balance of his or her GP-Related Capital Account or portion thereof attributable to each such GP-Related Investment as of his or her Settlement Date without giving effect to the GP-Related Unrealized Net Income (Loss) from such GP-Related Investment as of his or her Settlement Date, which shall be forfeited by the Withdrawn Partner or (C) apply the provisions of paragraph (f) above; provided, that the maximum amount of GP-Related Net Income (Loss) allocable to such Withdrawn Partner with respect to any GP-Related Investment shall equal such Partner’s percentage interest of the GP-Related Unrealized Net Income, if any, attributable to such GP-Related Investment as of the Settlement Date (the balance of such GP-Related Net Income (Loss), if any, shall be allocated as determined by the General Partner). The Withdrawn Partner shall not have any continuing interest in any GP-Related Investment to the extent an election is made pursuant to (A) or (B) above.
(ii) Any amounts payable by the Partnership to the Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject to the prior payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to or on or after the applicable date of payment or distribution.
(n) The payments to a Withdrawn Partner pursuant to this Section 6.5 may be conditioned on the compliance by such Withdrawn Partner with any lawful and reasonable (under the circumstances) restrictions against engaging or investing in a business competitive with that of the Partnership or any of its subsidiaries and Affiliates for a period not exceeding two years determined by the General Partner. Upon written notice to the General Partner, any Withdrawn Partner who is subject to noncompetition restrictions established by the General Partner pursuant to this paragraph (n) may elect to forfeit the principal amount payable in the final installment of his or her subordinated promissory note, together with interest to be accrued on such installment after the date of forfeiture, in lieu of being bound by such restrictions.
(o) In addition to the foregoing, the General Partner shall have the right to pay a Withdrawn Partner (other than the General Partner) a discretionary additional payment in an amount and based upon such circumstances and conditions as it determines to be relevant. The provisions of this Section 6.5 shall apply to any Investor Special Limited Partner relating to another Limited Partner, and to any transferee of any GP-Related Partner Interest of such Partner pursuant to Section 6.3, if such Partner Withdraws from the Partnership.
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(p) (i) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the Withdrawn Partner’s GP-Related Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
(ii) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(q) Each Partner (other than the General Partner) hereby irrevocably appoints the General Partner as such Partner’s true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements, instruments, consents, ratifications, documents and certificates which the General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 6.5, including, without limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
Section 6.6. Termination of the Partnership. The General Partner may dissolve the Partnership at any time on giving notice of the dissolution to the other Partners. Upon the dissolution of the Partnership, the Partners’ respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in Section 6.5, which provides for allocations to the GP-Related Capital Accounts of the Partners and distributions in accordance with the capital account balances of the Partners.
Section 6.7. Certain Tax Matters. (a) The General Partner shall determine all matters concerning allocations for tax purposes not expressly provided for herein in its sole discretion.
(b) The General Partner shall cause to be prepared all federal, state and local tax returns of the Partnership for each year for which such returns are required to be filed and, after approval of such returns by the General Partner, shall cause such returns to be timely filed. The General Partner shall determine the appropriate treatment of each item of income, gain, loss, deduction and credit of the Partnership and the accounting methods and conventions under the tax laws of the United States, the several States and other relevant jurisdictions as to the
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treatment of any such item or any other method or procedure related to the preparation of such tax returns. The General Partner may cause the Partnership to make or refrain from making any and all elections permitted by such tax laws. Each Partner agrees that he or she shall not, unless he or she provides prior notice of such action to the Partnership, (i) treat, on his or her individual income tax returns, any item of income, gain, loss, deduction or credit relating to his or her interest in the Partnership in a manner inconsistent with the treatment of such item by the Partnership as reflected on the Form K-1 or other information statement furnished by the Partnership to such Partner for use in preparing his or her income tax returns or (ii) file any claim for refund relating to any such item based on, or which would result in, such inconsistent treatment. In respect of an income tax audit of any tax return of the Partnership, the filing of any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership, or any administrative or judicial proceedings arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, (A) the Tax Matters Partner (as defined below) shall be authorized to act for, and his or her decision shall be final and binding upon, the Partnership and all Partners except to the extent a Partner shall properly elect to be excluded from such proceeding pursuant to the Code, (B) all expenses incurred by the Tax Matters Partner in connection therewith (including, without limitation, attorneys’, accountants’ and other experts’ fees and disbursements) shall be expenses of the Partnership and (C) no Partner shall have the right to (1) participate in the audit of any Partnership tax return, (2) file any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership (unless he or she provides prior notice of such action to the Partnership as provided above), (3) participate in any administrative or judicial proceedings conducted by the Partnership or the Tax Matters Partner arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim or (4) appeal, challenge or otherwise protest any adverse findings in any such audit conducted by the Partnership or the Tax Matters Partner or with respect to any such amended return or claim for refund filed by the Partnership or the Tax Matters Partner or in any such administrative or judicial proceedings conducted by the Partnership or the Tax Matters Partner. The Partnership and each Partner hereby designate any person selected by the General Partner as the “tax matters partner” or “partnership representative” (each as defined under the Code), as applicable (the “Tax Matters Partner”). To the fullest extent permitted by applicable law, each Partner agrees to indemnify and hold harmless the Partnership and all other Partners from and against any and all liabilities, obligations, damages, deficiencies and expenses resulting from any breach or violation by such Partner of the provisions of this Section 6.7 and from all actions, suits, proceedings, demands, assessments, judgments, costs and expenses, including reasonable attorneys’ fees and disbursements, incident to any such breach or violation.
(c) Each individual Partner shall provide to the Partnership copies of each federal, state and local income tax return of such Partner (including any amendment thereof) within 30 days after filing such return.
(d) To the extent the General Partner reasonably determines that the Partnership (or any entity in which the Partnership holds an interest) is or may be required by law to withhold or to make tax payments, including interest and penalties on such amounts, on behalf of or with respect to any Partner (“Tax Advances”), the General Partner may withhold or escrow such amounts or make such tax payments as so required. All Tax Advances made on
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behalf of a Partner shall, at the option of the General Partner, (i) be promptly paid to the Partnership by the Partner on whose behalf such Tax Advances were made or (ii) be repaid by reducing the amount of the current or next succeeding distribution or distributions which would otherwise have been made to such Partner or, if such distributions are not sufficient for that purpose, by so reducing the proceeds upon dissolution of the Partnership otherwise payable to such Partner. Whenever the General Partner selects option (ii) pursuant to the preceding sentence for repayment of a Tax Advance by a Partner, for all other purposes of this Agreement such Partner shall be treated as having received all distributions (whether before or upon dissolution of the Partnership) unreduced by the amount of such Tax Advance. To the fullest extent permitted by law, each Partner hereby agrees to indemnify and hold harmless all other Partners from and against any liability (including, without limitation, any liability for taxes, penalties, additions to tax or interest) with respect to income attributable to or distributions or other payments to such Partner. The obligations of a Partner set forth in this Section 6.7(d) shall survive the withdrawal of any Partner from the Partnership or any Transfer of a Partner’s interest.
Section 6.8. Special Basis Adjustments. In connection with any assignment or transfer of a Partnership interest permitted by the terms of this Agreement, the General Partner may cause the Partnership, on behalf of the Partners and at the time and in the manner provided in Treasury Regulations Section 1.754-1(b), to make an election to adjust the basis of the Partnership’s property in the manner provided in Sections 734(b) and 743(b) of the Code.
ARTICLE VII
CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS;
ALLOCATIONS; DISTRIBUTIONS
Section 7.1. Capital Commitment Interests, etc.
(a) (i) This Article VII and Article VIII hereof set forth certain terms and conditions with respect to the Capital Commitment Partner Interests and the Capital Commitment BREDS II Interest and matters related to the Capital Commitment Partner Interests and the Capital Commitment BREDS II Interest. Except as otherwise expressly provided in this Article VII or in Article VIII, the terms and provisions of this Article VII and Article VIII shall not apply to the GP-Related Partner Interests or the GP-Related BREDS II Interest.
(ii) Each Partner severally, agrees to make contributions of capital to the Partnership (“Capital Commitment-Related Capital Contributions”) as required to fund the Partnership’s direct or indirect capital contributions to BREDS II, in respect of the Capital Commitment BREDS II Interest, if any, and the related Capital Commitment BREDS II Commitment, if any. No Partner shall be obligated to make Capital Commitment-Related Capital Contributions to the Partnership in an amount in excess of such Partner’s Capital Commitment-Related Commitment. The Commitment Agreements and SMD Agreements, if any, of the Partners may include provisions with respect to the foregoing matters. It is understood that a Partner will not necessarily participate in each Capital Commitment Investment (which may include additional amounts invested in an existing Capital Commitment Investment) nor will a Partner necessarily have the same
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Capital Commitment Profit Sharing Percentage with respect to (i) the Partnership’s portion of the Capital Commitment BREDS II Commitment, if any or (ii) the making of each Capital Commitment Investment in which such Partner participates; provided, that this in no way limits the terms of any Commitment Agreement or SMD Agreement. In addition, nothing contained herein shall be construed to give any Partner the right to obtain financing with respect to the purchase of any Capital Commitment Interest, and nothing contained herein shall limit or dictate the terms upon which the General Partner and its Affiliates may provide such financing. The acquisition of a Capital Commitment Interest by a Partner shall be evidenced by receipt by the Partnership of funds equal to such Partner’s Capital Commitment-Related Commitment then due with respect to such Capital Commitment Interest and such appropriate documentation as the General Partner may submit to the Partners from time to time.
(b) The General Partner or one of its Affiliates (in such capacity, the “Advancing Party”) may in its sole discretion advance to any Limited Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners that are also executive officers of Blackstone) all or any portion of the Capital Commitment-Related Capital Contributions due to the Partnership from such Limited Partner with respect to any Capital Commitment Investment (“Firm Advances”). Each such Limited Partner shall pay to the Advancing Party interest on each Firm Advance from the date of such Firm Advance until the repayment thereof by such Limited Partner. Each Firm Advance shall be repayable in full, including accrued interest to the date of such repayment, upon prior written notice by the Advancing Party. The making and repayment of each Firm Advance shall be recorded in the books and records of the Partnership, and such recording shall be conclusive evidence of each such Firm Advance, binding on the Limited Partner and the Advancing Party absent manifest error. Except as provided below, the interest rate applicable to a Firm Advance shall equal the cost of funds of the Advancing Party at the time of the making of such Firm Advance. The Advancing Party shall inform any Limited Partner of such rate upon such Limited Partner’s request; provided, that such interest rate shall not exceed the maximum interest rate allowable by applicable law; provided further, that amounts that are otherwise payable to such Limited Partner pursuant to Section 7.4(a) shall be used to repay such Firm Advance (including interest thereon). The Advancing Party may, in its sole discretion, change the terms of Firm Advances (including the terms contained herein) and/or discontinue the making of Firm Advances; provided, that (i) the Advancing Party shall notify the relevant Limited Partners of any material changes to such terms and (ii) the interest rate applicable to such Firm Advances and overdue amounts thereon shall not exceed the maximum interest rate allowable by applicable law.
Section 7.2. Capital Commitment Capital Accounts.
(a) There shall be established for each Partner on the books of the Partnership as of the date of formation of the Partnership, or such later date on which such Partner is admitted to the Partnership, and on each such other date as such Partner first acquires a Capital Commitment Interest in a particular Capital Commitment Investment, a Capital Commitment Capital Account for each Capital Commitment Investment in which such Partner acquires a Capital Commitment Interest on such date. Each Capital Commitment-Related Capital Contribution of a Partner shall be credited to the appropriate Capital Commitment Capital Account of such Partner on the date such Capital Commitment-Related Capital Contribution is paid to the Partnership. Capital Commitment Capital Accounts shall be adjusted to reflect any transfer of a Partner’s interest in the Partnership related to his or her Capital Commitment Partner Interest, as provided in this Agreement.
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(b) A Partner shall not have any obligation to the Partnership or to any other Partner to restore any negative balance in the Capital Commitment Capital Account of such Partner. Until distribution of any such Partner’s interest in the Partnership with respect to a Capital Commitment Interest as a result of the disposition by the Partnership of the related Capital Commitment Investment and in whole upon the dissolution of the Partnership, neither such Partner’s Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption except with the consent of the General Partner.
Section 7.3. Allocations.
(a) Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners (including the General Partner) participating in such Capital Commitment Investment in proportion to their respective Capital Commitment Profit Sharing Percentages for such Capital Commitment Investment. Capital Commitment Net Income (Loss) on any Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion which such Partner’s aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; provided, that if any Partner makes the election provided for in Section 7.6, Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners participating in such Capital Commitment Investment who do not make such election in proportion to their respective Capital Commitment Profit Sharing Percentages for such Capital Commitment Investment.
(b) Any special costs relating to distributions pursuant to Section 7.6 or Section 7.7 shall be specially allocated to the electing Limited Partner.
(c) Notwithstanding the foregoing, the General Partner may make such allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 7.4. Distributions.
(a) Each Limited Partner’s allocable portion of Capital Commitment Net Income received from his or her Capital Commitment Investments, distributions to such Limited Partner that constitute returns of capital, and other Capital Commitment Net Income of the Partnership (including without limitation Capital Commitment Net Income attributable to Unallocated Capital Commitment Interests) during a Fiscal Year of the Partnership will be credited to payment of the Investor Notes to the extent required below as of the last day of such Fiscal Year (or on such earlier date as related distributions are made in the sole discretion of the General Partner) with any cash amount distributable to such Limited Partner pursuant to clauses (ii) and (vii) below to be distributed within 45 days after the end of each Fiscal Year of the Partnership (or in each case on such earlier date as selected by the General Partner in its sole discretion) as follows (subject to Section 7.4(c) below):
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(i) First, to the payment of interest then due on all Investor Notes (relating to Capital Commitment Investments or otherwise) of such Limited Partner (to the extent Capital Commitment Net Income and distributions or payments from Other Sources do not equal or exceed all interest payments due, the selection of those of such Limited Partner’s Investor Notes upon which interest is to be paid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor);
(ii) Second, to distribution to the Limited Partner of an amount equal to the federal, state and local income taxes on income of the Partnership allocated to such Limited Partner for such year in respect of such Limited Partner’s Capital Commitment Partner Interest (the aggregate amount of any such distribution shall be determined by the General Partner, subject to the limitation that the minimum aggregate amount of such distribution be the tax that would be payable if the taxable income of the Partnership related to all Partners’ Capital Commitment Partner Interests were all allocated to an individual subject to the then-prevailing maximum federal, New York State and New York City tax rates (including, without limitation, the “medicare” tax imposed under Section 1411 of the Code and taking into account the extent to which such taxable income allocated by the Partnership was composed of long-term capital gains and the deductibility of state and local income taxes for federal income tax purposes)); provided, that additional amounts shall be paid to the Limited Partner pursuant to this clause (ii) to the extent that such amount reduces the amount otherwise distributable to the Limited Partner pursuant to a comparable provision in any other BCE Agreement and there are not sufficient amounts to fully satisfy such provision from the relevant partnership or other entity; provided further, that amounts paid pursuant to the provisions in such other BCE Agreements comparable to the immediately preceding proviso shall reduce those amounts otherwise distributable to the Limited Partner pursuant to provisions in such other BCE Agreements that are comparable to this clause (ii);
(iii) Third, to the payment in full of the principal amount of the Investor Note financing (A) any Capital Commitment Investment disposed of during or prior to such Fiscal Year or (B) any BCE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year, to the extent not repaid from Other Sources;
(iv) Fourth, to the return to such Limited Partner of (A) all Capital Commitment-Related Capital Contributions made in respect of the Capital Commitment Interest to which any Capital Commitment Investment disposed of during or prior to such Fiscal Year relates or (B) all capital contributions made to any Blackstone Collateral Entity (other than the Partnership) in respect of interests therein relating to BCE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year (including all principal paid on the related Investor Notes), to the extent not repaid from amounts of Other Sources (other than amounts of CC Carried Interest);
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(v) Fifth, to the payment of principal (including any previously deferred amounts) then owing under all other Investor Notes of such Limited Partner (including those unrelated to the Partnership), the selection of those of such Limited Partner’s Investor Notes to be repaid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor;
(vi) Sixth, up to 50% of any Capital Commitment Net Income remaining after application pursuant to clauses (i) through (v) above shall be applied pro rata to prepayment of principal of all remaining Investor Notes of such Limited Partner (including those unrelated to the Partnership), the selection of those of such Limited Partner’s Investor Notes to be repaid, the division of payments among such Investor Notes and the percentage of remaining Capital Commitment Net Income to be applied thereto to be determined by the Lender or Guarantor; and
(vii) Seventh, to such Limited Partner to the extent of any amount of Capital Commitment Net Income remaining after making the distributions in clauses (i) through (vi) above, and such amount is not otherwise required to be applied to Investor Notes pursuant to the terms thereof.
To the extent there is a partial disposition of a Capital Commitment Investment or any other BCE Investment, as applicable, the payments in clauses (iii) and (iv) above shall be based on that portion of the Capital Commitment Investment or other BCE Investment, as applicable, disposed of, and the principal amount and related interest payments of such Investor Note shall be adjusted to reflect such partial payment so that there are equal payments over the remaining term of the related Investor Note. For a Limited Partner who is no longer an employee or officer of Blackstone, distributions shall be made pursuant to clauses (i) through (iii) above, and then, unless the General Partner or its Affiliate has exercised its rights pursuant to Section 8.1 hereof, any remaining income or other distribution in respect of such Limited Partner’s Capital Commitment Partner Interest shall be applied to the prepayment of the outstanding Investor Notes of such Limited Partner, until all such Limited Partner’s Investor Notes have been repaid in full, with any such income or other distribution remaining thereafter distributed to such Limited Partner.
Distributions of Capital Commitment Net Income may be made at any other time at the discretion of the General Partner. At the General Partner’s discretion, any amounts distributed to a Limited Partner in respect of such Limited Partner’s Capital Commitment Partner Interest will be net of any interest and principal payable on his or her Investor Notes for the full period in respect of which the distribution is made. A distribution of Capital Commitment Net Income to the General Partner shall be made contemporaneously with each distribution of Capital Commitment Net Income to or for the accounts of the Limited Partners.
(b) [Intentionally omitted.]
(c) To the extent that the foregoing Partnership distributions and distributions and payments from Other Sources are insufficient to satisfy any principal and/or interest due on Investor Notes, and to the extent that the General Partner in its sole discretion elects to apply this paragraph (c) to any individual payments due, such unpaid interest will be added to the
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remaining principal amount of such Investor Notes and shall be payable on the next scheduled principal payment date (along with any deferred principal and any principal and interest due on such date); provided, that such deferral shall not apply to a Limited Partner that is no longer an employee or officer of Blackstone. All unpaid interest on such Investor Notes shall accrue interest at the interest rate then in effect for such Investor Notes.
(d) [Intentionally omitted.]
(e) The Capital Commitment Capital Account of each Partner shall be reduced by the amount of any distribution to such Partner pursuant to Section 7.4(a).
(f) At any time that a sale, exchange, transfer or other disposition of a portion of a Capital Commitment Investment is being considered by the Partnership or BREDS II (a “Capital Commitment Disposable Investment”), at the election of the General Partner each Partner’s Capital Commitment Interest with respect to such Capital Commitment Investment shall be vertically divided into two separate Capital Commitment Interests, a Capital Commitment Interest attributable to the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment Class B Interest”), and a Capital Commitment Interest attributable to such Capital Commitment Investment excluding the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment Class A Interest”). Distributions (including those resulting from a direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Disposable Investment shall be made only to holders of Capital Commitment Class B Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class B Interests, and distributions (including those resulting from the direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Investment excluding such Capital Commitment Disposable Investment shall be made only to holders of Capital Commitment Class A Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class A Interests.
(g) (i) If the Partnership is obligated under the Giveback Provisions to contribute to BREDS II all or a portion of a Giveback Amount with respect to the Capital Commitment BREDS II Interest (the amount of any such obligation of the Partnership being herein called a “Capital Commitment Giveback Amount”), the General Partner shall call for such amounts as are necessary to satisfy such obligation of the Partnership as determined by the General Partner, in which case each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions by the Partnership with respect to the Capital Commitment BREDS II Interest (the “Capital Commitment Recontribution Amount”) which equals such Partner’s pro rata share of prior distributions in connection with (a) the Capital Commitment BREDS II Investment giving rise to the Capital Commitment Giveback Amount, (b) if the amounts contributed pursuant to clause (a) above are insufficient to satisfy such Capital Commitment Giveback Amount, Capital Commitment BREDS II Investments other than the one giving rise to such obligation and (c) if the Capital Commitment Giveback Amount is unrelated to a specific Capital Commitment BREDS II Investment, all Capital Commitment BREDS II Investments. Each Partner shall promptly contribute to the Partnership upon notice thereof such Partner’s Capital Commitment
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Recontribution Amount. Prior to such time, the General Partner may, in the General Partner’s discretion (but shall be under no obligation to), provide notice that in the General Partner’s judgment, the potential obligations in respect of the Capital Commitment Giveback Amount will probably materialize (and an estimate of the aggregate amount of such obligations).
(ii) (A) In the event any Partner (a “Capital Commitment Defaulting Party”) fails to recontribute all or any portion of such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Capital Commitment Profit Sharing Percentages), such amounts as are necessary to fulfill the Capital Commitment Defaulting Party’s obligation to pay such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount (a “Capital Commitment Deficiency Contribution”) if the General Partner determines in its good faith judgment that the Partnership will be unable to collect such amount in cash from such Capital Commitment Defaulting Party for payment of the Capital Commitment Giveback Amount at least 20 Business Days prior to the latest date that the Partnership is permitted to pay the Capital Commitment Giveback Amount; provided, that no Partner shall as a result of such Capital Commitment Deficiency Contribution be required to contribute an amount in excess of 150% of the amount of the Capital Commitment Recontribution Amount initially requested from such Partner in respect of such default. Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the Capital Commitment Defaulting Party, the cost of which shall be a Partnership expense to the extent not ultimately reimbursed by the Capital Commitment Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such Capital Commitment Defaulting Party becoming a Capital Commitment Defaulting Party) to set-off as appropriate and apply against such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount any amounts otherwise payable to the Capital Commitment Defaulting Party by the Partnership or any Affiliate thereof. Each Partner hereby grants to the General Partner a security interest, effective upon such Partner becoming a Capital Commitment Defaulting Party, in all accounts receivable and other rights to receive payment from the Partnership or any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and authority, in the name of such Partner or in the name of the Partnership, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the Capital Commitment Recontribution Amount of a Capital Commitment Defaulting Party from the date such Capital Commitment Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
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(B) Any Partner’s failure to make a Capital Commitment Deficiency Contribution shall cause such Partner to be a Capital Commitment Defaulting Party with respect to such amount.
(iii) A Partner’s obligation to make contributions to the Partnership under this Section 7.4(g) shall survive the termination of the Partnership.
Section 7.5. Valuations. Capital Commitment Investments shall be valued annually as of the end of each year (and at such other times as deemed appropriate by the General Partner) in accordance with the principles utilized by the Partnership (or any Affiliate of the Partnership that is a general partner of BREDS II) in valuing investments of BREDS II or, in the case of investments not held by BREDS II, in the good faith judgment of the General Partner, subject in each case to the second proviso of the immediately succeeding sentence. The value of any Capital Commitment Interest as of any date (the “Capital Commitment Value”) shall be based on the value of the underlying Capital Commitment Investment as set forth above; provided, that the Capital Commitment Value may be determined as of an earlier date if determined appropriate by the General Partner in good faith; provided further, that such value may be adjusted by the General Partner to take into account factors relating solely to the value of a Capital Commitment Interest (as compared to the value of the underlying Capital Commitment Investment), such as restrictions on transferability, the lack of a market for such Capital Commitment Interest and lack of control of the underlying Capital Commitment Investment. To the full extent permitted by applicable law such valuations shall be final and binding on all Partners; provided further, that the immediately preceding proviso shall not apply to any Capital Commitment Interests held by a person who is or was at any time a direct member or partner of a General Partner.
Section 7.6. Disposition Election.
(a) At any time prior to the date of the Partnership’s execution of a definitive agreement to dispose of a Capital Commitment Investment, the General Partner may in its sole discretion permit a Partner to retain all or any portion of its pro rata share of such Capital Commitment Investment (as measured by such Partner’s Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment). If the General Partner so permits, such Partner shall instruct the General Partner in writing prior to such date (i) not to dispose of all or any portion of such Partner’s pro rata share of such Capital Commitment Investment (the “Retained Portion”) and (ii) either to (A) distribute such Retained Portion to such Partner on the closing date of such disposition or (B) retain such Retained Portion in the Partnership on behalf of such Partner until such time as such Partner shall instruct the General Partner upon 5 days’ notice to distribute such Retained Portion to such Partner. Such Partner’s Capital Commitment Capital Account shall not be adjusted in any way to reflect the retention in the Partnership of such Retained Portion or the Partnership’s disposition of other Partners’ pro rata shares of such Capital Commitment Investment; provided, that such Partner’s Capital Commitment Capital Account shall be adjusted upon distribution of such Retained Portion to such Partner or upon distribution of proceeds with respect to a subsequent disposition thereof by the Partnership.
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(b) No distribution of such Retained Portion shall occur unless any Investor Notes relating thereto shall have been paid in full prior to or simultaneously with such distribution.
Section 7.7. Capital Commitment Special Distribution Election.
(a) From time to time during the term of this Agreement, the General Partner may in its sole discretion, upon receipt of a written request from a Partner, distribute to such Partner any portion of its pro rata share of a Capital Commitment Investment (as measured by such Partner’s Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment) (a “Capital Commitment Special Distribution”). Such Partner’s Capital Commitment Capital Account shall be adjusted upon distribution of such Capital Commitment Special Distribution.
(b) No Capital Commitment Special Distributions shall occur unless any Investor Notes relating thereto shall have been paid in full prior to or simultaneously with such Capital Commitment Special Distribution.
ARTICLE VIII
WITHDRAWAL; ADMISSION OF NEW PARTNERS
Section 8.1. Limited Partner Withdrawal; Repurchase of Capital Commitment Interests.
(a) Capital Commitment Interests (or a portion thereof) that were financed by Investor Notes will be treated as Non-Contingent for purposes hereof based upon the proportion of (a) the sum of Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to each Capital Commitment Interest and principal payments on the related Investor Note to (b) the sum of the Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to such Capital Commitment Interest, the original principal amount of such Investor Note and all deferred amounts of interest which from time to time comprise part of the principal amount of the Investor Note. A Limited Partner may prepay a portion of any outstanding principal on the Investor Notes; provided, that in the event that a Limited Partner prepays all or any portion of the principal amount of the Investor Notes within nine months prior to the date on which such Limited Partner is no longer an employee or officer of Blackstone, the Partnership (or its designee) shall have the right, in its sole discretion, to purchase the Capital Commitment Interest that became Non-Contingent as a result of such prepayment; provided further, that the purchase price for such Capital Commitment Interest shall be determined in accordance with the determination of the purchase price of a Limited Partner’s Contingent Capital Commitment Interests as set forth in paragraph (b) below. Prepayments made by a Limited Partner shall apply pro rata against all of such Limited Partner’s Investor Notes; provided, that such Limited Partner may request that such prepayments be applied only to Investor Notes related to BCE Investments that are related to one or more Blackstone Collateral Entities specified by such Limited Partner. Except as expressly provided herein, Capital Commitment Interests that were not financed in any respect with Investor Notes shall be treated as Non-Contingent Capital Commitment Interests.
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(b) (i) Upon a Limited Partner ceasing to be an officer or employee of the General Partner or any of its Affiliates, other than as a result of such Limited Partner dying or suffering a Total Disability, such Limited Partner (the “Withdrawn Partner”) and the Partnership or any other person designated by the General Partner shall each have the right (exercisable by the Withdrawn Partner within 30 days and by the Partnership or its designee(s) within 45 days after such Limited Partner’s ceasing to be such an officer or employee) or any time thereafter, upon 30 days’ notice, but not the obligation, to require (subject to the prior consent of the General Partner on behalf of the Partnership, such consent not to be unreasonably withheld or delayed), subject to the Partnership Act, to buy (in the case of exercise of such right by such Withdrawn Partner) or the Withdrawn Partner to sell (in the case of exercise of such right by the Partnership or its designee(s)) all (but not less than all) such Withdrawn Partner’s Contingent Capital Commitment Interests.
(ii) The purchase price for each such Contingent Capital Commitment Interest shall be an amount equal to the lesser of (A) the Adjusted Unpaid Principal Amount (as hereinafter defined) with respect to such Contingent Capital Commitment Interest at the date of the purchase of such Contingent Capital Commitment Interest by the Partnership or its designee(s), or (B) the Capital Commitment Value of such Contingent Capital Commitment Interest (determined in good faith by the General Partner as of the most recent valuation prior to the date of the purchase of such Contingent Capital Commitment Interest by the Partnership or its designee(s)).
(iii) The “Adjusted Unpaid Principal Amount” with respect to any Contingent Capital Commitment Interest at the date of any such purchase means the sum of (A) the outstanding principal amount of the related Investor Note(s) plus accrued interest thereon to the date of such purchase (such portion of the purchase price to be paid in cash) and (B) an additional amount (the “Adjustment Amount”) equal to (x) all interest paid by the Limited Partner on the portion of the principal amount of such Investor Note(s) relating to the portion of the related Capital Commitment Interest remaining Contingent and to be repurchased, plus (y) all Capital Commitment Net Losses allocated to the Withdrawn Partner on such Contingent portion of such Capital Commitment Interest, minus (z) all Capital Commitment Net Income allocated to the Withdrawn Partner on such Contingent portion of such Capital Commitment Interest; provided, that, if the Withdrawn Partner was terminated from employment or his or her position as an officer for Cause, all amounts referred to in clause (x) or (y) of the Adjustment Amount, in the General Partner’s sole discretion, may be deemed to equal zero. The Adjustment Amount shall, if positive, be payable by the holders of the purchased Capital Commitment Interests to the Withdrawn Partner from the next Capital Commitment Net Income received by such holders on the Contingent portion of such Withdrawn Partner’s Capital Commitment Interests at the time such Capital Commitment Net Income is received. If the Adjustment Amount is negative, it shall be payable to the holders of the purchased Capital Commitment Interest by the Withdrawn Partner (A) from the next Capital Commitment Net Income on the Non-Contingent portion of the Withdrawn Partner’s Capital Commitment Interests at the time such Capital Commitment Net Income is received by the Withdrawn Partner , or (B) if the Partnership or its designee(s) elects to purchase such Withdrawn Partner’s Non-Contingent Capital Commitment Interests, in cash by the Withdrawn Partner at the time of such purchase; provided, that the General Partner and its Affiliates may offset any amounts otherwise owing to a Withdrawn Partner against any Adjustment Amount owed by such Withdrawn Partner. Until so paid, such remaining Adjustment Amount will not itself bear interest.
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(iv) Upon such Limited Partner ceasing to be such an officer or employee of the General Partner or any of its Affiliates, all Investor Notes shall become fully recourse to the Withdrawn Partner in his or her individual capacity (whether or not the Withdrawn Partner or the Partnership or its designee(s) exercises the right to require repurchase of the Withdrawn Partner’s Contingent Capital Commitment Interests).
(v) If, at any time, the Withdrawn Partner or the Partnership or its designee(s) exercises the right to require repurchase of such Limited Partner’s Contingent Capital Commitment Interests, then, at the time of such repurchase of such Contingent Capital Commitment Interests, the related Investor Note(s) shall become due and payable in full.
(vi) If neither the Withdrawn Partner nor the Partnership or its designee(s) exercises the right to require repurchase of such Contingent Capital Commitment Interests, then the Withdrawn Partner shall retain the Contingent portion of his or her Capital Commitment Interests and the related Investor Note(s) shall remain outstanding, shall become fully recourse to the Withdrawn Partner in his or her individual capacity, shall be payable in accordance with their remaining original maturity schedule(s) and shall be prepayable at any time by the Withdrawn Partner at his or her option (and the General Partner shall apply such prepayments against outstanding Investor Notes on a pro rata basis).
(vii) To the extent that another Partner purchases a portion of a Capital Commitment Interest of a Withdrawn Partner, the purchasing Partner’s Capital Commitment Capital Account and Capital Commitment Profit Sharing Percentage for such Capital Commitment Investment shall be correspondingly increased.
(c) Upon the occurrence of a Final Event with respect to any Limited Partner, such Limited Partner shall thereupon cease to be a Partner with respect to such Limited Partner’s Capital Commitment Partner Interest. If such a Final Event shall occur, no Successor in Interest to any such Limited Partner shall for any purpose hereof become or be deemed to become a Partner. The sole right, as against the Partnership and the remaining Partners, acquired hereunder by, or resulting hereunder to, a Successor in Interest to any Partner shall be to receive any distributions and allocations with respect to such Limited Partner’s Capital Commitment Partner Interest pursuant to Article VII and this Article VIII (subject to the right of the Partnership to purchase the Capital Commitment Interests of such former Partner pursuant to Section 8.1(b) or Section 8.1(d)), to the extent, at the time, in the manner and in the amount otherwise payable to such Limited Partner had such a Final Event not occurred, and no other right shall be acquired hereunder by, or shall result hereunder to, a Successor in Interest to such Partner, whether by operation of law or otherwise. Until distribution of any such Partner’s interest in the Partnership upon the dissolution of the Partnership as provided in Section 9.2, neither his or her Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption without the consent of the General Partner. The General Partner shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder with respect to such Partner’s Capital Commitment Partner Interest.
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(d) If a Limited Partner dies or suffers a Total Disability, all Contingent Capital Commitment Interests of such Partner shall be purchased by the Partnership or its designee (within 30 days of the first date on which the Partnership knows or has reason to know of such Limited Partner’s death or Total Disability) as provided in Section 8.1(b) (and the purchase price for such Contingent Capital Commitment Interests shall be determined in accordance with Section 8.1(b), except that any Adjustment Amount shall be payable by or to such Limited Partner, or, as applicable, such Limited Partner’s estate, personal representative or other Successor in Interest, in cash), and any Investor Notes financing such Contingent Capital Commitment Interests shall thereupon be prepaid as provided in Section 8.1(b). Upon such Limited Partner’s death or Total Disability, any Investor Notes financing such Contingent Capital Commitment Interests shall become fully recourse. In addition, in the case of the death or Total Disability of a Limited Partner, if the Limited Partner, or, as applicable, such Limited Partner’s estate, personal representative or other Successor in Interest of such Limited Partner so requests in writing within 180 days of the Limited Partner’s death or ceasing to be an employee or member (directly or indirectly) of the General Partner or any of its Affiliates by reason of Total Disability (such requests shall not exceed one per calendar year), the Partnership or its designee may but is not obligated to purchase for cash all (but not less than all) Non-Contingent Capital Commitment Interests of such Limited Partner as of the last day of the Partnership’s then current Fiscal Year at a price equal to the Capital Commitment Value thereof as of the most recent valuation prior to the date of purchase. Each Limited Partner shall be required to include appropriate provisions in his or her will to reflect such provisions of this Agreement. In addition, the Partnership may, in the sole discretion of the General Partner, upon notice to such Limited Partner or, as applicable, the estate, personal representative or other Successor in Interest of such Limited Partner, within 30 days of the first date on which the General Partner knows or has reason to know of such Limited Partner’s death or Total Disability, determine either (i) to distribute Securities or other property to such Limited Partner or, as applicable, the estate, personal representative or other Successor in Interest of such Limited Partner, in exchange for such Non-Contingent Capital Commitment Interests as provided in Section 8.1(e) or (ii) to require sale of such Non-Contingent Capital Commitment Interests to the Partnership or its designee as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion) for an amount in cash equal to the Capital Commitment Value thereof.
(e) In lieu of retaining a Withdrawn Partner as a Limited Partner with respect to any Non-Contingent Capital Commitment Interests, the General Partner may, in its sole discretion, by notice to such Withdrawn Partner within 45 days of his or her ceasing to be an employee or officer of the General Partner or any of its Affiliates, or at any time thereafter, upon 30 days written notice, determine (1) to distribute to such Withdrawn Partner the pro rata portion of the Securities or other property underlying such Withdrawn Partner’s Non-Contingent Capital Commitment Interests, subject to any restrictions on distributions associated with the Securities or other property, in satisfaction of his or her Non-Contingent Capital Commitment Interests in the Partnership or (2) to cause, as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion), the Partnership or another
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person designated by the General Partner (who may be itself another Limited Partner or another Affiliate of the General Partner) to purchase all (but not less than all) of such Withdrawn Partner’s Non-Contingent Capital Commitment Interests for a price equal to the Capital Commitment Value thereof (determined in good faith by the General Partner as of the most recent valuation prior to the date of the purchase). The General Partner shall condition any distribution or purchase of voting Securities pursuant to paragraph (d) above or this paragraph (e) upon the Withdrawn Partner’s execution and delivery to the Partnership of an appropriate irrevocable proxy, in favor of the General Partner or its nominee, relating to such Securities.
(f) The Partnership may subsequently transfer any Unallocated Capital Commitment Interest or portion thereof which is purchased by it as described above to any other person approved by the General Partner. In connection with such purchase or transfer or the purchase of a Capital Commitment Interest or portion thereof by the General Partner’s designee(s), Blackstone may loan all or a portion of the purchase price of the transferred or purchased Capital Commitment Interest to the Partnership, the transferee or the designee-purchaser(s), as applicable (excluding any of the foregoing who is an executive officer of Blackstone). To the extent that a Withdrawn Partner’s Capital Commitment Interests (or portions thereof) are repurchased by the Partnership and not transferred to or purchased by another person, all or any portion of such repurchased Capital Commitment Interests may, in the sole discretion of the General Partner, (i) be allocated to each Partner already participating in the Capital Commitment Investment to which the repurchased Capital Commitment Interest relates, (ii) be allocated to each Partner in the Partnership, whether or not already participating in such Capital Commitment Investment and/or (iii) continue to be held by the Partnership itself as an unallocated Capital Commitment Investment (such Capital Commitment Interests being herein called “Unallocated Capital Commitment Interests”). To the extent that a Capital Commitment Interest is allocated to Partners as provided in clause (i) and/or (ii) above, any indebtedness incurred by the Partnership to finance such repurchase shall also be allocated to such Partners. All such Capital Commitment Interests allocated to Limited Partners shall be deemed to be Contingent and shall become Non-Contingent as and to the extent that the principal amount of such related indebtedness is repaid. The Limited Partners receiving such allocations shall be responsible for such related indebtedness only on a nonrecourse basis to the extent provided in this Agreement, except as otherwise provided in this Section 8.1 and such Limited Partners and the General Partner shall otherwise agree; provided, that such indebtedness shall become fully recourse to the extent and at the time provided in this Section 8.1. If the indebtedness financing such repurchased interests is not to be nonrecourse or so limited, the Partnership may require an assumption by the Limited Partners of such indebtedness on the terms thereof as a precondition to allocation of the related Capital Commitment Interests to such Limited Partners; provided, that a Limited Partner shall not, except as set forth in his or her Investor Note, be obligated to accept any obligation that is personally recourse (except as otherwise provided in this Section 8.1), unless his or her prior consent is obtained. So long as the Partnership itself retains the Unallocated Capital Commitment Interests pursuant to clause (iii) above, such Unallocated Capital Commitment Interests shall belong to the Partnership and any indebtedness financing the Unallocated Capital Commitment Interests shall be an obligation of the Partnership to which all income of the Partnership is subject except as otherwise agreed by the lender of such indebtedness. Any Capital Commitment Net Income (Loss) on an Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion his or her aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; debt service on such related financing will be an expense of the Partnership allocable to all Partners in such proportions.
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(g) If a Partner is required to Withdraw from the Partnership with respect to such Partner’s Capital Commitment Partner Interest for Cause, then his or her Capital Commitment Interests shall be settled in accordance with paragraphs (a)-(f) and (j) of this Section 8.1; provided, that if such Partner was not at any time a direct partner or member of a General Partner, the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such settlement:
(i) purchase for cash all of such Withdrawn Partner’s Non-Contingent Capital Commitment Interests. The purchase price for each such Non-Contingent Capital Commitment Interest shall be the lower of (A) the original cost of such Non-Contingent Capital Commitment Interest or (B) an amount equal to the Capital Commitment Value thereof (determined as of the most recent valuation prior to the date of the purchase of such Non-Contingent Capital Commitment Interest);
(ii) allow the Withdrawn Partner to retain such Non-Contingent Capital Commitment Interests; provided, that the maximum amount of Capital Commitment Net Income allocable to such Withdrawn Partner with respect to any Capital Commitment Investment shall equal the amount of Capital Commitment Net Income that would have been allocated to such Withdrawn Partner if such Capital Commitment Investment had been sold as of the Settlement Date at the then prevailing Capital Commitment Value thereof; or (iii) in lieu of cash, purchase such Non-Contingent Capital Commitment Interests by providing the Withdrawn Partner with a promissory note in the amount determined in (i) above. Such promissory note shall have a maximum term of ten (10) years with interest at the Federal Funds Rate.
(h) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the Withdrawn Partner’s Capital Commitment Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
(i) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(j) Each Limited Partner hereby irrevocably appoints each General Partner as such Limited Partner’s true and lawful agent, representative and attorney-in-fact, each acting alone, in such Limited Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Limited Partner, any and all agreements, instruments, consents, ratifications, documents and certificates which such General Partner deems necessary or advisable in connection with any
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transaction or matter contemplated by or provided for in this Section 8.1, including, without limitation, the performance of any obligation of such Limited Partner or the Partnership or the exercise of any right of such Limited Partner or the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Limited Partner for any reason and shall not be affected by the death, disability or incapacity of such Limited Partner.
Section 8.2. Transfer of Limited Partner’s Capital Commitment Interest. Without the prior written consent of the General Partner, no Limited Partner or former Limited Partner shall have the right to sell, assign, mortgage, pledge, grant a security interest over or otherwise dispose of or transfer (“Transfer”) all or part of any such Partner’s Capital Commitment Partner Interest in the Partnership; provided, that this Section 8.2 shall in no way impair (i) Transfers as permitted in Section 8.1 above, in the case of the purchase of a Withdrawn Partner’s or deceased or Totally Disabled Limited Partner’s Capital Commitment Interests, (ii) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers by a Limited Partner to another Limited Partner of Non-Contingent Capital Commitment Interests, (iii) Transfers with the prior written consent of the General Partner, which consent may be granted or withheld in its sole discretion without giving any reason therefor and (iv) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers, for estate planning purposes, of up to 25% of a Limited Partner’s Capital Commitment Partner Interest to an Estate Planning Vehicle (it being understood that it shall not be unreasonable for the General Partner to condition any Transfer of an Interest pursuant to this clause (iv) on the satisfaction of certain conditions and/or requirements imposed by the General Partner in connection with any such Transfer, including, for example, a requirement that any transferee of an Interest hold such Interest as a passive, non-voting interest in the Partnership). Each Estate Planning Vehicle will be a Nonvoting Limited Partner. Such Limited Partner and the Nonvoting Limited Partner shall be jointly and severally liable for all obligations of both such Limited Partner and such Nonvoting Limited Partner with respect to the interest transferred (including the obligation to make additional Capital Commitment-Related Capital Contributions). The General Partner may at its sole option exercisable at any time require such Estate Planning Vehicle to Withdraw from the Partnership on the terms of Section 8.1 and Article VI. No person acquiring an interest in the Partnership pursuant to this Section 8.2 shall become a Limited Partner of the Partnership, or acquire such Partner’s right to participate in the affairs of the Partnership, unless such person shall be admitted as a Limited Partner pursuant to Section 6.1. A Limited Partner shall not cease to be a limited partner of the Partnership upon the collateral assignment of, or the pledging or granting of a security interest in, its entire limited partner interest in the Partnership in accordance with the provisions of this Agreement.
Section 8.3. Compliance with Law. Notwithstanding any provision hereof to the contrary, no Transfer of a Capital Commitment Interest in the Partnership may be made except in compliance with all federal, state and other applicable laws, including federal and state securities laws.
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ARTICLE IX
DISSOLUTION
Section 9.1. Dissolution.
(a) The Partnership shall be dissolved and subsequently terminated:
(i) pursuant to Section 6.6;
(ii) upon the expiration of the term of the Partnership; or (iii) upon the occurrence of a Disabling Event with respect to the last remaining General Partner; provided, that the Partnership shall not be dissolved if, within 90 days after the Disabling Event, the Limited Partners entitled to vote thereon as provided herein who, as of the last day of the most recent accounting period ending on or prior to the date of the Disabling Event, have aggregate GP-Related Capital Account balances representing at least a majority in amount of the total GP-Related Capital Account balances of all the persons who are Limited Partners entitled to vote thereon as provided herein agree in writing to continue the business of the Partnership and to the appointment, effective as of the date of the Disabling Event, of another General Partner.
(b) When the Partnership is dissolved, the business and property of the Partnership shall be wound up and liquidated by the General Partner or, in the event of the unavailability of the General Partner, such Limited Partner or other liquidating trustee as shall be named by the a Majority in Interest of the Partners (excluding Nonvoting Limited Partners) (the General Partner, such Limited Partner or other liquidating trustee, as the case may be, being hereinafter referred to as the “Liquidator”).
Section 9.2. Final Distribution.
(a) Within 120 calendar days after the effective date of dissolution of the Partnership, the assets of the Partnership shall be distributed in the following manner and order:
(i) to the payment of the expenses of the winding-up, liquidation and dissolution of the Partnership;
(ii) to pay all creditors of the Partnership, other than Partners, either by the payment thereof or the making of reasonable provision therefor;
(iii) to establish reserves, in amounts established by the General Partner or the Liquidator, to meet other liabilities of the Partnership; and (iv) to pay, in accordance with the terms agreed among them and otherwise on a pro rata basis, all creditors of the Partnership that are Partners, either by the payment thereof or the making of reasonable provision therefor.
(b) The remaining assets of the Partnership shall be applied and distributed among the Partners as follows:
(i) With respect to each Partner’s GP-Related Partner Interest, the remaining assets of the Partnership shall be applied and distributed to such Partner in accordance with the procedures set forth in Section 6.5 which provide for allocations to the capital accounts of the Partners and distributions in accordance with the capital
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account balances of the Partners; and for purposes of the application of this Section 9.2(b)(i), determining GP-Related Capital Accounts on liquidation, all unrealized gains, losses and accrued income and deductions of the Partnership shall be treated as realized and recognized immediately before the date of distribution; and (ii) With respect to each Partner’s Capital Commitment Partner Interest, an amount shall be paid to such Partner in cash or Securities in an amount equal to such Partner’s respective Capital Commitment Liquidating Share for each Capital Commitment Investment; provided, that if the remaining assets relating to any Capital Commitment Investment shall not be equal to or exceed the aggregate Capital Commitment Liquidating Shares for such Capital Commitment Investment, to each Partner in proportion to its Capital Commitment Liquidating Share for such Capital Commitment Investment; and the remaining assets of the Partnership related to the Partners’ Capital Commitment Partner Interests shall be paid to the Partners in cash or Securities in proportion to their respective Capital Commitment Profit Sharing Percentages for each Capital Commitment Investment from which such cash or Securities are derived.
Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests.
(a) If there are any Securities or other property or other investments or securities related to the Partners’ Capital Commitment Partner Interests which, in the judgment of the Liquidator, cannot be sold, or properly distributed in kind in the case of dissolution, without sacrificing a significant portion of the value thereof, the value of a Partner’s interest in each such Security or other investment or security may be excluded from the amount distributed to the Partners participating in the related Capital Commitment Investment pursuant to clause (ii) of Section 9.2(b). Any interest of a Partner, including his or her pro rata interest in any gains, losses or distributions, in Securities or other property or other investments or securities so excluded shall not be paid or distributed until such time as the Liquidator shall determine.
(b) If there is any pending transaction, contingent liability or claim by or against the Partnership related to the Partners’ Capital Commitment Partner Interests as to which the interest or obligation of any Partner therein cannot, in the judgment of the Liquidator, be then ascertained, the value thereof or probable loss therefrom may be deducted from the amount distributable to such Partner pursuant to clause (ii) of Section 9.2(b). No amount shall be paid or charged to any such Partner on account of any such transaction or claim until its final settlement or such earlier time as the Liquidator shall determine. The Partnership may meanwhile retain from other sums due such Partner in respect of such Partner’s Capital Commitment Partner Interest an amount which the Liquidator estimates to be sufficient to cover the share of such Partner in any probable loss or liability on account of such transaction or claim.
(c) Upon determination by the Liquidator that circumstances no longer require the exclusion of any Securities or other property or retention of sums as provided in paragraphs (a) and (b) of this Section 9.3, the Liquidator shall, at the earliest practicable time, distribute as provided in clause (ii) of Section 9.2(b) such sums or such Securities or other property or the proceeds realized from the sale of such Securities or other property to each Partner from whom such sums or Securities or other property were withheld.
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ARTICLE X
MISCELLANEOUS
Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial. (a) Any and all disputes which cannot be settled amicably, including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision as well as any and all disputes arising out of, relating to or in connection with the termination, winding up or dissolution of the Partnership), whether arising during the existence of the Partnership or at or after its termination or during or after the winding up or dissolution of the Partnership, shall be finally settled by arbitration conducted by a single arbitrator in New York, New York U.S.A. in accordance with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the parties to the dispute fail to agree on the selection of an arbitrator within thirty (30) days of the receipt of the request for arbitration, the International Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings.
(b) Notwithstanding the provisions of paragraph (a), the General Partner may bring, or may cause the Partnership to bring, on behalf of the General Partner or the Partnership or on behalf of one or more Partners, an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Partner (i) expressly consents to the application of paragraph (c) of this Section 10.1 to any such action or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate and (iii) irrevocably appoints the General Partner as such Partner’s agent for service of process in connection with any such action or proceeding and agrees that service of process upon any such agent, who shall promptly advise such Partner of any such service of process, shall be deemed in every respect effective service of process upon the Partner in any such action or proceeding.
(c) (i) EACH PARTNER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION 10.1, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the forum(s) designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties’ relationship with one another.
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(ii) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in paragraph (c)(i) of this Section 10.1 and such parties agree not to plead or claim the same.
(d) Notwithstanding any provision of this Agreement to the contrary, this Section 10.1 shall be construed to the maximum extent possible to comply with the laws of the State of Delaware, including the Delaware Uniform Arbitration Act (10 Del. C. § 5701 et seq.) (the “Delaware Arbitration Act”). If, nevertheless, it shall be determined by a court of competent jurisdiction that any provision or wording of this Section 10.1, including any rules of the International Chamber of Commerce, shall be invalid or unenforceable under the Delaware Arbitration Act, or other applicable law, such invalidity shall not invalidate all of this Section 10.1. In that case, this Section 10.1 shall be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements of the Delaware Arbitration Act or other applicable law, and, in the event such term or provision cannot be so limited, this Section 10.1 shall be construed to omit such invalid or unenforceable provision.
Section 10.2. Ownership and Use of the Firm Name. The Partnership acknowledges that Blackstone TM L.L.C. (“TM”), a Delaware limited liability company with a principal place of business at 345 Park Avenue, New York, New York 10154 U.S.A., (or its successors or assigns) is the sole and exclusive owner of the mark and name BLACKSTONE and that the ownership of, and the right to use, sell or otherwise dispose of, the firm name or any abbreviation or modification thereof which consists of or includes BLACKSTONE, shall belong exclusively to TM, which company (or its predecessors, successors or assigns) has licensed the Partnership to use BLACKSTONE in its name. The Partnership acknowledges that TM owns the service mark BLACKSTONE for various services and that the Partnership is using the BLACKSTONE mark and name on a non-exclusive, non-sublicensable and non-assignable basis in connection with its business and authorized activities with the permission of TM. All services rendered by the Partnership under the BLACKSTONE mark and name will be rendered in a manner and with quality levels that are consistent with the high reputation heretofore developed for the BLACKSTONE mark by TM and its Affiliates and licensees. The Partnership understands that TM may terminate its right to use BLACKSTONE at any time in TM’s sole discretion by giving the Partnership written notice of termination. Promptly following any such termination, the Partnership will take all steps necessary to change its partnership name to one which does not include BLACKSTONE or any confusingly similar term and cease all use of BLACKSTONE or any term confusingly similar thereto as a service mark or otherwise.
Section 10.3. Written Consent. Any action required or permitted to be taken by a vote of Partners at a meeting may be taken without a meeting if a Majority in Interest of the Partners consent thereto in writing.
Section 10.4. Letter Agreements; Schedules. The General Partner may, or may cause the Partnership to, enter or has previously entered, into separate letter agreements with individual Partners, officers or employees with respect to GP-Related Profit Sharing Percentages, Capital Commitment Profit Sharing Percentages, benefits or any other matter, which letter agreements have the effect of establishing rights under, or altering or supplementing, the terms of this Agreement with respect to any such Partner and such matters. The parties hereto agree that any rights established, or any terms of this Agreement altered or supplemented, in any such
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separate letter agreement, including any Commitment Agreement or SMD Agreement, shall govern solely with respect to such Partner notwithstanding any other provision of this Agreement. The General Partner may from time to time execute and deliver to the Partners Schedules which set forth the then current capital balances, GP-Related Profit Sharing Percentages and Capital Commitment Profit Sharing Percentages of the Partners and any other matters deemed appropriate by the General Partner. Such Schedules shall be for information purposes only and shall not be deemed to be part of this Agreement for any purpose whatsoever; provided, that this in no way limits the effectiveness of any Commitment Agreement or SMD Agreement.
Section 10.5. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law. In particular, the Partnership has been formed pursuant to the Partnership Act, and the rights and liabilities of the Partners shall be as provided therein, except as herein otherwise expressly provided. If any provision of this Agreement shall be held to be invalid, such provision shall be given its meaning to the maximum extent permitted by law and the remainder of this Agreement shall not be affected thereby.
Section 10.6. Successors and Assigns; Third Party Beneficiaries. This Agreement shall be binding upon and shall, subject to the penultimate sentence of Section 6.3(a), inure to the benefit of the parties hereto, their respective heirs and personal representatives, and any successor to a trustee of a trust which is or becomes a party hereto; provided, that no person claiming by, through or under a Partner (whether such Partner’s heir, personal representative or otherwise), as distinct from such Partner itself, shall have any rights as, or in respect to, a Partner (including the right to approve or vote on any matter or to notice thereof) except the right to receive only those distributions expressly payable to such person pursuant to Article VI and Article VIII. Any Partner or Withdrawn Partner shall remain liable for the obligations under this Agreement (including any Net GP-Related Recontribution Amounts and any Capital Commitment Recontribution Amounts) of any transferee of all or any portion of such Partner’s or Withdrawn Partner’s interest in the Partnership, unless waived by the General Partner. The Partnership shall, if the General Partner determines, in its good faith judgment, based on the standards set forth in Section 5.8(d)(ii)(A) and Section 7.4(g)(ii)(A), to pursue such transferee, pursue payment (including any Net GP-Related Recontribution Amounts and/or any Capital Commitment Recontribution Amounts) from the transferee with respect to any such obligations. Nothing in this Agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, on any person other than the Partners and their respective legal representatives, heirs, successors and permitted assigns. Notwithstanding the foregoing, solely to the extent required by the BREDS II Agreements, (x) the limited partners in BREDS II shall be a third-party beneficiaries of the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount (for purpose of this sentence, as defined in paragraph 9.2.8(b) of the BREDS II Partnership Agreement) and (y) the amendment of the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions related thereto), solely as they relate to any Clawback Amount (for purpose of this sentence, as defined in paragraph 9.2.8(b) of the BREDS II Partnership Agreement), shall be effective against such limited partners only with the Combined Limited Partner Consent (as such term is used in the BREDS II Partnership Agreement).
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Section 10.7. Partner’s Will. Each Limited Partner and Withdrawn Partner shall include in his or her will a provision that addresses certain matters in respect of his or her obligation relating to the Partnership that is satisfactory to the General Partner, and each such Limited Partner and Withdrawn Partner shall confirm annually to the Partnership, in writing, that such provision remains in his or her current will. Where applicable, any estate planning trust of such Partner or Withdrawn Partner to which a portion of such Limited Partner’s or Withdrawn Partner’s Interest is transferred shall include a provision substantially similar to such provision and the trustee of such trust shall confirm annually to the Partnership, in writing, that such provision or its substantial equivalent remains in such trust. In the event any Limited Partner or Withdrawn Partner fails to comply with the provisions of this Section 10.7 after the Partnership has notified such Limited Partner or Withdrawn Partner of his or her failure to so comply and such failure to so comply is not cured within 30 days of such notice, the Partnership may withhold any and all distributions to such Limited Partner or Withdrawn Partner until the time at which such party complies with the requirements of this Section 10.7.
Section 10.8. Confidentiality.
(a) By executing this Agreement, each Partner expressly agrees, at all times during the term of the Partnership and thereafter and whether or not at the time a Partner of the Partnership, to maintain the confidentiality of, and not to disclose to any person other than the Partnership, another Partner or a person designated by the Partnership, any information relating to the business, financial structure, financial position or financial results, clients or affairs of the Partnership that shall not be generally known to the public or the securities industry, except as otherwise required by law or by any regulatory or self-regulatory organization having jurisdiction; provided, however, that any corporate Partner may disclose any such information it is required by law, rule, regulation or custom to disclose. Notwithstanding anything in this Agreement to the contrary, to comply with Treasury Regulations Section 1.6011-4(b)(3)(i), each Partner (and any employee, representative or other agent of such Partner) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax treatment and tax structure of the Partnership, it being understood and agreed, for this purpose, (1) the name of, or any other identifying information regarding (a) the Partners or any existing or future investor (or any Affiliate thereof) in any of the Partners, or (b) any investment or transaction entered into by the Partners; (2) any performance information relating to any of the Partners or their investments; and (3) any performance or other information relating to previous funds or investments sponsored by any of the Partners, does not constitute such tax treatment or tax structure information.
(b) Nothing in this Agreement shall prohibit or impede any Partner from communicating, cooperating or filing a complaint on possible violations of U.S. federal, state or local law or regulation to or with any governmental agency or regulatory authority (collectively, a “Governmental Entity”), including, but not limited to, the SEC, FINRA, EEOC or NLRB, or from making other disclosures to any Governmental Entity that are protected under the whistleblower provisions of U.S. federal, state or local law or regulation, provided that in each case such communications and disclosures are consistent with applicable law. Each Partner understands and acknowledges that (a) an individual shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a U.S. federal, state, or local government official or to an attorney solely for the
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purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal, and (b) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Moreover, a Partner shall not be required to give prior notice to (or get prior authorization from) Blackstone regarding any such communication or disclosure. Except as otherwise provided in this paragraph or under applicable law, under no circumstance is any Partner authorized to disclose any information covered by Blackstone or its affiliates’ attorney-client privilege or attorney work product or Blackstone’s trade secrets without the prior written consent of Blackstone.
Section 10.9. Notices. Whenever notice is required or permitted by this Agreement to be given, such notice shall be in writing (including telecopy or similar writing) and shall be given by hand delivery (including any courier service) or telecopy to any Partner at its address or telecopy number shown in the books and records of the Partnership or, if given to the General Partner or the Partnership, at the address or telecopy number of the Partnership in New York City. Each such notice shall be effective (i) if given by telecopy, upon dispatch and (ii) if given by hand delivery, when delivered to the address of such Partner or the General Partner or the Partnership specified as aforesaid.
Section 10.10. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute a single instrument.
Section 10.11. Power of Attorney. Each Partner hereby irrevocably appoints the General Partner as such Partner’s true and lawful representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file all instruments, documents and certificates which, from time to time, may be required to set forth any amendment to this Agreement or may be required by this Agreement or by the laws of the United States of America, the State of Delaware or any other state in which the Partnership shall determine to do business, or any political subdivision or agency thereof, to execute, implement and continue the valid and subsisting existence of the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and effect notwithstanding the subsequent Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the subsequent disability or incapacity of such Partner.
Section 10.12. Cumulative Remedies. Rights and remedies under this Agreement are cumulative and do not preclude use of other rights and remedies available under applicable law.
Section 10.13. Legal Fees. Except as more specifically provided herein, in the event of a legal dispute (including litigation, arbitration or mediation) between any Partner or Withdrawn Partner and the Partnership, arising in connection with any party seeking to enforce Section 4.1(d) or any other provision of this Agreement relating to the Holdback, the Clawback Amount, the GP-Related Giveback Amount, the Capital Commitment Giveback Amount, the Net
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GP-Related Recontribution Amount or the Capital Commitment Recontribution Amount, the “losing” party to such dispute shall promptly reimburse the “victorious party” for all reasonable legal fees and expenses incurred in connection with such dispute (such determination to be made by the relevant adjudicator). Any amounts due under this Section 10.13 shall be paid within 30 days of the date upon which such amounts are due to be paid and such amounts remaining unpaid after such date shall accrue interest at the Default Interest Rate.
Section 10.14. Modifications. Except as provided herein, this Agreement may be amended or modified at any time by the General Partner in its sole discretion, upon notification thereof to the Limited Partners.
Section 10.15. Entire Agreement. This Agreement embodies the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein. Subject to Section 10.4, this Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first above written. In the event that it is impracticable to obtain the signature of any one or more of the Partners to this Agreement, this Agreement shall be binding among the other Partners executing the same.
GENERAL PARTNER:
BLACKSTONE HOLDINGS III L.P., as Member
By: Blackstone Holdings III GP L.P., its General Partner
By: Blackstone Holdings III GP Management L.L.C., its General Partner
By: /s/ John G. Finley Name: John G. Finley
Title: Authorized Person
INITIAL LIMITED PARTNER:
Christopher J. James,
As Initial Limited Partner, solely to reflect his Withdrawal from the Partnership
By: /s/ Christopher J. James | [
"Exhibit 10.86 HIGHLY CONFIDENTIAL & TRADE SECRET BLACKSTONE REAL ESTATE DEBT STRATEGIES ASSOCIATES II L.P. AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP Dated February 15, 2018 Effective as of April 17, 2013 THE LIMITED PARTNERSHIP INTERESTS (THE “INTERESTS”) OF BLACKSTONE REAL ESTATE DEBT STRATEGIES ASSOCIATES II L.P. (THE “PARTNERSHIP”) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS, AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS AND CONDITIONS OF THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP. THE INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP.",
"THEREFORE, PURCHASERS OF SUCH INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. -------------------------------------------------------------------------------- Table of Contents ARTICLE I DEFINITIONS 1 Section 1.1. Definitions 1 Section 1.2. Terms Generally 22 ARTICLE II GENERAL PROVISIONS 22 Section 2.1. General Partner and Limited Partners 22 Section 2.2. Formation; Name; Foreign Jurisdictions 22 Section 2.3. Term 23 Section 2.4. Purpose; Powers 23 Section 2.5. Registered Office; Place of Business 26 Section 2.6. Withdrawal of Initial Limited Partner 26 ARTICLE III MANAGEMENT 26 Section 3.1. General Partners 26 Section 3.2. Limitations on Limited Partners 26 Section 3.3. Partner Voting 26 Section 3.4.",
"Management 26 Section 3.5. Responsibilities of Partners 29 Section 3.6. Exculpation and Indemnification 29 Section 3.7. Representations of Limited Partners 31 Section 3.8. Tax Representation and Further Assurances 32 ARTICLE IV CAPITAL OF THE PARTNERSHIP 33 Section 4.1. Capital Contributions by Partners 33 Section 4.2. Interest 41 Section 4.3. Withdrawals of Capital 41 ARTICLE V PARTICIPATION IN PROFITS AND LOSSES 41 Section 5.1. General Accounting Matters 41 Section 5.2. GP-Related Capital Accounts 43 Section 5.3. GP-Related Profit Sharing Percentages 43 Section 5.4. Allocations of GP-Related Net Income (Loss) 44 Section 5.5.",
"Liability of General Partners 45 Section 5.6. Liability of Limited Partners 45 Section 5.7. Repurchase Rights, etc. 46 Section 5.8. Distributions 46 Section 5.9. Business Expenses 53 Section 5.10. Tax Capital Accounts; Tax Allocations 53 ARTICLE VI ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS; SATISFACTION AND DISCHARGE OF PARTNERSHIP INTERESTS; TERMINATION 54 Section 6.1. Additional Partners 54 Section 6.2. Withdrawal of Partners 55 Section 6.3. GP-Related Partner Interests Not Transferable 57 -------------------------------------------------------------------------------- Section 6.4. General Partner Withdrawal; Transfer of General Partner’s Interest 57 Section 6.5. Satisfaction and Discharge of a Withdrawn Partner’s GP-Related Partner Interest 58 Section 6.6. Termination of the Partnership 63 Section 6.7. Certain Tax Matters 63 Section 6.8. Special Basis Adjustments 65 ARTICLE VII CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS 65 Section 7.1. Capital Commitment Interests, etc.",
"65 Section 7.2. Capital Commitment Capital Accounts 66 Section 7.3. Allocations 67 Section 7.4. Distributions 67 Section 7.5. Valuations 72 Section 7.6. Disposition Election 72 Section 7.7. Capital Commitment Special Distribution Election 73 ARTICLE VIII WITHDRAWAL; ADMISSION OF NEW PARTNERS 73 Section 8.1. Limited Partner Withdrawal; Repurchase of Capital Commitment Interests 73 Section 8.2. Transfer of Limited Partner’s Capital Commitment Interest 79 Section 8.3. Compliance with Law 79 ARTICLE IX DISSOLUTION 79 Section 9.1. Dissolution 80 Section 9.2. Final Distribution 80 Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests 81 ARTICLE X MISCELLANEOUS 82 Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial 82 Section 10.2. Ownership and Use of the Firm Name 83 Section 10.3. Written Consent 83 Section 10.4.",
"Letter Agreements; Schedules 83 Section 10.5. Governing Law 84 Section 10.6. Successors and Assigns; Third Party Beneficiaries 84 Section 10.7. Partner’s Will 85 Section 10.8. Confidentiality 85 Section 10.9. Notices 86 Section 10.10. Counterparts 86 Section 10.11. Power of Attorney 86 Section 10.12. Cumulative Remedies 86 Section 10.13. Legal Fees 86 Section 10.14. Modifications 87 Section 10.15. Entire Agreement 87 3 -------------------------------------------------------------------------------- BLACKSTONE REAL ESTATE DEBT STRATEGIES ASSOCIATES II L.P. AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated February 15, 2018 and effective as of April 17, 2013 of Blackstone Real Estate Debt Strategies Associates II L.P., a Delaware limited partnership (the “Partnership”), by and between BREDS II GP L.L.C., a Delaware limited liability company (the “General Partner”), Christopher J. James (the “Initial Limited Partner”), as initial limited partner, and the limited partners listed in the books and records of the Partnership, as limited partners.",
"WITNESSETH WHEREAS, Blackstone Real Estate Debt Strategies Associates II L.P. was formed as a Delaware limited partnership on September 4, 2012; WHEREAS, the General Partner and the Initial Limited Partner entered into a Limited Partnership Agreement dated as of September 4, 2012 (the “Original Agreement”); WHEREAS, the parties hereto now wish to amend and restate the Original Agreement in its entirety as hereinafter set forth; NOW, THEREFORE, in consideration of the mutual covenants and agreements herein made and intending to be legally bound, the parties hereto hereby agree that the Original Agreement shall be amended and restated in its entirety as follows: ARTICLE I DEFINITIONS Section 1.1. Definitions.",
"Unless the context otherwise requires, the following terms shall have the following meanings for purposes of this Agreement: “Adjustment Amount” has the meaning set forth in Section 8.1(b)(iii). “Advancing Party” has the meaning set forth in Section 7.1(b). “Affiliate” when used with reference to another person means any person (other than the Partnership), directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with, such other person, which may include, for greater certainty, endowment funds, charitable programs and other similar and/or related vehicles or accounts associated with or established by Blackstone and/or its affiliates, partners and current and/or former employees. “Agreement” means this Amended and Restated Agreement of Limited Partnership, as it may be further amended, supplemented, restated or otherwise modified from time to time.",
"-------------------------------------------------------------------------------- “Alternative Vehicle” means any investment vehicle or structure formed pursuant to paragraph 2.7 of the BREDS II Partnership Agreement or any other “Alternative Vehicle” (as defined in any other BREDS II Agreements). “Applicable Collateral Percentage,” with respect to any Firm Collateral or Special Firm Collateral, has the meaning set forth in the books and records of the Partnership with respect thereto. “Bankruptcy” means, with respect to any person, the occurrence of any of the following events: (i) the filing of an application by such person for, or a consent to, the appointment of a trustee or custodian of his or her assets; (ii) the filing by such person of a voluntary petition in Bankruptcy or the seeking of relief under Title 11 of the United States Code, as now constituted or hereafter amended, or the filing of a pleading in any court of record admitting in writing his or her inability to pay his or her debts as they become due; (iii) the failure of such person to pay his or her debts as such debts become due; (iv) the making by such person of a general assignment for the benefit of creditors; (v) the filing by such person of an answer admitting the material allegations of, or his or her consenting to, or defaulting in answering, a Bankruptcy petition filed against him or her in any Bankruptcy proceeding or petition seeking relief under Title 11 of the United States Code, as now constituted or as hereafter amended; or (vi) the entry of an order, judgment or decree by any court of competent jurisdiction adjudicating such person a bankrupt or insolvent or for relief in respect of such person or appointing a trustee or custodian of his or her assets and the continuance of such order, judgment or decree unstayed and in effect for a period of 60 consecutive days.",
"“BCE Agreement” means the limited partnership agreement, limited liability company agreement or other governing document of any limited partnership, limited liability company or other entity named or referred to in the definition of any of “BFREP,” “BFIP,” “BFGSO,” “BFCOMP” or “Other Blackstone Collateral Entity,” as such limited partnership agreement, limited liability company agreement or other governing document may be amended, supplemented, restated or otherwise modified to date, and as such limited partnership agreement, limited liability company agreement or other governing document may be further amended, supplemented, restated or otherwise modified from time to time, and any Other Blackstone Collateral Entity limited partnership agreement, limited liability company agreement or other governing document.",
"“BCE Investment” means any direct or indirect investment by any Blackstone Collateral Entity. “BCEP” means the collective reference to (i) Blackstone Core Equity Partners L.P., a Delaware limited partnership and (ii) any Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreement for the partnership referred to in clause (i) above). “BCOM” is the collective reference to (i) Blackstone Communications Partners I L.P., a Delaware limited partnership and (ii) any other investment vehicle established pursuant to Article 2 of the partnership agreement for the partnership referred to in clause (i) above. 2 -------------------------------------------------------------------------------- “BCP Asia” is the collective reference to (i) Blackstone Capital Partners Asia L.P., a Cayman Islands exempted limited partnership and (ii) any Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreement for the partnership referred to in clause (i) above). “BCP VI” is the collective reference to (i) Blackstone Capital Partners VI L.P., a Delaware limited partnership and (ii) any Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreement for the partnership referred to in clause (i) above).",
"“BCP VII” is the collective reference to (i) Blackstone Capital Partners VII L.P. and Blackstone Capital Partners VII.2 L.P, each a Delaware limited partnership and (ii) any Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreements for the partnerships referred to in clause (i) above). “BCTP” means (i) Blackstone Clean Technology Partners L.P., a Delaware limited partnership and (ii) any other Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreement for the partnership referred to in clause (i) above). “BEP” means (i) Blackstone Energy Partners L.P. and Blackstone Energy Partners Q L.P., each a Delaware limited partnership and (ii) any other Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreement for the partnership referred to in clause (i) above). “BEP II” means (i) Blackstone Energy Partners II L.P. and Blackstone Energy Partners II.F L.P., each a Delaware limited partnership and (ii) any other Alternative Investment Vehicles or Parallel Funds (each as defined in the partnership agreement for the partnership referred to in clause (i) above).",
"“BFCOMP” means Blackstone Family Communications Partnership I L.P., Blackstone Family Communications Partnership I-SMD L.P. and any other entity that is an Affiliate thereof and has terms substantially similar to those of the foregoing partnerships and is formed in connection with the participation by one or more partners thereof directly or indirectly in investments in securities also purchased by BCOM or any other funds with substantially similar investment objectives to BCOM and that are sponsored or managed by an Affiliate of the General Partner (which includes serving as general partner of such funds). “BFGSO” means any entity formed to invest side-by-side with any GSO Fund and any other entity that is an Affiliate thereof and that has terms substantially similar to those of the foregoing partnerships or other entities and is formed in connection with the participation by one or more partners or other equity owners thereof directly or indirectly in investments in securities also purchased by any GSO Fund or any other funds with substantially similar investment objectives to any GSO Fund and that are sponsored or managed by an Affiliate of the General Partner (which includes serving as general partner of such funds).",
"3 -------------------------------------------------------------------------------- “BFIP” means Blackstone Capital Associates II L.P., Blackstone Capital Associates III L.P., Blackstone Family Investment Partnership II L.P., Blackstone Family Investment Partnership III L.P., Blackstone Family Investment Partnership IV-A L.P., Blackstone Family Investment Partnership IV-A - SMD L.P., Blackstone Family Investment Partnership V L.P., Blackstone Family Investment Partnership V- SMD L.P., Blackstone Family Investment Partnership VI L.P., Blackstone Family Investment Partnership VI-SMD L.P., Blackstone Family Investment Partnership VII - ESC L.P., Blackstone Family Cleantech Investment Partnership L.P., Blackstone Family Cleantech Investment Partnership—SMD L.P., Blackstone Energy Family Investment Partnership L.P., Blackstone Energy Family Investment Partnership—SMD L.P., Blackstone Family Tactical Opportunities Investment Partnership L.P., Blackstone Family Tactical Opportunities Investment Partnership - SMD L.P., Blackstone Family Tactical Opportunities Investment Partnership (Cayman) L.P., Blackstone Family Tactical Opportunities Investment Partnership (Cayman)—SMD L.P., Blackstone Energy Family Investment Partnership II L.P., and any other entity that is an Affiliate thereof and has terms similar to those of the foregoing partnerships and is formed in connection with the participation by one or more of the partners thereof in investments in securities also purchased by BCP VI, BCP VII, BCP Asia, BCEP, BCTP, BEP, BEP II, BTO, BTORO, BUMO or any other fund with substantially similar investment objectives to BCP VI, BCP VII, BCP Asia, BCEP, BCTP, BEP, BEP II, BTO, BTORO or BUMO and that are sponsored or managed by an Affiliate of the General Partner (which includes serving as general partner of such funds).",
"“BFREP” means Blackstone Real Estate Capital Associates L.P., Blackstone Real Estate Capital Associates II L.P., Blackstone Real Estate Capital Associates III L.P., Blackstone Family Real Estate Partnership L.P., Blackstone Family Real Estate Partnership II L.P., Blackstone Family Real Estate Partnership III L.P., Blackstone Family Real Estate Partnership International-A-SMD L.P., Blackstone Family Real Estate Partnership IV-SMD L.P., Blackstone Family Real Estate Partnership International II-SMD L.P., Blackstone Family Real Estate Partnership V-SMD L.P., Blackstone Family Real Estate Partnership VI-SMD L.P., Blackstone Family Real Estate Partnership VII-SMD L.P., Blackstone Family Real Estate Partnership VIII-SMD L.P., Blackstone Family Real Estate Partnership Europe III-SMD L.P., Blackstone Family Real Estate Special Situations Partnership - SMD L.P., Blackstone Family Real Estate Special Situations Partnership Europe - SMD L.P., Blackstone Real Estate Holdings L.P., Blackstone Real Estate Holdings II L.P., Blackstone Real Estate Holdings III L.P., Blackstone Real Estate Holdings International - A L.P., Blackstone Real Estate Holdings IV L.P., Blackstone Real Estate Holdings International II L.P., Blackstone Real Estate Holdings V L.P., Blackstone Real Estate Holdings VI L.P., Blackstone Real Estate Holdings VII L.P., Blackstone Real Estate Holdings Europe III L.P., Blackstone Real Estate Holdings Europe IV L.P., Blackstone Real Estate Special Situations Holdings II L.P., Blackstone Real Estate Special Situations Holdings Europe L.P., Blackstone Family Real Estate Partnership Europe IV SMD L.P., Blackstone Real Estate Holdings Europe IV ESC L.P., Blackstone Family Real Estate Partnership Europe V SMD L.P., 4 -------------------------------------------------------------------------------- Blackstone Real Estate Holdings Europe V ESC L.P., Blackstone Family Real Estate Partnership Asia—SMD L.P., Blackstone Real Estate Holdings Asia—ESC L.P., Blackstone Real Estate Holdings VII-ESC L.P., Blackstone Real Estate Holdings VIII-ESC L.P., and any other entity that is an Affiliate thereof and that has terms substantially similar to those of the foregoing partnerships and is formed in connection with the participation by one or more partners thereof in real estate and real estate-related investments also purchased by BREP VII, BREP VIII, the BREDS Funds, BREP Europe IV, BREP Europe V or BREP Asia and any other funds with substantially similar investment objectives to BREP VII, BREP VIII, the BREDS Funds, BREP Europe IV, BREP Europe V, BREP Asia or BPP and that are sponsored or managed by an Affiliate of the General Partner (which includes serving as general partner of such funds).",
"“Blackstone” means collectively, The Blackstone Group L.P., a Delaware limited partnership, and any Affiliate thereof (excluding any natural persons and any portfolio companies of any Blackstone-sponsored fund). “Blackstone Capital Commitment” has the meaning set forth in the BREDS II Partnership Agreement. “Blackstone Collateral Entity” means any limited partnership, limited liability company or other entity named or referred to in the definition of any of “BFREP,” “BFIP,” “BFGSO,” “BFCOMP” or “Other Blackstone Collateral Entity.” “Blackstone Entity” means any partnership, limited liability company or other entity (excluding any natural persons and any portfolio companies of any Blackstone-sponsored fund) that is an Affiliate of The Blackstone Group L.P. “BPP” means (i) Blackstone Property Partners L.P., a Delaware limited partnership, and Blackstone Property Partners Europe L.P., a Cayman Islands exempted limited partnership, (ii) any other Alternative Vehicles or Parallel Funds (each as defined in the partnership agreements for the partnerships referred to in clause (i) above) or (iii) any other investment vehicle established pursuant to Article 2 of the partnership agreements for the partnerships referred to in clause (i) above.",
"“BREDS Funds” means the investment funds, vehicles and/or managed accounts managed on a day-to-day basis primarily by personnel in the Blackstone Real Estate Debt Strategies Group (including, without limitation, Blackstone Real Estate Special Situations Fund II L.P., Blackstone Real Estate Special Situations Fund II.1 L.P., Blackstone Real Estate Special Situations Fund II.2 L.P., Blackstone Real Estate Debt Strategies II L.P. Blackstone Real Estate Debt Strategies II – AC L.P., Blackstone Real Estate Debt Strategies II – Gaussian L.P., Blackstone Real Estate Debt Strategies III – Gaussian L.P., Blackstone Real Estate Debt Strategies III L.P., Blackstone Real Estate Debt Strategies II – A L.P., Blackstone Real Estate Debt Strategies III – N L.P., Blackstone Real Estate CMBS Fund L.P., Blackstone Real Estate Special Situations Europe L.P., Blackstone Real Estate Special Situations Europe 1 L.P., Blackstone Real Estate Special Situations Europe 2 L.P., Blackstone Commercial Real Estate Debt Fund L.P., Blackstone Real Estate Special Situations Fund L.P. and, in each case, any alternative vehicles, feeder 5 -------------------------------------------------------------------------------- vehicles or subsidiaries formed in connection therewith, any successor funds, any supplemental capital vehicles or other vehicles formed in connection therewith (or are otherwise related thereto) or in connection with any investments made thereby, and, in each case, any vehicles formed in connection with Blackstone’s side-by-side or additional general partner investments relating thereto).",
"“BREDS II” means (i) Blackstone Real Estate Debt Strategies II L.P., a Delaware limited partnership, (ii) any other Alternative Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the respective partnership agreements for the partnerships referred to in clause (i) above) and/or related vehicles, or (iii) any other investment vehicle established pursuant to Article 2 of the respective partnership agreements for any of the partnerships referred to in clause (i) above. “BREDS II Agreements” is the collective reference to the BREDS II Partnership Agreement and any governing agreement of any of the partnerships or other entities referred to in clauses (ii) or (iii) of the definition of “BREDS II.” “BREDS II Partnership Agreement” means the Amended and Restated Agreement of Limited Partnership of BREDS II, dated as of the respective dates set forth therein, as each may be amended, supplemented, restated or otherwise modified from time to time.",
"“BREP VII” means (i) Blackstone Real Estate Partners VII L.P., Blackstone Real Estate Partners VII.TE.1 L.P., Blackstone Real Estate Partners VII.TE.2 L.P., Blackstone Real Estate Partners VII.TE.3 L.P., Blackstone Real Estate Partners VII.TE.4 L.P., Blackstone Real Estate Partners VII.TE.5 L.P., Blackstone Real Estate Partners VII.TE.6 L.P., Blackstone Real Estate Partners VII.TE.7 L.P., Blackstone Real Estate Partners VII.TE.8 L.P. and Blackstone Real Estate Partners VII.F L.P., each a Delaware limited partnership, (ii) any other Alternative Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the respective partnership agreements for the partnerships referred to in clause (i) above) or (iii) any other investment vehicle established pursuant to Article 2 of the respective partnership agreements for any of the partnerships referred to in clause (i) above. “BREP VIII” means (i) Blackstone Real Estate Partners VIII L.P., Blackstone Real Estate Partners VIII.TE.1 L.P., Blackstone Real Estate Partners VIII.TE.2 L.P. and Blackstone Real Estate Partners VIII.F L.P., each a Delaware limited partnership, (ii) any other Alternative Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the respective partnership agreements for the partnerships referred to in clause (i) above), or (iii) any other investment vehicle established pursuant to Article 2 of the respective partnership agreements for any of the partnerships referred to in clause (i) above. “BREP Asia” is the collective reference to (i) Blackstone Real Estate Partners Asia L.P., a Cayman Islands exempted limited partnership, Blackstone Real Estate Partners Asia.F L.P., a Delaware limited partnership, and Blackstone Real Estate Partners Asia II L.P., a Cayman Islands exempted limited partnership, (ii) any other Alternative Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the partnership agreement for the partnership referred to in clause (i) above) or (iii) any other investment vehicle established pursuant to Article 2 of the partnership agreement for the partnership referred to in clause (i) above.",
"6 -------------------------------------------------------------------------------- “BREP Europe IV” is the collective reference to (i) Blackstone Real Estate Partners Europe IV L.P. and Blackstone Real Estate Partners Europe IV.2 L.P., each a Cayman Islands exempted limited partnership, (ii) Blackstone Real Estate Partners Europe IV.F L.P., a Delaware limited partnership, (iii) any other Alternative Investment Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the partnership agreements for the partnerships referred to in clause (i) or (ii) above), or (iv) any other investment vehicle established pursuant to Article 2 of the partnership agreements for the partnerships referred to in clause (i) or (ii) above.",
"“BREP Europe V” is the collective reference to (i) Blackstone Real Estate Partners Europe V L.P., a Cayman Islands exempted limited partnership, (ii) any other Alternative Investment Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the partnership agreement for the partnership referred to in clause (i) above) or (iii) any other investment vehicle established pursuant to Article 2 of the partnership agreement for the partnership referred to in clause (i) above.",
"“BTO” means (i) the investment funds, vehicles and/or managed accounts managed on a day-to-day basis primarily by personnel in the Blackstone Tactical Opportunities Program (including, without limitation, Blackstone Tactical Opportunities Fund L.P. and Blackstone Tactical Opportunities Fund II L.P., each a Delaware limited partnership, and Blackstone Tactical Opportunities Fund II.F L.P., a Cayman Islands exempted limited partnership), (ii) any alternative investment vehicles relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition, (iii) any parallel fund, managed account or other capital vehicle relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition and (iv) any other limited partnership, limited liability company or other entity (in each case, whether now or hereafter established) of which the Blackstone Tactical Opportunities Program (including, without limitation, Blackstone Tactical Opportunities Associates L.L.C., Blackstone Tactical Opportunities Associates II L.L.C., BTOA L.L.C.",
"and BTOA II L.L.C.) or its personnel serves, directly or indirectly, as the general partner, manager or managing member or in a similar capacity. “BTORO” means (i) the investment funds, vehicles and/or managed accounts managed on a day-to-day basis primarily by personnel in the Tac Opps Residential Program (including, without limitation, Blackstone TORO Fund-A L.P., a Delaware limited partnership, and TORO Holdings, L.P. a Delaware limited partnership), (ii) any alternative investment vehicles relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition, (iii) any parallel fund, managed account or other capital vehicle relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition, and (iv) any other limited partnership, limited liability company or other entity (in each case, whether now or hereafter established) of which the Tac Opps Residential Program (including, without limitation, Blackstone TORO Fund-A L.P. and TORO Holdings, L.P.) or its personnel serves, directly or indirectly, as the general partner, manager or managing member or in a similar capacity.",
"7 -------------------------------------------------------------------------------- “BUMO” means (i) the investment funds, vehicles and/or managed accounts managed on a day-to-day basis primarily by personnel in the Blackstone UK Mortgage Opportunities Program (including, without limitation, Blackstone UK Mortgage Opportunities Fund L.P., a Cayman exempted limited partnership), (ii) any alternative investment vehicles relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition, (iii) any parallel fund, managed account or other capital vehicle relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition, and (iv) any other exempted limited partnership, limited liability company or other entity (in each case, whether now or hereafter established) of which the Blackstone UK Mortgage Opportunities Program (including, without limitation, Blackstone UK Mortgage Opportunities Fund L.P.) or its personnel serves, directly or indirectly, as the general partner, manager or managing member or in a similar capacity.",
"“Business Day” means any day other than a Saturday, Sunday or other day on which banks are authorized or required by law to be closed in New York, New York, United States. “Capital Commitment BREDS II Commitment” means the Capital Commitment (as defined in the BREDS II Partnership Agreement), if any, of the Partnership to BREDS II that relates solely to the Capital Commitment BREDS II Interest, if any. “Capital Commitment BREDS II Interest” means the Interest (as defined in the BREDS II Partnership Agreement), if any, of the Partnership as a capital partner (and, if applicable, a limited partner and/or a general partner) of BREDS II. “Capital Commitment BREDS II Investment” means the Partnership’s interest in a specific investment of BREDS II held by the Partnership through the Capital Commitment BREDS II Interest.",
"“Capital Commitment Capital Account” means, with respect to each Capital Commitment Investment for each Partner, the account maintained for such Partner to which are credited such Partner’s contributions to the Partnership with respect to such Capital Commitment Investment and any net income allocated to such Partner pursuant to Section 7.3 with respect to such Capital Commitment Investment and from which are debited any distributions with respect to such Capital Commitment Investment to such Partner and any net losses allocated to such Partner with respect to such Capital Commitment Investment pursuant to Section 7.3. In the case of any such distribution in kind, the Capital Commitment Capital Accounts for the related Capital Commitment Investment shall be adjusted as if the asset distributed had been sold in a taxable transaction and the proceeds distributed in cash, and any resulting gain or loss on such sale shall be allocated to the Partners participating in such Capital Commitment Investment pursuant to Section 7.3.",
"8 -------------------------------------------------------------------------------- “Capital Commitment Class A Interest” has the meaning set forth in Section 7.4(f). “Capital Commitment Class B Interest” has the meaning set forth in Section 7.4(f). “Capital Commitment Defaulting Party” has the meaning specified in Section 7.4(g)(ii)(A). “Capital Commitment Deficiency Contribution” has the meaning specified in Section 7.4(g)(ii)(A). “Capital Commitment Disposable Investment” has the meaning set forth in Section 7.4(f). “Capital Commitment Distributions” means, with respect to each Capital Commitment Investment, all amounts of distributions, received by the Partnership with respect to such Capital Commitment Investment solely in respect of the Capital Commitment BREDS II Interest, if any, less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of such Capital Commitment Investment as it may determine in good faith is appropriate.",
"“Capital Commitment Giveback Amount” has the meaning set forth in Section 7.4(g)(i). “Capital Commitment Interest” means the interest of a Partner in a specific Capital Commitment Investment as provided herein. “Capital Commitment Investment” means any Capital Commitment BREDS II Investment, but shall exclude any GP-Related Investment. “Capital Commitment Liquidating Share” with respect to each Capital Commitment Investment means, in the case of dissolution of the Partnership, the related Capital Commitment Capital Account of a Partner (less amounts reserved in accordance with Section 9.3) immediately prior to dissolution. “Capital Commitment Net Income (Loss)” with respect to each Capital Commitment Investment means all amounts of income received by the Partnership with respect to such Capital Commitment Investment, including without limitation gain or loss in respect of the disposition, in whole or in part, of such Capital Commitment Investment, less any costs, fees and expenses of the Partnership allocated thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership anticipated to be allocated thereto; provided, that any income received in respect of the Capital Commitment BREDS II Interest that is unrelated to any Capital Commitment Investment (as determined by the General Partner in its sole discretion) shall be allocated to the Partners in accordance with their Capital Commitment Profit Sharing Percentage. 9 -------------------------------------------------------------------------------- “Capital Commitment Partner Interest” means a Partner’s limited partnership interest in the Partnership with respect to the Capital Commitment BREDS II Interest.",
"“Capital Commitment Profit Sharing Percentage” with respect to each Capital Commitment Investment means the percentage interest of a Partner in Capital Commitment Net Income (Loss) from such Capital Commitment Investment set forth in the books and records of the Partnership. “Capital Commitment Recontribution Amount” has the meaning set forth in Section 7.4(g)(i). “Capital Commitment-Related Capital Contributions” has the meaning set forth in Section 7.1(a)(ii). “Capital Commitment-Related Commitment”, with respect to any Partner, means such Partner’s commitment to the Partnership relating to such Partner’s Capital Commitment Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any.",
"“Capital Commitment Special Distribution” has the meaning set forth in Section 7.7(a). “Capital Commitment Value” has the meaning set forth in Section 7.5. “Carried Interest” means (i) “Carried Interest Distributions,” as defined in the BREDS II Partnership Agreement, and (ii) any other carried interest distribution to a Fund GP pursuant to any BREDS II Agreement. In the case of each of (i) and (ii) above, except as determined by the General Partner, the amount shall not be less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto (in each case which the General Partner may allocate among all or any portion of the GP-Related Investments as it determines in good faith is appropriate). “Carried Interest Give Back Percentage” means, for any Partner or Withdrawn Partner, subject to Section 5.8(e), the percentage determined by dividing (A) the aggregate amount of distributions received by such Partner or Withdrawn Partner from the Partnership or any Other Fund GPs or their Affiliates in respect of Carried Interest by (B) the aggregate amount of distributions made to all Partners, Withdrawn Partners or any other person by the Partnership or any Other Fund GP or any of their Affiliates (in any capacity) in respect of Carried Interest. For purposes of determining any “Carried Interest Give Back Percentage” hereunder, all Trust Amounts contributed to the Trust by the Partnership or any Other Fund GPs on behalf of a Partner or Withdrawn Partner (but not the Trust Income thereon) shall be deemed to have been initially distributed or paid to the Partners and Withdrawn Partners as members, partners or other equity owners of the Partnership or any of the Other Fund GPs or their Affiliates.",
"10 -------------------------------------------------------------------------------- “Carried Interest Sharing Percentage” means, with respect to each GP-Related Investment, the percentage interest of a Partner in Carried Interest from such GP-Related Investment set forth in the books and records of the Partnership.",
"“Cause” means the occurrence or existence of any of the following with respect to any Partner, as determined fairly, reasonably, on an informed basis and in good faith by the General Partner: (i) (w) any breach by any Partner of any provision of any non-competition agreement, (x) any material breach of this Agreement or any rules or regulations applicable to such Partner that are established by the General Partner, (y) such Partner’s deliberate failure to perform his or her duties to the Partnership or any of its Affiliates or (z) such Partner’s committing to or engaging in any conduct or behavior that is or may be harmful to the Partnership or any of its Affiliates in a material way as determined by the General Partner; provided, that in the case of any of the foregoing clauses (w), (x), (y) and (z), the General Partner has given such Partner written notice (a “Notice of Breach”) within fifteen days after the General Partner becomes aware of such action and such Partner fails to cure such breach, failure to perform or conduct or behavior within fifteen days after receipt of such Notice of Breach from the General Partner (or such longer period, not to exceed an additional fifteen days, as shall be reasonably required for such cure; provided, that such Partner is diligently pursuing such cure); (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Partnership or any of its Affiliates; (iii) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony or crime (including any misdemeanor charge involving moral turpitude, false statements or misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations of the applicable securities industry, that such Partner individually has violated any applicable securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) such Partner’s ability to function as a Partner of the Partnership, taking into account the services required of such Partner and the nature of the business of the Partnership and its Affiliates or (B) the business of the Partnership and its Affiliates or (iv) becoming subject to an event described in Rule 506(d)(1)(i)-(viii) of Regulation D under the Securities Act.",
"“CC Carried Interest” means, with respect to any Partner, the aggregate amount of distributions or payments received by such Partner (in any capacity) from Affiliates of the Partnership in respect of or relating to “carried interest”, including the amount of any bonuses received by a Partner as an employee of an Affiliate of the Partnership that relate to the amount of “carried interest” received by an Affiliate of the Partnership. “CC Carried Interest” includes any amount initially received by an Affiliate of the Partnership from any fund (including BREDS II, any similar funds formed after the date hereof, and any other private equity merchant banking, real estate or mezzanine funds, whether or not in existence as of the date hereof) to which such Affiliate serves as general partner (or other similar capacity) that exceeds such Affiliate’s pro rata share of distributions from such fund based upon capital contributions thereto (or the capital contributions to make the investment of such fund giving rise to such “carried interest”). 11 -------------------------------------------------------------------------------- “Clawback Adjustment Amount” has the meaning set forth in Section 5.8(e). “Clawback Amount” means the “Clawback Amount” and (to the extent applicable to any limited partnership, limited liability company or other entity named or referred to in the definition of BREDS II) the “Interim Clawback Amount,” both as defined in Article One of the BREDS II Partnership Agreement, and any other clawback amount payable to the limited partners of BREDS II or to BREDS II pursuant to any BREDS II Agreement, as applicable. “Clawback Provisions” means paragraphs 4.2.9 and 9.2.8 of the BREDS II Partnership Agreement and any other similar provisions in any other BREDS II Partnership Agreement existing heretofore or hereafter entered into.",
"“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any reference herein to a particular provision of the Code means, where appropriate, the corresponding provision in any successor statute. “Commitment Agreement” means the agreement between the Partnership or an Affiliate thereof and a Partner, pursuant to which such Partner undertakes certain obligations, including the obligation to make capital contributions pursuant to Section 4.1 and/or Section 7.1. Each Commitment Agreement is hereby incorporated by reference as between the Partnership and the relevant Partner. “Contingent” means subject to repurchase rights and/or other requirements. The term “control” when used with reference to any person means the power to direct the management and policies of such person, directly or indirectly, by or through stock or other equity ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral) with one or more other persons by or through stock or other equity ownership, agency or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.",
"“Controlled Entity” when used with reference to another person means any person controlled by such other person. “Covered Person” has the meaning set forth in Section 3.6(a). “Deceased Partner” means any Partner or Withdrawn Partner who has died or who suffers from Incompetence. For purposes hereof, references to a Deceased Partner shall refer collectively to the Deceased Partner and the estate and heirs or legal representative of such Deceased Partner, as the case may be, that have received such Deceased Partner’s interest in the Partnership. “Default Interest Rate” means the lower of (i) the sum of (a) the Prime Rate and (b) 5% or (ii) the highest rate of interest permitted under applicable law. “Delaware Arbitration Act” has the meaning set forth in Section 10.1(d).",
"12 -------------------------------------------------------------------------------- “Disabling Event” means (a) the Withdrawal of the General Partner, other than in accordance with Section 6.4(a) or (b) the General Partner (i) makes an assignment for the benefit of its creditors, (ii) files a voluntary petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent or has entered against it an order for relief in any bankruptcy or insolvency proceeding, (iv) files a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in a proceeding described in clause (iv) or (vi) seeks, consents to, or acquiesces in, the appointment of a trustee, receiver or liquidator of the General Partner or of all or substantially all of its properties. “Estate Planning Vehicle” has the meaning set forth in Section 6.3(a). “Excess Holdback” has the meaning set forth in Section 4.1(d)(v)(A). “Excess Holdback Percentage” has the meaning set forth in Section 4.1(d)(v)(A).",
"“Excess Tax-Related Amount” has the meaning set forth in Section 5.8(e). “Existing Partner” means any Partner who is neither a Retaining Withdrawn Partner nor a Deceased Partner. “Final Event” means the death, Total Disability, Incompetence, Bankruptcy, liquidation, dissolution or Withdrawal from the Partnership of any person who is a Partner. “Firm Advances” has the meaning set forth in Section 7.1(b). “Firm Collateral” means a Partner’s or Withdrawn Partner’s interest in one or more partnerships or limited liability companies, in either case affiliated with the Partnership, and certain other assets of such Partner or Withdrawn Partner, in each case that has been pledged or made available to the Trustee(s) to satisfy all or any portion of the Excess Holdback of such Partner or Withdrawn Partner as more fully described in the books and records of the Partnership; provided, that for all purposes hereof (and any other agreement (e.g., the Trust Agreement) that incorporates the meaning of the term “Firm Collateral” by reference), references to “Firm Collateral” shall include “Special Firm Collateral”, excluding references to “Firm Collateral” in Section 4.1(d)(v) and Section 4.1(d)(viii).",
"“Firm Collateral Realization” has the meaning set forth in Section 4.1(d)(v)(B). “Fiscal Year” means a calendar year, or any other period chosen by the General Partner. “Fund GP” means the Partnership (only with respect to the GP-Related BREDS II Interest) and the Other Fund GPs. 13 -------------------------------------------------------------------------------- “GAAP” means U.S. generally accepted accounting principles. “General Partner” means BREDS II GP L.L.C. and any person admitted to the Partnership as an additional or substitute general partner of the Partnership in accordance with the provisions of this Agreement (until such time as such person ceases to be a general partner of the Partnership as provided herein or in the Partnership Act). “Giveback Amount” means the “Investment Specific Giveback Amount,” as such term is defined in the BREDS II Partnership Agreement.",
"“Giveback Provisions” means paragraph 3.4.3 of the BREDS II Partnership Agreement and any other similar provisions in any other BREDS II Agreement existing heretofore or hereafter entered into. “Governmental Entity” has the meaning set forth in Section 10.8(b). “GP-Related BREDS II Interest” means the interest held by the Partnership in BREDS II in the Partnership’s capacity as general partner of BREDS II, excluding any Capital Commitment BREDS II Interest. “GP-Related BREDS II Investment” means the Partnership’s interest in an Investment (for purposes of this definition, as defined in the BREDS II Partnership Agreement) in the Partnership’s capacity as the general partner of BREDS II, but does not include any Capital Commitment Investment. “GP-Related Capital Account” has the meaning set forth in Section 5.2(a). “GP-Related Capital Contributions” has the meaning set forth in Section 4.1(a).",
"“GP-Related Class A Interest” has the meaning set forth in Section 5.8(a)(ii). “GP-Related Class B Interest” has the meaning set forth in Section 5.8(a)(ii). “GP-Related Commitment”, with respect to any Partner, means such Partner’s commitment to the Partnership relating to such Partner’s GP-Related Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any. “GP-Related Defaulting Party” has the meaning set forth in Section 5.8(d)(ii)(A). “GP-Related Deficiency Contribution” has the meaning set forth in Section 5.8(d)(ii)(A). “GP-Related Disposable Investment” has the meaning set forth in Section 5.8(a)(ii).",
"“GP-Related Giveback Amount” has the meaning set forth in Section 5.8(d)(i)(A). 14 -------------------------------------------------------------------------------- “GP-Related Investment” means any investment (direct or indirect) of the Partnership in respect of the GP-Related BREDS II Interest (including, without limitation, any GP-Related BREDS II Investment, but excluding any Capital Commitment Investment). “GP-Related Net Income (Loss)” has the meaning set forth in Section 5.1(b). “GP-Related Partner Interest” of a Partner means all interests of such Partner in the Partnership (other than such Partner’s Capital Commitment Partner Interest), including, without limitation, such Partner’s interest in the Partnership with respect to the GP-Related BREDS II Interest and with respect to all GP-Related Investments. “GP-Related Profit Sharing Percentage” means the “Carried Interest Sharing Percentage” and “Non-Carried Interest Sharing Percentage” of each Partner; provided, that any references in this Agreement to GP-Related Profit Sharing Percentages made (i) in connection with voting or voting rights or (ii) GP-Related Capital Contributions with respect to GP-Related Investments (including Section 5.3(b)) means the “Non-Carried Interest Sharing Percentage” of each Partner; provided further, that the term “GP-Related Profit Sharing Percentage” shall not include any Capital Commitment Profit Sharing Percentage.",
"“GP-Related Recontribution Amount” has the meaning set forth in Section 5.8(d)(i)(A). “GP-Related Required Amounts” has the meaning set forth in Section 4.1(a). “GP-Related Unallocated Percentage” has the meaning set forth in Section 5.3(b). “GP-Related Unrealized Net Income (Loss)” attributable to any GP-Related BREDS II Investment as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related BREDS II Investment if BREDS II’s entire portfolio of investments were sold on such date for cash in an amount equal to their aggregate value on such date (determined in accordance with Section 5.1(e)) and all distributions payable by BREDS II to the Partnership (indirectly through the general partner of BREDS II) pursuant to any BREDS II Agreement with respect to such GP-Related BREDS II Investment were made on such date. “GP-Related Unrealized Net Income (Loss)” attributable to any other GP-Related Investment (other than any Capital Commitment Investment) as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related Investment if such GP-Related Investment were sold on such date for cash in an amount equal to its value on such date (determined in accordance with Section 5.1(h)).",
"“GSO Fund” means (i) any of GSO Capital Opportunities Fund LP, GSO Capital Opportunities Overseas Fund L.P., GSO Capital Opportunities Overseas Master Fund L.P., GSO Liquidity Partners LP, GSO Liquidity Overseas Partners LP, Blackstone / GSO Capital Solutions Fund LP, Blackstone / GSO Capital Solutions Overseas Fund L.P., Blackstone / GSO Capital Solutions Overseas Master Fund L.P., GSO Capital 15 -------------------------------------------------------------------------------- Solutions Fund II LP, GSO Capital Solutions Overseas Feeder Fund II LP, GSO European Senior Debt Fund LP, GSO European Senior Debt Feeder Fund LP, GSO Targeted Opportunity Partners LP, GSO Targeted Opportunity Overseas Partners L.P., GSO Targeted Opportunity Overseas Intermediate Partners L.P., GSO Targeted Opportunity Master Partners L.P., GSO SJ Partners LP, GSO Capital Opportunities Fund II LP, GSO Capital Opportunities Cayman Overseas Fund II LP, GSO NMERB LP, GSO Energy Partners-A LP, GSO Palmetto Opportunistic Investment Partners LP, GSO Foreland Co-Invest Holdings LP, GSO Bakken Holdings I LP or GSO Churchill Partners LP, or (ii) any alternative vehicle or parallel fund relating to any of the partnerships referred to in clause (i) above.",
"“Holdback” has the meaning set forth in Section 4.1(d)(i). “Holdback Percentage” has the meaning set forth in Section 4.1(d)(i). “Holdback Vote” has the meaning set forth in Section 4.1(d)(iv)(A). “Holdings” means Blackstone Holdings III L.P., a Québec société en commandite. “Incompetence” means, with respect to any Partner, the determination by the General Partner in its sole discretion, after consultation with a qualified medical doctor, that such Partner is incompetent to manage his or her person or his or her property. “Initial Holdback Percentages” has the meaning set forth in Section 4.1(d)(i). “Initial Limited Partner” has the meaning set forth in the recitals. “Interest” means a Partner’s interest in the Partnership, including any interest that is held by a Retaining Withdrawn Partner, and including any Partner’s GP-Related Partner Interest and Capital Commitment Partner Interest. “Investment” means any investment (direct or indirect) of the Partnership designated by the General Partner from time to time as an investment in which the Partners’ respective interests shall be established and accounted for on a basis separate from the Partnership’s other businesses, activities and investments, including (a) GP-Related Investments and (b) Capital Commitment Investments.",
"“Investor Note” means a promissory note of a Partner evidencing indebtedness incurred by such Partner to purchase a Capital Commitment Interest, the terms of which were or are approved by the General Partner and which is secured by such Capital Commitment Interest, all other Capital Commitment Interests of such Partner and all other interests of such Partner in Blackstone Collateral Entities; provided, that such promissory note may also evidence indebtedness relating to other interests of such Partner in Blackstone Collateral Entities, and such indebtedness shall be prepayable with Capital Commitment Net Income (whether or not such indebtedness relates to Capital Commitment Investments) as set forth in this Agreement, the Investor Note, the other BCE Agreements and any documentation relating to Other Sources; provided further, that 16 -------------------------------------------------------------------------------- references to “Investor Notes” herein refer to multiple loans made pursuant to such note, whether made with respect to Capital Commitment Investments or other BCE Investments, and references to an “Investor Note” refer to one such loan as the context requires. In no way shall any indebtedness incurred to acquire Capital Commitment Interests or other interests in Blackstone Collateral Entities be considered part of the Investor Notes for purposes hereof if the Lender or Guarantor is not the lender or guarantor with respect thereto. “Investor Special Limited Partner” means any Limited Partner so designated at the time of its admission as a partner of the Partnership.",
"“Issuer” means the issuer of any Security comprising part of an Investment. “L/C” has the meaning set forth in Section 4.1(d)(vi). “L/C Partner” has the meaning set forth in Section 4.1(d)(vi). “Lender or Guarantor” means Blackstone Holdings I L.P. in its capacity as lender or guarantor under the Investor Notes, or any other Affiliate of the Partnership that makes or guarantees loans to enable a Partner to acquire Capital Commitment Interests or other interests in Blackstone Collateral Entities.",
"“Limited Partner” means any person who is shown on the books and records of the Partnership as a Limited Partner of the Partnership, including any Special Limited Partner, any Investor Special Limited Partner and any Nonvoting Limited Partner. “Liquidator” has the meaning set forth in Section 9.1(b). “Loss Amount” has the meaning set forth in Section 5.8(e)(i)(A). “Loss Investment” has the meaning set forth in Section 5.8(e). “Majority in Interest of the Partners” on any date (a “vote date”) means one or more persons who are Partners (including the General Partner and the Limited Partners but excluding Nonvoting Limited Partners) on the vote date and who, as of the last day of the most recent accounting period ending on or prior to the vote date (or as of such later date on or prior to the vote date selected by the General Partner as of which the Partners’ capital account balances can be determined), have aggregate capital account balances representing at least a majority in amount of the total capital account balances of all the persons who are Partners (including the General Partner and the Limited Partners but excluding Nonvoting Limited Partners) on the vote date.",
"“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto. “Net Carried Interest Distribution” has the meaning set forth in Section 5.8(e)(i)(C). 17 -------------------------------------------------------------------------------- “Net Carried Interest Distribution Recontribution Amount” has the meaning set forth in Section 5.8(e)(i)(C). “Net GP-Related Recontribution Amount” has the meaning set forth in Section 5.8(d)(i)(A). “Non-Carried Interest” means, with respect to each GP-Related Investment (including any GP-Related BREDS II Investment), all amounts of distributions, other than Carried Interest (and other than Capital Commitment Distributions) received by the Partnership with respect to such GP-Related Investment (including any GP-Related BREDS II Investment), less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of the GP-Related Investments (including any GP-Related BREDS II Investment) as it may determine in good faith is appropriate. “Non-Carried Interest Sharing Percentage” means, with respect to each GP-Related Investment (including any GP-Related BREDS II Investments), the percentage interest of a Partner in Non-Carried Interest from such GP-Related Investment (including any GP-Related BREDS II Investments) set forth in the books and records of the Partnership.",
"“Non-Contingent” means generally not subject to repurchase rights or other requirements. “Nonvoting Limited Partner” has the meaning set forth in Section 6.1(a). “Original Agreement” has the meaning set forth in the recitals. “Other Blackstone Collateral Entity” means any Blackstone Entity (other than any limited partnership, limited liability company or other entity named or referred to in the definition of any of “BFIP,” “BFREP,” “BFGSO” or “BFCOMP”) in which any limited partner interest, limited liability company interest, unit or other interest is pledged to secure any Investor Note. “Other Fund GPs” means the General Partner (only with respect to the General Partner’s GP-Related Partner Interest in the Partnership) and any other entity (other than the Partnership) through which any Partner, Withdrawn Partner or any other person directly receives any amounts of Carried Interest, and any successor thereto; provided, that this includes any other entity which has in its organizational documents a provision which indicates that it is a “Fund GP” or an “Other Fund GP”; provided further, that notwithstanding any of the foregoing, neither Holdings nor any Estate Planning Vehicle established for the benefit of family members of any Partner or of any member or partner of any Other Fund GP shall be considered an “Other Fund GP” for purposes hereof. “Other Sources” means (i) distributions or payments of CC Carried Interest (which shall include amounts of CC Carried Interest which are not distributed or paid to a Partner but are instead contributed to a trust (or similar arrangement) to satisfy any “holdback” obligation with respect thereto) and (ii) distributions from Blackstone Collateral Entities (other than the Partnership) to such Partner.",
"18 -------------------------------------------------------------------------------- “Parallel Fund” means any additional collective investment vehicle (or other similar arrangement) formed pursuant to paragraph 2.8 of the BREDS II Partnership Agreement. “Partner” means any person who is a partner of the Partnership, whether a General Partner or a Limited Partner in whatsoever Partner Category. “Partner Category” means the Existing Partners, Retaining Withdrawn Partners or Deceased Partners, each referred to as a group for purposes hereof. “Partnership” means Blackstone Real Estate Debt Strategies Associates II L.P., a Delaware limited partnership. “Partnership Act” means the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. §§ 17-101, et seq., as it may be amended from time to time, and any successor to such statute. “Partnership Affiliate” has the meaning set forth in Section 3.4(c).",
"“Partnership Affiliate Governing Agreement” has the meaning set forth in Section 3.4(c). “Pledgable Blackstone Interests” has the meaning set forth in Section 4.1(d)(v)(A). “Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate. “Qualifying Fund” means any fund designated by the General Partner as a “Qualifying Fund.” “Repurchase Period” has the meaning set forth in Section 5.8(c). “Required Rating” has the meaning set forth in Section 4.1(d)(vi). “Retained Portion” has the meaning set forth in Section 7.6(a). “Retaining Withdrawn Partner” means a Withdrawn Partner who has retained a GP-Related Partner Interest, pursuant to Section 6.5(f) or otherwise. A Retaining Withdrawn Partner shall be considered a Nonvoting Limited Partner for all purposes hereof.",
"“Securities” means any debt or equity securities of an Issuer and its subsidiaries and other Controlled Entities constituting part of an Investment, including without limitation common and preferred stock, interests in limited partnerships and interests in 19 -------------------------------------------------------------------------------- limited liability companies (including warrants, rights, put and call options and other options relating thereto or any combination thereof), notes, bonds, debentures, trust receipts and other obligations, instruments or evidences of indebtedness, choses in action, other property or interests commonly regarded as securities, interests in real property, whether improved or unimproved, interests in oil and gas properties and mineral properties, short-term investments commonly regarded as money-market investments, bank deposits and interests in personal property of all kinds, whether tangible or intangible. “Securities Act” means the U.S. Securities Act of 1933, as amended from time to time, or any successor statute.",
"“Settlement Date” has the meaning set forth in Section 6.5(a). “SMD Agreements” means the agreements between the Partnership and/or one or more of its Affiliates and certain of the Partners, entered into in accordance with Section 10.4 and pursuant to which each such Partner undertakes certain obligations with respect to the Partnership and/or its Affiliates. The SMD Agreements are hereby incorporated by reference as between the Partnership and the relevant Partner. “Special Firm Collateral” means interests in a Qualifying Fund or other assets that have been pledged to the Trustee(s) to satisfy all or any portion of a Partner’s or Withdrawn Partner’s Holdback obligation (excluding any Excess Holdback) as more fully described in the books and records of the Partnership. “Special Firm Collateral Realization” has the meaning set forth in Section 4.1(d)(viii)(B). “Special Limited Partner” means any of the persons shown in the books and records of the Partnership as a Special Limited Partner and any person admitted to the Partnership as an additional Special Limited Partner in accordance with the provisions of this Agreement. “S&P” means Standard & Poor’s Ratings Group, and any successor thereto. “Subject Investment” has the meaning set forth in Section 5.8(e)(i). “Subject Partner” has the meaning set forth in Section 4.1(d)(iv)(A).",
"“Successor in Interest” means any (i) shareholder of; (ii) trustee, custodian, receiver or other person acting in any Bankruptcy or reorganization proceeding with respect to; (iii) assignee for the benefit of the creditors of; (iv) officer, director or partner of; (v) trustee or receiver, or former officer, director or partner, or other fiduciary acting for or with respect to the dissolution, liquidation or termination of; or (vi) other executor, administrator, committee, legal representative or other successor or assign of, any Partner, whether by operation of law or otherwise. “Tax Advances” has the meaning set forth in Section 6.7(d). 20 -------------------------------------------------------------------------------- “Tax Matters Partner” has the meaning set forth in Section 6.7(b). “TM” has the meaning set forth in Section 10.2. “Total Disability” means the inability of a Limited Partner substantially to perform the services required of such Limited Partner (in its capacity as such or in any other capacity with respect to any Affiliate of the Partnership) for a period of six consecutive months by reason of physical or mental illness or incapacity and whether arising out of sickness, accident or otherwise.",
"“Transfer” has the meaning set forth in Section 8.2. “Trust Account” has the meaning set forth in the Trust Agreement. “Trust Agreement” means the Trust Agreement dated as of the date set forth therein, as amended, supplemented, restated or otherwise modified from time to time, among the Partners, the Trustee(s) and certain other persons that may receive distributions in respect of or relating to Carried Interest from time to time. “Trust Amount” has the meaning set forth in the Trust Agreement. “Trust Income” has the meaning set forth in the Trust Agreement.",
"“Trustee(s)” has the meaning set forth in the Trust Agreement. “Unadjusted Carried Interest Distributions” has the meaning set forth in Section 5.8(e)(i)(B). “Unallocated Capital Commitment Interests” has the meaning set forth in Section 8.1(f). “Withdraw” or “Withdrawal” with respect to a Partner means a Partner ceasing to be a partner of the Partnership (except as a Retaining Withdrawn Partner) for any reason (including death, disability, removal, resignation or retirement, whether such is voluntary or involuntary), unless the context shall limit the type of withdrawal to a specific reason, and “Withdrawn” with respect to a Partner means, as aforesaid, a Partner who has ceased to be a partner of the Partnership. “Withdrawal Date” means the date of the Withdrawal from the Partnership of a Withdrawn Partner. “Withdrawn Partner” means a Limited Partner whose GP-Related Partner Interest or Capital Commitment Partner Interest in the Partnership has been terminated for any reason, including the occurrence of an event specified in Section 6.2, and shall include, unless the context requires otherwise, the estate or legal representatives of any such Partner.",
"“W-8BEN” has the meaning set forth in Section 3.8. 21 -------------------------------------------------------------------------------- “W-8BEN-E” has the meaning set forth in Section 3.8. “W-8IMY” has the meaning set forth in Section 3.8. “W-9” has the meaning set forth in Section 3.8. Section 1.2. Terms Generally. The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The term “person” includes individuals, partnerships (including limited liability partnerships), companies (including limited liability companies), joint ventures, corporations, trusts, governments (or agencies or political subdivisions thereof) and other associations and entities.",
"The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. ARTICLE II GENERAL PROVISIONS Section 2.1. General Partner and Limited Partners. The Partners may be General Partners or Limited Partners. The General Partner as of the date hereof is BREDS II GP L.L.C. The Limited Partners shall be as shown on the books and records of the Partnership. The books and records of the Partnership contain the GP-Related Profit Sharing Percentage and GP-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to the GP-Related Investments of the Partnership as of the date hereof. The books and records of the Partnership contain the Capital Commitment Profit Sharing Percentage and Capital Commitment-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to the Capital Commitment Investments of the Partnership as of the date hereof. The books and records of the Partnership shall be amended by the General Partner from time to time to reflect additional GP-Related Investments, additional Capital Commitment Investments, dispositions by the Partnership of GP-Related Investments, dispositions by the Partnership of Capital Commitment Investments, the GP-Related Profit Sharing Percentages of the Partners (including, without limitation, the General Partner) as modified from time to time, the Capital Commitment Profit Sharing Percentages of the Partners (including, without limitation, the General Partner) as modified from time to time, the admission of additional Partners, the Withdrawal of Partners, and the transfer or assignment of interests in the Partnership pursuant to the terms of this Agreement.",
"At the time of admission of each additional Partner, the General Partner shall determine in its sole discretion the GP-Related Investments and Capital Commitment Investments in which such Partner shall participate and such Partner’s GP-Related Commitment, Capital Commitment-Related Commitment, GP-Related Profit Sharing Percentage with respect to each such GP-Related Investment and Capital Commitment Profit Sharing Percentage with respect to each such Capital Commitment Investment. Each Partner may have a GP-Related Partner Interest and/or a Capital Commitment Partner Interest. Section 2.2. Formation; Name; Foreign Jurisdictions. The Partnership is hereby continued as a limited partnership pursuant to the Partnership Act and shall conduct its activities on and after the date hereof under the name of Blackstone Real Estate Debt Strategies Associates 22 -------------------------------------------------------------------------------- II L.P. The certificate of limited partnership of the Partnership may be amended and/or restated from time to time by the General Partner. The General Partner is further authorized to execute and deliver and file any other certificates (and any amendments and/or restatements thereof) necessary for the Partnership to qualify to do business in a jurisdiction in which the Partnership may wish to conduct business. Section 2.3. Term.",
"The term of the Partnership shall continue until December 31, 2066, unless earlier dissolved and terminated in accordance with this Agreement and the Partnership Act. Section 2.4. Purpose; Powers.",
"(a) The purposes of the Partnership shall be, directly or indirectly through subsidiaries or Affiliates: (i) to serve as the general partner of BREDS II (including any Alternative Vehicle and any Parallel Fund) and perform the functions of a general partner of BREDS II (including any Alternative Vehicle and any Parallel Fund) specified in the BREDS II Agreements; (ii) to serve as, and hold the Capital Commitment BREDS II Interest as, a capital partner (and, if applicable, a limited partner and/or a general partner) of BREDS II (including any Alternative Vehicle and any Parallel Fund) and perform the functions of a capital partner (and, if applicable, a limited partner and/or a general partner) of BREDS II (including any Alternative Vehicle and any Parallel Fund) specified in the BREDS II Agreements; (iii) to make the Blackstone Capital Commitment or a portion thereof, directly or indirectly, and to invest in GP-Related Investments, Capital Commitment Investments and other Investments and acquire and invest in Securities or other property either directly or indirectly through another entity; (iv) to serve as a general or limited partner, member, shareholder or other equity interest owner of any Other Fund GP and perform the functions of a general or limited partner, member, shareholder or other equity interest owner specified in any such Fund’s GP’s respective partnership agreement, limited liability company agreement, charter or other governing documents, as amended, supplemented, restated or otherwise modified from time to time; (v) to serve as a member, shareholder or other equity interest owner of limited liability companies, other companies, corporations or other entities and perform the functions of a member, shareholder or other equity interest owner specified in the respective limited liability company agreement, charter or other governing documents, as amended, supplemented, restated or otherwise modified from time to time, of any such limited liability company, company, corporation or other entity; (vi) to invest in Capital Commitment Investments and/or GP-Related Investments and acquire and invest in Securities or other property (directly or indirectly through BREDS II (including any Alternative Vehicle and any Parallel Fund)), including, without limitation, in connection with any action referred to in any of clauses (i) through (v) above; 23 -------------------------------------------------------------------------------- (vii) to carry on such other businesses, perform such other services and make such other investments as are deemed desirable by the General Partner and as are permitted under the Partnership Act, the BREDS II Agreements, and any applicable partnership agreement, limited liability company agreement, charter or other governing document referred to in clause (iv) or (v) above, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time; (viii) any other lawful purpose; and (ix) to do all things necessary, desirable, convenient or incidental thereto.",
"(b) In furtherance of its purposes, the General Partner on behalf of the Partnership shall have all powers necessary, suitable or convenient for the accomplishment of its purposes, alone or with others, as principal or agent, including the following: (i) to be and become a general partner or limited partner of partnerships, a member of limited liability companies, a holder of common and preferred stock of corporations and/or an investor in the foregoing entities or other entities, in connection with the making of Investments or the acquisition, holding or disposition of Securities or other property or as otherwise deemed appropriate by the General Partner in the conduct of the Partnership’s business, and to take any action in connection therewith; (ii) to acquire and invest in general partner or limited partner interests, in limited liability company interests, in common and preferred stock of corporations and/or in other interests in or obligations of the foregoing entities or other entities and in Investments and Securities or other property or direct or indirect interests therein, whether such Investments and Securities or other property are readily marketable or not, and to receive, hold, sell, dispose of or otherwise transfer any such partner interests, limited liability company interests, stock, interests, obligations, Investments or Securities or other property and any dividends and distributions thereon and to purchase and sell, on margin, and be long or short, futures contracts and to purchase and sell, and be long or short, options on futures contracts; (iii) to buy, sell and otherwise acquire investments, whether such investments are readily marketable or not; (iv) to invest and reinvest the cash assets of the Partnership in money-market or other short-term investments; (v) to hold, receive, mortgage, pledge, grant security interests over, lease, transfer, exchange or otherwise dispose of, grant options with respect to, and otherwise deal in and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, all property held or owned by the Partnership; 24 -------------------------------------------------------------------------------- (vi) to borrow or raise money from time to time and to issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable and non-negotiable instruments and evidences of indebtedness, to secure payment of the principal of any such indebtedness and the interest thereon by mortgage, pledge, conveyance or assignment in trust of, or the granting of a security interest in, the whole or any part of the property of the Partnership, whether at the time owned or thereafter acquired, to guarantee the obligations of others and to buy, sell, pledge or otherwise dispose of any such instrument or evidence of indebtedness; (vii) to lend any of its property or funds, either with or without security, at any legal rate of interest or without interest; (viii) to have and maintain one or more offices within or without the State of Delaware, and in connection therewith, to rent or acquire office space, engage personnel and compensate them and do such other acts and things as may be advisable or necessary in connection with the maintenance of such office or offices; (ix) to open, maintain and close accounts, including margin accounts, with brokers; (x) to open, maintain and close bank accounts and draw checks and other orders for the payment of moneys; (xi) to engage accountants, auditors, custodians, investment advisers, attorneys and any and all other agents and assistants, both professional and nonprofessional, and to compensate any of them as may be necessary or advisable; (xii) to form or cause to be formed and to own the stock of one or more corporations, whether foreign or domestic, to form or cause to be formed and to participate in partnerships and joint ventures, whether foreign or domestic, and to form or cause to be formed and be a member or manager or both of one or more limited liability companies; (xiii) to enter into, make and perform all contracts, agreements and other undertakings as may be necessary, convenient or advisable or incident to carrying out its purposes; (xiv) to sue and be sued, to prosecute, settle or compromise all claims against third parties, to compromise, settle or accept judgment to claims against the Partnership, and to execute all documents and make all representations, admissions and waivers in connection therewith; (xv) to distribute, subject to the terms of this Agreement, at any time and from time to time to the Partners cash or investments or other property of the Partnership, or any combination thereof; and (xvi) to take such other actions necessary, desirable, convenient or incidental thereto and to engage in such other businesses as may be permitted under Delaware and other applicable law.",
"25 -------------------------------------------------------------------------------- Section 2.5. Registered Office; Place of Business. The Partnership shall maintain a registered office at c/o Intertrust Corporate Services Delaware Ltd., 200 Bellevue Parkway, Suite 210, Bellevue Park Corporate Center, Wilmington, Delaware 19809. The Partnership shall maintain an office and principal place of business at such place or places as the General Partner specifies from time to time and as set forth in the books and records of the Partnership. The name and address of the Partnership’s registered agent is Intertrust Corporate Services Delaware Ltd., 200 Bellevue Parkway, Suite 210, Bellevue Park Corporate Center, Wilmington, Delaware 19809. The General Partner may from time to time change the registered agent or office by an amendment to the certificate of limited partnership of the Partnership.",
"Section 2.6. Withdrawal of Initial Limited Partner. Upon the admission of one or more additional Limited Partners to the Partnership, the Initial Limited Partner shall (a) receive a return of any capital contribution made by it to the Partnership, (b) Withdraw as the Initial Limited Partner of the Partnership and (c) have no further right, interest or obligation of any kind whatsoever as a Partner in the Partnership; provided, that the effective date of such Withdrawal shall be deemed as between the parties hereto to be April 17, 2013. ARTICLE III MANAGEMENT Section 3.1. General Partners. The General Partner shall be the general partner of the Partnership. The General Partner may not be removed without its consent. Section 3.2.",
"Limitations on Limited Partners. Except as may be expressly required or permitted by the Partnership Act, Limited Partners as such shall have no right to, and shall not, take part in the management, conduct or control of the Partnership’s business or act for or bind the Partnership, and shall have only the rights and powers granted to Limited Partners herein. Section 3.3. Partner Voting. (a) To the extent a Partner is entitled to vote with respect to any matter relating to the Partnership, such Partner shall not be obligated to abstain from voting on any matter (or vote in any particular manner) because of any interest (or conflict of interest) of such Partner (or any Affiliate thereof) in such matter. (b) Meetings of the Partners may be called only by the General Partner. (c) Notwithstanding any other provision of this Agreement, any Limited Partner or Withdrawn Partner that fails to respond to a notice provided by the General Partner requesting the consent, approval or vote (including, without limitation, with respect to any amendments pursuant to Section 10.14) of such Limited Partner or Withdrawn Partner within fourteen (14) days after such notice is sent to such Limited Partner or Withdrawn Partner shall be deemed to have given its affirmative consent or approval thereto. Section 3.4. Management. (a) The management, control and operation of the Partnership and the formulation and execution of business and investment policy shall be vested in the General Partner, and the General Partner shall have full control over the business and affairs of the Partnership.",
"The General Partner shall, in the General Partner’s discretion, exercise 26 -------------------------------------------------------------------------------- all powers necessary and convenient for the purposes of the Partnership, including those enumerated in Section 2.4, on behalf and in the name of the Partnership. All decisions and determinations (howsoever described herein) to be made by the General Partner pursuant to this Agreement shall be made in the General Partner’s discretion, subject only to the express terms and conditions of this Agreement. (b) All outside business or investment activities of the Partners (including outside directorships or trusteeships) shall be subject to such rules and regulations as are established by the General Partner from time to time. (c) Notwithstanding any provision in this Agreement to the contrary, the General Partner on behalf of the Partnership is hereby authorized, without the need for any further act, vote or consent of any person directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as a general partner, capital partner and/or limited partner of BREDS II, or in the Partnership’s capacity as a general partner or limited partner, member or other equity owner of any Partnership Affiliate (as hereinafter defined), (i) to execute and deliver, and to perform the Partnership’s obligations under, the BREDS II Agreements, including, without limitation, serving as a general partner of BREDS II, (ii) to execute and deliver, and to perform the Partnership’s obligations under, the governing agreement, as amended, supplemented, restated or otherwise modified (each a “Partnership Affiliate Governing Agreement”), of any other partnership, limited liability company, other company, corporation or other entity (each a “Partnership Affiliate”) of which the Partnership is to become a general partner or limited partner, member, shareholder or other equity interest owner, including, without limitation, serving as a general partner or limited partner, member, shareholder or other equity interest owner of each Partnership Affiliate and (iii) to take any action, in the applicable capacity, contemplated by or arising out of this Agreement, the BREDS II Agreements or any Partnership Affiliate Governing Agreement (and any amendment, supplement, restatement and/or other modification of any of the foregoing).",
"(d) The General Partner and any other person designated by the General Partner, each acting individually, is hereby authorized and empowered, as an authorized representative of the Partnership or as an authorized person of the General Partner (within the meaning of the Delaware Limited Liability Company Act, 6 Del.",
"C. §§ 18-101 et seq., as amended, or otherwise) (the General Partner hereby authorizing and ratifying any of the following actions): (i) to prepare or cause to be prepared and to execute and deliver and/or file (including any such action, directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as general partner, capital partner and/or limited partner of BREDS II, or in the Partnership’s capacity as general partner or limited partner, member, shareholder or other equity owner of any Partnership Affiliate, any of the following): (A) any agreement, certificate, instrument or other document of the Partnership, BREDS II or any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications thereof), including, without limitation, the following: (I) the BREDS II Agreements and each Partnership 27 -------------------------------------------------------------------------------- Affiliate Governing Agreement, (II) subscription agreements and documents on behalf of BREDS II and/or the Partnership, (III) side letters issued in connection with investments in BREDS II on behalf of BREDS II and/or the Partnership and (IV) such other agreements, certificates, instruments and other documents as may be necessary or desirable in furtherance of the purposes of the Partnership, BREDS II or any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing referred to in (I) through (IV) hereof); (B) the certificates of formation, certificates of limited partnership and/or other organizational documents of the Partnership, BREDS II or any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications thereof); and (C) any other certificates, notices, applications or other documents (and any amendments, supplements, restatements and/or other modifications thereof) to be filed with any government or governmental or regulatory body, including, without limitation, any such document that may be necessary for the Partnership, BREDS II or any Partnership Affiliate to qualify to do business in a jurisdiction in which the Partnership, BREDS II or such Partnership Affiliate desires to do business; (ii) to prepare or cause to be prepared, and to sign, execute and deliver and/or file (including any such action, directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as a general partner, capital partner and/or limited partner of BREDS II or in the Partnership’s capacity as a general partner or limited partner, member, shareholder or other equity owner of any Partnership Affiliate): (A) any certificates, forms, notices, applications or other documents to be filed with any government or governmental or regulatory body on behalf of the Partnership, BREDS II and/or any Partnership Affiliate, (B) any certificates, forms, notices, applications or other documents that may be necessary or advisable in connection with any bank account of the Partnership, BREDS II or any Partnership Affiliate or any banking facilities or services that may be utilized by the Partnership, BREDS II or any Partnership Affiliate, and all checks, notes, drafts or other documents of the Partnership, BREDS II or any Partnership Affiliate that may be required in connection with any such bank account, banking facilities or services and (C) resolutions with respect to any of the foregoing matters (which resolutions, when executed by any person authorized as provided in this Section 3.4(d), each acting individually, shall be deemed to have been duly adopted by the General Partner, the Partnership, BREDS II or any Partnership Affiliate, as applicable, for all purposes).",
"The authority granted to any person (other than the General Partner) in this Section 3.4(d) may be revoked at any time by the General Partner by an instrument in writing signed by the General Partner. 28 -------------------------------------------------------------------------------- Section 3.5. Responsibilities of Partners. (a) Unless otherwise determined by the General Partner in a particular case, each Limited Partner shall devote substantially all his or her time and attention to the businesses of the Partnership and its Affiliates. (b) All outside business or investment activities of the Partners (including outside directorships or trusteeships), shall be subject to such rules and regulations as are established by the General Partner from time to time. (c) The General Partner may from time to time establish such other rules and regulations applicable to Partners or other employees as the General Partner deems appropriate, including rules governing the authority of Partners or other employees to bind the Partnership to financial commitments or other obligations. Section 3.6.",
"Exculpation and Indemnification. (a) Liability to Partners. Notwithstanding any other provision of this Agreement, whether express or implied, to the fullest extent permitted by law, no Partner nor any of such Partner’s representatives, agents or advisors nor any partner, member, officer, employee, representative, agent or advisor of the Partnership or any of its Affiliates (individually, a “Covered Person” and collectively, the “Covered Persons”) shall be liable to the Partnership or any other Partner for any act or omission (in relation to the Partnership, this Agreement, any related document or any transaction or investment contemplated hereby or thereby) taken or omitted by a Covered Person (other than any act or omission constituting Cause), unless there is a final and non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interests of the Partnership and within the authority granted to such Covered Person by this Agreement, and, with respect to any criminal act or proceeding, had reasonable cause to believe that such Covered Person’s conduct was unlawful.",
"Each Covered Person shall be entitled to rely in good faith on the advice of legal counsel to the Partnership, accountants and other experts or professional advisors, and no action taken by any Covered Person in reliance on such advice shall in any event subject such person to any liability to any Partner or the Partnership. To the extent that, at law or in equity, a Partner has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or to another Partner, to the fullest extent permitted by law, such Partner acting under this Agreement shall not be liable to the Partnership or to any such other Partner for its good faith reliance on the provisions of this Agreement.",
"The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of a Partner otherwise existing at law or in equity, are agreed by the Partners, to the fullest extent permitted by law, to modify to that extent such other duties and liabilities of such Partner. To the fullest extent permitted by law, the parties hereto agree that the General Partner shall be held to have acted in good faith for the purposes of this Agreement and its duties under the Partnership Act if it acts honestly and in accordance with the specific terms of this Agreement.",
"(b) Indemnification. (i) To the fullest extent permitted by law, the Partnership shall indemnify and hold harmless (but only to the extent of the Partnership’s assets (including, without limitation, the remaining GP-Related Commitments and Capital Commitment-Related Commitments of the Partners)) each Covered Person from and against any 29 -------------------------------------------------------------------------------- and all claims, damages, losses, costs, expenses and liabilities (including, without limitation, amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against any claim or alleged claim), joint and several, of any nature whatsoever, known or unknown, liquidated or unliquidated (collectively, for purposes of this Section 3.6, “Losses”), arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of such Covered Person’s management of the affairs of the Partnership or which relate to or arise out of or in connection with the Partnership, its property, its business or affairs (other than claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, arising out of any act or omission of such Covered Person constituting Cause); provided, that a Covered Person shall not be entitled to indemnification under this Section 3.6(b) with respect to any claim, issue or matter if there is a final and non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interest of the Partnership and within the authority granted to such Covered Person by this Agreement, and, with respect to any criminal act or proceeding, had reasonable cause to believe that such Covered Person’s conduct was unlawful; provided further, that if such Covered Person is a Partner or a Withdrawn Partner, such Covered Person shall bear its share of such Losses in accordance with such Covered Person’s GP-Related Profit Sharing Percentage in the Partnership as of the time of the actions or omissions that gave rise to such Losses.",
"To the fullest extent permitted by law, expenses (including legal fees) incurred by a Covered Person (including, without limitation, the General Partner) in defending any claim, demand, action, suit or proceeding may, with the approval of the General Partner, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of a written undertaking by or on behalf of the Covered Person to repay such amount to the extent that it shall be subsequently determined that the Covered Person is not entitled to be indemnified as authorized in this Section 3.6(b), and the Partnership and its Affiliates shall have a continuing right of offset against such Covered Person’s interests/investments in the Partnership and such Affiliates and shall have the right to withhold amounts otherwise distributable to such Covered Person to satisfy such repayment obligation.",
"If a Partner institutes litigation against a Covered Person which gives rise to an indemnity obligation hereunder, such Partner shall be responsible, up to the amount of such Partner’s Interests and remaining GP-Related Commitments and Capital Commitment-Related Commitments, for such Partner’s pro rata share of the Partnership’s expenses related to such indemnity obligation, as determined by the General Partner. The Partnership may purchase insurance, to the extent available at reasonable cost, to cover losses, claims, damages or liabilities covered by the foregoing indemnification provisions. Partners will not be personally obligated with respect to indemnification pursuant to this Section 3.6(b). The General Partner shall have the authority to enter into separate agreements with any Covered Person in order to give effect to the obligations to indemnify pursuant to this Section 3.6(b).",
"(ii) (A) Notwithstanding anything to the contrary herein, for greater certainty, it is understood and/or agreed that the Partnership’s obligations hereunder are not intended to render the Partnership as a primary indemnitor for purposes of the indemnification, advancement of expenses and related provisions under applicable law governing BREDS II and/or a particular portfolio entity through which an Investment is 30 -------------------------------------------------------------------------------- indirectly held. It is further understood and/or agreed that a Covered Person shall first seek to be so indemnified and have such expenses advanced in the following order of priority: first, out of proceeds available in respect of applicable insurance policies maintained by the applicable portfolio entity and/or BREDS II; second, by the applicable portfolio entity through which such investment is indirectly held and third, by BREDS II (only to the extent the foregoing sources have been exhausted). (B) The Partnership’s obligation, if any, to indemnify or advance expenses to any Covered Person shall be reduced by any amount that such Covered Person may collect as indemnification or advancement from BREDS II and/or the applicable portfolio entity (including by virtue of any applicable insurance policies maintained thereby), and to the extent the Partnership (or any Affiliate thereof) pays or causes to be paid any amounts that should have been paid by BREDS II and/or the applicable portfolio entity (including by virtue of any applicable insurance policies maintained thereby), it is agreed among the Partners that the Partnership shall have a subrogation claim against BREDS II and/or such portfolio entity in respect of such advancement or payments.",
"The General Partner and the Partnership shall be specifically empowered to structure any such advancement or payment as a loan or other arrangement (except for a loan to an executive officer of The Blackstone Group L.P. or any of its Affiliates, which shall not be permitted) as the General Partner may determine necessary or advisable to give effect to or otherwise implement the foregoing. Section 3.7. Representations of Limited Partners. (a) Each Limited Partner by execution of this Agreement (or by otherwise becoming bound by the terms and conditions hereof as provided herein or in the Partnership Act) represents and warrants to every other Partner and to the Partnership, except as may be waived by the General Partner, that such Limited Partner is acquiring each of such Limited Partner’s Interests for such Limited Partner’s own account for investment and not with a view to resell or distribute the same or any part hereof, and that no other person has any interest in any such Interest or in the rights of such Limited Partner hereunder; provided, that a Partner may choose to make transfers for estate and charitable planning purposes (pursuant to Section 6.3(a) and otherwise in accordance with the terms of this Agreement). Each Limited Partner represents and warrants that such Limited Partner understands that the Interests have not been registered under the Securities Act, and therefore such Interests may not be resold without registration under the Securities Act or exemption from such registration, and that accordingly such Limited Partner must bear the economic risk of an investment in the Partnership for an indefinite period of time.",
"Each Limited Partner represents that such Limited Partner has such knowledge and experience in financial and business matters that such Limited Partner is capable of evaluating the merits and risks of an investment in the Partnership, and that such Limited Partner is able to bear the economic risk of such investment. Each Limited Partner represents that such Limited Partner’s overall commitment to the Partnership and other investments which are not readily marketable is not disproportionate to the Limited Partner’s net worth and the Limited Partner has no need for liquidity in the Limited Partner’s investment in Interests. Each Limited Partner represents that to the full satisfaction of the Limited Partner, the Limited Partner has been furnished any materials that such Limited Partner has requested relating to the Partnership, any Investment and the 31 -------------------------------------------------------------------------------- offering of Interests and has been afforded the opportunity to ask questions of representatives of the Partnership concerning the terms and conditions of the offering of Interests and any matters pertaining to each Investment and to obtain any other additional information relating thereto. Each Limited Partner represents that the Limited Partner has consulted to the extent deemed appropriate by the Limited Partner with the Limited Partner’s own advisers as to the financial, tax, legal and related matters concerning an investment in Interests and on that basis believes that an investment in the Interests is suitable and appropriate for the Limited Partner.",
"(b) Each Partner agrees that the representations and warranties contained in paragraph (a) above shall be true and correct as of any date that such Partner (1) makes a capital contribution to the Partnership (whether as a result of Firm Advances made to such Partner or otherwise) with respect to any Investment, and such Partner hereby agrees that such capital contribution shall serve as confirmation thereof and/or (2) repays any portion of the principal amount of a Firm Advance, and such Partner hereby agrees that such repayment shall serve as confirmation thereof. Section 3.8. Tax Representation and Further Assurances.",
"(a) Each Limited Partner, upon the request of the General Partner, agrees to perform all further acts and to execute, acknowledge and deliver any documents that may be reasonably necessary to comply with the General Partner’s or the Partnership’s obligations under applicable law or to carry out the provisions of this Agreement. (b) Each Limited Partner certifies that (A) if the Limited Partner is a United States person (as defined in the Code) (x) (i) the Limited Partner’s name, social security number (or, if applicable, employer identification number) and address provided to the Partnership and its Affiliates pursuant to an IRS Form W-9, Request for Taxpayer Identification Number Certification (“W-9”) or otherwise are correct and (ii) the Limited Partner will complete and return a W-9 and (y) (i) the Limited Partner is a United States person (as defined in the Code) and (ii) the Limited Partner will notify the Partnership within 60 days of a change to foreign (non-United States) status or (B) if the Limited Partner is not a United States person (as defined in the Code) (x) (i) the information on the completed IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) (“W-8BEN”), IRS Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) (“W-8BEN-E”), or other applicable form, including but not limited to IRS Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S.",
"Branches for United States Tax Withholding and Reporting (“W-8IMY”), or otherwise is correct and (ii) the Limited Partner will complete and return the applicable IRS form, including but not limited to a W-8BEN, W-8BEN-E or W-8IMY and (y) (i) the Limited Partner is not a United States person (as defined in the Code) and (ii) the Limited Partner will notify the Partnership within 60 days of any change of such status. The Limited Partner agrees to provide such cooperation and assistance, including but not limited to properly executing and providing to the Partnership in a timely manner any tax or other information reporting documentation or information that may be reasonably requested by the Partnership or the General Partner. 32 -------------------------------------------------------------------------------- (c) Each Limited Partner acknowledges and agrees that the Partnership and the General Partner may release confidential information or other information about the Limited Partner or related to such Limited Partner’s investment in the Partnership if the Partnership or the General Partner, in its or their sole discretion, determines that such disclosure is required by applicable law or regulation or in order to comply for an exception from, or reduced tax rate of, tax or other tax benefit. Any such disclosure shall not be treated as a breach of any restriction upon the disclosure of information imposed on any such person by law or otherwise, and a Limited Partner shall have no claim against the Partnership, the General Partner or any of their Affiliates for any form of damages or liability as a result of actions taken by the foregoing in order to comply with any disclosure obligations that the foregoing reasonably believe are required by law, regulation or otherwise.",
"(d) Each Limited Partner acknowledges and agrees that if it provides information that is in anyway materially misleading, or if it fails to provide the Partnership or its agents with any information requested hereunder, in either case in order to satisfy the Partnership’s obligations, the General Partner reserves the right to take any action and pursue any remedies at its disposal, including (i) requiring such Limited Partner to Withdraw for Cause and (ii) withholding or deducting any costs caused by such Limited Partner’s action or inaction from amounts otherwise distributable to such Limited Partner from the Partnership and its Affiliates. ARTICLE IV CAPITAL OF THE PARTNERSHIP Section 4.1.",
"Capital Contributions by Partners. (a) Each Partner shall be required to make capital contributions to the Partnership (“GP-Related Capital Contributions”) at such times and in such amounts (the “GP-Related Required Amounts”) as are required to satisfy the Partnership’s obligation to make capital contributions to BREDS II in respect of the GP-Related BREDS II Interest with respect to any GP-Related BREDS II Investment and as are otherwise determined by the General Partner from time to time or as may be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any, or otherwise; provided, that additional GP-Related Capital Contributions in excess of the GP-Related Required Amounts may be made pro rata among the Partners based upon each Partner’s Carried Interest Sharing Percentage. GP-Related Capital Contributions in excess of the GP-Related Required Amounts which are to be used for ongoing business operations as distinct from financing, legal or other specific liabilities of the Partnership (including those specifically set forth in Section 4.1(d) and Section 5.8(d)) shall be determined by the General Partner. Limited Partners shall not be required to make additional GP-Related Capital Contributions to the Partnership in excess of the GP-Related Required Amounts, except (i) as a condition of an increase in such Limited Partner’s GP-Related Profit Sharing Percentage or (ii) as specifically set forth in this Agreement; provided, however, that the General Partner and any Limited Partner may agree from time to time that such Limited Partner shall make an additional GP-Related Capital Contribution to the Partnership; and provided, further, that each Investor Special Limited Partner shall maintain its GP-Related Capital Accounts at an aggregate level equal to the product of (i) its GP-Related Profit Sharing Percentage from time to time and (ii) the total capital of the Partnership related to the GP-Related BREDS II Interest.",
"33 -------------------------------------------------------------------------------- (b) The General Partner may elect on a case by case basis to (i) cause the Partnership to loan any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group L.P. or any Affiliate thereof) the amount of any GP-Related Capital Contribution required to be made by such Partner or (ii) permit any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group L.P. or any Affiliate thereof) to make a required GP-Related Capital Contribution to the Partnership in installments, in each case on terms determined by the General Partner. (c) Each GP-Related Capital Contribution by a Partner shall be credited to the appropriate GP-Related Capital Account of such Partner in accordance with Section 5.2, subject to Section 5.10.",
"(d) (i) The Partners and the Withdrawn Partners have entered into the Trust Agreement, pursuant to which certain amounts of the distributions relating to the Carried Interest will be paid to the Trustee(s) for deposit in the Trust Account (such amounts to be paid to the Trustee(s) for deposit in the Trust Account constituting a “Holdback”). The General Partner shall determine, as set forth below, the percentage of each distribution of Carried Interest that shall be withheld for any General Partner (including, without limitation, the General Partner) and each Partner Category (such withheld percentage constituting a General Partner’s and such Partner Category’s “Holdback Percentage”). The applicable Holdback Percentages initially shall be 0% for any General Partner, 15% for Existing Partners (other than any General Partner), 21% for Retaining Withdrawn Partners (other than any General Partner) and 24% for Deceased Partners (the “Initial Holdback Percentages”).",
"Any provision of this Agreement to the contrary notwithstanding, the Holdback Percentage for any General Partner (including, without limitation, the General Partner) shall not be subject to change pursuant to clause (ii), (iii) or (iv) of this Section 4.1(d). (ii) The Holdback Percentage may not be reduced for any individual Partner as compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may only reduce the Holdback Percentages among the Partner Categories on a proportionate basis.",
"For example, if the Holdback Percentage for Existing Partners is decreased to 12.5%, the Holdback Percentage for Retaining Withdrawn Partners and Deceased Partners shall be reduced to 17.5% and 20%, respectively. Any reduction in the Holdback Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such reduction. (iii) The Holdback Percentage may not be increased for any individual Partner as compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may not increase the Retaining Withdrawn Partners’ Holdback Percentage beyond 21% unless the General Partner concurrently increases the Existing Partners’ Holdback Percentage to 21%. The General Partner may not increase the Deceased Partners’ Holdback Percentage beyond 24% unless the General Partner increases the Holdback Percentage for both Existing Partners and Retaining Withdrawn Partners to 24%.",
"The General Partner may not increase the 34 -------------------------------------------------------------------------------- Holdback Percentage of any Partner Category beyond 24% unless such increase applies equally to all Partner Categories. Any increase in the Holdback Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such increase. The foregoing shall in no way prevent the General Partner from proportionately increasing the Holdback Percentage of any Partner Category (following a reduction of the Holdback Percentages below the Initial Holdback Percentages), if the resulting Holdback Percentages are consistent with the above. For example, if the General Partner reduces the Holdback Percentages for Existing Partners, Retaining Withdrawn Partners and Deceased Partners to 12.5%, 17.5% and 20%, respectively, the General Partner shall have the right to subsequently increase the Holdback Percentages to the Initial Holdback Percentages.",
"(iv) (A) Notwithstanding anything contained herein to the contrary, the General Partner may increase or decrease the Holdback Percentage for any Partner in any Partner Category (in such capacity, the “Subject Partner”) pursuant to the vote of a majority in interest of the Special Limited Partners and the General Partner (a “Holdback Vote”); provided, that, notwithstanding anything to the contrary contained herein, the Holdback Percentage applicable to any General Partner shall not be increased or decreased without its prior written consent; provided further, that a Subject Partner’s Holdback Percentage shall not be (I) increased prior to such time as such Subject Partner (x) is notified by the Partnership of the decision to increase such Subject Partner’s Holdback Percentage and (y) has, if requested by such Subject Partner, been given 30 days to gather and provide information to the Partnership for consideration before a second Holdback Vote (requested by the Subject Partner) or (II) decreased unless such decrease occurs subsequent to an increase in a Subject Partner’s Holdback Percentage pursuant to a Holdback Vote under this clause (iv); provided further, that such decrease shall not exceed an amount such that such Subject Partner’s Holdback Percentage is less than the prevailing Holdback Percentage for such Subject Partner’s Partner Category; provided further, that a Partner shall not vote to increase a Subject Partner’s Holdback Percentage unless such voting Partner determines, in such Partner’s good faith judgment, that the facts and circumstances indicate that it is reasonably likely that such Subject Partner, or any of such Subject Partner’s successors or assigns (including such Subject Partner’s estate or heirs) who at the time of such vote holds the GP-Related Partner Interest or otherwise has the right to receive distributions relating thereto, will not be capable of satisfying any GP-Related Recontribution Amounts that may become due.",
"(B) A Holdback Vote shall take place at a Partnership meeting. Each of the Special Limited Partners and the General Partner shall be entitled to cast one vote with respect to the Holdback Vote regardless of such Partner’s interest in the Partnership. Such vote may be cast by any such Partner in person or by proxy. (C) If the result of the second Holdback Vote is an increase in a Subject Partner’s Holdback Percentage, such Subject Partner may submit the decision to an arbitrator, the identity of which is mutually agreed upon by both the Subject Partner and the Partnership; provided, that if the Partnership and the Subject Partner cannot agree upon a mutually satisfactory arbitrator within 10 35 -------------------------------------------------------------------------------- days of the second Holdback Vote, each of the Partnership and the Subject Partner shall request its candidate for arbitrator to select a third arbitrator satisfactory to such candidates; provided further, that if such candidates fail to agree upon a mutually satisfactory arbitrator within 30 days of such request, the then sitting President of the American Arbitration Association shall unilaterally select the arbitrator. Each Subject Partner that submits the decision of the Partnership pursuant to the second Holdback Vote to arbitration and the Partnership shall estimate their reasonably projected out-of-pocket expenses relating thereto and each such party shall, to the satisfaction of the arbitrator and prior to any determination being made by the arbitrator, pay the total of such estimated expenses (i.e., both the Subject Partner’s and the Partnership’s expenses) into an escrow account to be controlled by Simpson Thacher & Bartlett LLP, as escrow agent (or such other comparable law firm as the Partnership and the Subject Partner shall agree).",
"The arbitrator shall direct the escrow agent to pay out of such escrow account all expenses associated with such arbitration (including costs leading thereto) and to return to the “victorious” party the entire amount of funds such party paid into such escrow account. If the amount contributed to the escrow account by the losing party is insufficient to cover the expenses of such arbitration, such “losing” party shall then provide any additional funds necessary to cover such costs to such “victorious” party. For purposes hereof, the “victorious” party shall be the Partnership, if the Holdback Percentage ultimately determined by the arbitrator is closer to the percentage determined in the second Holdback Vote than it is to the prevailing Holdback Percentage for the Subject Partner’s Partner Category; otherwise, the Subject Partner shall be the “victorious” party. The party that is not the “victorious” party shall be the “losing” party. (D) In the event of a decrease in a Subject Partner’s Holdback Percentage (1) pursuant to a Holdback Vote under this clause (iv) or (2) pursuant to a decision of an arbitrator under paragraph (C) of this clause (iv), the Partnership shall release and distribute to such Subject Partner any Trust Amounts (and the Trust Income thereon (except as expressly provided herein with respect to using Trust Income as Firm Collateral)) which exceed the required Holdback of such Subject Partner (in accordance with such Subject Partner’s reduced Holdback Percentage) as though such reduced Holdback Percentage had applied since the increase of the Subject Partner’s Holdback Percentage pursuant to a previous Holdback Vote under this clause (iv).",
"(v) (A) If a Partner’s Holdback Percentage exceeds 15% (such percentage in excess of 15% constituting the “Excess Holdback Percentage”), such Partner may satisfy the portion of his or her Holdback obligation in respect of his or her Excess Holdback Percentage (such portion constituting such Partner’s “Excess Holdback”), and such Partner (or a Withdrawn Partner with respect to amounts contributed to the Trust Account while he or she was a Partner), to the extent his or her Excess Holdback obligation has previously been satisfied in cash, may obtain the release of the Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) satisfying such Partner’s or 36 -------------------------------------------------------------------------------- Withdrawn Partner’s Excess Holdback obligation, by pledging, granting a security interest or otherwise making available to the General Partner, on a first priority basis (except as provided below), all or any portion of his or her Firm Collateral in satisfaction of his or her Excess Holdback obligation.",
"Any Partner seeking to satisfy all or any portion of the Excess Holdback utilizing Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Partnership to realize on (if required), such Firm Collateral; provided, that in the case of entities listed in the books and records of the Partnership, in which Partners/members are permitted to pledge or grant a security interest over their interests therein to finance all or a portion of their capital contributions thereto (“Pledgable Blackstone Interests”), to the extent a first priority security interest is unavailable because of an existing lien on such Firm Collateral, the Partner or Withdrawn Partner seeking to utilize such Firm Collateral shall grant the General Partner a second priority security interest therein in the manner provided above; provided further, that (x) in the case of Pledgable Blackstone Interests, to the extent that neither a first priority nor a second priority security interest is available or (y) if the General Partner otherwise determines in its good faith judgment that a security interest in Firm Collateral (and the corresponding documents and actions) are not necessary or appropriate, the Partner or Withdrawn Partner shall (in the case of either clause (x) or (y) above) irrevocably instruct in writing the relevant partnership, limited liability company or other entity listed in the books and records of the Partnership to remit any and all net proceeds resulting from a Firm Collateral Realization on such Firm Collateral to the Trustee(s) as more fully provided in clause (B) below. The Partnership shall, at the request of any Partner or Withdrawn Partner, assist such Partner or Withdrawn Partner in taking such action as is necessary to enable such Partner or Withdrawn Partner to use Firm Collateral as provided hereunder.",
"(B) If upon a sale or other realization of all or any portion of any Firm Collateral (a “Firm Collateral Realization”), the remaining Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement, then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Firm Collateral Realization (including distributions subject to the repayment of financing sources as in the case of Pledgable Blackstone Interests) shall be paid into the Trust Account to fully satisfy such Excess Holdback requirement (allocated to such Partner or Withdrawn Partner) and shall be deemed to be Trust Amounts for purposes hereunder.",
"Any net proceeds from such Firm Collateral Realization in excess of the amount necessary to satisfy such Excess Holdback requirement shall be distributed to such Partner or Withdrawn Partner. (C) Upon any valuation or revaluation of Firm Collateral that results in a decreased valuation of such Firm Collateral so that such Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement (including upon a Firm Collateral Realization, if net proceeds therefrom and the remaining Firm Collateral are insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement), the Partnership 37 -------------------------------------------------------------------------------- shall provide notice of the foregoing to such Partner or Withdrawn Partner and such Partner or Withdrawn Partner shall, within 30 days of receiving such notice, contribute cash (or additional Firm Collateral) to the Trust Account in an amount necessary to satisfy his or her Excess Holdback requirement. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that clause (A) of Section 5.8(d)(ii) shall be deemed inapplicable to a default under this clause (C); provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term “GP-Related Defaulting Party” where such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).",
"(vi) Any Limited Partner or Withdrawn Partner may (A) obtain the release of any Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) or Firm Collateral, in each case, held in the Trust Account for the benefit of such Partner or Withdrawn Partner or (B) require the Partnership to distribute all or any portion of amounts otherwise required to be placed in the Trust Account (whether cash or Firm Collateral), by obtaining a letter of credit (an “L/C”) for the benefit of the Trustee(s) in such amounts. Any Partner or Withdrawn Partner choosing to furnish an L/C to the Trustee(s) (in such capacity, an “L/C Partner”) shall deliver to the Trustee(s) an unconditional and irrevocable L/C from a commercial bank whose (x) short-term deposits are rated at least A-1 by S&P and P-1 by Moody’s (if the L/C is for a term of 1 year or less) or (y) long-term deposits are rated at least A+ by S&P or A1 by Moody’s (if the L/C is for a term of 1 year or more) (each a “Required Rating”).",
"If the relevant rating of the commercial bank issuing such L/C drops below the relevant Required Rating, the L/C Partner shall supply to the Trustee(s), within 30 days of such occurrence, a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, in lieu of the insufficient L/C. In addition, if the L/C has a term expiring on a date earlier than the latest possible termination date of BREDS II, the Trustee(s) shall be permitted to drawdown on such L/C if the L/C Partner fails to provide a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, at least 30 days prior to the stated expiration date of such existing L/C. The Trustee(s) shall notify an L/C Partner 10 days prior to drawing on any L/C. The Trustee(s) may (as directed by the Partnership in the case of clause (I) below) draw down on an L/C only if (I) such a drawdown is necessary to satisfy an L/C Partner’s obligation relating to the Partnership’s obligations under the Clawback Provisions or (II) an L/C Partner has not provided a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating (or the requisite amount of cash and/or Firm Collateral (to the extent permitted hereunder)), at least 30 days prior to the stated expiration of an existing L/C in accordance with this clause (vi).",
"The Trustee(s), as directed by the Partnership, shall return to any L/C Partner his or her L/C upon (1) the termination of the Trust Account and satisfaction of the Partnership’s obligations, if any, in respect of the Clawback Provisions, (2) an L/C Partner satisfying his or her entire Holdback obligation in cash and Firm Collateral (to the extent permitted hereunder) or (3) the release, by the Trustee(s), as 38 -------------------------------------------------------------------------------- directed by the Partnership, of all amounts in the Trust Account to the Partners or Withdrawn Partners. If an L/C Partner satisfies a portion of his or her Holdback obligation in cash and/or Firm Collateral (to the extent permitted hereunder) or if the Trustee(s), as directed by the Partnership, release a portion of the amounts in the Trust Account to the Partners or Withdrawn Partners in the Partner Category of such L/C Partner, the L/C of an L/C Partner may be reduced by an amount corresponding to such portion satisfied in cash and/or Firm Collateral (to the extent permitted hereunder) or such portion released by the Trustee(s), as directed by the Partnership; provided, that in no way shall the general release of any Trust Income cause an L/C Partner to be permitted to reduce the amount of an L/C by any amount. (vii) (A) Any in-kind distributions by the Partnership relating to Carried Interest shall be made in accordance herewith as though such distributions consisted of cash. The Partnership may direct the Trustee(s) to dispose of any in-kind distributions held in the Trust Account at any time. The net proceeds therefrom shall be treated as though initially contributed to the Trust Account. (B) In lieu of the foregoing, any Existing Partner may pledge with respect to any in-kind distribution the Special Firm Collateral referred to in the applicable category in the books and records of the Partnership; provided, that the initial contribution of such Special Firm Collateral shall initially equal 130% of the required Holdback Amount for a period of 90 days, and thereafter shall equal at least 115% of the required Holdback Amount.",
"Paragraphs 4.1(d)(viii)(C) and (D) shall apply to such Special Firm Collateral. To the extent such Special Firm Collateral exceeds the applicable minimum percentage of the required Holdback Amount specified in the first sentence of this clause (vii)(B), the related Partner may obtain a release of such excess amount from the Trust Account. (viii) (A) Any Limited Partner or Withdrawn Partner may satisfy all or any portion of his or her Holdback (excluding any Excess Holdback), and such Partner or a Withdrawn Partner may, to the extent his or her Holdback (excluding any Excess Holdback) has been previously satisfied in cash or by the use of an L/C as provided herein, obtain a release of Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) that satisfy such Partner’s or Withdrawn Partner’s Holdback (excluding any Excess Holdback) by pledging or granting a security interest to the Trustee(s) on a first priority basis all of his or her Special Firm Collateral in a particular Qualifying Fund, which at all times must equal or exceed the amount of the Holdback distributed to the Partner or Withdrawn Partner (as more fully set forth below).",
"Any Partner seeking to satisfy such Partner’s Holdback utilizing Special Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Trustee(s) to realize on (if required), such Special Firm Collateral. 39 -------------------------------------------------------------------------------- (B) If upon a distribution, withdrawal, sale, liquidation or other realization of all or any portion of any Special Firm Collateral (a “Special Firm Collateral Realization”), the remaining Special Firm Collateral (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund and is being used in connection with an Excess Holdback) is insufficient to cover any Partner’s or Withdrawn Partner’s Holdback (when taken together with other means of satisfying the Holdback as provided herein (i.e., cash contributed to the Trust Account or an L/C in the Trust Account)), then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Special Firm Collateral Realization (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund or other asset and is being used in connection with an Excess Holdback) shall be paid into the Trust (and allocated to such Partner or Withdrawn Partner) to fully satisfy such Holdback and shall be deemed thereafter to be Trust Amounts for purposes hereunder.",
"Any net proceeds from such Special Firm Collateral Realization in excess of the amount necessary to satisfy such Holdback (excluding any Excess Holdback) shall be distributed to such Partner or Withdrawn Partner. To the extent a Qualifying Fund distributes Securities to a Partner or Withdrawn Partner in connection with a Special Firm Collateral Realization, such Partner or Withdrawn Partner shall be required to promptly fund such Partner’s or Withdrawn Partner’s deficiency with respect to his or her Holdback in cash or an L/C. (C) Upon any valuation or revaluation of the Special Firm Collateral and/or any adjustment in the Applicable Collateral Percentage applicable to a Qualifying Fund (as provided in the books and records of the Partnership), if such Partner’s or Withdrawn Partner’s Special Firm Collateral is valued at less than such Partner’s Holdback (excluding any Excess Holdback) as provided in the books and records of the Partnership, taking into account other permitted means of satisfying the Holdback hereunder, the Partnership shall provide notice of the foregoing to such Partner or Withdrawn Partner and, within 10 Business Days of receiving such notice, such Partner or Withdrawn Partner shall contribute cash or additional Special Firm Collateral to the Trust Account in an amount necessary to make up such deficiency. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that clause (A) of Section 5.8(d)(ii) shall be deemed inapplicable to such default; provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term “GP-Related Defaulting Party” where such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).",
"(D) Upon a Partner becoming a Withdrawn Partner, at any time thereafter the General Partner may revoke the ability of such Withdrawn Partner to use Special Firm Collateral as set forth in this Section 4.1(d)(viii), notwithstanding anything else in this Section 4.1(d)(viii). In that case the provisions of clause (C) above shall apply to the Withdrawn Partner’s obligation to satisfy the Holdback (except that 30 days’ notice of such revocation shall be given), given that the Special Firm Collateral is no longer available to satisfy any portion of the Holdback (excluding any Excess Holdback).",
"40 -------------------------------------------------------------------------------- (E) Nothing in this Section 4.1(d)(viii) shall prevent any Partner or Withdrawn Partner from using any amount of such Partner’s interest in a Qualifying Fund as Firm Collateral; provided, that at all times Section 4.1(d)(v) and this Section 4.1(d)(viii) are each satisfied. Section 4.2. Interest. Interest on the balances of the Partners’ capital related to the Partners’ GP-Related Partner Interests (excluding capital invested in GP-Related Investments and, if deemed appropriate by the General Partner, capital invested in any other investment of the Partnership) shall be credited to the Partners’ GP-Related Capital Accounts at the end of each accounting period pursuant to Section 5.2, or at any other time as determined by the General Partner, at rates determined by the General Partner from time to time, and shall be charged as an expense of the Partnership. Section 4.3.",
"Withdrawals of Capital. No Partner may withdraw capital related to such Partner’s GP-Related Partner Interests from the Partnership except (i) for distributions of cash or other property pursuant to Section 5.8, (ii) as otherwise expressly provided in this Agreement or (iii) as determined by the General Partner. ARTICLE V PARTICIPATION IN PROFITS AND LOSSES Section 5.1. General Accounting Matters. (a) GP-Related Net Income (Loss) shall be determined by the General Partner at the end of each accounting period and shall be allocated as described in Section 5.4. (b) “GP-Related Net Income (Loss)” from any activity of the Partnership related to the GP-Related BREDS II Interest for any accounting period (other than GP-Related Net Income (Loss) from GP-Related Investments described below) means (i) the gross income realized by the Partnership from such activity during such accounting period less (ii) all expenses of the Partnership, and all other items that are deductible from gross income, for such accounting period that are allocable to such activity (determined as provided below).",
"(c) “GP-Related Net Income (Loss)” from any GP-Related Investment for any accounting period in which such GP-Related Investment has not been sold or otherwise disposed of means (i) the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period less (ii) all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment (determined as provided below). (d) “GP-Related Net Income (Loss)” from any GP-Related Investment for the accounting period in which such GP-Related Investment is sold or otherwise disposed of means (i) the sum of the gross proceeds from the sale or other disposition of such GP-Related Investment and the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period less (ii) the sum of the cost or other basis to the Partnership of such GP-Related Investment and all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment.",
"41 -------------------------------------------------------------------------------- GP-Related Net Income (Loss) shall be determined in accordance with the accounting method used by the Partnership for federal income tax purposes with the following adjustments: (i) any income of the Partnership that is exempt from federal income taxation and not otherwise taken into account in computing GP-Related Net Income (Loss) shall be added to such taxable income or loss; (ii) if any asset has a value on the books of the Partnership that differs from its adjusted tax basis for federal income tax purposes, any depreciation, amortization or gain resulting from a disposition of such asset shall be calculated with reference to such value; (iii) upon an adjustment to the value of any asset on the books of the Partnership pursuant to Treasury Regulations Section 1.704-1(b)(2), the amount of the adjustment shall be included as gain or loss in computing such taxable income or loss; (iv) any expenditures of the Partnership not deductible in computing taxable income or loss, not properly capitalizable and not otherwise taken into account in computing GP-Related Net Income (Loss) pursuant to this definition shall be treated as deductible items; (v) any income from a GP-Related Investment that is payable to Partnership employees in respect of “phantom interests” in such GP-Related Investment awarded by the General Partner to employees shall be included as an expense in the calculation of GP-Related Net Income (Loss) from such GP-Related Investment and (vi) items of income and expense (including interest income and overhead and other indirect expenses) of the Partnership and Affiliates of the Partnership shall be allocated among the Partnership and such Affiliates, among various Partnership activities and GP-Related Investments and between accounting periods, in each case as determined by the General Partner. Any adjustments to GP-Related Net Income (Loss) by the General Partner, including adjustments for items of income accrued but not yet received, unrealized gains, items of expense accrued but not yet paid, unrealized losses, reserves (including reserves for taxes, bad debts, actual or threatened litigation, or any other expenses, contingencies or obligations) and other appropriate items, shall be made in accordance with GAAP; provided, that the General Partner shall not be required to make any such adjustment.",
"(e) An accounting period shall be a Fiscal Year except that, at the option of the General Partner, an accounting period will terminate and a new accounting period will begin on the admission date of an additional Partner or the Settlement Date of a Withdrawn Partner, if any such date is not the first day of a Fiscal Year. If any event referred to in the preceding sentence occurs and the General Partner does not elect to terminate an accounting period and begin a new accounting period, then the General Partner may make such adjustments as it deems appropriate to the Partners’ GP-Related Profit Sharing Percentages for the accounting period in which such event occurs (prior to any allocations of GP-Related Unallocated Percentages or adjustments to GP-Related Profit Sharing Percentages pursuant to Section 5.3) to reflect the Partners’ average GP-Related Profit Sharing Percentages during such accounting period; provided, that the GP-Related Profit Sharing Percentages of Partners in GP-Related Net Income (Loss) from GP-Related Investments acquired during such accounting period will be based on GP-Related Profit Sharing Percentages in effect when each such GP-Related Investment was acquired.",
"42 -------------------------------------------------------------------------------- (f) In establishing GP-Related Profit Sharing Percentages and allocating GP-Related Unallocated Percentages pursuant to Section 5.3, the General Partner may consider such factors as it deems appropriate. (g) All determinations, valuations and other matters of judgment required to be made for accounting purposes under this Agreement shall be made by the General Partner and approved by the Partnership’s independent accountants. Such approved determinations, valuations and other accounting matters shall be conclusive and binding on all Partners, all Withdrawn Partners, their successors, heirs, estates or legal representatives and any other person, and to the fullest extent permitted by law no such person shall have the right to an accounting or an appraisal of the assets of the Partnership or any successor thereto. Section 5.2. GP-Related Capital Accounts. (a) There shall be established for each Partner on the books of the Partnership, to the extent and at such times as may be appropriate, one or more capital accounts as the General Partner may deem to be appropriate for purposes of accounting for such Partner’s interests in the capital of the Partnership related to the GP-Related BREDS II Interest and the GP-Related Net Income (Loss) of the Partnership (each a “GP-Related Capital Account”).",
"(b) As of the end of each accounting period or, in the case of a contribution to the Partnership by one or more of the Partners with respect to such Partner or Partners’ GP-Related Partner Interests or a distribution by the Partnership to one or more of the Partners with respect to such Partner or Partners’ GP-Related Partner Interests, at the time of such contribution or distribution, (i) the appropriate GP-Related Capital Accounts of each Partner shall be credited with the following amounts: (A) the amount of cash and the value of any property contributed by such Partner to the capital of the Partnership related to the GP-Related BREDS II Interest during such accounting period, (B) the GP-Related Net Income allocated to such Partner for such accounting period and (C) the interest credited on the balance of such Partner’s capital related to such Partner’s GP-Related Partner Interest for such accounting period pursuant to Section 4.2; and (ii) the appropriate GP-Related Capital Accounts of each Partner shall be debited with the following amounts: (x) the amount of cash, the principal amount of any subordinated promissory note of the Partnership referred to in Section 6.5 (as such amount is paid) and the value of any property distributed to such Partner during such accounting period with respect to such Partner’s GP-Related Partner Interest and (y) the GP-Related Net Loss allocated to such Partner for such accounting period. Section 5.3. GP-Related Profit Sharing Percentages.",
"(a) Prior to the beginning of each annual accounting period, the General Partner shall establish the profit sharing percentage (the “GP-Related Profit Sharing Percentage”) of each Partner in each category of GP-Related Net Income (Loss) for such annual accounting period pursuant to Section 5.1(a) taking into account such factors as the General Partner deems appropriate; provided, however, that (i) the General Partner may elect to establish GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment acquired by the Partnership during such accounting period at the time such GP-Related Investment is acquired in accordance with paragraph (b) below and (ii) GP-Related Net 43 -------------------------------------------------------------------------------- Income (Loss) for such accounting period from any GP-Related Investment shall be allocated in accordance with the GP-Related Profit Sharing Percentages in such GP-Related Investment established in accordance with paragraph (b) below.",
"The General Partner may establish different GP-Related Profit Sharing Percentages for any Partner in different categories of GP-Related Net Income (Loss). In the case of the Withdrawal of a Partner, such former Partner’s GP-Related Profit Sharing Percentages shall be allocated by the General Partner to one or more of the remaining Partners as the General Partner shall determine. In the case of the admission of any Partner to the Partnership as an additional Partner, the GP-Related Profit Sharing Percentages of the other Partners shall be reduced by an amount equal to the GP-Related Profit Sharing Percentage allocated to such new Partner pursuant to Section 6.1(b); such reduction of each other Partner’s GP-Related Profit Sharing Percentage shall be pro rata based upon such Partner’s GP-Related Profit Sharing Percentage as in effect immediately prior to the admission of the new Partner. Notwithstanding the foregoing, the General Partner may also adjust the GP-Related Profit Sharing Percentage of any Partner for any annual accounting period at the end of such annual accounting period in its sole discretion.",
"(b) The General Partner may elect to allocate to the Partners less than 100% of the GP-Related Profit Sharing Percentages of any category for any annual accounting period at the time specified in Section 5.3(a) for the annual fixing of GP-Related Profit Sharing Percentages (any remainder of such GP-Related Profit Sharing Percentages being called a “GP-Related Unallocated Percentage”); provided, that any GP-Related Unallocated Percentage in any category of GP-Related Net Income (Loss) for any annual accounting period that is not allocated by the General Partner within 90 days after the end of such accounting period shall be deemed to be allocated among all the Partners (including the General Partner) in the manner determined by the General Partner in its sole discretion. (c) Unless otherwise determined by the General Partner in a particular case, (i) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment shall be allocated in proportion to the Partners’ respective GP-Related Capital Contributions in respect of such GP-Related Investment and (ii) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from each GP-Related Investment shall be fixed at the time such GP-Related Investment is acquired and shall not thereafter change, subject to any repurchase rights established by the General Partner pursuant to Section 5.7. Section 5.4.",
"Allocations of GP-Related Net Income (Loss). (a) Except as provided in Section 5.4(d), GP-Related Net Income of the Partnership for each GP-Related Investment shall be allocated to the GP-Related Capital Accounts related to such GP-Related Investment of all the Partners participating in such GP-Related Investment (including the General Partner): first, in proportion to and to the extent of the amount of Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest distributed to the Partners, second, to Partners that received Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest in years prior to the years such GP-Related Net Income is being allocated to the extent such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest exceeded GP-Related Net Income allocated to such Partners in such earlier years; and third, to the Partners in the same manner that such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest would have been distributed if cash were available to distribute with respect thereto.",
"44 -------------------------------------------------------------------------------- (b) GP-Related Net Loss of the Partnership shall be allocated as follows: (i) GP-Related Net Loss relating to realized losses suffered by BREDS II and allocated to the Partnership with respect to its pro rata share thereof (based on capital contributions made by the Partnership to BREDS II with respect to the GP-Related BREDS II Interest) shall be allocated to the Partners in accordance with each Partner’s Non-Carried Interest Sharing Percentage with respect to the GP-Related Investment giving rise to such loss suffered by BREDS II and (ii) GP-Related Net Loss relating to realized losses suffered by BREDS II and allocated to the Partnership with respect to the Carried Interest shall be allocated in accordance with a Partner’s (including a Withdrawn Partner’s) Carried Interest Give Back Percentage (as of the date of such loss) (subject to adjustment pursuant to Section 5.8(e)). Withdrawn Partners shall remain Partners for purposes of allocating such GP-Related Net Loss with respect to Carried Interest.",
"(c) Notwithstanding Section 5.4(a) above, GP-Related Net Income relating to Carried Interest allocated after the allocation of a GP-Related Net Loss pursuant to clause (ii) of Section 5.4(b) shall be allocated in accordance with such Carried Interest Give Back Percentages until such time as the Partners have been allocated GP-Related Net Income relating to Carried Interest equal to the aggregate amount of GP-Related Net Loss previously allocated in accordance with clause (ii) of Section 5.4(b). (d) To the extent the Partnership has any GP-Related Net Income (Loss) for any accounting period unrelated to BREDS II, such GP-Related Net Income (Loss) will be allocated in accordance with GP-Related Profit Sharing Percentages prevailing at the beginning of such accounting period. (e) The General Partner may authorize from time to time advances to Partners (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group L.P. or any Affiliate thereof) against their allocable shares of GP-Related Net Income (Loss). (f) Notwithstanding the foregoing, the General Partner may make such allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose. Section 5.5.",
"Liability of General Partners. General Partners shall have unlimited liability for the satisfaction and discharge of all losses, liabilities and expenses of the Partnership. Section 5.6. Liability of Limited Partners. Each Limited Partner (including each Special Limited Partner) and former Limited Partner shall be liable for the satisfaction and discharge of all losses, liabilities and expenses of the Partnership allocable to him or her pursuant to Section 5.4 or Section 7.3, but only to the extent required by applicable law.",
"Except as otherwise provided in the following sentence, in no event shall any Limited Partner (including each Special Limited Partner) or former Limited Partner be obligated to make any additional 45 -------------------------------------------------------------------------------- capital contribution to the Partnership in excess of his or her aggregate GP-Related Capital Contributions and Capital Commitment-Related Capital Contributions pursuant to Section 4.1 and Section 7.1, or have any liability in excess of such aggregate GP-Related Capital Contributions and Capital Commitment-Related Capital Contributions for the satisfaction and discharge of the losses, liabilities and expenses of the Partnership. In no way does any of the foregoing limit any Partner’s obligations under Section 4.1(d), Section 5.8(d) or Section 7.4(g) or otherwise to make capital contributions as provided hereunder.",
"Section 5.7. Repurchase Rights, etc. The General Partner may from time to time establish such repurchase rights and/or other requirements with respect to the Partners’ GP-Related Partner Interests relating to GP-Related BREDS II Investments as the General Partner may determine. The General Partner shall have authority to (a) withhold any distribution otherwise payable to any Partner until any such repurchase rights have lapsed or any such requirements have been satisfied, (b) pay any distribution to any Partner that is Contingent as of the distribution date and require the refund of any portion of such distribution that is Contingent as of the Withdrawal Date of such Partner, (c) amend any previously established repurchase rights or other requirements from time to time and (d) make such exceptions thereto as it may determine on a case by case basis. Section 5.8. Distributions. (a) (i) The Partnership shall make distributions of available cash (subject to reserves and other adjustments as provided herein) or other property to Partners with respect to such Partners’ GP-Related Partner Interests at such times and in such amounts as are determined by the General Partner.",
"The General Partner shall, if it deems it appropriate, determine the availability for distribution of, and distribute, cash or other property separately for each category of GP-Related Net Income (Loss) established pursuant to Section 5.1(a). Distributions of cash or other property with respect to Non-Carried Interest shall be made among the Partners in accordance with their respective Non-Carried Interest Sharing Percentages, and, subject to Section 4.1(d) and Section 5.8(e), distributions of cash or other property with respect to Carried Interest shall be made among Partners in accordance with their respective Carried Interest Sharing Percentages. (ii) At any time that a sale, exchange, transfer or other disposition by BREDS II of a portion of a GP-Related Investment is being considered by the Partnership (a “GP-Related Disposable Investment”), at the election of the General Partner each Partner’s GP-Related Partner Interest with respect to such GP-Related Investment shall be vertically divided into two separate GP-Related Partner Interests, a GP-Related Partner Interest attributable to the GP-Related Disposable Investment (a Partner’s “GP-Related Class B Interest”), and a GP-Related Partner Interest attributable to such GP-Related Investment excluding the GP-Related Disposable Investment (a Partner’s “GP-Related Class A Interest”).",
"Distributions (including those resulting from a sale, transfer, exchange or other disposition by BREDS II) relating to a GP-Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class B Interests with respect to such GP-Related Investment in accordance with their GP-Related Profit Sharing Percentages relating to such GP-Related Class B Interests, and distributions (including those resulting from the 46 -------------------------------------------------------------------------------- sale, transfer, exchange or other disposition by BREDS II) relating to a GP-Related Investment excluding such GP-Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class A Interests with respect to such GP-Related Investment in accordance with their respective GP-Related Profit Sharing Percentages relating to such GP-Related Class A Interests. Except as provided above, distributions of cash or other property with respect to each category of GP-Related Net Income (Loss) shall be allocated among the Partners in the same proportions as the allocations of GP-Related Net Income (Loss) of each such category. (b) Subject to the Partnership’s having sufficient available cash in the reasonable judgment of the General Partner, the Partnership shall make cash distributions to each Partner with respect to each Fiscal Year of the Partnership in an aggregate amount at least equal to the total federal, New York State and New York City income and other taxes that would be payable by such Partner with respect to all categories of GP-Related Net Income (Loss) allocated to such Partner for such Fiscal Year, the amount of which shall be calculated (i) on the assumption that each Partner is an individual subject to the then prevailing maximum rate of federal, New York State, New York City and other income taxes (including, without limitation, taxes under Section 1411 of the Code), (ii) taking into account the deductibility of state and local income and other taxes for federal income tax purposes and (iii) taking into account any differential in applicable rates due to the type and character of GP-Related Net Income (Loss) allocated to such Partner.",
"Notwithstanding the provisions of the foregoing sentence, the General Partner may refrain from making any distribution if, in the reasonable judgment of the General Partner, such distribution is prohibited by the Partnership Act. (c) The General Partner may provide that the GP-Related Partner Interest of any Partner or employee (including such Partner’s or employee’s right to distributions and investments of the Partnership related thereto) may be subject to repurchase by the Partnership during such period as the General Partner shall determine (a “Repurchase Period”). Any Contingent distributions from GP-Related Investments subject to repurchase rights will be withheld by the Partnership and will be distributed to the recipient thereof (together with interest thereon at rates determined by the General Partner from time to time) as the recipient’s rights to such distributions become Non-Contingent (by virtue of the expiration of the applicable Repurchase Period or otherwise). The General Partner may elect in an individual case to have the Partnership distribute any Contingent distribution to the applicable recipient thereof irrespective of whether the applicable Repurchase Period has lapsed. If a Partner Withdraws from the Partnership for any reason other than his or her death, Total Disability or Incompetence, the undistributed share of any GP-Related Investment that remains Contingent as of the applicable Withdrawal Date shall be repurchased by the Partnership at a purchase price determined at such time by the General Partner. Unless determined otherwise by the General Partner, the repurchased portion thereof will be allocated among the remaining Partners with interests in such GP-Related Investment in proportion to their respective percentage interests in such GP-Related Investment, or if no other Partner has a percentage interest in such specific GP-Related Investment, to the General Partner; provided, that the General Partner may allocate the Withdrawn Partner’s share of unrealized investment income from a repurchased GP-Related Investment attributable to the period after the Withdrawn Partner’s Withdrawal Date on any basis it may determine, including to existing or new Partners who did not previously have interests in such GP-Related Investment, except that, in any event, each Investor Special Limited Partner shall be allocated a share of such unrealized investment income equal to its respective GP-Related Profit Sharing Percentage of such unrealized investment income.",
"47 -------------------------------------------------------------------------------- (d) (i) (A) If the Partnership is obligated under the Clawback Provisions or Giveback Provisions to contribute to BREDS II a Clawback Amount or a Giveback Amount (other than a Capital Commitment Giveback Amount) in respect of the GP-Related BREDS II Interest (the amount of any such obligation of the Partnership with respect to such a Giveback Amount being herein called a “GP-Related Giveback Amount”), the General Partner shall call for such amounts as are necessary to satisfy such obligations of the Partnership, as determined by the General Partner, in which case each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions by the Partnership (and the Other Fund GPs) with respect to Carried Interest (and/or Non-Carried Interest in the case of a GP-Related Giveback Amount) (the “GP-Related Recontribution Amount”) which equals (I) the product of (a) a Partner’s or Withdrawn Partner’s Carried Interest Give Back Percentage and (b) the aggregate Clawback Amount payable by the Partnership, in the case of Clawback Amounts and (II) with respect to a GP-Related Giveback Amount, such Partner’s pro rata share of prior distributions of Carried Interest and/or Non-Carried Interest in connection with (a) the GP-Related BREDS II Investment giving rise to the GP-Related Giveback Amount, (b) if the amounts contributed pursuant to clause (II)(a) above are insufficient to satisfy such GP-Related Giveback Amount, GP-Related BREDS II Investments other than the one giving rise to such obligation, but only those amounts received by the Partners with an interest in the GP-Related BREDS II Investment referred to in clause (II)(a) above and (c) if the GP-Related Giveback Amount is unrelated to a specific GP-Related BREDS II Investment, all GP-Related BREDS II Investments.",
"Each Partner and Withdrawn Partner shall promptly contribute to the Partnership, along with satisfying his or her comparable obligations to the Other Fund GPs, if any, upon such call, such Partner’s or Withdrawn Partner’s GP-Related Recontribution Amount, less the amount paid out of the Trust Account on behalf of such Partner or Withdrawn Partner by the Trustee(s) pursuant to written instructions from the General Partner, or if applicable, any of the Other Fund GPs with respect to Carried Interest (and/or Non-Carried Interest in the case of GP-Related Giveback Amounts) (the “Net GP-Related Recontribution Amount”), irrespective of the fact that the amounts in the Trust Account may be sufficient on an aggregate basis to satisfy the Partnership’s and the Other Fund GPs’ obligation under the Clawback Provisions and/or Giveback Provisions; provided, that to the extent a Partner’s or Withdrawn Partner’s share of the amount paid with respect to the Clawback Amount and/or the GP-Related Giveback Amount exceeds his or her GP-Related Recontribution Amount, such excess shall be repaid to such Partner or Withdrawn Partner as promptly as reasonably practicable, subject to clause (ii) below; provided further, that such written instructions from the General Partner shall specify each Partner’s and Withdrawn Partner’s GP-Related Recontribution Amount.",
"Prior to such time, the General Partner may, in its discretion (but shall be under no obligation to), provide notice that in the General Partner’s judgment, the potential obligations in respect of the Clawback Provisions or the Giveback Provisions will probably materialize (and an estimate of the aggregate amount of such obligations); provided further, that any amount from a Partner’s Trust Account used to pay any part of any GP-Related Giveback Amount (or such lesser amount as may be required by the General Partner) shall be contributed by such Partner to such Partner’s Trust Account no later than 30 days after the Net GP-Related Recontribution Amount is paid with respect to such GP-Related Giveback Amount. Solely to the extent 48 -------------------------------------------------------------------------------- required by the BREDS II Agreements, each member of the General Partner shall have the same obligations as a Partner (which obligations shall be subject to the same limitations as the obligations of a Partner) under this Section 5.8(d)(i)(A) and under Section 5.8(d)(ii)(A) solely with respect to such member’s pro rata share of any Clawback Amount (for purposes of this sentence, as defined in the BREDS II Partnership Agreement) and solely to the extent that the Partnership has insufficient funds to meet the Partnership’s obligations under the BREDS II Partnership Agreements (and/or the corresponding provisions under any other BREDS II Agreement).",
"(B) To the extent any Partner or Withdrawn Partner has satisfied any Holdback obligation with Firm Collateral, such Partner or Withdrawn Partner shall, within 10 days of the General Partner’s call for GP-Related Recontribution Amounts, make a cash payment into the Trust Account in an amount equal to the amount of the Holdback obligation satisfied with such Firm Collateral, or such lesser amount such that the amount in the Trust Account allocable to such Partner or Withdrawn Partner equals the sum of (I) such Partner’s or Withdrawn Partner’s GP-Related Recontribution Amount and (II) any similar amounts payable to any of the Other Fund GPs. Immediately upon receipt of such cash, the Trustee(s) shall take such steps as are necessary to release such Firm Collateral of such Partner or Withdrawn Partner equal to the amount of such cash payment.",
"If the amount of such cash payment is less than the amount of Firm Collateral of such Partner or Withdrawn Partner, the balance of such Firm Collateral if any, shall be retained to secure the payment of GP-Related Deficiency Contributions, if any, and shall be fully released upon the satisfaction of the Partnership’s and the Other Fund GPs’ obligation to pay the Clawback Amount. The failure of any Partner or Withdrawn Partner to make a cash payment in accordance with this clause (B) (to the extent applicable) shall constitute a default under Section 5.8(d)(ii) as if such cash payment hereunder constitutes a Net GP-Related Recontribution Amount under Section 5.8(d)(ii). (ii) (A) In the event any Partner or Withdrawn Partner (a “GP-Related Defaulting Party”) fails to recontribute all or any portion of such GP-Related Defaulting Party’s Net GP-Related Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Carried Interest Give Back Percentages in the case of Clawback Amounts, and GP-Related Profit Sharing Percentages in the case of GP-Related Giveback Amounts (as more fully described in clause (II) of Section 5.8(d)(i)(A) above)), such amounts as are necessary to fulfill the GP-Related Defaulting Party’s obligation to pay such GP-Related Defaulting Party’s Net GP-Related Recontribution Amount (a “GP-Related Deficiency Contribution”) if the General Partner determines in its good faith judgment that the Partnership (or an Other Fund GP) will be unable to collect such amount in cash from such GP-Related Defaulting Party for payment of the Clawback Amount or GP-Related Giveback Amount, as the case may be, at least 20 Business Days prior to the latest date that the Partnership, and the Other Fund GPs, if applicable, are permitted to pay the Clawback Amount or GP-Related Giveback Amount, as the case may be; provided, that, subject to Section 5.8(e), no Partner or Withdrawn Partner shall as a result of such GP-Related Deficiency Contribution be required to contribute an amount in excess of 167% of the amount of the Net GP-Related Recontribution Amount initially requested from such Partner or Withdrawn Partner in respect of such default.",
"49 -------------------------------------------------------------------------------- (B) Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the GP-Related Defaulting Party, the cost of which shall be a Partnership expense to the extent not ultimately reimbursed by the GP-Related Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such GP-Related Defaulting Party becoming a GP-Related Defaulting Party) to set-off as appropriate and apply against such GP-Related Defaulting Party’s Net GP-Related Recontribution Amount any amounts otherwise payable to the GP-Related Defaulting Party by the Partnership or any Affiliate thereof (including amounts unrelated to Carried Interest, such as returns of capital and profit thereon). Each Partner and Withdrawn Partner hereby grants to the General Partner a security interest, effective upon such Partner or Withdrawn Partner becoming a GP-Related Defaulting Party, in all accounts receivable and other rights to receive payment from any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner and Withdrawn Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and authority, in the name of such Partner or Withdrawn Partner or in the name of the General Partner, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the Net GP-Related Recontribution Amount of a GP-Related Defaulting Party from the date such Net GP-Related Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.",
"(C) Any Partner’s or Withdrawn Partner’s failure to make a GP-Related Deficiency Contribution shall cause such Partner or Withdrawn Partner to be a GP-Related Defaulting Party with respect to such amount. The Partnership shall first seek any remaining Trust Amounts (and Trust Income thereon) allocated to such Partner or Withdrawn Partner to satisfy such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency Contribution before seeking cash contributions from such Partner or Withdrawn Partner in satisfaction of such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency Contribution. (iii) In the event any Partner or Withdrawn Partner initially fails to recontribute all or any portion of such Partner or Withdrawn Partner’s pro rata share of any Clawback Amount pursuant to Section 5.8(d)(i)(A), the General Partner shall use its reasonable efforts to collect the amount which such Partner or Withdrawn Partner so fails to recontribute. 50 -------------------------------------------------------------------------------- (iv) A Partner’s or Withdrawn Partner’s obligation to make contributions to the Partnership under this Section 5.8(d) shall survive the termination of the Partnership. (e) The Partners acknowledge that the General Partner will (and is hereby authorized to) take such steps as it deems appropriate, in its good faith judgment, to further the objective of providing for the fair and equitable treatment of all Partners, including by allocating Net Losses on Writedowns and Losses (each as defined in the BREDS II Agreements) on GP-Related BREDS II Investments that have been the subject of a Writedown and/or Losses (each, a “Loss Investment”) to those Partners who participated in such Loss Investments based on their Carried Interest Sharing Percentage therein to the extent that such Partners receive or have received Carried Interest distributions from other GP-Related BREDS II Investments.",
"Consequently and notwithstanding anything herein to the contrary, adjustments to Carried Interest distributions shall be made as set forth in this Section 5.8(e). (i) At the time the Partnership is making Carried Interest distributions in connection with a GP-Related BREDS II Investment (the “Subject Investment”) that have been reduced under any BREDS II Agreement as a result of one or more Loss Investments, the General Partner shall calculate amounts distributable to or due from each such Partner as follows: (A) determine each Partner’s share of each such Loss Investment based on his or her Carried Interest Sharing Percentage in each such Loss Investment (which may be zero) to the extent such Loss Investment has reduced the Carried Interest distributions otherwise available for distribution to all Partners (indirectly through the Partnership from BREDS II) from the Subject Investment (such reduction, the “Loss Amount”); (B) determine the amount of Carried Interest distributions otherwise distributable to such Partner with respect to the Subject Investment (indirectly through the Partnership from BREDS II) before any reduction in respect of the amount determined in clause (A) above (the “Unadjusted Carried Interest Distributions”); and (C) subtract (I) the Loss Amounts relating to all Loss Investments from (II) the Unadjusted Carried Interest Distributions for such Partner, to determine the amount of Carried Interest distributions to actually be paid to such Partner (“Net Carried Interest Distribution”).",
"To the extent that the Net Carried Interest Distribution for a Partner as calculated in this clause (i) is a negative number, the General Partner shall (I) notify such Partner, at or prior to the time such Carried Interest distributions are actually made to the Partners, of his or her obligation to recontribute to the Partnership prior Carried Interest distributions (a “Net Carried Interest Distribution Recontribution Amount”), up to the amount of such negative Net Carried Interest 51 -------------------------------------------------------------------------------- Distribution and (II) to the extent amounts recontributed pursuant to clause (I) are insufficient to satisfy such negative Net Carried Interest Distribution amount, reduce future Carried Interest distributions otherwise due such Partner, up to the amount of such remaining negative Net Carried Interest Distribution.",
"If a Partner’s (x) Net Carried Interest Distribution Recontribution Amount exceeds (y) the aggregate amount of prior Carried Interest distributions less the amount of tax thereon, calculated based on the Assumed Tax Rate (as defined in the BREDS II Partnership Agreement) in effect in the Fiscal Years of such distributions (the “Excess Tax-Related Amount”), then such Partner may, in lieu of paying such Partner’s Excess Tax-Related Amount, defer such amounts as set forth below. Such deferred amount shall accrue interest at the Prime Rate. Such deferred amounts shall be reduced and repaid by the amount of Carried Interest otherwise distributable to such Partner in connection with future Carried Interest distributions until such balance is reduced to zero. Any deferred amounts shall be payable in full upon the earlier of (i) such time as the Clawback Amount is determined (as provided herein) and (ii) such time as the Partner becomes a Withdrawn Partner.",
"To the extent there is an amount of negative Net Carried Interest Distribution with respect to a Partner remaining after the application of this clause (i), notwithstanding clause (II) of the preceding paragraph, such remaining amount of negative Net Carried Interest Distribution shall be allocated to the other Partners pro rata based on each of their Carried Interest Sharing Percentages in the Subject Investment. A Partner who fails to pay a Net Carried Interest Distribution Recontribution Amount promptly upon notice from the General Partner (as provided above) shall be deemed a GP-Related Defaulting Party for all purposes hereof. A Partner may satisfy in part any Net Carried Interest Distribution Recontribution Amount from cash that is then subject to a Holdback, to the extent that the amounts that remain subject to a Holdback satisfy the Holdback requirements hereof as they relate to the reduced amount of aggregate Carried Interest distributions received by such Partner (taking into account any Net Carried Interest Distribution Recontribution Amount contributed to the Partnership by such Partner). Any Net Carried Interest Distribution Recontribution Amount contributed by a Partner, including amounts of cash subject to a Holdback as provided above, shall increase the amount available for distribution to the other Partners as Carried Interest distributions with respect to the Subject Investment; provided, that any such amounts then subject to a Holdback may be so distributed to the other Partners to the extent a Partner receiving such distribution has satisfied the Holdback requirements with respect to such distribution (taken together with the other Carried Interest distributions received by such Partner to date).",
"(ii) In the case of Clawback Amounts which are required to be contributed to the Partnership as otherwise provided herein, the obligation of the Partners with respect to any Clawback Amount shall be adjusted by the General Partner as follows: 52 -------------------------------------------------------------------------------- (A) determine each Partner’s share of any Losses in any GP-Related BREDS II Investments which gave rise to the Clawback Amount (i.e., the Losses that followed the last GP-Related BREDS II Investment with respect to which Carried Interest distributions were made), based on such Partner’s Carried Interest Sharing Percentage in such GP-Related BREDS II Investments; (B) determine each Partner’s obligation with respect to the Clawback Amount based on such Partner’s Carried Interest Give Back Percentage as otherwise provided herein; and (C) subtract the amount determined in clause (B) above from the amount determined in clause (A) above with respect to each Partner to determine the amount of adjustment to each Partner’s share of the Clawback Amount (a Partner’s “Clawback Adjustment Amount”). A Partner’s share of the Clawback Amount shall for all purposes hereof be decreased by such Partner’s Clawback Adjustment Amount, to the extent it is a negative number (except to the extent expressly provided below). A Partner’s share of the Clawback Amount shall for all purposes hereof be increased by such Partner’s Clawback Adjustment Amount (to the extent it is a positive number); provided, that in no way shall a Partner’s aggregate obligation to satisfy a Clawback Amount as a result of this clause (ii) exceed the aggregate Carried Interest distributions received by such Partner.",
"To the extent a positive Clawback Adjustment Amount remains after the application of this clause (ii) with respect to a Partner, such remaining Clawback Adjustment Amount shall be allocated to the Partners (including any Partner whose Clawback Amount was increased pursuant to this clause (ii)) pro rata based on their Carried Interest Give Back Percentages (determined without regard to this clause (ii)). Any distribution or contribution adjustments pursuant to this Section 5.8(e) by the General Partner shall be based on its good faith judgment, and no Partner shall have any claim against the Partnership, the General Partner or any other Partners as a result of any adjustment made as set forth above.",
"This Section 5.8(e) applies to all Partners, including Withdrawn Partners. It is agreed and acknowledged that this Section 5.8(e) is an agreement among the Partners and in no way modifies the obligations of each Partner regarding the Clawback Amount as provided in the BREDS II Agreements. Section 5.9. Business Expenses. The Partnership shall reimburse the Partners for reasonable travel, entertainment and miscellaneous expenses incurred by them in the conduct of the Partnership’s business in accordance with rules and regulations established by the General Partner from time to time. Section 5.10. Tax Capital Accounts; Tax Allocations. (a) For federal income tax purposes, there shall be established for each Partner a single capital account combining such Partner’s Capital Commitment Capital Account and GP-Related Capital Account, with such adjustments as the General Partner determines are appropriate so that such single capital account is maintained in compliance with the principles and requirements of Section 704(b) of the Code and the Treasury Regulations thereunder. 53 -------------------------------------------------------------------------------- (b) All items of income, gain, loss, deduction and credit of the Partnership shall be allocated among the Partners for federal, state and local income tax purposes in the same manner as such items of income, gain, loss, deduction and credit shall be allocated among the Partners pursuant to this Agreement, except as may otherwise be provided herein or by the Code or other applicable law.",
"In the event there is a net decrease in partnership minimum gain or partner nonrecourse debt minimum gain (determined in accordance with the principles of Treasury Regulations Sections 1.704-2(d) and 1.704-2(i)) during any taxable year of the Partnership, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to its respective share of such net decrease during such year, determined pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5). The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(f). In addition, this Agreement shall be considered to contain a “qualified income offset” as provided in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). Notwithstanding the foregoing, the General Partner in its sole discretion shall make allocations for tax purposes as may be needed to ensure that allocations are in accordance with the interests of the Partners within the meaning of the Code and the Treasury Regulations. (c) For federal, state and local income tax purposes only, Partnership income, gain, loss, deduction or expense (or any item thereof) for each Fiscal Year shall be allocated to and among the Partners in a manner corresponding to the manner in which corresponding items are allocated among the Partners pursuant to the other provisions of this Section 5.10; provided, that the General Partner may in its sole discretion make such allocations for tax purposes as it determines are appropriate so that allocations have substantial economic effect or are in accordance with the interests of the Partners, within the meaning of the Code and the Treasury Regulations thereunder.",
"ARTICLE VI ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS; SATISFACTION AND DISCHARGE OF PARTNERSHIP INTERESTS; TERMINATION Section 6.1. Additional Partners. (a) Effective on the first day of any month (or on such other date as shall be determined by the General Partner in its sole discretion), the General Partner shall have the right to admit one or more additional or substitute persons into the Partnership as General Partners or Limited Partners. Each such person shall make the representations and certifications with respect to itself set forth in Section 3.7 and Section 3.8. The General Partner shall determine and negotiate with the additional Partner (which term, for the avoidance of doubt, shall include, without limitation, any substitute Partner) all terms of such additional Partner’s participation in the Partnership, including the additional Partner’s initial GP-Related Capital Contribution, Capital Commitment-Related Capital Contribution, GP-Related Profit Sharing Percentage and Capital Commitment Profit Sharing Percentage.",
"Each additional Partner shall have such voting rights as may be determined by the General Partner from time to time unless, upon the admission to the Partnership of any Limited Partner, the General Partner shall designate that such Limited Partner shall not have such voting rights (any such Limited Partner being called a “Nonvoting 54 -------------------------------------------------------------------------------- Limited Partner”). Any additional Partner shall, as a condition to becoming a Partner, agree to become a party to, and be bound by the terms and conditions of, the Trust Agreement. If Blackstone or another or subsequent holder of an Investor Note approved by the General Partner for purposes of this Section 6.1(a) shall foreclose upon a Limited Partner’s Investor Note issued to finance such Limited Partner’s purchase of his or her Capital Commitment Interests, Blackstone or such other or subsequent holder shall succeed to such Limited Partner’s Capital Commitment Interests and shall be deemed to have become a Limited Partner to such extent.",
"Any additional Partner may have a GP-Related Partner Interest or a Capital Commitment Partner Interest, without having the other such interest. Notwithstanding any provision in this Agreement to the contrary, the General Partner is authorized, without the need for any further act, vote or consent of any person, to make adjustments to the GP-Related Profit Sharing Percentages as it determines necessary in its sole discretion in connection with any additional Partners admitted to the Partnership, adjustments with respect to other Partners of the Partnership and to give effect to other matters set forth herein, as applicable. (b) The GP-Related Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners’ GP-Related Profit Sharing Percentages as of such date, shall be established by the General Partner pursuant to Section 5.3.",
"The Capital Commitment Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners’ Capital Commitment Profit Sharing Percentages as of such date, shall be established by the General Partner. (c) An additional Partner shall be required to contribute to the Partnership his or her pro rata share of the Partnership’s total capital, excluding capital in respect of GP-Related Investments and Capital Commitment Investments in which such Partner does not acquire any interests, at such times and in such amounts as shall be determined by the General Partner in accordance with Section 4.1 and Section 7.1.",
"(d) The admission of an additional Partner will be evidenced by (i) the execution of a counterpart copy of, or counter-signature page with respect to, this Agreement by such additional Partner, (ii) the execution of an amendment to this Agreement by the General Partner and the additional Partner, as determined by the General Partner or (iii) the execution by such additional Partner of any other writing evidencing the intent of such person to become a substitute or additional Limited Partner and to be bound by the terms of this Agreement and such writing being accepted by the General Partner on behalf of the Partnership. In addition, each additional Partner shall sign a counterpart copy of the Trust Agreement or any other writing evidencing the intent of such person to become a party to the Trust Agreement that is acceptable to the General Partner. Section 6.2.",
"Withdrawal of Partners. (a) Any Partner may Withdraw voluntarily from the Partnership subject to the prior written consent of the General Partner. The General Partner generally intends to permit voluntary Withdrawals on the last day of any calendar month (or on such other date as shall be determined by the General Partner in its sole discretion), on not less than 15 days’ prior written 55 -------------------------------------------------------------------------------- notice by such Partner to the General Partner (or on such shorter notice period as may be mutually agreed upon between such Partner and the General Partner); provided, that a Partner may not voluntarily Withdraw without the consent of the General Partner if such Withdrawal would (i) cause the Partnership to be in default under any of its contractual obligations or (ii) in the reasonable judgment of the General Partner, have a material adverse effect on the Partnership or its business; provided further, that a Partner may Withdraw from the Partnership with respect to such Partner’s GP-Related Partner Interest without Withdrawing from the Partnership with respect to such Partner’s Capital Commitment Partner Interest, and a Partner may Withdraw from the Partnership with respect to such Partner’s Capital Commitment Partner Interest without Withdrawing from the Partnership with respect to such Partner’s GP-Related Partner Interest. (b) Upon the Withdrawal of any Partner, including by the occurrence of any withdrawal event under the Partnership Act with respect to any Partner, such Partner shall thereupon cease to be a Partner, except as expressly provided herein.",
"(c) Upon the Total Disability of a Limited Partner, such Partner shall thereupon cease to be a Limited Partner with respect to such Partner’s GP-Related Partner Interest; provided, however, that the General Partner may elect to admit such Withdrawn Partner to the Partnership as a Nonvoting Limited Partner with respect to such Partner’s GP-Related Partner Interest, with such GP-Related Partner Interest as the General Partner may determine. The determination of whether any Partner has suffered a Total Disability shall be made by the General Partner in its sole discretion after consultation with a qualified medical doctor. In the absence of agreement between the General Partner and such Partner, each party shall nominate a qualified medical doctor and the two doctors shall select a third doctor, who shall make the determination as to Total Disability. (d) If the General Partner determines that it shall be in the best interests of the Partnership for any Partner (including any Partner who has given notice of voluntary Withdrawal pursuant to paragraph (a) above) to Withdraw from the Partnership (whether or not Cause exists) with respect to such Partner’s GP-Related Partner Interest and/or with respect to such Partner’s Capital Commitment Partner Interest, such Partner, upon written notice by the General Partner to such Partner, shall be required to Withdraw with respect to such Partner’s GP-Related Partner Interest and/or with respect to such Partner’s Capital Commitment Partner Interest, as of a date specified in such notice, which date shall be on or after the date of such notice. If the General Partner requires any Partner to Withdraw for Cause with respect to such Partner’s GP-Related Partner Interest and/or with respect to such Partner’s Capital Commitment Partner Interest, such notice shall state that it has been given for Cause and shall describe the particulars thereof in reasonable detail.",
"(e) The Withdrawal from the Partnership of any Partner shall not, in and of itself, affect the obligations of the other Partners to continue the Partnership during the remainder of its term. A Withdrawn General Partner shall remain liable for all obligations of the Partnership incurred while it was a General Partner and resulting from its acts or omissions as a General Partner to the fullest extent provided by law. 56 -------------------------------------------------------------------------------- Section 6.3.",
"GP-Related Partner Interests Not Transferable. (a) No Partner may sell, assign, pledge, grant a security interest over or otherwise transfer or encumber all or any portion of such Partner’s GP-Related Partner Interest without the prior written consent of the General Partner; provided, that, subject to the Partnership Act, this Section 6.3 shall not impair transfers by operation of law, transfers by will or by other testamentary instrument occurring by virtue of the death or dissolution of a Partner, or transfers required by trust agreements; provided further, that, subject to the prior written consent of the General Partner, which shall not be unreasonably withheld, a Limited Partner may transfer, for estate planning purposes, up to 25% of his or her GP-Related Profit Sharing Percentage to any estate planning trust, limited partnership or limited liability company with respect to which such Limited Partner controls investments related to any interest in the Partnership held therein (an “Estate Planning Vehicle”). Each Estate Planning Vehicle will be a Nonvoting Limited Partner. Such Limited Partner and the Nonvoting Limited Partner shall be jointly and severally liable for all obligations of both such Limited Partner and such Nonvoting Limited Partner with respect to the interest transferred (including the obligation to make additional GP-Related Capital Contributions).",
"The General Partner may at its sole option exercisable at any time require such Estate Planning Vehicle to Withdraw from the Partnership on the terms of this Article VI. Except as provided in the second proviso to the first sentence of this Section 6.3(a), no assignee, legatee, distributee, heir or transferee (by conveyance, operation of law or otherwise) of the whole or any portion of any Partner’s GP-Related Partner Interest shall have any right to be a General Partner or Limited Partner without the prior written consent of the General Partner (which consent may be given or withheld in its sole discretion without giving any reason therefor). Notwithstanding the granting of a security interest in the entire partnership interest of any Partner, such Partner shall continue to be a partner of the Partnership. (b) Notwithstanding any provision hereof to the contrary, no sale or transfer of any GP-Related Partner Interest in the Partnership may be made except in compliance with all federal, state and other applicable laws, including federal and state securities laws.",
"Section 6.4. General Partner Withdrawal; Transfer of General Partner’s Interest. (a) The General Partner may not transfer or assign its interest as a General Partner in the Partnership or its right to manage the affairs of the Partnership, except that the General Partner may, with the prior written approval of a Majority in Interest of the Partners, admit another person as an additional or substitute General Partner who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law or otherwise); provided, however, that the General Partner may, in its sole discretion, transfer all or part of its interest in the Partnership to a person who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law or otherwise) and who owns, directly or indirectly, the principal part of the business then conducted by the General Partner in connection with any liquidation, dissolution or reorganization of the General Partner, and, upon the assumption by such person of liability for all the obligations of the General Partner under this Agreement, such person shall be admitted as the General Partner.",
"A person who is so admitted as an additional or substitute General Partner shall thereby become a General Partner and shall have the right to manage the affairs of the Partnership and to vote as a Partner to the extent of the interest in the Partnership so acquired. The General Partner shall not cease to be the general partner of the Partnership upon the collateral assignment of or the pledging or granting of a security interest in its entire Interest in the Partnership. 57 -------------------------------------------------------------------------------- (b) Except as contemplated by Section 6.4(a) above, Withdrawal by a General Partner is not permitted. The Withdrawal of a General Partner shall not dissolve the Partnership if at the time of such Withdrawal there are one or more remaining General Partners, and any one or more of such remaining General Partners continue the business of the Partnership (any and all such remaining General Partners being hereby authorized to continue the business of the Partnership without dissolution and hereby agreeing to do so).",
"If upon the Withdrawal of a General Partner there shall be no remaining General Partner, the Partnership nonetheless shall not be dissolved and shall not be required to be wound up if, within 90 days of the occurrence of such event of Withdrawal, all remaining Limited Partners (excluding Withdrawn Partners) agree in writing to continue the business of the Partnership and to the appointment, effective as of the date of such Withdrawal, of one or more General Partners. Section 6.5. Satisfaction and Discharge of a Withdrawn Partner’s GP-Related Partner Interest. (a) The terms of this Section 6.5 shall apply to the GP-Related Partner Interest of a Withdrawn Partner, but, except as otherwise expressly provided in this Section 6.5, shall not apply to the Capital Commitment Partner Interest of a Withdrawn Partner.",
"For purposes of this Section 6.5, the term “Settlement Date” means the date as of which a Withdrawn Partner’s GP-Related Partner Interest in the Partnership is settled as determined under paragraph (b) below. Notwithstanding the foregoing, any Limited Partner who Withdraws from the Partnership, and all or any portion of whose GP-Related Partner Interest is retained as a Limited Partner, shall be considered a Withdrawn Partner for all purposes hereof. (b) Except where a later date for the settlement of a Withdrawn Partner’s GP-Related Partner Interest in the Partnership may be agreed to by the General Partner and a Withdrawn Partner, a Withdrawn Partner’s Settlement Date shall be his or her Withdrawal Date; provided, that if a Withdrawn Partner’s Withdrawal Date is not the last day of a month, then the General Partner may elect for such Withdrawn Partner’s Settlement Date to be the last day of the month in which his or her Withdrawal Date occurs. During the interval, if any, between a Withdrawn Partner’s Withdrawal Date and Settlement Date, such Withdrawn Partner shall have the same rights and obligations with respect to GP-Related Capital Contributions, interest on capital, allocations of GP-Related Net Income (Loss) and distributions as would have applied had such Withdrawn Partner remained a Partner of the Partnership during such period. (c) In the event of the Withdrawal of a Partner with respect to such Withdrawn Partner’s GP-Related Partner Interest, the General Partner shall, promptly after such Withdrawn Partner’s Settlement Date, (i) determine and allocate to the Withdrawn Partner’s GP-Related Capital Accounts such Withdrawn Partner’s allocable share of the GP-Related Net Income (Loss) of the Partnership for the period ending on such Settlement Date in accordance with Article V and (ii) credit the Withdrawn Partner’s GP-Related Capital Accounts with interest in accordance with Section 5.2.",
"In making the foregoing calculations, the General Partner shall be entitled to establish such reserves (including reserves for taxes, bad debts, unrealized losses, actual or threatened litigation or any other expenses, contingencies or obligations) as it deems 58 -------------------------------------------------------------------------------- appropriate. Unless otherwise determined by the General Partner in a particular case, a Withdrawn Partner shall not be entitled to receive any GP-Related Unallocated Percentage in respect of the accounting period during which such Partner Withdraws from the Partnership (whether or not previously awarded or allocated) or any GP-Related Unallocated Percentage in respect of prior accounting periods that have not been paid or allocated (whether or not previously awarded) as of such Withdrawn Partner’s Withdrawal Date. (d) From and after the Settlement Date of the Withdrawn Partner, the Withdrawn Partner’s GP-Related Profit Sharing Percentages shall, unless otherwise allocated by the General Partner pursuant to Section 5.3(a), be deemed to be GP-Related Unallocated Percentages (except for GP-Related Profit Sharing Percentages with respect to GP-Related Investments as provided in paragraph (f) below).",
"(e) (i) Upon the Withdrawal from the Partnership of a Partner with respect to such Partner’s GP-Related Partner Interest, such Withdrawn Partner thereafter shall not, except as expressly provided in this Section 6.5, have any rights of a Partner (including voting rights) with respect to such Partner’s GP-Related Partner Interest, and, except as expressly provided in this Section 6.5, such Withdrawn Partner shall not have any interest in the Partnership’s GP-Related Net Income (Loss) or in distributions related to such Partner’s GP-Related Partner Interest, GP-Related Investments or other assets related to such Partner’s GP-Related Partner Interest. If a Partner Withdraws from the Partnership with respect to such Partner’s GP-Related Partner Interest for any reason other than for Cause pursuant to Section 6.2, then the Withdrawn Partner shall be entitled to receive, at the time or times specified in Section 6.5(i) below, in satisfaction and discharge in full of the Withdrawn Partner’s GP-Related Partner Interest in the Partnership, (x) payment equal to the aggregate credit balance, if any, as of the Settlement Date of the Withdrawn Partner’s GP-Related Capital Accounts, (excluding any GP-Related Capital Account or portion thereof attributable to any GP-Related Investment) and (y) the Withdrawn Partner’s percentage interest attributable to each GP-Related Investment in which the Withdrawn Partner has an interest as of the Settlement Date as provided in paragraph (f) below (which shall be settled in accordance with paragraph (f) below), subject to all the terms and conditions of paragraphs (a)-(p) of this Section 6.5.",
"If the amount determined pursuant to clause (x) above is an aggregate negative balance, the Withdrawn Partner shall pay the amount thereof to the Partnership upon demand by the General Partner on or after the date of the statement referred to in Section 6.5(i) below; provided, that if the Withdrawn Partner was solely a Limited Partner (other than a Special Limited Partner) on his or her Withdrawal Date, such payment shall be required only to the extent of any amounts payable to such Withdrawn Partner pursuant to this Section 6.5. Any aggregate negative balance in the GP-Related Capital Accounts of a Withdrawn Partner who was solely a Limited Partner (other than a Special Limited Partner), upon the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, shall be allocated among the other Partners’ GP-Related Capital Accounts in accordance with their respective GP-Related Profit Sharing Percentages in the categories of GP-Related Net Income (Loss) giving rise to such negative balance as determined by the General Partner as of such Withdrawn Partner’s Settlement Date.",
"In the settlement of any Withdrawn Partner’s GP-Related Partner Interest in the Partnership, no value shall be ascribed to goodwill, the Partnership name or the anticipation of any value the Partnership or any successor thereto might have in the event the Partnership or any interest therein were to be sold in whole or in part. 59 -------------------------------------------------------------------------------- (ii) Notwithstanding clause (i) of this Section 6.5(e), in the case of a Partner whose Withdrawal with respect to such Partner’s GP-Related Partner Interest resulted from such Partner’s death or Incompetence, such Partner’s estate or legal representative, as the case may be, may elect, at the time described below, to receive a Nonvoting Limited Partner GP-Related Partner Interest and retain such Partner’s GP-Related Profit Sharing Percentage in all (but not less than all) illiquid investments of the Partnership in lieu of a cash payment (or Investor Note) in settlement of that portion of the Withdrawn Partner’s GP-Related Partner Interest.",
"The election referred to above shall be made within 60 days after the Withdrawn Partner’s Settlement Date, based on a statement of the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5. (f) For purposes of clause (y) of paragraph (e)(i) above, a Withdrawn Partner’s “percentage interest” means his or her GP-Related Profit Sharing Percentage as of the Settlement Date in the relevant GP-Related Investment. The Withdrawn Partner shall retain his or her percentage interest in such GP-Related Investment and shall retain his or her GP-Related Capital Account or portion thereof attributable to such GP-Related Investment, in which case such Withdrawn Partner (a “Retaining Withdrawn Partner”) shall become and remain a Special Limited Partner for such purpose (and, if the General Partner so designates, such Special Limited Partner shall be a Nonvoting Limited Partner). The GP-Related Partner Interest of a Retaining Withdrawn Partner pursuant to this paragraph (f) shall be subject to the terms and conditions applicable to GP-Related Partner Interests of any kind hereunder and such other terms and conditions as are established by the General Partner. At the option of the General Partner in its sole discretion, the General Partner and the Retaining Withdrawn Partner may agree to have the Partnership acquire such GP-Related Partner Interest without the approval of the other Partners; provided, that the General Partner shall reflect in the books and records of the Partnership the terms of any acquisition pursuant to this sentence.",
"(g) The General Partner may elect, in lieu of payment in cash of any amount payable to a Withdrawn Partner pursuant to paragraph (e) above, (i) to have the Partnership issue to the Withdrawn Partner a subordinated promissory note and/or (ii) to distribute in kind to the Withdrawn Partner such Withdrawn Partner’s pro rata share (as determined by the General Partner) of any securities or other investments of the Partnership in relation to such Partner’s GP-Related Partner Interest.",
"If any securities or other investments are distributed in kind to a Withdrawn Partner under this paragraph (g), the amount described in clause (x) of paragraph (e)(i) shall be reduced by the value of such distribution as valued on the latest balance sheet of the Partnership in accordance with generally accepted accounting principles or, if not appearing on such balance sheet, as reasonably determined by the General Partner. (h) [Intentionally omitted]. (i) Within 120 days after each Settlement Date, the General Partner shall submit to the Withdrawn Partner a statement of the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5 together with any cash payment, subordinated promissory note and in kind distributions to be made to such Partner as shall be determined by the General Partner. The General Partner shall submit to the Withdrawn Partner supplemental statements with respect to additional amounts payable to or by the 60 -------------------------------------------------------------------------------- Withdrawn Partner in respect of the settlement of his or her GP-Related Partner Interest in the Partnership (e.g., payments in respect of GP-Related Investments pursuant to paragraph (f) above or adjustments to reserves pursuant to paragraph (j) below) promptly after such amounts are determined by the General Partner. To the fullest extent permitted by law, such statements and the valuations on which they are based shall be accepted by the Withdrawn Partner without examination of the accounting books and records of the Partnership or other inquiry.",
"Any amounts payable by the Partnership to a Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject to the prior payment or provision for payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to the applicable date of payment or distribution; provided, that such Withdrawn Partner shall otherwise rank pari passu in right of payment (x) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year before the Withdrawal Date of the Withdrawn Partner in question and (y) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year after the Withdrawal Date of the Withdrawn Partner in question. (j) If the aggregate reserves established by the General Partner as of the Settlement Date in making the foregoing calculations should prove, in the determination of the General Partner, to be excessive or inadequate, the General Partner may elect, but shall not be obligated, to pay the Withdrawn Partner or his or her estate such excess, or to charge the Withdrawn Partner or his or her estate such deficiency, as the case may be. (k) Any amounts owed by the Withdrawn Partner to the Partnership at any time on or after the Settlement Date (e.g., outstanding Partnership loans or advances to such Withdrawn Partner) shall be offset against any amounts payable or distributable by the Partnership to the Withdrawn Partner at any time on or after the Settlement Date or shall be paid by the Withdrawn Partner to the Partnership, in each case as determined by the General Partner.",
"All cash amounts payable by a Withdrawn Partner to the Partnership under this Section 6.5 shall bear interest from the due date to the date of payment at a floating rate equal to the lesser of (x) the Prime Rate or (y) the maximum rate of interest permitted by applicable law. The “due date” of amounts payable by a Withdrawn Partner pursuant to Section 6.5(i) above shall be 120 days after a Withdrawn Partner’s Settlement Date. The “due date” of amounts payable to or by a Withdrawn Partner in respect of GP-Related Investments for which the Withdrawn Partner has retained a percentage interest in accordance with paragraph (f) above shall be 120 days after realization with respect to such GP-Related Investment.",
"The “due date” of any other amounts payable by a Withdrawn Partner shall be 60 days after the date such amounts are determined to be payable. (l) At the time of the settlement of any Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, the General Partner may, to the fullest extent permitted by applicable law, impose any restrictions it deems appropriate on the assignment, pledge, grant of a security interest, encumbrance or other transfer by such Withdrawn Partner of any interest in any GP-Related Investment retained by such Withdrawn Partner, any securities or other investments distributed in kind to such Withdrawn Partner or such Withdrawn Partner’s right to any payment from the Partnership.",
"61 -------------------------------------------------------------------------------- (m) If a Partner is required to Withdraw from the Partnership with respect to such Partner’s GP-Related Partner Interest for Cause pursuant to Section 6.2(d), then his or her GP-Related Partner Interest shall be settled in accordance with paragraphs (a)-(q) of this Section 6.5; provided, however, that the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such settlement: (i) In settling the Withdrawn Partner’s interest in any GP-Related Investment in which he or she has an interest as of his or her Settlement Date, the General Partner may elect to (A) determine the GP-Related Unrealized Net Income (Loss) attributable to each such GP-Related Investment as of the Settlement Date and allocate to the appropriate GP-Related Capital Account of the Withdrawn Partner his or her allocable share of such GP-Related Unrealized Net Income (Loss) for purposes of calculating the aggregate balance of such Withdrawn Partner’s GP-Related Capital Account pursuant to clause (x) of paragraph (e)(i) above, (B) credit or debit, as applicable, the Withdrawn Partner with the balance of his or her GP-Related Capital Account or portion thereof attributable to each such GP-Related Investment as of his or her Settlement Date without giving effect to the GP-Related Unrealized Net Income (Loss) from such GP-Related Investment as of his or her Settlement Date, which shall be forfeited by the Withdrawn Partner or (C) apply the provisions of paragraph (f) above; provided, that the maximum amount of GP-Related Net Income (Loss) allocable to such Withdrawn Partner with respect to any GP-Related Investment shall equal such Partner’s percentage interest of the GP-Related Unrealized Net Income, if any, attributable to such GP-Related Investment as of the Settlement Date (the balance of such GP-Related Net Income (Loss), if any, shall be allocated as determined by the General Partner).",
"The Withdrawn Partner shall not have any continuing interest in any GP-Related Investment to the extent an election is made pursuant to (A) or (B) above. (ii) Any amounts payable by the Partnership to the Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject to the prior payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to or on or after the applicable date of payment or distribution. (n) The payments to a Withdrawn Partner pursuant to this Section 6.5 may be conditioned on the compliance by such Withdrawn Partner with any lawful and reasonable (under the circumstances) restrictions against engaging or investing in a business competitive with that of the Partnership or any of its subsidiaries and Affiliates for a period not exceeding two years determined by the General Partner.",
"Upon written notice to the General Partner, any Withdrawn Partner who is subject to noncompetition restrictions established by the General Partner pursuant to this paragraph (n) may elect to forfeit the principal amount payable in the final installment of his or her subordinated promissory note, together with interest to be accrued on such installment after the date of forfeiture, in lieu of being bound by such restrictions. (o) In addition to the foregoing, the General Partner shall have the right to pay a Withdrawn Partner (other than the General Partner) a discretionary additional payment in an amount and based upon such circumstances and conditions as it determines to be relevant. The provisions of this Section 6.5 shall apply to any Investor Special Limited Partner relating to another Limited Partner, and to any transferee of any GP-Related Partner Interest of such Partner pursuant to Section 6.3, if such Partner Withdraws from the Partnership. 62 -------------------------------------------------------------------------------- (p) (i) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the Withdrawn Partner’s GP-Related Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.",
"(ii) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners. (q) Each Partner (other than the General Partner) hereby irrevocably appoints the General Partner as such Partner’s true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements, instruments, consents, ratifications, documents and certificates which the General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 6.5, including, without limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership.",
"Such power of attorney is coupled with an interest and shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner. Section 6.6. Termination of the Partnership. The General Partner may dissolve the Partnership at any time on giving notice of the dissolution to the other Partners. Upon the dissolution of the Partnership, the Partners’ respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in Section 6.5, which provides for allocations to the GP-Related Capital Accounts of the Partners and distributions in accordance with the capital account balances of the Partners. Section 6.7. Certain Tax Matters. (a) The General Partner shall determine all matters concerning allocations for tax purposes not expressly provided for herein in its sole discretion. (b) The General Partner shall cause to be prepared all federal, state and local tax returns of the Partnership for each year for which such returns are required to be filed and, after approval of such returns by the General Partner, shall cause such returns to be timely filed.",
"The General Partner shall determine the appropriate treatment of each item of income, gain, loss, deduction and credit of the Partnership and the accounting methods and conventions under the tax laws of the United States, the several States and other relevant jurisdictions as to the 63 -------------------------------------------------------------------------------- treatment of any such item or any other method or procedure related to the preparation of such tax returns. The General Partner may cause the Partnership to make or refrain from making any and all elections permitted by such tax laws. Each Partner agrees that he or she shall not, unless he or she provides prior notice of such action to the Partnership, (i) treat, on his or her individual income tax returns, any item of income, gain, loss, deduction or credit relating to his or her interest in the Partnership in a manner inconsistent with the treatment of such item by the Partnership as reflected on the Form K-1 or other information statement furnished by the Partnership to such Partner for use in preparing his or her income tax returns or (ii) file any claim for refund relating to any such item based on, or which would result in, such inconsistent treatment.",
"In respect of an income tax audit of any tax return of the Partnership, the filing of any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership, or any administrative or judicial proceedings arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, (A) the Tax Matters Partner (as defined below) shall be authorized to act for, and his or her decision shall be final and binding upon, the Partnership and all Partners except to the extent a Partner shall properly elect to be excluded from such proceeding pursuant to the Code, (B) all expenses incurred by the Tax Matters Partner in connection therewith (including, without limitation, attorneys’, accountants’ and other experts’ fees and disbursements) shall be expenses of the Partnership and (C) no Partner shall have the right to (1) participate in the audit of any Partnership tax return, (2) file any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership (unless he or she provides prior notice of such action to the Partnership as provided above), (3) participate in any administrative or judicial proceedings conducted by the Partnership or the Tax Matters Partner arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim or (4) appeal, challenge or otherwise protest any adverse findings in any such audit conducted by the Partnership or the Tax Matters Partner or with respect to any such amended return or claim for refund filed by the Partnership or the Tax Matters Partner or in any such administrative or judicial proceedings conducted by the Partnership or the Tax Matters Partner. The Partnership and each Partner hereby designate any person selected by the General Partner as the “tax matters partner” or “partnership representative” (each as defined under the Code), as applicable (the “Tax Matters Partner”).",
"To the fullest extent permitted by applicable law, each Partner agrees to indemnify and hold harmless the Partnership and all other Partners from and against any and all liabilities, obligations, damages, deficiencies and expenses resulting from any breach or violation by such Partner of the provisions of this Section 6.7 and from all actions, suits, proceedings, demands, assessments, judgments, costs and expenses, including reasonable attorneys’ fees and disbursements, incident to any such breach or violation. (c) Each individual Partner shall provide to the Partnership copies of each federal, state and local income tax return of such Partner (including any amendment thereof) within 30 days after filing such return.",
"(d) To the extent the General Partner reasonably determines that the Partnership (or any entity in which the Partnership holds an interest) is or may be required by law to withhold or to make tax payments, including interest and penalties on such amounts, on behalf of or with respect to any Partner (“Tax Advances”), the General Partner may withhold or escrow such amounts or make such tax payments as so required. All Tax Advances made on 64 -------------------------------------------------------------------------------- behalf of a Partner shall, at the option of the General Partner, (i) be promptly paid to the Partnership by the Partner on whose behalf such Tax Advances were made or (ii) be repaid by reducing the amount of the current or next succeeding distribution or distributions which would otherwise have been made to such Partner or, if such distributions are not sufficient for that purpose, by so reducing the proceeds upon dissolution of the Partnership otherwise payable to such Partner.",
"Whenever the General Partner selects option (ii) pursuant to the preceding sentence for repayment of a Tax Advance by a Partner, for all other purposes of this Agreement such Partner shall be treated as having received all distributions (whether before or upon dissolution of the Partnership) unreduced by the amount of such Tax Advance. To the fullest extent permitted by law, each Partner hereby agrees to indemnify and hold harmless all other Partners from and against any liability (including, without limitation, any liability for taxes, penalties, additions to tax or interest) with respect to income attributable to or distributions or other payments to such Partner. The obligations of a Partner set forth in this Section 6.7(d) shall survive the withdrawal of any Partner from the Partnership or any Transfer of a Partner’s interest. Section 6.8. Special Basis Adjustments.",
"In connection with any assignment or transfer of a Partnership interest permitted by the terms of this Agreement, the General Partner may cause the Partnership, on behalf of the Partners and at the time and in the manner provided in Treasury Regulations Section 1.754-1(b), to make an election to adjust the basis of the Partnership’s property in the manner provided in Sections 734(b) and 743(b) of the Code.",
"ARTICLE VII CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS Section 7.1. Capital Commitment Interests, etc. (a) (i) This Article VII and Article VIII hereof set forth certain terms and conditions with respect to the Capital Commitment Partner Interests and the Capital Commitment BREDS II Interest and matters related to the Capital Commitment Partner Interests and the Capital Commitment BREDS II Interest. Except as otherwise expressly provided in this Article VII or in Article VIII, the terms and provisions of this Article VII and Article VIII shall not apply to the GP-Related Partner Interests or the GP-Related BREDS II Interest. (ii) Each Partner severally, agrees to make contributions of capital to the Partnership (“Capital Commitment-Related Capital Contributions”) as required to fund the Partnership’s direct or indirect capital contributions to BREDS II, in respect of the Capital Commitment BREDS II Interest, if any, and the related Capital Commitment BREDS II Commitment, if any. No Partner shall be obligated to make Capital Commitment-Related Capital Contributions to the Partnership in an amount in excess of such Partner’s Capital Commitment-Related Commitment. The Commitment Agreements and SMD Agreements, if any, of the Partners may include provisions with respect to the foregoing matters.",
"It is understood that a Partner will not necessarily participate in each Capital Commitment Investment (which may include additional amounts invested in an existing Capital Commitment Investment) nor will a Partner necessarily have the same 65 -------------------------------------------------------------------------------- Capital Commitment Profit Sharing Percentage with respect to (i) the Partnership’s portion of the Capital Commitment BREDS II Commitment, if any or (ii) the making of each Capital Commitment Investment in which such Partner participates; provided, that this in no way limits the terms of any Commitment Agreement or SMD Agreement. In addition, nothing contained herein shall be construed to give any Partner the right to obtain financing with respect to the purchase of any Capital Commitment Interest, and nothing contained herein shall limit or dictate the terms upon which the General Partner and its Affiliates may provide such financing. The acquisition of a Capital Commitment Interest by a Partner shall be evidenced by receipt by the Partnership of funds equal to such Partner’s Capital Commitment-Related Commitment then due with respect to such Capital Commitment Interest and such appropriate documentation as the General Partner may submit to the Partners from time to time.",
"(b) The General Partner or one of its Affiliates (in such capacity, the “Advancing Party”) may in its sole discretion advance to any Limited Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners that are also executive officers of Blackstone) all or any portion of the Capital Commitment-Related Capital Contributions due to the Partnership from such Limited Partner with respect to any Capital Commitment Investment (“Firm Advances”). Each such Limited Partner shall pay to the Advancing Party interest on each Firm Advance from the date of such Firm Advance until the repayment thereof by such Limited Partner. Each Firm Advance shall be repayable in full, including accrued interest to the date of such repayment, upon prior written notice by the Advancing Party.",
"The making and repayment of each Firm Advance shall be recorded in the books and records of the Partnership, and such recording shall be conclusive evidence of each such Firm Advance, binding on the Limited Partner and the Advancing Party absent manifest error. Except as provided below, the interest rate applicable to a Firm Advance shall equal the cost of funds of the Advancing Party at the time of the making of such Firm Advance. The Advancing Party shall inform any Limited Partner of such rate upon such Limited Partner’s request; provided, that such interest rate shall not exceed the maximum interest rate allowable by applicable law; provided further, that amounts that are otherwise payable to such Limited Partner pursuant to Section 7.4(a) shall be used to repay such Firm Advance (including interest thereon). The Advancing Party may, in its sole discretion, change the terms of Firm Advances (including the terms contained herein) and/or discontinue the making of Firm Advances; provided, that (i) the Advancing Party shall notify the relevant Limited Partners of any material changes to such terms and (ii) the interest rate applicable to such Firm Advances and overdue amounts thereon shall not exceed the maximum interest rate allowable by applicable law.",
"Section 7.2. Capital Commitment Capital Accounts. (a) There shall be established for each Partner on the books of the Partnership as of the date of formation of the Partnership, or such later date on which such Partner is admitted to the Partnership, and on each such other date as such Partner first acquires a Capital Commitment Interest in a particular Capital Commitment Investment, a Capital Commitment Capital Account for each Capital Commitment Investment in which such Partner acquires a Capital Commitment Interest on such date. Each Capital Commitment-Related Capital Contribution of a Partner shall be credited to the appropriate Capital Commitment Capital Account of such Partner on the date such Capital Commitment-Related Capital Contribution is paid to the Partnership.",
"Capital Commitment Capital Accounts shall be adjusted to reflect any transfer of a Partner’s interest in the Partnership related to his or her Capital Commitment Partner Interest, as provided in this Agreement. 66 -------------------------------------------------------------------------------- (b) A Partner shall not have any obligation to the Partnership or to any other Partner to restore any negative balance in the Capital Commitment Capital Account of such Partner. Until distribution of any such Partner’s interest in the Partnership with respect to a Capital Commitment Interest as a result of the disposition by the Partnership of the related Capital Commitment Investment and in whole upon the dissolution of the Partnership, neither such Partner’s Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption except with the consent of the General Partner. Section 7.3. Allocations. (a) Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners (including the General Partner) participating in such Capital Commitment Investment in proportion to their respective Capital Commitment Profit Sharing Percentages for such Capital Commitment Investment.",
"Capital Commitment Net Income (Loss) on any Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion which such Partner’s aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; provided, that if any Partner makes the election provided for in Section 7.6, Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners participating in such Capital Commitment Investment who do not make such election in proportion to their respective Capital Commitment Profit Sharing Percentages for such Capital Commitment Investment. (b) Any special costs relating to distributions pursuant to Section 7.6 or Section 7.7 shall be specially allocated to the electing Limited Partner. (c) Notwithstanding the foregoing, the General Partner may make such allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.",
"Section 7.4. Distributions.",
"(a) Each Limited Partner’s allocable portion of Capital Commitment Net Income received from his or her Capital Commitment Investments, distributions to such Limited Partner that constitute returns of capital, and other Capital Commitment Net Income of the Partnership (including without limitation Capital Commitment Net Income attributable to Unallocated Capital Commitment Interests) during a Fiscal Year of the Partnership will be credited to payment of the Investor Notes to the extent required below as of the last day of such Fiscal Year (or on such earlier date as related distributions are made in the sole discretion of the General Partner) with any cash amount distributable to such Limited Partner pursuant to clauses (ii) and (vii) below to be distributed within 45 days after the end of each Fiscal Year of the Partnership (or in each case on such earlier date as selected by the General Partner in its sole discretion) as follows (subject to Section 7.4(c) below): 67 -------------------------------------------------------------------------------- (i) First, to the payment of interest then due on all Investor Notes (relating to Capital Commitment Investments or otherwise) of such Limited Partner (to the extent Capital Commitment Net Income and distributions or payments from Other Sources do not equal or exceed all interest payments due, the selection of those of such Limited Partner’s Investor Notes upon which interest is to be paid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor); (ii) Second, to distribution to the Limited Partner of an amount equal to the federal, state and local income taxes on income of the Partnership allocated to such Limited Partner for such year in respect of such Limited Partner’s Capital Commitment Partner Interest (the aggregate amount of any such distribution shall be determined by the General Partner, subject to the limitation that the minimum aggregate amount of such distribution be the tax that would be payable if the taxable income of the Partnership related to all Partners’ Capital Commitment Partner Interests were all allocated to an individual subject to the then-prevailing maximum federal, New York State and New York City tax rates (including, without limitation, the “medicare” tax imposed under Section 1411 of the Code and taking into account the extent to which such taxable income allocated by the Partnership was composed of long-term capital gains and the deductibility of state and local income taxes for federal income tax purposes)); provided, that additional amounts shall be paid to the Limited Partner pursuant to this clause (ii) to the extent that such amount reduces the amount otherwise distributable to the Limited Partner pursuant to a comparable provision in any other BCE Agreement and there are not sufficient amounts to fully satisfy such provision from the relevant partnership or other entity; provided further, that amounts paid pursuant to the provisions in such other BCE Agreements comparable to the immediately preceding proviso shall reduce those amounts otherwise distributable to the Limited Partner pursuant to provisions in such other BCE Agreements that are comparable to this clause (ii); (iii) Third, to the payment in full of the principal amount of the Investor Note financing (A) any Capital Commitment Investment disposed of during or prior to such Fiscal Year or (B) any BCE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year, to the extent not repaid from Other Sources; (iv) Fourth, to the return to such Limited Partner of (A) all Capital Commitment-Related Capital Contributions made in respect of the Capital Commitment Interest to which any Capital Commitment Investment disposed of during or prior to such Fiscal Year relates or (B) all capital contributions made to any Blackstone Collateral Entity (other than the Partnership) in respect of interests therein relating to BCE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year (including all principal paid on the related Investor Notes), to the extent not repaid from amounts of Other Sources (other than amounts of CC Carried Interest); 68 -------------------------------------------------------------------------------- (v) Fifth, to the payment of principal (including any previously deferred amounts) then owing under all other Investor Notes of such Limited Partner (including those unrelated to the Partnership), the selection of those of such Limited Partner’s Investor Notes to be repaid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor; (vi) Sixth, up to 50% of any Capital Commitment Net Income remaining after application pursuant to clauses (i) through (v) above shall be applied pro rata to prepayment of principal of all remaining Investor Notes of such Limited Partner (including those unrelated to the Partnership), the selection of those of such Limited Partner’s Investor Notes to be repaid, the division of payments among such Investor Notes and the percentage of remaining Capital Commitment Net Income to be applied thereto to be determined by the Lender or Guarantor; and (vii) Seventh, to such Limited Partner to the extent of any amount of Capital Commitment Net Income remaining after making the distributions in clauses (i) through (vi) above, and such amount is not otherwise required to be applied to Investor Notes pursuant to the terms thereof.",
"To the extent there is a partial disposition of a Capital Commitment Investment or any other BCE Investment, as applicable, the payments in clauses (iii) and (iv) above shall be based on that portion of the Capital Commitment Investment or other BCE Investment, as applicable, disposed of, and the principal amount and related interest payments of such Investor Note shall be adjusted to reflect such partial payment so that there are equal payments over the remaining term of the related Investor Note. For a Limited Partner who is no longer an employee or officer of Blackstone, distributions shall be made pursuant to clauses (i) through (iii) above, and then, unless the General Partner or its Affiliate has exercised its rights pursuant to Section 8.1 hereof, any remaining income or other distribution in respect of such Limited Partner’s Capital Commitment Partner Interest shall be applied to the prepayment of the outstanding Investor Notes of such Limited Partner, until all such Limited Partner’s Investor Notes have been repaid in full, with any such income or other distribution remaining thereafter distributed to such Limited Partner. Distributions of Capital Commitment Net Income may be made at any other time at the discretion of the General Partner.",
"At the General Partner’s discretion, any amounts distributed to a Limited Partner in respect of such Limited Partner’s Capital Commitment Partner Interest will be net of any interest and principal payable on his or her Investor Notes for the full period in respect of which the distribution is made. A distribution of Capital Commitment Net Income to the General Partner shall be made contemporaneously with each distribution of Capital Commitment Net Income to or for the accounts of the Limited Partners. (b) [Intentionally omitted.] (c) To the extent that the foregoing Partnership distributions and distributions and payments from Other Sources are insufficient to satisfy any principal and/or interest due on Investor Notes, and to the extent that the General Partner in its sole discretion elects to apply this paragraph (c) to any individual payments due, such unpaid interest will be added to the 69 -------------------------------------------------------------------------------- remaining principal amount of such Investor Notes and shall be payable on the next scheduled principal payment date (along with any deferred principal and any principal and interest due on such date); provided, that such deferral shall not apply to a Limited Partner that is no longer an employee or officer of Blackstone.",
"All unpaid interest on such Investor Notes shall accrue interest at the interest rate then in effect for such Investor Notes. (d) [Intentionally omitted.] (e) The Capital Commitment Capital Account of each Partner shall be reduced by the amount of any distribution to such Partner pursuant to Section 7.4(a). (f) At any time that a sale, exchange, transfer or other disposition of a portion of a Capital Commitment Investment is being considered by the Partnership or BREDS II (a “Capital Commitment Disposable Investment”), at the election of the General Partner each Partner’s Capital Commitment Interest with respect to such Capital Commitment Investment shall be vertically divided into two separate Capital Commitment Interests, a Capital Commitment Interest attributable to the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment Class B Interest”), and a Capital Commitment Interest attributable to such Capital Commitment Investment excluding the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment Class A Interest”). Distributions (including those resulting from a direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Disposable Investment shall be made only to holders of Capital Commitment Class B Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class B Interests, and distributions (including those resulting from the direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Investment excluding such Capital Commitment Disposable Investment shall be made only to holders of Capital Commitment Class A Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class A Interests.",
"(g) (i) If the Partnership is obligated under the Giveback Provisions to contribute to BREDS II all or a portion of a Giveback Amount with respect to the Capital Commitment BREDS II Interest (the amount of any such obligation of the Partnership being herein called a “Capital Commitment Giveback Amount”), the General Partner shall call for such amounts as are necessary to satisfy such obligation of the Partnership as determined by the General Partner, in which case each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions by the Partnership with respect to the Capital Commitment BREDS II Interest (the “Capital Commitment Recontribution Amount”) which equals such Partner’s pro rata share of prior distributions in connection with (a) the Capital Commitment BREDS II Investment giving rise to the Capital Commitment Giveback Amount, (b) if the amounts contributed pursuant to clause (a) above are insufficient to satisfy such Capital Commitment Giveback Amount, Capital Commitment BREDS II Investments other than the one giving rise to such obligation and (c) if the Capital Commitment Giveback Amount is unrelated to a specific Capital Commitment BREDS II Investment, all Capital Commitment BREDS II Investments. Each Partner shall promptly contribute to the Partnership upon notice thereof such Partner’s Capital Commitment 70 -------------------------------------------------------------------------------- Recontribution Amount. Prior to such time, the General Partner may, in the General Partner’s discretion (but shall be under no obligation to), provide notice that in the General Partner’s judgment, the potential obligations in respect of the Capital Commitment Giveback Amount will probably materialize (and an estimate of the aggregate amount of such obligations).",
"(ii) (A) In the event any Partner (a “Capital Commitment Defaulting Party”) fails to recontribute all or any portion of such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Capital Commitment Profit Sharing Percentages), such amounts as are necessary to fulfill the Capital Commitment Defaulting Party’s obligation to pay such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount (a “Capital Commitment Deficiency Contribution”) if the General Partner determines in its good faith judgment that the Partnership will be unable to collect such amount in cash from such Capital Commitment Defaulting Party for payment of the Capital Commitment Giveback Amount at least 20 Business Days prior to the latest date that the Partnership is permitted to pay the Capital Commitment Giveback Amount; provided, that no Partner shall as a result of such Capital Commitment Deficiency Contribution be required to contribute an amount in excess of 150% of the amount of the Capital Commitment Recontribution Amount initially requested from such Partner in respect of such default. Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the Capital Commitment Defaulting Party, the cost of which shall be a Partnership expense to the extent not ultimately reimbursed by the Capital Commitment Defaulting Party.",
"It is agreed that the Partnership shall have the right (effective upon such Capital Commitment Defaulting Party becoming a Capital Commitment Defaulting Party) to set-off as appropriate and apply against such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount any amounts otherwise payable to the Capital Commitment Defaulting Party by the Partnership or any Affiliate thereof. Each Partner hereby grants to the General Partner a security interest, effective upon such Partner becoming a Capital Commitment Defaulting Party, in all accounts receivable and other rights to receive payment from the Partnership or any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and authority, in the name of such Partner or in the name of the Partnership, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the Capital Commitment Recontribution Amount of a Capital Commitment Defaulting Party from the date such Capital Commitment Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.",
"71 -------------------------------------------------------------------------------- (B) Any Partner’s failure to make a Capital Commitment Deficiency Contribution shall cause such Partner to be a Capital Commitment Defaulting Party with respect to such amount. (iii) A Partner’s obligation to make contributions to the Partnership under this Section 7.4(g) shall survive the termination of the Partnership. Section 7.5. Valuations. Capital Commitment Investments shall be valued annually as of the end of each year (and at such other times as deemed appropriate by the General Partner) in accordance with the principles utilized by the Partnership (or any Affiliate of the Partnership that is a general partner of BREDS II) in valuing investments of BREDS II or, in the case of investments not held by BREDS II, in the good faith judgment of the General Partner, subject in each case to the second proviso of the immediately succeeding sentence. The value of any Capital Commitment Interest as of any date (the “Capital Commitment Value”) shall be based on the value of the underlying Capital Commitment Investment as set forth above; provided, that the Capital Commitment Value may be determined as of an earlier date if determined appropriate by the General Partner in good faith; provided further, that such value may be adjusted by the General Partner to take into account factors relating solely to the value of a Capital Commitment Interest (as compared to the value of the underlying Capital Commitment Investment), such as restrictions on transferability, the lack of a market for such Capital Commitment Interest and lack of control of the underlying Capital Commitment Investment.",
"To the full extent permitted by applicable law such valuations shall be final and binding on all Partners; provided further, that the immediately preceding proviso shall not apply to any Capital Commitment Interests held by a person who is or was at any time a direct member or partner of a General Partner. Section 7.6. Disposition Election. (a) At any time prior to the date of the Partnership’s execution of a definitive agreement to dispose of a Capital Commitment Investment, the General Partner may in its sole discretion permit a Partner to retain all or any portion of its pro rata share of such Capital Commitment Investment (as measured by such Partner’s Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment). If the General Partner so permits, such Partner shall instruct the General Partner in writing prior to such date (i) not to dispose of all or any portion of such Partner’s pro rata share of such Capital Commitment Investment (the “Retained Portion”) and (ii) either to (A) distribute such Retained Portion to such Partner on the closing date of such disposition or (B) retain such Retained Portion in the Partnership on behalf of such Partner until such time as such Partner shall instruct the General Partner upon 5 days’ notice to distribute such Retained Portion to such Partner.",
"Such Partner’s Capital Commitment Capital Account shall not be adjusted in any way to reflect the retention in the Partnership of such Retained Portion or the Partnership’s disposition of other Partners’ pro rata shares of such Capital Commitment Investment; provided, that such Partner’s Capital Commitment Capital Account shall be adjusted upon distribution of such Retained Portion to such Partner or upon distribution of proceeds with respect to a subsequent disposition thereof by the Partnership. 72 -------------------------------------------------------------------------------- (b) No distribution of such Retained Portion shall occur unless any Investor Notes relating thereto shall have been paid in full prior to or simultaneously with such distribution. Section 7.7. Capital Commitment Special Distribution Election. (a) From time to time during the term of this Agreement, the General Partner may in its sole discretion, upon receipt of a written request from a Partner, distribute to such Partner any portion of its pro rata share of a Capital Commitment Investment (as measured by such Partner’s Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment) (a “Capital Commitment Special Distribution”). Such Partner’s Capital Commitment Capital Account shall be adjusted upon distribution of such Capital Commitment Special Distribution. (b) No Capital Commitment Special Distributions shall occur unless any Investor Notes relating thereto shall have been paid in full prior to or simultaneously with such Capital Commitment Special Distribution.",
"ARTICLE VIII WITHDRAWAL; ADMISSION OF NEW PARTNERS Section 8.1. Limited Partner Withdrawal; Repurchase of Capital Commitment Interests. (a) Capital Commitment Interests (or a portion thereof) that were financed by Investor Notes will be treated as Non-Contingent for purposes hereof based upon the proportion of (a) the sum of Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to each Capital Commitment Interest and principal payments on the related Investor Note to (b) the sum of the Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to such Capital Commitment Interest, the original principal amount of such Investor Note and all deferred amounts of interest which from time to time comprise part of the principal amount of the Investor Note. A Limited Partner may prepay a portion of any outstanding principal on the Investor Notes; provided, that in the event that a Limited Partner prepays all or any portion of the principal amount of the Investor Notes within nine months prior to the date on which such Limited Partner is no longer an employee or officer of Blackstone, the Partnership (or its designee) shall have the right, in its sole discretion, to purchase the Capital Commitment Interest that became Non-Contingent as a result of such prepayment; provided further, that the purchase price for such Capital Commitment Interest shall be determined in accordance with the determination of the purchase price of a Limited Partner’s Contingent Capital Commitment Interests as set forth in paragraph (b) below.",
"Prepayments made by a Limited Partner shall apply pro rata against all of such Limited Partner’s Investor Notes; provided, that such Limited Partner may request that such prepayments be applied only to Investor Notes related to BCE Investments that are related to one or more Blackstone Collateral Entities specified by such Limited Partner. Except as expressly provided herein, Capital Commitment Interests that were not financed in any respect with Investor Notes shall be treated as Non-Contingent Capital Commitment Interests. 73 -------------------------------------------------------------------------------- (b) (i) Upon a Limited Partner ceasing to be an officer or employee of the General Partner or any of its Affiliates, other than as a result of such Limited Partner dying or suffering a Total Disability, such Limited Partner (the “Withdrawn Partner”) and the Partnership or any other person designated by the General Partner shall each have the right (exercisable by the Withdrawn Partner within 30 days and by the Partnership or its designee(s) within 45 days after such Limited Partner’s ceasing to be such an officer or employee) or any time thereafter, upon 30 days’ notice, but not the obligation, to require (subject to the prior consent of the General Partner on behalf of the Partnership, such consent not to be unreasonably withheld or delayed), subject to the Partnership Act, to buy (in the case of exercise of such right by such Withdrawn Partner) or the Withdrawn Partner to sell (in the case of exercise of such right by the Partnership or its designee(s)) all (but not less than all) such Withdrawn Partner’s Contingent Capital Commitment Interests.",
"(ii) The purchase price for each such Contingent Capital Commitment Interest shall be an amount equal to the lesser of (A) the Adjusted Unpaid Principal Amount (as hereinafter defined) with respect to such Contingent Capital Commitment Interest at the date of the purchase of such Contingent Capital Commitment Interest by the Partnership or its designee(s), or (B) the Capital Commitment Value of such Contingent Capital Commitment Interest (determined in good faith by the General Partner as of the most recent valuation prior to the date of the purchase of such Contingent Capital Commitment Interest by the Partnership or its designee(s)). (iii) The “Adjusted Unpaid Principal Amount” with respect to any Contingent Capital Commitment Interest at the date of any such purchase means the sum of (A) the outstanding principal amount of the related Investor Note(s) plus accrued interest thereon to the date of such purchase (such portion of the purchase price to be paid in cash) and (B) an additional amount (the “Adjustment Amount”) equal to (x) all interest paid by the Limited Partner on the portion of the principal amount of such Investor Note(s) relating to the portion of the related Capital Commitment Interest remaining Contingent and to be repurchased, plus (y) all Capital Commitment Net Losses allocated to the Withdrawn Partner on such Contingent portion of such Capital Commitment Interest, minus (z) all Capital Commitment Net Income allocated to the Withdrawn Partner on such Contingent portion of such Capital Commitment Interest; provided, that, if the Withdrawn Partner was terminated from employment or his or her position as an officer for Cause, all amounts referred to in clause (x) or (y) of the Adjustment Amount, in the General Partner’s sole discretion, may be deemed to equal zero.",
"The Adjustment Amount shall, if positive, be payable by the holders of the purchased Capital Commitment Interests to the Withdrawn Partner from the next Capital Commitment Net Income received by such holders on the Contingent portion of such Withdrawn Partner’s Capital Commitment Interests at the time such Capital Commitment Net Income is received. If the Adjustment Amount is negative, it shall be payable to the holders of the purchased Capital Commitment Interest by the Withdrawn Partner (A) from the next Capital Commitment Net Income on the Non-Contingent portion of the Withdrawn Partner’s Capital Commitment Interests at the time such Capital Commitment Net Income is received by the Withdrawn Partner , or (B) if the Partnership or its designee(s) elects to purchase such Withdrawn Partner’s Non-Contingent Capital Commitment Interests, in cash by the Withdrawn Partner at the time of such purchase; provided, that the General Partner and its Affiliates may offset any amounts otherwise owing to a Withdrawn Partner against any Adjustment Amount owed by such Withdrawn Partner.",
"Until so paid, such remaining Adjustment Amount will not itself bear interest. 74 -------------------------------------------------------------------------------- (iv) Upon such Limited Partner ceasing to be such an officer or employee of the General Partner or any of its Affiliates, all Investor Notes shall become fully recourse to the Withdrawn Partner in his or her individual capacity (whether or not the Withdrawn Partner or the Partnership or its designee(s) exercises the right to require repurchase of the Withdrawn Partner’s Contingent Capital Commitment Interests). (v) If, at any time, the Withdrawn Partner or the Partnership or its designee(s) exercises the right to require repurchase of such Limited Partner’s Contingent Capital Commitment Interests, then, at the time of such repurchase of such Contingent Capital Commitment Interests, the related Investor Note(s) shall become due and payable in full. (vi) If neither the Withdrawn Partner nor the Partnership or its designee(s) exercises the right to require repurchase of such Contingent Capital Commitment Interests, then the Withdrawn Partner shall retain the Contingent portion of his or her Capital Commitment Interests and the related Investor Note(s) shall remain outstanding, shall become fully recourse to the Withdrawn Partner in his or her individual capacity, shall be payable in accordance with their remaining original maturity schedule(s) and shall be prepayable at any time by the Withdrawn Partner at his or her option (and the General Partner shall apply such prepayments against outstanding Investor Notes on a pro rata basis).",
"(vii) To the extent that another Partner purchases a portion of a Capital Commitment Interest of a Withdrawn Partner, the purchasing Partner’s Capital Commitment Capital Account and Capital Commitment Profit Sharing Percentage for such Capital Commitment Investment shall be correspondingly increased. (c) Upon the occurrence of a Final Event with respect to any Limited Partner, such Limited Partner shall thereupon cease to be a Partner with respect to such Limited Partner’s Capital Commitment Partner Interest. If such a Final Event shall occur, no Successor in Interest to any such Limited Partner shall for any purpose hereof become or be deemed to become a Partner. The sole right, as against the Partnership and the remaining Partners, acquired hereunder by, or resulting hereunder to, a Successor in Interest to any Partner shall be to receive any distributions and allocations with respect to such Limited Partner’s Capital Commitment Partner Interest pursuant to Article VII and this Article VIII (subject to the right of the Partnership to purchase the Capital Commitment Interests of such former Partner pursuant to Section 8.1(b) or Section 8.1(d)), to the extent, at the time, in the manner and in the amount otherwise payable to such Limited Partner had such a Final Event not occurred, and no other right shall be acquired hereunder by, or shall result hereunder to, a Successor in Interest to such Partner, whether by operation of law or otherwise. Until distribution of any such Partner’s interest in the Partnership upon the dissolution of the Partnership as provided in Section 9.2, neither his or her Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption without the consent of the General Partner.",
"The General Partner shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder with respect to such Partner’s Capital Commitment Partner Interest. 75 -------------------------------------------------------------------------------- (d) If a Limited Partner dies or suffers a Total Disability, all Contingent Capital Commitment Interests of such Partner shall be purchased by the Partnership or its designee (within 30 days of the first date on which the Partnership knows or has reason to know of such Limited Partner’s death or Total Disability) as provided in Section 8.1(b) (and the purchase price for such Contingent Capital Commitment Interests shall be determined in accordance with Section 8.1(b), except that any Adjustment Amount shall be payable by or to such Limited Partner, or, as applicable, such Limited Partner’s estate, personal representative or other Successor in Interest, in cash), and any Investor Notes financing such Contingent Capital Commitment Interests shall thereupon be prepaid as provided in Section 8.1(b).",
"Upon such Limited Partner’s death or Total Disability, any Investor Notes financing such Contingent Capital Commitment Interests shall become fully recourse. In addition, in the case of the death or Total Disability of a Limited Partner, if the Limited Partner, or, as applicable, such Limited Partner’s estate, personal representative or other Successor in Interest of such Limited Partner so requests in writing within 180 days of the Limited Partner’s death or ceasing to be an employee or member (directly or indirectly) of the General Partner or any of its Affiliates by reason of Total Disability (such requests shall not exceed one per calendar year), the Partnership or its designee may but is not obligated to purchase for cash all (but not less than all) Non-Contingent Capital Commitment Interests of such Limited Partner as of the last day of the Partnership’s then current Fiscal Year at a price equal to the Capital Commitment Value thereof as of the most recent valuation prior to the date of purchase. Each Limited Partner shall be required to include appropriate provisions in his or her will to reflect such provisions of this Agreement. In addition, the Partnership may, in the sole discretion of the General Partner, upon notice to such Limited Partner or, as applicable, the estate, personal representative or other Successor in Interest of such Limited Partner, within 30 days of the first date on which the General Partner knows or has reason to know of such Limited Partner’s death or Total Disability, determine either (i) to distribute Securities or other property to such Limited Partner or, as applicable, the estate, personal representative or other Successor in Interest of such Limited Partner, in exchange for such Non-Contingent Capital Commitment Interests as provided in Section 8.1(e) or (ii) to require sale of such Non-Contingent Capital Commitment Interests to the Partnership or its designee as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion) for an amount in cash equal to the Capital Commitment Value thereof.",
"(e) In lieu of retaining a Withdrawn Partner as a Limited Partner with respect to any Non-Contingent Capital Commitment Interests, the General Partner may, in its sole discretion, by notice to such Withdrawn Partner within 45 days of his or her ceasing to be an employee or officer of the General Partner or any of its Affiliates, or at any time thereafter, upon 30 days written notice, determine (1) to distribute to such Withdrawn Partner the pro rata portion of the Securities or other property underlying such Withdrawn Partner’s Non-Contingent Capital Commitment Interests, subject to any restrictions on distributions associated with the Securities or other property, in satisfaction of his or her Non-Contingent Capital Commitment Interests in the Partnership or (2) to cause, as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion), the Partnership or another 76 -------------------------------------------------------------------------------- person designated by the General Partner (who may be itself another Limited Partner or another Affiliate of the General Partner) to purchase all (but not less than all) of such Withdrawn Partner’s Non-Contingent Capital Commitment Interests for a price equal to the Capital Commitment Value thereof (determined in good faith by the General Partner as of the most recent valuation prior to the date of the purchase).",
"The General Partner shall condition any distribution or purchase of voting Securities pursuant to paragraph (d) above or this paragraph (e) upon the Withdrawn Partner’s execution and delivery to the Partnership of an appropriate irrevocable proxy, in favor of the General Partner or its nominee, relating to such Securities. (f) The Partnership may subsequently transfer any Unallocated Capital Commitment Interest or portion thereof which is purchased by it as described above to any other person approved by the General Partner. In connection with such purchase or transfer or the purchase of a Capital Commitment Interest or portion thereof by the General Partner’s designee(s), Blackstone may loan all or a portion of the purchase price of the transferred or purchased Capital Commitment Interest to the Partnership, the transferee or the designee-purchaser(s), as applicable (excluding any of the foregoing who is an executive officer of Blackstone).",
"To the extent that a Withdrawn Partner’s Capital Commitment Interests (or portions thereof) are repurchased by the Partnership and not transferred to or purchased by another person, all or any portion of such repurchased Capital Commitment Interests may, in the sole discretion of the General Partner, (i) be allocated to each Partner already participating in the Capital Commitment Investment to which the repurchased Capital Commitment Interest relates, (ii) be allocated to each Partner in the Partnership, whether or not already participating in such Capital Commitment Investment and/or (iii) continue to be held by the Partnership itself as an unallocated Capital Commitment Investment (such Capital Commitment Interests being herein called “Unallocated Capital Commitment Interests”).",
"To the extent that a Capital Commitment Interest is allocated to Partners as provided in clause (i) and/or (ii) above, any indebtedness incurred by the Partnership to finance such repurchase shall also be allocated to such Partners. All such Capital Commitment Interests allocated to Limited Partners shall be deemed to be Contingent and shall become Non-Contingent as and to the extent that the principal amount of such related indebtedness is repaid. The Limited Partners receiving such allocations shall be responsible for such related indebtedness only on a nonrecourse basis to the extent provided in this Agreement, except as otherwise provided in this Section 8.1 and such Limited Partners and the General Partner shall otherwise agree; provided, that such indebtedness shall become fully recourse to the extent and at the time provided in this Section 8.1.",
"If the indebtedness financing such repurchased interests is not to be nonrecourse or so limited, the Partnership may require an assumption by the Limited Partners of such indebtedness on the terms thereof as a precondition to allocation of the related Capital Commitment Interests to such Limited Partners; provided, that a Limited Partner shall not, except as set forth in his or her Investor Note, be obligated to accept any obligation that is personally recourse (except as otherwise provided in this Section 8.1), unless his or her prior consent is obtained. So long as the Partnership itself retains the Unallocated Capital Commitment Interests pursuant to clause (iii) above, such Unallocated Capital Commitment Interests shall belong to the Partnership and any indebtedness financing the Unallocated Capital Commitment Interests shall be an obligation of the Partnership to which all income of the Partnership is subject except as otherwise agreed by the lender of such indebtedness. Any Capital Commitment Net Income (Loss) on an Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion his or her aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; debt service on such related financing will be an expense of the Partnership allocable to all Partners in such proportions.",
"77 -------------------------------------------------------------------------------- (g) If a Partner is required to Withdraw from the Partnership with respect to such Partner’s Capital Commitment Partner Interest for Cause, then his or her Capital Commitment Interests shall be settled in accordance with paragraphs (a)-(f) and (j) of this Section 8.1; provided, that if such Partner was not at any time a direct partner or member of a General Partner, the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such settlement: (i) purchase for cash all of such Withdrawn Partner’s Non-Contingent Capital Commitment Interests. The purchase price for each such Non-Contingent Capital Commitment Interest shall be the lower of (A) the original cost of such Non-Contingent Capital Commitment Interest or (B) an amount equal to the Capital Commitment Value thereof (determined as of the most recent valuation prior to the date of the purchase of such Non-Contingent Capital Commitment Interest); (ii) allow the Withdrawn Partner to retain such Non-Contingent Capital Commitment Interests; provided, that the maximum amount of Capital Commitment Net Income allocable to such Withdrawn Partner with respect to any Capital Commitment Investment shall equal the amount of Capital Commitment Net Income that would have been allocated to such Withdrawn Partner if such Capital Commitment Investment had been sold as of the Settlement Date at the then prevailing Capital Commitment Value thereof; or (iii) in lieu of cash, purchase such Non-Contingent Capital Commitment Interests by providing the Withdrawn Partner with a promissory note in the amount determined in (i) above. Such promissory note shall have a maximum term of ten (10) years with interest at the Federal Funds Rate.",
"(h) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the Withdrawn Partner’s Capital Commitment Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate. (i) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such professionals.",
"If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners. (j) Each Limited Partner hereby irrevocably appoints each General Partner as such Limited Partner’s true and lawful agent, representative and attorney-in-fact, each acting alone, in such Limited Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Limited Partner, any and all agreements, instruments, consents, ratifications, documents and certificates which such General Partner deems necessary or advisable in connection with any 78 -------------------------------------------------------------------------------- transaction or matter contemplated by or provided for in this Section 8.1, including, without limitation, the performance of any obligation of such Limited Partner or the Partnership or the exercise of any right of such Limited Partner or the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Limited Partner for any reason and shall not be affected by the death, disability or incapacity of such Limited Partner.",
"Section 8.2. Transfer of Limited Partner’s Capital Commitment Interest. Without the prior written consent of the General Partner, no Limited Partner or former Limited Partner shall have the right to sell, assign, mortgage, pledge, grant a security interest over or otherwise dispose of or transfer (“Transfer”) all or part of any such Partner’s Capital Commitment Partner Interest in the Partnership; provided, that this Section 8.2 shall in no way impair (i) Transfers as permitted in Section 8.1 above, in the case of the purchase of a Withdrawn Partner’s or deceased or Totally Disabled Limited Partner’s Capital Commitment Interests, (ii) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers by a Limited Partner to another Limited Partner of Non-Contingent Capital Commitment Interests, (iii) Transfers with the prior written consent of the General Partner, which consent may be granted or withheld in its sole discretion without giving any reason therefor and (iv) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers, for estate planning purposes, of up to 25% of a Limited Partner’s Capital Commitment Partner Interest to an Estate Planning Vehicle (it being understood that it shall not be unreasonable for the General Partner to condition any Transfer of an Interest pursuant to this clause (iv) on the satisfaction of certain conditions and/or requirements imposed by the General Partner in connection with any such Transfer, including, for example, a requirement that any transferee of an Interest hold such Interest as a passive, non-voting interest in the Partnership).",
"Each Estate Planning Vehicle will be a Nonvoting Limited Partner. Such Limited Partner and the Nonvoting Limited Partner shall be jointly and severally liable for all obligations of both such Limited Partner and such Nonvoting Limited Partner with respect to the interest transferred (including the obligation to make additional Capital Commitment-Related Capital Contributions). The General Partner may at its sole option exercisable at any time require such Estate Planning Vehicle to Withdraw from the Partnership on the terms of Section 8.1 and Article VI. No person acquiring an interest in the Partnership pursuant to this Section 8.2 shall become a Limited Partner of the Partnership, or acquire such Partner’s right to participate in the affairs of the Partnership, unless such person shall be admitted as a Limited Partner pursuant to Section 6.1. A Limited Partner shall not cease to be a limited partner of the Partnership upon the collateral assignment of, or the pledging or granting of a security interest in, its entire limited partner interest in the Partnership in accordance with the provisions of this Agreement. Section 8.3. Compliance with Law.",
"Notwithstanding any provision hereof to the contrary, no Transfer of a Capital Commitment Interest in the Partnership may be made except in compliance with all federal, state and other applicable laws, including federal and state securities laws. 79 -------------------------------------------------------------------------------- ARTICLE IX DISSOLUTION Section 9.1. Dissolution. (a) The Partnership shall be dissolved and subsequently terminated: (i) pursuant to Section 6.6; (ii) upon the expiration of the term of the Partnership; or (iii) upon the occurrence of a Disabling Event with respect to the last remaining General Partner; provided, that the Partnership shall not be dissolved if, within 90 days after the Disabling Event, the Limited Partners entitled to vote thereon as provided herein who, as of the last day of the most recent accounting period ending on or prior to the date of the Disabling Event, have aggregate GP-Related Capital Account balances representing at least a majority in amount of the total GP-Related Capital Account balances of all the persons who are Limited Partners entitled to vote thereon as provided herein agree in writing to continue the business of the Partnership and to the appointment, effective as of the date of the Disabling Event, of another General Partner.",
"(b) When the Partnership is dissolved, the business and property of the Partnership shall be wound up and liquidated by the General Partner or, in the event of the unavailability of the General Partner, such Limited Partner or other liquidating trustee as shall be named by the a Majority in Interest of the Partners (excluding Nonvoting Limited Partners) (the General Partner, such Limited Partner or other liquidating trustee, as the case may be, being hereinafter referred to as the “Liquidator”). Section 9.2. Final Distribution. (a) Within 120 calendar days after the effective date of dissolution of the Partnership, the assets of the Partnership shall be distributed in the following manner and order: (i) to the payment of the expenses of the winding-up, liquidation and dissolution of the Partnership; (ii) to pay all creditors of the Partnership, other than Partners, either by the payment thereof or the making of reasonable provision therefor; (iii) to establish reserves, in amounts established by the General Partner or the Liquidator, to meet other liabilities of the Partnership; and (iv) to pay, in accordance with the terms agreed among them and otherwise on a pro rata basis, all creditors of the Partnership that are Partners, either by the payment thereof or the making of reasonable provision therefor.",
"(b) The remaining assets of the Partnership shall be applied and distributed among the Partners as follows: (i) With respect to each Partner’s GP-Related Partner Interest, the remaining assets of the Partnership shall be applied and distributed to such Partner in accordance with the procedures set forth in Section 6.5 which provide for allocations to the capital accounts of the Partners and distributions in accordance with the capital 80 -------------------------------------------------------------------------------- account balances of the Partners; and for purposes of the application of this Section 9.2(b)(i), determining GP-Related Capital Accounts on liquidation, all unrealized gains, losses and accrued income and deductions of the Partnership shall be treated as realized and recognized immediately before the date of distribution; and (ii) With respect to each Partner’s Capital Commitment Partner Interest, an amount shall be paid to such Partner in cash or Securities in an amount equal to such Partner’s respective Capital Commitment Liquidating Share for each Capital Commitment Investment; provided, that if the remaining assets relating to any Capital Commitment Investment shall not be equal to or exceed the aggregate Capital Commitment Liquidating Shares for such Capital Commitment Investment, to each Partner in proportion to its Capital Commitment Liquidating Share for such Capital Commitment Investment; and the remaining assets of the Partnership related to the Partners’ Capital Commitment Partner Interests shall be paid to the Partners in cash or Securities in proportion to their respective Capital Commitment Profit Sharing Percentages for each Capital Commitment Investment from which such cash or Securities are derived.",
"Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests. (a) If there are any Securities or other property or other investments or securities related to the Partners’ Capital Commitment Partner Interests which, in the judgment of the Liquidator, cannot be sold, or properly distributed in kind in the case of dissolution, without sacrificing a significant portion of the value thereof, the value of a Partner’s interest in each such Security or other investment or security may be excluded from the amount distributed to the Partners participating in the related Capital Commitment Investment pursuant to clause (ii) of Section 9.2(b). Any interest of a Partner, including his or her pro rata interest in any gains, losses or distributions, in Securities or other property or other investments or securities so excluded shall not be paid or distributed until such time as the Liquidator shall determine. (b) If there is any pending transaction, contingent liability or claim by or against the Partnership related to the Partners’ Capital Commitment Partner Interests as to which the interest or obligation of any Partner therein cannot, in the judgment of the Liquidator, be then ascertained, the value thereof or probable loss therefrom may be deducted from the amount distributable to such Partner pursuant to clause (ii) of Section 9.2(b). No amount shall be paid or charged to any such Partner on account of any such transaction or claim until its final settlement or such earlier time as the Liquidator shall determine. The Partnership may meanwhile retain from other sums due such Partner in respect of such Partner’s Capital Commitment Partner Interest an amount which the Liquidator estimates to be sufficient to cover the share of such Partner in any probable loss or liability on account of such transaction or claim.",
"(c) Upon determination by the Liquidator that circumstances no longer require the exclusion of any Securities or other property or retention of sums as provided in paragraphs (a) and (b) of this Section 9.3, the Liquidator shall, at the earliest practicable time, distribute as provided in clause (ii) of Section 9.2(b) such sums or such Securities or other property or the proceeds realized from the sale of such Securities or other property to each Partner from whom such sums or Securities or other property were withheld. 81 -------------------------------------------------------------------------------- ARTICLE X MISCELLANEOUS Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial. (a) Any and all disputes which cannot be settled amicably, including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision as well as any and all disputes arising out of, relating to or in connection with the termination, winding up or dissolution of the Partnership), whether arising during the existence of the Partnership or at or after its termination or during or after the winding up or dissolution of the Partnership, shall be finally settled by arbitration conducted by a single arbitrator in New York, New York U.S.A. in accordance with the then-existing Rules of Arbitration of the International Chamber of Commerce.",
"If the parties to the dispute fail to agree on the selection of an arbitrator within thirty (30) days of the receipt of the request for arbitration, the International Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings. (b) Notwithstanding the provisions of paragraph (a), the General Partner may bring, or may cause the Partnership to bring, on behalf of the General Partner or the Partnership or on behalf of one or more Partners, an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Partner (i) expressly consents to the application of paragraph (c) of this Section 10.1 to any such action or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate and (iii) irrevocably appoints the General Partner as such Partner’s agent for service of process in connection with any such action or proceeding and agrees that service of process upon any such agent, who shall promptly advise such Partner of any such service of process, shall be deemed in every respect effective service of process upon the Partner in any such action or proceeding.",
"(c) (i) EACH PARTNER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION 10.1, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the forum(s) designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties’ relationship with one another.",
"82 -------------------------------------------------------------------------------- (ii) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in paragraph (c)(i) of this Section 10.1 and such parties agree not to plead or claim the same. (d) Notwithstanding any provision of this Agreement to the contrary, this Section 10.1 shall be construed to the maximum extent possible to comply with the laws of the State of Delaware, including the Delaware Uniform Arbitration Act (10 Del. C. § 5701 et seq.) (the “Delaware Arbitration Act”).",
"If, nevertheless, it shall be determined by a court of competent jurisdiction that any provision or wording of this Section 10.1, including any rules of the International Chamber of Commerce, shall be invalid or unenforceable under the Delaware Arbitration Act, or other applicable law, such invalidity shall not invalidate all of this Section 10.1. In that case, this Section 10.1 shall be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements of the Delaware Arbitration Act or other applicable law, and, in the event such term or provision cannot be so limited, this Section 10.1 shall be construed to omit such invalid or unenforceable provision. Section 10.2.",
"Ownership and Use of the Firm Name. The Partnership acknowledges that Blackstone TM L.L.C. (“TM”), a Delaware limited liability company with a principal place of business at 345 Park Avenue, New York, New York 10154 U.S.A., (or its successors or assigns) is the sole and exclusive owner of the mark and name BLACKSTONE and that the ownership of, and the right to use, sell or otherwise dispose of, the firm name or any abbreviation or modification thereof which consists of or includes BLACKSTONE, shall belong exclusively to TM, which company (or its predecessors, successors or assigns) has licensed the Partnership to use BLACKSTONE in its name. The Partnership acknowledges that TM owns the service mark BLACKSTONE for various services and that the Partnership is using the BLACKSTONE mark and name on a non-exclusive, non-sublicensable and non-assignable basis in connection with its business and authorized activities with the permission of TM.",
"All services rendered by the Partnership under the BLACKSTONE mark and name will be rendered in a manner and with quality levels that are consistent with the high reputation heretofore developed for the BLACKSTONE mark by TM and its Affiliates and licensees. The Partnership understands that TM may terminate its right to use BLACKSTONE at any time in TM’s sole discretion by giving the Partnership written notice of termination. Promptly following any such termination, the Partnership will take all steps necessary to change its partnership name to one which does not include BLACKSTONE or any confusingly similar term and cease all use of BLACKSTONE or any term confusingly similar thereto as a service mark or otherwise. Section 10.3.",
"Written Consent. Any action required or permitted to be taken by a vote of Partners at a meeting may be taken without a meeting if a Majority in Interest of the Partners consent thereto in writing. Section 10.4. Letter Agreements; Schedules. The General Partner may, or may cause the Partnership to, enter or has previously entered, into separate letter agreements with individual Partners, officers or employees with respect to GP-Related Profit Sharing Percentages, Capital Commitment Profit Sharing Percentages, benefits or any other matter, which letter agreements have the effect of establishing rights under, or altering or supplementing, the terms of this Agreement with respect to any such Partner and such matters. The parties hereto agree that any rights established, or any terms of this Agreement altered or supplemented, in any such 83 -------------------------------------------------------------------------------- separate letter agreement, including any Commitment Agreement or SMD Agreement, shall govern solely with respect to such Partner notwithstanding any other provision of this Agreement. The General Partner may from time to time execute and deliver to the Partners Schedules which set forth the then current capital balances, GP-Related Profit Sharing Percentages and Capital Commitment Profit Sharing Percentages of the Partners and any other matters deemed appropriate by the General Partner.",
"Such Schedules shall be for information purposes only and shall not be deemed to be part of this Agreement for any purpose whatsoever; provided, that this in no way limits the effectiveness of any Commitment Agreement or SMD Agreement. Section 10.5. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law. In particular, the Partnership has been formed pursuant to the Partnership Act, and the rights and liabilities of the Partners shall be as provided therein, except as herein otherwise expressly provided. If any provision of this Agreement shall be held to be invalid, such provision shall be given its meaning to the maximum extent permitted by law and the remainder of this Agreement shall not be affected thereby.",
"Section 10.6. Successors and Assigns; Third Party Beneficiaries. This Agreement shall be binding upon and shall, subject to the penultimate sentence of Section 6.3(a), inure to the benefit of the parties hereto, their respective heirs and personal representatives, and any successor to a trustee of a trust which is or becomes a party hereto; provided, that no person claiming by, through or under a Partner (whether such Partner’s heir, personal representative or otherwise), as distinct from such Partner itself, shall have any rights as, or in respect to, a Partner (including the right to approve or vote on any matter or to notice thereof) except the right to receive only those distributions expressly payable to such person pursuant to Article VI and Article VIII. Any Partner or Withdrawn Partner shall remain liable for the obligations under this Agreement (including any Net GP-Related Recontribution Amounts and any Capital Commitment Recontribution Amounts) of any transferee of all or any portion of such Partner’s or Withdrawn Partner’s interest in the Partnership, unless waived by the General Partner. The Partnership shall, if the General Partner determines, in its good faith judgment, based on the standards set forth in Section 5.8(d)(ii)(A) and Section 7.4(g)(ii)(A), to pursue such transferee, pursue payment (including any Net GP-Related Recontribution Amounts and/or any Capital Commitment Recontribution Amounts) from the transferee with respect to any such obligations.",
"Nothing in this Agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, on any person other than the Partners and their respective legal representatives, heirs, successors and permitted assigns. Notwithstanding the foregoing, solely to the extent required by the BREDS II Agreements, (x) the limited partners in BREDS II shall be a third-party beneficiaries of the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount (for purpose of this sentence, as defined in paragraph 9.2.8(b) of the BREDS II Partnership Agreement) and (y) the amendment of the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions related thereto), solely as they relate to any Clawback Amount (for purpose of this sentence, as defined in paragraph 9.2.8(b) of the BREDS II Partnership Agreement), shall be effective against such limited partners only with the Combined Limited Partner Consent (as such term is used in the BREDS II Partnership Agreement). 84 -------------------------------------------------------------------------------- Section 10.7.",
"Partner’s Will. Each Limited Partner and Withdrawn Partner shall include in his or her will a provision that addresses certain matters in respect of his or her obligation relating to the Partnership that is satisfactory to the General Partner, and each such Limited Partner and Withdrawn Partner shall confirm annually to the Partnership, in writing, that such provision remains in his or her current will. Where applicable, any estate planning trust of such Partner or Withdrawn Partner to which a portion of such Limited Partner’s or Withdrawn Partner’s Interest is transferred shall include a provision substantially similar to such provision and the trustee of such trust shall confirm annually to the Partnership, in writing, that such provision or its substantial equivalent remains in such trust.",
"In the event any Limited Partner or Withdrawn Partner fails to comply with the provisions of this Section 10.7 after the Partnership has notified such Limited Partner or Withdrawn Partner of his or her failure to so comply and such failure to so comply is not cured within 30 days of such notice, the Partnership may withhold any and all distributions to such Limited Partner or Withdrawn Partner until the time at which such party complies with the requirements of this Section 10.7. Section 10.8. Confidentiality. (a) By executing this Agreement, each Partner expressly agrees, at all times during the term of the Partnership and thereafter and whether or not at the time a Partner of the Partnership, to maintain the confidentiality of, and not to disclose to any person other than the Partnership, another Partner or a person designated by the Partnership, any information relating to the business, financial structure, financial position or financial results, clients or affairs of the Partnership that shall not be generally known to the public or the securities industry, except as otherwise required by law or by any regulatory or self-regulatory organization having jurisdiction; provided, however, that any corporate Partner may disclose any such information it is required by law, rule, regulation or custom to disclose.",
"Notwithstanding anything in this Agreement to the contrary, to comply with Treasury Regulations Section 1.6011-4(b)(3)(i), each Partner (and any employee, representative or other agent of such Partner) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax treatment and tax structure of the Partnership, it being understood and agreed, for this purpose, (1) the name of, or any other identifying information regarding (a) the Partners or any existing or future investor (or any Affiliate thereof) in any of the Partners, or (b) any investment or transaction entered into by the Partners; (2) any performance information relating to any of the Partners or their investments; and (3) any performance or other information relating to previous funds or investments sponsored by any of the Partners, does not constitute such tax treatment or tax structure information. (b) Nothing in this Agreement shall prohibit or impede any Partner from communicating, cooperating or filing a complaint on possible violations of U.S. federal, state or local law or regulation to or with any governmental agency or regulatory authority (collectively, a “Governmental Entity”), including, but not limited to, the SEC, FINRA, EEOC or NLRB, or from making other disclosures to any Governmental Entity that are protected under the whistleblower provisions of U.S. federal, state or local law or regulation, provided that in each case such communications and disclosures are consistent with applicable law.",
"Each Partner understands and acknowledges that (a) an individual shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a U.S. federal, state, or local government official or to an attorney solely for the 85 -------------------------------------------------------------------------------- purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal, and (b) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order.",
"Moreover, a Partner shall not be required to give prior notice to (or get prior authorization from) Blackstone regarding any such communication or disclosure. Except as otherwise provided in this paragraph or under applicable law, under no circumstance is any Partner authorized to disclose any information covered by Blackstone or its affiliates’ attorney-client privilege or attorney work product or Blackstone’s trade secrets without the prior written consent of Blackstone. Section 10.9. Notices. Whenever notice is required or permitted by this Agreement to be given, such notice shall be in writing (including telecopy or similar writing) and shall be given by hand delivery (including any courier service) or telecopy to any Partner at its address or telecopy number shown in the books and records of the Partnership or, if given to the General Partner or the Partnership, at the address or telecopy number of the Partnership in New York City.",
"Each such notice shall be effective (i) if given by telecopy, upon dispatch and (ii) if given by hand delivery, when delivered to the address of such Partner or the General Partner or the Partnership specified as aforesaid. Section 10.10. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute a single instrument. Section 10.11. Power of Attorney. Each Partner hereby irrevocably appoints the General Partner as such Partner’s true and lawful representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file all instruments, documents and certificates which, from time to time, may be required to set forth any amendment to this Agreement or may be required by this Agreement or by the laws of the United States of America, the State of Delaware or any other state in which the Partnership shall determine to do business, or any political subdivision or agency thereof, to execute, implement and continue the valid and subsisting existence of the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and effect notwithstanding the subsequent Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the subsequent disability or incapacity of such Partner.",
"Section 10.12. Cumulative Remedies. Rights and remedies under this Agreement are cumulative and do not preclude use of other rights and remedies available under applicable law. Section 10.13. Legal Fees. Except as more specifically provided herein, in the event of a legal dispute (including litigation, arbitration or mediation) between any Partner or Withdrawn Partner and the Partnership, arising in connection with any party seeking to enforce Section 4.1(d) or any other provision of this Agreement relating to the Holdback, the Clawback Amount, the GP-Related Giveback Amount, the Capital Commitment Giveback Amount, the Net 86 -------------------------------------------------------------------------------- GP-Related Recontribution Amount or the Capital Commitment Recontribution Amount, the “losing” party to such dispute shall promptly reimburse the “victorious party” for all reasonable legal fees and expenses incurred in connection with such dispute (such determination to be made by the relevant adjudicator). Any amounts due under this Section 10.13 shall be paid within 30 days of the date upon which such amounts are due to be paid and such amounts remaining unpaid after such date shall accrue interest at the Default Interest Rate.",
"Section 10.14. Modifications. Except as provided herein, this Agreement may be amended or modified at any time by the General Partner in its sole discretion, upon notification thereof to the Limited Partners. Section 10.15. Entire Agreement. This Agreement embodies the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein. Subject to Section 10.4, this Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. 87 -------------------------------------------------------------------------------- IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first above written.",
"In the event that it is impracticable to obtain the signature of any one or more of the Partners to this Agreement, this Agreement shall be binding among the other Partners executing the same. GENERAL PARTNER: BLACKSTONE HOLDINGS III L.P., as Member By: Blackstone Holdings III GP L.P., its General Partner By: Blackstone Holdings III GP Management L.L.C., its General Partner By: /s/ John G. Finley Name: John G. Finley Title: Authorized Person INITIAL LIMITED PARTNER: Christopher J. James, As Initial Limited Partner, solely to reflect his Withdrawal from the Partnership By: /s/ Christopher J. James"
] | https://github.com/TheAtticusProject/cuad | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
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DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Election/Restrictions Applicant’s election without traverse of Species B (Fig. 2C, a stand- in the reply filed on November 15, 2021 is acknowledged. Examiner notes that the stand alone hood in Fig. 2C appears to have the same structure as the hood shown in Figs. 2A and 2B). Claim 18 is withdrawn, by Examiner, from further consideration pursuant to 37 CFR 1.142(b) as being drawn to a nonelected species, there being no allowable generic or linking claim. Claim 18 recites, “wherein the face opening is shaped to extend below a chin of the wearer”, however such a structure is seen in Fig. 3A which is not part of elected Species B, and therefore it has been withdrawn by Examiner. As directed by the amendment, claims 2-3 are canceled; claim 18 is withdrawn from further consideration; and claim 8 has been added. Accordingly, claims 1 and 4-18 are pending in this application, with an action on the merits to follow regarding claims 1 and 4-17. Drawings The drawings are objected to under 37 CFR 1.83(a). The drawings must show every feature of the invention specified in the claims. Therefore, the two flexible seams being parallel (claim 7) and the two flexible seams being parallel throughout their The drawings are objected to as failing to comply with 37 CFR 1.84(p)(5) because they do not include the following reference sign(s) mentioned in the description: 140, 142, 144, 146, and 148 (see paras. 0033-0034 The drawings are objected to as failing to comply with 37 CFR 1.84(p)(4) because; Reference character “104” has been used to designate both a jacket and a shelf seam (para. 0020). Reference character “108” has been used to designate both wrapping gussets and torso seam (para. 0021); Reference character “124” has been used to designate both wrapping gussets and a seam (para. 0027). The drawings are objected to as failing to comply with 37 CFR 1.84(p)(4) because reference characters "104" (para. 0040) and "118" (para. 0025) have both been used to designate a shelf seam. The drawings are objected to because: In Fig. 1B, reference character “104” is not indicating either a shelf seam or a jacket (as disclosed in para. 0020); In Fig. 1B, 126 is pointing to an exterior cuff but is disclosed as an interior cuff (see para. 0028).
Claim Objections Claims 5 and 11 are objected to because of the following informalities: Claim 5 should recite, “wherein the two flexible seams run along the vertical axis from a location on the hood that corresponds with [[the]] a base of [[the]] a back of [[the]] a neck of the wearer over a top of [[the]] a head of the wearer to a forehead of the wearer”; Claim 6 should recite, “wherein the hood further comprises a face opening and the two flexible seams run along the vertical axis to a position that is a distance short of [[the]] a Claim 11 should recite, “wherein the horizontal flexible seam is positioned on the hood [[is]] in a location that corresponds to [[the]] a base of [[the]] a head of the wearer.” Appropriate correction is required. Claim Rejections - 35 USC § 112 The following is a quotation of 35 U.S.C. 112(b): (b) CONCLUSION.—The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.
The following is a quotation of 35 U.S.C. 112 (pre-AIA ), second paragraph: The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.
Claims 1, 4, 9, and 12 (and claims 5-8, 10-11 and 13-17 at least for depending from a rejected claim) are rejected under 35 U.S.C. 112(b) or 35 U.S.C. 112 (pre-AIA ), second paragraph, as being indefinite for failing to particularly point out and distinctly claim the subject matter which the inventor or a joint inventor (or for applications subject to pre-AIA 35 U.S.C. 112, the applicant), regards as the invention. Claim 1 is indefinite as it recites, “the hood having a flexible seam that extends along either or both of a vertical or horizontal axis….” It is unclear if Applicant is claiming a seam that runs either vertical or horizontal, a seam the runs both vertical and horizontal, or if there can be two seams where one runs vertical and another runs horizontal. Examiner respectfully suggests amending to recite, “the hood having [[a]] at least one of at least one flexible seam that extends alongaxis or a flexible seam that runs along a horizontal axis….” comprises the at least one flexible seam that runs along the vertical axis, and the at least one flexible seam that runs along the vertical axis Claim 9 is indefinite as it recites, “wherein the hood further comprises a horizontal flexible seam that extends along the horizontal axis.” First as claim 1 recites “the hood having a flexible seam that extends along either or both of a vertical or horizontal axis”, it is unclear if the horizontal seam in claim 9 is in addition to the flexible seam to or part of the flexible seam(s) recited in claim 1. Further, as claim 9 recites, “further comprising” it appears that it is in addition to the seams of claim 1 but only one horizontal seam has been disclosed in the specification. Based on proposed claim amendments for claim 1, Examiner respectfully suggests amending claim 9 to recite, “wherein the hood the flexible seam that extends along the horizontal axis.” Claim 12 is indefinite as it recites, “wherein the hood has two flexible seams, a first flexible seam runs along the vertical axis and a second flexible seam runs along the horizontal axis.” As claim 1 recites “the hood having a flexible seam that extends along either or both of a vertical or horizontal axis”, it is unclear if the seams in claim 4 are in comprises both the at least one flexible seam that runs along the vertical axis and the flexible seam that runs along the horizontal axis Claim Rejections - 35 USC § 101 35 U.S.C. 101 reads as follows: Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
Section 33(a) of the America Invents Act reads as follows: Notwithstanding any other provision of law, no patent may issue on a claim directed to or encompassing a human organism.
Claim 13 is rejected under 35 U.S.C. 101 and section 33(a) of the America Invents Act as being directed to or encompassing a human organism. See also Animals - Patentability, 1077 Off. Gaz. Pat. Office 24 (April 21, 1987) (indicating that human organisms are excluded from the scope of patentable subject matter under 35 U.S.C. 101). Claim 13 recites, “wherein the hood further comprises a facemask that extends around a portion of a face of the wearer.” As such, Applicant has positively recited and claimed a human body part, because face of a wearer is actively being recited as being "extend[ed]" around within a product claim. Examiner respectfully suggests amending to add functional language such as "adapted to” or “configured to” preceding any reference to a human or human body part. For example, Applicant could is configured to extend[[s]] around a portion of a face of the wearer.” Claim Rejections - 35 USC § 102 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The following is a quotation of the appropriate paragraphs of 35 U.S.C. 102 that form the basis for the rejections under this section made in this Office action: A person shall be entitled to a patent unless –
(a)(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention.
Claim(s) 1, 4-6, and 12-13 (as best as can be understood) is/are rejected under 35 U.S.C. 102(a)(2) as being anticipated by Villaruz (US 2019/0298041). Regarding claim 1, Villaruz discloses an article of apparel (Figs. 1-5), comprising: a main body portion (10 exclusive of 18); a hood (18) attached to the main body portion (as can be seen in Figs. 1-5), the hood having a flexible seam that extends along either or both of a vertical or horizontal axis (as the hood has a vertical flexible seam between 18a and 18L, another vertical flexible seam between 18a and 18R, and a horizontal flexible seam between 18d and 18c, 18L, and 18R, seams disclosed in para. 0023, and considered flexible as the seams can be made by stitching as disclosed in para. 0017 and stitching is known as a flexible seam connection as the garment is capable of being the vertical or horizontal axis corresponding to a vertical or horizontal head movement of a wearer when the article of apparel is worn by the wearer (as and be understood from Fig. 4). Examiner notes that italicized limitations in the prior art rejections are functional and do not positively recite a structural limitation, but instead require an ability to so perform and/or function. As the prior art discloses the structure of the apparel, there would be a reasonable expectation for the apparel to perform such functions, as Examiner has explained after each functional limitation. Regarding claim 4, Villaruz discloses wherein the hood (18) has two flexible seams that run along the vertical axis (vertical flexible seam between 18a and 18L, another vertical flexible seam between 18a and 18R; Examiner notes this interpretation is based on the 35 USC 112(b) rejections above). Regarding claim 5, Villaruz discloses wherein the two flexible seams run along the vertical axis from a location on the hood that corresponds with the base of the back of the neck of the wearer (as can be seen in Fig. 4, the seams between 18L, 18a, and 18R begin at 18d which is in an area at the base of the neck of at least one user) over a top of the head of the wearer to a forehead of the wearer (as can be seen in Fig. 3-4, the seams extend over the head and terminate at a forehead of at least one wearer). Regarding claim 6, Viillaruz discloses wherein the hood (18) further comprises a face opening (opening around 18b, 18L, and 18R, as best seen in Figs. 1A, 1B, and 1C) and the two flexible seams (vertical flexible seam between 18a and 18L, another vertical flexible seam between 18a and 18R) run along the vertical axis to a position that is a Regarding claim 12, Villaruz discloses wherein the hood has two flexible seams, a first flexible seam runs along the vertical axis (vertical flexible seam between 18a and 18L, another vertical flexible seam between 18a and 18R) and a second flexible seam runs along the horizontal axis (horizontal flexible seam between 18d and 18c, 18L, and 18R) (Examiner notes this interpretation is based on the 35 USC 112(b) rejections above). Regarding claim 13, Villaruz discloses wherein the hood (18) further comprises a facemask (18eL and 18eR) that extends around a portion of a face of the wearer (as can be seen in Fig. 1A). Claim Rejections - 35 USC § 103 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
Claims 7-11 (as best as can be understood) is/are rejected under 35 U.S.C. 103 as being unpatentable over Villaruz as applied to claims 1 and 4-5 above, and further in view of West (US 2016/0331052). Regarding claim 7, Villaruz discloses all the limitations of claims 1 and 4-5 above, but does not expressly disclose wherein the two flexible seams are parallel. West teaches an outerwear garment wherein the two flexible seams (at 122 on each side of the hood) are parallel (as can be seen in Figs. 1 and 2). Villaruz and West teach analogous inventions in the field of outerwear garments with paneled and seamed hoods. Therefore, it would have been obvious to one having ordinary skill in the art before the effective filing date of the claimed invention to make the vertical seams of the hood of Villaruz to be parallel as taught by West in order to simplify the manufacturing process so that panels with fewer curves can be cut and straight instead of curved seams can be sewn. Regarding claim 8, the modified article of apparel of Villaruz discloses wherein the two flexible seams (vertical flexible seam between 18a and 18L, another vertical flexible seam between 18a and 18R of Villaruz as modified to be parallel by West) are parallel throughout respective lengths of the two flexible seams (as can be seen in Figs. 1-2 of West). Regarding claim 9, the modified article of apparel of Villaruz discloses wherein the hood (18 of Villaruz) further comprises a horizontal flexible seam that extends along the horizontal axis (Examiner notes this interpretation is based on the 35 USC 112(b) rejections above).
Regarding claim 11, the modified article of apparel of Villaruz discloses wherein the horizontal flexible seam (horizontal flexible seam between 18d and 18c, 18L, and 18R of Villaruz) is positioned on the hood (18 of Villaruz) in a location that corresponds to the base of the head of the wearer (as can be seen in Fig. 2A, the horizontal seam is in an area that would be at the base of a head of at least one wearer).
Claims 14-17 (as best as can be understood) is/are rejected under 35 U.S.C. 103 as being unpatentable over Villaruz as applied to claim 1, and further in view of Rolfe (US 2014/0317829). Regarding claim 14, Villaruz discloses all the limitations of claim 1 above, but does not expressly disclose wherein the hood further comprises a shock cord that extends around a portion of the hood to adjust a size of the hood at a location that corresponds to a neck of the wearer. Rolfe teaches a hood apparatus wherein the hood (50) further comprises a shock cord (elastic member 300) that extends around a portion of the hood (as can be seen in Fig. 3) to adjust a size of the hood at a location that corresponds to a neck of the wearer (as can be seen in Fig. 3, the location of the shock cord would be at a neck area of at least one wearer; It is noted that the hood will fit differently sized wearers in different Villaruz and Rolfe teach analogous inventions in the field of hoods made of multiple panels. Therefore, it would have been obvious to one having ordinary skill in the art before the effective filing date of the claimed invention to add a shock cord around a back of the hood of Villaruz as taught by Rolfe in order “to secure the lower forehead margin to the forehead” (para. 0117 of Rolfe). Regarding claim 15, Villaruz discloses all the limitations of claim 1 above, but does not expressly disclose wherein the hood further comprises a shock cord that extends around a portion of the hood to adjust a size of the hood at a location that corresponds to a back of the head of the wearer. Rolfe teaches a hood apparatus wherein the hood (50) further comprises a shock cord (elastic member 300) that extends around a portion of the hood (as can be seen in Fig. 3) to adjust a size of the hood at a location that corresponds to back of the head of the wearer (as can be seen in Fig. 3, the location of the shock cord would be along the back of the head of at least one wearer). Villaruz and Rolfe teach analogous inventions in the field of hoods made of multiple panels. Therefore, it would have been obvious to one having ordinary skill in the art before the effective filing date of the claimed invention to add a shock cord around a back of the hood of Villaruz as taught by Rolfe in order “to secure the lower forehead margin to the forehead” (para. 0117 of Rolfe). Regarding claim 16, Villaruz discloses wherein the hood (18) further comprises a face opening (opening around 18b, 18L, and 18R, as best seen in Figs. 1A, 1B, and Rolfe teaches a hood apparatus wherein the hood (50) further comprises a shock cord (395) that extends around the face opening (as can be seen in Figs. 3-4). Villaruz and Rolfe teach analogous inventions in the field of hoods made of multiple panels. Therefore, it would have been obvious to one having ordinary skill in the art before the effective filing date of the claimed invention to add a shock cord around the face opening of the hood of Villaruz as taught by Rolfe in order “to secure the lower forehead margin to the forehead” (para. 0117 of Rolfe). Regarding claim 17, the modified article of apparel of Villaruz discloses wherein the face opening (opening around 18b, 18L, and 18R, as best seen in Figs. 1A, 1B, and 1C of Villaruz) is shaped to extend above a mouth of the wearer ( as can be seen in Figs. 1A, 1B, and 1C of Villaruz, the opening would be above the mouth of at least one wearer; It is noted that the hood will fit differently sized feet in different manners and an intended relative position of the face opening to the wearer's mouth is functional and not patentably significant). Conclusion The prior art made of record and not relied upon is considered pertinent to applicant's disclosure. Shown are garments with hoods analogous to Applicant’s invention. For example, Hussey (US 2018/0271189), Sneath (US 2018/0177248) and Tolton (US 2005/0241045) each shows a hood with seams and shock cords.
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/HEATHER MANGINE, Ph.D./Primary Examiner, Art Unit 3732 | 2022-01-06T10:32:08 | [
"DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Election/Restrictions Applicant’s election without traverse of Species B (Fig. 2C, a stand- in the reply filed on November 15, 2021 is acknowledged. Examiner notes that the stand alone hood in Fig. 2C appears to have the same structure as the hood shown in Figs.",
"2A and 2B). Claim 18 is withdrawn, by Examiner, from further consideration pursuant to 37 CFR 1.142(b) as being drawn to a nonelected species, there being no allowable generic or linking claim. Claim 18 recites, “wherein the face opening is shaped to extend below a chin of the wearer”, however such a structure is seen in Fig. 3A which is not part of elected Species B, and therefore it has been withdrawn by Examiner. As directed by the amendment, claims 2-3 are canceled; claim 18 is withdrawn from further consideration; and claim 8 has been added. Accordingly, claims 1 and 4-18 are pending in this application, with an action on the merits to follow regarding claims 1 and 4-17. Drawings The drawings are objected to under 37 CFR 1.83(a).",
"The drawings must show every feature of the invention specified in the claims. Therefore, the two flexible seams being parallel (claim 7) and the two flexible seams being parallel throughout their The drawings are objected to as failing to comply with 37 CFR 1.84(p)(5) because they do not include the following reference sign(s) mentioned in the description: 140, 142, 144, 146, and 148 (see paras. 0033-0034 The drawings are objected to as failing to comply with 37 CFR 1.84(p)(4) because; Reference character “104” has been used to designate both a jacket and a shelf seam (para. 0020). Reference character “108” has been used to designate both wrapping gussets and torso seam (para. 0021); Reference character “124” has been used to designate both wrapping gussets and a seam (para.",
"0027). The drawings are objected to as failing to comply with 37 CFR 1.84(p)(4) because reference characters \"104\" (para. 0040) and \"118\" (para. 0025) have both been used to designate a shelf seam. The drawings are objected to because: In Fig. 1B, reference character “104” is not indicating either a shelf seam or a jacket (as disclosed in para. 0020); In Fig. 1B, 126 is pointing to an exterior cuff but is disclosed as an interior cuff (see para. 0028). Claim Objections Claims 5 and 11 are objected to because of the following informalities: Claim 5 should recite, “wherein the two flexible seams run along the vertical axis from a location on the hood that corresponds with [[the]] a base of [[the]] a back of [[the]] a neck of the wearer over a top of [[the]] a head of the wearer to a forehead of the wearer”; Claim 6 should recite, “wherein the hood further comprises a face opening and the two flexible seams run along the vertical axis to a position that is a distance short of [[the]] a Claim 11 should recite, “wherein the horizontal flexible seam is positioned on the hood [[is]] in a location that corresponds to [[the]] a base of [[the]] a head of the wearer.” Appropriate correction is required.",
"Claim Rejections - 35 USC § 112 The following is a quotation of 35 U.S.C. 112(b): (b) CONCLUSION.—The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention. The following is a quotation of 35 U.S.C. 112 (pre-AIA ), second paragraph: The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention. Claims 1, 4, 9, and 12 (and claims 5-8, 10-11 and 13-17 at least for depending from a rejected claim) are rejected under 35 U.S.C.",
"112(b) or 35 U.S.C. 112 (pre-AIA ), second paragraph, as being indefinite for failing to particularly point out and distinctly claim the subject matter which the inventor or a joint inventor (or for applications subject to pre-AIA 35 U.S.C. 112, the applicant), regards as the invention. Claim 1 is indefinite as it recites, “the hood having a flexible seam that extends along either or both of a vertical or horizontal axis….” It is unclear if Applicant is claiming a seam that runs either vertical or horizontal, a seam the runs both vertical and horizontal, or if there can be two seams where one runs vertical and another runs horizontal.",
"Examiner respectfully suggests amending to recite, “the hood having [[a]] at least one of at least one flexible seam that extends alongaxis or a flexible seam that runs along a horizontal axis….” comprises the at least one flexible seam that runs along the vertical axis, and the at least one flexible seam that runs along the vertical axis Claim 9 is indefinite as it recites, “wherein the hood further comprises a horizontal flexible seam that extends along the horizontal axis.” First as claim 1 recites “the hood having a flexible seam that extends along either or both of a vertical or horizontal axis”, it is unclear if the horizontal seam in claim 9 is in addition to the flexible seam to or part of the flexible seam(s) recited in claim 1. Further, as claim 9 recites, “further comprising” it appears that it is in addition to the seams of claim 1 but only one horizontal seam has been disclosed in the specification. Based on proposed claim amendments for claim 1, Examiner respectfully suggests amending claim 9 to recite, “wherein the hood the flexible seam that extends along the horizontal axis.” Claim 12 is indefinite as it recites, “wherein the hood has two flexible seams, a first flexible seam runs along the vertical axis and a second flexible seam runs along the horizontal axis.” As claim 1 recites “the hood having a flexible seam that extends along either or both of a vertical or horizontal axis”, it is unclear if the seams in claim 4 are in comprises both the at least one flexible seam that runs along the vertical axis and the flexible seam that runs along the horizontal axis Claim Rejections - 35 USC § 101 35 U.S.C.",
"101 reads as follows: Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title. Section 33(a) of the America Invents Act reads as follows: Notwithstanding any other provision of law, no patent may issue on a claim directed to or encompassing a human organism. Claim 13 is rejected under 35 U.S.C. 101 and section 33(a) of the America Invents Act as being directed to or encompassing a human organism. See also Animals - Patentability, 1077 Off. Gaz.",
"Pat. Office 24 (April 21, 1987) (indicating that human organisms are excluded from the scope of patentable subject matter under 35 U.S.C. 101). Claim 13 recites, “wherein the hood further comprises a facemask that extends around a portion of a face of the wearer.” As such, Applicant has positively recited and claimed a human body part, because face of a wearer is actively being recited as being \"extend[ed]\" around within a product claim. Examiner respectfully suggests amending to add functional language such as \"adapted to” or “configured to” preceding any reference to a human or human body part. For example, Applicant could is configured to extend[[s]] around a portion of a face of the wearer.” Claim Rejections - 35 USC § 102 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The following is a quotation of the appropriate paragraphs of 35 U.S.C. 102 that form the basis for the rejections under this section made in this Office action: A person shall be entitled to a patent unless – (a)(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention.",
"Claim(s) 1, 4-6, and 12-13 (as best as can be understood) is/are rejected under 35 U.S.C. 102(a)(2) as being anticipated by Villaruz (US 2019/0298041). Regarding claim 1, Villaruz discloses an article of apparel (Figs. 1-5), comprising: a main body portion (10 exclusive of 18); a hood (18) attached to the main body portion (as can be seen in Figs. 1-5), the hood having a flexible seam that extends along either or both of a vertical or horizontal axis (as the hood has a vertical flexible seam between 18a and 18L, another vertical flexible seam between 18a and 18R, and a horizontal flexible seam between 18d and 18c, 18L, and 18R, seams disclosed in para. 0023, and considered flexible as the seams can be made by stitching as disclosed in para. 0017 and stitching is known as a flexible seam connection as the garment is capable of being the vertical or horizontal axis corresponding to a vertical or horizontal head movement of a wearer when the article of apparel is worn by the wearer (as and be understood from Fig.",
"4). Examiner notes that italicized limitations in the prior art rejections are functional and do not positively recite a structural limitation, but instead require an ability to so perform and/or function. As the prior art discloses the structure of the apparel, there would be a reasonable expectation for the apparel to perform such functions, as Examiner has explained after each functional limitation. Regarding claim 4, Villaruz discloses wherein the hood (18) has two flexible seams that run along the vertical axis (vertical flexible seam between 18a and 18L, another vertical flexible seam between 18a and 18R; Examiner notes this interpretation is based on the 35 USC 112(b) rejections above). Regarding claim 5, Villaruz discloses wherein the two flexible seams run along the vertical axis from a location on the hood that corresponds with the base of the back of the neck of the wearer (as can be seen in Fig.",
"4, the seams between 18L, 18a, and 18R begin at 18d which is in an area at the base of the neck of at least one user) over a top of the head of the wearer to a forehead of the wearer (as can be seen in Fig. 3-4, the seams extend over the head and terminate at a forehead of at least one wearer). Regarding claim 6, Viillaruz discloses wherein the hood (18) further comprises a face opening (opening around 18b, 18L, and 18R, as best seen in Figs. 1A, 1B, and 1C) and the two flexible seams (vertical flexible seam between 18a and 18L, another vertical flexible seam between 18a and 18R) run along the vertical axis to a position that is a Regarding claim 12, Villaruz discloses wherein the hood has two flexible seams, a first flexible seam runs along the vertical axis (vertical flexible seam between 18a and 18L, another vertical flexible seam between 18a and 18R) and a second flexible seam runs along the horizontal axis (horizontal flexible seam between 18d and 18c, 18L, and 18R) (Examiner notes this interpretation is based on the 35 USC 112(b) rejections above).",
"Regarding claim 13, Villaruz discloses wherein the hood (18) further comprises a facemask (18eL and 18eR) that extends around a portion of a face of the wearer (as can be seen in Fig. 1A). Claim Rejections - 35 USC § 103 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.",
"Patentability shall not be negated by the manner in which the invention was made. Claims 7-11 (as best as can be understood) is/are rejected under 35 U.S.C. 103 as being unpatentable over Villaruz as applied to claims 1 and 4-5 above, and further in view of West (US 2016/0331052). Regarding claim 7, Villaruz discloses all the limitations of claims 1 and 4-5 above, but does not expressly disclose wherein the two flexible seams are parallel. West teaches an outerwear garment wherein the two flexible seams (at 122 on each side of the hood) are parallel (as can be seen in Figs. 1 and 2). Villaruz and West teach analogous inventions in the field of outerwear garments with paneled and seamed hoods. Therefore, it would have been obvious to one having ordinary skill in the art before the effective filing date of the claimed invention to make the vertical seams of the hood of Villaruz to be parallel as taught by West in order to simplify the manufacturing process so that panels with fewer curves can be cut and straight instead of curved seams can be sewn. Regarding claim 8, the modified article of apparel of Villaruz discloses wherein the two flexible seams (vertical flexible seam between 18a and 18L, another vertical flexible seam between 18a and 18R of Villaruz as modified to be parallel by West) are parallel throughout respective lengths of the two flexible seams (as can be seen in Figs.",
"1-2 of West). Regarding claim 9, the modified article of apparel of Villaruz discloses wherein the hood (18 of Villaruz) further comprises a horizontal flexible seam that extends along the horizontal axis (Examiner notes this interpretation is based on the 35 USC 112(b) rejections above). Regarding claim 11, the modified article of apparel of Villaruz discloses wherein the horizontal flexible seam (horizontal flexible seam between 18d and 18c, 18L, and 18R of Villaruz) is positioned on the hood (18 of Villaruz) in a location that corresponds to the base of the head of the wearer (as can be seen in Fig. 2A, the horizontal seam is in an area that would be at the base of a head of at least one wearer). Claims 14-17 (as best as can be understood) is/are rejected under 35 U.S.C.",
"103 as being unpatentable over Villaruz as applied to claim 1, and further in view of Rolfe (US 2014/0317829). Regarding claim 14, Villaruz discloses all the limitations of claim 1 above, but does not expressly disclose wherein the hood further comprises a shock cord that extends around a portion of the hood to adjust a size of the hood at a location that corresponds to a neck of the wearer. Rolfe teaches a hood apparatus wherein the hood (50) further comprises a shock cord (elastic member 300) that extends around a portion of the hood (as can be seen in Fig. 3) to adjust a size of the hood at a location that corresponds to a neck of the wearer (as can be seen in Fig. 3, the location of the shock cord would be at a neck area of at least one wearer; It is noted that the hood will fit differently sized wearers in different Villaruz and Rolfe teach analogous inventions in the field of hoods made of multiple panels.",
"Therefore, it would have been obvious to one having ordinary skill in the art before the effective filing date of the claimed invention to add a shock cord around a back of the hood of Villaruz as taught by Rolfe in order “to secure the lower forehead margin to the forehead” (para. 0117 of Rolfe). Regarding claim 15, Villaruz discloses all the limitations of claim 1 above, but does not expressly disclose wherein the hood further comprises a shock cord that extends around a portion of the hood to adjust a size of the hood at a location that corresponds to a back of the head of the wearer. Rolfe teaches a hood apparatus wherein the hood (50) further comprises a shock cord (elastic member 300) that extends around a portion of the hood (as can be seen in Fig. 3) to adjust a size of the hood at a location that corresponds to back of the head of the wearer (as can be seen in Fig.",
"3, the location of the shock cord would be along the back of the head of at least one wearer). Villaruz and Rolfe teach analogous inventions in the field of hoods made of multiple panels. Therefore, it would have been obvious to one having ordinary skill in the art before the effective filing date of the claimed invention to add a shock cord around a back of the hood of Villaruz as taught by Rolfe in order “to secure the lower forehead margin to the forehead” (para. 0117 of Rolfe). Regarding claim 16, Villaruz discloses wherein the hood (18) further comprises a face opening (opening around 18b, 18L, and 18R, as best seen in Figs. 1A, 1B, and Rolfe teaches a hood apparatus wherein the hood (50) further comprises a shock cord (395) that extends around the face opening (as can be seen in Figs. 3-4). Villaruz and Rolfe teach analogous inventions in the field of hoods made of multiple panels.",
"Therefore, it would have been obvious to one having ordinary skill in the art before the effective filing date of the claimed invention to add a shock cord around the face opening of the hood of Villaruz as taught by Rolfe in order “to secure the lower forehead margin to the forehead” (para. 0117 of Rolfe). Regarding claim 17, the modified article of apparel of Villaruz discloses wherein the face opening (opening around 18b, 18L, and 18R, as best seen in Figs. 1A, 1B, and 1C of Villaruz) is shaped to extend above a mouth of the wearer ( as can be seen in Figs. 1A, 1B, and 1C of Villaruz, the opening would be above the mouth of at least one wearer; It is noted that the hood will fit differently sized feet in different manners and an intended relative position of the face opening to the wearer's mouth is functional and not patentably significant). Conclusion The prior art made of record and not relied upon is considered pertinent to applicant's disclosure. Shown are garments with hoods analogous to Applicant’s invention. For example, Hussey (US 2018/0271189), Sneath (US 2018/0177248) and Tolton (US 2005/0241045) each shows a hood with seams and shock cords.",
"Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Clinton Ostrup can be reached on 571-272-5559. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of published or unpublished applications may be obtained from Patent Center. Unpublished application information in Patent Center is available to registered users. To file and manage patent submissions in Patent Center, visit: https://patentcenter.uspto.gov. Visit https://www.uspto.gov/patents/apply/patent-center for more information about Patent Center and https://www.uspto.gov/patents/docx for information about filing in DOCX format. For additional questions, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000. /HEATHER MANGINE, Ph.D./Primary Examiner, Art Unit 3732"
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2022-01-09.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Case 1:19-cv-11311-JSR Document 32-1 Filed 06/26/20 Page 1 of 3
Exhibit A Case 1:19-cv-11311-JSR Document 32-1 Filed 06/26/20 Page 2 of 3 Case 1:19-cv-11311-JSR Document 32-1 Filed 06/26/20 Page 3 of 3 | 2020-06-26 | [
"Case 1:19-cv-11311-JSR Document 32-1 Filed 06/26/20 Page 1 of 3 Exhibit A Case 1:19-cv-11311-JSR Document 32-1 Filed 06/26/20 Page 2 of 3 Case 1:19-cv-11311-JSR Document 32-1 Filed 06/26/20 Page 3 of 3"
] | https://www.courtlistener.com/api/rest/v3/recap-documents/138133151/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
MEMORANDUM AND ORDER SHARP, Chief Judge. This case was filed pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, with jurisdiction based on diversity of citizenship, 28 U.S.C. § 1332. The action is presently before this Court on plaintiff’s, Hawkeye Security Insurance Company, motion for summary judgment. The background facts are not in dispute. On May 26, 1978 an automobile being driven by Arthur Buck collided with another vehicle being driven by John D. Robusto. At the time of the accident, the plaintiff was Mr. Buck’s insurance carrier, while Mr. Robusto’s insurer was defendant, State Farm Mutual Automobile Insurance Company, (State Farm). Seventeen months later, on October 24,1979, plaintiff received a letter from an attorney on behalf of Mr. Robusto concerning the collision; this was apparently the first notice given the plaintiff of the accident. On December 19,1979, Arthur Buck died. On May 23, 1980, John Robusto filed a personal injury action against Arthur Buck in state court. State Farm intervened in that proceeding to protect its interests under the policy’s uninsured motorist provision. After intervention was granted, State Farm made claim against the plaintiff, Hawkeye Security Insurance Company, for any sums State Farm might be required to pay its insured, John Robusto. On April 2,1981, plaintiff filed this action in federal court seeking declaratory relief. Specifically, plaintiff seeks a determination of its obligation, if any, to defend or indemnify the estate of Arthur Buck under the terms of the underlying insurance policy. Plaintiff included as party defendants Minnie Porter, Personal Representative of the Estate of Arthur Buck; John D. Robusto; and State Farm. On July 24, 1981, this Court entered default judgment against Minnie Porter in her capacity as the estate’s personal representative. On July 19, 1982, plaintiff filed its motion for summary judgment, arguing that this Court’s entry of default judgment acted to relieve the plaintiff from any obligation to defend or indemnify Arthur Buck’s estate in the state court action, and therefore no genuine issues of material fact remained. Thereafter, on September 9, 1982, defendant, State Farm, filed its memorandum in opposition to the plaintiff’s Motion for Summary Judgment. After a pretrial conference on the following day, September 10, 1982, where both parties argued the motion for summary judgment, said motion was taken under advisement by this Court. Federal Rule of Civil Procedure 17(b) states, in relevant part: The capacity of an individual, other than one acting in a representative capacity, to sue or be sued shall be determined by the law of his domicile. The capacity of a corporation to sue or be sued shall be determined by the law under which it was organized. In all other cases capacity to sue or be sued shall be determined by the law of the state in which the district court is held, (emphasis added). In the present case, Minnie Porter was sued in this federal court in her capacity as personal representative of the estate of Arthur Buck; hence, Indiana law applies. Under the law of the State of Indiana, a cause of action survives the death of the person entitled to or liable for such action, if brought by or against the personal representative of the decedent. Ind.Code Ann. § 34-1-1-1 (Burns 1982). However, the discharge of the personal representative by the probate court acts not only as a release from any further duties to the estate, but acts also as a bar to suit against the personal representative’s fraud, mistake, or wilful misconduct. Ind.Code Ann. § 29-1-17-13 (Burns 1971). On examination of the record in this case reveals that the probate of Arthur Buck’s estate was completed on January 26, 1981, at which time Ms. Porter was discharged as personal representative. The present ac*419tion was not filed against Minnie Porter in her representative capacity until April 2, 1981; thus, a gap of more than two months separates the closing of Arthur Buck’s estate (and the release by the probate court of Ms. Porter as the estate’s personal representative) from the filing of this action on April 2,1981. Further, there is no showing in the record that plaintiff alleged any fraud, mistake, or wilful misconduct on the part of Minnie Porter as personal representative of the estate. Thus, at the time of the filing of this action in federal court, Minnie Porter was no longer personal representative of the estate, and said estate had ceased to exist as a legal entity. Since an estate must cease to exist as a legal entity once it has been fully probated, and the personal representative has been discharged, it necessarily follows that the default judgment entered by this Court on July 24, 1981 against Minnie Porter in her capacity as personal representative of Arthur Buck’s estate constitutes a judgment against a non-entity. A judgment against a non-entity is a void judgment, Rich v. Fidelity Mutual Company of Indianapolis, 137 Ind.App. 619, 207 N.E.2d 850 (1965), and a void judgment is a legal nullity. See, e.g., Kansas City Southern Railway Co. v. Great Lakes Carbon, 624 F.2d 822 (8th Cir. 1980), cert. den., 449 U.S. 955, 101 S.Ct. 363, 66 L.Ed.2d 220. Defendant State Farm argues in Part II of its Memorandum in Opposition to Plaintiff’s Motion for Summary Judgment that this Court should set aside its earlier entry of default judgment on the grounds set forth above, i.e., that said judgment was a nullity and void. Construing defendant’s request as a motion to set aside a default judgment under Rule 55(c) of the Federal Rules of Civil Procedure, Rule 55(c) provides that the setting aside of the earlier judgment be in conformity with Rule 60(b). Rule 60(b)(4) states, in relevant part: On motion and upon such terms as are just, the Court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: He * * * * * (4) the judgment is void; ****** The motion shall be made within'a reasonable time .. . Because Rule 60(b) of the Federal Rules of Civil Procedure requires that- the motion shall be made within a reasonable time, the only question remaining before this Court is whether defendant State Farm’s motion to set aside, filed more than one year after the entry of default judgment, was made within a reasonable time. The reasonable time criterion of Rule 60(b) as it relates to void judgments means, in effect, no time limitation, because a void judgment is no judgment at all. Taft v. Donellan Jerome, Inc., 407 F.2d 807 (7th Cir. 1969). Therefore, the court that entered a void judgment may vacate it at any time. 7 J. Moore, Federal Practice ¶ 60.-25[4], p. 315 (2d ed. 1982); 11 Wright & Miller, Federal Practice and Procedure § 2862, p. 197 (1973); Lavine & Horning, Manual of Federal Practice § 7.87, p. 575 (2d ed. revised, 1979). For the above-stated reasons, defendant State Farm’s motion to set aside this Court’s entry of default judgment against Minnie Porter as personal representative of the estate of Arthur Buck is hereby GRANTED. Plaintiff’s motion for summary judgment is accordingly DENIED. SO ORDERED. | 11-26-2022 | [
"MEMORANDUM AND ORDER SHARP, Chief Judge. This case was filed pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, with jurisdiction based on diversity of citizenship, 28 U.S.C. § 1332. The action is presently before this Court on plaintiff’s, Hawkeye Security Insurance Company, motion for summary judgment. The background facts are not in dispute. On May 26, 1978 an automobile being driven by Arthur Buck collided with another vehicle being driven by John D. Robusto. At the time of the accident, the plaintiff was Mr. Buck’s insurance carrier, while Mr. Robusto’s insurer was defendant, State Farm Mutual Automobile Insurance Company, (State Farm).",
"Seventeen months later, on October 24,1979, plaintiff received a letter from an attorney on behalf of Mr. Robusto concerning the collision; this was apparently the first notice given the plaintiff of the accident. On December 19,1979, Arthur Buck died. On May 23, 1980, John Robusto filed a personal injury action against Arthur Buck in state court. State Farm intervened in that proceeding to protect its interests under the policy’s uninsured motorist provision. After intervention was granted, State Farm made claim against the plaintiff, Hawkeye Security Insurance Company, for any sums State Farm might be required to pay its insured, John Robusto. On April 2,1981, plaintiff filed this action in federal court seeking declaratory relief.",
"Specifically, plaintiff seeks a determination of its obligation, if any, to defend or indemnify the estate of Arthur Buck under the terms of the underlying insurance policy. Plaintiff included as party defendants Minnie Porter, Personal Representative of the Estate of Arthur Buck; John D. Robusto; and State Farm. On July 24, 1981, this Court entered default judgment against Minnie Porter in her capacity as the estate’s personal representative. On July 19, 1982, plaintiff filed its motion for summary judgment, arguing that this Court’s entry of default judgment acted to relieve the plaintiff from any obligation to defend or indemnify Arthur Buck’s estate in the state court action, and therefore no genuine issues of material fact remained.",
"Thereafter, on September 9, 1982, defendant, State Farm, filed its memorandum in opposition to the plaintiff’s Motion for Summary Judgment. After a pretrial conference on the following day, September 10, 1982, where both parties argued the motion for summary judgment, said motion was taken under advisement by this Court. Federal Rule of Civil Procedure 17(b) states, in relevant part: The capacity of an individual, other than one acting in a representative capacity, to sue or be sued shall be determined by the law of his domicile. The capacity of a corporation to sue or be sued shall be determined by the law under which it was organized. In all other cases capacity to sue or be sued shall be determined by the law of the state in which the district court is held, (emphasis added).",
"In the present case, Minnie Porter was sued in this federal court in her capacity as personal representative of the estate of Arthur Buck; hence, Indiana law applies. Under the law of the State of Indiana, a cause of action survives the death of the person entitled to or liable for such action, if brought by or against the personal representative of the decedent. Ind.Code Ann. § 34-1-1-1 (Burns 1982). However, the discharge of the personal representative by the probate court acts not only as a release from any further duties to the estate, but acts also as a bar to suit against the personal representative’s fraud, mistake, or wilful misconduct. Ind.Code Ann. § 29-1-17-13 (Burns 1971). On examination of the record in this case reveals that the probate of Arthur Buck’s estate was completed on January 26, 1981, at which time Ms. Porter was discharged as personal representative. The present ac*419tion was not filed against Minnie Porter in her representative capacity until April 2, 1981; thus, a gap of more than two months separates the closing of Arthur Buck’s estate (and the release by the probate court of Ms. Porter as the estate’s personal representative) from the filing of this action on April 2,1981.",
"Further, there is no showing in the record that plaintiff alleged any fraud, mistake, or wilful misconduct on the part of Minnie Porter as personal representative of the estate. Thus, at the time of the filing of this action in federal court, Minnie Porter was no longer personal representative of the estate, and said estate had ceased to exist as a legal entity. Since an estate must cease to exist as a legal entity once it has been fully probated, and the personal representative has been discharged, it necessarily follows that the default judgment entered by this Court on July 24, 1981 against Minnie Porter in her capacity as personal representative of Arthur Buck’s estate constitutes a judgment against a non-entity. A judgment against a non-entity is a void judgment, Rich v. Fidelity Mutual Company of Indianapolis, 137 Ind.App. 619, 207 N.E.2d 850 (1965), and a void judgment is a legal nullity.",
"See, e.g., Kansas City Southern Railway Co. v. Great Lakes Carbon, 624 F.2d 822 (8th Cir. 1980), cert. den., 449 U.S. 955, 101 S.Ct. 363, 66 L.Ed.2d 220. Defendant State Farm argues in Part II of its Memorandum in Opposition to Plaintiff’s Motion for Summary Judgment that this Court should set aside its earlier entry of default judgment on the grounds set forth above, i.e., that said judgment was a nullity and void. Construing defendant’s request as a motion to set aside a default judgment under Rule 55(c) of the Federal Rules of Civil Procedure, Rule 55(c) provides that the setting aside of the earlier judgment be in conformity with Rule 60(b). Rule 60(b)(4) states, in relevant part: On motion and upon such terms as are just, the Court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: He * * * * * (4) the judgment is void; ****** The motion shall be made within'a reasonable time .. .",
"Because Rule 60(b) of the Federal Rules of Civil Procedure requires that- the motion shall be made within a reasonable time, the only question remaining before this Court is whether defendant State Farm’s motion to set aside, filed more than one year after the entry of default judgment, was made within a reasonable time. The reasonable time criterion of Rule 60(b) as it relates to void judgments means, in effect, no time limitation, because a void judgment is no judgment at all.",
"Taft v. Donellan Jerome, Inc., 407 F.2d 807 (7th Cir. 1969). Therefore, the court that entered a void judgment may vacate it at any time. 7 J. Moore, Federal Practice ¶ 60.-25[4], p. 315 (2d ed. 1982); 11 Wright & Miller, Federal Practice and Procedure § 2862, p. 197 (1973); Lavine & Horning, Manual of Federal Practice § 7.87, p. 575 (2d ed. revised, 1979). For the above-stated reasons, defendant State Farm’s motion to set aside this Court’s entry of default judgment against Minnie Porter as personal representative of the estate of Arthur Buck is hereby GRANTED. Plaintiff’s motion for summary judgment is accordingly DENIED. SO ORDERED."
] | https://www.courtlistener.com/api/rest/v3/opinions/8799112/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Patterson, J.: The infant plaintiff, two and a half years of age, was injured by being run over by a horse car of the defendant, while such infant was being conducted by his sister, a child thirteen or fourteen years old, across Essex street, between Broome and Grand streets, in the city of New York. The children were crossing at about fifty feet south of Broome street. The car had stopped at Broome street, but there was evidence to show that when the children started from the sidewalk it was in motion. The sister looked before she left the sidewalk and the car was then distant somewhere between twenty-five and forty feet. The speed of the car was rapid. When the accident occurred, the driver of the car was not looking forward, but his head was averted toward the west side of the street and he was engaged in conversation with a person on the front platform of the car. He made no effort to stop the car, and evidently he was not aware of any one being on or near the track until the infant plaintiff was struck, thrown down and injured. The testimony of the sister seems to have been intelligently and honestly given. She swears that the car was twenty-five feet away from her when she started to cross the street holding her little brother by the hand; that as they approached the car, the little boy bent down, as if to pick up a penny he had dropped; she attempted to pull him across the track, but he was struck and dragged from her hand; that when she stepped on the track the horses were about two, or three or four feet distant from her. She had proceeded about two feet past the horses when the child was dragged from her hand. There was some other evidence to show negligence of the girl in charge of the child, but it is unnecessary to allude particularly to it. *388A clear issue of contributory negligence was presented and was referred to by the trial judge in his charge to the jury as being that either of the girl or of the parents of the child. The defendant’s counsel requested the court to charge that, if the plaintiff’s sister was in fact in charge of the infant plaintiff, and attempted to lead him across defendant’s railroad track at a time when the horses attached to defendant’s car were approaching in full sight and were so near as to make it dangerous for her to proceed, and that the plaintiff’s sister rushed across the track two, three or four feet in front of the horses’ heads, “ leaving her baby brother to his fate,” then the sister, who for the time being was the guardian of the infant plaintiff, was guilty of negligence which contributed to the plaintiff’s injury, and the jury should render a verdict in favor of the defendant on that ground. The court, instead of charging that request as made, modified it by the addition of the following words: “ Unless you believe that the defendant’s driver could, by the exercise of reasonable care and prudence, have avoided the consequences of such contributory negligence.” That was, in effect, charging the jury that if they found the facts to be as stated in the request, the contributory negligence thereby established would not prevent a recovery, if by the exercise of reasonable care and prudence the accident could have been' avoided. That modification of the request eliminated from the case the rwhole subject of contributory negligence for the reason that on the evidence the jury were entitled to find that the car was not operated by the driver with reasonable care and prudence. The modification of the charge was an application to the concrete case of a rule with respect to contributory negligence which applies only in cases in which some new circumstance is introduced or new relation established, apart from the original act or omission constituting negligence, such new circumstance being the proximate cause of the injury sustained. In Rider v. Syracuse R. T. Railway Co. (171 N. Y. 148) the court says that the contributory negligence of the injured party could not be taken from the jury except in cases where it is clear that there was some new act of negligence on the part of the defendant that was the proximate cause of the injury, and in the same case it is said that in determining whether the cause of the acci*389dent is proximate or remote, the same test must be applied to the conduct of both parties. Here, there was no intervention of a new circumstance. All that was in proof consisted of the continuous negligent conduct of the driver of the car, and the conduct of the custodian of the child under conditions in no way changed by any new fact or circumstance. The proximate cause, so far as the defendant is concerned,, was the one act of negligence in careless driving. In Csatlos v. Met. St. Ry. Co. (70 App. Div. 609) this subject was considered,, and some of the cases bearing upon it are cited in the opinion of the court. The present case is altogether unlike those in which a new element is introduced to show that, notwithstanding contributory negligence, by the exercise of reasonable care and prudence of a defendant or its servants the accident could be avoided. Much stress is laid upon the opinion of the Court of Appeals in Costello v. Third Ave. R. R. Co. (161 N. Y. 317), but there the facts, as they appeared in the record when that case was in this court, showed that although the injured boy may have placed himself in a position of peril in the first instance and may have been guilty of contributory negligence, yet the motorman of the car, who could have seen the situation had he looked, committed a new act of negligence by suddenly increasing the speed of the car and that act was the proximate cause of the injury. For the reason above given, the judgment and order appealed from should be reversed and a new trial ordered, with costs to the appellant to abide the event. Van Brunt, P. J., O’Brien, McLaughlin and Laughlin, JJ., concurred. Judgment and order reversed, new trial ordered, costs to appellant to abide event. | 01-06-2022 | [
"Patterson, J.: The infant plaintiff, two and a half years of age, was injured by being run over by a horse car of the defendant, while such infant was being conducted by his sister, a child thirteen or fourteen years old, across Essex street, between Broome and Grand streets, in the city of New York. The children were crossing at about fifty feet south of Broome street. The car had stopped at Broome street, but there was evidence to show that when the children started from the sidewalk it was in motion. The sister looked before she left the sidewalk and the car was then distant somewhere between twenty-five and forty feet.",
"The speed of the car was rapid. When the accident occurred, the driver of the car was not looking forward, but his head was averted toward the west side of the street and he was engaged in conversation with a person on the front platform of the car. He made no effort to stop the car, and evidently he was not aware of any one being on or near the track until the infant plaintiff was struck, thrown down and injured. The testimony of the sister seems to have been intelligently and honestly given. She swears that the car was twenty-five feet away from her when she started to cross the street holding her little brother by the hand; that as they approached the car, the little boy bent down, as if to pick up a penny he had dropped; she attempted to pull him across the track, but he was struck and dragged from her hand; that when she stepped on the track the horses were about two, or three or four feet distant from her. She had proceeded about two feet past the horses when the child was dragged from her hand. There was some other evidence to show negligence of the girl in charge of the child, but it is unnecessary to allude particularly to it.",
"*388A clear issue of contributory negligence was presented and was referred to by the trial judge in his charge to the jury as being that either of the girl or of the parents of the child. The defendant’s counsel requested the court to charge that, if the plaintiff’s sister was in fact in charge of the infant plaintiff, and attempted to lead him across defendant’s railroad track at a time when the horses attached to defendant’s car were approaching in full sight and were so near as to make it dangerous for her to proceed, and that the plaintiff’s sister rushed across the track two, three or four feet in front of the horses’ heads, “ leaving her baby brother to his fate,” then the sister, who for the time being was the guardian of the infant plaintiff, was guilty of negligence which contributed to the plaintiff’s injury, and the jury should render a verdict in favor of the defendant on that ground.",
"The court, instead of charging that request as made, modified it by the addition of the following words: “ Unless you believe that the defendant’s driver could, by the exercise of reasonable care and prudence, have avoided the consequences of such contributory negligence.” That was, in effect, charging the jury that if they found the facts to be as stated in the request, the contributory negligence thereby established would not prevent a recovery, if by the exercise of reasonable care and prudence the accident could have been' avoided. That modification of the request eliminated from the case the rwhole subject of contributory negligence for the reason that on the evidence the jury were entitled to find that the car was not operated by the driver with reasonable care and prudence.",
"The modification of the charge was an application to the concrete case of a rule with respect to contributory negligence which applies only in cases in which some new circumstance is introduced or new relation established, apart from the original act or omission constituting negligence, such new circumstance being the proximate cause of the injury sustained. In Rider v. Syracuse R. T. Railway Co. (171 N. Y. 148) the court says that the contributory negligence of the injured party could not be taken from the jury except in cases where it is clear that there was some new act of negligence on the part of the defendant that was the proximate cause of the injury, and in the same case it is said that in determining whether the cause of the acci*389dent is proximate or remote, the same test must be applied to the conduct of both parties.",
"Here, there was no intervention of a new circumstance. All that was in proof consisted of the continuous negligent conduct of the driver of the car, and the conduct of the custodian of the child under conditions in no way changed by any new fact or circumstance. The proximate cause, so far as the defendant is concerned,, was the one act of negligence in careless driving. In Csatlos v. Met. St. Ry. Co. (70 App. Div. 609) this subject was considered,, and some of the cases bearing upon it are cited in the opinion of the court. The present case is altogether unlike those in which a new element is introduced to show that, notwithstanding contributory negligence, by the exercise of reasonable care and prudence of a defendant or its servants the accident could be avoided. Much stress is laid upon the opinion of the Court of Appeals in Costello v. Third Ave. R. R. Co. (161 N. Y. 317), but there the facts, as they appeared in the record when that case was in this court, showed that although the injured boy may have placed himself in a position of peril in the first instance and may have been guilty of contributory negligence, yet the motorman of the car, who could have seen the situation had he looked, committed a new act of negligence by suddenly increasing the speed of the car and that act was the proximate cause of the injury.",
"For the reason above given, the judgment and order appealed from should be reversed and a new trial ordered, with costs to the appellant to abide the event. Van Brunt, P. J., O’Brien, McLaughlin and Laughlin, JJ., concurred. Judgment and order reversed, new trial ordered, costs to appellant to abide event."
] | https://www.courtlistener.com/api/rest/v3/opinions/5192638/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
.Mialee. Junan: Specific performance of a contract for the sale or exchange of land and landed interests is sought by the bill, and by the decree appealed from performance by both parties was decreed. The contract sought to be enforced was made between the defendant James M. Vance and W. Iv. Cowden, Trustee, by Z. T. Vinson, dated October 10, 1903. The plaintiff company claims under a deed from Cowden, Trustee, and others, dated June 8, 1907. This suit was not begun until August 10, 1908. So that nearly five years elapsed between the date of the contract and the date of the suit to enforce it. The bill offers no excuse on behalf of Cowden, Trustee, or on its own behalf, for delay in asserting his or its rights under the contract, except the general allegation,'denied by the answer, that Cowden, Trustee, was at all times before he “conveyed” the land to plaintiff, and that plaintiff since then has been, ready and willing to comply, with the terms of said agreement on his or its part, but that defendant Vance has refused and still refuses to perform the contract on his part. Cowden never did convey the land to Vance. By the terms of the contract, Vance thereby agreed to convey Cowden “all the coal, oil and gas and fire clay on and under” the land on Huff’s Creek, Logan County, conveyed to him by Jesse R. Irwin in 1901; also “a strip of land 60 feet in width for a right-of-way through said tract of land and all the other property owned by the said Vance on the Northwest side of Huff’s Creek, and to a railroad or other road that may be built up said creek.” It also provides that “The said 60 foot strip is to be designated by the said Cowden, Trustee, or some one acting for him.” And that “said Vance is to have the privilege of using said right-of-way for ingress and egress for his own individual purposes.” And that “In the deed conveying mineral to said Cowden, Trustee, will be contained provisions for the usual mining rights and privileges.” “In consideration for which,” said contract provides, “the *150said Cowden, Trustee, hereby agrees to convey to the said Vance the surface of said 200' acres, and also the surface of 50 acres in addition to the said 200 acres, which said 50 acres is to join the other lands of the said Vance, and is to be selected and located by him.” That “In the deed from Cowden, Trustee, to Vance, the said Cowden will reserve the usual right-of-way, mining rights and privileges for any and all lands which he or his assigns may own or control in that vicinity.” And that, “Said deeds are to be executed by both parties so soon as proper and appropriate descriptions can be procured.” And lastly that: “In the deed to be executed by Cowden, it shall be provided that Vance shall have the right to clear any of the lands conveyed to him by Cowden, and Cowden shall have the timber remaining on said land that will measure 18 inches in diameter or under inside the bark four feet from the ground, for mining purposes.” On demurrer, and in his answer and amended answer to the bill, Vance’s defenses are, (1) alleged want of authority of Vinson to act for Cowden in making .the contract;' (2) laches and abandonment of the contract; (3) that complainant is not the assignee of the contract; (4) uncertainty of the contract, and non-performance of conditions precedent; (5) want of mutuality; (6) want of consideration; (7) denial of relationship of vendor and vendee between Cowden, Trustee, and Vance; (8) misrepresentation or mutual mistake as to good title in Cowden; and lastly, (9) that specific performance is not matter of right but subject to the sound discretion of a court of equity. Wo have carefully considered all these defenses, and the responses thereto, and the numerous authorities cited by counsel for the several propositions covering them, but if we are correct in our conclusion, as we think we are, that laches constitutes a complete defense, that defense is conclusive of the whole case, and it becomes unnecessary to deal with the other questions presented, except incidentally, for they do not fairly arise. Pertinent to the defense of laches, the fact is conceded that at the date of the contract neither party had good title to the land or landed interests proposed to be conveyed. Vance had a deed, and possession; Cowden had nothing but a worthless deed and no possession. The true title to the 200 acres and the 50 *151acres was then in M. B. Mullins. But Vance was and had been for many years in possession of the 200 acres lying adjoining his home farm, at first under a lease in 1887, and thereafter under a deed made in 1901, from Jesse R. Irwin; and he never, at any time, got possession of the land from Cowden, Trustee, or from plaintiff, or from any one under whom they claimed. Furthermore, Vance alleges and proves on the witness stand that he was induced to enter into the contract on the representation of Vinson, for Cowden, Trustee, that Cowden had good title, and that he would he able through him to perfect his own title, else he would not have entered into the contract.. Vinson contradicts Vance, and urges supposed contradictory statements in Vance’s testimony, in corroboration of his own evidence. As we view the case this controverted fact is not very material. However, as Vance was and had been in possession of the land for years, it is difficult to see what advantage or benefit he got from the contract, or why he made It, unless some inducement was held out to him. Cowden’s title or claim to the 50 acres, which he contracted to convey to Vance, was subject to the same infirmity as his claim to the 200 acres. As to both pieces Cowden’s title was worthless. His deed to Vance would have given no strength to Vance’s claim so far as we can see. Vance ascertained soon after his contract with Cowden, Trustee, when Mullins warned him against cutting the timber with threat of legal proceedings, that Mullins had the good title. He then consulted counsel and was so advised. He swears he notified Vinson of Mullins’ claim and called upon him to protect him, which neither Cowden nor Vinson did. Vinson, however, denies; such notice. But the fact is that Vance was obliged to protect, his title and possession bjr purchase from Mullins, which he1 did, taking from Mullins a quit claim deed, dated July 26, 1904, which he put on record August 19, 1904. For this deed he paid' Mullins two hundred dollars. He was never reimbursed for this' outlay or any portion of it by plaintiff or Cowden. Hor did plaintiff or Cowden, Trustee, as Vance alleges in his answer and swears on the witness stand, at any time after the contract of October 10, 1903, propose to Vance to perform the contract on their part, or call upon or demand of him execution thereof. *152'They had apparently abandoned the same, and Vance was never .given any notice, except by the institution of this suit, that plaintiff or Cowden, Trustee, claimed any rights under the contract. The deed from Cowden to plaintiff makes no mention of the contract. It does not in terms convey any rights under it. That deed was made more than a year before the institution of this suit, and in the mean time plaintiff asserted nothing under the contract as against Alance. Vance swears that he had greatly improved his whole farm, had built houses and barns, and cleared fields; that the proposed right of way through his lands, if the contract should bo enforced against him, would cause him great injury and damage, which he proves would be from fifteen hundred to twenty-five hundred dollars. AVhat excuse does the plaintiff or Cowden offer for this unreasonable •delay? Absolutely none. Silence for so long when the contract by its terms provided for prompt action by both parties, and the facts and. circumstances already detailed, at least raises a presumption of abandonment. True there is no evidence in the case showing what changes in value have taken place since the date of the contract, but we may take judicial notice that the value of all mineral and timber land in this state had greatly enhanced in value within the five years intervening between the date of the contract and the date of the suit. We think we may assume from the facts established in the cause that some object of advantage to the plaintiff and disadvantage to the defendant called the plaintiff to action after nearly five years of unexplained delay. The law of this State, and most if not all jurisdictions, is, that specific performance will not in equity be decreed at the ¡suit of one who does not show himself to have been ready, desirous, prompt and eager to perform the contract on his part, ••and if his conduct has indicated bad faith or virtual abandonment of the contract, equity will deny him any relief. Clay v. Deskins, 36 W. Va. 350; Frame v. Frame, 32 W. Va. 463; Chilhowie Iron Co. v. Gardiner, 79 Va. 305; Ford v. Euker, 86 Va. 75; 14 Enc. Dig. Va. & W. Va. Rep. 939, and cases cited. But it is argued that the above rule has little, if any, application to a case such as counsel conceive this case to be, where the *153demand is exclusively equitable, fully proven by documentary evidence, and the delay has in no way operated to the prejudice of the defendant, and the facts and circumstances negative inference of intent on the part of plaintiff to abandon or relin•quish his right, a legal proposition affirmed in Depue v. Miller, 65 W. Va. 120. Plaintiff also invoices the rule of Plant v. Humphries, 66 W. Va. 88, that “laches does not run against one asserting rights to real estate which he has had in possession during the delay in asserting those rights.” Also the rule of Nuttall v. McVey, 63 W. Va. 380, that “A purchaser in actual possession of land under an executory contract of sale will not •be barred by laches from enforcing his right to a conveyance.” We have already indicated our opinion that the lapse of time and the facts and circumstances attending this case raise a presumption of intent to abandon the contract on the part of plaintiff; that the defendant Vance has been prejudiced by the delay, and that nothing has been shown negativing the intent by Cowden or the plaintiff to abandon their rights, and that the rule of Depue v. Miller ought not to be applied. We do not see what application the rule in Plant v. Humphries and Nuttall v. McVey lias to plaintiff’s ease. If Vance had obtained possession from Cowden, and ivas suing for specific execution, the rule of those cases might apply. The case at bar is not a case of that kind, nor one where the rule of the eases relied on should be applied. Vance did not get possession under his contract with Cowden, Trustee; nor does Cowden pretend to have had any possession under Vance. Vance, finding that •Cowden had no title, was obliged to purchase the land from Mullins to save his right and possession under Irwin. It is contended on behalf of plaintiff and Cowden that Vance knew •of the Mullins title when he made the contract with Cowden. 'This is based on the evidence of Vance that at that time he knew •of the deed from Wilkinson, Special Commissioner, to Stoddard and Hall, under whom Mullins claimed; but it does not appear that Vance knew the effect of that deed, or that it invested good title in Stoddard and Hall. He learned this after Mullins had warned him against cutting timber, and he had taken advice of •counsel. That he did not know the effect of the Stoddard and Hall deed, at the time of his contract with Cowden, is further *154evidenced by his testimony, that when hq signed the contract with Cowden he thought he would get a good title, or he would not have signed it. The record shows that there were numerous conflicting claims to this land, but that the title of Mullins under Stoddard and Hall was superior to them all, and had been adjudicated. With like insistence upon the alleged equitable rights of plaintiff for specific execution, it is contended, that notwithstanding Cowden had no title, and Vance was obliged to protect his own claim and possession by purchase from Mullins,, the relationship of vendor and vendee arising from the contract made Vance, in the purchase of the outstanding title from Mullins, trustee ^for Cowden, entitled Cowden to specific execution of the contract, on his refunding to Vance the purchase price of the Mullins deed. This was the theory of the decree appealed from. But this equitable rule applies only where the vendee has obtained possession from the vendor. The reason for the rule is, that it would be inequitable for a vendee-to enter under his vendor, acquire possession thereby, and after-wards, without surrendering that possession, deny his vendor's title. But where the reason for the rule is not present in a-given case the rule is inapplicable, and should not be enforced in equity. 29 Am. & Eng. Ency. Law 706; Roller v. Effinger, 88 Va. 641, 645, citing Galloway v. Finley, 12 Pet. 293. The general rule that specific performance is not a matter of absolute right, but lies only in the sound discretion of the court, is invoked by appellant in this case. That such is the general rule needs no citation of authorities. Sound discretion does not require a court of equity to decree specific performance when the circumstances and conditions of things have so changed as to-result in hardship. Dyer v. Duffy, 39 W. Va. 148; Clay v. Deskins, supra. The court has a right to look to all the circumstances and say whether justice and right-demand specific performance. Hogg's Eq. Prin., section 396; Abbott v. L’Hommedieu, 10 W. Va. 677; Lowther Oil Co. v. Miller-Sibley Oil Co., 53 W. Va. 501, 513. Looking at this case in the light of all the facts and circumstances, including the long delay in asserting their rights under the contract, if any, to decree specific performance now would *155be to permit Cowden, or the plaintiff under him, now that some object of advantage to them and of disadvantage and injury to appellant may have aroused them from their slumbers, would be to permit them to reap where they have not sown, and to deprive the appellant of the benefits of his diligence and enterprise in perfecting his title, and in which he has been in no way aided by his contract with Cowden. •Our conclusion, therefore, is that the decree below should be reversed, and the plaintiff’s bill dismissed, with cost to the appellant in this Court and in the circuit court in this behalf expended. Reversed, and Bill Dismissed. | 09-09-2022 | [
".Mialee. Junan: Specific performance of a contract for the sale or exchange of land and landed interests is sought by the bill, and by the decree appealed from performance by both parties was decreed. The contract sought to be enforced was made between the defendant James M. Vance and W. Iv. Cowden, Trustee, by Z. T. Vinson, dated October 10, 1903. The plaintiff company claims under a deed from Cowden, Trustee, and others, dated June 8, 1907. This suit was not begun until August 10, 1908. So that nearly five years elapsed between the date of the contract and the date of the suit to enforce it. The bill offers no excuse on behalf of Cowden, Trustee, or on its own behalf, for delay in asserting his or its rights under the contract, except the general allegation,'denied by the answer, that Cowden, Trustee, was at all times before he “conveyed” the land to plaintiff, and that plaintiff since then has been, ready and willing to comply, with the terms of said agreement on his or its part, but that defendant Vance has refused and still refuses to perform the contract on his part.",
"Cowden never did convey the land to Vance.",
"By the terms of the contract, Vance thereby agreed to convey Cowden “all the coal, oil and gas and fire clay on and under” the land on Huff’s Creek, Logan County, conveyed to him by Jesse R. Irwin in 1901; also “a strip of land 60 feet in width for a right-of-way through said tract of land and all the other property owned by the said Vance on the Northwest side of Huff’s Creek, and to a railroad or other road that may be built up said creek.” It also provides that “The said 60 foot strip is to be designated by the said Cowden, Trustee, or some one acting for him.” And that “said Vance is to have the privilege of using said right-of-way for ingress and egress for his own individual purposes.” And that “In the deed conveying mineral to said Cowden, Trustee, will be contained provisions for the usual mining rights and privileges.” “In consideration for which,” said contract provides, “the *150said Cowden, Trustee, hereby agrees to convey to the said Vance the surface of said 200' acres, and also the surface of 50 acres in addition to the said 200 acres, which said 50 acres is to join the other lands of the said Vance, and is to be selected and located by him.” That “In the deed from Cowden, Trustee, to Vance, the said Cowden will reserve the usual right-of-way, mining rights and privileges for any and all lands which he or his assigns may own or control in that vicinity.” And that, “Said deeds are to be executed by both parties so soon as proper and appropriate descriptions can be procured.” And lastly that: “In the deed to be executed by Cowden, it shall be provided that Vance shall have the right to clear any of the lands conveyed to him by Cowden, and Cowden shall have the timber remaining on said land that will measure 18 inches in diameter or under inside the bark four feet from the ground, for mining purposes.” On demurrer, and in his answer and amended answer to the bill, Vance’s defenses are, (1) alleged want of authority of Vinson to act for Cowden in making .the contract;' (2) laches and abandonment of the contract; (3) that complainant is not the assignee of the contract; (4) uncertainty of the contract, and non-performance of conditions precedent; (5) want of mutuality; (6) want of consideration; (7) denial of relationship of vendor and vendee between Cowden, Trustee, and Vance; (8) misrepresentation or mutual mistake as to good title in Cowden; and lastly, (9) that specific performance is not matter of right but subject to the sound discretion of a court of equity.",
"Wo have carefully considered all these defenses, and the responses thereto, and the numerous authorities cited by counsel for the several propositions covering them, but if we are correct in our conclusion, as we think we are, that laches constitutes a complete defense, that defense is conclusive of the whole case, and it becomes unnecessary to deal with the other questions presented, except incidentally, for they do not fairly arise. Pertinent to the defense of laches, the fact is conceded that at the date of the contract neither party had good title to the land or landed interests proposed to be conveyed. Vance had a deed, and possession; Cowden had nothing but a worthless deed and no possession. The true title to the 200 acres and the 50 *151acres was then in M. B. Mullins. But Vance was and had been for many years in possession of the 200 acres lying adjoining his home farm, at first under a lease in 1887, and thereafter under a deed made in 1901, from Jesse R. Irwin; and he never, at any time, got possession of the land from Cowden, Trustee, or from plaintiff, or from any one under whom they claimed. Furthermore, Vance alleges and proves on the witness stand that he was induced to enter into the contract on the representation of Vinson, for Cowden, Trustee, that Cowden had good title, and that he would he able through him to perfect his own title, else he would not have entered into the contract.. Vinson contradicts Vance, and urges supposed contradictory statements in Vance’s testimony, in corroboration of his own evidence.",
"As we view the case this controverted fact is not very material. However, as Vance was and had been in possession of the land for years, it is difficult to see what advantage or benefit he got from the contract, or why he made It, unless some inducement was held out to him. Cowden’s title or claim to the 50 acres, which he contracted to convey to Vance, was subject to the same infirmity as his claim to the 200 acres. As to both pieces Cowden’s title was worthless. His deed to Vance would have given no strength to Vance’s claim so far as we can see.",
"Vance ascertained soon after his contract with Cowden, Trustee, when Mullins warned him against cutting the timber with threat of legal proceedings, that Mullins had the good title. He then consulted counsel and was so advised. He swears he notified Vinson of Mullins’ claim and called upon him to protect him, which neither Cowden nor Vinson did. Vinson, however, denies; such notice. But the fact is that Vance was obliged to protect, his title and possession bjr purchase from Mullins, which he1 did, taking from Mullins a quit claim deed, dated July 26, 1904, which he put on record August 19, 1904. For this deed he paid' Mullins two hundred dollars. He was never reimbursed for this' outlay or any portion of it by plaintiff or Cowden. Hor did plaintiff or Cowden, Trustee, as Vance alleges in his answer and swears on the witness stand, at any time after the contract of October 10, 1903, propose to Vance to perform the contract on their part, or call upon or demand of him execution thereof.",
"*152'They had apparently abandoned the same, and Vance was never .given any notice, except by the institution of this suit, that plaintiff or Cowden, Trustee, claimed any rights under the contract. The deed from Cowden to plaintiff makes no mention of the contract. It does not in terms convey any rights under it. That deed was made more than a year before the institution of this suit, and in the mean time plaintiff asserted nothing under the contract as against Alance. Vance swears that he had greatly improved his whole farm, had built houses and barns, and cleared fields; that the proposed right of way through his lands, if the contract should bo enforced against him, would cause him great injury and damage, which he proves would be from fifteen hundred to twenty-five hundred dollars.",
"AVhat excuse does the plaintiff or Cowden offer for this unreasonable •delay? Absolutely none. Silence for so long when the contract by its terms provided for prompt action by both parties, and the facts and. circumstances already detailed, at least raises a presumption of abandonment. True there is no evidence in the case showing what changes in value have taken place since the date of the contract, but we may take judicial notice that the value of all mineral and timber land in this state had greatly enhanced in value within the five years intervening between the date of the contract and the date of the suit. We think we may assume from the facts established in the cause that some object of advantage to the plaintiff and disadvantage to the defendant called the plaintiff to action after nearly five years of unexplained delay.",
"The law of this State, and most if not all jurisdictions, is, that specific performance will not in equity be decreed at the ¡suit of one who does not show himself to have been ready, desirous, prompt and eager to perform the contract on his part, ••and if his conduct has indicated bad faith or virtual abandonment of the contract, equity will deny him any relief. Clay v. Deskins, 36 W. Va. 350; Frame v. Frame, 32 W. Va. 463; Chilhowie Iron Co. v. Gardiner, 79 Va. 305; Ford v. Euker, 86 Va. 75; 14 Enc. Dig. Va. & W. Va. Rep. 939, and cases cited. But it is argued that the above rule has little, if any, application to a case such as counsel conceive this case to be, where the *153demand is exclusively equitable, fully proven by documentary evidence, and the delay has in no way operated to the prejudice of the defendant, and the facts and circumstances negative inference of intent on the part of plaintiff to abandon or relin•quish his right, a legal proposition affirmed in Depue v. Miller, 65 W. Va. 120.",
"Plaintiff also invoices the rule of Plant v. Humphries, 66 W. Va. 88, that “laches does not run against one asserting rights to real estate which he has had in possession during the delay in asserting those rights.” Also the rule of Nuttall v. McVey, 63 W. Va. 380, that “A purchaser in actual possession of land under an executory contract of sale will not •be barred by laches from enforcing his right to a conveyance.” We have already indicated our opinion that the lapse of time and the facts and circumstances attending this case raise a presumption of intent to abandon the contract on the part of plaintiff; that the defendant Vance has been prejudiced by the delay, and that nothing has been shown negativing the intent by Cowden or the plaintiff to abandon their rights, and that the rule of Depue v. Miller ought not to be applied. We do not see what application the rule in Plant v. Humphries and Nuttall v. McVey lias to plaintiff’s ease.",
"If Vance had obtained possession from Cowden, and ivas suing for specific execution, the rule of those cases might apply. The case at bar is not a case of that kind, nor one where the rule of the eases relied on should be applied. Vance did not get possession under his contract with Cowden, Trustee; nor does Cowden pretend to have had any possession under Vance. Vance, finding that •Cowden had no title, was obliged to purchase the land from Mullins to save his right and possession under Irwin.",
"It is contended on behalf of plaintiff and Cowden that Vance knew •of the Mullins title when he made the contract with Cowden. 'This is based on the evidence of Vance that at that time he knew •of the deed from Wilkinson, Special Commissioner, to Stoddard and Hall, under whom Mullins claimed; but it does not appear that Vance knew the effect of that deed, or that it invested good title in Stoddard and Hall. He learned this after Mullins had warned him against cutting timber, and he had taken advice of •counsel. That he did not know the effect of the Stoddard and Hall deed, at the time of his contract with Cowden, is further *154evidenced by his testimony, that when hq signed the contract with Cowden he thought he would get a good title, or he would not have signed it. The record shows that there were numerous conflicting claims to this land, but that the title of Mullins under Stoddard and Hall was superior to them all, and had been adjudicated. With like insistence upon the alleged equitable rights of plaintiff for specific execution, it is contended, that notwithstanding Cowden had no title, and Vance was obliged to protect his own claim and possession by purchase from Mullins,, the relationship of vendor and vendee arising from the contract made Vance, in the purchase of the outstanding title from Mullins, trustee ^for Cowden, entitled Cowden to specific execution of the contract, on his refunding to Vance the purchase price of the Mullins deed. This was the theory of the decree appealed from.",
"But this equitable rule applies only where the vendee has obtained possession from the vendor. The reason for the rule is, that it would be inequitable for a vendee-to enter under his vendor, acquire possession thereby, and after-wards, without surrendering that possession, deny his vendor's title. But where the reason for the rule is not present in a-given case the rule is inapplicable, and should not be enforced in equity. 29 Am. & Eng. Ency. Law 706; Roller v. Effinger, 88 Va. 641, 645, citing Galloway v. Finley, 12 Pet. 293. The general rule that specific performance is not a matter of absolute right, but lies only in the sound discretion of the court, is invoked by appellant in this case. That such is the general rule needs no citation of authorities.",
"Sound discretion does not require a court of equity to decree specific performance when the circumstances and conditions of things have so changed as to-result in hardship. Dyer v. Duffy, 39 W. Va. 148; Clay v. Deskins, supra. The court has a right to look to all the circumstances and say whether justice and right-demand specific performance. Hogg's Eq. Prin., section 396; Abbott v. L’Hommedieu, 10 W. Va. 677; Lowther Oil Co. v. Miller-Sibley Oil Co., 53 W. Va. 501, 513. Looking at this case in the light of all the facts and circumstances, including the long delay in asserting their rights under the contract, if any, to decree specific performance now would *155be to permit Cowden, or the plaintiff under him, now that some object of advantage to them and of disadvantage and injury to appellant may have aroused them from their slumbers, would be to permit them to reap where they have not sown, and to deprive the appellant of the benefits of his diligence and enterprise in perfecting his title, and in which he has been in no way aided by his contract with Cowden.",
"•Our conclusion, therefore, is that the decree below should be reversed, and the plaintiff’s bill dismissed, with cost to the appellant in this Court and in the circuit court in this behalf expended. Reversed, and Bill Dismissed."
] | https://www.courtlistener.com/api/rest/v3/opinions/8177044/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
1 UNITED STATES DISTRICT COURT DISTRICT OF NEVADA 2
3 UNITED STATES OF AMERICA, Case No. 2:20-cr-00293-APG-NJK 4 Plaintiff, ORDER OF DISMISSAL OF THE 5 vs. INDICTMENT WITHOUT PREJUDICE 6 CHARON DEVANTE CHRISTY, 7 Defendant. 8
9 Pursuant to Rule 48(a) of the Federal Rules of Criminal Procedure, and upon leave of
10 Court, the Acting United States Attorney for the District of Nevada hereby dismisses without prejudice the charge brought against defendant CHARON DEVANTE CHRISTY contained in 11 the Indictment in case number 2:20-cr-00293-APG-NJK. 12
13 Respectfully submitted, CHRISTOPHER CHIOU 14 Acting United States Attorney
15 /s/ Brett Ruff______ BRETT RUFF Assistant United States Attorney 16
17 Leave of the Court is granted for the filing of the foregoing dismissal of the charge 18 brought against defendant CHARON DEVANTE CHRISTY contained in the Indictment in 19 case number 2:20-cr-00293-APG-NJK.
20 7th DATED this _______ May day of __________ 2021. 21
22 __________________________________ HONORABLE ANDREW P. GORDON 23 UNITED STATES DISTRICT JUDGE 24
3 | 2021-05-07 | [
"1 UNITED STATES DISTRICT COURT DISTRICT OF NEVADA 2 3 UNITED STATES OF AMERICA, Case No. 2:20-cr-00293-APG-NJK 4 Plaintiff, ORDER OF DISMISSAL OF THE 5 vs. INDICTMENT WITHOUT PREJUDICE 6 CHARON DEVANTE CHRISTY, 7 Defendant. 8 9 Pursuant to Rule 48(a) of the Federal Rules of Criminal Procedure, and upon leave of 10 Court, the Acting United States Attorney for the District of Nevada hereby dismisses without prejudice the charge brought against defendant CHARON DEVANTE CHRISTY contained in 11 the Indictment in case number 2:20-cr-00293-APG-NJK. 12 13 Respectfully submitted, CHRISTOPHER CHIOU 14 Acting United States Attorney 15 /s/ Brett Ruff______ BRETT RUFF Assistant United States Attorney 16 17 Leave of the Court is granted for the filing of the foregoing dismissal of the charge 18 brought against defendant CHARON DEVANTE CHRISTY contained in the Indictment in 19 case number 2:20-cr-00293-APG-NJK. 20 7th DATED this _______ May day of __________ 2021. 21 22 __________________________________ HONORABLE ANDREW P. GORDON 23 UNITED STATES DISTRICT JUDGE 24 3"
] | https://www.courtlistener.com/api/rest/v3/recap-documents/169081155/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Case 1:15-cv-05340-KPF Document 14 Filed 06/02/20 Page 1 of 2
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
YUN ZHOU ZHANG, Petitioner, -v.- OSCAR AVILES, in his official capacity as Warden of Hudson County Correctional Facility, CHRISTOPHER SHANAHAN, in his 15 Civ. 5340 (KPF) official capacity as New York Field Office Director for U.S. Immigration and Customs ORDER Enforcement, JEH JOHNSON, in his Official Capacity as Secretary of Homeland Security, and LORETTA LYNCH, in her official capacity as Attorney General of the United States,
Respondents.
KATHERINE POLK FAILLA, District Judge:
On July 29, 2015, the Honorable Shira A. Scheindlin entered an Order
requiring the Government to provide Petitioner with an individualized bond
hearing within fifteen days and closing this case. (Dkt. #7). On September 28,
2015, Respondents filed a notice of appeal of that decision. (Dkt. #9). On April
27, 2020, the Second Circuit Court of Appeals remanded this matter for further
consideration in light of the Supreme Court’s decisions Nielsen v. Preap, 139 S.
Ct. 954 (2019), and Jennings v. Rodriguez, 138 S. Ct. 830 (2018). The matter
was reassigned to this Court on April 28, 2020. On May 18, 2020, the Court
issued an Order requiring the parties to file a joint letter advising the Court as
to their positions regarding whether the Petition had been mooted by
developments following Judge Scheindlin’s July 29, 2015 Order. (Dkt. #12). Case 1:15-cv-05340-KPF Document 14 Filed 06/02/20 Page 2 of 2
On June 1, 2020, the parties filed a joint letter stating that Petitioner
had received two bond hearings and had been released from custody in
December 2015. Accordingly, the parties advised the Court that Petitioner had
received the relief sought in his Petition. The parties requested that the
Petition be dismissed without prejudice.
In light of the fact that Petitioner has received the relief sought in his
Petition, the parties’ acknowledgment that no further action is required in this
case, and the parties’ joint request for dismissal without prejudice, the Petition
is hereby DISMISSED without prejudice to Petitioner’s ability to refile a habeas
petition should future circumstances warrant it. The Clerk of Court is directed
to terminate all pending motions, adjourn all remaining dates, and close this
case.
SO ORDERED.
Dated: June 2, 2020 New York, New York __________________________________ KATHERINE POLK FAILLA United States District Judge
2 | 2020-06-02 | [
"Case 1:15-cv-05340-KPF Document 14 Filed 06/02/20 Page 1 of 2 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK YUN ZHOU ZHANG, Petitioner, -v.- OSCAR AVILES, in his official capacity as Warden of Hudson County Correctional Facility, CHRISTOPHER SHANAHAN, in his 15 Civ. 5340 (KPF) official capacity as New York Field Office Director for U.S. Immigration and Customs ORDER Enforcement, JEH JOHNSON, in his Official Capacity as Secretary of Homeland Security, and LORETTA LYNCH, in her official capacity as Attorney General of the United States, Respondents. KATHERINE POLK FAILLA, District Judge: On July 29, 2015, the Honorable Shira A. Scheindlin entered an Order requiring the Government to provide Petitioner with an individualized bond hearing within fifteen days and closing this case. (Dkt. #7). On September 28, 2015, Respondents filed a notice of appeal of that decision. (Dkt. #9). On April 27, 2020, the Second Circuit Court of Appeals remanded this matter for further consideration in light of the Supreme Court’s decisions Nielsen v. Preap, 139 S. Ct. 954 (2019), and Jennings v. Rodriguez, 138 S. Ct. 830 (2018).",
"The matter was reassigned to this Court on April 28, 2020. On May 18, 2020, the Court issued an Order requiring the parties to file a joint letter advising the Court as to their positions regarding whether the Petition had been mooted by developments following Judge Scheindlin’s July 29, 2015 Order. (Dkt. #12). Case 1:15-cv-05340-KPF Document 14 Filed 06/02/20 Page 2 of 2 On June 1, 2020, the parties filed a joint letter stating that Petitioner had received two bond hearings and had been released from custody in December 2015. Accordingly, the parties advised the Court that Petitioner had received the relief sought in his Petition. The parties requested that the Petition be dismissed without prejudice.",
"In light of the fact that Petitioner has received the relief sought in his Petition, the parties’ acknowledgment that no further action is required in this case, and the parties’ joint request for dismissal without prejudice, the Petition is hereby DISMISSED without prejudice to Petitioner’s ability to refile a habeas petition should future circumstances warrant it. The Clerk of Court is directed to terminate all pending motions, adjourn all remaining dates, and close this case. SO ORDERED.",
"Dated: June 2, 2020 New York, New York __________________________________ KATHERINE POLK FAILLA United States District Judge 2"
] | https://www.courtlistener.com/api/rest/v3/recap-documents/135293056/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Preliminary Amendment The preliminary amendment filed on 7/26/2022 has been entered. Claim Rejections - 35 USC § 102 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The following is a quotation of the appropriate paragraphs of 35 U.S.C. 102 that form the basis for the rejections under this section made in this Office action: A person shall be entitled to a patent unless –
(a)(1) the claimed invention was patented, described in a printed publication, or in public use, on sale or otherwise available to the public before the effective filing date of the claimed invention.
(a)(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention.
Claims 25, 26 and 29 are rejected under 35 U.S.C. 102(a)(1) as being anticipated by Yu et al. (US 2015/0376851). With regard claim 25, Yu et al. discloses a first device (Fig.1 elements 110 and 120 and para.43-44) for a docking system (Fig.1 and para.42) including a second device (Fig.1 element 130 and para.43-45 and 51, where the target body 130 is guided from a long distant to a short distance…) being moveable relative to a first device (Fig.1 element 130 and para.43-45 and 51, where the guide unit includes at least one ultrasonic beacon 114 that generates ultrasonic waves toward the target body 130 so that the target body 130 is guided from a long distant to a short distance about the agent unit.), the first device comprising: a docking station (Fig.1 element 110 and para.44-45, 50, where the docking station 110 includes a guide unit that transmits a guide signal to guide the target body 130 to the docking station 110 or the agent unit 120), an optical cable storage device configured to dispense optical cable (Fig.1 elements 113 and 140 and para.45, where a winch 113 for use in winding or unwinding a cable 140 connected to the agent unit 120 is provided at a portion of the docking station 110. To conduct the operation of docking the target body 130, the winch 113 is operated to unwind the cable 140 that has been wound around a drum of the winch 113. Then, the agent unit 120 is moored under the water at a position spaced apart from the docking station 110 by a predetermined distance. ) therefrom in cooperation with the second device (para.56 and 80, where after the operation of docking the target body 130 on the agent unit 120 has been completed, the winch 113 is operated to wind the cable 140 around the drum. Consequently, the target body 130 docked on the agent unit 120 is retrieved to the docking station 110); a first optical transceiver (Fig.3C element 128 and para.64), and a first controller configured to operate said first optical transceiver to receive an optical beacon signal (para.51 and 53) from a second optical transceiver (Fig.3C element 134 and para.65) of the second device (Fig.3C element 130 and para.64-65), and generate and transmit an optical guidance data signal based on the optical beacon signal (para.51, 66 and 75, where the guide unit includes at least one ultrasonic beacon 114 that generates ultrasonic waves toward the target body 130 so that the target body 130 is guided from a long distant to a short distance about the agent unit and the communication units 128 and 134 function to transmit data and a control signal, which is transmit from the docking station 110 by the cable 140, to the target body 130 via the agent unit 120) so that the second optical transceiver (Fig.3C element 134) receives the optical guidance data signal from the first optical transceiver (para.51, 66 and 75, where the guide unit includes at least one ultrasonic beacon 114 that generates ultrasonic waves toward the target body 130 so that the target body 130 is guided from a long distant to a short distance about the agent unit and the communication units 128 and 134 function to transmit data and a control signal, which is transmit from the docking station 110 by the cable 140, to the target body 130 via the agent unit 120) and cooperates with a second controller of the second device to operate a propulsion system of the second device (Fig.3C element 130 and para.67, where the target body 130 autonomously moves under the water to collect a variety of information in response to a given assignment. The target body 130 may be an unmanned underwater vehicle or robot such as an autonomous underwater vehicle (AUV) or a remotely operated vehicle (ROV). It is inherent that the target body 130 has a propulsion system.) based upon the optical guidance data signal to dock the second device to the docking station ((Fig.3C and 3D and para.53, 67-68, where when the target body 130 is within a long distant from the agent unit 120, the ultrasonic beacon 114 generates ultrasonic waves to roughly guide the target body 130 into a short distance from the docking station 110 … and the target body 130 autonomously moves under the water to collect a variety of information in response to a given assignment (para.67).) With regard claim 26, Yu et al. further discloses wherein the first controller is configured to determine a range of the second device (para.17 and 51, where the range would be a long distance or a short distance) and generate the optical guidance data signal based thereon (para.51, where the guide unit includes at least one ultrasonic beacon 114 that generates ultrasonic waves toward the target body 130 so that the target body 130 is guided from a long distant to a short distance about the agent unit.) With regard claim 29, Yu et al. further discloses wherein the docking station comprises an underwater docking station (Fig.1 element 130 and para.67, where the target body 130 may be an unmanned underwater vehicle or robot such as an autonomous underwater vehicle (AUV) or a remotely operated vehicle (ROV)). Claim Rejections - 35 USC § 103 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102 of this title, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
Claims 27, 28 and 30-37 are rejected under 35 U.S.C. 103 as being unpatentable over Yu et al. (US 2015/0376851) in view of GILLIAND et al. (EP 2963445). With regard claim 27, Yu et al. discloses all of the subject matter as described in the above paragraph except for specifically teaching wherein the first optical transceiver comprises a first laser transceiver. However, GILLIAND et al. teaches wherein the first optical transceiver comprises a first laser transceiver (Fig.1 element 106 and col.23 lines 1-4, where the pulsed laser transmitter 106 is an array of vertical cavity surface emitting lasers (VCSELs)) in order to reduce cost, size, power consumption, and/or enhance reliability (col.23 lines 1-4). Therefore, it would have been obvious to one of ordinary skill before the effective filing date of the claimed invention to include wherein the first optical transceiver comprises a first laser transceiver as taught by GILLIAND et al. into Yu’s first optical transceiver so as to reduce cost, size, power consumption, and/or enhance reliability. With regard claim 28, the modified circuit of Yu et al. and GILLIAND et al. further teaches wherein the first laser transceiver comprises a first vertical cavity surface emitting laser (Fig.1 element 106 and col.23 lines 1-4, where the pulsed laser transmitter 106 is an array of vertical cavity surface emitting lasers (VCSELs)). With regard claim 30, which is a first device for a docking system claim related to claim 28, all limitation is contained in claim 28. The explanation of all the limitation is already addressed in the above paragraph. With regard claim 31, Yu et al. further discloses wherein the first controller is configured to determine a range of the second device (para.17 and 51, where the range would be a long distance or a short distance) and generate the optical guidance data signal based thereon (para.51, where the guide unit includes at least one ultrasonic beacon 114 that generates ultrasonic waves toward the target body 130 so that the target body 130 is guided from a long distant to a short distance about the agent unit.) With regard claim 32, Yu et al. further discloses wherein the docking station comprises an underwater docking station (Fig.1 element 130 and para.67, where the target body 130 may be an unmanned underwater vehicle or robot such as an autonomous underwater vehicle (AUV) or a remotely operated vehicle (ROV)). With regard claim 33, which is a method claim related to claim 26, all limitation is contained in claim 26 except for specifically teaching a long-range navigation device. The explanation of all the limitation is already addressed in the above paragraph. However, GILLIAND et al. teaches a long-range navigation device (col.4 lines 14-27, where FIG. 5 is a block diagram of a typical vehicle installation comprising a long range LADAR … and FIG. 6 is a block diagram shows the elements of a typical vehicle installation … provide an inertial navigation reference, provide global positioning references, …) in order to provide semi-autonomously navigated, or fully autonomously steered and controlled, and which may be manned or unmanned (col.13 lines 5-15). Therefore, it would have been obvious to one of ordinary skill before the effective filing date of the claimed invention to include the long-range navigation device as taught by GILLIAND et al. into Yu’s second deice so as to provide semi-autonomously navigated, or fully autonomously steered and controlled, and which may be manned or unmanned. With regard claim 34, Yu et al. further discloses wherein the first controller is configured to determine a range of the second device (para.17 and 51, where the range would be a long distance or a short distance) and generate the optical guidance data signal based thereon (para.51, where the guide unit includes at least one ultrasonic beacon 114 that generates ultrasonic waves toward the target body 130 so that the target body 130 is guided from a long distant to a short distance about the agent unit.) With regard claim 35, Yu et al. discloses all of the subject matter as described in the above paragraph except for specifically teaching wherein the first optical transceiver comprises a first laser transceiver. However, GILLIAND et al. teaches wherein the first optical transceiver comprises a first laser transceiver (Fig.1 element 106 and col.23 lines 1-4, where the pulsed laser transmitter 106 is an array of vertical cavity surface emitting lasers (VCSELs)) in order to reduce cost, size, power consumption, and/or enhance reliability (col.23 lines 1-4). Therefore, it would have been obvious to one of ordinary skill before the effective filing date of the claimed invention to include wherein the first optical transceiver comprises a first laser transceiver as taught by GILLIAND et al. into Yu’s first optical transceiver so as to reduce cost, size, power consumption, and/or enhance reliability. With regard claim 36, the modified circuit of Yu et al. and GILLIAND et al. further teaches wherein the first laser transceiver comprises a first vertical cavity surface emitting laser (Fig.1 element 106 and col.23 lines 1-4, where the pulsed laser transmitter 106 is an array of vertical cavity surface emitting lasers (VCSELs)). With regard claim 37, Yu et al. further discloses wherein the first and second devices each comprises an underwater device (Fig.1 elements 120 (first device) and 130 (second device) and para.7 and 67, where the target body may be an unmanned underwater vehicle or robot such as an autonomous underwater vehicle (AUV) or a remotely operated vehicle (ROV) and the unmanned underwater vehicle be docked on an underwater docking station without retrieval onto the ground, and then battery charge and data transmission and reception are conducted in real time with the vehicle remaining under the water.) Conclusion Examiner's Note: Examiner has cited particular columns and line numbers in the references applied to the claims above for the convenience of the applicants. Although the specified citations are representative of the teachings of the art and are applied to specific limitations within the individual claim, other passages and figures may apply as well. It is respectfully requested from the applicants in preparing responses, to fully consider the references in their entirety as potentially teaching all or part of the claimed invention, as well as the context of the passage as taught by the prior art or disclosed by the Examiner. In the case of amending the claimed invention, Applicant is respectfully requested to indicate the portion(s) of the specification which dictate(s) the structure relied on for proper interpretation and also to verify and ascertain the metes and bounds of the claimed invention. Any inquiry concerning this communication or earlier communications from the examiner should be directed to Ted M. Wang whose telephone number is 571-272-3053. The examiner can normally be reached on M-F, 7:30 AM to 5:00 PM. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Sam Ahn can be reached on 571-272-3044. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see http://pair-direct.uspto.gov. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free).
/Ted M Wang/ Primary Examiner, Art Unit 2633 | 2022-12-04T16:13:39 | [
"DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Preliminary Amendment The preliminary amendment filed on 7/26/2022 has been entered. Claim Rejections - 35 USC § 102 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The following is a quotation of the appropriate paragraphs of 35 U.S.C. 102 that form the basis for the rejections under this section made in this Office action: A person shall be entitled to a patent unless – (a)(1) the claimed invention was patented, described in a printed publication, or in public use, on sale or otherwise available to the public before the effective filing date of the claimed invention.",
"(a)(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention. Claims 25, 26 and 29 are rejected under 35 U.S.C. 102(a)(1) as being anticipated by Yu et al. (US 2015/0376851). With regard claim 25, Yu et al.",
"discloses a first device (Fig.1 elements 110 and 120 and para.43-44) for a docking system (Fig.1 and para.42) including a second device (Fig.1 element 130 and para.43-45 and 51, where the target body 130 is guided from a long distant to a short distance…) being moveable relative to a first device (Fig.1 element 130 and para.43-45 and 51, where the guide unit includes at least one ultrasonic beacon 114 that generates ultrasonic waves toward the target body 130 so that the target body 130 is guided from a long distant to a short distance about the agent unit. ), the first device comprising: a docking station (Fig.1 element 110 and para.44-45, 50, where the docking station 110 includes a guide unit that transmits a guide signal to guide the target body 130 to the docking station 110 or the agent unit 120), an optical cable storage device configured to dispense optical cable (Fig.1 elements 113 and 140 and para.45, where a winch 113 for use in winding or unwinding a cable 140 connected to the agent unit 120 is provided at a portion of the docking station 110.",
"To conduct the operation of docking the target body 130, the winch 113 is operated to unwind the cable 140 that has been wound around a drum of the winch 113. Then, the agent unit 120 is moored under the water at a position spaced apart from the docking station 110 by a predetermined distance. ) therefrom in cooperation with the second device (para.56 and 80, where after the operation of docking the target body 130 on the agent unit 120 has been completed, the winch 113 is operated to wind the cable 140 around the drum.",
"Consequently, the target body 130 docked on the agent unit 120 is retrieved to the docking station 110); a first optical transceiver (Fig.3C element 128 and para.64), and a first controller configured to operate said first optical transceiver to receive an optical beacon signal (para.51 and 53) from a second optical transceiver (Fig.3C element 134 and para.65) of the second device (Fig.3C element 130 and para.64-65), and generate and transmit an optical guidance data signal based on the optical beacon signal (para.51, 66 and 75, where the guide unit includes at least one ultrasonic beacon 114 that generates ultrasonic waves toward the target body 130 so that the target body 130 is guided from a long distant to a short distance about the agent unit and the communication units 128 and 134 function to transmit data and a control signal, which is transmit from the docking station 110 by the cable 140, to the target body 130 via the agent unit 120) so that the second optical transceiver (Fig.3C element 134) receives the optical guidance data signal from the first optical transceiver (para.51, 66 and 75, where the guide unit includes at least one ultrasonic beacon 114 that generates ultrasonic waves toward the target body 130 so that the target body 130 is guided from a long distant to a short distance about the agent unit and the communication units 128 and 134 function to transmit data and a control signal, which is transmit from the docking station 110 by the cable 140, to the target body 130 via the agent unit 120) and cooperates with a second controller of the second device to operate a propulsion system of the second device (Fig.3C element 130 and para.67, where the target body 130 autonomously moves under the water to collect a variety of information in response to a given assignment.",
"The target body 130 may be an unmanned underwater vehicle or robot such as an autonomous underwater vehicle (AUV) or a remotely operated vehicle (ROV). It is inherent that the target body 130 has a propulsion system.) based upon the optical guidance data signal to dock the second device to the docking station ((Fig.3C and 3D and para.53, 67-68, where when the target body 130 is within a long distant from the agent unit 120, the ultrasonic beacon 114 generates ultrasonic waves to roughly guide the target body 130 into a short distance from the docking station 110 … and the target body 130 autonomously moves under the water to collect a variety of information in response to a given assignment (para.67).) With regard claim 26, Yu et al.",
"further discloses wherein the first controller is configured to determine a range of the second device (para.17 and 51, where the range would be a long distance or a short distance) and generate the optical guidance data signal based thereon (para.51, where the guide unit includes at least one ultrasonic beacon 114 that generates ultrasonic waves toward the target body 130 so that the target body 130 is guided from a long distant to a short distance about the agent unit.) With regard claim 29, Yu et al. further discloses wherein the docking station comprises an underwater docking station (Fig.1 element 130 and para.67, where the target body 130 may be an unmanned underwater vehicle or robot such as an autonomous underwater vehicle (AUV) or a remotely operated vehicle (ROV)).",
"Claim Rejections - 35 USC § 103 In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status. The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102 of this title, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.",
"Patentability shall not be negated by the manner in which the invention was made. Claims 27, 28 and 30-37 are rejected under 35 U.S.C. 103 as being unpatentable over Yu et al. (US 2015/0376851) in view of GILLIAND et al. (EP 2963445). With regard claim 27, Yu et al. discloses all of the subject matter as described in the above paragraph except for specifically teaching wherein the first optical transceiver comprises a first laser transceiver. However, GILLIAND et al. teaches wherein the first optical transceiver comprises a first laser transceiver (Fig.1 element 106 and col.23 lines 1-4, where the pulsed laser transmitter 106 is an array of vertical cavity surface emitting lasers (VCSELs)) in order to reduce cost, size, power consumption, and/or enhance reliability (col.23 lines 1-4).",
"Therefore, it would have been obvious to one of ordinary skill before the effective filing date of the claimed invention to include wherein the first optical transceiver comprises a first laser transceiver as taught by GILLIAND et al. into Yu’s first optical transceiver so as to reduce cost, size, power consumption, and/or enhance reliability. With regard claim 28, the modified circuit of Yu et al.",
"and GILLIAND et al. further teaches wherein the first laser transceiver comprises a first vertical cavity surface emitting laser (Fig.1 element 106 and col.23 lines 1-4, where the pulsed laser transmitter 106 is an array of vertical cavity surface emitting lasers (VCSELs)). With regard claim 30, which is a first device for a docking system claim related to claim 28, all limitation is contained in claim 28. The explanation of all the limitation is already addressed in the above paragraph. With regard claim 31, Yu et al. further discloses wherein the first controller is configured to determine a range of the second device (para.17 and 51, where the range would be a long distance or a short distance) and generate the optical guidance data signal based thereon (para.51, where the guide unit includes at least one ultrasonic beacon 114 that generates ultrasonic waves toward the target body 130 so that the target body 130 is guided from a long distant to a short distance about the agent unit.) With regard claim 32, Yu et al.",
"further discloses wherein the docking station comprises an underwater docking station (Fig.1 element 130 and para.67, where the target body 130 may be an unmanned underwater vehicle or robot such as an autonomous underwater vehicle (AUV) or a remotely operated vehicle (ROV)). With regard claim 33, which is a method claim related to claim 26, all limitation is contained in claim 26 except for specifically teaching a long-range navigation device. The explanation of all the limitation is already addressed in the above paragraph. However, GILLIAND et al. teaches a long-range navigation device (col.4 lines 14-27, where FIG. 5 is a block diagram of a typical vehicle installation comprising a long range LADAR … and FIG. 6 is a block diagram shows the elements of a typical vehicle installation … provide an inertial navigation reference, provide global positioning references, …) in order to provide semi-autonomously navigated, or fully autonomously steered and controlled, and which may be manned or unmanned (col.13 lines 5-15).",
"Therefore, it would have been obvious to one of ordinary skill before the effective filing date of the claimed invention to include the long-range navigation device as taught by GILLIAND et al. into Yu’s second deice so as to provide semi-autonomously navigated, or fully autonomously steered and controlled, and which may be manned or unmanned. With regard claim 34, Yu et al. further discloses wherein the first controller is configured to determine a range of the second device (para.17 and 51, where the range would be a long distance or a short distance) and generate the optical guidance data signal based thereon (para.51, where the guide unit includes at least one ultrasonic beacon 114 that generates ultrasonic waves toward the target body 130 so that the target body 130 is guided from a long distant to a short distance about the agent unit.) With regard claim 35, Yu et al.",
"discloses all of the subject matter as described in the above paragraph except for specifically teaching wherein the first optical transceiver comprises a first laser transceiver. However, GILLIAND et al. teaches wherein the first optical transceiver comprises a first laser transceiver (Fig.1 element 106 and col.23 lines 1-4, where the pulsed laser transmitter 106 is an array of vertical cavity surface emitting lasers (VCSELs)) in order to reduce cost, size, power consumption, and/or enhance reliability (col.23 lines 1-4). Therefore, it would have been obvious to one of ordinary skill before the effective filing date of the claimed invention to include wherein the first optical transceiver comprises a first laser transceiver as taught by GILLIAND et al. into Yu’s first optical transceiver so as to reduce cost, size, power consumption, and/or enhance reliability.",
"With regard claim 36, the modified circuit of Yu et al. and GILLIAND et al. further teaches wherein the first laser transceiver comprises a first vertical cavity surface emitting laser (Fig.1 element 106 and col.23 lines 1-4, where the pulsed laser transmitter 106 is an array of vertical cavity surface emitting lasers (VCSELs)). With regard claim 37, Yu et al. further discloses wherein the first and second devices each comprises an underwater device (Fig.1 elements 120 (first device) and 130 (second device) and para.7 and 67, where the target body may be an unmanned underwater vehicle or robot such as an autonomous underwater vehicle (AUV) or a remotely operated vehicle (ROV) and the unmanned underwater vehicle be docked on an underwater docking station without retrieval onto the ground, and then battery charge and data transmission and reception are conducted in real time with the vehicle remaining under the water.)",
"Conclusion Examiner's Note: Examiner has cited particular columns and line numbers in the references applied to the claims above for the convenience of the applicants. Although the specified citations are representative of the teachings of the art and are applied to specific limitations within the individual claim, other passages and figures may apply as well. It is respectfully requested from the applicants in preparing responses, to fully consider the references in their entirety as potentially teaching all or part of the claimed invention, as well as the context of the passage as taught by the prior art or disclosed by the Examiner. In the case of amending the claimed invention, Applicant is respectfully requested to indicate the portion(s) of the specification which dictate(s) the structure relied on for proper interpretation and also to verify and ascertain the metes and bounds of the claimed invention.",
"Any inquiry concerning this communication or earlier communications from the examiner should be directed to Ted M. Wang whose telephone number is 571-272-3053. The examiner can normally be reached on M-F, 7:30 AM to 5:00 PM. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Sam Ahn can be reached on 571-272-3044. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only.",
"For more information about the PAIR system, see http://pair-direct.uspto.gov. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). /Ted M Wang/ Primary Examiner, Art Unit 2633"
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2022-12-11.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
DETAILED ACTION
Notice of Pre-AIA or AIA Status
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
Response to Arguments
Applicants' arguments, filed August 20, 2021, have been fully considered but they are not deemed to be fully persuasive. The following rejections and/or objections constitute the complete set presently being applied to the instant application.
Applicants argue that the number of references applied and number of combinations applied means that piecemeal prosection in contravention to MPEP 707.07 has taken place in this case. The need to cite 18 different references in 23 different combinations to support a conclusion of obviousness is in and of itself evidence of non-obviousness of the claimed invention. None of the applied references have been able to even come close to arriving at the claimed invention in a predictable fashion. The inventors of the present invention were the only ones who were able to put the claimed invention into practice and to successfully demonstrate such an inventive concept in vivo. The invention is of significant clinical important and has been These arguments are unpersuasive. The Examiner has not engaged in piecemeal prosecution as each claim has been rejected on all valid grounds available without undue multiplication of references. That no single prior art reference contains all features of the claimed invention is why the claims are rejected over a combination of prior art. At no time in prosecution was a rejection based on 18 references used to reject any claim. All previous actions were not reviewed to determine the maximum number of references used to reject any particular claim, reliance on a large number of references in a rejection does not, without more, weigh against the obviousness of the claimed invention. See In re Gorman, 933 F.2d 982, 18 USPQ2d 1885 (Fed. Cir. 1991). The claim set filed August 20, 2021 is the first claim set filed that contained no amendments and each of the previous 9 sets of claims filed contained amendments to at least independent claim 36. Due to changes in claim scope and the effective filing date of various claims during prosecution, the applied prior art has also changed during the course of prosecution. The Office Actions mailed March 22, 2021, May 11, 2020 and November 27, 2019 each used the combination of Park et al., Al-Dubai et al., Koo et al. and Binauld et al. as the basis for all of the obviousness rejections set forth therein. The more specific arguments set forth by Applicants about the applied prior art are addressed below, the arguments and evidence of record has not established that the person of ordinary skill in the art would not have had a reasonable expectation of success in arriving at the claimed invention. No evidence of secondary considerations such as commercial success has been made of record for the Examiner to examine and
Claim Rejections - 35 USC § 103
The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
The factual inquiries for establishing a background for determining obviousness under 35 U.S.C. 103 are summarized as follows: 1. Determining the scope and contents of the prior art. 2. Ascertaining the differences between the prior art and the claims at issue. 3. Resolving the level of ordinary skill in the pertinent art. 4. Considering objective evidence present in the application indicating obviousness or nonobviousness.
This application currently names joint inventors. In considering patentability of the claims the examiner presumes that the subject matter of the various claims was commonly owned as of the effective filing date of the claimed invention(s) absent any evidence to the contrary. Applicant is advised of the obligation under 37 CFR 1.56 to point out the inventor and effective filing dates of each claim that was not commonly owned as of the effective filing date of the later invention in order for the examiner to
Claims 36, 51 – 58, 61, 62, 71 – 73, 77, 78 and 83 were rejected under 35 U.S.C. 103 as being unpatentable over Park et al. (US 2012/0100103) in view of Al-Dubai et al. (Nanotechnol Sci Appl, 2011), Koo et al. (Angew Chem, Int Ed 2012) and Binauld et al. (Chem Commun, 2013; first published December 10, 2012). This rejection is MAINTAINED for the reasons of record set forth in the Office Action mailed March 22, 2021 and those set forth herein. Applicants traverse this rejection on the grounds that the claimed method has several advantages over the prior art methods in that the drug delivery/refill system permits refilling of the device multiple times, refilling through oral administration and refilling not only at subcutaneous sites but also gels resident at disease sites and such a method is not taught by Park et al., Al-Dubai et al., Koo et al. and Binauld et al., alone or in combination. These arguments are unpersuasive. In response to applicant's argument that the references fail to show certain features of applicant’s invention, it is noted that the features upon which applicant relies (i.e., refilling multiple times (only one administration step of the drug refile is required); oral administration of the refill or non-subcutaneous treatment sites) are not recited in the rejected claim(s). Although the claims are interpreted in light of the specification, limitations from the specification are not read into the claims. See In re Van Geuns, 988 F.2d 1181, 26 USPQ2d 1057 (Fed. Cir. 1993).
These arguments are unpersuasive. A conclusion of obviousness takes into account the explicit and implicit teachings of the applied prior art and the knowledge of the person of ordinary skill in the art who is also a person of ordinary creativity and is not an automaton. As discussed in greater detail previously, Park discloses an in situ forming hydrogel, formed by means such as crosslinking, that can provide sustained delivery of drugs encapsulated in the hydrogel present in defected or depressed sites of the body cavities. This reads on step i) of the instant claim although the presence of the target recognition moiety is not present. Al-Dubai et al. teaches the in situ loading and possible reloading (reads on refilling) of an implant that comprise a biorecognition site for binding of nanoparticles. Binauld et al. discloses that the acidic environment of the tumor tissue can be used to bring about drug release with an acid-degradable hydrazone linker. The person of ordinary skill in the art would recognize that there are various, known means by which sustained and controlled release of drugs can be achieved, including loaded in hydrogels, degradation of polymeric nanoparticles loaded with drugs or drug attached via a cleavable linker that exhibits enhanced cleavage in the more acidic tumor environment. That an exogenous agent can be administered systemically but reach at a specific location due to the use of biorthogonal chemistry is taught by Koo et al., and to do so one member of the pair would need to present on the in situ forming hydrogel of Park et al. Such biorthogonal reactions are not reversible and Applicants also argue that there is no motivation or suggestion to combine the cited references. The primary objective of Park is to improve the biostability and mechanical strength of hydrogels in the body and one of skill in the art wishing to design a refillable drug delivery device would not have looked to Park. Al-Dubai only focuses on chitosan nanoparticles as a potentially refillable system and not hydrogels. Nanoparticles and hydrogels are completely different drug release system as one would have tried using chitosan or other nanoparticles and not alginate hydrogels. Koo focuses on liposomes rather than hydrogels. Koo also teaches away from the present invention by suggesting that the moiety should remain attached to the target, citing a section which states that the binding of the nanoparticles to the cell surface is important for further application as drug carriers and discourages cleavage of the nanoparticles from the azide-DBCO complex. Binauld does not remedy the deficiencies as the acid-cleavable linkers facilitate hydrogel degradation and the claimed invention requires a non–acid degradable alginate hydrogel and it is not clear why Binauld would even be relevant to the claimed invention.
Applicants also argues that even if there was a motivation to combine the applied prior art references, there is not a reasonable expectation of success. The instant rejection constitutes nothing more than picking and choosing the various elements of the claims from a number of references based on impermissible hindsight rather than the teachings in the art. The proposed combination would at best yield an acid degradable hydrogel with drug containing nanoparticles that can interact with the hydrogel though antibody antigen interactions, not arriving at the refillable drug system of the claimed invention. Park has no teaching of refilling, the nanoparticles of Al-Dubai are a completely different approach from hydrogels. The click chemistry and nanoparticle of Koo is distinct from the claimed invention. Binauld teaches acid-degradable polymers to facilitate hydrogel degradation. None of the these references teach or suggest the concept of refilling of implanted, in vivo drug delivery devices using a cleavable linker that cleaves to bring about sustained and controlled release of the drug. In re McLaughlin, 443 F.2d 1392, 170 USPQ 209 (CCPA 1971). As discussed in greater detail above, there need not be bodily incorporation of the features of the secondary references into the primary reference. The person of ordinary skill in the art is also not an automaton and possessed ordinary creativity. An explicit teaching, suggestion or motivation in the prior art is one rationale that can support a conclusion of obviousness but it is not the only such rationale (see MPEP 2143). That different targeting mechanisms are used in the different pieces of prior art or that Park discloses an in situ forming hydrogel while Al-Dubai uses hydrogel nanoparticles does not establish that the combination would not have predictable results. Only a reasonable and not an absolute expectation of success is required. The hydrogels of Park et al. with improved biostability and mechanical strength can be functionalized with one functional group of a biorthogonal pair such as taught by Koo et al., such that later administered molecules comprising drug will be specifically delivered to an implant already in a subject to overcome the limitation of depletion of the reservoir of drug initially contained in the drug delivering implant, as suggested by Al-Dubai. Such biorthogonal reactions are by design highly specific but irreversible, this would leave the drug permanently attached to the hydrogel drug depot. Binauld et al. provides a means .
Claims 59 and 60 were rejected under 35 U.S.C. 103 as being unpatentable over Park et al., Al-Dubai et al., Koo et al. and Binauld et al. further in view of Griffiths et al. (US 6,077,499). This rejection is MAINTAINED for the reasons of record set forth in the Office Action mailed March 22, 2021 and those set forth herein. Applicants argue the Griffiths discloses combination therapies with immunoconjugates comprising an antibody as a fundamental cell antigen targeting component of an immunoconjugate. The targeted drug delivery system is completely different from the system recited in the claimed methods. These arguments are unpersuasive. Griffiths is relied on to teach the use of targeted drug delivery system for the treatment of hematological cancers or one of the particular solid tumors recited in claim 60. The precise nature of the targeting system does not render Griffiths et al. uncombinable with the other references or non-analogous art. The general principle in Griffiths et al. of administration of conjugate of targeting moiety for a tumor associated marker, a first member of a binding pair and a first therapeutic agent followed by the subsequent administration of a second conjugate comprising a complementary member of the binding pair and a second therapeutic .
Claims 71, 81 and 82 were rejected under 35 U.S.C. 103 as being unpatentable over Park et al., Al-Dubai et al., Koo et al. and Binauld et al. further in view of Devaraj et al. (Bioconjugate Chem, 2008). This rejection is MAINTAINED for the reasons of record set forth in the Office Action mailed March 22, 2021 and those set forth herein. Applicants argue that Devaraj et al. has nothing to do with drug refills and teaches tetrazine based cycloadditions used for in vitro labelling experiments. These arguments are unpersuasive. Devaraj et al. is relied upon to teach the particular biorthogonal reaction members required by the rejected claims. Koo et al. also discloses biorthogonal reactions for accumulation of nanoparticles in the target site but uses different chemistries. Based on the explicit disclosures of the applied prior art documents and the knowledge of the person of ordinary skill in the art, such an artisan would reasonably expect that NOR and Tz of Devaraj et al. could be used in vivo for site specific reaction and localization of conjugates containing such groups even though there was no explicit in vivo use of this particular biorthogonal reaction pair in this piece of art. Biorthogonal reactions are highly specific reactions intended for use in biological .
Claims 84 and 85 were rejected under 35 U.S.C. 103 as being unpatentable over Park et al., Al-Dubai et al., Koo et al. and Binauld et al. further in view of Lee et al. (Prog Poly Sci, January 2012). This rejection is MAINTAINED for the reasons of record set forth in the Office Action mailed March 22, 2021 and those set forth herein. Applicants argue that Lee et al. has nothing to do with drug refills and is a review paper about the general properties of alginate and its hydrogels. These arguments are unpersuasive. Park discloses the use of hydrogels based on heparin or alginate but not oxidized alginate as required by claims 84 and 85 and Lee et al. is relied upon to cure this deficiency. Lee et al. discloses that partial oxidation renders alginate degradable in aqueous media without significantly interfering with gel formations as mammals lack alginase (see p 17 of the March 22, 2021 Office Action). Thus Lee et al. is analogous art as relating to materials suitable for hydrogel formation and use in biological systems as in the instant claims.
Double Patenting
The nonstatutory double patenting rejection is based on a judicially created doctrine grounded in public policy (a policy reflected in the statute) so as to prevent the unjustified or improper timewise extension of the “right to exclude” granted by a patent and to prevent possible harassment by multiple assignees. A nonstatutory double In re Berg, 140 F.3d 1428, 46 USPQ2d 1226 (Fed. Cir. 1998); In re Goodman, 11 F.3d 1046, 29 USPQ2d 2010 (Fed. Cir. 1993); In re Longi, 759 F.2d 887, 225 USPQ 645 (Fed. Cir. 1985); In re Van Ornum, 686 F.2d 937, 214 USPQ 761 (CCPA 1982); In re Vogel, 422 F.2d 438, 164 USPQ 619 (CCPA 1970); In re Thorington, 418 F.2d 528, 163 USPQ 644 (CCPA 1969). A timely filed terminal disclaimer in compliance with 37 CFR 1.321(c) or 1.321(d) may be used to overcome an actual or provisional rejection based on nonstatutory double patenting provided the reference application or patent either is shown to be commonly owned with the examined application, or claims an invention made as a result of activities undertaken within the scope of a joint research agreement. See MPEP § 717.02 for applications subject to examination under the first inventor to file provisions of the AIA as explained in MPEP § 2159. See MPEP § 2146 et seq. for applications not subject to examination under the first inventor to file provisions of the AIA . A terminal disclaimer must be signed in compliance with 37 CFR 1.321(b). The USPTO Internet website contains terminal disclaimer forms which may be used. Please visit www.uspto.gov/patent/patents-forms. The filing date of the application in which the form is filed determines what form (e.g., PTO/SB/25, PTO/SB/26, PTO/AIA /25, or PTO/AIA /26) should be used. A web-based eTerminal Disclaimer may be filled out completely online using web-screens. An eTerminal Disclaimer that meets all requirements is auto-processed and approved immediately upon submission. For
Claims 36, 51 – 62, 71 – 73, 77, 78 and 81 – 85 were provisionally rejected on the ground of nonstatutory double patenting as being unpatentable over claims 1, 2, 5, 6, 8 – 18, 20, and 22 - 25 of copending Application No. 16/705,672 in view of Park et al. (US 2012/0100103) optionally further in view of Devaraj et al. (Bioconjugate Chem, 2008) or Lee et al. (Prog Poly Sci, January 2012). This rejection is MAINTAINED for the reasons of record set forth in the Office Action mailed March 22, 2021 and those set forth herein. Applicants state that when the pending claims are indicated as otherwise allowable, the filing of a terminal disclaimer will be considered. As the claims are not otherwise allowable and a Terminal Disclaimer has not been filed and approved, this rejection is maintained for the reasons of record set forth previously. This is a provisional nonstatutory double patenting rejection.
Conclusion
THIS ACTION IS MADE FINAL. Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a). A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within
Any inquiry concerning this communication or earlier communications from the examiner should be directed to Nissa M Westerberg whose telephone number is (571)270-3532. The examiner can normally be reached on M - F 8 am - 4 pm. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Michael Hartley can be reached on 571-272-0616. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair. Should you have questions on access to the Private
/Nissa M Westerberg/Primary Examiner, Art Unit 1618 | 2021-10-05T04:30:55 | [
"DETAILED ACTION Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Response to Arguments Applicants' arguments, filed August 20, 2021, have been fully considered but they are not deemed to be fully persuasive. The following rejections and/or objections constitute the complete set presently being applied to the instant application. Applicants argue that the number of references applied and number of combinations applied means that piecemeal prosection in contravention to MPEP 707.07 has taken place in this case. The need to cite 18 different references in 23 different combinations to support a conclusion of obviousness is in and of itself evidence of non-obviousness of the claimed invention. None of the applied references have been able to even come close to arriving at the claimed invention in a predictable fashion. The inventors of the present invention were the only ones who were able to put the claimed invention into practice and to successfully demonstrate such an inventive concept in vivo.",
"The invention is of significant clinical important and has been These arguments are unpersuasive. The Examiner has not engaged in piecemeal prosecution as each claim has been rejected on all valid grounds available without undue multiplication of references. That no single prior art reference contains all features of the claimed invention is why the claims are rejected over a combination of prior art. At no time in prosecution was a rejection based on 18 references used to reject any claim. All previous actions were not reviewed to determine the maximum number of references used to reject any particular claim, reliance on a large number of references in a rejection does not, without more, weigh against the obviousness of the claimed invention. See In re Gorman, 933 F.2d 982, 18 USPQ2d 1885 (Fed.",
"Cir. 1991). The claim set filed August 20, 2021 is the first claim set filed that contained no amendments and each of the previous 9 sets of claims filed contained amendments to at least independent claim 36. Due to changes in claim scope and the effective filing date of various claims during prosecution, the applied prior art has also changed during the course of prosecution. The Office Actions mailed March 22, 2021, May 11, 2020 and November 27, 2019 each used the combination of Park et al., Al-Dubai et al., Koo et al. and Binauld et al. as the basis for all of the obviousness rejections set forth therein. The more specific arguments set forth by Applicants about the applied prior art are addressed below, the arguments and evidence of record has not established that the person of ordinary skill in the art would not have had a reasonable expectation of success in arriving at the claimed invention.",
"No evidence of secondary considerations such as commercial success has been made of record for the Examiner to examine and Claim Rejections - 35 USC § 103 The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.",
"Patentability shall not be negated by the manner in which the invention was made. The factual inquiries for establishing a background for determining obviousness under 35 U.S.C. 103 are summarized as follows: 1. Determining the scope and contents of the prior art. 2. Ascertaining the differences between the prior art and the claims at issue. 3. Resolving the level of ordinary skill in the pertinent art. 4. Considering objective evidence present in the application indicating obviousness or nonobviousness. This application currently names joint inventors. In considering patentability of the claims the examiner presumes that the subject matter of the various claims was commonly owned as of the effective filing date of the claimed invention(s) absent any evidence to the contrary. Applicant is advised of the obligation under 37 CFR 1.56 to point out the inventor and effective filing dates of each claim that was not commonly owned as of the effective filing date of the later invention in order for the examiner to Claims 36, 51 – 58, 61, 62, 71 – 73, 77, 78 and 83 were rejected under 35 U.S.C.",
"103 as being unpatentable over Park et al. (US 2012/0100103) in view of Al-Dubai et al. (Nanotechnol Sci Appl, 2011), Koo et al. (Angew Chem, Int Ed 2012) and Binauld et al. (Chem Commun, 2013; first published December 10, 2012). This rejection is MAINTAINED for the reasons of record set forth in the Office Action mailed March 22, 2021 and those set forth herein. Applicants traverse this rejection on the grounds that the claimed method has several advantages over the prior art methods in that the drug delivery/refill system permits refilling of the device multiple times, refilling through oral administration and refilling not only at subcutaneous sites but also gels resident at disease sites and such a method is not taught by Park et al., Al-Dubai et al., Koo et al. and Binauld et al., alone or in combination. These arguments are unpersuasive. In response to applicant's argument that the references fail to show certain features of applicant’s invention, it is noted that the features upon which applicant relies (i.e., refilling multiple times (only one administration step of the drug refile is required); oral administration of the refill or non-subcutaneous treatment sites) are not recited in the rejected claim(s).",
"Although the claims are interpreted in light of the specification, limitations from the specification are not read into the claims. See In re Van Geuns, 988 F.2d 1181, 26 USPQ2d 1057 (Fed. Cir. 1993). These arguments are unpersuasive. A conclusion of obviousness takes into account the explicit and implicit teachings of the applied prior art and the knowledge of the person of ordinary skill in the art who is also a person of ordinary creativity and is not an automaton. As discussed in greater detail previously, Park discloses an in situ forming hydrogel, formed by means such as crosslinking, that can provide sustained delivery of drugs encapsulated in the hydrogel present in defected or depressed sites of the body cavities. This reads on step i) of the instant claim although the presence of the target recognition moiety is not present.",
"Al-Dubai et al. teaches the in situ loading and possible reloading (reads on refilling) of an implant that comprise a biorecognition site for binding of nanoparticles. Binauld et al. discloses that the acidic environment of the tumor tissue can be used to bring about drug release with an acid-degradable hydrazone linker. The person of ordinary skill in the art would recognize that there are various, known means by which sustained and controlled release of drugs can be achieved, including loaded in hydrogels, degradation of polymeric nanoparticles loaded with drugs or drug attached via a cleavable linker that exhibits enhanced cleavage in the more acidic tumor environment.",
"That an exogenous agent can be administered systemically but reach at a specific location due to the use of biorthogonal chemistry is taught by Koo et al., and to do so one member of the pair would need to present on the in situ forming hydrogel of Park et al. Such biorthogonal reactions are not reversible and Applicants also argue that there is no motivation or suggestion to combine the cited references. The primary objective of Park is to improve the biostability and mechanical strength of hydrogels in the body and one of skill in the art wishing to design a refillable drug delivery device would not have looked to Park. Al-Dubai only focuses on chitosan nanoparticles as a potentially refillable system and not hydrogels. Nanoparticles and hydrogels are completely different drug release system as one would have tried using chitosan or other nanoparticles and not alginate hydrogels.",
"Koo focuses on liposomes rather than hydrogels. Koo also teaches away from the present invention by suggesting that the moiety should remain attached to the target, citing a section which states that the binding of the nanoparticles to the cell surface is important for further application as drug carriers and discourages cleavage of the nanoparticles from the azide-DBCO complex. Binauld does not remedy the deficiencies as the acid-cleavable linkers facilitate hydrogel degradation and the claimed invention requires a non–acid degradable alginate hydrogel and it is not clear why Binauld would even be relevant to the claimed invention. Applicants also argues that even if there was a motivation to combine the applied prior art references, there is not a reasonable expectation of success. The instant rejection constitutes nothing more than picking and choosing the various elements of the claims from a number of references based on impermissible hindsight rather than the teachings in the art. The proposed combination would at best yield an acid degradable hydrogel with drug containing nanoparticles that can interact with the hydrogel though antibody antigen interactions, not arriving at the refillable drug system of the claimed invention. Park has no teaching of refilling, the nanoparticles of Al-Dubai are a completely different approach from hydrogels.",
"The click chemistry and nanoparticle of Koo is distinct from the claimed invention. Binauld teaches acid-degradable polymers to facilitate hydrogel degradation. None of the these references teach or suggest the concept of refilling of implanted, in vivo drug delivery devices using a cleavable linker that cleaves to bring about sustained and controlled release of the drug. In re McLaughlin, 443 F.2d 1392, 170 USPQ 209 (CCPA 1971). As discussed in greater detail above, there need not be bodily incorporation of the features of the secondary references into the primary reference. The person of ordinary skill in the art is also not an automaton and possessed ordinary creativity.",
"An explicit teaching, suggestion or motivation in the prior art is one rationale that can support a conclusion of obviousness but it is not the only such rationale (see MPEP 2143). That different targeting mechanisms are used in the different pieces of prior art or that Park discloses an in situ forming hydrogel while Al-Dubai uses hydrogel nanoparticles does not establish that the combination would not have predictable results. Only a reasonable and not an absolute expectation of success is required. The hydrogels of Park et al. with improved biostability and mechanical strength can be functionalized with one functional group of a biorthogonal pair such as taught by Koo et al., such that later administered molecules comprising drug will be specifically delivered to an implant already in a subject to overcome the limitation of depletion of the reservoir of drug initially contained in the drug delivering implant, as suggested by Al-Dubai.",
"Such biorthogonal reactions are by design highly specific but irreversible, this would leave the drug permanently attached to the hydrogel drug depot. Binauld et al. provides a means . Claims 59 and 60 were rejected under 35 U.S.C. 103 as being unpatentable over Park et al., Al-Dubai et al., Koo et al. and Binauld et al. further in view of Griffiths et al. (US 6,077,499). This rejection is MAINTAINED for the reasons of record set forth in the Office Action mailed March 22, 2021 and those set forth herein. Applicants argue the Griffiths discloses combination therapies with immunoconjugates comprising an antibody as a fundamental cell antigen targeting component of an immunoconjugate. The targeted drug delivery system is completely different from the system recited in the claimed methods. These arguments are unpersuasive. Griffiths is relied on to teach the use of targeted drug delivery system for the treatment of hematological cancers or one of the particular solid tumors recited in claim 60.",
"The precise nature of the targeting system does not render Griffiths et al. uncombinable with the other references or non-analogous art. The general principle in Griffiths et al. of administration of conjugate of targeting moiety for a tumor associated marker, a first member of a binding pair and a first therapeutic agent followed by the subsequent administration of a second conjugate comprising a complementary member of the binding pair and a second therapeutic . Claims 71, 81 and 82 were rejected under 35 U.S.C. 103 as being unpatentable over Park et al., Al-Dubai et al., Koo et al.",
"and Binauld et al. further in view of Devaraj et al. (Bioconjugate Chem, 2008). This rejection is MAINTAINED for the reasons of record set forth in the Office Action mailed March 22, 2021 and those set forth herein. Applicants argue that Devaraj et al. has nothing to do with drug refills and teaches tetrazine based cycloadditions used for in vitro labelling experiments. These arguments are unpersuasive. Devaraj et al. is relied upon to teach the particular biorthogonal reaction members required by the rejected claims. Koo et al. also discloses biorthogonal reactions for accumulation of nanoparticles in the target site but uses different chemistries. Based on the explicit disclosures of the applied prior art documents and the knowledge of the person of ordinary skill in the art, such an artisan would reasonably expect that NOR and Tz of Devaraj et al.",
"could be used in vivo for site specific reaction and localization of conjugates containing such groups even though there was no explicit in vivo use of this particular biorthogonal reaction pair in this piece of art. Biorthogonal reactions are highly specific reactions intended for use in biological . Claims 84 and 85 were rejected under 35 U.S.C. 103 as being unpatentable over Park et al., Al-Dubai et al., Koo et al. and Binauld et al. further in view of Lee et al. (Prog Poly Sci, January 2012).",
"This rejection is MAINTAINED for the reasons of record set forth in the Office Action mailed March 22, 2021 and those set forth herein. Applicants argue that Lee et al. has nothing to do with drug refills and is a review paper about the general properties of alginate and its hydrogels. These arguments are unpersuasive. Park discloses the use of hydrogels based on heparin or alginate but not oxidized alginate as required by claims 84 and 85 and Lee et al. is relied upon to cure this deficiency. Lee et al. discloses that partial oxidation renders alginate degradable in aqueous media without significantly interfering with gel formations as mammals lack alginase (see p 17 of the March 22, 2021 Office Action). Thus Lee et al. is analogous art as relating to materials suitable for hydrogel formation and use in biological systems as in the instant claims. Double Patenting The nonstatutory double patenting rejection is based on a judicially created doctrine grounded in public policy (a policy reflected in the statute) so as to prevent the unjustified or improper timewise extension of the “right to exclude” granted by a patent and to prevent possible harassment by multiple assignees. A nonstatutory double In re Berg, 140 F.3d 1428, 46 USPQ2d 1226 (Fed.",
"Cir. 1998); In re Goodman, 11 F.3d 1046, 29 USPQ2d 2010 (Fed. Cir. 1993); In re Longi, 759 F.2d 887, 225 USPQ 645 (Fed. Cir. 1985); In re Van Ornum, 686 F.2d 937, 214 USPQ 761 (CCPA 1982); In re Vogel, 422 F.2d 438, 164 USPQ 619 (CCPA 1970); In re Thorington, 418 F.2d 528, 163 USPQ 644 (CCPA 1969). A timely filed terminal disclaimer in compliance with 37 CFR 1.321(c) or 1.321(d) may be used to overcome an actual or provisional rejection based on nonstatutory double patenting provided the reference application or patent either is shown to be commonly owned with the examined application, or claims an invention made as a result of activities undertaken within the scope of a joint research agreement.",
"See MPEP § 717.02 for applications subject to examination under the first inventor to file provisions of the AIA as explained in MPEP § 2159. See MPEP § 2146 et seq. for applications not subject to examination under the first inventor to file provisions of the AIA . A terminal disclaimer must be signed in compliance with 37 CFR 1.321(b). The USPTO Internet website contains terminal disclaimer forms which may be used. Please visit www.uspto.gov/patent/patents-forms. The filing date of the application in which the form is filed determines what form (e.g., PTO/SB/25, PTO/SB/26, PTO/AIA /25, or PTO/AIA /26) should be used. A web-based eTerminal Disclaimer may be filled out completely online using web-screens.",
"An eTerminal Disclaimer that meets all requirements is auto-processed and approved immediately upon submission. For Claims 36, 51 – 62, 71 – 73, 77, 78 and 81 – 85 were provisionally rejected on the ground of nonstatutory double patenting as being unpatentable over claims 1, 2, 5, 6, 8 – 18, 20, and 22 - 25 of copending Application No. 16/705,672 in view of Park et al. (US 2012/0100103) optionally further in view of Devaraj et al. (Bioconjugate Chem, 2008) or Lee et al. (Prog Poly Sci, January 2012). This rejection is MAINTAINED for the reasons of record set forth in the Office Action mailed March 22, 2021 and those set forth herein. Applicants state that when the pending claims are indicated as otherwise allowable, the filing of a terminal disclaimer will be considered. As the claims are not otherwise allowable and a Terminal Disclaimer has not been filed and approved, this rejection is maintained for the reasons of record set forth previously.",
"This is a provisional nonstatutory double patenting rejection. Conclusion THIS ACTION IS MADE FINAL. Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a). A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within Any inquiry concerning this communication or earlier communications from the examiner should be directed to Nissa M Westerberg whose telephone number is (571)270-3532. The examiner can normally be reached on M - F 8 am - 4 pm.",
"Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Michael Hartley can be reached on 571-272-0616. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see https://ppair-my.uspto.gov/pair/PrivatePair. Should you have questions on access to the Private /Nissa M Westerberg/Primary Examiner, Art Unit 1618"
] | https://dh-opendata.s3.amazonaws.com/bdr-oa-bulkdata/weekly/bdr_oa_bulkdata_weekly_2021-09-19.zip | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
315 F.3d 1268 Terrence M. BROWN, Petitioner-Appellant,v.WARDEN, SPRINGFIELD MEDICAL CENTER FOR FEDERAL PRISONERS; Carla Stovall, Attorney General of Kansas, Respondents-Appellees. No. 02-3210. United States Court of Appeals, Tenth Circuit. January 2, 2003.
Submitted on the briefs:* Terrence M. Brown, Pro Se. Before EBEL, LUCERO and HARTZ, Circuit Judges. LUCERO, Circuit Judge.
1 This case presents the issue of whether a prisoner in federal custody, whose state sentence has been fully served, may nonetheless challenge his prior state conviction under 28 U.S.C. § 2254. Terrence M. Brown, the federal prisoner in question, seeks a certificate of appealability pursuant to 28 U.S.C. § 2253(c) to challenge the district court's dismissal of his petition for a writ of habeas corpus for lack of jurisdiction. The district court dismissed Brown's petition because he was no longer in state custody as required by 28 U.S.C. § 2254. We conclude that the district court lacked jurisdiction over Brown's petition, deny a COA, and dismiss.
2 On August 7, 1997, Brown pled no contest in a Kansas state court to charges of aggravated indecent solicitation of a child relating to an incident when he exposed himself to a youth. Brown completed this state sentence on February 25, 2000, and was subsequently transferred to federal custody for a conviction arising from a different incident, in which he attempted to induce another youth to engage in sexually explicit conduct in violation of 18 U.S.C. § 2251. On February 14, 2001, Brown filed a petition for a writ of habeas corpus pursuant to 28 U.S.C. § 2254, challenging his prior state sentence.
3 In his § 2254 petition, Brown claimed that he received ineffective assistance of counsel at his state trial and that the state judge erred in denying his motion to withdraw his plea. Although Brown was no longer in state custody when his § 2254 petition was filed, he claimed that he could still attack the state sentence because it affected his current federal sentence. The district court dismissed the case for lack of jurisdiction.
4 Brown's petition was filed after April 24, 1996, the effective date of the Antiterrorism and Effective Death Penalty Act ("AEDPA"), and thus AEDPA's provisions apply to this case. See Rogers v. Gibson, 173 F.3d 1278, 1282 n. 1 (10th Cir.1999) (citing Lindh v. Murphy, 521 U.S. 320, 117 S.Ct. 2059, 138 L.Ed.2d 481 (1997)). AEDPA provides that a challenge to detention arising from a state court decision may not be appealed unless a COA is granted. 28 U.S.C. § 2253(c)(1)(A). A COA may be issued "only if the applicant has made a substantial showing of the denial of a constitutional right." § 2253(c)(2). Because the district court denied Brown's motion for a COA, we proceed to analyze whether a COA should have been granted.
5 Under § 2254, this court shall "entertain an application for a writ of habeas corpus in behalf of a person in custody pursuant to the judgment of a State court only on the ground that he is in custody in violation of the Constitution or laws or treaties of the United States." § 2254(a) (emphasis added). Brown has completely served his state sentence, and thus he is no longer "in custody pursuant to the judgment of a State court." A prisoner who has completely served his state sentence is not entitled to habeas relief under § 2254 even if the state sentence affected the calculation of his federal sentence. See Tomlinson v. Mendez, 9 Fed. Appx. 853, 854-55 (10th Cir.2001); Charlton v. Morris, 53 F.3d 929, 929 (8th Cir.1995) (per curiam) (citing Maleng v. Cook, 490 U.S. 488, 492, 109 S.Ct. 1923, 104 L.Ed.2d 540 (1989) (per curiam)). Accordingly, the district court lacked jurisdiction to entertain Brown's § 2254 petition.1
6 As we are obligated to construe pro se filings liberally under Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972), it might be possible to recharacterize Brown's petition as a 28 U.S.C. § 2255 petition. Such a petition, however, would ultimately fail. Brown has already brought a § 2255 petition — which was denied — claiming that his federal conviction was imposed in violation of the Constitution. See United States v. Brown, 7 Fed. Appx. 825, 826, 829 (10th Cir.2001). By bringing his prior § 2255 motion, Brown challenged his federal sentence as well as his federal conviction. See 28 U.S.C. § 2255 (characterizing a § 2255 petition as a motion to "vacate, set aside, or correct [a federal] sentence" (emphasis added)). Another § 2255 petition would accordingly constitute a second or successive claim that his current federal sentence is subject to collateral attack.
7 In order for a petitioner to bring a second or successive § 2255 motion, we must certify the motion to contain
8 (1) newly discovered evidence that, if proven and viewed in light of the evidence as a whole, would be sufficient to establish by clear and convincing evidence that no reasonable factfinder would have found the movant guilty of the offense; or
9 (2) a new rule of constitutional law, made retroactive to cases on collateral review by the Supreme Court, that was previously unavailable.
10 Id. Brown has not offered any "newly discovered evidence," nor has he cited any new rules of constitutional law made retroactive to cases on collateral review by the Supreme Court.2 Therefore, we could not certify a second or successive § 2255 motion, and we consequently decline to recharacterize Brown's § 2254 petition as a § 2255 petition.
11 Because the district court lacked jurisdiction to entertain Brown's petition, the application for a COA is DENIED and the matter is DISMISSED.
Notes:
* At the parties' request, the case is unanimously ordered submitted without oral argument pursuant to Fed. R.App. P. 34(f) and 10th Cir. R. 34.1(G)
1 Brown relies onFoster v. Booher, 296 F.3d 947 (10th Cir.2002), to support the proposition that a prior sentence can be challenged while a second, consecutive sentence is being served. Foster, however, involved two consecutive state sentences, not a state sentence followed by a federal sentence. Id. at 948-49. The petitioner in Foster was in state custody when he brought his § 2254 petition in federal court. Id. at 948. Accordingly, Foster does not address the issue of whether a federal prisoner may bring a § 2254 petition to challenge a state sentence that has been fully served.
2 The two Supreme Court cases upon which Brown principally relies,Garlotte v. Fordice, 515 U.S. 39, 115 S.Ct. 1948, 132 L.Ed.2d 36 (1995), and Peyton v. Rowe, 391 U.S. 54, 88 S.Ct. 1549, 20 L.Ed.2d 426 (1968), were both decided before Brown's prior § 2255 motion, and could have been cited in that petition, had he chosen to make the argument at that time. | 08-14-2010 | [
"315 F.3d 1268 Terrence M. BROWN, Petitioner-Appellant,v.WARDEN, SPRINGFIELD MEDICAL CENTER FOR FEDERAL PRISONERS; Carla Stovall, Attorney General of Kansas, Respondents-Appellees. No. 02-3210. United States Court of Appeals, Tenth Circuit. January 2, 2003. Submitted on the briefs:* Terrence M. Brown, Pro Se. Before EBEL, LUCERO and HARTZ, Circuit Judges. LUCERO, Circuit Judge. 1 This case presents the issue of whether a prisoner in federal custody, whose state sentence has been fully served, may nonetheless challenge his prior state conviction under 28 U.S.C. § 2254. Terrence M. Brown, the federal prisoner in question, seeks a certificate of appealability pursuant to 28 U.S.C. § 2253(c) to challenge the district court's dismissal of his petition for a writ of habeas corpus for lack of jurisdiction. The district court dismissed Brown's petition because he was no longer in state custody as required by 28 U.S.C. § 2254. We conclude that the district court lacked jurisdiction over Brown's petition, deny a COA, and dismiss. 2 On August 7, 1997, Brown pled no contest in a Kansas state court to charges of aggravated indecent solicitation of a child relating to an incident when he exposed himself to a youth.",
"Brown completed this state sentence on February 25, 2000, and was subsequently transferred to federal custody for a conviction arising from a different incident, in which he attempted to induce another youth to engage in sexually explicit conduct in violation of 18 U.S.C. § 2251. On February 14, 2001, Brown filed a petition for a writ of habeas corpus pursuant to 28 U.S.C. § 2254, challenging his prior state sentence. 3 In his § 2254 petition, Brown claimed that he received ineffective assistance of counsel at his state trial and that the state judge erred in denying his motion to withdraw his plea. Although Brown was no longer in state custody when his § 2254 petition was filed, he claimed that he could still attack the state sentence because it affected his current federal sentence. The district court dismissed the case for lack of jurisdiction. 4 Brown's petition was filed after April 24, 1996, the effective date of the Antiterrorism and Effective Death Penalty Act (\"AEDPA\"), and thus AEDPA's provisions apply to this case. See Rogers v. Gibson, 173 F.3d 1278, 1282 n. 1 (10th Cir.1999) (citing Lindh v. Murphy, 521 U.S. 320, 117 S.Ct. 2059, 138 L.Ed.2d 481 (1997)).",
"AEDPA provides that a challenge to detention arising from a state court decision may not be appealed unless a COA is granted. 28 U.S.C. § 2253(c)(1)(A). A COA may be issued \"only if the applicant has made a substantial showing of the denial of a constitutional right.\" § 2253(c)(2). Because the district court denied Brown's motion for a COA, we proceed to analyze whether a COA should have been granted. 5 Under § 2254, this court shall \"entertain an application for a writ of habeas corpus in behalf of a person in custody pursuant to the judgment of a State court only on the ground that he is in custody in violation of the Constitution or laws or treaties of the United States.\" § 2254(a) (emphasis added).",
"Brown has completely served his state sentence, and thus he is no longer \"in custody pursuant to the judgment of a State court.\" A prisoner who has completely served his state sentence is not entitled to habeas relief under § 2254 even if the state sentence affected the calculation of his federal sentence. See Tomlinson v. Mendez, 9 Fed. Appx. 853, 854-55 (10th Cir.2001); Charlton v. Morris, 53 F.3d 929, 929 (8th Cir.1995) (per curiam) (citing Maleng v. Cook, 490 U.S. 488, 492, 109 S.Ct. 1923, 104 L.Ed.2d 540 (1989) (per curiam)). Accordingly, the district court lacked jurisdiction to entertain Brown's § 2254 petition.1 6 As we are obligated to construe pro se filings liberally under Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972), it might be possible to recharacterize Brown's petition as a 28 U.S.C. § 2255 petition. Such a petition, however, would ultimately fail. Brown has already brought a § 2255 petition — which was denied — claiming that his federal conviction was imposed in violation of the Constitution. See United States v. Brown, 7 Fed. Appx.",
"825, 826, 829 (10th Cir.2001). By bringing his prior § 2255 motion, Brown challenged his federal sentence as well as his federal conviction. See 28 U.S.C. § 2255 (characterizing a § 2255 petition as a motion to \"vacate, set aside, or correct [a federal] sentence\" (emphasis added)). Another § 2255 petition would accordingly constitute a second or successive claim that his current federal sentence is subject to collateral attack. 7 In order for a petitioner to bring a second or successive § 2255 motion, we must certify the motion to contain 8 (1) newly discovered evidence that, if proven and viewed in light of the evidence as a whole, would be sufficient to establish by clear and convincing evidence that no reasonable factfinder would have found the movant guilty of the offense; or 9 (2) a new rule of constitutional law, made retroactive to cases on collateral review by the Supreme Court, that was previously unavailable. 10 Id. Brown has not offered any \"newly discovered evidence,\" nor has he cited any new rules of constitutional law made retroactive to cases on collateral review by the Supreme Court.2 Therefore, we could not certify a second or successive § 2255 motion, and we consequently decline to recharacterize Brown's § 2254 petition as a § 2255 petition.",
"11 Because the district court lacked jurisdiction to entertain Brown's petition, the application for a COA is DENIED and the matter is DISMISSED. Notes: * At the parties' request, the case is unanimously ordered submitted without oral argument pursuant to Fed. R.App. P. 34(f) and 10th Cir. R. 34.1(G) 1 Brown relies onFoster v. Booher, 296 F.3d 947 (10th Cir.2002), to support the proposition that a prior sentence can be challenged while a second, consecutive sentence is being served. Foster, however, involved two consecutive state sentences, not a state sentence followed by a federal sentence. Id. at 948-49. The petitioner in Foster was in state custody when he brought his § 2254 petition in federal court. Id. at 948. Accordingly, Foster does not address the issue of whether a federal prisoner may bring a § 2254 petition to challenge a state sentence that has been fully served.",
"2 The two Supreme Court cases upon which Brown principally relies,Garlotte v. Fordice, 515 U.S. 39, 115 S.Ct. 1948, 132 L.Ed.2d 36 (1995), and Peyton v. Rowe, 391 U.S. 54, 88 S.Ct. 1549, 20 L.Ed.2d 426 (1968), were both decided before Brown's prior § 2255 motion, and could have been cited in that petition, had he chosen to make the argument at that time."
] | https://www.courtlistener.com/api/rest/v3/opinions/162898/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 1 of 10
DX1676 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 2 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 3 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 4 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 5 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 6 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 7 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 8 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 9 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 10 of 10 | 2021-02-08 | [
"Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 1 of 10 DX1676 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 2 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 3 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 4 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 5 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 6 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 7 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 8 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 9 of 10 Case 3:18-cv-02615-AGT Document 159-41 Filed 02/08/21 Page 10 of 10"
] | https://www.courtlistener.com/api/rest/v3/recap-documents/160311858/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Carley, Judge. Appellee-plaintiff The Citizens Bank of Ashburn (Bank) filed a complaint, alleging that appellant-defendant owed it a stated sum, “plus interest and attorney’s fees on a note, a copy of which [was] attached [t]hereto as Exhibit ‘[B]’ and incorporated [t]herein by reference.” Appellant’s answer consisted of a general denial of the material allegations of the Bank’s complaint. The Bank subsequently moved for summary judgment. The motion was supported by the affidavit of one who stated therein that she “was at the time of the execution of the subject note Vice President of the [Bank].” This affidavit contained the affiant’s initial statement “[t]hat the facts stated in the affidavit are within [her] personal knowledge. . . .” The substance of the affidavit was that appellant had “executed and delivered to [the Bank] a promissory note . . . , a true copy of which is attached to and made a part of this Motion for Summary Judgment.” In the record before us, however, there is no copy of any promissory note attached to either the affidavit or to the Bank’s mption. The affidavit then concluded with the statement that “said note is in default” and that stated specific amounts of principal, interest and attorney fees were due. In opposition, appellant filed his own affidavit. Therein, he stated the following: “The loan officers I dealt with, conversed [with] and [who] handled all my transactions at the [Bank] was [sic] not [the Bank’s affiant]. In my affiliation with the Bank I have never dealt with [the Bank’s affiant] and did not know that she worked or was affiliated with the [Bank]. I would not recognize her and do not know who she is. I . . . have no knowledge from the information provided [in the Bank’s affidavit] whether said sum is owed to the Bank even though some sum is probably owed to the Bank.” On this evidence, the trial court granted the Bank’s motion for summary judgment in the exact amounts which had been stated by the Bank’s affiant to be due and owing. Appellant appeals, contending that the affidavit submitted by the Bank was insufficient to authorize the grant of its motion. “Introduction of the promissory note (together with related documents, where appropriate) makes a prima facie case for the plaintiff and imposes upon the defendant the burden of raising defenses in rebuttal of the plaintiff’s evidence. [Cits.] If the defendant cannot do *772so, liability is established, and the plaintiff then has the burden of proving the amount owed. [Cits.]” First Nat. Bank of Dalton v. Damil, Inc., 171 Ga. App. 237, 238 (319 SE2d 54) (1984). Assuming without deciding that the Bank’s affidavit was otherwise sufficient to establish appellant’s liability on the note, a copy of which was attached to its complaint but not its motion, the issue remains whether the Bank was entitled to summary judgment in the exact amounts in which it was granted. Here, as in Thomasson v. Trust Co. Bank, 149 Ga. App. 556 (254 SE2d 881) (1979), appellant has contested the “personal knowledge” of the Bank’s affiant as to the amounts which are due and owing on the note. Likewise as in Thomasson, the statements of the Bank’s affiant with regard to specific amounts are not supported by documents qualifying as “business records” pursuant to OCGA § 24-3-14. This evidence must be construed most strongly against the Bank as the movant. When the evidence is thus construed, the following would appear: Although the Bank’s affiant states that she “was at the time of the execution of the subject note Vice President of the [Bank],” her subsequent and present capacity is not stated. (Emphasis supplied.) If, as appellant contends, the Bank’s affiant lacked immediate and independent “personal knowledge” as to the extent of his liability on the note, then her affidavit was presumably based upon information provided either by an unidentified third party with such immediate “personal knowledge” or upon her own knowledge of the contents of the Bank’s records regarding appellant’s note. If the former, then the affiant’s statement as to amounts would clearly be hearsay. OCGA § 24-3-1. If the latter, “[a]bsent the preliminary proof required to qualify under [OCGA § 24-3-14], the affiant’s statements as to facts, the knowledge of which [s]he obtained from records not personally kept by [her], were hearsay and had no probative value. [Cits.]” Thomasson v. Trust Co. Bank, supra at 559. After appellant filed his affidavit, the Bank did not submit any amended affidavit on its behalf clarifying either the current capacity or the basis upon which the original affiant claimed “personal knowledge” of appellant’s default and the extent to which he was liable on the note. Construing this evidence most strongly against the Bank, we are constrained to hold that it has not proved, as a matter of law, its entitlement to summary judgment in the amount in which it was granted. See American Druggist Ins. Co. v. Ga. Power Co., 145 Ga. App. 104, 106 (1) (243 SE2d 319) (1978). That appellant admitted in his affidavit owing “some sum” to the Bank does not require a contrary result. See Edge v. Stephens, 172 Ga. App. 759 (324 SE2d 579) (1984).
Judgment reversed.
Birdsong, P. J., and Sognier, J., concur in the judgment only.
*773Decided February 11, 1986. Stephen L. Ivie, for appellant. J. Harvey Davis, for appellee. | 01-11-2022 | [
"Carley, Judge. Appellee-plaintiff The Citizens Bank of Ashburn (Bank) filed a complaint, alleging that appellant-defendant owed it a stated sum, “plus interest and attorney’s fees on a note, a copy of which [was] attached [t]hereto as Exhibit ‘[B]’ and incorporated [t]herein by reference.” Appellant’s answer consisted of a general denial of the material allegations of the Bank’s complaint. The Bank subsequently moved for summary judgment. The motion was supported by the affidavit of one who stated therein that she “was at the time of the execution of the subject note Vice President of the [Bank].” This affidavit contained the affiant’s initial statement “[t]hat the facts stated in the affidavit are within [her] personal knowledge.",
". . .” The substance of the affidavit was that appellant had “executed and delivered to [the Bank] a promissory note . . . , a true copy of which is attached to and made a part of this Motion for Summary Judgment.” In the record before us, however, there is no copy of any promissory note attached to either the affidavit or to the Bank’s mption. The affidavit then concluded with the statement that “said note is in default” and that stated specific amounts of principal, interest and attorney fees were due. In opposition, appellant filed his own affidavit. Therein, he stated the following: “The loan officers I dealt with, conversed [with] and [who] handled all my transactions at the [Bank] was [sic] not [the Bank’s affiant]. In my affiliation with the Bank I have never dealt with [the Bank’s affiant] and did not know that she worked or was affiliated with the [Bank]. I would not recognize her and do not know who she is. I .",
". . have no knowledge from the information provided [in the Bank’s affidavit] whether said sum is owed to the Bank even though some sum is probably owed to the Bank.” On this evidence, the trial court granted the Bank’s motion for summary judgment in the exact amounts which had been stated by the Bank’s affiant to be due and owing. Appellant appeals, contending that the affidavit submitted by the Bank was insufficient to authorize the grant of its motion.",
"“Introduction of the promissory note (together with related documents, where appropriate) makes a prima facie case for the plaintiff and imposes upon the defendant the burden of raising defenses in rebuttal of the plaintiff’s evidence. [Cits.] If the defendant cannot do *772so, liability is established, and the plaintiff then has the burden of proving the amount owed. [Cits. ]” First Nat. Bank of Dalton v. Damil, Inc., 171 Ga. App. 237, 238 (319 SE2d 54) (1984). Assuming without deciding that the Bank’s affidavit was otherwise sufficient to establish appellant’s liability on the note, a copy of which was attached to its complaint but not its motion, the issue remains whether the Bank was entitled to summary judgment in the exact amounts in which it was granted. Here, as in Thomasson v. Trust Co. Bank, 149 Ga. App. 556 (254 SE2d 881) (1979), appellant has contested the “personal knowledge” of the Bank’s affiant as to the amounts which are due and owing on the note.",
"Likewise as in Thomasson, the statements of the Bank’s affiant with regard to specific amounts are not supported by documents qualifying as “business records” pursuant to OCGA § 24-3-14. This evidence must be construed most strongly against the Bank as the movant. When the evidence is thus construed, the following would appear: Although the Bank’s affiant states that she “was at the time of the execution of the subject note Vice President of the [Bank],” her subsequent and present capacity is not stated. (Emphasis supplied.) If, as appellant contends, the Bank’s affiant lacked immediate and independent “personal knowledge” as to the extent of his liability on the note, then her affidavit was presumably based upon information provided either by an unidentified third party with such immediate “personal knowledge” or upon her own knowledge of the contents of the Bank’s records regarding appellant’s note.",
"If the former, then the affiant’s statement as to amounts would clearly be hearsay. OCGA § 24-3-1. If the latter, “[a]bsent the preliminary proof required to qualify under [OCGA § 24-3-14], the affiant’s statements as to facts, the knowledge of which [s]he obtained from records not personally kept by [her], were hearsay and had no probative value. [Cits. ]” Thomasson v. Trust Co. Bank, supra at 559. After appellant filed his affidavit, the Bank did not submit any amended affidavit on its behalf clarifying either the current capacity or the basis upon which the original affiant claimed “personal knowledge” of appellant’s default and the extent to which he was liable on the note. Construing this evidence most strongly against the Bank, we are constrained to hold that it has not proved, as a matter of law, its entitlement to summary judgment in the amount in which it was granted. See American Druggist Ins.",
"Co. v. Ga. Power Co., 145 Ga. App. 104, 106 (1) (243 SE2d 319) (1978). That appellant admitted in his affidavit owing “some sum” to the Bank does not require a contrary result. See Edge v. Stephens, 172 Ga. App. 759 (324 SE2d 579) (1984). Judgment reversed. Birdsong, P. J., and Sognier, J., concur in the judgment only. *773Decided February 11, 1986. Stephen L. Ivie, for appellant. J. Harvey Davis, for appellee."
] | https://www.courtlistener.com/api/rest/v3/opinions/5641856/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
PER CURIAM. Affirmed. Scott v. Florida Parole and Probation Commission, 533 So.2d 310 (Fla. 1st DCA 1988). ERVIN, BARFIELD and BENTON, JJ, concur. | 07-30-2022 | [
"PER CURIAM. Affirmed. Scott v. Florida Parole and Probation Commission, 533 So.2d 310 (Fla. 1st DCA 1988). ERVIN, BARFIELD and BENTON, JJ, concur."
] | https://www.courtlistener.com/api/rest/v3/opinions/7678046/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-06-00606-CV
The University of Texas, Appellant
v.
Hermelinda Amezquita, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201st JUDICIAL DISTRICT NO. D-1-GN-03-000578, HONORABLE STEPHEN YELENOSKY, JUDGE PRESIDING
MEMORANDUM OPINION
The University of Texas at Austin (the “University”) appeals the district court’s order
denying its plea to the jurisdiction. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8) (West
2008). The University asserts that sovereign immunity bars the tort claims of appellee, Hermelinda
Amezquita. Amezquita sued the University under the Texas Tort Claims Act. See Tex. Civ. Prac.
& Rem. Code Ann. §§ 101.001-.109 (West 2005 & Supp. 2008) (the “Act”). We will reverse the
trial court’s order and render judgment granting the University’s plea.
FACTUAL AND PROCEDURAL BACKGROUND
On February 23, 2001, Amezquita sustained injuries when she slipped on a metal
plate incorporated into a walkway in front of the University’s baseball stadium. The plate, which
served as a removable drainage trench cover, was slippery because rain had accumulated on it. Amezquita filed suit in February 2003, alleging that the plate was a premises defect for which the
University’s immunity had been waived under the Act.1 See Act § 101.022.
The University filed a plea to the jurisdiction asserting that the plate was not a
premises defect and that even if it was, its presence was a discretionary decision for which the
University retained immunity from suit under section 101.056 of the Act. In support of its plea, the
University filed an affidavit by William Throop, an engineer employed by the University. The trial
court excluded portions of Throop’s affidavit and denied the University’s plea. The University
perfected this interlocutory appeal.
STANDARD OF REVIEW
We review the denial of a plea to the jurisdiction de novo. Texas Dep’t of Parks
& Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). When a plea challenges the existence of
jurisdictional facts, a court should consider relevant evidence submitted by the parties when
necessary to resolve the jurisdictional issues raised. Id. Where the jurisdictional issue or facts do
not implicate the merits of the plaintiff’s case, and the facts are disputed, the court—not the
jury—must make the necessary fact findings to resolve the jurisdictional issue. See id. (“‘Whether
a district court has subject matter jurisdiction is a question for the court, not a jury, to decide, even
if the determination requires making factual findings, unless the jurisdictional issue is inextricably
bound to the merits of the case.’”) (quoting Cameron v. Children’s Hosp. Med. Ctr., 131 F.3d 1167,
1170 (6th Cir. 1997)). If, however, the facts relevant to jurisdiction are undisputed, the court should
1 Amezquita originally alleged that the plate was both a premises defect and a special defect, but she later amended her petition to delete her special-defect claim.
2 make the jurisdictional determination as a matter of law based solely on those undisputed facts.
Id. at 228. Because a court should not proceed with a case over which it has no jurisdiction, it should
make the jurisdictional determination as soon as practicable, but has discretion to defer the decision
until the case has been more fully developed. Id. at 227.2 On appeal, any fact findings made to
resolve the jurisdictional issue may be challenged, as any other fact findings, for legal and factual
sufficiency. This includes implied fact findings if written findings and conclusions are not issued.
Cf. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002).
DISCUSSION
The jurisdictional evidence here does not implicate the merits of the plaintiff’s case:
the jurisdictional issue concerns whether incorporating a metal plate into a sidewalk was a
discretionary decision, whereas the merits concern whether the University acted negligently. Thus,
the trial court was required to resolve the jurisdictional issue on the basis of facts that it found or that
were undisputed. See Miranda, 133 S.W.3d at 226 (citing Cameron, 131 F.3d at 1170). As plaintiff,
Amezquita bore the burden of proving facts that would establish the trial court’s jurisdiction. See
Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993).
2 Here, the trial court’s order denying the plea to the jurisdiction did not indicate that the court was deferring its jurisdictional determination until the case was more fully developed. Nor did Amezquita urge a deferral of the issue in her response to the University’s plea to the jurisdiction. Accordingly, because the trial court did not purport to exercise its discretion in this regard, we will not attempt to apply an abuse-of-discretion standard in reviewing the trial court’s denial of portions of the plea. In any event, as discussed below, the relevant facts before the trial court were conclusive, so fuller development of the case would have been pointless.
3 The University argues that its evidence proves conclusively that it has not waived
immunity under the Act. See Act § 101.021 (discussing waiver of immunity). Under section
101.056 of the Act,
the State preserves its immunity for an act “if the law leaves the performance or nonperformance of the act to the discretion of the governmental unit.” Thus, if the State’s action is discretionary, it does not waive its immunity. An act is discretionary if it requires exercising judgment and the law does not mandate performing the act with such precision that nothing is left to discretion or judgment. Design of any public work, such as a roadway, is a discretionary function involving many policy decisions, and the governmental entity responsible may not be sued for such decisions.
State v. Rodriguez, 985 S.W.2d 83, 85 (Tex. 1999) (per curiam) (emphasis added) (quoting Act
§ 101.056(2)) (citations omitted). Plans formulated by state engineers are paradigmatic discretionary
decisions immune from suit. See id. at 86; see also Sanchez v. Matagorda County, 124 S.W.3d 350,
353 (Tex. App.—Corpus Christi 2003, no pet.) (choice of “one design over another is the essence
of the exercise of discretion”). This rule applies to plans for all manner of public works. See,
e.g., Rodriguez, 985 S.W.2d at 85 (roadways); City of Round Rock v. Smith, 687 S.W.2d 300, 303
(Tex. 1985) (subdivision plat); Perez v. City of Dallas, 180 S.W.3d 906, 913 (Tex. App.—Dallas
2005, no pet.) (trash pit); Sanchez, 124 S.W.3d at 353 (bridge); Berry v. City of Reno,
107 S.W.3d 128, 132-33 (Tex. App.—Fort Worth 2003, no pet.) (drainage system); University of
Texas Health Scis. Ctr. v. Bruen, 92 S.W.3d 24, 27 (Tex. App.—San Antonio 2002, pet. denied)
(auditorium ramp); Ramos v. Texas Dep’t of Pub. Safety, 35 S.W.3d 723, 733 (Tex. App.—Houston
[1st Dist.] 2000, pet. denied) (parking lot); Mitchell v. City of Dallas, 855 S.W.2d 741, 745 (Tex.
4 App.—Dallas 1993) (public buildings and other municipal premises), aff’d, 870 S.W.2d 21, 37
(Tex. 1994).
Here, the University’s evidence showed that the University incorporated a metal plate
into a sidewalk to cover a drainage trench. Amezquita argues that the University failed to establish
that this action represents a discretionary decision by University engineers. On the contrary, the
affidavit of engineer Throop, which the University submitted in support of its plea to the jurisdiction,
establishes just that.3 Throop’s affidavit states: “[T]he metal plate Ms. Amezquita allegedly slipped
on was a part of the original design of the University baseball stadium.” The affidavit also states:
“[T]he metal plate in question was constructed and incorporated into the baseball stadium sidewalk
in conformity with the architectural plans and original design.” While the trial court excluded
portions of Throop’s affidavit, it did not exclude the quoted portions, and Amezquita offered no
evidence to rebut them. Because the quoted portions implicate the trial court’s jurisdiction, we must
consider them. Miranda, 133 S.W.3d at 227. Furthermore, affidavit aside, it is hard to imagine how
decisions about the composition and placement of trench covers could be non-discretionary. See
Rodriguez, 985 S.W.2d at 85 (“[d]esign of any public work . . . is a discretionary function”)
(emphasis added). We therefore conclude that incorporating the metal plate into the sidewalk was
a discretionary design decision for which the University retains immunity. See id. at 86.
Our conclusion might be different if Amezquita had complained not of the metal
plate’s presence but of its installation, for the Act waives immunity for negligent implementation of
3 Throop was an interested witness, but we credit his affidavit because it was “clear, positive and direct, otherwise credible and free from contradictions and inconsistencies, and could have been readily controverted.” Tex. R. Civ. P. 166a(c).
5 discretionary decisions. See Stephen F. Austin State Univ. v. Flynn, 228 S.W.3d 653, 657 (Tex.
2007). But nowhere in the record does Amezquita allege that the metal plate was defectively
constructed, positioned, maintained, or the like. Rather, Amezquita has consistently alleged—and
no evidence indicates that she could do otherwise—that the “defect” at issue is simply the
University’s decision to use a potentially slippery metal plate. For example, in response to an
interrogatory asking for the exact conditions that caused her injuries, Amezquita answered: “The
conditions . . . were . . . having a metal surface on a walkway, which became extremely slippery
when wet on a rainy day.” This is a complaint about the decision to put a potentially slippery metal
plate in the walkway, not a complaint about the execution of that decision. As a result, the
University’s immunity from suit has not been waived.
For the foregoing reasons, we hold that the University’s incorporation of a metal plate
into its sidewalk was a discretionary decision for which the University retains immunity under the
Act. See Act § 101.056. Because our holding disposes of this case, we do not address other issues
raised on appeal. Accord Perez, 180 S.W.3d at 913 (declining to consider premises defect claim
because underlying discretionary decision immunized city from suit).
CONCLUSION
Because the jurisdictional evidence shows conclusively that the University’s
incorporation of a metal plate into a sidewalk was a discretionary decision for which the University
retains immunity under the Texas Tort Claims Act, we reverse the trial court’s order denying the
University’s plea to the jurisdiction and render judgment granting the University’s plea and
dismissing Amezquita’s suit for lack of jurisdiction.
6 __________________________________________
J. Woodfin Jones, Chief Justice
Before Chief Justice Jones, Justices Puryear and Henson
Reversed and Rendered
Filed: June 4, 2009
7 | 09-06-2015 | [
"TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN NO. 03-06-00606-CV The University of Texas, Appellant v. Hermelinda Amezquita, Appellee FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201st JUDICIAL DISTRICT NO. D-1-GN-03-000578, HONORABLE STEPHEN YELENOSKY, JUDGE PRESIDING MEMORANDUM OPINION The University of Texas at Austin (the “University”) appeals the district court’s order denying its plea to the jurisdiction. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8) (West 2008). The University asserts that sovereign immunity bars the tort claims of appellee, Hermelinda Amezquita. Amezquita sued the University under the Texas Tort Claims Act. See Tex. Civ. Prac. & Rem. Code Ann. §§ 101.001-.109 (West 2005 & Supp.",
"2008) (the “Act”). We will reverse the trial court’s order and render judgment granting the University’s plea. FACTUAL AND PROCEDURAL BACKGROUND On February 23, 2001, Amezquita sustained injuries when she slipped on a metal plate incorporated into a walkway in front of the University’s baseball stadium. The plate, which served as a removable drainage trench cover, was slippery because rain had accumulated on it. Amezquita filed suit in February 2003, alleging that the plate was a premises defect for which the University’s immunity had been waived under the Act.1 See Act § 101.022. The University filed a plea to the jurisdiction asserting that the plate was not a premises defect and that even if it was, its presence was a discretionary decision for which the University retained immunity from suit under section 101.056 of the Act. In support of its plea, the University filed an affidavit by William Throop, an engineer employed by the University.",
"The trial court excluded portions of Throop’s affidavit and denied the University’s plea. The University perfected this interlocutory appeal. STANDARD OF REVIEW We review the denial of a plea to the jurisdiction de novo. Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). When a plea challenges the existence of jurisdictional facts, a court should consider relevant evidence submitted by the parties when necessary to resolve the jurisdictional issues raised. Id. Where the jurisdictional issue or facts do not implicate the merits of the plaintiff’s case, and the facts are disputed, the court—not the jury—must make the necessary fact findings to resolve the jurisdictional issue. See id. (“‘Whether a district court has subject matter jurisdiction is a question for the court, not a jury, to decide, even if the determination requires making factual findings, unless the jurisdictional issue is inextricably bound to the merits of the case.’”) (quoting Cameron v. Children’s Hosp.",
"Med. Ctr., 131 F.3d 1167, 1170 (6th Cir. 1997)). If, however, the facts relevant to jurisdiction are undisputed, the court should 1 Amezquita originally alleged that the plate was both a premises defect and a special defect, but she later amended her petition to delete her special-defect claim. 2 make the jurisdictional determination as a matter of law based solely on those undisputed facts. Id. at 228. Because a court should not proceed with a case over which it has no jurisdiction, it should make the jurisdictional determination as soon as practicable, but has discretion to defer the decision until the case has been more fully developed. Id. at 227.2 On appeal, any fact findings made to resolve the jurisdictional issue may be challenged, as any other fact findings, for legal and factual sufficiency. This includes implied fact findings if written findings and conclusions are not issued. Cf.",
"BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002). DISCUSSION The jurisdictional evidence here does not implicate the merits of the plaintiff’s case: the jurisdictional issue concerns whether incorporating a metal plate into a sidewalk was a discretionary decision, whereas the merits concern whether the University acted negligently. Thus, the trial court was required to resolve the jurisdictional issue on the basis of facts that it found or that were undisputed. See Miranda, 133 S.W.3d at 226 (citing Cameron, 131 F.3d at 1170). As plaintiff, Amezquita bore the burden of proving facts that would establish the trial court’s jurisdiction. See Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex.",
"1993). 2 Here, the trial court’s order denying the plea to the jurisdiction did not indicate that the court was deferring its jurisdictional determination until the case was more fully developed. Nor did Amezquita urge a deferral of the issue in her response to the University’s plea to the jurisdiction. Accordingly, because the trial court did not purport to exercise its discretion in this regard, we will not attempt to apply an abuse-of-discretion standard in reviewing the trial court’s denial of portions of the plea. In any event, as discussed below, the relevant facts before the trial court were conclusive, so fuller development of the case would have been pointless.",
"3 The University argues that its evidence proves conclusively that it has not waived immunity under the Act. See Act § 101.021 (discussing waiver of immunity). Under section 101.056 of the Act, the State preserves its immunity for an act “if the law leaves the performance or nonperformance of the act to the discretion of the governmental unit.” Thus, if the State’s action is discretionary, it does not waive its immunity. An act is discretionary if it requires exercising judgment and the law does not mandate performing the act with such precision that nothing is left to discretion or judgment. Design of any public work, such as a roadway, is a discretionary function involving many policy decisions, and the governmental entity responsible may not be sued for such decisions. State v. Rodriguez, 985 S.W.2d 83, 85 (Tex.",
"1999) (per curiam) (emphasis added) (quoting Act § 101.056(2)) (citations omitted). Plans formulated by state engineers are paradigmatic discretionary decisions immune from suit. See id. at 86; see also Sanchez v. Matagorda County, 124 S.W.3d 350, 353 (Tex. App.—Corpus Christi 2003, no pet.) (choice of “one design over another is the essence of the exercise of discretion”). This rule applies to plans for all manner of public works. See, e.g., Rodriguez, 985 S.W.2d at 85 (roadways); City of Round Rock v. Smith, 687 S.W.2d 300, 303 (Tex. 1985) (subdivision plat); Perez v. City of Dallas, 180 S.W.3d 906, 913 (Tex. App.—Dallas 2005, no pet.) (trash pit); Sanchez, 124 S.W.3d at 353 (bridge); Berry v. City of Reno, 107 S.W.3d 128, 132-33 (Tex. App.—Fort Worth 2003, no pet.) (drainage system); University of Texas Health Scis. Ctr.",
"v. Bruen, 92 S.W.3d 24, 27 (Tex. App.—San Antonio 2002, pet. denied) (auditorium ramp); Ramos v. Texas Dep’t of Pub. Safety, 35 S.W.3d 723, 733 (Tex. App.—Houston [1st Dist.] 2000, pet. denied) (parking lot); Mitchell v. City of Dallas, 855 S.W.2d 741, 745 (Tex. 4 App.—Dallas 1993) (public buildings and other municipal premises), aff’d, 870 S.W.2d 21, 37 (Tex. 1994). Here, the University’s evidence showed that the University incorporated a metal plate into a sidewalk to cover a drainage trench. Amezquita argues that the University failed to establish that this action represents a discretionary decision by University engineers. On the contrary, the affidavit of engineer Throop, which the University submitted in support of its plea to the jurisdiction, establishes just that.3 Throop’s affidavit states: “[T]he metal plate Ms. Amezquita allegedly slipped on was a part of the original design of the University baseball stadium.” The affidavit also states: “[T]he metal plate in question was constructed and incorporated into the baseball stadium sidewalk in conformity with the architectural plans and original design.” While the trial court excluded portions of Throop’s affidavit, it did not exclude the quoted portions, and Amezquita offered no evidence to rebut them.",
"Because the quoted portions implicate the trial court’s jurisdiction, we must consider them. Miranda, 133 S.W.3d at 227. Furthermore, affidavit aside, it is hard to imagine how decisions about the composition and placement of trench covers could be non-discretionary. See Rodriguez, 985 S.W.2d at 85 (“[d]esign of any public work . . . is a discretionary function”) (emphasis added). We therefore conclude that incorporating the metal plate into the sidewalk was a discretionary design decision for which the University retains immunity. See id. at 86. Our conclusion might be different if Amezquita had complained not of the metal plate’s presence but of its installation, for the Act waives immunity for negligent implementation of 3 Throop was an interested witness, but we credit his affidavit because it was “clear, positive and direct, otherwise credible and free from contradictions and inconsistencies, and could have been readily controverted.” Tex.",
"R. Civ. P. 166a(c). 5 discretionary decisions. See Stephen F. Austin State Univ. v. Flynn, 228 S.W.3d 653, 657 (Tex. 2007). But nowhere in the record does Amezquita allege that the metal plate was defectively constructed, positioned, maintained, or the like. Rather, Amezquita has consistently alleged—and no evidence indicates that she could do otherwise—that the “defect” at issue is simply the University’s decision to use a potentially slippery metal plate. For example, in response to an interrogatory asking for the exact conditions that caused her injuries, Amezquita answered: “The conditions . . . were . . . having a metal surface on a walkway, which became extremely slippery when wet on a rainy day.” This is a complaint about the decision to put a potentially slippery metal plate in the walkway, not a complaint about the execution of that decision. As a result, the University’s immunity from suit has not been waived. For the foregoing reasons, we hold that the University’s incorporation of a metal plate into its sidewalk was a discretionary decision for which the University retains immunity under the Act. See Act § 101.056.",
"Because our holding disposes of this case, we do not address other issues raised on appeal. Accord Perez, 180 S.W.3d at 913 (declining to consider premises defect claim because underlying discretionary decision immunized city from suit). CONCLUSION Because the jurisdictional evidence shows conclusively that the University’s incorporation of a metal plate into a sidewalk was a discretionary decision for which the University retains immunity under the Texas Tort Claims Act, we reverse the trial court’s order denying the University’s plea to the jurisdiction and render judgment granting the University’s plea and dismissing Amezquita’s suit for lack of jurisdiction. 6 __________________________________________ J. Woodfin Jones, Chief Justice Before Chief Justice Jones, Justices Puryear and Henson Reversed and Rendered Filed: June 4, 2009 7"
] | https://www.courtlistener.com/api/rest/v3/opinions/2876656/ | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
Exhibit 10.1 Extension of Scheduled Expiry Date Reference is made to that certain Amended and Restated Series 2006-2 Indenture Supplement, dated as of December 1, 2006, as amended by the First Amendment thereto, dated as of March 6, 2007, and the Second Amendment thereto, dated as of November 30, 2007 (as further amended or supplemented, the “Series 2006-2 Indenture Supplement”), among Chesapeake Funding LLC (the “Issuer”), PHH Vehicle Management Services, LLC, as administrator, the several commercial paper conduits listed on Schedule I thereto (the “CP Conduit Purchasers”), the banks party thereto with respect to each CP Conduit Purchaser (the “APA Banks”), the agent banks party thereto with respect to each CP Conduit Purchaser (the “Funding Agents”), JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the CP Conduit Purchasers, the APA Banks and the Funding Agents, and The Bank of New York Mellon (formerly known as The Bank of New York), as Indenture Trustee (the “Indenture Trustee”), to the Base Indenture, dated as of March 7, 2006 between the Issuer and the Indenture Trustee. All capitalized terms defined in the Series 2006-2 Indenture Supplement and used herein shall have the meanings given to them therein. The undersigned hereby agree to extend the Scheduled Expiry Date to December 8, 2008. Dated: November 25, 2008
PARK AVENUE RECEIVABLES COMPANY, LLC, as a CP Conduit Purchaser By: JPMorgan Chase Bank, N.A., its attorney-in-fact By: /s/ Daniel J. Clarke, Jr. Name: Daniel J. Clarke, Jr. Title: Managing Director JPMORGAN CHASE BANK, N.A., as an APA Bank By: /s/ Daniel J. Clarke, Jr. Name: Daniel J. Clarke, Jr. Title: Managing Director
--------------------------------------------------------------------------------
2
VARIABLE FUNDING CAPITAL COMPANY LLC, as a CP Conduit Purchaser By: WACHOVIA CAPITAL MARKETS, LLC, As Attorney-in-Fact By: /s/ Haojin Wu Name: Haojin Wu Title: Vice President WACHOVIA BANK, NATIONAL ASSOCIATION, as an APA Bank By: /s/ Kevin McConnell Name: Kevin McConnell Title: Managing Director
Signature Page to Series 2006-2 Consent
--------------------------------------------------------------------------------
3
YC SUSI TRUST, as a CP Conduit Purchaser By: Bank of America, National Association, as Administrative Trustee By: /s/ Leif E. Rauer Name: Leif E. Rauer Title: Vice President BANK OF AMERICA, NATIONAL ASSOCIATION, as an APA Bank By: /s/ Leif E. Rauer Name: Leif E. Rauer Title: Vice President
Signature Page to Series 2006-2 Consent
--------------------------------------------------------------------------------
4
LIBERTY STREET FUNDING LLC, as a CP Conduit Purchaser By: /s/ Jill A. Russo Name: Jill A. Russo Title: Vice President THE BANK OF NOVA SCOTIA, as an APA Bank By: /s/ Michael Eden Name: Michael Eden Title: Director
Signature Page to Series 2006-2 Consent
--------------------------------------------------------------------------------
5
PARADIGM FUNDING, LLC, as a CP Conduit Purchaser By: /s/ Evelyn Echevarria Name: Evelyn Echevarria Title: Vice President WESTLB AG, NEW YORK BRANCH, as an APA Bank By: /s/ Karen Ngai Name: Karen Ngai Title: Director By: /s/ Michael Gilbuley Name: Michael Gilbuley Title: Associate Director
Signature Page to Series 2006-2 Consent
--------------------------------------------------------------------------------
6
CHARTA, LLC, as a CP Conduit Purchaser By: CITICORP NORTH AMERICA, INC., as Attorney-in-Fact By: /s/ James Murray Name: James Murray Title: Managing Director CITIBANK, N.A., as an APA Bank By: /s/ Steven Vierengel Name: Steven Vierengel Title: Director
Signature Page to Series 2006-2 Consent
--------------------------------------------------------------------------------
7
SHEFFIELD RECEIVABLES CORPORATION, as a CP Conduit Purchaser By: /s/ Fouad Onbargi Name: Fouad Onbargi Title: Director BARCLAYS BANK PLC, as an APA Bank By: /s/ Pierre Duleyrie Name: Pierre Duleyrie Title: Director
Signature Page to Series 2006-2 Consent
--------------------------------------------------------------------------------
8
ATLANTIC ASSET SECURITIZATION LLC, as a CP Conduit Purchaser By: /s/ Kostantina Kourmpetis Name: Kostantina Kourmpetis Title: Managing Director By: /s/ Sam Pilcer Name: Sam Pilcer Title: Managing Director CALYON NEW YORK BRANCH, as an APA Bank By: /s/ Kostantina Kourmpetis Name: Kostantina Kourmpetis Title: Managing Director By: /s/ Sam Pilcer Name: Sam Pilcer Title: Managing Director
Signature Page to Series 2006-2 Consent
--------------------------------------------------------------------------------
9
WINDMILL FUNDING CORPORATION, as CP Conduit Purchaser By: /s/ Jill A. Russo Name: Jill A. Russo Title: Vice President ABN AMRO BANK N.V., as APA Bank and Funding Agent By: /s/ David Viney Name: David Viney Title: Managing Director
Signature Page to Series 2006-2 Consent | [
"Exhibit 10.1 Extension of Scheduled Expiry Date Reference is made to that certain Amended and Restated Series 2006-2 Indenture Supplement, dated as of December 1, 2006, as amended by the First Amendment thereto, dated as of March 6, 2007, and the Second Amendment thereto, dated as of November 30, 2007 (as further amended or supplemented, the “Series 2006-2 Indenture Supplement”), among Chesapeake Funding LLC (the “Issuer”), PHH Vehicle Management Services, LLC, as administrator, the several commercial paper conduits listed on Schedule I thereto (the “CP Conduit Purchasers”), the banks party thereto with respect to each CP Conduit Purchaser (the “APA Banks”), the agent banks party thereto with respect to each CP Conduit Purchaser (the “Funding Agents”), JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the CP Conduit Purchasers, the APA Banks and the Funding Agents, and The Bank of New York Mellon (formerly known as The Bank of New York), as Indenture Trustee (the “Indenture Trustee”), to the Base Indenture, dated as of March 7, 2006 between the Issuer and the Indenture Trustee.",
"All capitalized terms defined in the Series 2006-2 Indenture Supplement and used herein shall have the meanings given to them therein. The undersigned hereby agree to extend the Scheduled Expiry Date to December 8, 2008. Dated: November 25, 2008 PARK AVENUE RECEIVABLES COMPANY, LLC, as a CP Conduit Purchaser By: JPMorgan Chase Bank, N.A., its attorney-in-fact By: /s/ Daniel J. Clarke, Jr. Name: Daniel J. Clarke, Jr. Title: Managing Director JPMORGAN CHASE BANK, N.A., as an APA Bank By: /s/ Daniel J. Clarke, Jr. Name: Daniel J. Clarke, Jr.",
"Title: Managing Director -------------------------------------------------------------------------------- 2 VARIABLE FUNDING CAPITAL COMPANY LLC, as a CP Conduit Purchaser By: WACHOVIA CAPITAL MARKETS, LLC, As Attorney-in-Fact By: /s/ Haojin Wu Name: Haojin Wu Title: Vice President WACHOVIA BANK, NATIONAL ASSOCIATION, as an APA Bank By: /s/ Kevin McConnell Name: Kevin McConnell Title: Managing Director Signature Page to Series 2006-2 Consent -------------------------------------------------------------------------------- 3 YC SUSI TRUST, as a CP Conduit Purchaser By: Bank of America, National Association, as Administrative Trustee By: /s/ Leif E. Rauer Name: Leif E. Rauer Title: Vice President BANK OF AMERICA, NATIONAL ASSOCIATION, as an APA Bank By: /s/ Leif E. Rauer Name: Leif E. Rauer Title: Vice President Signature Page to Series 2006-2 Consent -------------------------------------------------------------------------------- 4 LIBERTY STREET FUNDING LLC, as a CP Conduit Purchaser By: /s/ Jill A. Russo Name: Jill A. Russo Title: Vice President THE BANK OF NOVA SCOTIA, as an APA Bank By: /s/ Michael Eden Name: Michael Eden Title: Director Signature Page to Series 2006-2 Consent -------------------------------------------------------------------------------- 5 PARADIGM FUNDING, LLC, as a CP Conduit Purchaser By: /s/ Evelyn Echevarria Name: Evelyn Echevarria Title: Vice President WESTLB AG, NEW YORK BRANCH, as an APA Bank By: /s/ Karen Ngai Name: Karen Ngai Title: Director By: /s/ Michael Gilbuley Name: Michael Gilbuley Title: Associate Director Signature Page to Series 2006-2 Consent -------------------------------------------------------------------------------- 6 CHARTA, LLC, as a CP Conduit Purchaser By: CITICORP NORTH AMERICA, INC., as Attorney-in-Fact By: /s/ James Murray Name: James Murray Title: Managing Director CITIBANK, N.A., as an APA Bank By: /s/ Steven Vierengel Name: Steven Vierengel Title: Director Signature Page to Series 2006-2 Consent -------------------------------------------------------------------------------- 7 SHEFFIELD RECEIVABLES CORPORATION, as a CP Conduit Purchaser By: /s/ Fouad Onbargi Name: Fouad Onbargi Title: Director BARCLAYS BANK PLC, as an APA Bank By: /s/ Pierre Duleyrie Name: Pierre Duleyrie Title: Director Signature Page to Series 2006-2 Consent -------------------------------------------------------------------------------- 8 ATLANTIC ASSET SECURITIZATION LLC, as a CP Conduit Purchaser By: /s/ Kostantina Kourmpetis Name: Kostantina Kourmpetis Title: Managing Director By: /s/ Sam Pilcer Name: Sam Pilcer Title: Managing Director CALYON NEW YORK BRANCH, as an APA Bank By: /s/ Kostantina Kourmpetis Name: Kostantina Kourmpetis Title: Managing Director By: /s/ Sam Pilcer Name: Sam Pilcer Title: Managing Director Signature Page to Series 2006-2 Consent -------------------------------------------------------------------------------- 9 WINDMILL FUNDING CORPORATION, as CP Conduit Purchaser By: /s/ Jill A. Russo Name: Jill A. Russo Title: Vice President ABN AMRO BANK N.V., as APA Bank and Funding Agent By: /s/ David Viney Name: David Viney Title: Managing Director Signature Page to Series 2006-2 Consent"
] | https://github.com/TheAtticusProject/cuad | Legal & Government | https://huggingface.co/datasets/pile-of-law/pile-of-law |
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