Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 1 of 132 Page ID #:1
$1'(5621<(+3& (GZDUG0$QGHUVRQ 67$7(%$512 5HJLQD 3ODLQWLII$/&21(17(57$,10(17//& ³3/$,17,))´RU³$/&21´ KHUHE\DOOHJHVDVIROORZV -85,6',&7,21$1'9(18( Subject Matter Jurisdiction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ee, e.g., Johnson v. Columbia Properties Anchorage, LP,)G WK&LU Siloam Springs Hotel, L.L.C. v. Century Sur. Co.)G WK&LU $/&21¶VVROHPHPEHULV$OFRQ0HGLD*URXS//&ZKRVHPHPEHUVDUH )UHGHULFN:6PLWK$QGUHZ.RVRYHDQG%URGHULFN-RKQVRQ6PLWKLVDFLWL]HQRI WKH6WDWHRI7HQQHVVHH.RVRYHDQG-RKQVRQDUHFLWL]HQVRIWKH6WDWHRI&DOLIRUQLD 7KXVQRQHRI$/&21¶6PHPEHUVDUHFLWL]HQVRIDQ\IRUHLJQVWDWH)RUSXUSRVHV RIGLYHUVLW\MXULVGLFWLRQ$/&21LVWKXVDFLWL]HQRIWKH6WDWHVRI&DOLIRUQLDDQG 7HQQHVVHHDQGQRWDFLWL]HQRIDQ\IRUHLJQVWDWH 'HIHQGDQW$87202%,/(63(8*(276$ ³3(8*(27´ LVD )UHQFKVRFLHWHDQRQ\PHZKLFKIRUSXUSRVHVRIGLYHUVLW\MXULVGLFWLRQLVEHVWWUHDWHG DVWKHHTXLYDOHQWRIDFRUSRUDWLRQRUJDQL]HGXQGHUWKHODZVRI)UDQFHDQGWKXVDVD FLWL]HQRUVXEMHFWRI)UDQFHSXUVXDQWWR86& F See, e.g., Bank &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 3 of 132 Page ID #:3 Brussells Lambert v. Chase Manhattan Bank, N.A., :/ 6'1< Rolland v. Smithkline Beckman Corp.:/ ('3D White Pearl Inversiones S.A. (Uruguay) v. Cemusa, Inc.)G WK&LU Macartney)G WK&LU 3(8*(27GRHVQRWKDYHLWV SULQFLSDOSODFHRIEXVLQHVVZLWKLQDQ\6WDWHRIWKH8QLWHG6WDWHVDQGLQDQ\HYHQW GRHVQRWKDYHLWVSULQFLSDOSODFHRIEXVLQHVVLQWKH6WDWHVRI&DOLIRUQLD'HODZDUH RU7HQQHVVHHDV3(8*(27¶6SULQFLSDOSODFHRIEXVLQHVVLVDW5XH+HQUL 6DLQWH&ODLUH'HYL5XHLO0DOPDLVRQ)UDQFH 'HIHQGDQW,6$%(/6$/$60(1'(= ³0(1'(=´ LVDQLQGLYLGXDO ZKRDWDOOWLPHVUHOHYDQWWRWKHVXEMHFWPDWWHURIWKLV&RPSODLQWZDVDFLWL]HQDQG UHVLGHQWRI)UDQFHIRUWKHSXUSRVHRIGLYHUVLW\MXULVGLFWLRQ 7RWKHH[WHQWVXSSOHPHQWDOMXULVGLFWLRQLVUHTXLUHGZLWKUHVSHFWWRDQ\ FODLPIRUUHOLHIWKH&RXUWKDVVXSSOHPHQWDOMXULVGLFWLRQSXUVXDQWWR86& RYHUDOOVXFKFODLPV$OORI3/$,17,))¶6FODLPVIRUUHOLHIDULVHIURPD FRPPRQQXFOHXVRIRSHUDWLYHIDFWVVXFKWKDWWKHFODLPVIRUPSDUWRIWKHVDPHFDVH RUFRQWURYHUV\XQGHU$UWLFOH,,,RIWKH8QLWHG6WDWHV&RQVWLWXWLRQ Personal Jurisdiction &DOLIRUQLD¶VSHUVRQDOMXULVGLFWLRQDOORQJDUPVWDWXWH&DO&RGH&LY 3URDOORZVFRXUWVLQWKH6WDWHWRH[HUFLVHSHUVRQDOMXULVGLFWLRQRYHU SDUWLHVWRWKHIXOOH[WHQWSHUPLVVLEOHXQGHUWKH8QLWHG6WDWHV&RQVWLWXWLRQPHDQLQJ SHUVRQDOMXULVGLFWLRQLVSHUPLVVLEOHLILWFRPSRUWVZLWKGXHSURFHVV7KH&RXUW¶V H[HUFLVHRISHUVRQDOMXULVGLFWLRQRYHUHDFKRIWKH'HIHQGDQWVKHUHFRPSRUWVZLWK GXHSURFHVVEHFDXVHHDFKRIWKH'HIHQGDQWVKDVPLQLPXPFRQWDFWVZLWKWKH6WDWH RI&DOLIRUQLDVXFKWKDWPDLQWHQDQFHRIWKHVXLWGRHVQRWRIIHQGWUDGLWLRQDOQRWLRQV RIIDLUSOD\DQGVXEVWDQWLDOMXVWLFH 7KH&RXUWKDVDWOHDVWVSHFLILFRUOLPLWHGSHUVRQDOMXULVGLFWLRQRYHU 3(8*(27LQWKDW3(8*(27GLUHFWHGLWVDFWLYLWLHVWRZDUG3/$,17,))ZKR 3(8*(27NQHZWREHDFLWL]HQDQGUHVLGHQWRIWKH6WDWHRI&DOLIRUQLD3(8*(27 &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 4 of 132 Page ID #:4 SXUSRVHIXOO\DYDLOHGLWVHOIRIWKHULJKWVSULYLOHJHVDQGSURWHFWLRQVRIGRLQJ EXVLQHVVLQ&DOLIRUQLDDQG3(8*(27SDUWLFLSDWHGLQGLUHFWLQJIDOVHVWDWHPHQWV DQGRWKHULQWHQWLRQDOO\WRUWLRXVFRQGXFWWRZDUG3/$,17,))DQGRWKHUVZKRP 3(8*(27NQHZWREHFLWL]HQVDQGUHVLGHQWVRIWKH6WDWHRI&DOLIRUQLD3(8*(27 NQHZWKDWWKHKDUPFDXVHGE\LWVLQWHQWLRQDOO\WRUWLRXVFRQGXFWZRXOGEHIHOWE\ 3/$,17,))DQGRWKHUVLQ&DOLIRUQLD3/$,17,))¶6FODLPVDULVHRXWRI 3(8*(27¶6DFWVRISXUSRVHIXODYDLOPHQWDQGWKHH[HUFLVHRISHUVRQDOMXULVGLFWLRQ RYHU3(8*(27LVUHDVRQDEOHDQGIDLU $PRQJRWKHUVSHFLILFIDFWRUVGHPRQVWUDWLQJWKH&RXUW¶VVSHFLILF SHUVRQDOMXULVGLFWLRQRYHU3(8*(27ZLWKUHVSHFWWR3/$,17,))¶6FODLPV D 3(8*(27VLJQHGFRQWUDFWVDJUHHLQJWKDWWKHSDUWLHV¶FRPPXQLFDWLRQV DQGQHJRWLDWLRQVUHJDUGLQJWKHPRWLRQSLFWXUHBlade Runner 2049 WKH ³3LFWXUH´RU³%5´ ZRXOGEHJRYHUQHGE\WKHODZVRIWKH6WDWHRI &DOLIRUQLDGHPRQVWUDWLQJ3(8*(27¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 5 of 132 Page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¶6UHSUHVHQWDWLYHVWKDW3(8*(27NQHZZRXOGEH UHFHLYHGLQ&DOLIRUQLD%H\RQGHPDLOVVRPHRIWKHLQWHQWLRQDOO\ WRUWLRXVDQGIDOVHVWDWHPHQWVRURWKHUVWDWHPHQWVFUHDWLQJOLDELOLW\ZHUH PDGHE\0(1'(=DQG3(8*(27¶6RWKHUUHSUHVHQWDWLYHVWR 3/$,17,))¶VUHSUHVHQWDWLYHVLQSHUVRQZKLOHDOOVXFKSHUVRQVZHUH SK\VLFDOO\SUHVHQWLQ&DOLIRUQLDDQGWRJHWKHULQWKHVDPHURRPDW 3/$,17,))¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 6 of 132 Page ID #:6 OHDVWVRPHRIWKHLQWHQWLRQDOO\WRUWLRXVO\IDOVHVWDWHPHQWVZKLOH0(1'(=ZDV SHUVRQDOO\SUHVHQWLQ&DOLIRUQLDLQFOXGLQJDW3/$,17,))¶6/RV$QJHOHVRIILFHV IRUWKHSXUSRVHRIWKHWUDQVDFWLRQVWKDWDUHWKHVXEMHFWPDWWHURIWKLV&RPSODLQW LQFOXGLQJ0(1'(=¶6RZQSHUVRQDOVFKHPHV0(1'(=NQHZWKDWWKHKDUPIURP KHUWRUWLRXVFRQGXFWZRXOGEHIHOWE\3/$,17,))LQ&DOLIRUQLD3/$,17,))¶6 FODLPVDULVHRXWRI0(1'(=¶6IRUHJRLQJDFWVRISXUSRVHIXODYDLOPHQWDQGWKH H[HUFLVHRISHUVRQDOMXULVGLFWLRQRYHU0(1'(=LVDOVRUHDVRQDEOHDQGIDLU $PRQJRWKHUVSHFLILFIDFWRUVGHPRQVWUDWLQJWKH&RXUW¶VVSHFLILF SHUVRQDOMXULVGLFWLRQRYHU0(1'(=ZLWKUHVSHFWWR3/$,17,))¶6FODLPV D 0(1'(=VLJQHGFRQWUDFWVLQERWKKHULQGLYLGXDODQGFRUSRUDWH FDSDFLWLHVDJUHHLQJWKDWWKHODZJRYHUQLQJWKHFRPPXQLFDWLRQVDQG QHJRWLDWLRQVEHWZHHQWKHSDUWLHVZRXOGEHDQGZDVWKHODZRIWKH6WDWH RI&DOLIRUQLDGHPRQVWUDWLQJ0(1'(=¶6SXUSRVHIXODYDLOPHQWRIWKH EHQHILWVDQGSULYLOHJHVRIFRQGXFWLQJDFWLYLWLHVLQ&DOLIRUQLD E 0(1'(=SHUVRQDOO\WUDYHOHGWR&DOLIRUQLDDQGDWWHQGHGPHHWLQJVDW 3/$,17,))¶6RIILFHVLQ&DOLIRUQLDIRUWKHSXUSRVHRIQHJRWLDWLQJDQG FDUU\LQJRXWWKHFRQWUDFWDQGUHODWLRQVKLSEHWZHHQWKHSDUWLHV UHJDUGLQJ%5DQGIRUWKHLQWHQWLRQDOSXUSRVHRIGHIUDXGLQJ 3/$,17,))RURWKHUZLVHFDXVLQJ3/$,17,))KDUP F 'XULQJWKHVHPHHWLQJVLQ/RV$QJHOHV0(1'(=PDGHLQWHQWLRQDOO\ IDOVHVWDWHPHQWVDQGRUPLVOHDGLQJPDWHULDORPLVVLRQVWR 3/$,17,))¶6UHSUHVHQWDWLYHVLQSHUVRQIRUWKHLQWHQGHGSXUSRVHRI GHIUDXGLQJ3/$,17,))UHJDUGLQJWKH%5RSSRUWXQLW\DQG 3(8*(27¶6DQG0(1'(=¶6LQWHQWDQGDXWKRULW\DQGRWKHUPDWHULDO IDFWVUHOHYDQWWR3/$,17,))¶6GHFLVLRQPDNLQJ G 0(1'(=SHUVRQDOO\VHQWPXOWLSOHHPDLOVWR3/$,17,))DQG 3/$,17,))¶6UHSUHVHQWDWLYHVZKRP0(1'(=XQGHUVWRRGWREHLQ &DOLIRUQLDIRUWKHLQWHQGHGSXUSRVHRIWUDQVDFWLQJZLWK3/$,17,)) &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 7 of 132 Page ID #:7 UHJDUGLQJ%5DQ\UHVXOWLQJFRQWUDFWDERXWZKLFK0(1'(= NQHZDQGXQGHUVWRRGZRXOGUHTXLUHVXEVWDQWLDOSHUIRUPDQFHLQ &DOLIRUQLDDQGWKXVDQRQJRLQJUHODWLRQVKLSZLWK&DOLIRUQLD,QWKH FRXUVHRIWKHVHHPDLOFRPPXQLFDWLRQV0(1'(=KHUVHOILQWHQWLRQDOO\ DQGWRUWLRXVO\PDGHIDOVHVWDWHPHQWVWR3/$,17,))DQG 3/$,17,))¶6UHSUHVHQWDWLYHVIRUWKHSXUSRVHRIGHIUDXGLQJ 3/$,17,))DQGRUFDXVLQJ3/$,17,))GHWULPHQWDOO\WRFKDQJHLWV SRVLWLRQLQUHOLDQFHRQ0(1'(=¶6VWDWHPHQWV Venue 9HQXHLVSURSHULQWKLVGLVWULFWSXUVXDQWWR86& D E E DQG F DQGRQWKHJURXQGVWKDWDVXEVWDQWLDOSDUWRIWKHHYHQWVDQG RPLVVLRQVJLYLQJULVHWRWKHFODLPVKHUHLQRFFXUUHGLQWKLVGLVWULFWRUDVXEVWDQWLDO SDUWRIWKHSURSHUW\WKDWLVWKHVXEMHFWRIWKHDFWLRQLVVLWXDWHGKHUHWKHUHLVQR GLVWULFWLQZKLFKWKHDFWLRQPD\RWKHUZLVHEHEURXJKWDVSURYLGHGLQVHFWLRQ DQGWKHGHIHQGDQWVDUHVXEMHFWWRWKHFRXUW¶VSHUVRQDOMXULVGLFWLRQZLWKUHVSHFWWR WKHDFWLRQDQGHDFKRIWKHGHIHQGDQWVLVQRWUHVLGHQWLQWKH8QLWHG6WDWHVDQGVR PD\EHVXHGLQDQ\MXGLFLDOGLVWULFW 3$57,(6 Plaintiff $OFRQ(QWHUWDLQPHQW//&$/&21LVDOLPLWHGOLDELOLW\ FRPSDQ\RUJDQL]HGXQGHUWKHODZVRIWKH6WDWHRI'HODZDUHZLWKLWVSULQFLSDO SODFHRIEXVLQHVVORFDWHGDW6DQWD0RQLFD%OYG6XLWH/RV$QJHOHV &DOLIRUQLD $/&21LVDQLQGHSHQGHQWPRWLRQSLFWXUHDQGWHOHYLVLRQSURGXFWLRQ VWXGLR,WVILOPDQGWHOHYLVLRQSURGXFWVDUHGLVWULEXWHGZRUOGZLGH$/&21KDV SURGXFHGPRUHWKDQWKLUW\PDMRUPRWLRQSLFWXUHVLQFOXGLQJDPRQJPDQ\RWKHUV The Blind Side ZKLFKZRQWKH$FDGHP\$ZDUGIRU%HVW$FWUHVV Dolphin TaleSisterhood of the Traveling PantsBook of EliThe Wicker Man (2006)P.S. I &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 8 of 132 Page ID #:8 Love YouMy Dog SkipBeautiful CreaturesPrisonersTranscendenceDQGPoint Break (2015)$/&21DOVRSURGXFHVWKHFULWLFDOO\DFFODLPHGWHOHYLVLRQVHULHVThe Expanse $/&21LVDOVRWKHDVVLJQHHRIDOOFODLPVDQGSRWHQWLDOFODLPVWKDW PLJKWEHPDGHE\&ROXPELD7UL6WDU0DUNHWLQJ*URXS,QF ³&70*´ DJDLQVWDQ\ RIWKHGHIHQGDQWVWRWKLV&RPSODLQWZLWKUHVSHFWWR%5 Named Defendants $XWRPRELOHV3HXJHRW6$3(8*(27LVDVRFLHWHDQRQ\PH RUJDQL]HGXQGHUWKHODZVRI)UDQFHZLWKLWVSULQFLSDOSODFHRIEXVLQHVVDW 5XH+HQUL6DLQWH&ODLUH'HYL5XHLO0DOPDLVRQ)UDQFH$)UHQFK VRFLHWHDQRQ\PHLVOHJDOO\HTXLYDOHQWWRDFRUSRUDWLRQXQGHUWKHODZVRIWKH 8QLWHG6WDWHVIRUSXUSRVHVRIGLYHUVLW\MXULVGLFWLRQ 3(8*(27LVRQHRIWKHZRUOG¶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¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 10 of 132 Page ID #:10 WDUJHWHG3/$,17,))RQWKHVXEMHFWPDWWHURIWKLV&RPSODLQW 3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW ZKHWKHURUQRWVRPHRIWKHFXUUHQW&DOLIRUQLDGLUHFWHGDXWRPRELOHVDOHVHIIRUWVRI 3(8*(27DUHEHLQJFDUULHGRXWLQSDUWE\$PHULFDQFRUSRUDWHVXEVLGLDULHV 3(8*(27¶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¶6UHSUHVHQWDWLYHV ,QWKHDOWHUQDWLYH3/$,17,))SOHDGVWKDW0(1'(=GRHVQRWKDYH VXFKDFWXDODXWKRULW\EXWWKDW3(8*(27DQG0(1'(=ERWKHQJDJHGLQFRQGXFW VXFKWKDWDVWR3/$,17,))0(1'(=KDGDWOHDVWRVWHQVLEOHDXWKRULW\WRELQG 3(8*(27WRSURGXFWSODFHPHQWDQGFRSURPRWLRQDOFRQWUDFWXDODQGRWKHU EXVLQHVVUHODWLRQVKLSVLQFOXGLQJZLWKUHVSHFWWRPDMRUPRWLRQSLFWXUHV 3/$,17,))LVLQIRUPHGDQGEHOLHYHVRQWKDWEDVLVDOOHJHVWKDW 0(1'(=DOVRKDGHLWKHUWKHDFWXDORURVWHQVLEOHDXWKRULW\ZLWKLQ3(8*(27WR &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 11 of 132 Page ID #:11 GHVLJQDWHDJHQWVLQFOXGLQJ38%/,&,6WRQHJRWLDWHIRUDQGRWKHUZLVHWRELQG 3(8*(27WRSURGXFWSODFHPHQWDQGFRSURPRWLRQDOFRQWUDFWVDQGRWKHUEXVLQHVV UHODWLRQVKLSVDQGWUDQVDFWLRQVLQFOXGLQJUHJDUGLQJPDMRUPRWLRQSLFWXUHV Non-Party Persons or Entities of Interest 3XEOLFLV*URXSH6$DQG3XEOLFLV0HGLD)UDQFH6$1RQ SDUW\3XEOLFLV*URXSH6$ ³38%/,&,6*5283(´ LVD)UHQFKVRFLHWHDQRQ\PH ZLWKLWVSULQFLSDOSODFHRIEXVLQHVVDWDYHQXHGH&KDPSVGH(O\VHHV 3DULV)UDQFHDQGRUDWUXHGH&KHPLQYHUW3DULV)UDQFH1RQ SDUW\3XEOLFLV0HGLD)UDQFH6$ ³38%/,&,60(',$)5$1&(´ LVD )UHQFKVRFLHWHDQRQ\PHZLWKLWVSULQFLSDOSODFHRIEXVLQHVVDWUXH%UHJXHW± UXHGH&KHPLQYHUW3DULV)UDQFH3ODLQWLIILVLQIRUPHGDQG EHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW38%/,&,60(',$)5$1&(LVGLUHFWO\RU LQGLUHFWO\ZKROO\RZQHGDQGFRQWUROOHGE\38%/,&,6*5283()RUSXUSRVHVRI WKLV&RPSODLQWWKHWHUP³38%/,&,6´LQFOXGHVERWK38%/,&,60(',$ )5$1&(DQG38%/,&,6*5283( 3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW 38%/,&,6 PRVWVSHFLILFDOO\38%/,&,60(',$)5$1&( LVWKHVXFFHVVRULQ LQWHUHVWWR7KH&DVDEODQFD$JHQF\ ³&DVDEODQFD´ $VXVHGLQWKLV&RPSODLQWWKH GHILQHGWHUPV³38%/,&,60(',$)5$1&(´DQG³38%/,&,6´HDFKLQFOXGHV &DVDEODQFD 3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW ³3XEOLFLV0HGLD´LVDGLYLVLRQRI38%/,&,6QRWRUJDQL]HGDVIRUPDOVHSDUDWH OHJDOHQWLW\DQGZLWKWKHSULQFLSDOSODFHRIEXVLQHVVRI3XEOLFLV0HGLDDOVRDW WKHDGGUHVVRUDGGUHVVHVVWDWHGIRU38%/,&,6)RUSXUSRVHVRIWKLV&RPSODLQW WKHWHUP³38%/,&,6´DOVRLQFOXGHV3XEOLFLV0HGLD 38%/,&,6 FHUWDLQO\38%/,&,6*5283(VSHFLILFDOO\ LVDJOREDO DGYHUWLVLQJDQGSXEOLFUHODWLRQVFRPSDQ\VRPHWLPHVLGHQWLILHGDVWKHROGHVW FRPPXQLFDWLRQVFRPSDQ\LQWKHZRUOGDQGXQTXHVWLRQDEO\RQHRIWKHODUJHVW &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 12 of 132 Page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¶6NQRZOHGJHRIWKHVHEXVLQHVVDUHDVDQGWKHLUFXVWRPVDQG SUDFWLFHVZDVDQGLVLPSXWHGWR38%/,&,6¶6SULQFLSDO3(8*(27 Doe Defendants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³'HIHQGDQWV´VXFKDOOHJDWLRQVKDOOEH GHHPHGWRPHDQWKHDFWVRI'HIHQGDQWVDFWLQJLQGLYLGXDOO\MRLQWO\DQGRU VHYHUDOO\3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW QRQHRIWKH'2(6LVDFLWL]HQRUUHVLGHQWRIWKH6WDWHVRI'HODZDUH7HQQHVVHH RU&DOLIRUQLDIRUSXUSRVHVRIGLYHUVLW\MXULVGLFWLRQ 3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW '2(6WKURXJKDUHHQWLWLHVZKLFK3(8*(27PD\FRQWHQGDUH3(8*(27 &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 13 of 132 Page ID #:13 FRQWUROOHGRU3(8*(27DIILOLDWHGHQWLWLHVZKLFKVKRXOGEHWUHDWHGDVWKH FRQWUDFWLQJSDUW\RUSDUWLHVZLWK3/$,17,))HLWKHULQDGGLWLRQWRRULQVWHDGRI 3(8*(27RURWKHUZLVHDV3(8*(27FRQWUROOHGRU3(8*(27DIILOLDWHGHQWLWLHV RQEHKDOIRIZKLFK0(1'(=38%/,&,6DQGRURWKHUDJHQWVRUUHSUHVHQWDWLYHV IRUGHIHQGDQWVZHUHLQWHUDFWLQJZLWK3/$,17,))DQG3/$,17,))¶6 UHSUHVHQWDWLYHV 3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW '2(6WKURXJKDUHHQWLWLHVWKDWPD\RWKHUZLVHKDYHOLDELOLW\IRUWKHFRQGXFWDW LVVXH Agency ([FHSWDVKHUHLQDIWHUVSHFLILFDOO\GHVFULEHGDWDOOWLPHVUHOHYDQW KHUHWR38%/,&,6DQG'2(6WKURXJKZHUHWKHDJHQWRUDJHQWVRI 3(8*(27([FHSWDVVSHFLILFDOO\DOOHJHGKHUHLQWRWKHFRQWUDU\LQFOXGLQJRQ FHUWDLQDOWHUQDWLYHSOHDGLQJWKHRULHV38%/,&,6DQG'2(6WKURXJKZHUH DWDOOWLPHVDFWLQJZLWKWKHVFRSHRILWVRUWKHLUDJHQF\DQGDXWKRULW\LQ 38%/,&,6¶6GHDOLQJVZLWK3/$,17,))DQGZLWKWKHSHUPLVVLRQFRQVHQW DXWKRUL]DWLRQUDWLILFDWLRQZKHWKHUH[SUHVVRULPSOLHGRI3(8*(27DQGRU ZLWK3(8*(27¶6NQRZLQJDFFHSWDQFHRIWKHEHQHILWVRIWKHFRQGXFWRI 38%/,&,6 ([FHSWDVKHUHLQDIWHUVSHFLILFDOO\GHVFULEHGDWDOOWLPHVUHOHYDQW KHUHWR0(1'(=ZDVDQHPSOR\HHRIILFHUDQGDJHQWRI3(8*(27DQG H[FHSWDVVSHFLILFDOO\DOOHJHGKHUHLQWRWKHFRQWUDU\ 0(1'(=ZDVDWDOO WLPHVDFWLQJZLWKWKHVFRSHRIKHUHPSOR\PHQWDJHQF\DQGDXWKRULW\LQ 0(1'(=¶6GHDOLQJVZLWK3/$,17,))DQGZLWKWKHSHUPLVVLRQFRQVHQW DXWKRUL]DWLRQUDWLILFDWLRQZKHWKHUH[SUHVVRULPSOLHGRI3(8*(27DQGRU ZLWK3(8*(27¶6NQRZLQJDFFHSWDQFHRIWKHEHQHILWVRIWKHLPSURSHUFRQGXFW RI0(1'(= &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 14 of 132 Page ID #:14 Aiding and Abetting ([FHSWDVKHUHLQVSHFLILFDOO\GHVFULEHG3/$,17,))LVLQIRUPHGDQG EHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDWHDFKRIWKH'HIHQGDQWVDLGHGDQGDEHWWHGWKH WRUWLRXVFRQGXFWRIWKHRWKHU'HIHQGDQWVLQWKDWHDFKRIWKH'HIHQGDQWVHLWKHU NQHZWKHRWKHU'HIHQGDQWV¶FRQGXFWFRQVWLWXWHGDEUHDFKRIGXW\WR3/$,17,)) DQGJDYHVXEVWDQWLDODVVLVWDQFHRUHQFRXUDJHPHQWWRVDLG'HIHQGDQWVWRVRDFW DQGRUJDYHVXEVWDQWLDODVVLVWDQFHWRWKHRWKHU'HIHQGDQWVLQDFFRPSOLVKLQJD WRUWLRXVUHVXOWDQGVDLGDLGLQJDQGDEHWWLQJ'HIHQGDQW¶VFRQGXFWFRQVWLWXWHGD EUHDFKRIGXW\WR3/$,17,))7KXVHDFKRIWKH'HIHQGDQWVLVOLDEOHIRUWKH WRUWLRXVFRQGXFWRIHDFKRIWKHRWKHU'HIHQGDQWVWKDWWKH\VRDLGHGDQGDEHWWHGDV LIVDLGDLGLQJDQGDEHWWLQJ'HIHQGDQWVKDGHQJDJHGLQVDLGFRQGXFWWKHPVHOYHV )$&76&2002172$//&$86(62)$&7,21 1982: Blade Runner ,Q$/&21¶6SUHGHFHVVRUVLQLQWHUHVWLQFKDLQRIWLWOHSURGXFHG DQGUHOHDVHGWKHVHPLQDOPRWLRQSLFWXUHBlade Runner VRPHWLPHVUHIHUUHGWR KHUHLQDVWKH³2ULJLQDO3LFWXUH´ Blade RunnerLVZLGHO\UHFRJQL]HGDVRQHRIWKH PRVWVLJQLILFDQWPRWLRQSLFWXUHVHYHUSURGXFHG,WLVUHJXODUO\YRWHGE\FULWLFV IDQVDQGHYHQVFLHQWLVWVDVWKH1XPEHUVFLHQFHILFWLRQPRYLHRIDOOWLPH see, e.g.GuardianSROORIVFLHQWLVWV DQGUHJXODUO\UHFRJQL]HGDVRQHRIWKH JUHDWHVWPRYLHVRIDOOWLPHDFURVVDOOJHQUHV see, e.g.EmpirePDJD]LQH UDQNLQJBlade RunnerRQOLVWRI7KH*UHDWHVW0RYLHVRI$OO7LPH $PRQJRWKHUZHOONQRZQDQGKLJKO\UHJDUGHGDVSHFWVRIWKH2ULJLQDO 3LFWXUHDUHWKHH[FHSWLRQDOTXDOLW\RILWVSURGXFWLRQGHVLJQHOHPHQWVUHVXOWLQJIURP WKHXQLTXHFROODERUDWLRQDQGFKHPLVWU\DPRQJWKHFUHDWLYHJLDQWVWKDWZRUNHGRQ WKH2ULJLQDO3LFWXUHLQFOXGLQJ5LGOH\6FRWWDQG6\G0HDG,QGHHG0HDGDORQHLV UHJDUGHGDVRQHRIWKHZRUOG¶VJUHDWHVWSURGXFWDQGLQGXVWULDOGHVLJQHUVDQG FRQFHSWDUWLVWVERWKIRUUHDOZRUOGZRUNV LQFOXGLQJLQWKHDXWRPRWLYHLQGXVWU\ DQGIRUKLVIXWXULVWLFYLVLRQVWKDWKDYHJUDFHGPDMRUFLQHPDIRUGHFDGHVBlade &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 15 of 132 Page ID #:15 RunnerLVRIWHQFRQVLGHUHG0HDG¶Vmagnum opus,WLVDPRQJWKHPRVW FRPSUHKHQVLYHLPSDFWIXODQGHQGXULQJFLQHPDWLFSURGXFWLRQGHVLJQZRUNVRIDOO WLPH)RUH[DPSOHLQWKH9LVXDO(IIHFWV6RFLHW\QDPHGBlade RunnerWKH 0RVW,QIOXHQWLDO9);)LOPVRI$OO7LPH VHFRQGRQO\WRStar WarsDV $PRQJWKH2ULJLQDO3LFWXUH¶VPRVWQRWDEOHDQGUHVRQDQWGHVLJQ HOHPHQWVZHUHDQGDUHWKHIO\LQJFDUVRU³VSLQQHUV´WKDWIHDWXUHSURPLQHQWO\LQLWV GHWDLOHGDQGVWXQQLQJO\FRKHUHQWIXWXULVWLFZRUOG,WLVQRH[DJJHUDWLRQWRVD\WKDW WKHBlade RunnerVSLQQHUVDUHDPRQJWKHPRVWIDPRXVDQGUHFRJQL]DEOH DXWRPRELOHVLQWKHKLVWRU\RIILOP Blade RunnerKDVEHHQLQFRQWLQXRXVGLVWULEXWLRQZRUOGZLGHWKURXJK YDULRXVGLVWULEXWLRQFKDQQHOVVLQFH(YHQQRZWKLUW\VL[\HDUVDIWHULWVLQLWLDO WKHDWULFDOUHOHDVHLWUHPDLQVDFXOWXUDOO\UHOHYDQWILOPZLWKDQDFWLYHDQG DSSUHFLDWLYHDXGLHQFH,WLVDSLHFHRISHUPDQHQWDUWWKDWWUDQVFHQGVHSKHPHUDO SRSXODUFXOWXUH,QLWZDVVHOHFWHGIRUSUHVHUYDWLRQLQWKH8QLWHG6WDWHV 1DWLRQDO)LOP5HJLVWU\E\WKH/LEUDU\RI&RQJUHVVDV³FXOWXUDOO\KLVWRULFDOO\RU DHVWKHWLFDOO\VLJQLILFDQW´ 7KHBlade RunnerVSLQQHUVWKHPVHOYHVLQFOXGLQJWKHUHDOZRUOG SK\VLFDOPRGHOYHUVLRQVXVHGLQILOPLQJWKH2ULJLQDO3LFWXUHDUHDOVRHQGXULQJ SLHFHVRIDUWLQWKHLURZQULJKW)RUH[DPSOHRQHRIWKHRULJLQDOBlade Runner VSLQQHUVLVRQSHUPDQHQWH[KLELWDWWKH6FLHQFH)LFWLRQ0XVHXPDQG+DOORI)DPH LQ6HDWWOH:DVKLQJWRQ 7KHBlade RunnerSURSHUW\DOVRKROGVDVSHFLDOSODFHLQILOPKLVWRU\ ZLWKUHVSHFWWRSURGXFWSODFHPHQWVPDUNHWLQJDQGDGYHUWLVLQJ$PRQJRWKHU WKHPHVBlade RunnerGHOYHGLQWRWKHVRFLDODQGFXOWXUDOHIIHFWVRIDGYDQFHG FRQVXPHULVPDQGLVQRWDEOHIRULQWHJUDWLQJUHDOZRUOGEUDQGVVXFKDV&RFD&ROD DQG3DQ$PLQWRWKHILOP¶VG\VWRSLDQIXWXUHYLVLRQ$VPXFKRUPRUHWKDQDQ\ RWKHUILOPSURGXFWSODFHPHQWVDUHDQLQWHJUDOSDUWRIWKHBlade RunnerSURSHUW\ DQGPLOLHX7KLVPHDQVWKDWSURGXFWSODFHPHQWVDUHDQDUWLVWLFDOO\RUJDQLFDVSHFW &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 16 of 132 Page ID #:16 RIWKHBlade RunnerZRUOG)XUWKHULQFOXVLRQRIDEUDQGRQVFUHHQLQDBlade RunnerVWRU\FDQJLYHDEUDQGDQDOPRVWP\VWLFDODQGWLPHOHVVTXDOLW\DQGLQDQ\ HYHQWFOHDUO\HQKDQFHVWKHEUDQG¶VOHJDF\IRUJHQHUDWLRQVLIQRWIRUHYHU ,QDQGBlade RunnerZDVDOVRDUDUHSURSHUW\LQWKDWLWKDG UHPDLQHGIDOORZIRUPRUHWKDQWKLUW\\HDUVZLWKQRDGGLWLRQDOSLFWXUHVFUHDWHG IURPXQWLOWKHUHZHUHQRBlade RunnerVHTXHOVSUHTXHOVWHOHYLVLRQ VHULHVRUDQ\RWKHUPRWLRQSLFWXUHRUWHOHYLVLRQH[WHQVLRQVRIWKHVWRU\$PRQJ RWKHUIDFWRUVWKHFKDLQRIWLWOHWRWKHBlade RunnerSURSHUW\EHFDPHFRPSOH[ WDQJOHGDQGGLYLGHGGLVVXDGLQJDQGREVWUXFWLQJWKHFUHDWLRQRIIXUWKHUSLFWXUHV 2010 to 2016: Alcon Solves the Rights Tangle and Develops a Sequel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¶VPRVWFULWLFDOO\DFFODLPHG &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 17 of 132 Page ID #:17 FRQWHPSRUDU\GLUHFWRUV'HQLV9LOOHQHXYH DQDWLYH)UHQFKVSHDNHUERUQDQGUDLVHG LQ4XHEHF Early 2016: Sony Pictures Entertainment Inc. %\QRODWHUWKDQ-DQXDU\$/&21HQWHUHGLQWRDFRSURGXFWLRQ DQGGLVWULEXWLRQDJUHHPHQWDQGUHODWLRQVKLSZLWK&ROXPELD3LFWXUHV,QGXVWULHV,QF ³&3,,´ DGLUHFWRULQGLUHFWFRUSRUDWHVXEVLGLDU\RI6RQ\3LFWXUHV(QWHUWDLQPHQW ,QF WRJHWKHUKHUHLQ³6RQ\´ UHJDUGLQJFHUWDLQDVSHFWVRIILQDQFLQJSURGXFWLRQ GLVWULEXWLRQSURPRWLRQDQGPDUNHWLQJRI%5DPRQJRWKHUDVSHFWV5HOHYDQW KHUHDVSDUWRIDQGUHODWHGWRWKDWFRQWUDFWXDODQGEXVLQHVVUHODWLRQVKLSZLWK6RQ\ H[HFXWLYHVRI&70*6RQ\¶VDQG&3,,¶6SURGXFWSODFHPHQWFRSURPRWLRQDQG PDUNHWLQJDUPZHUHDXWKRUL]HGWRDQGGLGFRPPXQLFDWHZLWKDQGQHJRWLDWHZLWK SRWHQWLDOEXVLQHVVSDUWQHUVRQWKH%5SURMHFWLQFOXGLQJZLWKUHVSHFWWR SURGXFWSODFHPHQWDQGFRSURPRWLRQDORSSRUWXQLWLHVLQFOXGLQJZLWKERWK 3(8*(27DQG38%/,&,6 $WOHDVWVRPHRIWKHSDUWLHV¶FRPPXQLFDWLRQVUHJDUGLQJ%5 FRQWHPSODWHGRUUHIHUHQFHG&70*DVDSDUW\WRWKHSURGXFWSODFHPHQWDQGFR SURPRWLRQDJUHHPHQWWKDWLVSDUWLDOO\WKHVXEMHFWPDWWHURIWKLV&RPSODLQW$V UHIHUHQFHGHDUOLHUWRWKHH[WHQWWKDW&70*LVRUZDVDSDUW\WRDQ\RIWKH DJUHHPHQWVGLVFXVVHGKHUHLQRURWKHUZLVHKDVRUPLJKWKDYHFODLPVDJDLQVWDQ\RI WKHGHIHQGDQWVZLWKUHVSHFWWR%5WKRVHFODLPVKDYHEHHQDVVLJQHGE\&70* WR$/&21 Logistics of Film Production, Product Placement and Co-Promotions 3/$,17,))SODQQHGIRUDQGDFKLHYHGD³GD\DQGGDWH´JOREDO WKHDWULFDOUHOHDVHRI%5PHDQLQJWKDWWKH3LFWXUHZDVWKHDWULFDOO\UHOHDVHGIRU WKHILUVWWLPHLQVXEVWDQWLDOO\DOOPDMRUWKHDWULFDOPDUNHWVDURXQGWKHZRUOGRQWKH VDPHGD\±2FWREHU 7KHLQLWLDOWKHDWULFDOUHOHDVHRIDQ\PDMRUPRWLRQSLFWXUHUHTXLUHV LQWHQVLYHORJLVWLFDOSODQQLQJ6WULFWDGKHUHQFHWRVFKHGXOHVIRUPRQWKVRUHYHQ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 18 of 132 Page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± OLNH%5±DUHH[FHSWLRQDOO\WLPHVHQVLWLYH3(8*(2738%/,&,6 0(1'(=DQG'2(6WKURXJKDOONQHZWKDWWKLVZDVWUXHIRU%5 )RUDPDMRUSURGXFWSODFHPHQWDQGFRSURPRWLRQLQWHJUDWHGLQWRWKH RYHUDOOVWRU\±OLNHEUDQGLQJWKHPDLQFKDUDFWHU¶VYHKLFOHZLWKDFRSURPRWLRQDO SDUWQHU¶VORJRDQGWUDGHGUHVV±WKHGHDOVPXVWEHQHJRWLDWHGDQGFORVHGRQWKHNH\ WHUPVDVPXFKDVD\HDURUHYHQORQJHUEHIRUHWKHUHOHDVHGDWHRUWKHRSSRUWXQLW\ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 19 of 132 Page ID #:19 ZLOOTXLFNO\EHFRPHVPDOOHUDQGZLOOEHHIIHFWLYHO\ORVWDOWRJHWKHUPDQ\PRQWKV EHIRUHWKHUHOHDVHGDWHLIH[HFXWLRQIDLOV±RULIDSDUW\UHQHJHV 5HOHYDQWWRPDMRUPRWLRQSLFWXUHEUDQGSDUWQHULQJDQGZKDWKDSSHQHG EHWZHHQWKHSDUWLHVKHUHFHUWDLQLQGXVWU\WHUPVDQGUHDOLWLHVDUHZRUWKGLVFXVVLQJ IRUEDFNJURXQG ³3UHSURGXFWLRQ´UHIHUVWRWKHWLPHEHWZHHQWKHJUHHQOLJKWLQJRIWKH SLFWXUH IXQGLQJRISURGXFWLRQ DQGWKHFRPPHQFHPHQWRI³3ULQFLSDO 3KRWRJUDSK\´3UHSURGXFWLRQLQFOXGHVDZLGHUDQJHRISUHSDUDWLRQVIRUDFWXDO SURGXFWLRQLQFOXGLQJWKHFUHDWLRQRIFRQFHSWDUWDQGSK\VLFDOSURSVDQGPRGHOV LQFOXGLQJRIWKLQJVOLNHYHKLFOHVWKDWZLOODSSHDURQVFUHHQLQWKHSLFWXUH ³3ULQFLSDO3KRWRJUDSK\´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³GRRYHU´ ,IDPRWLRQSLFWXUHOLNH%5KDVDQDUUDWLYHZKHUHWKHPDLQ FKDUDFWHUVSHQGVPXFKRIWKHVWRU\WUDYHOLQJLQDQGZLWKDSDUWLFXODUYHKLFOHDQ\ LGHDWKDWWKHYHKLFOH¶VIXQGDPHQWDOORRNDQGGHVLJQFRXOGEHWRWDOO\FKDQJHGDIWHU WKHFRPSOHWLRQRI3ULQFLSDO3KRWRJUDSK\LVFRPPHUFLDOO\XQUHDOLVWLFDQGZRXOGEH HQRUPRXVO\H[SHQVLYHLQDGGLWLRQWRMHRSDUGL]LQJWKHLQWHQGHGUHOHDVHGDWH ³3LFWXUH/RFN´UHIHUVWRWKHVWDJHRISRVWSURGXFWLRQZKHUHWKHWLPLQJ DQGVHTXHQFHRIDOORIWKHVFHQHVLQWKHSLFWXUHKDYHEHHQVHW0DQ\VXEVWDQWLDO FKDQJHVWRDPRWLRQSLFWXUHRFFXUDIWHU3LFWXUH/RFNLQFOXGLQJVRXQGPL[LQJ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 20 of 132 Page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³3LFWXUH'HOLYHU\´UHIHUVWRZKHQWKHILQDOGLJLWDODQGILOPSULQW YHUVLRQVRIWKHILOPWKDWZLOOEHVKRZQLQWKHDWHUVDURXQGZRUOGDUHVHQWRXWWR WKHDWHUV3LFWXUH'HOLYHU\LVWKHXOWLPDWHGHDGOLQHIRUDQ\FKDQJHVWRILOP±DIWHU 3LFWXUH'HOLYHU\QRFKDQJHVWRWKHILOPDVLWZLOODSSHDURQVFUHHQLQWKHDWHUVFDQ EHPDGHDWDOO $OOSURIHVVLRQDOVZKRZRUNDQGWUDQVDFWLQWKHSURGXFWSODFHPHQWDQG FRSURPRWLRQDOILHOGLQFRQQHFWLRQZLWKPRWLRQSLFWXUHVNQRZWKHVHWLPH VHQVLWLYLWLHVDQGUHVWULFWLRQV7KHJUHDWHUWKHUROHRIWKHSODFHPHQWDQGFR SURPRWLRQLQFRQQHFWLRQZLWKWKHILOP¶VVWRU\WKHJUHDWHUWKHVWDNHVDQGWLPH VHQVLWLYLWLHV The BR2049 Spinner Product Placement and Co-Promotion Opportunity %5SUHVHQWHGDQH[FHSWLRQDOO\UDUHDQGKLJKO\YDOXDEOH DXWRPRWLYHSURGXFWSODFHPHQWDQGFRSURPRWLRQDORSSRUWXQLW\ %5¶VSURWDJRQLVWLV³.´ZKRPE\HDUO\KDGDOUHDG\EHHQ FDVWWREHSOD\HGE\WKHKLJKO\FKDULVPDWLFVWDUDFWRU5\DQ*RVOLQJ.LVDEODGH UXQQHURUKXQWHURIURJXHUHSOLFDQWV V\QWKHWLFKXPDQV +HLVDOVRDUHSOLFDQW KLPVHOI%5FHQWHUVDURXQG.¶V+RO\*UDLOOLNHTXHVWWRGLVFRYHUWKHWUXWK DERXWDKXPDQUHSOLFDQWVH[XDOXQLRQWKDWSURGXFHGDK\EULGFKLOGDJDLQVWDOO NQRZQVFLHQWLILFSRVVLELOLW\DQGWKHWUXWKRI.¶VRZQRULJLQVDQGLGHQWLW\ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 21 of 132 Page ID #:21 .KDVWZROR\DOFRPSDQLRQVLQKLVMRXUQH\±KLVORYHU-RLZKRLVD KRORJUDPDQGKLVYHKLFOHDVSLQQHUHYROYHGIURPWKHIO\LQJFDUVRIWKH2ULJLQDO 3LFWXUH.¶VTXHVWWDNHVKLPWRIDUIOXQJDQGIRUELGGHQSODFHVDFURVV%5¶V G\VWRSLDQ6RXWKHUQ&DOLIRUQLDIXWXUHVFDSH.¶VVSLQQHUDFFRPSDQLHVDQGDVVLVWV KLPDOPRVWHYHU\ZKHUH.JRHV.¶VVSLQQHUKDVDVHPLLQWHOOLJHQFHPDNLQJLW QHDUO\VHQWLHQWLWVHOI.¶VVSLQQHUUHVSRQGVWRKLVYRLFHFRPPDQGVSURWHFWV.DQG DVVLVWV.LQKLVWDVNVEH\RQGPHUHWUDQVSRUWDWLRQVHUYLQJDVVHQWU\DQGVFRXWLQ DGGLWLRQWRIO\LQJVWHHG0RUHWKDQMXVWDFDUWKHVSLQQHULVDOPRVWDFKDUDFWHUXQWR LWVHOILQWKH3LFWXUHDQGRQHVWURQJO\DVVRFLDWHGZLWKWKHFKDULVPDWLF*RVOLQJ %5WKXVSUHVHQWHGDJHQHUDWLRQDORSSRUWXQLW\IRUDQDXWRPRWLYH SURGXFWSODFHPHQWDQGFRSURPRWLRQDOSDUWQHUVKLS)RU.¶VVSLQQHUWREHEUDQGHG DVPDGHE\DUHDOZRUOGPDQXIDFWXUHUZRXOGEHDUWLVWLFDOO\RUJDQLFDQGFUHDWLYHO\ WUXHWRWKH2ULJLQDO3LFWXUH¶VOHJDF\DQGWKHPHVZKLFKZHDYHGDQGPRUSKHGUHDO ZRUOGEUDQGVLQWRWKHBlade RunnerDOWHUQDWHIXWXUHKLVWRU\0DNLQJ.¶VVSLQQHUD UHDOZRUOGEUDQGWKXVVHUYHGWKHDUWRIWKH3LFWXUHZKLOHDOVRFOHDUO\EHLQJRI H[WUHPHO\KLJKYDOXHWRDQDXWRPRWLYHEUDQG :LWKHYHQRQO\VHYHUDOVHFRQGVRIRQVFUHHQDVVRFLDWLRQRIDQ DXWRPRWLYHEUDQG¶VORJRDQGWUDGHGUHVVZLWK.¶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¶VVSLQQHULQ%5FRXOG WKXVLPPHGLDWHO\JOREDOO\OLIWUHYLWDOL]HDQGHYHQSRWHQWLDOO\FLQHPDWLFDOO\ LPPRUWDOL]HDEUDQG &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 22 of 132 Page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³5HOHDVH'DWH´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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 23 of 132 Page ID #:23 %\DVHDUO\DV-DQXDU\$/&21ZDVORRNLQJIRUDXWRPRWLYH SURGXFWSODFHPHQWDQGFRSURPRWLRQDOSDUWQHUV %\QRODWHUWKDQ$SULOWKHDXWRPRWLYHSURGXFWSODFHPHQWDQGFR SURPRWLRQDOEXVLQHVVFRPPXQLW\NQHZRIWKH%5RSSRUWXQLW\$/&21KDG UHFHLYHGLQWHUHVWIURPPXOWLSOHJOREDODXWRPRWLYHEUDQGVDQGZDVHIIHFWLYHO\ UXQQLQJDQDXFWLRQ %\DERXWHDUO\0D\WKLVSUDFWLFDODXFWLRQZDVGRZQWRWZR KLJKO\LQWHUHVWHGELGGHUVDPDMRUJOREDOOX[XU\DXWRPRWLYHEUDQGUHIHUUHGWRKHUHLQ DV³$XWRPRWLYH%UDQG=´DQG3(8*(27%RWKELGULFKO\+RZHYHU3(8*(27 ZDVLQWHQWRQFRQWUROOLQJWKHRSSRUWXQLW\DQGELGWKHPRVWULFKO\VRWKDWLWZRXOG Peugeot Intentionally Puts in the Richest Bid to Take Control of the BR2049 Opportunity for Itself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¶VUHOHDVHDQGVXUURXQGLQJLWWKHEUDQGDQG VWXGLRDOVRZRUNWRJHWKHURQDFRSURPRWLRQDOFDPSDLJQ,QVXFKDFDPSDLJQERWK &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 24 of 132 Page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¶6RZQUHFHQWKLVWRU\ZLWKWKHUHPDNHRIPoint Break-HHSYHKLFOHVZHUHSODFHGLQWKHVWRU\RIWKHILOPLWVHOI7RVXSSRUWWKH UHOHDVHRIWKHILOPDQGDOVRWRDGYHUWLVHEUDQG-HHSUDQWHOHYLVLRQDQGRQOLQHYLGHR DGYHUWLVHPHQWVIRU-HHSWKDWLQFOXGHGIRRWDJHIURPWKHILOPVKRZLQJWKHVWDUVRIWKH ILOPHQJDJHGLQYDULRXVGDULQJRXWGRRUDFWLYLWLHVLQFOXGLQJZLWK-HHSYHKLFOHV,Q ERWKWKH$XGL-DPHV%RQGDQG-HHSPoint BreakH[DPSOHVWKHWHOHYLVLRQDQGRWKHU DGYHUWLVHPHQWVVHUYHWRSURPRWHERWKWKHDXWRPRWLYHEUDQGDQGWKHPRWLRQSLFWXUH LQWKHVDPHDGYHUWLVHPHQWDQGRYHUDOOFRSURPRWLRQDOPHGLDFDPSDLJQ )RUUHODWLRQVKLSVLQYROYLQJERWKDSURGXFWSODFHPHQWDQGDFR SURPRWLRQWKHSULFLQJRIWKHGHDOEHWZHHQWKHEUDQGDQGWKHVWXGLRPD\EH VWUXFWXUHGLQWZRSDUWVDVLQJOHSURGXFWSODFHPHQWIHHZKLFKLVFDVKSDLGGLUHFWO\ IURPWKHEUDQG RUWKHEUDQG¶VUHSUHVHQWDWLYH WRWKHVWXGLRDQGDQDJUHHG PLQLPXP³PHGLDVSHQG´7KHPHGLDVSHQGLVW\SLFDOO\PDJQLWXGHVODUJHUWKDQWKH SURGXFWSODFHPHQWIHHDQGLVQRWSDLGE\WKHEUDQGGLUHFWO\WRWKHVWXGLR5DWKHU WKHPHGLDVSHQG¶VGROODUILJXUHUHSUHVHQWVWKHJXDUDQWHHGPLQLPXPGROODUYDOXHRI WKHSDLGPHGLD WHOHYLVLRQDGYHUWLVHPHQWVUDGLRDGYHUWLVHPHQWVGLJLWDO DGYHUWLVHPHQWVDQGWKHOLNH WKDWWKHEUDQGFRPPLWVWRSURGXFHDQGSXWLQWRWKH VWUHDPRIFRPPHUFHWRPDUNHWWKHILOP DQGWKHEUDQGDWWKHVDPHWLPH &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 25 of 132 Page ID #:25 $OWKRXJKWKHPHGLDVSHQGGRHVQRWJRGLUHFWO\WRWKHVWXGLRD JXDUDQWHHGFRSURPRWLRQDOPHGLDVSHQGKDVKLJKYDOXHWRDILOPDQGRQFH FRPPLWWHGWKHVWXGLRUHOLHVRQLW7KHPDUNHWLQJDQGSURPRWLRQDOHIIRUWUHTXLUHG WRPDNHDJOREDODXGLHQFHDZDUHRIWKHGD\DQGGDWHUHOHDVHRIDPDMRUPRWLRQ SLFWXUHDQGJLYHWKHUHOHDVHWKHEHVWFKDQFHWRVXFFHHGUHTXLUHVLQWKHWHQVRI PLOOLRQVRIGROODUVDQGFDQH[FHHGDKXQGUHGPLOOLRQGROODUV7KDWDEUDQGKDV FRPPLWWHGWRDJXDUDQWHHGFRSURPRWLRQDOPHGLDVSHQGWKXVEROVWHUVWKHPDUNHWLQJ DQGDGYHUWLVLQJRIWKHILOPLQFUHDVLQJLWVFKDQFHVIRUVXFFHVVDQGDOVRUHGXFHVWKH PDUNHWLQJDQGDGYHUWLVLQJEXUGHQWKDWWKHVWXGLRRWKHUZLVHPXVWILQDQFHGLUHFWO\ RXWRILWVRZQSRFNHW7KHPRUHPDUNHWLQJDQGDGYHUWLVLQJH[SHQVHVWKDWWKHVWXGLR KDVWRSD\IRULWVHOI YHUVXVWKURXJKDFRSURPRWLRQDOPHGLDVSHQGE\DEUDQG WKH JUHDWHUWKHKXUGOHIRUWKHILOPWREHDILQDQFLDOVXFFHVVEHFDXVHWKHJUHDWHUWKH DPRXQWRIPRQH\WKHILOPPXVWJHQHUDWHIURPDXGLHQFHVDQGOLFHQVHHVEHIRUHLWFDQ RYHUFRPHGLVWULEXWLRQH[SHQVHVDQGWKHQSURGXFWLRQFRVWVWRKRSHIXOO\DWVRPH SRLQWEHFRPHSURILWDEOH&RSURPRWLRQDOPHGLDVSHQGVWKXVKDYHKLJKYDOXHWRWKH VWXGLRHYHQWKRXJKWKHPHGLDVSHQGLVQRWLWVHOISDLGGLUHFWO\WRWKHVWXGLR 3URGXFWSODFHPHQWVDQGFRSURPRWLRQDOPHGLDVSHQGVDQGFUHDWLYLW\ LQLPSOHPHQWLQJWKHPKDYHEHFRPHHYHQPRUHYDOXDEOHWRERWKEUDQGVDQGVWXGLRV DVWKHZRUOGFRQWLQXHVWRPRYHIXUWKHULQWRWKH,QIRUPDWLRQ$JH7RGD\¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 26 of 132 Page ID #:26 PLOOHQQLDOVHHVWKHWUDGLWLRQDOEURDGFDVWWHOHYLVLRQDGWKH\DUHOHVVOLNHO\WREHDV LQIOXHQFHGE\LWWKDQSDVWJHQHUDWLRQVDVWKH\KDYHJURZQXSPRUHFRQVWDQWO\ ERPEDUGHGE\FRPPHUFLDODGYHUWLVLQJ 7KHEHVWH[HFXWHGPRVWYDOXDEOHDQGPRVWHIIHFWLYHSURGXFW SODFHPHQWDQGFRSURPRWLRQDOPHGLDVSHQGH[SHULHQFHVIRUEUDQGVVWXGLRVDQG FRQVXPHUVDUHWKRVHZKHUHWKHEUDQGFDQRUJDQLFDOO\EHSDUWRIWKHVWRU\RIWKHILOP RUWHOHYLVLRQHSLVRGHLWVHOIDQGZKHUHWKHFRSURPRWLRQDOFDPSDLJQDOVRKHOSV VXSSRUWDGYDQFHRUHQULFKWKHILOP¶VVWRU\DWWKHVDPHWLPHWKDWLWLQFUHDVHVEUDQG DZDUHQHVVZLWKDXGLHQFHV)RUH[DPSOHWKHFRSURPRWLRQDODGYHUWLVHPHQWVPLJKW EHXVHGWRWHOOVKRUW³RIIVFUHHQ´VWRULHVWKDWPLJKWVHUYHDVDSUHDPEOHWRDQGSUH HGXFDWLRQRIWKHDXGLHQFHDERXWWKHILOP¶VVWRU\HYHQEHIRUHWKHILOP¶VUHOHDVH 7KHEHVWFRSURPRWLRQDOFDPSDLJQVPLJKWDOVRLQFOXGHHYHQW PDUNHWLQJZKHUHDXGLHQFHVKDYHWKHRSSRUWXQLW\WRLQWHUDFWGLUHFWO\LQDQ H[SHULHQWLDOZD\ZLWKWKHEUDQGDQGWKHILOP¶VVWRU\RUZRUOG±IRUH[DPSOHDUHDO ZRUOGSK\VLFDOO\LPPHUVLYHHYHQWDWDIDQFRQYHQWLRQRURWKHUYHQXH OLNHDQDXWR VKRZ ZKHUHDXGLHQFHVPLJKWJHWWRVHHRUHYHQWRXFKSK\VLFDOSURSVIURPWKHILOP IHDWXULQJWKHSODFHGEUDQGLQJ 7KH%5.VSLQQHUSODFHPHQWRSSRUWXQLW\ZDVDWWKHIDUKLJKHQG RIWKHVSHFWUXPLQWHUPVRIZKDWLWRIIHUHGERWKLQSRVVLELOLWLHVIRUWKHEUDQGDQG WKHH[SHFWDWLRQVIRU$/&21,WZDVQRPHUHVLQJOHVHTXHQFHSODFHPHQW,QGHHG LQHYLWDEO\DQ\PHDQLQJIXODVVRFLDWLRQRIDQDXWRPRWLYHEUDQGZLWK.¶VVSLQQHU HYHQLQDVLQJOHVHTXHQFHZRXOGHIIHFWLYHO\SODFHWKHEUDQGLQGHOLEO\LQWRWKH HQWLUHVWRU\RIWKHILOPDQGVWURQJO\DVVRFLDWHWKHEUDQGZLWK*RVOLQJWRRJLYHQWKH VSLQQHU¶VUROHLQWKH%5VWRU\ 0RUHRYHUHVSHFLDOO\JLYHQWKDWPRUHWKDQWKLUW\ILYH\HDUVKDGSDVVHG VLQFHWKHUHOHDVHRIWKH2ULJLQDO3LFWXUHWKHPDUNHWLQJDQGSURPRWLRQDOSODQIRU %5DOUHDG\FRQWHPSODWHGWKHSUHUHOHDVHJHQHUDWLRQDQGGLVWULEXWLRQRIVKRUW IRUPYLGHRFRQWHQWUHOHDVHGWKURXJK SODWIRUPVDQGGHVLJQHGWR³SUHWHOO´WRWKHDXGLHQFHVRPHRIZKDWKDGKDSSHQHGLQ WKHBlade RunnerZRUOGEHWZHHQWKHWLPHRIWKH2ULJLQDO3LFWXUHDQG%5 ZKLFKWDNHVSODFHWKLUW\\HDUVODWHU7KXVWKHRSSRUWXQLW\ZDVDOVRHVSHFLDOO\ SULPHGIRUDEUDQGWRZRUNZLWKWKHVWXGLRWRSUHHVWDEOLVKWRDXGLHQFHVWKDW.¶V VSLQQHUZDVDSDUWLFXODUDXWRPRWLYHPDNHWKURXJKWKHXVHRIHLWKHUVKRUWIRUP YLGHRFRQWHQWRUWUDGLWLRQDODGYHUWLVLQJRURWKHUK\EULGPDUNHWLQJDQGVWRU\WHOOLQJ PHWKRGVHYHQEHIRUHWKHILOP¶VUHOHDVH 7KHBlade RunnerIDQEDVHLVDIHUYHQWRQHDQGLWZDVGHVSHUDWHO\ KXQJU\LQWKHPRQWKVDQGHYHQ\HDUVSULRUWR%5¶VUHOHDVHIRUDQ\DQGDOO LQIRUPDWLRQDERXW%5DQGZKDWVXUSULVHVLWPLJKWKROG$UHOHDVHRIHYHQD VLQJOHSKRWRJUDSKRI.¶VVSLQQHUDVIRUH[DPSOH3HXJHRWEUDQGHGLQWKHPRQWKV OHDGLQJXSWR%5¶VUHOHDVHZRXOGDOPRVWFHUWDLQO\KDYHEHHQYLUDOO\FLUFXODWHG DQGGLVFXVVHGRQWKH,QWHUQHWDQGHOVHZKHUHE\KXQGUHGVRIWKRXVDQGVRUHYHQ PLOOLRQVRIFRQVXPHUVDQGLQHQWHUWDLQPHQWPHGLDPDJD]LQHVDQGSURJUDPVHYHQ ZLWKRXWDQ\SDLGPHGLDDWDOO )LQDOO\OLNHWKH2ULJLQDO3LFWXUHSK\VLFDOSURSVRI.¶VVSLQQHU LQFOXGLQJIXOOVL]HSK\VLFDOYHUVLRQVRIWKHYHKLFOHLQFOXGLQJZLWKEUDQGLQJZRXOG EHPDGH7KLVSUHVHQWHGWKHRSSRUWXQLW\WRKDYHDSK\VLFDOYHKLFOHWKDWFRXOG DFWXDOO\WUDYHODQGDSSHDUDWH[SHULHQWLDOPDUNHWLQJHYHQWVOLNHDXWRVKRZVDQG HQWHUWDLQPHQWIDQFRQYHQWLRQV IRUGHFDGHV DQGWKDWKDGWKHUHDOLVWLFSURVSHFWRI SHUPDQHQWSODFHPHQWIRURQJRLQJSXEOLFH[KLELWLRQLQYHQXHVOLNH6HDWWOH¶V6FLHQFH )LFWLRQ0XVHXPDQG+DOORI)DPHDVLQGHHGKDSSHQHGIRUWKH2ULJLQDO3LFWXUH¶V OLIHVL]HVSLQQHUPRGHO $XWRPRWLYH%UDQG=3(8*(27DQGDOORWKHUELGGHUVXQGHUVWRRG WKDWJLYHQDOORIWKHDERYHIDFWRUVDQGWKHH[FHSWLRQDOO\KLJKYDOXHRIWKH RSSRUWXQLW\$/&21ZRXOGQHYHUDFFHSWDGHDOIRUDSURGXFWSODFHPHQWZLWKRXWD PHGLDVSHQG$ELGE\DQDXWRSDUWQHUWRSD\$/&21RQO\DSURGXFWSODFHPHQW IHHRIRQO\VHYHUDOKXQGUHGWKRXVDQGGROODUVZLWKRXWDFRPPLWPHQWWRDPDMRU &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 28 of 132 Page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¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 29 of 132 Page ID #:29 PDMRUPRWLRQSLFWXUHSODQQHGIRUUHOHDVHRQWKRXVDQGVRI86PRYLHVFUHHQVDQG WKDWZRXOGDOPRVWFHUWDLQO\EHVHHQE\WHQVRIPLOOLRQVRI86FRQVXPHUV WKHDWULFDOO\DQGLQVXEVHTXHQWZLQGRZVEXWWKDWFRXOGEHHIIHFWLYHO\SDLGIRUZLWK LQWHUQDWLRQDOPHGLDVSHQGGROODUVPHVKHGXQXVXDOO\ZHOOZLWK3(8*(27¶6QHHGV DQGLQWHUHVWV 7RHQJDJHZLWK$/&21RQWKLVRSSRUWXQLW\3(8*(27HPSOR\HGDW OHDVWWKUHHGLIIHUHQWDJHQFLHV38%/,&,6%(7&DQG%UDQGHG(QWHUWDLQPHQW 1HWZRUN ³%(1´ %(7&LVD)UHQFKDGYHUWLVLQJDJHQF\IRXQGHGLQ3DULVLQ DQGLVDJOREDOO\DFFODLPHGFUHDWLYHDJHQF\3/$,17,))LVLQIRUPHGDQGEHOLHYHV DQGRQWKDWEDVLVDOOHJHVWKDWLQWKHWRWLPHIUDPH%(7&DOUHDG\KDGD VLJQLILFDQWFRQWLQXRXVDQGV\VWHPDWLF&DOLIRUQLDSUHVHQFHDQGDFWXDOO\RSHQHGD SK\VLFDORIILFHLQ/RV$QJHOHVRQRUDERXW2FWREHU 38%/,&,6¶6UHSUHVHQWDWLRQRI3(8*(27UHJDUGLQJ%5ZDV KDQGOHGZLWK38%/,&,6¶6&DVDEODQFDGLYLVLRQRUDJHQF\VHUYLQJDVWKHGD\WR GD\SRLQWIRU3(8*(27ZLWK&DVDEODQFD¶VSHUVRQQHODFWLYHO\VXSSRUWHGDQG EDFNHGE\WKHODUJHU38%/,&,6RUJDQL]DWLRQLQFOXGLQJWKH38%/,&,6OHJDOWHDP %(1LVD/RV$QJHOHVEDVHGDGYHUWLVLQJDJHQF\%(1¶6 FRPPXQLFDWLRQVZLWK$/&21UHJDUGLQJWKH%5RSSRUWXQLW\RQEHKDOIRI 3(8*(27ZHUHKDQGOHGSULPDULO\E\5HLNR3RUWHUDWWKHWLPHD%(10DQDJHU ZKRUHVLGHVDQGZRUNVLQWKHJUHDWHU/RV$QJHOHVDUHD 3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW 3(8*(270(1'(=38%/,&,6%(1DQGRU%(7&DOONQHZWKDW$/&21KDG PXOWLSOHFRPSHWLQJELGVIRUWKHRSSRUWXQLW\DQGWKDWWKHUHZDVDWOHDVWRQHRWKHU FRPSHWLQJELGGHUWKDWZDVOLNHO\WRZLQWKHELGXQOHVV3(8*(27SXWLQDULFKELG $XWRPRWLYH%UDQG=¶VELGWR$/&21IRUWKLVRSSRUWXQLW\ZDVSULFHG DVDVHYHUDOKXQGUHGWKRXVDQGGROODUSURGXFWSODFHPHQWIHHWREHPDGHGLUHFWO\WR WKHVWXGLRDQGDJXDUDQWHHGPLQLPXPPHGLDVSHQGFRPPLWPHQWRIDERXW PLOOLRQ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 30 of 132 Page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±WRPDNH$/&21DQRIIHUWKDW$/&21ZRXOGEHXQDEOHWRUHIXVH %\HDUO\0D\3(8*(27KDGVXEPLWWHGDWOHDVWRQHELGEXW RQHWKDWKDGFOHDUO\QRWZRQWKHELGGLQJ3(8*(27¶6ELGKDGWREHVZHHWHQHGWR ZLQ $VWKHQXPEHURIELGGHUVQDUURZVDQGWKHUHPDLQLQJELGGHUVEHFRPH PRUHDQGPRUHOLNHO\WREHWKHXOWLPDWHSRWHQWLDOSDUWQHUPRUHLQIRUPDWLRQDERXW WKHSURMHFWLVRIWHQVKDUHGDQGIRUDFORVHO\JXDUGHGSURMHFWOLNH%5RQD FRQILGHQWLDOEDVLV %\RQRUDERXW0D\5HLNR3RUWHUIRU%(1LQUHSUHVHQWDWLRQ RI3(8*(27ZLWKUHVSHFWWR%5KDGVLJQHGDFRQILGHQWLDOLW\DJUHHPHQWZLWK $/&21SXUVXDQWWRZKLFK%(1DJUHHGWKDWLWDQGLWVSULQFLSDOVLQFOXGLQJ 3(8*(27QRWRQO\ZRXOGWUHDWDOO%5LQIRUPDWLRQDVFRQILGHQWLDOEXWDOVR WKDWWKHSDUWLHV¶UHODWLRQVKLSDQGWKHFRPPXQLFDWLRQVDERXWLWZRXOGEHJRYHUQHG E\WKHODZVRIWKH6WDWHRI&DOLIRUQLD3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQ WKDWEDVLVDOOHJHVWKDWWKLVFRQILGHQWLDOLW\DJUHHPHQWZDVVLJQHGE\3RUWHUZKLOH 3RUWHUZDVLQ&DOLIRUQLD ZKHUHKHZRUNVDQGUHVLGHV DQGZDVGHOLYHUHGWR $/&21LQ&DOLIRUQLDE\3RUWHURQEHKDOIRI%(1DQG3(8*(273/$,17,))LV &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 31 of 132 Page ID #:31 LQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW3(8*(27DQG0(1'(= NQHZDQGXQGHUVWRRGWKHFRQWHQWRIWKHFRQILGHQWLDOLW\DJUHHPHQWDQGDXWKRUL]HG 3RUWHUWRH[HFXWHLWDQGRUODWHUUDWLILHGKLVH[HFXWLRQRILW3/$,17,))LVWKXV LQIRUPHGDQGEHOLHYHVDQGWKHUHRQDOOHJHVWKDWQRWRQO\GLG3(8*(27DQG 0(1'(=H[SUHVVO\DXWKRUL]H%(1¶VELGGLQJIRU3(8*(27RQWKH%5 RSSRUWXQLW\3(8*(27DQG0(1'(=ERWKNQHZDQGXQGHUVWRRGDWWKHWLPHRI ELGGLQJWKDWWKHGHDODQGWKHSDUWLHV¶FRPPXQLFDWLRQVZRXOGEHJRYHUQHGE\ &DOLIRUQLDODZ 2Q0D\DW3(8*(27¶6DQG0(1'(=¶6GLUHFWLRQDQGRU ZLWK3(8*(27¶6DQG0(1'(=¶6DSSURYDODQGDXWKRULW\DQGRUVXEVHTXHQW UDWLILFDWLRQ3RUWHUVHQWDQHPDLOWR-RVKXD5DYHWFK$/&21¶6SURGXFWSODFHPHQW OHDGVSHFLILFDOO\VZHHWHQLQJ3(8*(27¶6SULRUELGE\DGGLQJDPDVVLYH JXDUDQWHHGPHGLDVSHQG 5DYHWFKZKRUHFHLYHGWKHHPDLOIURP3RUWHUZRUNVDQGUHVLGHVLQ &DOLIRUQLDDV3RUWHU%(13(8*(270(1'(=DQG38%/,&,6DOONQHZ 7KH0D\3RUWHUWR5DYHWFKHPDLODQGUHODWHG FRPPXQLFDWLRQVUHOD\HGDSURSRVDOIURP3(8*(27IRUDSURGXFWSODFHPHQWDQG FRSURPRWLRQDOGHDOZKHUH3(8*(27ZRXOGSD\$/&21GLUHFWO\DSURGXFW SODFHPHQWIHHRIDQGFRPPLWWRDJXDUDQWHHGPHGLDVSHQGRIDPLQLPXP PLOOLRQWRPLOOLRQIROORZHGE\LQEROGOHWWHUV³ZLWKSRWHQWLDOWRULVHWR PLOOLRQ´3(8*(27DQG%(1DOVRODLGRXWDSRVVLEOHSODQIRUVSHFLILFPHGLD VSHQGVE\WHUULWRU\ %\LWV0D\ELG3(8*(27FOHDUO\VSHFLILFDOO\LQWHQGHGWKDW LWZDVWKHpromotional spend proposal QRWDQ\PHUHVHYHUDOKXQGUHGWKRXVDQG GROODUSURGXFWSODFHPHQWIHH WKDWVKRXOGLQGXFH$/&21WRGHDOZLWK3(8*(27 UDWKHUWKDQRWKHUELGGHUV,QGHHGDIWHUOD\LQJRXWWKHGHWDLOVRIWKHXSWR PLOOLRQFRSURPRWLRQWKDW3(8*(27HQYLVLRQHGDQGGDQJOHG3RUWHUVSHFLILFDOO\ ZURWH³3HXJHRWLVH[FLWHGDERXWWKHSRVVLELOLW\RISDUWQHULQJRQ%ODGH5XQQHUDQG &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 32 of 132 Page ID #:32 that this new promotional insightZLOOEHNH\WRPRYLQJIRUZDUGZLWK QHJRWLDWLRQV´ (PSKDVLVDGGHG :KDW3RUWHUPHDQWE\WKLVDQGZKDWDOOLQYROYHGXQGHUVWRRGZDVWKDW 3(8*(27NQHZWKDW3(8*(27¶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¶VVSLQQHUDQG DVPDOOHUQXPEHURIVFHQHV ZKHUHWKH3(8*(27ORJRZRXOGDSSHDURQVFUHHQDVDIHDWXUHRIWKH%5 ZRUOGVXFKDVLQDZDOODGRUVN\VFUDSHUDGLQWKHEDFNJURXQG DOVRVRPHWLPHV FDOOHGE\WKHSDUWLHVD³KRORJUDSKLFDGYHUWLVHPHQW´ )URPWKH0D\FRPPXQLFDWLRQIRUZDUG XQWLODSSUR[LPDWHO\ D\HDUODWHUZKHQ3(8*(27WULHGWRIDEULFDWHMXVWLILFDWLRQVIRUEUHDFK 3(8*(27FRQVLVWHQWO\FRPPXQLFDWHGWKDWZKLOH3(8*(27GHVLUHGERWKW\SHV RILQWHJUDWLRQVRIWKHWZRW\SHVWKHYHKLFOHLQWHJUDWLRQVZHUHIDUPRUHLPSRUWDQW WR3(8*(27WKDQWKHZDOODGLQWHJUDWLRQV 3/$,17,))FDQQRWEHDZDUHRIZKDWSUHFLVHO\ZDVLQ3(8*(27¶6 DQG0(1'(=¶6PLQGVDWWKHWLPHEXWEDVHGRQKRZWKLQJVSOD\HGRXW 3/$,17,))DOOHJHVDQGSOHDGVKHUHDOWHUQDWLYHVHWVRIIDFWVZLWKUHVSHFWWR 3(8*(27¶6DQG0(1'(=¶6LQWHQWLQFDXVLQJ3RUWHUDQG%(1WRUDPSXS 3(8*(27¶6ELGGLQJSRVLWLRQUDGLFDOO\LQWKLVZD\ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 33 of 132 Page ID #:33 ,QRQHDOWHUQDWLYH3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDW EDVLVDOOHJHVWKDW3(8*(27DQG0(1'(=IXOO\LQWHQGHGWRDWWHPSWWRFORVHDQG SHUIRUPDQDJUHHPHQWZLWK$/&21RQWKHDERYHWHUPVEXWWKDWFLUFXPVWDQFHV VXFKDVDFKDQJHLQ3(8*(27¶6ILQDQFLDOVLWXDWLRQRURWKHUZLVHODWHUFDXVHG 3(8*(27DQG0(1'(=WRGHQ\HYHQWKHEDVLFIDFWVRIWKHQHJRWLDWLRQVDQGWKH WHUPVRIWKHSDUWLHV¶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³\HV´IURPKHU VXSHULRUV±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¶6IUDXGWKH\GLGVRZLWKRXWNQRZLQJ WKH\ZHUHGRLQJVRDWOHDVWLQLWLDOO\ ,QDWKLUGDOWHUQDWLYH3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQG WKHUHRQDOOHJHVWKDWWKHDERYHIUDXGXOHQWVFKHPHZDVQRW0(1'(=¶6DORQHZLWKLQ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 34 of 132 Page ID #:34 3(8*(27EXWWKDW0(1'(=¶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¶VJRRGIDLWK PLOOLRQSOXVELG ZKLFK3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGWKHUHRQDOOHJHV WKDW3(8*(27DQG0(1'(=EHOLHYHGWREHHYHQKLJKHUWKDQLWDFWXDOO\ZDV 3(8*(27DQG0(1'(=LQWHQWLRQDOO\ZHQWIRUZDUGZLWKWKHIUDXGXOHQWVFKHPH DQ\ZD\HYHQWKRXJKWKH\NQHZWKDWWKHSRWHQWLDOGDPDJHWR$/&21ZRXOGEH PDVVLYHLIWKH\FDUULHGWKHVFKHPHDOOWKHZD\WRIUXLWLRQDQGEDFNHGRXWRIWKHGHDO LQEDGIDLWK 7KH0D\3RUWHUWR5DYHWFKSURSRVDOIURP3(8*(27DQG 3(8*(27¶6UHODWHGFRPPXQLFDWLRQVWR$/&21DWWKLVWLPHVRRQKDGWKH LQWHQGHGHIIHFW $/&21H[SUHVVHGVWURQJLQWHUHVWLQ3(8*(27¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 35 of 132 Page ID #:35 WKDWWKHSDUWLHV¶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eugeot Binds Itself to Contractual and Other Duties to Alcon %HWZHHQ0D\DQGHDUO\-XO\3(8*(27DQG$/&21 ZLWK&70*H[HFXWLYHV LQFOXGLQJWKURXJKWKHLUUHVSHFWLYHUHSUHVHQWDWLYHV FRQWLQXHGWRGLVFXVVDQGQHJRWLDWHDERXWWKH%5RSSRUWXQLW\ 2QRUDERXW-XO\+HUYH0RQWURQD&DVDEODQFD 38%/,&,6 H[HFXWLYHWUDQVPLWWHGDWZRSDJHGRFXPHQWHQWLWOHG³%ODGH5XQQHU,, $JUHHPHQWLQ3ULQFLSOH´IURP3DULVWR$/&21DQGRU$/&21¶6UHSUHVHQWDWLYHV LQ&DOLIRUQLDRQEHKDOIRI3(8*(277KHSDUWLHVVRPHWLPHVUHIHUWRWKLV GRFXPHQWDVWKH³-XO\/HWWHURI,QWHQW´RU³-XO\/2,´ 3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW 3(8*(27DQG0(1'(=H[SUHVVO\DSSURYHG0RQWURQ¶VWUDQVPLVVLRQRIWKH-XO\ /2,WR$/&21DQGRU$/&21¶6UHSUHVHQWDWLYHVDQGRUUDWLILHGLW &RQVLVWHQWZLWK$/&21¶6DOWHUQDWLYHSOHDGLQJWKHRULHVRQ0(1'(=¶6DQG 3(8*(27¶6LQWHQWDVDUWLFXODWHGLQSULRUSDUDJUDSKV$/&21SOHDGVDVRQH IDFWXDODOWHUQDWLYHWKDW0(1'(=HLWKHUZLWKRUZLWKRXWWKHNQRZOHGJHRIKHU &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 36 of 132 Page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¶VVSLQQHU E 2QFHWKH.6SLQQHUEDGJLQJDQGIHDWXUHGHVLJQVZHUHDSSURYHGE\ 3(8*(27WKH\ZRXOGEHORFNHGDQG3(8*(27ZRXOGQRWEHDEOHWR FKDQJHRUGLVDSSURYHWKHPODWHU F 7KHILQLVKHG%5ILOPZRXOGLQFOXGHDWOHDVWVHYHUDOVHFRQGVRI IRRWDJHLQZKLFK3(8*(27¶6ORJRDQGEDGJLQJZRXOGEHFOHDUO\ YLVLEOHWRWKHDXGLHQFHZLWK3(8*(27DVNLQJ EXWZLWKWKHIROORZLQJ SRLQWVVWLOOVXEMHFWWRGLVFXVVLRQ WKDWWKHYLVLELOLW\RFFXUDFURVVWKUHH VFHQHVRIIRXU VHFRQGVHDFK IRUD3(8*(27UHTXHVWHGWRWDORI WZHOYH VHFRQGV ZLWKRIWKHVFHQHVEHLQJRI.¶VVSLQQHUEDGJLQJ DQGWKHWKLUGVFHQHEHLQJWKH3HXJHRWORJRLQDQH[WHUQDO DGYHUWLVHPHQWZDOODG VRPHWLPHVFDOOHGD³KRORJUDSKLF DGYHUWLVHPHQW´ G 7KHH[HFXWLRQRIWKHSODFHPHQWIRRWDJHZDVVXEMHFWWR3(8*(27¶6 UHYLHZDQGDSSURYDOZKLFKPHDQWUHYLHZDQGDSSURYDOZLWKLQLQGXVWU\ FXVWRPDU\SDUDPHWHUVPHDQLQJinter aliaUHYLHZZDVWREHSURPSW DQGWR3(8*(27¶6UHDVRQDEOHDQGJRRGIDLWKDSSURYDODQG &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 37 of 132 Page ID #:37 VDWLVIDFWLRQDQGZLWKLQWKHFUHDWLYHDQGDUWLVWLFSDUDPHWHUVRIWKHILOP DQGZKLFKUHYLHZDQGDSSURYDOZDVWREHFRQGXFWHGE\3(8*(27 ZLWKRXWXQUHDVRQDEOHGLVUXSWLRQRIWKHILOP¶VVFKHGXOHLQFOXGLQJ 3LFWXUH/RFN)LOP'HOLYHU\DQG5HOHDVH'DWH H 7KH3HXJHRWVSLQQHUEDGJLQJZRXOGEHDVVRFLDWHGZLWK5\DQ*RVOLQJ¶V FKDUDFWHU. I 5\DQ*RVOLQJ¶VFKDUDFWHU.ZRXOGQRWEHDVVRFLDWHGZLWKDQ\ULYDO DXWRPRELOHEUDQG J 7KH3HXJHRWEUDQGZRXOGQRWEHSUHVHQWHGLQDSHUMRUDWLYHFRQWH[W K ,QFOXGLQJERWKSXUVXDQWWRLQGXVWU\FXVWRPDQGSUDFWLFHDQGWKHSDUWLHV¶ H[SUHVVDQGLPSOLFLWGLVFXVVLRQVLIXSRQUHYLHZ3(8*(27ZDVQRW UHDVRQDEO\DQGLQJRRGIDLWKVDWLVILHGZLWKDSURSRVHGH[HFXWLRQRIWKH IRRWDJHSODFHPHQWWKHQ3(8*(27ZDVWRHQJDJHZLWK$/&21 UHDVRQDEO\DQGLQJRRGIDLWKRQFKDQJHVRUHQKDQFHPHQWVVXFKWKDW 3(8*(27ZRXOGEHDEOHWRJLYHLWVUHDVRQDEOHDQGJRRGIDLWK DSSURYDODOVRDJDLQZLWKLQWKHFUHDWLYHDQGDUWLVWLFSDUDPHWHUVRIWKH ILOP)XUWKHUWKLVSURFHVVZDVWREHFRQGXFWHGE\3(8*(27ZLWKRXW XQUHDVRQDEOHGLVUXSWLRQRIWKHILOP¶VVFKHGXOHLQFOXGLQJ3LFWXUH/RFN )LOP'HOLYHU\DQG5HOHDVH'DWH L ,I$/&21GHOLYHUHGDVDWLVIDFWRU\SODFHPHQWXQGHUWKHDERYH SDUDPHWHUVWKHQ3(8*(27ZRXOGEHREOLJDWHGWRSD\ GLUHFWO\WR$/&21DVDSURGXFWSODFHPHQWIHHDQGZRXOGDOVREH REOLJDWHGWRZRUNZLWK$/&21WRSODQILQDQFHDQGH[HFXWHDJOREDO FRSURPRWLRQPHGLDFDPSDLJQ ZKLFKFRXOGH[FOXGHWKH86 WR VXSSRUWWKH2FWREHUGD\DQGGDWHJOREDOWKHDWULFDOUHOHDVHRI WKH3LFWXUHZLWK3(8*(27REOLJDWHGWRGHOLYHUDWOHDVWPLOOLRQRI SDLGPHGLD &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 38 of 132 Page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¶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±WKHUH ZDVQRFRPPXQLFDWLRQIURP3(8*(27RU38%/,&,6IRUH[DPSOHWKDWDPHGLD VSHQGZRXOGKDYHWRFRPHIURP3(8*(27¶6UHWDLOGHDOHUVLQORFDOWHUULWRULHVZKR ZHUHQRWXQGHU3(8*(27¶6FRQWURO8QDZDUHRI0(1'(=¶6DQGRU 3(8*(27¶6EDGIDLWKDQGDQ\VXFKXQGLVFORVHGKLJKO\PDWHULDOLQIRUPDWLRQE\ QRODWHUWKDQDSSUR[LPDWHO\-XO\$/&21KDGIRUHJRQHWKHRSSRUWXQLW\ WRHQWHULQWRGHDOVZLWKRWKHUELGGHUVLQFOXGLQJZLWKRXWOLPLWDWLRQWKHPLOOLRQ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 39 of 132 Page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¶6DQG0(1'(=¶6 PLQGVRYHUDSSUR[LPDWHO\WKHQH[W\HDU3(8*(27SULPDULO\WKURXJK0(1'(= ZDVQHYHUQHJRWLDWLQJLQJRRGIDLWKZLWK$/&215DWKHU3(8*(27DQG 0(1'(=ZHUHLQWHQWLRQDOO\OHDGLQJ$/&21IXUWKHUDQGIXUWKHUGRZQDURDG ZKHUHLWZRXOGEHPRUHDQGPRUHGLIILFXOWIRU$/&21HYHUWRSDUWQHURQWKH %5RSSRUWXQLW\ZLWKDQ\RWKHUDXWRPRWLYHEUDQG3(8*(27DQG0(1'(= IUDXGXOHQWO\DQGLQEDGIDLWKZLWKKHOGDQGFRQFHDOHGIURP$/&21ZKDWZDV DFWXDOO\LQ3(8*(27¶6DQG0(1'(=¶6PLQGVLIDWDQ\SRLQW3(8*(27RU 0(1'(=GHFLGHGIRUWKHLURZQSHUVRQDORUFRUSRUDWHH[SHGLHQFLHVQRWWRJR IRUZDUGZLWKWKHGHDORUDQ\SDUWRILWWKH\ZRXOGWDNHWKHSRVLWLRQWKDWWKHUHQHYHU ZDVDELQGLQJFRQWUDFWRIDQ\NLQGDQGRUWKH\ZRXOGFODLPDUELWUDU\GLVVDWLVIDFWLRQ ZLWK$/&21¶6SHUIRUPDQFHWRDYRLGWKHLURZQREOLJDWLRQVHYHQLILWZDVWRRODWH IRU$/&21WRUHFRYHUIURP0(1'(=¶6DQGRU3(8*(27¶6EDGIDLWKDQGIUDXG Alcon Performs and Proceeds in Good Faith :LWKWKH-XO\/2,LQSODFHLQRUDERXWWKHODWWHUKDOIRI-XO\ 3(8*(2738%/,&,6DQG$/&21DOOZRUNHGWRJHWKHUWRIDFLOLWDWHDQLQ SHUVRQYLVLWE\3(8*(27DQG38%/,&,6WR%5¶VSURGXFWLRQRIILFHVDQGVHWV LQ%XGDSHVW+XQJDU\ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 40 of 132 Page ID #:40 2QRUDERXW-XO\DVDQ$/&21FRQGLWLRQWRWKH%XGDSHVW VHWYLVLW0(1'(=LQUHSUHVHQWDWLRQRI3(8*(27ZLWKUHVSHFWWR%5DQG DOVRELQGLQJKHUVHOIDVDQLQGLYLGXDOVLJQHGDFRQILGHQWLDOLW\DJUHHPHQWZLWK $/&21SXUVXDQWWRZKLFK0(1'(=KHUVHOIDQG3(8*(27DJUHHGDQG UHDIILUPHGWKDWERWK0(1'(=DVDQLQGLYLGXDODQG3(8*(27DVDFRPSDQ\ ZRXOGWUHDWDOO%5LQIRUPDWLRQDVFRQILGHQWLDODQGWKDWWKHSDUWLHV¶ UHODWLRQVKLSDQGFRPPXQLFDWLRQVDERXWLWZRXOGEHJRYHUQHGE\WKHODZVRIWKH 6WDWHRI&DOLIRUQLD3/$,17,))LVWKXVLQIRUPHGDQGEHOLHYHVDQGWKHUHRQDOOHJHV WKDWDOWKRXJK0(1'(=ZDVWUDYHOLQJWR%XGDSHVW0(1'(=DJDLQXQGHUVWRRG DQGKDGLWUHLQIRUFHGWRKHUWKDWWKHEXVLQHVVLQZKLFKVKHZDVHQJDJLQJZLWK $/&21ZRXOGEHJRYHUQHGE\&DOLIRUQLDODZDQGWKDW$/&21ZDVD&DOLIRUQLD HQWLW\ 7KH3(8*(27UHSUHVHQWDWLYHVDWWHQGLQJWKH%XGDSHVWSURGXFWLRQ YLVLWLQFOXGHG 2QRUDERXW-XO\DQG-XO\0(1'(=&DLDQG 38%/,&,6¶66LVVRNRDOOWUDYHOHGWR%XGDSHVWDQGVSHQWDSSUR[LPDWHO\DIXOOGD\ RUPRUHPHHWLQJZLWK3(8*(27¶6SURGXFWLRQOHDGVLQFOXGLQJ'LUHFWRU'HQLV 9LOOHQXHYH3URGXFWLRQ'HVLJQHU'HQQLV*DVVQHU6XSHUYLVLQJ$UW'LUHFWRU3DXO ,QJOLV([HFXWLYH3URGXFHU%LOO&DUUDURDQGQXPHURXVRWKHUV0(1'(=&DLDQG 6LVVRNRZHUHDOOVKRZQERWKSK\VLFDODQGFRPSXWHUPRGHOVRI.¶VVSLQQHULWVHOI DQGZHUHJLYHQLQWLPDWHLQVLJKWVLQWRWKHFUHDWLYHYLVLRQIRUQRWRQO\.¶VVSLQQHU EXWIRUWKHRYHUDOO%5ILOPDQGLWVORRNIHHODQGWRQH0(1'(=&DL DQG SRVVLEO\DOVR6LVVRNR DOVRVKDUHG3(8*(27¶6FUHDWLYHDQGEXVLQHVVQHHGVDQG ZLVKOLVWV ,WEHDUVQRWLQJWKDWIRUDPDMRUPRWLRQSLFWXUHSURGXFWLRQWRGHYRWH VXEVWDQWLDOUHVRXUFHVGXULQJSULQFLSDOSKRWRJUDSK\WRDYLVLWRIWKLVW\SHLVLWVHOI TXLWHH[SHQVLYHIRUWKHVWXGLR(YHU\GD\±LQGHHGHYHU\KRXU±RISURGXFWLRQ WLPHRQDPDMRUPRWLRQSLFWXUHLVWUDFNHGDFFRXQWHGIRUDQGDIIHFWVWKHEXGJHWRI WKH3LFWXUH7KLVLVFRPPRQNQRZOHGJHLQWKHLQGXVWU\DQG3(8*(27 38%/,&,6DQG0(1'(=DOONQHZWKDW$/&21ZDVLQFXUULQJVXEVWDQWLDOH[SHQVH WRZRUNZLWK3(8*(27DQG38%/,&,6LQFOXGLQJLQSHUIRUPLQJDQGSUHSDULQJWR SHUIRUP$/&21¶6SDUWRIWKHGHDO 'XULQJDQGDIWHUWKHVHWYLVLW3(8*(2738%/,&,60(1'(=&DL DQG6LVVRNRDOOFRQVLVWHQWO\FRPPXQLFDWHGWKHLUKLJKOHYHORIHQWKXVLDVPIRUWKH SURMHFWWR$/&21DQG$/&21¶6UHSUHVHQWDWLYHVDORQJZLWK3(8*(27¶6 FRPPLWPHQWDQGGHVLUHWRPRYHIRUZDUG$WQRWLPHGXULQJWKHVHWYLVLWGLG 0(1'(=HYHUFRPPXQLFDWHDQ\WKLQJWR$/&21WKDW38%/,&,6RU6LVVRNR VSHFLILFDOO\ZHUHQRWDXWKRUL]HGWRDFWRQ3(8*(27¶6EHKDOIZLWKUHVSHFWWRWKH %5GHDO,QGHHGE\KHUVWDWHPHQWVDQGFRQGXFW0(1'(=DQG3(8*(27 LQVWHDGUHDIILUPHGWKDW38%/,&,6DQG6LVVRNRVSHFLILFDOO\ZHUHH[SUHVVO\ DXWKRUL]HGDJHQWVIRU3(8*(27ZLWKIXOODXWKRULW\WRFRPPXQLFDWH3(8*(27¶6 SRVLWLRQVDQGWRELQG3(8*(27 &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 42 of 132 Page ID #:42 &ORVHLQWLPHWRWKHDERYHUHIHUHQFHGVHWYLVLW HLWKHUVKRUWO\EHIRUHRU VKRUWO\DIWHUWKHYLVLWRUERWK 3(8*(27GHVLJQHU&DLWUDQVPLWWHGSURSRVHG GHVLJQVRIKLVRZQIRUWKH.VSLQQHUWR$/&213/$,17,))LVLQIRUPHGDQG EHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW&DLGLGVRZLWKWKHNQRZOHGJHRI0(1'(= 6RPHRI&DL¶VGUDZLQJVIRUDUHGHVLJQRIWKH.VSLQQHUDUHDWWDFKHGWRWKLV &RPSODLQWDV([KLELW$DQGLQFRUSRUDWHGKHUHLQE\UHIHUHQFH $/&21DQGWKHSURGXFWLRQ¶VFUHDWLYHWHDPUHYLHZHG&DL¶VGUDZLQJV LQJRRGIDLWK&DL¶VILUVWVHWRIGUDZLQJVDQGGHVLJQV ([KLELW$ DUHKLJKTXDOLW\ DQGLQWHUHVWLQJ+RZHYHUDIWHUGXHFRQVLGHUDWLRQ$/&21FRPPXQLFDWHGWR 3(8*(27LQFOXGLQJZLWKWKHNQRZOHGJHDQGDZDUHQHVVRI0(1'(=WKDW&DL¶V SURSRVHGZKROHVDOHUHGHVLJQRI.¶VVSLQQHUZDVIDUWKHUWKDQWKHSURGXFWLRQZDV JRLQJWRJRERWKFUHDWLYHO\DQGIURPDFRVWVWDQGSRLQW$/&21FRPPXQLFDWHGLQ ODWH-XO\RUHDUO\$XJXVWWKDW&DL¶VSURSRVHGGHVLJQVZHUHWKXVUHMHFWHG DQGDVNHG3(8*(27WRVXEPLWDOWHUQDWLYHV 3(8*(270(1'(=DQG&DLDOODFFHSWHGWKDW$/&21KDG FRQVLGHUHG&DL¶VSURSRVHGUHGHVLJQVLQJRRGIDLWK3(8*(27DQG0(1'(= FRPPXQLFDWHGWR$/&21WKDWWKHGHDOZDVVWLOODJR3(8*(270(1'(=DQG &DLZHQWEDFNWRWKHGUDZLQJERDUGWRFRPHXSZLWKDOWHUQDWLYHGHVLJQQRWHV ,QODWH-XO\DQGRUHDUO\$XJXVW&DLWUDQVPLWWHGIRXUSDJHVRI DOWHUQDWLYHGHVLJQQRWHVRQ.¶VVSLQQHUWR$/&21RQEHKDOIRI3(8*(27DQG 3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVZLWKWKHNQRZOHGJH DQGDSSURYDORI0(1'(=$FRS\RIWKLV&DLVHFRQGVHWRIGHVLJQQRWHVDUH DWWDFKHGWRWKLV&RPSODLQWDV([KLELW%7KHDQQRWDWLRQVRQWKHGHVLJQQRWHVDUH &DL¶VRQEHKDOIRI3(8*(27 %\&DL¶VQRWHVDQGLQUHODWHGFRPPXQLFDWLRQVEHWZHHQ3(8*(27¶6 UHSUHVHQWDWLYHVDQG$/&21¶6UHSUHVHQWDWLYHV3(8*(27SURSRVHGDQGUHTXHVWHG WKDWWKHIROORZLQJGHVLJQFKDQJHVEHPDGHWR.¶VVSLQQHU D 7KHZRUGORJR³3(8*(27´DSSHDURQWKHIURQWJULOO &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 43 of 132 Page ID #:43 E 7KHZRUGORJR³3(8*(27´DSSHDUDFURVVWKHUHDUKRRG F 7KHZRUGORJR³3(8*(27´DSSHDU LQVXEWOHEODFNOHWWHULQJ RQWKH GDVKERDUGGLUHFWO\DKHDGRIWKHGULYHU¶VVHDW G 7KHGULYHU¶VGLVSOD\EHWZRVTXDUHVFUHHQV ZKHUHWKHORJRFRXOG DSSHDULQRQHRUPRUHVHTXHQFHVRIWKHPRYLHRQIRUH[DPSOHDVWDUW RUUHVWDUWRIWKHYHKLFOH H 7KHPRGHUQFKURPH3HXJHRWURDULQJOLRQORJREHSODFHGRQWKHFHQWHU FRQVROHUDWKHUWKDQDQDOWHUQDWLYH3HXJHRW³FRDWRIDUPV´ORJR I 3(8*(27¶6WUDGHPDUN³WKUHHFODZV´EUDNHOLJKWLQJEHDGGHGWRWKH UHDURIWKHYHKLFOH J 7KHYHKLFOH¶VIURQWKHDGOLJKWLQJDQGUXQQLQJOLJKWVWUDFNVSHFLILF SRVLWLRQLQJDVGUDZQE\&DL ,QFRPPXQLFDWLRQVEHWZHHQWKHLUUHSUHVHQWDWLYHV3(8*(27DQG $/&21DOVRGLVFXVVHG3(8*(27¶6GHVLUHWRIHDWXUHLWVFXUUHQWDFWXDOORJRVLQ WKH\HDURQVFUHHQZRUOGRI%5LQFOXGLQJRQ.¶VVSLQQHUUDWKHUWKDQD ILFWLRQDOIXWXULVWLFYHUVLRQRIWKHORJR3(8*(27HYHQSURYLGHGDQDUUDWLYH H[SODQDWLRQIRUWKHDQDFKURQLVPFRQVLVWHQWZLWKWKH%5VWRU\ ,QWKHVHVDPHDQGUHODWHGFRPPXQLFDWLRQVLQWKLVODWH-XO\DQGHDUO\ $XJXVWWLPHIUDPH$/&21DQG3(8*(27DOVRGLVFXVVHGDQLGHDE\ 3(8*(27WRKDYHDODUJHKRORJUDSKLF3(8*(27ORJRHPDQDWHIURPWKHH[WHULRU RI.¶VVSLQQHU IRUH[DPSOHRQLJQLWLRQRIWKHYHKLFOHRUXQORFNLQJLW $/&21 DQG3(8*(27WRJHWKHUGLVFXVVHGWKDWLWZRXOGEHEHWWHUWRKDYHDQLQFRFNSLW RQVFUHHQGDVKERDUGORJRRQVWDUWXSDQG3(8*(27DJUHHG %\DERXWWKHILUVWZHHNRI$XJXVW3(8*(27DQG$/&21KDG DJUHHGWKDWDOORI&DL¶VSURSRVHGGHVLJQFKDQJHVLQKLVVHFRQGVHWRIQRWHV ([KLELW % ZRXOGEHPDGHWR.¶VVSLQQHU7KLVLQFOXGHGDQGUHTXLUHGPDNLQJWKHFKDQJHV WRWKHDFWXDOOLIHVL]HSK\VLFDOYHUVLRQVRIWKHVSLQQHU7KHFKDQJHVZHUHQRW PHUHO\FRPSXWHUJUDSKLFVLPDJHFKDQJHVIRUH[DPSOH±WKH\LQYROYHGDFWXDOO\ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 44 of 132 Page ID #:44 PDNLQJSK\VLFDOFKDQJHVWRUHDOZRUOGYHKLFOHVRUPRGHOVWKHUHRILQFOXGLQJIXOO OLIHVL]HYHUVLRQV7KHFRVWRIPDNLQJ3(8*(27¶6FKDQJHVMXVWWRWKHSK\VLFDO YHUVLRQVRIWKHPRGHOVH[FHHGHG±WKHVHZHUHH[SHQVLYHFKDQJHVWRPDNH DQG$/&21QHYHUZRXOGKDYHPDGHWKHPEXWIRULWVXQGHUVWDQGLQJWKDWWKH SDUWLHVZHUHZRUNLQJWRJHWKHURQDSURGXFWSODFHPHQWDQGFRSURPRWLRQZLWKD JXDUDQWHHGPHGLDVSHQGLQWKHWHQVRIPLOOLRQVRIGROODUV3(8*(270(1'(= DQG38%/,&,6DOONQHZWKLV %\DERXWWKLVVDPHWLPH3(8*(27DQG$/&21KDGIXUWKHUDJUHHG WRDOORIWKHIROORZLQJVSHFLILFGHVLJQDQGSODFHPHQWLPSOHPHQWDWLRQV D 3(8*(27¶6FXUUHQWORJRVZRXOGEHXVHG UDWKHUWKDQIXWXULVWLF YHUVLRQVRIWKHORJRV ZLWK3(8*(27SURYLGLQJOLQNVWRDSSURYHG YHUVLRQVRIWKHORJR E $/&21GHPRQVWUDWHGVSHFLILFRQVFUHHQGDVKERDUGDQLPDWLRQVRIWKH 3HXJHRWORJR3(8*(27QRWRQO\DJUHHGWRWKHPEXWDIILUPHGWKDW WKH\ZHUH³JUHDW´ F $/&21GHPRQVWUDWHGDQG3(8*(27VSHFLILFDOO\DSSURYHGWKH VXEWOHQHVVRIWKHUHFHVVHGEODFN³3HXJHRW´GDVKERDUGOHWWHULQJDVYDOLG DQGDSSURYHGRQVFUHHQ3HXJHRWYHKLFOHEDGJLQJ ,QRUDERXWHDUO\$XJXVW$/&21¶6DQG3(8*(27¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 45 of 132 Page ID #:45 %\LQRUDERXW$XJXVW DQGQRODWHUWKDQ6HSWHPEHU $/&21DQG3(8*(27WKURXJKUHSUHVHQWDWLYHVDOVRH[SUHVVO\GLVFXVVHGDQG DJUHHGWKDWZKLOH3(8*(27KDGUHTXHVWHGDQ$/&21SURPLVHWKDWPRWLRQ SLFWXUHVRXQGWUDFNULJKWVZRXOGEHJUDQWHGIRUXVHLQ3(8*(27FRSURPRWLRQDO VSRWV$/&21ZDVGHFOLQLQJWRPDNHWKLVDFRQWUDFWXDOSURPLVHRUREOLJDWLRQ ODUJHO\EHFDXVHWKHVRXQGWUDFNZRXOGQRWEHILQDOL]HGXQWLOWRRFORVHWRWKH 3LFWXUH¶VSODQQHGUHOHDVHIRU3(8*(27¶6UHTXHVWWREHDFRQWUDFWXDOFRPPLWPHQW IURP$/&21 3(8*(27DJUHHGWRJLYHXSWKHVRXQGWUDFNDVNDVDWHUP ,QWKHFRXUVHRIDOORIWKHDERYHFRPPXQLFDWLRQVDQGFRQGXFWLWZDV DOVRUHDIILUPHGDQGPDGHFOHDUWR0(1'(=3(8*(27DQG38%/,&,6 DQG FXVWRPDQGSUDFWLFHLQWKHLQGXVWU\DOVRGLFWDWHV WKDWZKLOHLWZDVDJUHHGWKDW 3(8*(27KDGDULJKWRIUHYLHZDQGDSSURYDORIWKHVSHFLILFLPSOHPHQWDWLRQRI WKHWHQ VHFRQGVRIEUDQGLQJYLVLELOLW\IRRWDJHDVLWZRXOGDFWXDOO\DSSHDURQ VFUHHQ3(8*(27¶6UHYLHZDQGDSSURYDOSURFHVVZDVWREHSURPSWDQGVXEMHFWWR UHDVRQDEOHQHVVDQGJRRGIDLWKE\3(8*(273(8*(27¶6UHYLHZDQGDSSURYDO DOVRKDGWREHZLWKLQWKHFUHDWLYHDQGDUWLVWLFSDUDPHWHUVRIWKHILOPZKLFKZHUHLQ WKHFRQWURORI$/&21DQGQRW3(8*(27)XUWKHUPRUHUHYLHZDQGDSSURYDOZDV WREHFRQGXFWHGE\3(8*(27ZLWKRXWXQUHDVRQDEOHGLVUXSWLRQRIWKHILOP¶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¶QHJRWLDWLRQVSULRUWRUHDFKLQJDJUHHPHQWGLG3(8*(27HYHUUHTXHVWVXFK DQH[FHHGLQJO\XQXVXDO DQGLQGHHGLPSRVVLEOH FRQGLWLRQQRUZRXOG$/&21 &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 46 of 132 Page ID #:46 KDYHHYHUDJUHHGWRLWDQG$/&21GLGQRWGRVR QRUZRXOGDQ\PDMRUPRWLRQ SLFWXUHFRPSDQ\±WKHLGHDLVQRQVHQVLFDODVWKHFRSURPRWLRQSODQQLQJLVIRUWKH SXUSRVHRIVXSSRUWLQJWKHUHOHDVHDQGWKXVPXVWSUHFHGHWKHILOP¶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¶VVFKHGXOHLQFOXGLQJ3LFWXUH/RFN)LOP'HOLYHU\DQG5HOHDVH'DWHDQGDOVR VXFKWKDWWKHFRSURPRWLRQFRXOGEHSODQQHGDQGH[HFXWHG %\QRODWHUWKDQHDUO\$XJXVWZLWKWKHNQRZOHGJHDQGDSSURYDO RI3(8*(27DQG0(1'(=DQGLQUHOLDQFHWKDWDOORIWKHDERYHWHUPVZHUH DJUHHG$/&21SURFHHGHGWRH[HFXWHWKHDERYHDJUHHGVSHFLILFLPSOHPHQWDWLRQV RIWKHVSLQQHUGHVLJQDQGWRLQFRUSRUDWHWKHPLQWRWKHILOP¶VSURGXFWLRQLQFOXGLQJ LQSULQFLSDOSKRWRJUDSK\)RU$/&21WRVRSURFHHGUHTXLUHG$/&21WRFRPPLW DQGH[SHQGVXEVWDQWLDOILQDQFLDOUHVRXUFHVWLPHUHVRXUFHVDQGFUHDWLYHUHVRXUFHV WKDWKDGQRRWKHUSXUSRVHH[FHSWSHUIRUPLQJWKHSODFHPHQWIRU3(8*(27)URP DERXW$XJXVWDQGIRUZDUGWKH3(8*(27SODFHPHQWEHJDQWREH LQFRUSRUDWHGLQWRWKH%5ILOPLQZD\VWKDWZRXOGKDYHEHHQH[FHHGLQJO\ H[SHQVLYHWRXQGRRUFKDQJH $/&21ZRXOGQHYHUKDYHLQFXUUHGDQ\RIWKHVHH[SHQVHVRUDFWLRQVLI $/&21KDGNQRZQWKDW3(8*(27ZRXOGHYHUWDNHWKHSRVLWLRQWKDWWKHSDUWLHV KDGQRHQIRUFHDEOHDJUHHPHQWRIDQ\NLQGRUWKDW3(8*(27DQG0(1'(=ZHUH VHFUHWO\UHVHUYLQJDSXUSRUWHGXQLODWHUDOULJKWWREDFNRXWRIDQ\3(8*(27 &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 47 of 132 Page ID #:47 SHUIRUPDQFHVLIWKH\HYHUGHWHUPLQHGLWWREHSHUVRQDOO\RUFRUSRUDWHO\H[SHGLHQW IRUWKHPWRGRVRRUWKDW3(8*(27KDGQRWILUPO\FRPPLWWHGWRDWOHDVWD PLOOLRQPHGLDVSHQGXSRQDVDWLVIDFWRU\SODFHPHQWRUWKDW3(8*(27KDGQR EXGJHWRILWVRZQWRPDNHVXFKDVSHQG 3(8*(27DQG0(1'(=NQHZDOORIWKLVDQGWKDWDOOVXFK PLVUHSUHVHQWDWLRQVDQGRPLVVLRQVZHUHKLJKO\PDWHULDOWR$/&21¶6GHFLVLRQ PDNLQJ3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDWDW OHDVWXQGHURQHDOWHUQDWLYHVHWRIIDFWV3(8*(27DQG0(1'(=NQRZLQJO\ LQWHQWLRQDOO\IUDXGXOHQWO\DQGLQEDGIDLWKDOORZHG$/&21WRSURFHHGWRLWV GHWULPHQWZLWK3(8*(27DQG0(1'(=HVVHQWLDOO\VHFUHWO\KROGLQJLQWKHLU PHWDSKRULFDOSRFNHWWKDWWKH\ZRXOGFODLPWKDWWKH\KDGD³JHWRXWRIMDLOIUHH´FDUG WKDWWKH\LQWHQGHGWRSOD\DUELWUDULO\QRWWRSHUIRUPWKHLUREOLJDWLRQVXQGHUWKHGHDO LILWZDVSHUVRQDOO\RUFRUSRUDWHO\H[SHGLHQWIRUWKHPWRQRWWRSHUIRUP 3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW DPRQJRWKHUEDGIDLWKVWUDWHJLHV0(1'(=KDGD PLVWDNHQ EHOLHIDQGLQWHQWWKDW LIVKHFRXOGVWDOORUDYRLGSXWWLQJDQ\3(8*(27VLJQDWXUHRQDQ\ZULWWHQFRQWUDFW LQFOXGLQJLQEDGIDLWK WKDW3(8*(27FRXOGZDONDZD\IURPWKHHQWLUHGHDOZLWK QRFRQVHTXHQFHVDWDOO September 2016 to January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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 48 of 132 Page ID #:48 +HUHDOWKRXJKWKH\GLGQRWQHFHVVDULO\QHHGWRGRVR$/&21ZLWK &70*¶6SDUWLFLSDWLRQDVVLVWDQFHDQGUHSUHVHQWDWLRQDQG3(8*(27DQG 38%/,&,6DOOSURFHHGHGWRJHWKHUWRZRUNRQDORQJHUPRUHIRUPDOZULWWHQ GRFXPHQWDWLRQRIWKHSDUWLHV¶DJUHHPHQW$VSDUWRIWKDWSURFHVVWKHSDUWLHV FRQWLQXHGWRQHJRWLDWHDGGLWLRQDOWHUPVDQGUHILQHPHQWVWRWHUPV &70*H[HFXWLYHVVHQWDQLQLWLDOGUDIWRIDORQJHUPRUHIRUPDO DJUHHPHQWWR38%/,&,6RQRUDERXW6HSWHPEHUDQGWKHSDUWLHV¶ UHVSHFWLYHUHSUHVHQWDWLYHVH[FKDQJHGPXOWLSOHGUDIWVFRPPHQWVDQGHPDLOVDERXWLW LQWRHDUO\-DQXDU\ ,QSDUDOOHOGXULQJWKLVVDPHSHULRG 6HSWHPEHUWR-DQXDU\ $/&21DQG3(8*(27FRQWLQXHGWRFRPPXQLFDWHWRJHWKHUWRHIIHFWXDWHWKH SODFHPHQWFUHDWLYHO\DQGWRSODQIRUWKHFRSURPRWLRQ %HWZHHQ$XJXVWDQGWKURXJK'HFHPEHUDQGDIWHUZDUG FUHDWLYHSHUVRQQHOIRU$/&21DQGWKH%5SURGXFWLRQUHPDLQHGLQFRQWDFW ZLWK3(8*(27FUHDWLYHVLQFOXGLQJUHJDUGLQJH[HFXWLRQRIWKH&DLGHVLJQFKDQJHV WR.¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 49 of 132 Page ID #:49 3/$,17,))LVDOVRLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHV WKDW0(1'(=ZDVDOVRDZDUHRIDQGH[SUHVVO\DXWKRUL]HG38%/,&,6WRFRQWLQXH WRQHJRWLDWHUHILQHPHQWVWRWKHGHDOZLWK$/&21DQGNQHZWKDW38%/,&,6ZDV GRLQJVR $PRQJRWKHUFRPPXQLFDWLRQVLQDQHPDLOH[FKDQJHEHWZHHQ 38%/,&,6DQG&70*H[HFXWLYHVRQRUDERXW2FWREHUDQG DQGZLWK SULQFLSDOSKRWRJUDSK\ZHOOXQGHUZD\ZLWKWKH3HXJHRWEUDQGLQJLQFRUSRUDWHGLQWR .¶VVSLQQHU WKHSDUWLHVDJUHHGRQDPXWXDOO\DFFHSWDEOHDOORFDWLRQRIWKHDJUHHG WHQ VHFRQGVRIEUDQGLQJYLVLELOLW\IRRWDJHVL[ VHFRQGVWRVSLQQHUEUDQGLQJ IRRWDJHDFURVVQRPRUHWKDQWZR VHTXHQFHVDQGIRXU VHFRQGVWRWKH RXWGRRUZDOODG RU³KRORJUDSKLFDGYHUWLVHPHQW´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¶6UHDVRQDEOHDQGJRRGIDLWKDSSURYDORIWKHSODFHPHQWDQGWKHUHE\ LQVXUHWKHPHGLDVSHQG DQG$/&21LQIDFWGLGDOORIWKHVHWKLQJV 3(8*(27DQG0(1'(=FRQWLQXHGWROHDG$/&21DFWLYHO\GRZQ WKHURDGWKDWWKHFRSURPRWLRQZDVDJUHHGDQGWKDWWKHUHZHUHQRREVWDFOHVWR 3(8*(27ILQDQFLQJLWRURWKHUZLVHIXOILOOLQJLWZKHQWKHWLPHFDPH3/$,17,)) LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVLQFOXGLQJGXHWR3(8*(27¶6 &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 50 of 132 Page ID #:50 DQG0(1'(=¶6ODWHUH[SUHVVDGPLVVLRQVDQGXQGHURQHDOWHUQDWLYHVHWRIIDFWV WKDW3(8*(27¶6DQG0(1'(=¶6UHSUHVHQWDWLRQVWR$/&21DERXWWKLVZHUH IDOVHDQGLQEDGIDLWK±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¶ UHODWLRQVKLSDQGFRPPXQLFDWLRQVDERXW%5 LQZKLFK%(7&ZDVVHUYLQJDVDQ DJHQWIRU3(8*(27VSHFLILFDOO\DVWRWKHFRSURPRWLRQ ZRXOGEHJRYHUQHGE\ WKHODZVRIWKH6WDWHRI&DOLIRUQLD3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQ WKDWEDVLVDOOHJHVWKDW%(7&VLJQHGDQGGHOLYHUHGWKHFRQILGHQWLDOLW\DJUHHPHQWVWR $/&21DW0(1'(=¶6DQG3(8*(27¶6GLUHFWLRQDQGRUZLWK0(1'(=¶6DQG 3(8*(27¶6NQRZOHGJHDSSURYDORUVXEVHTXHQWUDWLILFDWLRQ %\LQRUDERXWHDUO\-DQXDU\$/&2138%/,&,63(8*(27 0(1'(=H[HFXWLYHVIURP&70*DQG%(7&KDGDOOPDGHSODQVWRDWWHQGD PHHWLQJDW$/&21¶6RIILFHVLQ/RV$QJHOHVVFKHGXOHGIRU-DQXDU\7KH PHHWLQJ¶VLQWHQGHGSXUSRVHZDVIRU$/&21WRVKRZWKHSODFHPHQWDQGRWKHU FUHDWLYHPDWHULDOVWR3(8*(2738%/,&,6DQG%(7&DQGRWKHUZLVHWDNHVWHSV VRWKDWZRUNFRXOGFRPPHQFHLQHDUQHVWRQSODQQLQJIRUDQGEHJLQQLQJWRH[HFXWH WKHFRSURPRWLRQ±LQGHHGDOOSDUWLHVXQGHUVWRRGWKH-DQXDU\PHHWLQJWR EHD³NLFNRII´PHHWLQJIRUWKHFRSURPRWLRQ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 51 of 132 Page ID #:51 2QRUDERXW-DQXDU\&70*H[HFXWLYHVWUDQVPLWWHGD SURSRVHGH[HFXWLRQYHUVLRQRIWKHORQJIRUPZULWWHQGRFXPHQWDWLRQRIWKH SODFHPHQWDQGFRSURPRWLRQDJUHHPHQWWR38%/,&,62QRUDERXW-DQXDU\ 38%/,&,6¶66LVVRNRHPDLOHGEDFNWR&70*H[HFXWLYHVORFDWHGLQ &DOLIRUQLDWKDWVDPHYHUVLRQRIWKHSURSRVHGORQJIRUPEHDULQJ0RQWURQ¶V VLJQDWXUHIRU38%/,&,6RQEHKDOIRI3(8*(276LVVRNRDFWXDOO\RUHIIHFWLYHO\ UHSUHVHQWHGDQGLQWHQGHGE\KLVWUDQVPLVVLRQRIWKHVLJQHGGUDIW DQG6LVVRNRZDV VD\LQJ³ILQDO´ ORQJIRUPEDFNWR$/&21DQG&70*WKDW$/&21DQG&70* UHO\RQWKHVLJQHGGRFXPHQWDVDWWDFKHGWR6LVVRNR¶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¶6UHVLVWDQFHWRREWDLQLQJ3(8*(27¶6GLUHFWVLJQDWXUHGLGQRWUDLVH IODJVWR$/&21DQG&70*DVWRZKHWKHUWKHSDUWLHVKDGDQ\GHDODWDOO7KH\ XQTXHVWLRQDEO\GLG3(8*(27KDGEHHQGLUHFWO\LQYROYHGLQQXPHURXV FRPPXQLFDWLRQVDQGKDGXVHGPXOWLSOHDJHQFLHVRWKHUWKDQ38%/,&,6WR FRPPXQLFDWHDERXWDQGDIILUPWKHGHDO+RZHYHU38%/,&,6¶6UHVLVWDQFHWR REWDLQLQJD3(8*(27VLJQDWXUHRQDSDUWLFXODUGRFXPHQWGLGUDLVHTXHVWLRQVIRU $/&21DQG&70*QRWDVWRZKHWKHU$/&21DQG3(8*(27KDGDGHDORQWKH PDWHULDOWHUPVRUZKHWKHU38%/,&,6ZDV3(8*(27¶6DXWKRUL]HGDJHQWEXW &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 52 of 132 Page ID #:52 UDWKHUZKHWKHU3(8*(27KDGVHHQDQGIXOO\DSSURYHGWKHSDUWLFXODUZULWWHQGUDIW LQTXHVWLRQ 7KDW3(8*(27ZDVGLUHFWO\DZDUHWKDWSDUWLHVKDGDGHDOIRUD JXDUDQWHHGFRSURPRWLRQDQGWKDW38%/,&,6ZDVUHSUHVHQWLQJ3(8*(27DERXW LWDVWRWKHQHJRWLDWLRQRIWHUPVZDVEH\RQGTXHVWLRQ)RUH[DPSOHWKH-DQXDU\ %53(8*(27FRSURPRWLRQDONLFNRIIPHHWLQJWRRNSODFHDW $/&21¶6RIILFHVLQ/RV$QJHOHVDWWHQGHGLQSHUVRQE\0(1'(=DQG6LVVRNR ,QWKHPHHWLQJ0(1'(=DQG6LVVRNRE\WKHLUVWDWHPHQWVDQGFRQGXFWVLWWLQJ QH[WWRHDFKRWKHULQSHUVRQFOHDUO\FRPPXQLFDWHGDQGUHDIILUPHGWR$/&21DQG &70*WKDWWKHGHDOZDVVWLOORQDVWRERWKWKHSODFHPHQWDQGFRSURPRWLRQDQG WKDW38%/,&,6FRQWLQXHGWREH3(8*(27¶6H[SUHVVO\DXWKRUL]HGDJHQW 0RUHRYHU%(7&H[HFXWLYHVZHUHDOVRSUHVHQWDWWKHVDPHPHHWLQJLQSHUVRQLQ WKHSUHVHQFHRI0(1'(=DQGZHUHWKHUHIRUWKHH[SUHVVSXUSRVHRIUHSUHVHQWLQJ 3(8*(27ZLWKUHVSHFWWRH[HFXWLRQRIWKHDJUHHGFRSURPRWLRQ i.e.38%/,&,6 KDGQHJRWLDWHGDQGZDVDXWKRUL]HGWRQHJRWLDWHWKHWHUPVRIWKHFRSURPRWLRQEXW %(7&ZDVDFWXDOO\WRFDUU\RXWWKHDJUHHGFRSURPRWLRQRUKHOS3(8*(27GR VR )XUWKHUGXULQJWKH-DQXDU\PHHWLQJ$/&21GLVWULEXWHGD FUHDWLYHGHFN 3RZHU3RLQWRU.H\QRWHSUHVHQWDWLRQ OD\LQJRXWYLVXDOVIURPWKH ILOPDQGVWRU\HOHPHQWVDQGVSHFLILFDOO\LQFOXGLQJPXOWLSOHLPDJHVRI.¶VVSLQQHU WUDFNHGWRVKRZFRPSOLDQFHZLWK3(8*(27GHVLJQHU 'XULQJWKH-DQXDU\PHHWLQJ0(1'(=3(8*(27DQG 38%/,&,6DQG%(7&DOOVDZDQGUHYLHZHGWKHGHFN$OORIWKHPFRPPXQLFDWHG 3(8*(27¶6DSSURYDORIWKH.VSLQQHUEDGJLQJGHVLJQH[HFXWLRQDQGFRPPHQFHG PRYLQJIRUZDUGZLWKGLVFXVVLRQRIWKHSODQQHGFRSURPRWLRQDOOLQWKH-DQXDU\ PHHWLQJ 8QGHUDWOHDVWRQHDOWHUQDWLYHVHWRIIDFWVUHJDUGLQJ0(1'(=¶6DQG 3(8*(27¶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¶6/RV$QJHOHVYLVLW6LVVRNRDQG 38%/,&,6VXJJHVWHGWKDWWKH3(8*(27VLJQDWXUHLVVXHFRXOGEHFODULILHGE\ 3(8*(27VLPSO\SURYLGLQJDVLJQHGFRQILUPDWLRQRI38%/,&,6¶6DXWKRULW\WR QHJRWLDWHDQGVLJQ%5FRQWUDFWVRQ3(8*(27¶6EHKDOI$FFRUGLQJO\ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 54 of 132 Page ID #:54 38%/,&,6DQG3(8*(27FDXVHGWREHWUDQVPLWWHGWR$/&21DQG&70*LQ &DOLIRUQLDDGRFXPHQWHQWLWOHG³'HOHJDWLRQRI6LJQDWXUH$XWKRULW\´7KH GRFXPHQWZDVVLJQHGE\0(1'(=IRU3(8*(27DQGH[SUHVVO\DIILUPHGWKDW³, WKHXQGHUVLJQHG,VDEHO6DODV0HQGH]DV3HXJHRW0DUNHWLQJDQG&RPPXQLFDWLRQ 0DQDJHUDXWKRUL]H7KH&DVDEODQFD$JHQF\±+HUYH0RQWURQDQGRU0DPRX 6LVVRNR>i.e.38%/,&,6DVWKDWGHILQHGWHUPLVXVHGLQWKLV&RPSODLQW@WRVLJQ DQ\GRFXPHQWUHODWHGWRWKHBlade Runner 2049SURMHFWRQEHKDOIRI3HXJHRW>@ )RUWKLVSXUSRVHWKRVHSHUVRQVPD\VLJQIRU3HXJHRWRQLWVEHKDOIDQ\IRUPRI GRFXPHQWUHTXLUHG7KH\PD\DOVRUHTXLUHDQ\QHFHVVDU\GRFXPHQWVIRU3HXJHRW´ ,QGHHG0(1'(=VLJQHGDQGWUDQVPLWWHGWKH³'HOHJDWLRQRI6LJQDWXUH$XWKRULW\´ GRFXPHQWtwice. 7KHILUVWYHUVLRQRIWKHFRQILUPDWLRQRI38%/,&,6VLJQDWXUHDXWKRULW\ VLJQHGE\0(1'(=ZDVGDWHGHIIHFWLYHDVRI'HFHPEHU7KHSDUWLHVDOO FRQVLGHUHGWKHLUIXQGDPHQWDOGHDODVKDYLQJEHHQPDGHQRODWHUWKDQ$XJXVW 7KXV$/&21DQG&70*H[SUHVVO\UHTXHVWHGWKDW0(1'(=UHVLJQWKHHIIHFWLYH GDWHRIWKH³'HOHJDWLRQRI6LJQDWXUH$XWKRULW\´WRJREDFNDVHDUO\DV$XJXVW DQGH[SUHVVO\EHFDXVHWKDWZDVDERXWWKHWLPHWKDW$/&21DQG3(8*(27 KDGUHDFKHGDJUHHPHQWRQPDWHULDOWHUPV 0(1'(=FRPSOLHGZLWK$/&21DQG&70*¶6UHTXHVWDQGH[HFXWHG WKH³'HOHJDWLRQRI6LJQDWXUH$XWKRULW\´DVHFRQGWLPHZLWKWKH$XJXVW HIIHFWLYHGDWH38%/,&,6DQGRU3(8*(27FDXVHGLWWREHWUDQVPLWWHGWR $/&21DQG&70*DQG$/&21UHFHLYHGLW LQ&DOLIRUQLDDVXQGHUVWRRGDQG LQWHQGHGE\38%/,&,63(8*(27DQG0(1'(= RQRUDERXW)HEUXDU\ $VGHVFULEHGLQGHWDLOLQVXEVHTXHQWSDUDJUDSKVGHVSLWH0(1'(=¶6 FOHDUVLJQDWXUH WZLFH RQWKH³'HOHJDWLRQRI6LJQDWXUH$XWKRULW\´GRFXPHQWV 0(1'(=DQG3(8*(27XOWLPDWHO\GHQLHGLQEDGIDLWK XQGHUDWOHDVWRQHIDFWXDO DOWHUQDWLYH WKDW38%/,&,6KDGEHHQDXWKRUL]HGWRQHJRWLDWHRQEHKDOIRI 3(8*(27RUKDGH[FHHGHGLWVDXWKRULW\3(8*(27DQG0(1'(=IXUWKHU &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 55 of 132 Page ID #:55 DVVHUWHGWKDWWKH\KDGQHYHUEHFRPHREOLJDWHGWR$/&21RU6RQ\XQGHUDQ\ FRQWUDFWXDORURWKHUGXW\RIDQ\NLQGZLWKUHVSHFWWRDQ\FRSURPRWLRQDQGGLGQRW HYHQNQRZVXFKGLVFXVVLRQVZHUHHYHQRFFXUULQJ GHVSLWH0(1'(=¶6SHUVRQDO SK\VLFDOSUHVHQFHDQGSDUWLFLSDWLRQLQIRUH[DPSOHWKH-DQXDU\FR SURPRWLRQNLFNRIIPHHWLQJ $VGHVFULEHGLQIXUWKHUGHWDLOLQVXEVHTXHQWVHFWLRQVRIWKLV&RPSODLQW HYHQWKRXJK3(8*(27KDGH[SUHVVO\LQGXFHG$/&21WRVWRSFRQVLGHULQJRWKHU ELGGHUVE\VSHFLILFDOO\VZHHWHQLQJ3(8*(27¶6RZQELGZLWKDQ³XSWR PLOOLRQFRSURPRWLRQ´DQGHYHQWKRXJK0(1'(=KDGVLJQHGWKHVLJQDWXUH GHOHJDWLRQGRFXPHQWVWZLFHDQGHYHQWKRXJK0(1'(=KHUVHOIKDGSHUVRQDOO\ FRPPXQLFDWHGZLWKERWK$/&21DQG&70*DQGKHUVHOIDIILUPHGWKDWWKHGHDO ZDVIRUERWKDSODFHPHQWDQGDFRSURPRWLRQDQGHYHQWKRXJK0(1'(=KHUVHOI SHUVRQDOO\DWWHQGHGDQGSDUWLFLSDWHGDW$/&21¶6/RV$QJHOHVRIILFHVLQWKHFR SURPRWLRQ³NLFNRII´PHHWLQJ0(1'(=QRQHWKHOHVVXOWLPDWHO\IODWO\UHIXVHGWR KDYHDQ\3(8*(27H[HFXWLYHVLJQanyYHUVLRQRIWKHPXOWLSOHZULWWHQGUDIWVWKDW WKHSDUWLHV¶H[FKDQJHGRIDPRUHIRUPDOZULWWHQDJUHHPHQWGRFXPHQWLQJWKHFR SURPRWLRQDQG DPD]LQJO\ 0(1'(=HYHQVHQWHPDLOVGHQ\LQJWKDWVKHRU 3(8*(27KDGHYHUDJUHHGWRDQ\FRSURPRWLRQDQGIXUWKHUGHQLHGWKDW 3(8*(27had even ever discussed one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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 56 of 132 Page ID #:56 .¶VVSLQQHU E 2QFHWKH.6SLQQHUEDGJLQJDQGIHDWXUHGHVLJQVZHUHDSSURYHGE\ 3(8*(27WKH\ZRXOGEHORFNHGDQG3(8*(27ZRXOGQRWEHDEOHWR FKDQJHRUGLVDSSURYHWKHPODWHU DQGWKHEDGJLQJDQGIHDWXUHGHVLJQV ZHUHDFWXDOO\DSSURYHGE\3(8*(27QRODWHUWKDQ-DQXDU\ F 7KHILQLVKHG%5ILOPZRXOGLQFOXGHDWOHDVWWHQ VHFRQGVRI IRRWDJHLQZKLFK3(8*(27¶6ORJRDQGEDGJLQJZRXOGEHFOHDUO\ YLVLEOHWRWKHDXGLHQFH DOWKRXJKLI$/&21IRUFUHDWLYHRURWKHU UHDVRQVGLGQRWLQFOXGHD3(8*(27SODFHPHQWWKHQWKLVZDVQRW QHFHVVDULO\DEUHDFKE\$/&21EXWWKHSDUWLHVZHUHH[SHFWHGDQG REOLJDWHGWRQHJRWLDWHZLWKHDFKRWKHULQJRRGIDLWKDERXWZKDWWRGRLQ VXFKHYHQW G 7KHDWOHDVWWHQ VHFRQGVRIIRRWDJHZDVWREHDSSRUWLRQHGDFURVV PXOWLSOHVHTXHQFHVLQWKHPRYLH ZLWKDFOHDUUHFRUGWKDW3(8*(27 KDGLWH[SODLQHGWRWKHPWKDWDVHTXHQFHRUVFHQHFRXOGLQFOXGHPRUH WKDQRQHFDPHUDVKRW±$/&21DQG&70*H[SUHVVO\GHFOLQHGWREH ERXQGE\PHDVXULQJWLPLQJE\VLQJOHVKRWVEXWUDWKHUZRXOGRQO\DJUHH WR³VHTXHQFHV´RU³VFHQHV´PHDQLQJDJJUHJDWLRQVRIUHODWHGVKRWV H 7KHDWOHDVWWHQ VHFRQGVRIIRRWDJHZDVWREHDSSRUWLRQHGDFURVV WZRW\SHVRIVHTXHQFHV EDGJLQJRQ.¶VVSLQQHUDQG DWOHDVWRQH VHTXHQFHZKHUHWKH3HXJHRWORJRZRXOGDSSHDULQWKH%5ZRUOG VXFKDVLQDQRXWGRRUDGYHUWLVHPHQWLQWKHEDFNJURXQG I 2IWKHWZRW\SHVRIVHTXHQFHVWKH.VSLQQHUEDGJLQJVHTXHQFHVZHUH PRUHLPSRUWDQWWR3(8*(27DQGWKHRXWGRRUZDOODGVHTXHQFHV RU ³KRORJUDSKLFDGYHUWLVHPHQWV´ ZHUHRIVHFRQGDU\LPSRUWDQFH LQFOXGLQJPHDQLQJWKDWRIWKHWHQ VHFRQGVPRUHRIWKHWLPHZRXOG JRWRWKH.VSLQQHUEDGJLQJVHTXHQFHV J $WOHDVWRQHPXWXDOO\DFFHSWDEOHDOORFDWLRQRIWKHWHQ VHFRQGVZDV &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 57 of 132 Page ID #:57 DERXWVL[ VHFRQGVRIYLVLELOLW\IRRWDJHLQWZRVSLQQHUVHTXHQFHVDQG DERXW VHFRQGVWRDWOHDVWRQHRXWGRRUZDOODGVHTXHQFH,WZDVDOVR FOHDUWKDW$/&21ZDVZLGHO\IOH[LEOHDQGUHDG\ZLOOLQJDQGDEOHWR SHUIRUPDGLIIHUHQWDOORFDWLRQDVORQJDV3(8*(27FRPPXQLFDWHGLWV GHVLUHVFOHDUO\ZLWKHQRXJKWLPHIRU$/&21WRPHHWWKHPZLWKRXW XQGXHSUHMXGLFH,QGHHG$/&21ZDVSUHSDUHGWRRYHUSHUIRUPRQWKH YLVLELOLW\GHOLYHULHVLILWKDGWR DQGLQIDFWLWGLGVR K 7KHH[HFXWLRQRIWKHWHQ VHFRQGVRISODFHPHQWIRRWDJHZDVVXEMHFW WR3(8*(27¶6FRPPHUFLDOO\UHDVRQDEOHDQGJRRGIDLWKUHYLHZDQG DSSURYDOZKLFKZDVWREHSURPSWDQGZLWKLQWKHFUHDWLYHDQGDUWLVWLF SDUDPHWHUVRIWKHILOPZKLFKZHUHXQGHUVWRRGQRWWREHLQ 3(8*(27¶6SXUYLHZ3(8*(27¶6UHYLHZDQGDSSURYDOZDVWREH FRQGXFWHGE\3(8*(27ZLWKRXWXQUHDVRQDEOHGLVUXSWLRQRIWKHILOP¶V VFKHGXOHLQFOXGLQJ3LFWXUH/RFN)LOP'HOLYHU\DQG5HOHDVH'DWHDQG DOVRHDUO\HQRXJKVXFKWKDWWKHFRSURPRWLRQFRXOGEHSODQQHGDQG H[HFXWHG L 7KH3HXJHRWVSLQQHUEDGJLQJZRXOGEHDVVRFLDWHGZLWK5\DQ*RVOLQJ¶V FKDUDFWHU. M 5\DQ*RVOLQJ¶VFKDUDFWHU.ZRXOGQRWEHDVVRFLDWHGZLWKDQ\ULYDO DXWRPRELOHEUDQG N 7KH3HXJHRWEUDQGZRXOGQRWEHSUHVHQWHGLQDSHUMRUDWLYHFRQWH[W 3(8*(27DFNQRZOHGJHGWKDWLWKDGUHYLHZHGWKH%5VFULSWDQG NQHZXQGHUVWRRGDQGDJUHHGWKDWWKH%5LQYROYHGRQHRUPRUH FUDVKHVRI.¶VVSLQQHUDQGWKDWWKHVHFUDVKHVZHUHDJUHHGDVQRW YLRODWLYHRIDQ\WHUPRIWKHSDUWLHV¶DJUHHPHQW O ,IXSRQUHYLHZ3(8*(27ZDVQRWUHDVRQDEO\DQGLQJRRGIDLWK VDWLVILHGZLWKDSURSRVHGH[HFXWLRQRIWKHIRRWDJHSODFHPHQWWKHQ 3(8*(27ZDVWRHQJDJHZLWK$/&21UHDVRQDEO\DQGLQJRRGIDLWK &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 58 of 132 Page ID #:58 RQFKDQJHVRUHQKDQFHPHQWVVXFKWKDW3(8*(27ZRXOGEHDEOHWR JLYHLWVUHDVRQDEOHDQGJRRGIDLWKDSSURYDODOVRDJDLQZLWKLQWKH FUHDWLYHDQGDUWLVWLFSDUDPHWHUVRIWKHILOPDQGZKLFKZDVWREH FRQGXFWHGE\3(8*(27ZLWKRXWXQUHDVRQDEOHGLVUXSWLRQRIWKHILOP¶V VFKHGXOHLQFOXGLQJ3LFWXUH/RFN)LOP'HOLYHU\DQG5HOHDVH'DWH P3(8*(27H[SUHVVO\DFNQRZOHGJHGWKDWLWKDGEHHQSURYLGHGZLWKWKH RSSRUWXQLW\WRUHYLHZWKHYLVXDOGHSLFWLRQVRIWKHSODFHPHQWLWHPVDQG KDGDSSURYHGWKHP Q ,I$/&21GHOLYHUHGVDWLVIDFWRU\SODFHPHQWIRRWDJHWKHQ3(8*(27 ZDVREOLJDWHGWRSD\GLUHFWO\WR$/&21DVDSURGXFW SODFHPHQWIHHDQGZDVDOVRREOLJDWHGWRZRUNZLWK$/&21WRSODQ ILQDQFHDQGH[HFXWHDJOREDOFRSURPRWLRQPHGLDFDPSDLJQ ZKLFK FRXOGH[FOXGHWKH86 WRVXSSRUWWKH2FWREHUGD\DQGGDWH JOREDOWKHDWULFDOUHOHDVHRIWKH3LFWXUHZLWK3(8*(27REOLJDWHGWR GHOLYHUDWOHDVWPLOOLRQRISDLGPHGLD R ,I$/&21IDLOHGWRGHOLYHUVDWLVIDFWRU\SODFHPHQWIRRWDJHHYHQDIWHU UHDVRQDEOHDQGJRRGIDLWKHQJDJHPHQWEHWZHHQWKHSDUWLHVWRDWWHPSWWR FXUHUHDVRQDEOHDQGJRRGIDLWKSODFHPHQWGLVVDWLVIDFWLRQVRI 3(8*(27WKHQWKHSDUWLHVZRXOGQHJRWLDWHLQJRRGIDLWKDERXW DOWHUQDWLYHWHUPVWKDWZRXOGEHIDLUDQGUHDVRQDEOHWRERWKVLGHV S 2IWKHSODFHPHQWIHHZDVDOORFDWHGWRWKHVSLQQHU SODFHPHQWVDQGWRWKHRXWGRRUZDOODGSODFHPHQW7KH SDUWLHVIXUWKHUDJUHHGDQGLQWHQGHGWKDWWKHSXUSRVHRIVHWWLQJIRUWKDQ DOORFDWLRQZDVWRSURYLGHD\DUGVWLFNIRUSRWHQWLDOUHGXFWLRQRIWKH SODFHPHQWIHHLIDQHOHPHQWRIWKHSODFHPHQWVZDVQRWVDWLVIDFWRU\DIWHU JRRGIDLWKFRRSHUDWLYHDWWHPSWVWRFXUHZHUHH[KDXVWHG T 7KHSODFHPHQWIHHZDVHDUQHGE\$/&21DQGRZHGE\ 3(8*(27QRODWHUWKDQXSRQ$/&21¶6ZULWWHQFRQILUPDWLRQWR &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 59 of 132 Page ID #:59 3(8*(27WKDWWKHSODFHPHQWVZRXOGEHLQWKHILQDO3LFWXUH±ZKLOH WKHSODFHPHQWIHHFRXOGEHSDLGE\3(8*(27DIWHUUHOHDVHRIWKH 3LFWXUHLWZDVHDUQHGE\$/&21DQGRZHGE\3(8*(27HDUOLHURQ $/&21¶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³$7/´ 6SHQGDQG PLOOLRQLQ%HORZ7KH/LQH ³%7/´ 6SHQG ZLWKLWXQGHUVWRRGDQG DJUHHGWKDWWKH$7/DQG%7/GHILQLWLRQVZHUHWKHDGYHUWLVLQJLQGXVWU\ VWDQGDUGGHILQLWLRQVRIWKHVHWHUPV±YHU\JHQHUDOO\$7/6SHQGUHIHUV WRPHGLDWKDWPDVVWDUJHWVODUJHDXGLHQFHVOLNHWHOHYLVLRQDQGUDGLR DQGPDQ\IRUPVRI,QWHUQHWPHGLD%7/6SHQGUHIHUVWRPHGLDWKDW PRUHVSHFLILFDOO\WDUJHWVDOLPLWHGVHWRIFRQVXPHUVOLNHIO\HUV GLVWULEXWHGIURPDSDUWLFXODUUHWDLOVWRUHRUPRVWIRUPVRIHYHQW PDUNHWLQJOLNHDIDQFRQYHQWLRQRUDXWRVKRZ X $/&21KDGDUHYLHZDQGDSSURYDOULJKWRYHUWKHFRSURPRWLRQ¶V VSHFLILFH[HFXWLRQVRQDFDVHE\FDVHEDVLV &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 60 of 132 Page ID #:60 Y 7KHFRSURPRWLRQZDVWRLQFOXGHDGHGLFDWHGSUHVHQFHRQ 3(8*(27¶6ZHEVLWH ZZZSHXJHRWIU Z3(8*(27ZDVREOLJDWHGWRFUHDWHDQGWKHFRSURPRWLRQZDVWR LQFOXGHDWOHDVWRQHWKLUW\VHFRQGWHOHYLVLRQVSRWXQOHVV*RVOLQJ UHIXVHGWRDSSURYHXVHRIKLVOLNHQHVVLQWKHVSRWLQZKLFKFDVH 3(8*(27ZDVUHOLHYHGRIWKHWHOHYLVLRQVSRWREOLJDWLRQ EXWQRWRI WKHHQWLUHFRSURPRWLRQ *RVOLQJDJUHHGLQSULQFLSDOWRSRWHQWLDOXVH RIKLVOLNHQHVVLQDWHOHYLVLRQVSRWIRU3(8*(27DQG3(8*(27 QHYHUVRXJKW*RVOLQJ¶VUHYLHZRUDSSURYDORIDQ\SURSRVHGVSRW LQFOXGLQJEHFDXVH3(8*(27QHYHUFUHDWHGRQH [ 3(8*(27ZDVWRFUHDWHDQGSURGXFH%HORZ7KH/LQHVSHQGVSRWV \ 3(8*(27ZDVWRFUHDWHDQGLVVXHDSUHVVUHOHDVHWRWKHPHGLD UHJDUGLQJWKHFRSURPRWLRQ February 2017 to May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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 61 of 132 Page ID #:61 WKHIXQGDPHQWDOGHDORU38%/,&,6¶6DQG3(8*(27¶6SULQFLSDODJHQW UHODWLRQVKLSEXWDWPRVWDQLVVXHDERXWZKDWOHYHORIUHYLHZRIVSHFLILFGUDIWVZDV DSSURSULDWHLQWHUQDOO\DVEHWZHHQ38%/,&,6DQG3(8*(27+RZHYHUDIWHU VRPHEDFNDQGIRUWK38%/,&,6DJUHHGWRREWDLQ3(8*(27¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 62 of 132 Page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¶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¶6LQWHUQDOOHJDOWHDP DERXWZKDWWKH\PLJKWEH $/&21DQG&70*PDUNHWLQJH[HFXWLYHVFRQWLQXHGWRFRPPXQLFDWH ZLWK3(8*(27DERXWYDULRXVVSHFLILFFRSURPRWLRQDORSSRUWXQLWLHVLQFOXGLQJ RSSRUWXQLWLHVWKDW3(8*(27FRXOGWDNHDGYDQWDJHRILWZDQWHGWRGRVR)RU &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 63 of 132 Page ID #:63 H[DPSOHRQRUDURXQG0DUFK$/&21DQG&70*H[HFXWLYHVLQTXLUHG DERXWZKDW3(8*(27ZDQWHGWRGRDERXWLWVEUDQGLQJLQFRQQHFWLRQZLWK FRQVXPHUSURGXFWVPRGHOVRI.¶VVSLQQHU±ZKHWKHU3(8*(27ZDQWHGWRKDYHLWV EUDQGLQJRQWKHPRUQRW,QWKHVHFRPPXQLFDWLRQVDQGVLPLODUVXFK FRPPXQLFDWLRQVFRQWLQXLQJWKURXJKDWOHDVW0DUFKDQGHYHQDIWHUZDUG 3(8*(27QHYHUFRPPXQLFDWHGWR$/&21WKDWWKHGHDOZDVRIIRUKDGQHYHU EHHQPDGHRUGLGQRWLQFOXGHDFRSURPRWLRQ 2QRUDERXW$SULODOPRVWWKUHHPRQWKVDIWHU0RQWURQ¶V VLJQDWXUHRQWKH-DQXDU\ZULWLQJ38%/,&,6¶6LQWHUQDOOHJDOWHDP HPDLOHGDSURSRVHGUHYLVHGGUDIWWR$/&21DQG&70*H[HFXWLYHVLQ&DOLIRUQLD ZLWK38%/,&,6¶6DQG3(8*(27¶6UHTXHVWHGDGGLWLRQDOFRPPHQWV38%/,&,6 UHSUHVHQWHGE\LWVH[SUHVVVWDWHPHQWVDQGLPSOLHGFRQGXFWWKDWWKH$SULO GUDIWKDGQRZZLWKIXOOFHUWDLQW\EHHQUHYLHZHGGLUHFWO\E\3(8*(27DQG DSSURYHGE\3(8*(27 3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDWWKH $SULOGUDIWIURP38%/,&,6¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 64 of 132 Page ID #:64 VLWWLQJQH[WWR38%/,&,6¶66LVVRNRDQG%(7&H[HFXWLYHVLQWKH-DQXDU\ PHHWLQJ$Q\GUDIWLQJPLVFRPPXQLFDWLRQEHWZHHQ38%/,&,6DQG3(8*(27 FRXOGQRWSRVVLEO\MXVWLI\QRWDFNQRZOHGJLQJ0(1'(=¶6DQG3(8*(27¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 65 of 132 Page ID #:65 ZLWKVWDWHPHQWVWKDWWKHQXPHURXVGHVLJQFKDQJHVWKDW3(8*(27KDGUHTXHVWHG LQFOXGLQJLQWKH&DLGUDZLQJV([KLELW% DQGWKDW$/&21KDGLUUHYRFDEO\ LPSOHPHQWHGDVVLJQLILFDQWH[SHQVHZHUHQRWLPSRUWDQWDQGRIQRYDOXHWR 3(8*(27 $V3(8*(27ZHOONQHZDQGDV$/&21¶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¶6SHUIRUPDQFHRI WKHSODFHPHQW7KXVWRWKHH[WHQWWKDWWKHUHZDVDQ\XQFHUWDLQW\DERXWWKH DOORFDWLRQRIWKHDJUHHGWHQ VHFRQGVLWZDVHQWLUHO\FUHDWHGE\3(8*(27DQG $/&21LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW3(8*(27 LQWHQWLRQDOO\GLGVRIRUWKHSXUSRVHRIFODLPLQJLQEDGIDLWKWKDWWKHUHZDVQRGHDO RUWKDW$/&21KDGQRWSHUIRUPHGEDVHGRQVRPHPRYLQJWDUJHWWHFKQLFDOLW\RIWKH DOORFDWLRQWHUPV 7KXVWKHQHJRWLDWLRQDQGGUDIWLQJKLVWRU\RIWKHSURSRVHGORQJIRUP DJUHHPHQWDQGLWVYHUVLRQVDOOVKRZDQGFRQILUPDVIXUWKHUDIILUPHGE\WKHSDUWLHV¶ FRXUVHRISHUIRUPDQFHDQGFRQGXFWSULRUWR3(8*(27¶6H[SUHVVUHQHJLQJRQWKH GHDORQ0D\WKDW WKHUHZDVLQIDFWDQDJUHHPHQWEHWZHHQ$/&21DQG 3(8*(27RQDOOPDWHULDOWHUPVWKDW$/&21VHHNVWRHQIRUFHE\WKLV&RPSODLQW DQG WKDWDJUHHPHQWRQDOOWHUPVDVVWDWHGDERYHZDVUHDFKHGQRODWHUWKDQ -DQXDU\ ZLWKPDQ\WHUPVDJUHHGZHOOEHIRUHWKDWDVHDUO\DV$XJXVW &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 66 of 132 Page ID #:66 ,QDGGLWLRQWRFRQFHUQVDERXWWKHVFRSHDQGVXEVWDQFHRI3(8*(27¶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¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 67 of 132 Page ID #:67 May 4, 2017: Peugeot Communicates Material Breach And Begins to Reveal Its Bad Faith %\ODWH$SULO DQGZHOOEHIRUHWKDW LWZDVDEXQGDQWO\FOHDUWKDW $/&21LQWHQGHGWRPDNHWKHIXOOSODFHPHQWLQIXOOFRPSOLDQFHZLWKWKHLQWHQWRI WKHGHDODQGZRXOGZRUNZLWK3(8*(27XQWLO3(8*(27ZDVUHDVRQDEO\DQGLQ JRRGIDLWKVDWLVILHGZLWKWKHSODFHPHQWHYHQLIWKDWPHDQWRYHUSHUIRUPLQJRQWKH QXPEHURIVHFRQGVRIRQVFUHHQEDGJLQJYLVLELOLW\,QGHHG$/&21¶6LQWHUQDO GRFXPHQWVVKRZWKDWDVRI0D\$/&21ZDVSUHSDUHGDQGDFWXDOO\DEOHWR GHOLYHUDVPDQ\DVVL[WHHQ VHFRQGVRIEUDQGLQJYLVLELOLW\ ZKHUHWKHSDUWLHV KDGFOHDUO\DJUHHGWKDWWHQ VHFRQGVZHUHVXIILFLHQW 2QRUDERXW$SULOZLWKMXVWRYHUILYHPRQWKVUHPDLQLQJ EHIRUHWKH2FWREHUUHOHDVHRIWKH3LFWXUHDQGZLWK3(8*(27VWLOO\HWWR VHQGLWVPRUHGHWDLOHGFRSURPRWLRQSODQDQGVWLOOKHPPLQJDQGKDZLQJDERXW SURYLGLQJDORQJIRUPVLJQDWXUHD&70*H[HFXWLYHVLPSO\WHOHSKRQHG0(1'(= GLUHFWO\DQGKDGDFRQYHUVDWLRQZLWKKHU+HDVNHG0(1'(=WRGHOLYHU 3(8*(27¶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¶6PRUHVSHFLILFFRSURPRWLRQSODQV+H FRPPXQLFDWHGWKDW$/&21DQG&70*ZHUHDOODQ[LRXVDQGORRNLQJIRUZDUGWR VHHLQJWKHP &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 68 of 132 Page ID #:68 0(1'(=ZDVFRUQHUHG :LWKQRIXUWKHUVWDOOLQJRQVLJQDWXUHVDYDLODEOHZLWK$/&21UHDG\ ZLOOLQJDQGDEOHWRPHHWDOORILWVREOLJDWLRQVDQGZLWK$/&21DQG&70*DVNLQJ IRU3(8*(27¶6PRUHVSHFLILFFRSURPRWLRQSODQV0(1'(=VLPSO\ZHQWZLWK EODWDQWIDOVHKRRGVDQGEDGIDLWKGHQLDOVWRIXUWKHUVWDOODQGDYRLGDQ\3(8*(27 SHUIRUPDQFHV3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW 0(1'(=GLGVRWRJXDUGKHURZQFRUSRUDWHFDUHHUDQGLQWHUQDOSROLWLFDOSRVLWLRQ DW3(8*(27DJDLQVWKHURZQH[FHHGLQJO\SRRUMXGJPHQWLQKHUEDGIDLWKGHDOLQJV RQ%5DQGDOVRNQRZLQJWKDWIRUKHUWRFRQWLQXHWRFRQGXFWKHUVHOILQWKLV PDQQHUZRXOGEHWR$/&21¶6IXUWKHUH[WUHPHSUHMXGLFHDQGGHWULPHQW 2Q0D\0(1'(=HPDLOHGEDFN ,QKHU0D\HPDLOWR&70*0(1'(=WRRNWKHIROORZLQJ VWXQQLQJSRVLWLRQVDQGPDGHWKHIROORZLQJDGPLVVLRQV D )DOVH'HQLDORI-XO\/2,0(1'(=GHQLHGWKDWVKHKDGHYHU KDGDQ\NQRZOHGJH SULRUWR&70*VHQGLQJLWWRKHUGLUHFWO\RQRU DERXW$SULO WKDWWKH-XO\/2,RUWKHGHDOGHVFULEHG LQLWHYHUH[LVWHG³,ZDVH[WUHPHO\VXUSULVHGZKHQ,IRXQGRXWWKH H[LVWHQFHRIWKLVGRFXPHQW\RXFDOOHG/2,HQWLWOHGµ%ODGH5XQQHU,, ±$JUHHPHQWLQSULQFLSOH¶VLQFH,W>VLF@ZDVWKHILUVWWLPHWKDW,HYHU VDZWKLVGRFXPHQW´%\WKLVIDOVHGHQLDODQGDVFOHDUIURPWKHUHVWRI KHUHPDLO3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLV DOOHJHVWKDW0(1'(=DOVRLPSOLFLWO\PHDQWWKDWQHLWKHUVKHQRU DQ\RQHHOVHDW3(8*(27KDGHYHUDXWKRUL]HGDQ\DJHQF\HYHQWR PDNHD%5bidWKDWLQFOXGHGDFRSURPRWLRQSURSRVDO6KHVR FRPPXQLFDWHGHYHQWKRXJKE\WKLVSRLQW0(1'(=KHUVHOIKDGEHHQ SHUVRQDOO\LQWHUDFWLQJIURPWLPHWRWLPHZLWK$/&21DQG&70* H[HFXWLYHVVSHFLILFDOO\DERXWDSODFHPHQWANDFRSURPRWLRQIRU DOPRVWWHQPRQWKV &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 69 of 132 Page ID #:69 E )DOVH'HQLDOWKDW0HQGH]RU3HXJHRW+DG*UDQWHG1HJRWLDWLQJDQG &RQWUDFWLQJ$XWKRULW\WR3XEOLFLV0(1'(=GHQLHGWKDWWKHODWH -DQXDU\HDUO\)HEUXDU\'HOHJDWLRQRI6LJQDWXUH$XWKRULW\ WKDWVKHKDGSHUVRQDOO\VLJQHG WZLFH FRQILUPLQJ38%/,&,6¶6 DXWKRULW\WRELQG3(8*(27KDGJLYHQRUFRQILUPHGDQ\DFWXDO DXWKRULW\E\38%/,&,6WRELQG3(8*(27WRDQ\WKLQJ(YHQIXUWKHU 0(1'(=GHQLHGWKDW38%/,&,6KDGDQ\DXWKRULW\WRPDNHDQ\ FRPPLWPHQWVIRU3(8*(27RQDQ\VXEMHFW,QDQH[SODQDWLRQ EHDULQJQRUHODWLRQVKLSDWDOOWRDQ\ODQJXDJHLQWKH'HOHJDWLRQRI 6LJQDWXUH$XWKRULW\0(1'(=IDOVHO\FKDUDFWHUL]HGWKHGRFXPHQWDV RQO\FRQILUPLQJWKDW3(8*(27ZDVQRWZRUNLQJZLWKDQ\DJHQFLHV RWKHUWKDQ38%/,&,6RQWKHSURGXFWSODFHPHQW³7KHRWKHUGRFXPHQW WKDW&$6$%/$1&$>38%/,&,6@DVNHGXVWRVLJQJLYLQJWKHPD PDQGDWHWREHRXUH[FOXVLYHLQWHUORFXWRUIRUWKH%ODGH5XQQHU SURGXFWSODFHPHQWSURMHFWZDVRQO\WRDVVXUHWKHPWKDWZHRQO\ ZRUNHGZLWKWKHPRQ%/$'(5811(5SURGXFWSODFHPHQWDQGQRW ZLWKDQ\RWKHUVDJHQFLHV:HQHYHUJDYHWKHPWKHULJKWWRWDNHDQ\ FRPPLWPHQWRQRXUEHKDOIDQGQHYHULQWHQGHGWRGRVRWKURXJK WKLVGRFXPHQW´ (PSKDVLVDGGHG 7KLVH[SODQDWLRQLVHVSHFLDOO\ FOHDUO\IDOVHDQGLQEDGIDLWKZKHUHHYHU\RQHNQHZWKDW3(8*(27 ZDVDOVRZRUNLQJZLWK%(7&RQ%5DQGQRWVROHO\ZLWK 38%/,&,6 F )DOVH'HQLDOWKDW0(1'(=RU3(8*(27KDGHYHUHYHQGLVFXVVHGD FRSURPRWLRQDODVSHFWWRWKH%5'HDO³>7@KH/2,GRHVQ¶W UHIOHFWDWDOORXUGLVFXVVLRQVZLWK&$6$%/$1&$>38%/,&,6@)RU XVZHDJUHHGRQO\RQDSURGXFWSODFHPHQWIRUDFHUWDLQDPRXQWWKDW REYLRXVO\LVPXFKKLJKHUWKDQWKHRQHZULWWHQLQWKH/2,´ 3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDWE\ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 70 of 132 Page ID #:70 WKLVODVWUHIHUHQFH0(1'(=PHDQWWKDW3(8*(27KDGDJUHHGWRSD\ WR38%/,&,6IRUWKHSODFHPHQWRIZKLFK38%/,&,6ZRXOG UHWDLQDVDIHHDQGWUDQVPLWWKHUHPDLQLQJWR $/&21>DQDUUDQJHPHQWWRZKLFK$/&21DQG&70*ZHUHHQWLUHO\ LQGLIIHUHQWWKDWWKHSODFHPHQWIHHSDLGGLUHFWO\WR$/&21ZDVWREH ZDVDJUHHGDQGQRWLQGLVSXWH@$JDLQ0(1'(=¶6 VWDWHPHQWVUHSUHVHQWDQXWWHUO\IDOVHGHQLDORI0(1'(=RUDQ\RQHDW 3(8*(27HYHQKDYLQJDQ\DZDUHQHVVRIDQ\FRSURPRWLRQDODVSHFW RIWKHGHDORUWKDW38%/,&,6ZDVLQYROYHGLQWKHFRPPXQLFDWLRQV DERXWLW7KLVZDVDQGLVDJDLQVWDOOREMHFWLYHUHDOLW\0(1'(= KHUVHOIKDGEHHQSHUVRQDOO\LQWHUDFWLQJIURPWLPHWRWLPHZLWK $/&21DQG&70*H[HFXWLYHVVSHFLILFDOO\DERXWDSODFHPHQWDQGFR SURPRWLRQIRUDOPRVWWHQPRQWKVLQFOXGLQJ0(1'(=LQWHUDFWLQJ GLUHFWO\ZLWK38%/,&,6H[HFXWLYHVabout the co-promotionZKLOH UHSUHVHQWDWLYHVIURP$/&21&70*3(8*(27 EH\RQGMXVW 0(1'(= 38%/,&,6DQG%(7&ZHUHDOOSK\VLFDOO\WRJHWKHULQ WKHVDPHURRPDW$/&21¶6/RV$QJHOHVRIILFHV G 0(1'(=DGPLWWHGWKDW$/&21KDGSHUIRUPHGWR3(8*(27¶6 VDWLVIDFWLRQRQWKHSODFHPHQWDQGWKDW38%/,&,6KDGHYHQSDUWLDOO\ SDLG38%/,&,6IRULW³>:@HKDYHDOUHDG\SDLG>WR38%/,&,6@ODVW \HDURIWKHIXOODPRXQW>RIWKHSODFHPHQWIHH@:HZHUHZDLWLQJ WRVHHWKHSURRIRIWKHSODFHPHQWGXULQJWKHUHOHDVHRIWKHPRYLHLQ WKHDWHUVLQRUGHUWRSD\WKHUHVW´7KHFOHDULPSOLFDWLRQRIWKLV DGPLVVLRQE\0(1'(=ZDVWKDW3(8*(27ZDVVDWLVILHGZLWK $/&21¶6SHUIRUPDQFHRQWKHSODFHPHQW DV3(8*(27DQG 0(1'(=KHUVHOIKDGDIILUPHGWR$/&21QXPHURXVWLPHVLQFOXGLQJ DWWKH-DQXDU\FRSURPRWLRQNLFNRIIPHHWLQJLQ/RV &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 71 of 132 Page ID #:71 $QJHOHV 7KDWWKHSODFHPHQWZRXOGLQIDFWEHLQWKH3LFWXUHZDVQRW LQDQ\GRXEW±$/&21KDGEHHQSHUIRUPLQJDQGKDGUHSHDWHGO\ DIILUPHGWR3(8*(27WKDW$/&21LQWHQGHGWRFRQWLQXHWRSHUIRUP DQGZDVUHDG\ZLOOLQJDQGDEOHWRGRVRLQFOXGLQJDFURVVDUHODWLYHO\ ZLGHVSHFWUXPRI3(8*(27¶6DGGLWLRQDOVSHFLILFLPSOHPHQWDWLRQ LQSXW)RUH[DPSOHDVQRWHGLQSUHYLRXVSDUDJUDSKV$/&21 LQWHUQDOO\ZDVSUHSDUHGDQGUHDG\DEOHDQGZLOOLQJLIQHFHVVDU\WR JRDERYHDQGEH\RQGWKHFRQWUDFWWHUPVRQVHFRQGVRIYLVLELOLW\ IRRWDJH HYHQDVPDQ\DVVHFRQGVLIQHFHVVDU\WRDYRLGDQ\WLPH FRXQWLQJGLVSXWHV 0RUHRYHUDV3(8*(27DQG0(1'(=ZHOO NQHZ$/&21ZDVE\WKLVWLPHGHHSO\DQGIRUDOOFRPPHUFLDOO\ SUDFWLFDOSXUSRVHVLUUHYRFDEO\FRPPLWWHGWR.¶VVSLQQHUDSSHDULQJ WKURXJKRXWWKHHQWLUHILOPDVD3HXJHRW7KLVPHDQWWKDW3(8*(27¶6 VDWLVIDFWLRQRQWKHSODFHPHQWZDVQRWLQDQ\ZD\DQREVWDFOHWR FRQWLQXLQJWRPRYHIRUZDUGZLWKWKHFRSURPRWLRQRQDQ\UHDVRQDEOH RUJRRGIDLWKPHDVXUH:KLOH$/&21ZDVZLOOLQJWRZDLWXQWLO UHOHDVHRIWKH3LFWXUHDFWXDOO\WRUHFHLYHWKHSODFHPHQWIHH QRPRWLRQSLFWXUHFDQZDLWXQWLODIWHUWKHUHOHDVHRIWKHSLFWXUHWRSODQ DQGH[HFXWHDFRSURPRWLRQ±WKHSXUSRVHRIWKHFRSURPRWLRQLVWR SUHFHGHDQGVXSSRUWWKHUHOHDVHRIWKH3LFWXUH7KXVWKHDFWXDO SD\PHQWWLPLQJRIWKHSODFHPHQWIHHDQGFRPPHQFHPHQWRIWKHFR SURPRWLRQZHUHGLVWLQFWLVVXHVZLWKOLWWOHEHDULQJRQHDFKRWKHUDVDOO SURIHVVLRQDOVWKDWZRUNLQWKHPRWLRQSLFWXUHSURGXFWSODFHPHQWDQG FRSURPRWLRQILHOGLQFOXGLQJ0(1'(=ZHUHDQGDUHZHOODZDUH :KDW0(1'(=FOHDUO\PHDQWE\KHUVWDWHPHQW DVRWKHUSRUWLRQVRI KHUHPDLOPDNHFOHDU ZDVWRVXJJHVWQRQVHQVLFDOO\DQGLQHJUHJLRXV EDGIDLWKWKDWWKHSDUWLHVVKRXOGRQO\EHJLQWRGLVFXVVDFRSURPRWLRQ afterWKHUHOHDVHRIWKHSLFWXUHKDGRFFXUUHG±ZKHQWKHFRSURPRWLRQ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 72 of 132 Page ID #:72 ZRXOGEHWRRODWHDQGKDYHOLWWOHRUQRYDOXHWR$/&21 H )DOVH'HQLDOWKDW3(8*(27+DG:RQWKH%LGGLQJ6SHFLILFDOO\E\ 2IIHULQJD/DUJH&R3URPRWLRQDQGWKDW0(1'(=KDGEHHQ ,QYROYHGLQ'RLQJ6R³,I,KDGNQRZQD\HDUDJR DWWKHEHJLQQLQJRI RXUGLVFXVVLRQV WKDW6RQ\>sic$/&21@ZDVH[SHFWLQJDPLQLPXP LQYHVWPHQWRQDSURPRWLRQFDPSDLJQWRVLJQDGHDO,ZRXOGKDG>VLF@ QHYHUDJUHHGZLWKLW´0(1'(=PHDQWE\WKLVWKDW38%/,&,6KDG JRQHURJXHDQGH[FHHGHGLWVDXWKRULW\E\HYHUGLVFXVVLQJ3(8*(27 SURSRVDOVWKDWLQFOXGHGDFRSURPRWLRQZLWKDJXDUDQWHHGPHGLD VSHQG7KLVZDVDJDLQDQRWKHUQRQVHQVLFDOVWDWHPHQWDQGLQPDQ\ ZD\VZDVQRQVHQVLFDOUHJDUGOHVVRIZKDW38%/,&,6¶6DXWKRULW\ DFWXDOO\ZDVRUZDVQRW$VGHWDLOHGLQSULRUSDUDJUDSKV3(8*(27 KDGZRQWKHELGGLQJD\HDUHDUOLHUE\YROXQWDULO\VZHHWHQLQJLWVRZQ ELGWRLQFOXGHDQ³XSWRPLOOLRQ´JXDUDQWHHGPHGLDVSHQG7KDW SURSRVDOKDGEHHQLQLWLDOO\FRPPXQLFDWHGby BENIRU3(8*(27± not38%/,&,638%/,&,6KDGQHYHUEHHQWKHLQLWLDWRURI 3(8*(27¶6GLVFXVVLRQVZLWK$/&21DERXW3(8*(27¶6FOHDUDQG LQWHQWLRQDOO\HQWLFLQJSURSRVDOIRUDODUJHJXDUDQWHHGPHGLDVSHQG 7KXVWREODPHDQ\ODFNRIDXWKRULW\E\38%/,&,6IRU3(8*(27 SXUSRUWHGO\QRWXQGHUVWDQGLQJWKDWPEUGEOTKDGSURSRVHGWKH JXDUDQWHHGPHGLDVSHQGDQGWKDWLWZDVSDUWRIWKHGHDO DQGLQGHHG WKHRQO\UHDVRQ$/&21KDGEHHQZRUNLQJZLWK3(8*(27IRUWKH EHWWHUSDUWRID\HDUUDWKHUWKDQRWKHUDXWRPRWLYHSDUWQHUV ZDVDQGLV DJDLQVWDOOREMHFWLYHUHDOLW\DQGFOHDUO\GHPRQVWUDWHV0(1'(=¶6DQG 3(8*(27¶6H[WUHPHEDGIDLWK I $GPLVVLRQDQGRU)DOVH'HQLDOWKDW1R3(8*(27%XGJHWIRUD 0HGLD6SHQG(YHU([LVWHG³,ZDVYHU\FOHDUZLWK&DVDEODQFD, &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 73 of 132 Page ID #:73 &$1127FRPPLWRQDQ\EXGJHWRQ3HXJHRWVXEVLGLDULHV¶EHKDOYHV EHFDXVHWKH\DUHIUHHWRPDQDJHWKHLURZQPHGLDEXGJHWV´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¶6UHWDLOGHDOHUVDURXQGWKHZRUOGRQO\WKHQ3(8*(27 PLJKWSXWWRJHWKHUDPHGLDFDPSDLJQZKHUHWKH3(8*(27EUDQG URGHRIIWKHHVWDEOLVKHGVXFFHVVRIWKH3LFWXUH0(1'(=DOVRPHDQW WKDWVKHZDVQRWHYHQJRLQJWRVWDUWWKHSURFHVVZLWKLQ3(8*(27WKDW PLJKWEHUHTXLUHGIRUDQ\FRSURPRWLRQXQWLOWKHUHOHDVHRIWKH3LFWXUH KDGDFWXDOO\RFFXUUHG3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQ WKDWEDVLVDOOHJHV XQGHUDWOHDVWRQHIDFWXDODOWHUQDWLYH WKDW 0(1'(=¶6PRWLYDWLRQDQGSODQZDVLQSDUWWRHOLPLQDWHDOOSHUVRQDO DQGFRUSRUDWHSROLWLFDOULVNWRKHUVHOIRIKDYLQJFRPPLWWHG3(8*(27 WRDPHGLDFDPSDLJQDURXQGDPRWLRQSLFWXUHWKDWPLJKWRUPLJKWQRW EHZHOOUHFHLYHGE\DXGLHQFHV,IWKH3LFWXUHZDVZHOOUHFHLYHG 0(1'(=LQWHQGHGWRFODLPLWDVKHUSHUVRQDOFRUSRUDWHYLFWRU\DQG KDYH3(8*(27ULGHRIILWLIWKH3LFWXUHZDVQRWZHOOUHFHLYHGWKHQ 3(8*(27ZRXOGRQO\EHRXWWKHRIWKHSODFHPHQWIHHWKDWKDG EHHQSDLGWR38%/,&,6DQG0(1'(=ZRXOGEODPHRWKHUVHYHQIRU WKDW$OORIWKLVZDVIUDXGXOHQWDQGHJUHJLRXVEDGIDLWKE\0(1'(= &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 74 of 132 Page ID #:74 DQG3(8*(27DQGFRPSOHWHO\FRQWUDU\WRWKHIXQGDPHQWDOVXEVWDQFH RIDOOFRPPXQLFDWLRQVEHWZHHQ$/&21DQG3(8*(27IURPWKH WLPHRI3(8*(27¶60D\VZHHWHQHGELGIRUZDUG$/&21 ZRXOGQHYHUKDYHDJUHHGWRDQ\VXFKEXVLQHVVUHODWLRQVKLSZLWK 3(8*(27RQWKHWHUPVWKDW0(1'(=ZDVQRZOD\LQJRXW QRU ZRXOGDQ\PDMRUPRWLRQSLFWXUHVWXGLRHYHUGRVR 1RZRQO\DERXWILYHPRQWKVDZD\IURPWKH3LFWXUH¶VUHOHDVHGDWHDQG ZLWK$/&21FRPSOHWHO\XQDEOHIRUDOOFRPPHUFLDOO\SUDFWLFDOSXUSRVHVWRILQGDQ DOWHUQDWLYHDXWRPRWLYHSDUWQHURUHYHQHDVLO\UHPRYH3(8*(27¶6EUDQGLQJIURP WKH3LFWXUH0(1'(=ZHQWRQLQKHU0D\HPDLOWRSURSRVHDFRPSOHWHUH QHJRWLDWLRQRIWHUPVHQWLUHO\LQEDGIDLWK ³:KDWZHZRXOGOLNHWRGD\LVWRVWLFNWRRXUGLVFXVVLRQVZLWK &$6$%/$1&$ ILUVWDQDJUHHPHQWRQWKHSURGXFWSODFHPHQW DQGWKHQLIZHDUHVDWLVILHGE\WKLVSURGXFWSODFHPHQWZHZLOO UHYLHZWKHSRVVLELOLW\WRZRUNRQDSURPRWLRQDOFDPSDLJQLIWKH FUHDWLYHFDPSDLJQSURSRVHGE\RXUDGDJHQF\LVYDOLGDWHGE\ RXU&(2DQGQRFRPPLWPHQWVRQDQ\EXGJHWRUILJXUHVRQDQ\ RIRXUVXEVLGLDULHV¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 75 of 132 Page ID #:75 ,VDEHO´ %\WKHDERYHDPRQJRWKHUWKLQJV0(1'(=FOHDUO\GHFODUHGRQ EHKDOIRI3(8*(27WKDW 3(8*(27PLJKWQRWDFNQRZOHGJHLWVVDWLVIDFWLRQ ZLWKWKHSODFHPHQWXQWLODIWHUWKH3LFWXUH¶VWKHDWULFDOUHOHDVHDQGZDVGHQ\LQJWKH SDUWLHVHYHQKDGDELQGLQJSODFHPHQWDJUHHPHQW\HWOHWDORQHDFRSURPRWLRQ DJUHHPHQWDQG UHJDUGOHVVDQGHYHQLIWKHSODFHPHQWZHUHVDWLVIDFWRU\ DV $/&21¶6SODFHPHQWSHUIRUPDQFHFOHDUO\KDGEHHQXSWRWKHWLPHRI0(1'(=¶6 0D\HPDLO 3(8*(27ZRXOGneverLWVHOIIXQGDFRSURPRWLRQPHGLD VSHQGIRU%50(1'(=WKXVFOHDUO\GHFODUHGRQEHKDOIRI3(8*(27WKDW 3(8*(27ZDVneverJRLQJWRSHUIRUPWKHPHGLDVSHQGDVSURPLVHG±DPDWHULDO WHUPRI3(8*(27¶60D\VZHHWHQHGDQGZLQQLQJELGDPDWHULDOWHUPRI WKH-XO\/2,DPDWHULDOWHUPRIWKHSDUWLHV¶SODFHPHQWDQGFRSURPRWLRQ DJUHHPHQWDQGHYHU\UHILQHPHQWRILWDQGDPDWHULDOWHUPRIHYHU\VLQJOHGUDIW YHUVLRQRIWKHSURSRVHGORQJIRUPGRFXPHQWDWLRQRIWKDWDJUHHPHQWSURSRVHGE\ HLWKHUVLGH )XUWKHUPRUHZLWKWKHSDUWLHVDERXWILYHPRQWKVDZD\IURPWKH 5HOHDVH'DWHDQGZLWK$/&21FOHDUO\SHUIRUPLQJRQWKHSODFHPHQWDQGLQWHQGLQJ WRFRQWLQXHWRGRVR3(8*(27ZDVXQGHUDGXW\WRFRQWLQXHWRPRYHIRUZDUG ZLWKSUHSDUDWLRQVWRH[HFXWHWKHFRSURPRWLRQ7KLVVSHFLILFDOO\PHDQWDPRQJ RWKHUWKLQJVVHQGLQJVSHFLILFSURSRVHGSODQVWR$/&21DQG&70*IRUUHYLHZ DQGDSSURYDO0(1'(=¶60D\HPDLODOVRFOHDUO\GHFODUHGWKDW 3(8*(27UHIXVHGWRGRVRDQGLQVWHDGLQVLVWHGWKDWWKHREOLJDWLRQVRQWKDWSRLQW EHUHYHUVHGDQGWKDW$/&21DQG&70*LQVWHDGPDNHWKHPHGLDVSHQGSODQVIRU 3(8*(27WRUHYLHZDQGDSSURYH DQGZKLFKSODQV3(8*(27PDGHFOHDULW ZRXOGQRWEHSD\LQJIRUDQ\SDUWRILWVHOIHYHQLILWDSSURYHGWKHP 7KLVUHIXVDO ZDVLWVHOIDPDWHULDOEUHDFK &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 76 of 132 Page ID #:76 0(1'(=RYHUDOOPDGHFOHDUE\KHU0D\HPDLOWKDWIURPWKH SRLQWRI3(8*(27¶60D\VZHHWHQHGELGWR$/&21DQGIRUZDUGDIWHU WKDW3(8*(27KDGDWDOOWLPHVEHHQQHJRWLDWLQJLQEDGIDLWKDQGIUDXGXOHQWO\ZLWK UHVSHFWWRWKHPHGLDVSHQGWKDWZDVWKHVLQJOHPRVWPDWHULDOWHUPRIWKHHQWLUHGHDO :RUVH3(8*(27ZDVQRZSURSRVLQJWRUHQHJRWLDWHWKHGHDOWREHUDGLFDOO\PRUH IDYRUDEOHWR3(8*(27DIWHU3(8*(27¶6RZQEDGIDLWKKDGVKDUSO\UHGXFHG $/&21¶6OHYHUDJH $OORIWKHVHFRPPXQLFDWLRQVE\0(1'(=RQEHKDOIRI3(8*(27 FRQVWLWXWHGDFWXDODQGRUDQWLFLSDWRU\PDWHULDOEUHDFKHVRIWKHSDUWLHV¶DJUHHPHQWV DQG3(8*(27¶6QHJRWLDWLQJGXWLHVWRZDUG$/&21DQG&70*7KXVXQGHU FOHDU&DOLIRUQLDODZIURP0(1'(=¶60D\HPDLOIRUZDUG LIQRWHDUOLHU $/&21 DQG&70* ZHUHUHOLHYHGRIPDNLQJDQ\IXUWKHUSHUIRUPDQFHVWR 3(8*(27RUPDNLQJDQ\IXUWKHUVDWLVIDFWLRQRIDQ\FRQGLWLRQVRI3(8*(27 SHUIRUPDQFHV±DQGFRXOGVWLOOIXOO\HQIRUFHWKHGHDOWHUPVDJDLQVW3(8*(27 $VMXVWRQHH[DPSOHIURPWKHWLPHRI0(1'(=¶60D\HPDLO IRUZDUG$/&21ZDVQRORQJHUERXQGWRSHUIRUPIRULQVWDQFHWKHDOORFDWLRQRI WKHYLVLELOLW\IRRWDJHGRZQWRDQ\VWULFWPHDVXUHRIVHFRQGVEHWZHHQVSLQQHU VHTXHQFHVDQGRXWGRRUZDOODGVHTXHQFHV,QGHHGDOWKRXJK$/&21GLGVR UHJDUGOHVVDQGLQWKHXWPRVWJRRGIDLWKIURP0(1'(=¶60D\HPDLO IRUZDUG$/&21ZDVQRORQJHUERXQGWRLQFOXGHany3(8*(27EUDQGLQJ YLVLELOLW\VHTXHQFHVDWDOO$QGDVORQJDV$/&21GLGQRWDFWLQEDGIDLWKRU FRPPHUFLDOO\XQUHDVRQDEO\$/&21FRXOGPDNHQRIXUWKHUSHUIRUPDQFHVWR 3(8*(27ZKDWVRHYHU±LQFOXGLQJKDYLQJQREUDQGLQJYLVLELOLW\IRRWDJHDWDOOLQ WKH3LFWXUHDQGFRXOGVWLOOIXOO\HQIRUFHWKHDJUHHPHQWDJDLQVW3(8*(27 1HLWKHU$/&21QRU&70*HYHUZDLYHGDQ\RI3(8*(27¶6DFWXDO DQGDQWLFLSDWRU\EUHDFKHVLQ0(1'(=¶60D\HPDLORUDQ\RWKHUV$QG 0(1'(=¶6DQG3(8*(27¶6FRQGXFWZDVEH\RQGHJUHJLRXV &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 77 of 132 Page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¶60D\HPDLORQRUDERXW0D\$/&21¶6 PDUNHWLQJWHDPDQG&70*SUHVHQWHG3(8*(27ZLWKWKHRSSRUWXQLW\WRLQFOXGH 3(8*(27EUDQGLQJLQDQLPPHUVLYH95H[SHULHQFHLQYROYLQJ.¶VVSLQQHUWKDW ZDVKLJKO\DWWUDFWLYHWRFRQVXPHUVEXW3(8*(27VLPSO\GLGQRWDFWRQLW 7KXV$/&21DQG&70*FRQWLQXHGWRSHUIRUPUHDVRQDEO\DQGLQ JRRGIDLWK EXWZLWKRXWZDLYHURI3(8*(27¶6EUHDFKHV DQGIXUWKHUHQJDJHGZLWK 3(8*(27WRWU\WRFKDQJHLWVPLQG Alcon and CTMG Go to Extraordinary Lengths to Attempt to Please Peugeot, Even After Peugeot’s Egregious and Bad Faith Material Breaches $IWHU0(1'(=¶60D\HPDLO$/&21DQGRU&70*PDGH FOHDUWR3(8*(27LQYDULRXVFRPPXQLFDWLRQVWKDW0(1'(=¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 78 of 132 Page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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 79 of 132 Page ID #:79 EDFNDQGIRUWKFRPPHQWVDQGHIIRUWVWRFXUHDQ\3(8*(27JRRG IDLWKDQGFRPPHUFLDOO\UHDVRQDEOHGLVVDWLVIDFWLRQ3(8*(27ZDV VDWLVILHGZLWKWKHSODFHPHQWWKHQ3(8*(27ZRXOGFRPPLWWRD PLQLPXPPLOOLRQPHGLDVSHQG 7KHDERYHSODFHPHQWWHUPVZHUHDWOHDVWDVIDYRUDEOHWR3(8*(27DV DQ\ODQJXDJHLQHLWKHUWKH-DQXDU\GUDIWORQJIRUPVLJQHGE\0RQWURQRU WKH$SULOUHYLVHGGUDIWORQJIRUPSURSRVHGE\38%/,&,6¶6LQWHUQDOOHJDO WHDPHYHQXQGHUDYHU\JHQHURXVWR3(8*(27LQWHUSUHWDWLRQRIWKHGUDIWV¶ ODQJXDJH 2Q0D\0(1'(=HPDLOHGEDFNWR&70*FRS\LQJ 38%/,&,6H[HFXWLYHV,QKHU0D\HPDLO0(1'(=UHMHFWHGWKHDERYH SURSRVHGDFFRUGRQEHKDOIRI3(8*(27DQGLQVWHDGSURFHHGHGWRDWWHPSWWR UHQHJRWLDWHWKHGHDODOPRVWHQWLUHO\XVLQJ3(8*(27¶6E\QRZH[WUHPHOHYHUDJH ,QKHU0D\HPDLO0(1'(=DJDLQGHQLHGHYHU\KDYLQJVHHQ RUEHHQDZDUHRIDQ\GUDIWRIWKHORQJIRUPDJUHHPHQWRUHYHQWKDW38%/,&,6KDG EHHQQHJRWLDWLQJRQHIRU3(8*(27SULRUWR&70*¶60D\WUDQVPLVVLRQ RIWKH-DQXDU\GUDIWVLJQHGE\0RQWURQGLUHFWO\WR0(1'(= 3/$,17,))LVLQIRUPHGDQGEHOLHYHVWKDWWKLVGHQLDOE\0(1'(=ZDVEODWDQWO\ IDOVHDQGWKDWDWDEDUHPLQLPXPE\QRODWHUWKDQ$SULO38%/,&,6¶6 LQWHUQDOOHJDOWHDPKDGVKDUHGDQGGLVFXVVHGERWKWKH-DQXDU\GUDIWDQG ZKDWEHFDPHWKH$SULOGUDIWZLWK0(1'(= $VDVHFRQGDOWHUQDWLYH EHFDXVH3(8*(27DVVHUWVDVPXFKDQGDWOHDVWVRPHRIWKHIDFWVDUHQRWNQRZQ RUUHDVRQDEO\NQRZDEOHE\$/&21ZLWKRXWGLVFRYHU\3/$,17,))UHVHUYHVWKH ULJKWWRDOOHJHWKDW38%/,&,6¶6UHSUHVHQWDWLRQVWR$/&21DQG&70*WKDWVXFK KDGRFFXUUHGZHUHQRWDFFXUDWHDQGHLWKHULQWHQWLRQDOO\IDOVHRUQHJOLJHQWO\PDGH E\38%/,&,6$/&21VLPLODUO\UHVHUYHVWKDW38%/,&,6SDUWLFXODUO\ &DVDEODQFDPD\KDYHHQJDJHGLQRWKHUFRQGXFWGHWULPHQWDOWR3/$,17,)) SRVVLEO\WKURXJKRXWWKHFRXUVHRIWKHSDUWLHV¶GHDOLQJVDQGIRUZKLFK38%/,&,6 &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 80 of 132 Page ID #:80 PLJKWKDYHLWVRZQOLDELOLW\KRZHYHUDWSUHVHQWDOWKRXJK3(8*(27FRQWHQGV WKLV3(8*(27KDVWRGDWHGHFOLQHGWRGHOLYHUWR$/&21DQ\VXSSRUWIRUVXFK FRQWHQWLRQVDQG$/&21¶6XQGHUVWDQGLQJLVWKDW38%/,&,6GHQLHV3(8*(27¶6 FRQWHQWLRQV$/&21UHVHUYHVDOOSRVLWLRQVDVWRZKDWPD\RUPD\QRWKDYH RFFXUUHGEHWZHHQ38%/,&,6DQG3(8*(27LQFOXGLQJZLWKRXWOLPLWDWLRQWKH ULJKWWRSOHDGDGGLWLRQDOIDFWVLQFOXGLQJDOWHUQDWLYHIDFWVDERXWVXFKPDWWHUV ,QKHU0D\HPDLO0(1'(=IXUWKHUGHQLHGDJDLQWKDW 38%/,&,6KDGDQ\DXWKRULW\WRQHJRWLDWHWKHSODFHPHQWWHUPVWKDWLWQHJRWLDWHGLQ WKHGUDIWORQJIRUPVRUDVSURSRVHGE\&70*¶60D\SRWHQWLDODFFRUGRU DQ\DXWKRULW\WRQHJRWLDWHDQ\PHGLDVSHQGDWDOO 0(1'(=WKHQSURSRVHGWKHIROORZLQJVSHFLILFUHQHJRWLDWHGWHUPV D 7KDW$/&21DIIRUGDWOHDVWWKUHH VSLQQHUEUDQGLQJYLVLELOLW\ VFHQHVUXQQLQJDWOHDVWIRXU VHFRQGVHDFK E 7KDWWKHVSLQQHUYLVLELOLW\VFHQHVKDGWRLQFOXGHDWOHDVWWKUHHYLHZVRI WKHVSLQQHULQFOXGLQJDOO3(8*(27EUDQGLQJRQLW ³)52175($5 DQG,16,'(WKHDQLPDWHGRQHRQWKHLQVLGHERDUG\RXVKRZHGXV´ F 7KDWLQDGGLWLRQWRWKHDERYHPLQLPXPWZHOYH VHFRQGVRIVSLQQHU EUDQGLQJYLVLELOLW\WKDW$/&21DOVRVWLOODIIRUG3(8*(27DQ DGGLWLRQDOKRORJUDSKLFDGYHUWLVHPHQWLQDEDFNJURXQGVFHQH G 7KDWWKHSODFHPHQWIHHEHDOORFDWHGHDFKWRDOO IRXU DERYHYLVLELOLW\VFHQHV H 7KDWLI3(8*(27DSSURYHGWKHSODFHPHQWDIWHUUHYLHZWKDW 3(8*(27¶6&(2ZRXOGWKHQFRQVLGHUDSSURYLQJDFRSURPRWLRQ FDPSDLJQ I %XWWKDWHYHQLI3(8*(27¶6&(2ZDVIXOO\VDWLVILHGZLWKERWKWKH SODFHPHQWDQGWKHSODQQHGFRSURPRWLRQ3(8*(27ZRXOGVWLOOQRW HYHUPDNHDQ\ELQGLQJFRPPLWPHQWWRIXQGDQ\FRSURPRWLRQDWDOO J $WPRVW3(8*(27ZRXOGSUHVHQWWKHSRVVLELOLW\RIDFRSURPRWLRQ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 81 of 132 Page ID #:81 FDPSDLJQWRLWVORFDOGHDOHUVKLSVE\WHUULWRU\DQGHYHQDVWRWKDW 3(8*(27GHFOLQHGWRDJUHHHYHQWRSURSRVHDQ\VSHFLILFDPRXQWRI PHGLDVSHQGWRWKHORFDOGHDOHUVKLSV &OHDUO\NQRZLQJWKDW0(1'(=¶60D\HPDLOZRXOGEH DQGZDV VKRFNLQJWR&70*RQ0D\0RQWURQHPDLOHGWKHVDPHJURXSEDFN FRS\LQJ0(1'(= DQGDWWHPSWHGWRVPRRWKRU³FODULI\´0(1'(=¶6SRVLWLRQV 0RQWURQDWWHPSWHGWRFODULI\WZRSRLQWV D 7KDW$/&21DQG&70*ZHUHIXOO\FRPPLWWHGWR%5IHDWXULQJ WKH3(8*(27EUDQGDQGWKDWLWZRXOGEHDKLJKYDOXHSODFHPHQWWR 3(8*(27 E 7KDW0(1'(=DQG3(8*(27PHDQWWKDWLI3(8*(27ZDVVDWLVILHG ZLWKWKHSODFHPHQWWKHQ³3HXJHRWLVUHDG\WRODXQFKDSURPRWLRQDO FDPSDLJQLI3HXJHRWDSSURYHVWKHSURGXFW EUDQG SODFHPHQW´ 7KHVDPHGD\0D\0(1'(=UHVSRQGHGDQGFRUUHFWHG 0RQWURQ D ³:HGRZDQWWRFRQWLQXHWKHORJRSODFHPHQWEXWZHQHHGWRDJUHHRQ WHUPV´DQG E ³:HLQWHQGWRSXVKDFRSURPRWLRQDOFDPSDLJQEXWZHGRQRW JXDUDQWHHLWDOOeven if the LOGO placement is confirmed´ (PSKDVLVDGGHG ,WZDVWKXVFU\VWDOFOHDUWKDW0(1'(=DQG3(8*(27ZHUH UHDIILUPLQJWKHLUDFWXDODQGRUDQWLFLSDWRU\PDWHULDOEUHDFKRIWKHDJUHHPHQWWKDW KDGEHHQQHJRWLDWHGIRURYHUWHQPRQWKVDQGIXUWKHUZHUHUHMHFWLQJHYHQ&70*¶6 SURSRVHGVSHFLILFDFFRUG &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 82 of 132 Page ID #:82 .QRZLQJKHUOHYHUDJHZDVH[WUHPHDWWKLVSRLQW0(1'(=WKXV SURFHHGHGWRHQFRXUDJH&70*WRFRPHWR3DULVDQGSUHVHQWLQSHUVRQWR 3(8*(27¶6&(2 VRWKDWPD\EH3(8*(27ZRXOGDWOHDVWGRVRPHWKLQJRQWKH FRSURPRWLRQFDPSDLJQLILWIHOWOLNHLWDIWHUWKH&(2YLHZHGURXJKFXWYLVLELOLW\ IRRWDJH :LWKRXWZDLYLQJ3(8*(27¶6EUHDFKHVEXWZLWKOLWWOHFKRLFHEXWWR WU\WKHLUEHVWWRPLWLJDWHWKHVLWXDWLRQ$/&21DQG&70*ZRUNHGWRJHWKHUWR SUHSDUHDSUHVHQWDWLRQLQFOXGLQJURXJKFXWDFWXDOIRRWDJHIURPWKH3LFWXUHDVLW VWRRGLQSURJUHVVZLWK3HXJHRWEUDQGLQJIRUWKHH[SUHVVSXUSRVHRI&70* H[HFXWLYHVSHUVRQDOO\SUHVHQWLQJLWLQ3DULVWR3(8*(27¶6&(2 :LWKWKHDFWLYHSDUWLFLSDWLRQDQGLQYROYHPHQWRI0(1'(=DQGKHU FOHDUNQRZOHGJHDQGDZDUHQHVVRIWKHSXUSRVHDQGLQWHQWRIWKHWULSDQ H[FHSWLRQDOO\KLJKOHYHOWHDPRI&70*H[HFXWLYHVLQFOXGLQJD3UHVLGHQWOHYHO SURPRWLRQVDQGPDUNHWLQJH[HFXWLYHZLWKLQWKH6RQ\RUJDQL]DWLRQWUDYHOHGLQ SHUVRQWR3(8*(27¶63DULVRIILFHV$JDLQWKHH[SUHVVSXUSRVHRIWKHWULSZDVWR PHHWZLWK3(8*(27¶6&(23(8*(27LQFOXGLQJWKURXJK0(1'(=KDG DJUHHGWRDQGSDUWLFLSDWHGLQWKHSODQQLQJDQGILQDOL]DWLRQRIWKHWULSDQG VSHFLILFDOO\WKDWWKHPHHWLQJZRXOGEHZLWKWKH3(8*(27&(2 $FFRUGLQJO\RQRUDERXW-XQH±WKHSODQQHGDQGDJUHHGGDWH IRU3(8*(27DQGLWV&(2WRUHFHLYHWKH&70*WHDPWKH&70*WHDPDUULYHG DW3(8*(27¶63DULVRIILFHV ZLWKVRPHRIWKHPKDYLQJWUDYHOHGIURP&DOLIRUQLD IRUWKHVSHFLILFSXUSRVHRIWKHPHHWLQJ ZLWKWKHSUHVHQWDWLRQPDWHULDOVLQFOXGLQJ 3LFWXUHIRRWDJH %\WKLVWLPHWKHRULJLQDOO\SODQQHG3LFWXUH/RFNGHDGOLQHRI-XQH ZDVRQO\VHYHQ GD\VDZD\DQGLQDQ\HYHQWZDVLPPLQHQW7KH5HOHDVH 'DWHZDVMXVWRYHUIRXUPRQWKVDZD\3(8*(27ZDVZHOODZDUHRIWKHVH GHDGOLQHVDQGWKDWWLPLQJZDVFULWLFDO &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 83 of 132 Page ID #:83 0(1'(=PHWWKH&70*WHDPDQGLQIRUPHGWKHPWKDW3(8*(27¶6 &(2ZDVQRWLQ3(8*(27¶6RIILFHVWKDWGD\DQGZRXOGQRWEHPHHWLQJZLWKWKH &70*WHDPRURWKHUZLVHUHYLHZLQJWKHSUHVHQWDWLRQ%XW0(1'(=VDLGWKDWVKH DQGRWKHUH[HFXWLYHVZKRZRUNHGXQGHU0(1'(=ZRXOGPHHWZLWK&70*DQGLI DSSURSULDWHFRPPXQLFDWHODWHUWKHPVHOYHVZLWKWKH&(2DERXW%5ZLWKRXW &70*SUHVHQW7KLVZDVVWXQQLQJ7KH&70*WULSZDVDQH[WUDRUGLQDU\RQH DFURVVFRQWLQHQWVWKDWKDGEHHQSODQQHGZLWK3(8*(27 WKURXJK0(1'(= IRU WKHH[SUHVVSXUSRVHRI&70*PHHWLQJZLWKDQGSUHVHQWLQJGLUHFWO\WRWKH&(2 %DVHGRQWKHFLUFXPVWDQFHVDQGRQIDFWVDQGJRLQJVRQWKDWWKH&70* WHDPREVHUYHGZKLOHDW3(8*(27¶6RIILFHV3/$,17,))LVLQIRUPHGDQGEHOLHYHV DQGRQWKDWEDVLVDOOHJHVWKDW0(1'(=¶6VWDWHPHQWVWKDWWKH3(8*(27&(2ZDV QRWLQ3(8*(27¶63DULVRIILFHDQGZDVXQDYDLODEOHIRUWKHPHHWLQJZHUHIDOVH DQGWKDWLQIDFW3(8*(27¶6&(2wasSK\VLFDOO\DWWKHRIILFHVWKDWGD\DQGFRXOG KDYHPHWZLWK&70*3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLV DOOHJHVWKDW0(1'(=LQIDFWVWLOOZDVZLWKKROGLQJIURPKHU&(2VXEVWDQWLDOO\WKH HQWLUH%5VLWXDWLRQDQGWKDW0(1'(=KDGIUDXGXOHQWO\DQGLQEDGIDLWK LQGXFHG&70*LQWRWKH-XQH3DULVPHHWLQJNQRZLQJDQGLQWHQGLQJIURP WKHRXWVHWWKDW0(1'(=ZRXOGQHYHUDOORZWKH&70*WHDPWRPHHWZLWKRU SUHVHQWGLUHFWO\WR3(8*(27¶6&(2,QWKHDOWHUQDWLYH3/$,17,))LVLQIRUPHG DQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDWWKH3(8*(27&(2ZDVDZDUHRIWKH VLWXDWLRQDQGKLPVHOISDUWLFLSDWHGDQGFRRUGLQDWHGZLWK0(1'(=LQKDYLQJ &70*WUDYHOKDOIZD\DFURVVWKHZRUOGIRUWKHPHHWLQJDQGDOZD\VLQWHQGHGWR KDYH0(1'(=WDNHLWLQKLVVWHDG RUWRFDQFHORURWKHUZLVHIUXVWUDWHLW 7KH&70*WHDPREMHFWHGEXWKDGOLWWOHDELOLW\WRFRPSHOWKH&(2WR FRPHRXWRIKLVRIILFHDQGSURFHHGHGLQJRRGIDLWKDVEHVWWKH\FRXOG$W 0(1'(=¶6EHKHVWWKH&70*PDGHWKHLUSUHVHQWDWLRQWRDJURXSRIPRUHMXQLRU 3(8*(27H[HFXWLYHVOHG DQG3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDW EDVLVDOOHJHVFRQWUROOHG E\0(1'(=7KLVLQFOXGHGVKRZLQJURXJKFXWIRRWDJH &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 84 of 132 Page ID #:84 IURPWKHVWLOOLQSURJUHVV3LFWXUHWKDWGHPRQVWUDWHGSURSRVHGYLVLELOLW\IRRWDJH VHTXHQFHVZLWK3(8*(27EUDQGLQJRQWKHVSLQQHUDQGLQDWOHDVWRQHRXWGRRUZDOO DG7KHIRRWDJHZDVDOOFRQVLVWHQWDWWKHYHU\OHDVWZLWK3(8*(27¶6LQSXWVRQ SODFHPHQWUHTXLUHPHQWVDQGGHVLUHVXSWRWKDWWLPHDQGFRPSOHWHO\RUDWWKHYHU\ OHDVWVXEVWDQWLDOO\WUXHWRWKH&DLGHVLJQQRWHV &70*¶6WHDPDOVRH[SUHVVO\GLVFXVVHGZLWK0(1'(=WKDWDOWKRXJK WKHDJUHHPHQWRQO\FDOOHGIRUWHQ VHFRQGVRIYLVLELOLW\IRRWDJH$/&21ZDV SUHSDUHGWRGHOLYHU WZHOYH VHFRQGVZLWKQRDGGLWLRQDODVNVIURP3(8*(27 H[FHSWWKDW3(8*(27DFWXDOO\PRYHIRUZDUGZLWKWKHGHDODVSUHYLRXVO\DJUHHG LQIDFWDVDOUHDG\QRWHG$/&21ZDVUHDG\DEOHDQGZLOOLQJLIQHFHVVDU\WR GHOLYHUDVPDQ\DVVL[WHHQ VHFRQGV &70*¶6WHDPDOVRH[SUHVVO\H[SODLQHG WKDWWKHIRRWDJHSUHVHQWHGFRXOGVWLOOEHPRGLILHGLI3(8*(27GHVLUHGHVSHFLDOO\ ZLWKUHVSHFWWRYLVLELOLW\,QGHHG$/&21ZDVSUHSDUHGWREHDQGZRXOGKDYH EHHQKLJKO\IOH[LEOHZLWKDQGDFFRPPRGDWLQJWR3(8*(27DVWRDOPRVWDQ\ FRPPHUFLDOO\UHDVRQDEOHDGMXVWPHQWVWRWKHSODFHPHQWWKDW3(8*(27PLJKWKDYH UHTXHVWHGLQJRRGIDLWKERWKWRVDWLVI\3(8*(27DVDSDUWQHUDQGWRJHWWKH PHGLDVSHQG±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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 85 of 132 Page ID #:85 3(8*(27ORJRVDPSOHVIRUSRVVLEOHLQVHUWLRQDQGRUVXEVWLWXWLRQLQWKHSODFHPHQW ZKLFK$/&21ZDVLQIDFWSUHSDUHGDQGDEOHWRGRLI3(8*(27KDGLQGHHG GHVLUHGLW )XUWKHU0(1'(=HYHQSURPLVHGWKDWVKHZRXOGGLUHFW%(7& 3(8*(27¶6DJHQF\IRUSODQQLQJDQGFDUU\LQJRXWWKHFRSURPRWLRQ WRVHQGRYHU DGHFN 3RZHU3RLQWRU.H\QRWHSUHVHQWDWLRQ ZLWKDPRUHVSHFLILFDQGXSGDWHGFR SURPRWLRQSODQ &70*UHWXUQHGWRWKH8QLWHG6WDWHVRSWLPLVWLFDOO\DQGERWK&70* DQG$/&21UHPDLQHGUHDG\ZLOOLQJDEOHDQGDQ[LRXVWRSHUIRUP 2QRUDERXW-XQHRQHRI0(1'(=¶6VXERUGLQDWHV 0\OHQH 3RQFHW HPDLOHGWKHSURPLVHGDGGLWLRQDOORJRVDPSOHVWR&70*%XWQRWKLQJHOVH 1R%(7&GHFNFDPH 2Q-XQHZLWKPRUHWKDQDZHHNKDYLQJSDVVHGVLQFHWKH-XQH PHHWLQJDQG0(1'(=¶6SURPLVHVIURPLW DQGZLWKWKH3LFWXUHQRZSDVW WKHRULJLQDOO\SODQQHG3LFWXUH/RFN &70*HPDLOHG0(1'(=DJDLQ ³:HDVVXPH\RXKDYHQRZVKDUHGWKHFDPSDLJQLGHDVZLWK \RXU&(2DVSURPLVHGDQGXUJHQWO\QHHGWRNQRZKLVUHDFWLRQ DQGIHHGEDFN $VPHQWLRQHGLQWKHPHHWLQJZHXUJHQWO\QHHGWRVKDUHWKHVH LGHDVLQWHUQDOO\QH[WZHHNLQRUGHUWRPHHWGHDGOLQHVDQGZRXOG OLNHWRNQRZZKHQWRH[SHFWWKHUHYLVHGGHFNIURP%(7&´ (PSKDVLVLQRULJLQDO 2Q-XQH3(8*(27ILQDOO\VXUIDFHGDJDLQDQGUHVSRQGHGLQ DQHPDLOIURP0(1'(=¶6VXERUGLQDWH3RQFHW0(1'(=LVRSHQO\FRSLHGRQ 3RQFHW¶V-XQHHPDLODQG3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDW EDVLVDOOHJHVWKDW0(1'(=HLWKHUVXEVWDQWLDOO\GUDIWHGRUGLFWDWHGWKHHPDLOKHUVHOI DQGKDG3RQFHWVHQGLWRUWKDW0(1'(=UHYLHZHGLWDQGDSSURYHGLWSULRUWR 3RQFHWWUDQVPLWWLQJLWDQGLQGHHGGLUHFWHG3RQFHWWRVHQGLW,QKHU-XQH HPDLOUHVSRQVH3RQFHW IRU0(1'(= GHFOLQHGWRVD\WKDWWKHSODFHPHQWPHW 3(8*(27¶6VDWLVIDFWLRQDQGLQVWHDGFRPPXQLFDWHGWKDWLWGLGQRWDQGGLUHFWHG &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 86 of 132 Page ID #:86 WKDW$/&21UHGRLW6RPHRIWKH3RQFHWFRPPHQWVUHODWHGWRVXFKWKLQJVDV OLJKWLQJRQDSDUWLFXODUORJRDQGUHTXHVWVWKDWLWEHLPSURYHG±ZKLFKZHUHERWK RUGLQDU\NLQGVRIFRPPHQWVLQSODFHPHQWUHYLHZJHQHUDOO\DQGZKLFK0(1'(= KDGKDGH[SODLQHGWRKHUZHUHQRWDSUREOHPDQGFRXOGHDVLO\EHGRQH,QWKH LQGXVWU\WKHVHZRXOGQRWEHYDOLGUHDVRQVWRGHFODUHWKDWDSODFHPHQWZDV XQVDWLVIDFWRU\ 2WKHUFRPPHQWVIURP3RQFHW IRU0(1'(= ZHUHHYHQPRUHFOHDUO\ LQEDGIDLWKDQGHYHQGLUHFWO\FRQWUDU\WRSULRUDSSURYDOVWKDW3(8*(27DQG 0(1'(=KDGDOUHDG\JLYHQ$/&21DQGXSRQZKLFK$/&21KDGUHOLHG7KH 3RQFHWHPDLOHYHQLQFOXGHGFRPPHQWVWKDWZHUHXQGHQLDEO\REMHFWLYHO\IDOVHDQG ULGLFXORXV)RUH[DPSOHE\WKH3RQFHWHPDLO0(1'(=SXUSRUWHGWRUHMHFWWKH SODFHPHQWRQWKHJURXQGVWKDWWKHVSLQQHUGHVLJQGLGQRWLQFRUSRUDWHWKH&DLGHVLJQ QRWHVHYHQWKRXJKWKHVSLQQHUFOHDUO\LQFRUSRUDWHVWKHPHVVHQWLDOO\H[DFWO\DV GUDZQE\&DLDQG0(1'(=KDGSUHYLRXVO\VHHQWKHPDQGDSSURYHGWKHP LQFOXGLQJDWWKH-DQXDU\FRSURPRWLRQNLFNRIIPHHWLQJ $VDQRWKHU H[DPSOHVWXQQLQJO\YLDWKH3RQFHWHPDLO0(1'(=SXUSRUWHGWRUHMHFWWKH SODFHPHQWRQWKHJURXQGVWKDWWKHDIILOLDWLRQEHWZHHQ*RVOLQJ¶VFKDUDFWHU.DQGWKH 3HXJHRWEUDQGHGVSLQQHUZDVQRWVWURQJHQRXJK±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³5HJDUGLQJWKLVSRWHQWLDO &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 87 of 132 Page ID #:87 SURPRWLRQDOFDPSDLJQ,QHHGWRUHLWHUDWHRXUSRVLWLRQWKDWeven if the placement was satisfyingZHFDQQRWFRPPLWRQWKHSURPRWLRQDOFDPSDLJQDQGRUDQ\ ILJXUHVUHJDUGLQJWKHFDPSDLJQ´ (PSKDVLVDGGHG )XUWKHUWKH-XQH3RQFHWHPDLODOVRGLVFORVHGWKDW0(1'(= DFWXDOO\KDGQRW\HWVKRZQWKHSODFHPHQWSUHVHQWDWLRQWRKHU&(2RUHYHQDV 3/$,17,))XQGHUVWDQGVKHUFRPPXQLFDWLRQWRanyRIKHUFRUSRUDWHVXSHULRUV 5DWKHUWKHVWDWHPHQWVRIGLVVDWLVIDFWLRQRQEHKDOIRI3(8*(27ZLWKWKH SODFHPHQWZHUHHQWLUHO\IURP0(1'(=KHUVHOI YLD3RQFHW DQGQRWIURPWKH &(2,QGHHG0(1'(=GLVFORVHG YLDWKH3RQFHWHPDLO WKDWVKHZRXOGQRWHYHQ EHPHHWLQJZLWKDQ\RQHDERYHKHULQWKH3(8*(27³KLHUDUFK\´DERXWWKH%5 RSSRUWXQLW\DQGLVVXHVXQWLO-XQH )XUWKHUNQRZLQJWKDWVKHKDGVXFFHHGHGLQGHVWUR\LQJDOO$/&21 QHJRWLDWLQJOHYHUDJHZLWKKHUUHSHDWHGGHOD\VEDGIDLWKQHJRWLDWLRQWDFWLFVDQG RXWULJKWIDOVHVWDWHPHQWVRYHUWKHFRXUVHRIQRZPRUHWKDQ\HDU0(1'(=EROGO\ DVNHGWKDW&70*VHQGRYHURQHRILWV)UDQFHEDVHGH[HFXWLYHVWRSUHVHQW DJDLQ WR3(8*(27RQ-XQH &70*¶V3UHVLGHQWOHYHOH[HFXWLYHZKRKDGSHUVRQDOO\DWWHQGHGWKH H[WUDRUGLQDU\-XQH QRQ&(2 PHHWLQJLQ3DULVUHVSRQGHGWR0(1'(= GLUHFWO\RQ-XQHUHJDUGLQJKHUVXERUGLQDWH¶VVWXQQLQJ-XQHHPDLO 7KH&70*H[HFXWLYHSRLQWHGRXWWR0(1'(=WKDWKHUH[SUHVVLRQRIRYHUDOO GLVVDWLVIDFWLRQZLWKWKHSODFHPHQWZDVFRPSOHWHO\FRQWUDU\WRKHUFRPPHQWVLQWKH -XQHPHHWLQJ+HDOVRH[SODLQHGKRZPDQ\RI0(1'(=¶6-XQH FRPSODLQWVDERXWWKHSODFHPHQWZHUHFRPSOHWHO\XQWHQDEOHREMHFWLYHO\+H FRPPXQLFDWHGWKDWLWDSSHDUHGWKDW3(8*(27DQG0(1'(=ZHUHVLPSO\ VWDOOLQJDQGLQWKHIDFHRIFULWLFDOXUJHQF\RQWLPLQJLIDQ\FRSURPRWLRQZDVHYHU JRLQJWRKDSSHQ+HWROG0(1'(=WKDWWKHPDWWHUZRXOGKDYHWREHWXUQHGRYHU WRWKHODZ\HUVDWWKLVSRLQW &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 88 of 132 Page ID #:88 $/&21DQG&70*FRQIHUUHGDQGGHFLGHGWRGRWKHLUEHVWWRDGGUHVV WKLQJVWKH\UHDVRQDEO\FRXOGLQFOXGLQJ0(1'(=¶6LQH[SOLFDEOHGHQLDOVWKDWDQ\ FRSURPRWLRQGHDOKDGHYHUHYHQEHHQXQGHUQHJRWLDWLRQ2QRUDERXW-XQH $/&21DQG&70*H[HFXWLYHVDIIL[HGVLJQDWXUHVIRU$/&21DQG&70* WRWKHZULWWHQORQJIRUPYHUVLRQWKDWKDGEHHQVLJQHGDQGGHOLYHUHGE\0RQWURQRQ -DQXDU\DQGSUHSDUHGWRVHQGDIXOO\H[HFXWHGFRS\RILWWR0(1'(= %HIRUHWKH\DFWXDOO\GLGRQ-XQH0(1'(=ILQDOO\ UHVSRQGHGWR&70*¶6-XQHHPDLODQGUHSHDWHG\HWDJDLQDOORIKHUEDG IDLWKDQGIDOVHGHQLDOV,QKHU-XQHHPDLO0(1'(=GLGWKHIROORZLQJ D )DOVHO\GHQLHGDJDLQWKDW3(8*(27KDGHYHUJLYHQDQ\QHJRWLDWLQJ RUFRQWUDFWLQJDXWKRULW\WR38%/,&,6DWDOODQGIDOVHO\GHQLHGWKDWWKH ³'HOHJDWLRQRI6LJQDWXUH$XWKRULW\´GRFXPHQWVWKDWVKHKDGVLJQHG WZLFHKHUVHOIJDYH38%/,&,6DQ\DXWKRULW\DWDOORQDQ\WKLQJ E )DOVHO\GHQLHGHYHUEHLQJDZDUHRIWKH-XO\/2, F )DOVHO\GHQLHGWKDW3(8*(27KDGHYHUVLJQHGDQ\FRQWUDFWHYHQ WKRXJK38%/,&,6KDGVLJQHGERWKWKH-XO\/2,DQGWKH -DQXDU\GUDIWRIWKHSURSRVHGORQJIRUPERWKWLPHV H[SUHVVO\RQ3(8*(27¶6EHKDOI G 5HLWHUDWHGWKDWUHJDUGOHVVRIDQ\VROXWLRQWKDWPLJKWEHIRXQGDVWRWKH SODFHPHQW3(8*(27ZRXOGQHYHUILQDQFHDFRSURPRWLRQPHGLD VSHQGLWVHOIDQGWKDWDOO3(8*(27ZRXOGHYHUSD\ZRXOGEHWKH SODFHPHQWIHH HYHQWKRXJK3(8*(27KDGZRQWKHELGGLQJLQ0D\ VSHFLILFDOO\E\VZHHWHQLQJLWVELGZLWKWKHFRSURPRWLRQ FRPPLWPHQWDQGHYHQWKRXJKWKHELGKDGEHHQWUDQVPLWWHGIRU 3(8*(27E\%(1QRW38%/,&,6 H 0(1'(=5HSHDWHGWKDWHYHQDVWRWKHSODFHPHQWWKH&(2¶6UHYLHZ DQGDSSURYDOZDVUHTXLUHGDQGIXUWKHUUHYHDOHGWKDW VWXQQLQJO\ 0(1'(=KDGagainGHOD\HGWKDW0(1'(=KDGFDQFHOOHGWKH-XQH &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 89 of 132 Page ID #:89 PHHWLQJUHIHUHQFHGLQ3RQFHW¶V-XQHHPDLO I /LNH&KDUOHV6FKXOW]¶V/XF\WHHLQJXSWKHIRRWEDOOIRUDSODFHNLFNWR VHHLI&KDUOLH%URZQZRXOGEHJXOOLEOHHQRXJKWROHWKHUSXOOLWDZD\ IURPKLPDWWKHODVWPRPHQW\HWDJDLQ0(1'(=DVNHG&70*WR VHQGDWHDPRYHUDJDLQIRUKHU&(2WREHDIIRUGHG\HWDQRWKHUFKDQFH WRUHYLHZWKHSODFHPHQWIRRWDJH$WWKHVDPHWLPHDQGLQWKHYHU\ QH[WVHQWHQFH0(1'(=DOVRPDGHFU\VWDOFOHDUWKDWVXFKDQHIIRUW ZRXOGEHIXWLOHUHJDUGOHVV³,DOVRUHLWHUDWHRXUSRVLWLRQWKDWeven if the product placement is approvedLWGRHVQRWPHDQWKDWWKHUHZLOO EHDSURPRWLRQDOFDPSDLJQ´ (PSKDVLVDGGHG 2Q-XQHD&70*ODZ\HUUHVSRQGHGWR0(1'(=YLDHPDLO &70*¶6-XQHODZ\HUHPDLODWWDFKHGWKH-DQXDU\YHUVLRQRIWKH ORQJIRUPDVVLJQHGE\0RQWURQDQGQRZZLWKVLJQDWXUHVDIIL[HGIRU$/&21DQG &70*ZLWKDFOHDUVWDWHPHQWWKDWDOWKRXJK$/&21DQG&70*ZHUHUHVHUYLQJ DOOULJKWVWKH\ERWKUHPDLQHGUHDG\ZLOOLQJDQGDEOHWRPRYHIRUZDUGZLWKWKH SDUWQHUVKLSLQFOXGLQJLIUHTXLUHGLQVDWLVIDFWLRQRIDOOWHUPVDVVWDWHGLQWKH-DQXDU\ ORQJIRUP±LI3(8*(27ZRXOGZLWKGUDZLWVUHQHJLQJRQWKHFR SURPRWLRQDQGFRPPLWWRDFWXDOO\VWDUWGRLQJLW%\WKLVFRPPXQLFDWLRQ$/&21 DQG&70*ERWKPHDQWDQG0(1'(=DQG3(8*(27ERWKFOHDUO\XQGHUVWRRG DQGNQHZWKDWDPRQJRWKHUWKLQJVUHJDUGOHVVRI3(8*(27¶6HJUHJLRXVFRQGXFW WRWKLVSRLQW$/&21ZDVVWLOOUHDG\DQGZLOOLQJWRHIIHFWWKHSODFHPHQWLQDOPRVW DQ\PDQQHUWKDW3(8*(27UHDVRQDEO\DQGLQJRRGIDLWKGHVLUHGWKDW$/&21 FRXOGDFWXDOO\DFFRPSOLVKZLWKRXWMHRSDUGL]LQJWKHUHOHDVHGDWHRIWKHILOPRU XQUHDVRQDEO\FRPSURPLVLQJWKHDUWRIWKHILOP7KLVLQFOXGHGJUDQWLQJ3(8*(27 DGGLWLRQDOVHFRQGVRIYLVLELOLW\EH\RQGWKHWHQ VHFRQGVWKDWKDGEHHQORQJ DJUHHGRUHYHQDOORFDWLQJDOOWHQ VHFRQGVHQWLUHO\WRWZRVSLQQHUVHTXHQFHVLI WKDWLVZKDW3(8*(27DFWXDOO\ZDQWHGRUPRUHYLVLELOLW\IRRWDJHWRRXWGRRUZDOO DGV±EXWDOORQO\LI3(8*(27ZRXOGUHFRPPLWWRDQGDFWXDOO\FRPPHQFH &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 90 of 132 Page ID #:90 PRYLQJIRUZDUGZLWKWKHFRSURPRWLRQDVKDGEHHQORQJDJUHHGDQGUHOLHGRQE\ $/&21WRLWVH[WUHPHGHWULPHQW 7KHQH[WGD\-XQH0(1'(=UHVSRQGHG0(1'(=GHQLHG HYHUKDYLQJVHHQWKH-DQXDU\GRFXPHQWVLJQHGE\0RQWURQRUDQ\RWKHU GUDIWRIWKHORQJIRUPDJUHHPHQW)XUWKHU0(1'(=DVVHUWHGHVVHQWLDOO\WKDWVKH ZDVHQWLUHO\XQDZDUHWKDW38%/,&,6ZDVHYHQQHJRWLDWLQJVXFKDGRFXPHQWRQ 3(8*(27¶6EHKDOI3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLV DOOHJHV XQGHUDWOHDVWRQHIDFWXDODOWHUQDWLYH WKDWWKLVZDVEODWDQWO\IDOVHRQDOO SRLQWV,QGHHG3/$,17,))LVLQIRUPHGDQGEHOLHYHVDQGRQWKDWEDVLVDOOHJHVWKDW DWDEDUHPLQLPXPLQFRQQHFWLRQZLWKWKH38%/,&,63(8*(27IHHGLVSXWHLQ WKHILUVWIHZPRQWKVRI38%/,&,6¶6LQWHUQDOOHJDOWHDPKDGVKRZQ 0(1'(=WKH-DQXDU\GUDIWVLJQHGE\0RQWURQDQGKDGVRXJKWDQG UHFHLYHG0(1'(=¶6UHYLHZDQGH[SOLFLWDSSURYDORIWKHSURSRVHG$SULO UHYLVHGGUDIWRIWKHORQJIRUPVHQWWR$/&21E\38%/,&,6¶6LQWHUQDOOHJDOWHDP $JDLQ$/&21H[SUHVVO\UHVHUYHVWKHULJKWWRDOOHJHDOWHUQDWLYHIDFWVWKDW 3(8*(27¶6FRQWHQWLRQWKDWHVVHQWLDOO\38%/,&,6LVO\LQJDERXWLPSRUWDQW WKLQJVRUGLGLVLQVWHDGZKDWKDSSHQHG+RZHYHUDJDLQ3(8*(27KDVQRW GHOLYHUHGWR$/&21DQ\VXSSRUWIRUDQ\VXFKFRQWHQWLRQVE\3(8*(27DQG $/&21¶6XQGHUVWDQGLQJLVWKDW38%/,&,6HQWLUHO\RUVXEVWDQWLDOO\GHQLHVWKHP 0(1'(=ZHQWRQLQKHU-XQHHPDLOWRUHMHFWRQEHKDOIRI 3(8*(27$/&21¶6DQG&70*¶6UHVHUYHGULJKWVRIIHUWRKDYHDOOSDUWLHVDJUHH WREHERXQGE\WKH-DQXDU\ORQJIRUPVLJQHGE\0RQWURQLI38%/,&,6 ZRXOGZLWKGUDZLWVEUHDFKHVDQGUHDIILUPLWVSURPLVHVWRSHUIRUPWKHFR SURPRWLRQDQGDFWXDOO\PRYHLWIRUZDUG,QVWHDG0(1'(=FRPPXQLFDWHG\HW DJDLQFOHDUO\3(8*(27¶6XWWHUO\EDGIDLWKGHQLDOWKDW3(8*(27KDGDQ\ELQGLQJ REOLJDWLRQVWR$/&21ZKDWVRHYHUDQGFHUWDLQO\UHIXVHGWREHERXQGE\WKHWHUPV DVVWDWHGLQWKH-DQXDU\GUDIWORQJIRUP RUDQ\RWKHUWHUPV 0(1'(= IXUWKHUPDGHFOHDUE\KHU-XQHHPDLOWKDWLI$/&21DQG&70*ZRXOG &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 91 of 132 Page ID #:91 QRWHQJDJHZLWK3(8*(27RQUHQHJRWLDWHGWHUPVIRUDSODFHPHQWRQO\ZLWKQR ELQGLQJ3(8*(27FRPPLWPHQWWRDQ\FRSURPRWLRQFDPSDLJQWKHQ3(8*(27 ZDVQRWLQWHUHVWHGLQDQ\IXUWKHUGLVFXVVLRQV Peugeot Receives the Benefit of the Placement without Any Co-Promotion and Still Refuses to Pay Alcon Even a Single Penny $IWHU0(1'(=¶6DQG3(8*(27¶6-XQHDEDQGRQPHQWRI WKH3LFWXUHDQGIXUWKHUGLVFXVVLRQVDERXWLW$/&21DQG&70*QRQHWKHOHVV FRQWLQXHGWRDFWUHDVRQDEO\DQGLQJRRGIDLWKWRVD\WKHOHDVW ,Q-XO\DOLIHVL]HUHDOZRUOGPRGHORI.¶V3HXJHRWEUDQGHG VSLQQHUZLWKDOORI&DL¶VGHVLJQQRWHVZDVWKHFHQWHUSLHFHRIDQLPPHUVLYHIDQ PDUNHWLQJH[SHULHQFHDW6DQ'LHJR&RPLF&RQ&RPLF&RQLVQRZRQHRIWKH HQWHUWDLQPHQWLQGXVWU\¶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¶VUHOHDVHQHDUHGDQGZRUGEHJDQWRVSUHDGWKDW.¶V VSLQQHUZRXOGEHD3HXJHRWPXOWLSOHQHZVRXWOHWVFRQWDFWHG$/&21ZDQWLQJWR GRVWRULHVIRFXVLQJRQ3HXJHRW¶VUROHLQ%5+RZHYHUWKHVHSXEOLFLW\ RSSRUWXQLWLHVDOOSDVVHGE\ZLWK0(1'(=KXQNHUHGLQKHURIILFHLQ3DULV EORFNLQJ3(8*(27¶VSDUWLFLSDWLRQRUHYHQIXOOFRUSRUDWHNQRZOHGJHRIWKH VLWXDWLRQDV0(1'(=JXDUGHGKHURZQSROLWLFDOFRUSRUDWHFDUHHUDWWKHH[SHQVHRI VRYHU\PDQ\SHRSOHDQGFRPSDQLHVZKRZRUNHGRQ%5DQGWKHSODFHPHQW &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 92 of 132 Page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¶6EUDQGLQ WKH3LFWXUHDQGLWVVWRU\ ,QGHHGWKHWUXWKIDUEH\RQGFRXQWLQJVHFRQGVRIORJRVLVWKDW&DL¶V GHVLJQQRWHVLQWHQGHGWRPDNHWKHHQWLUHVSLQQHUVLQJZLWK3(8*(27¶6WUDGH GUHVVIURPDOPRVWHYHU\DQJOHDUHRQVFUHHQWKURXJKRXWWKH3LFWXUH7KHVSLQQHU DFFRPSDQLHV.WKURXJKDOPRVWHYHU\DVSHFWRIKLVTXHVW3(8*(27¶6WULSOHFODZ EUDNHOLJKWVEODVWLQJRYHUDG\VWRSLDQ6RXWKHUQ&DOLIRUQLDIDUPVFDSHDUHDOPRVWWKH ILUVWWKLQJWKHDXGLHQFHVHHVLQWKHHQWLUHILOP7KHILOP¶VILUVWVHTXHQFHVIHDWXUH *RVOLQJLQWHUDFWLQJZLWKWKHYHKLFOHDQGVSHDNLQJWRLWDOPRVWDVDOLYLQJ FRPSDQLRQZLWK*RVOLQJ¶VIDFHQH[WWR3(8*(27¶6ORJRPXOWLSOHWLPHV7KH YLVLELOLW\RIWKH3(8*(27ORJRLQWKHVHVHTXHQFHVDQGRWKHUVFRXOGKDYHEHHQ HYHQKLJKHUKDG3(8*(27QRWDEDQGRQHGWKHSURFHVV*RVOLQJ¶VFORVH FRQQHFWLRQWRWKHVSLQQHUJRHVRQWKURXJKRXWWKHILOPDOOWKHZD\WRWKHILOP¶V ILQDOVHTXHQFHVZKHQ.ILQDOO\OD\VEDFNLQWKHIDOOLQJVQRZWRUHVWZLWKKLV VSLQQHUDIHZIHHWDZD\ $WWDFKHGKHUHWRDV([KLELW'DQGLQFRUSRUDWHGKHUHLQE\UHIHUHQFHDUH SKRWRJUDSKLFVWLOOVRIVFHQHVIURPWKH3LFWXUHLQFRUSRUDWLQJ3(8*(27¶6EDGJLQJ DQGWUDGHGUHVV &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 93 of 132 Page ID #:93 7KHSODFHPHQWDQGLWVULSSOHHIIHFWVWDNH3(8*(27¶6EUDQGORJRV DQGWUDGHGUHVVWRFRQVXPHUVZHOOSDVWMXVWWKHILOPDVLWDSSHDUVRQWKHDWHUDQG VWUHDPLQJVFUHHQV6RPHRIWKHILOP¶VPRVWSURPLQHQWRQHVKHHWV PDUNHWLQJ SRVWHUV IHDWXUH*RVOLQJQH[WWRWKH3HXJHRWVSLQQHU,QIDFWWKHYHU\ILUVWRQH VKHHWUHOHDVHGWRDKXQJU\DXGLHQFHILOOHGZLWKDQWLFLSDWLRQIRUWKHORQJGRUPDQW Blade RunnerSURSHUW\ZDV*RVOLQJVWDQGLQJLQIRJQH[WWRWKHVSLQQHU¶VUHGOLW WULSOHFODZ3HXJHRWWUDGHPDUNEUDNHOLJKWVMXVWDV&DLPDUNHGWKHPXS6HH ([KLELW(>2QH6KHHW@ $XGLHQFHVDQGDXWRPRWLYHLQGXVWU\SXEOLFDWLRQVDURXQGWKHZRUOG UHFRJQL]HGDQGJHQHUDOO\UHDFWHGRYHUZKHOPLQJO\IDYRUDEO\WRWKHSODFHPHQWZLWK SOHDVDQWVXUSULVHDQGDSSUHFLDWLRQWRVHHWKDW.¶VVSLQQHUZDVD3HXJHRW$QGLQ VRPHPDUNHWVWKHSODFHPHQWZDVVHHQDVDWUXHPLOHVWRQHIRU3(8*(27± HVSHFLDOO\WKH8QLWHG6WDWHV +HUHLQWKH86VRPHRIWKHEXVLQHVVFRPPXQLWLHVPRVWSURPLQHQW ZDWFKHUVFOHDUO\WRRNQRWHRIWKHSODFHPHQW$QGWKH\UHFRJQL]HGWKDWE\LW 3(8*(27KDGWDNHQDILUVWJLDQWDQGSRVLWLYHVWHSWRZDUGUHEXLOGLQJLWVEUDQGLQ WKH86PDUNHWIURPZKLFKLWKDGEHHQDEVHQWIRUDQHQWLUHJHQHUDWLRQ)RU H[DPSOHRQ2FWREHUWKH3LFWXUH¶V5HOHDVH'DWHBloombergSXEOLVKHGD WZRSDJHVWRU\RQ%5¶VWUHDWPHQWRIEUDQGVDQGLWVGHHSHUUHOHYDQFHWR EXVLQHVVKLVWRU\7KH3HXJHRWSODFHPHQWIHDWXUHVSURPLQHQWO\DQG RYHUZKHOPLQJO\SRVLWLYHO\LQWKHVWRU\7KHBloombergVWRU\HIIHFWLYHO\HTXDWHV WKHORQJKLEHUQDWHG3HXJHRW¶VEUDQGVWDWXUHZLWK&RFD&RODRQHRIWKHZRUOG¶V PRVWUHYHUHGEUDQGV,WLVKDUGWRLPDJLQHKRZPXFKSDLG86WHOHYLVLRQUDGLR DQGSULQWDGYHUWLVLQJPLJKWKDYHEHHQUHTXLUHGIRU3(8*(27WRDFKLHYHVXFKD EUDQGLQJPDJLFWULFN±WRJRDOPRVWRYHUQLJKWLQWKH86PDUNHWIURPDOPRVWQR UHFRJQLWLRQWREHLQJHTXDWHGWRWKHUHYHUHG&RFD&RODEUDQGDEVHQWWKH%5 SODFHPHQW &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 94 of 132 Page ID #:94 3(8*(27QHYHUH[HFXWHGDQ\SURPRWLRQDQGWKH3LFWXUH XQGRXEWHGO\VXIIHUHGIRULW7KH3LFWXUHKDGDWOHDVWPLOOLRQOHVVLQSDLGPHGLD WRVXSSRUWWKHILOP¶VUHOHDVHWKDQH[SHFWHGQRWWRPHQWLRQORVWSXEOLFLW\VKRUW IRUPYLGHRSUHDPEOHVQHYHUPDGHRUUHOHDVHGWRFRQVXPHUVWRSUHWHOOWKHVWRU\RI .¶VVSLQQHUDVD3(8*(27DQGRWKHUZD\VWRDGYDQFHWKHILOPZLWKFRQVXPHUV EH\RQGHYHQMXVWSDLGPHGLDWKDW3(8*(27VKRXOGKDYHEHHQSDUWRIDQGHYHQ OHG%XWWKDW3(8*(27ZDVQ¶WDQGGLGQ¶W 3(8*(27¶6EDGIDLWKIDLOXUHWRSHUIRUPLWVFRSURPRWLRQDO REOLJDWLRQVDOPRVWFHUWDLQO\QHJDWLYHO\DIIHFWHGWKH3LFWXUH¶VER[RIILFH SHUIRUPDQFH%XWHYHQDVWKH3LFWXUHDFWXDOO\SHUIRUPHGZLWKRXWWKHVXEVWDQWLDO PDUNHWLQJDQGSURPRWLRQVXSSRUWWKDW3(8*(27ZDVVXSSRVHGWRSURYLGH %5VWLOOJURVVHGDERXWPLOOLRQLQZRUOGZLGHER[RIILFHPHDQLQJWKDWLQ LWVLQLWLDOWKHDWULFDOUHOHDVHDORQHLW DQGWKH3(8*(27VSLQQHULQWHJUDOWRWKH VWRU\IURPEHJLQQLQJWRHQG ZDVVHHQE\RYHUWKLUW\PLOOLRQSHRSOHHDFKRIZKRP ZHUHH[SRVHGWRVHYHUDOminutesRIVFUHHQWLPHRI3(8*(27WUDGHGUHVVDQG EUDQGLQJ 7KH3LFWXUHDOVRUHFHLYHGH[WUDRUGLQDULO\SRVLWLYHDXGLHQFHUHVSRQVH ZLWKDQSRVLWLYHDXGLHQFHUHDFWLRQRQ5RWWHQ7RPDWRHV 7KHFULWLFDODFFODLPIRUWKH3LFWXUHZDVHYHQJUHDWHU$WWDFKHGKHUHWR DV([KLELW)LVDOLVWRIDZDUGVZRQE\%5,WLVSDJHVORQJ $PRQJQXPHURXVRWKHUDZDUGV%5ZDVQRPLQDWHGIRUILYH $FDGHP\$ZDUGVDQGLWZRQWZR%HVW&LQHPDWRJUDSK\DQG%HVW9LVXDO(IIHFWV± ERWKQRWDEO\DUJXDEO\WKHKLJKHVWUHFRJQLWLRQDILOPFDQUHFHLYHDVWRWKHZD\WKH ILOP LQFOXGLQJWKHVSLQQHU ORRNVRQWKHVFUHHQ ,*1QDPHG%5WKH%HVW0RYLHRIWKH $/&21VXFFHHGHGLQPDNLQJDQHQGXULQJSLHFHRIDUWWKDWZLOOSHUVLVW DQGEHDSSUHFLDWHGDFWLYHO\YLHZHGDQGFXOWXUDOO\UHOHYDQWIRUGHFDGHV 3(8*(27¶6EUDQGLVSHUPDQHQWO\DQGSRVLWLYHO\DSDUWRILWIRUHYHU Aftermath 3(8*(27KDVQRZKDGDPSOHWLPHWRVHHWKH3LFWXUH¶VSKHQRPHQDO TXDOLW\LQFOXGLQJWKHDUWLVWLFDOO\GHIWKLJKTXDOLW\H[HFXWLRQRIWKHSODFHPHQWDQG VSLQQHULQH[DFWPDWFKZLWK&DL¶VGHVLJQQRWHVDQGHYHQLQWKHIDFHRI 3(8*(27¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 96 of 132 Page ID #:96 LW7RWKHH[WHQWQHFHVVDU\$/&21LVWKXVHQWLWOHGWRWKHEHQHILWRIWKHGLVFRYHU\ UXOHRQVWDWXWHRIOLPLWDWLRQVDQGWLPHEDUVIRUDOOFODLPVDVWRZKLFKWKHGLVFRYHU\ UXOHLVDSSOLFDEOHDQGIXUWKHU3(8*(27DQG0(1'(=DUHOHJDOO\DQGHTXLWDEO\ HVWRSSHGDQGRWKHUZLVHEDUUHGWRFODLPWKDWDQ\WLPHEDUVZHUHUXQQLQJDWDOODQ\ HDUOLHUWKDQDWWKHYHU\HDUOLHVW-DQXDU\ ),567&/$,0)255(/,() Breach of Contract against Automobiles Peugeot SA and Does 1 through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¶VVSLQQHU E 2QFHWKH.6SLQQHUEDGJLQJDQGIHDWXUHGHVLJQVZHUHDSSURYHGE\ 3(8*(27WKH\ZRXOGEHORFNHGDQG3(8*(27ZRXOGQRWEHDEOHWR FKDQJHRUGLVDSSURYHWKHPODWHU DQGWKHEDGJLQJDQGIHDWXUHGHVLJQV ZHUHDFWXDOO\DSSURYHGE\3(8*(27QRODWHUWKDQ-DQXDU\ F 7KHILQLVKHG%5ILOPZRXOGLQFOXGHDWOHDVWWHQ VHFRQGVRI IRRWDJHLQZKLFK3(8*(27¶6ORJRDQGEDGJLQJZRXOGEHFOHDUO\ YLVLEOHWRWKHDXGLHQFH DOWKRXJKLI$/&21IRUFUHDWLYHRURWKHU UHDVRQVGLGQRWLQFOXGHD3(8*(27SODFHPHQWWKHQWKLVZDVQRW &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 97 of 132 Page ID #:97 QHFHVVDULO\DEUHDFKE\$/&21EXWWKHSDUWLHVZHUHH[SHFWHGDQG REOLJDWHGWRQHJRWLDWHZLWKHDFKRWKHULQJRRGIDLWKDERXWZKDWWRGRLQ VXFKHYHQW G 7KHDWOHDVWWHQ VHFRQGVRIIRRWDJHZDVWREHDSSRUWLRQHGDFURVV PXOWLSOHVHTXHQFHVLQWKHPRYLH ZLWKDFOHDUUHFRUGWKDW3(8*(27 KDGLWH[SODLQHGWRWKHPWKDWDVHTXHQFHRUVFHQHFRXOGLQFOXGHPRUH WKDQRQHFDPHUDVKRW±$/&21DQG&70*H[SUHVVO\GHFOLQHGWREH ERXQGE\PHDVXULQJWLPLQJE\VLQJOHVKRWVEXWUDWKHUZRXOGRQO\DJUHH WR³VHTXHQFHV´RU³VFHQHV´PHDQLQJDJJUHJDWLRQVRIUHODWHGVKRWV H 7KHDWOHDVWWHQ VHFRQGVRIIRRWDJHZDVWREHDSSRUWLRQHGDFURVV WZRW\SHVRIVHTXHQFHV EDGJLQJRQ.¶VVSLQQHUDQG DWOHDVWRQH VHTXHQFHZKHUHWKH3HXJHRWORJRZRXOGDSSHDULQWKH%5ZRUOG VXFKDVLQDQRXWGRRUDGYHUWLVHPHQWLQWKHEDFNJURXQG I 2IWKHWZRW\SHVRIVHTXHQFHVWKH.VSLQQHUEDGJLQJVHTXHQFHVZHUH PRUHLPSRUWDQWWR3(8*(27DQGWKHRXWGRRUZDOODGVHTXHQFHV RU ³KRORJUDSKLFDGYHUWLVHPHQWV´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¶6FRPPHUFLDOO\UHDVRQDEOHDQGJRRGIDLWKUHYLHZDQG &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 98 of 132 Page ID #:98 DSSURYDOZKLFKZDVWREHSURPSWDQGZLWKLQWKHFUHDWLYHDQGDUWLVWLF SDUDPHWHUVRIWKHILOPZKLFKZHUHXQGHUVWRRGQRWWREHLQ 3(8*(27¶6SXUYLHZ3(8*(27¶6UHYLHZDQGDSSURYDOZDVWREH FRQGXFWHGE\3(8*(27ZLWKRXWXQUHDVRQDEOHGLVUXSWLRQRIWKHILOP¶V VFKHGXOHLQFOXGLQJSLFWXUHORFNILOPGHOLYHU\DQGUHOHDVHGDWHDQG DOVRHDUO\HQRXJKVXFKWKDWWKHFRSURPRWLRQFRXOGEHSODQQHGDQG H[HFXWHG L 7KH3HXJHRWVSLQQHUEDGJLQJZRXOGEHDVVRFLDWHGZLWK5\DQ*RVOLQJ¶V FKDUDFWHU. M 5\DQ*RVOLQJ¶VFKDUDFWHU.ZRXOGQRWEHDVVRFLDWHGZLWKDQ\ULYDO DXWRPRELOHEUDQG N 7KH3HXJHRWEUDQGZRXOGQRWEHSUHVHQWHGLQDSHUMRUDWLYHFRQWH[W 3(8*(27DFNQRZOHGJHGWKDWLWKDGUHYLHZHGWKH%5VFULSWDQG NQHZXQGHUVWRRGDQGDJUHHGWKDWWKH%5LQYROYHGRQHRUPRUH FUDVKHVRI.¶VVSLQQHUDQGWKDWWKHVHFUDVKHVZHUHDJUHHGDVQRW YLRODWLYHRIDQ\WHUPRIWKHSDUWLHV¶DJUHHPHQW O ,IXSRQUHYLHZ3(8*(27ZDVQRWUHDVRQDEO\DQGLQJRRGIDLWK VDWLVILHGZLWKDSURSRVHGH[HFXWLRQRIWKHIRRWDJHSODFHPHQWWKHQ 3(8*(27ZDVWRHQJDJHZLWK$/&21UHDVRQDEO\DQGLQJRRGIDLWK RQFKDQJHVRUHQKDQFHPHQWVVXFKWKDW3(8*(27ZRXOGEHDEOHWR JLYHLWVUHDVRQDEOHDQGJRRGIDLWKDSSURYDODOVRDJDLQZLWKLQWKH FUHDWLYHDQGDUWLVWLFSDUDPHWHUVRIWKHILOPDQGZKLFKZDVWREH FRQGXFWHGE\3(8*(27ZLWKRXWXQUHDVRQDEOHGLVUXSWLRQRIWKHILOP¶V VFKHGXOHLQFOXGLQJSLFWXUHORFNILOPGHOLYHU\DQGUHOHDVHGDWH P3(8*(27H[SUHVVO\DFNQRZOHGJHGWKDWLWKDGEHHQSURYLGHGZLWKWKH RSSRUWXQLW\WRUHYLHZWKHYLVXDOGHSLFWLRQVRIWKHSODFHPHQWLWHPVDQG KDGDSSURYHGWKHP Q ,I$/&21GHOLYHUHGVDWLVIDFWRU\SODFHPHQWIRRWDJHWKHQ3(8*(27 &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 99 of 132 Page ID #:99 ZDVREOLJDWHGWRSD\GLUHFWO\WR$/&21DVDSURGXFW SODFHPHQWIHHDQGZDVDOVRREOLJDWHGWRZRUNZLWK$/&21WRSODQ ILQDQFHDQGH[HFXWHDJOREDOFRSURPRWLRQPHGLDFDPSDLJQ ZKLFK FRXOGH[FOXGHWKH86 WRVXSSRUWWKH2FWREHUGD\DQGGDWH JOREDOWKHDWULFDOUHOHDVHRIWKH3LFWXUHZLWK3(8*(27REOLJDWHGWR GHOLYHUDWOHDVWPLOOLRQRISDLGPHGLD,QWKLVFRQWH[WGHOLYHU\RI VDWLVIDFWRU\SODFHPHQWIRRWDJHPHDQWWKDW$/&21FRPPXQLFDWHG LQWHQWLRQWRSHUIRUPDQGGHOLYHUWKHIRRWDJH±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¶6ZULWWHQFRQILUPDWLRQWR 3(8*(27WKDWWKHSODFHPHQWVZRXOGEHLQWKHILQDO3LFWXUH±ZKLOH WKHSODFHPHQWIHHFRXOGEHSDLGE\3(8*(27DIWHUUHOHDVHRIWKH 3LFWXUHLWZDVHDUQHGE\$/&21DQGRZHGE\3(8*(27HDUOLHURQ $/&21¶6FRQILUPDWLRQWKDW$/&21LQWHQGHGWRSHUIRUPWKH SODFHPHQW ZKLFKFRQILUPDWLRQE\$/&21ZDVUHSHDWHGO\JLYHQ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 100 of 132 Page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³$7/´ 6SHQGDQG PLOOLRQLQ%HORZ7KH/LQH ³%7/´ 6SHQG ZLWKLWXQGHUVWRRGDQG DJUHHGWKDWWKH$7/DQG%7/GHILQLWLRQVZHUHWKHDGYHUWLVLQJLQGXVWU\ VWDQGDUGGHILQLWLRQVRIWKHVHWHUPV±YHU\JHQHUDOO\$7/6SHQGUHIHUV WRPHGLDWKDWPDVVWDUJHWVODUJHDXGLHQFHVOLNHWHOHYLVLRQDQGUDGLR DQGPDQ\IRUPVRI,QWHUQHWPHGLD%7/6SHQGUHIHUVWRPHGLDWKDW PRUHVSHFLILFDOO\WDUJHWVDOLPLWHGVHWRIFRQVXPHUVOLNHIO\HUV GLVWULEXWHGIURPDSDUWLFXODUUHWDLOVWRUHRUPRVWIRUPVRIHYHQW PDUNHWLQJOLNHDIDQFRQYHQWLRQRUDXWRVKRZ X $/&21KDGDUHYLHZDQGDSSURYDOULJKWRYHUWKHFRSURPRWLRQ¶V VSHFLILFH[HFXWLRQVRQDFDVHE\FDVHEDVLV Y 7KHFRSURPRWLRQZDVWRLQFOXGHDGHGLFDWHGSUHVHQFHRQ 3(8*(27¶6ZHEVLWH ZZZSHXJHRWIU Z3(8*(27ZDVREOLJDWHGWRFUHDWHDQGWKHFRSURPRWLRQZDVWR LQFOXGHDWOHDVWRQHWKLUW\VHFRQGWHOHYLVLRQVSRWXQOHVV*RVOLQJ UHIXVHGWRDSSURYHXVHRIKLVOLNHQHVVLQWKHVSRWLQZKLFKFDVH &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 101 of 132 Page ID #:101 3(8*(27ZDVUHOLHYHGRIWKHWHOHYLVLRQVSRWREOLJDWLRQ EXWQRWRI WKHHQWLUHFRSURPRWLRQ *RVOLQJDJUHHGLQSULQFLSDOWRSRWHQWLDOXVH RIKLVOLNHQHVVLQDWHOHYLVLRQVSRWIRU3(8*(27DQG3(8*(27 QHYHUVRXJKW*RVOLQJ¶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¶6REOLJDWLRQVWKDW 3/$,17,))VHHNVWRHQIRUFHKHUHLQKDYHHLWKHUEHHQVDWLVILHGRUZDLYHGRU RWKHUZLVHH[FXVHG 3(8*(27EUHDFKHGWKHFRQWUDFWLQDWOHDVWWKHIROORZLQJZD\V D 3(8*(27SXUSRUWHGLQEDGIDLWKWRGHQ\WKDWLWKDGJLYHQILQDO DSSURYDORYHUGHVLJQDQGEDGJLQJRI.¶VVSLQQHU E 3(8*(27LQEDGIDLWKDWWHPSWHGWRPDNHWKHDOORFDWLRQRIWKHWHQ VHFRQGVRIYLVLELOLW\DPRYLQJWDUJHWWKDW$/&21FRXOGQHYHUKLWIRU WKHSXUSRVHRI3(8*(27KROGLQJRQWRDEDGIDLWKH[FXVHIRULWVRZQ QRQSHUIRUPDQFH F 3(8*(27UHIXVHGDQGIDLOHGWRHQJDJHLQJRRGIDLWKDQG FRPPHUFLDOO\UHDVRQDEOHUHYLHZRIWKHYLVLELOLW\IRRWDJHIRUWKH SXUSRVHRI3(8*(27KROGLQJRQWRDEDGIDLWKH[FXVHIRULWVRZQ SHUIRUPDQFH G 3(8*(27SXUSRUWHGWRGLVDSSURYHWKHSODFHPHQWHYHQRQLVVXHV ZKHUHWKHSODFHPHQWIROORZHG3(8*(27FUHDWHGDQG3(8*(27 &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 102 of 132 Page ID #:102 DSSURYHGGHVLJQHOHPHQWV e.g.WKHVSLQQHU¶VWULSOHFODZEUDNHOLJKWV DQGWKHVXEWOHW\RIDUHFHVVHG3(8*(27EODFNOHWWHUZRUGORJRRQWKH GULYHU¶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¶6ZHEVLWH ZZZSHXJHRWIU P3(8*(27IDLOHGDQGUHIXVHGWRSURGXFHWKH79VSRW Q 3(8*(27IDLOHGDQGUHIXVHGWRSURGXFH%HORZ7KH/LQHVSHQG VSRWV R 3(8*(27IDLOHGDQGUHIXVHGWRLVVXHDSUHVVUHOHDVHWRWKHPHGLD UHJDUGLQJWKHFRSURPRWLRQ 3(8*(27¶6EUHDFKHVGDPDJHG3/$,17,)) 3(8*(27LVOLDEOHWR3/$,17,))LQWKHDPRXQWRIDWOHDVW PLOOLRQH[FOXVLYHRISUHMXGJPHQWLQWHUHVWDWWRUQH\V¶IHHVFRVWVRURWKHUDPRXQWV &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 103 of 132 Page ID #:103 '2(6WKURXJKDUHQDPHGKHUHLQDVHQWLWLHVZKLFK3(8*(27PD\ FRQWHQGDUH3(8*(27FRQWUROOHGRU3(8*(27DIILOLDWHGHQWLWLHVZKLFKVKRXOG EHWUHDWHGDVWKHFRQWUDFWLQJSDUW\RUSDUWLHVZLWK3/$,17,))HLWKHULQDGGLWLRQWR RULQVWHDGRI3(8*(277RWKHH[WHQW'2(6WKURXJKRUDQ\RIWKHPDUHD FRQWUDFWLQJSDUW\RUWKHFRQWUDFWLQJSDUW\DOORIWKHIRUHJRLQJDOOHJDWLRQVDUHPDGH DVWRVDLG'2(GHIHQGDQWDQGVDLG'2(GHIHQGDQWLVOLDEOHWR3/$,17,))IRU EUHDFKRIFRQWUDFWIRUWKHUHDVRQVDQGRQWKHJURXQGVHWIRUWKLQWKLV)LUVW&ODLPIRU 5HOLHI 6(&21'&/$,0)255(/,() Breach of Implied Covenant of Good Faith and Fair Dealing against Automobiles Peugeot SA and Does 1 through 5 3/$,17,))UHSHDWVUHDOOHJHVDQGLQFRUSRUDWHVKHUHLQE\UHIHUHQFH HDFKDQGHYHU\DOOHJDWLRQVHWIRUWKLQDOORIWKHIRUHJRLQJSDUDJUDSKVDQGHDFK SDUDJUDSKRIWKLV&RPSODLQWKHUHDIWHUDVLIVHWIRUWKKHUHLQLQIXOO 7RWKHH[WHQWDQ\RIWKHDOOHJDWLRQVRUWKHRULHVLQWKLV6HFRQG&ODLP IRU5HOLHIDUHLQFRQVLVWHQWZLWKRWKHUDOOHJDWLRQVRUWKHRULHVSOHGLQWKLV&RPSODLQW WKH\DUHSOHGLQWKHDOWHUQDWLYH 3/$,17,))DQGGHIHQGDQW3(8*(27HQWHUHGLQWRDYDOLGDQG HQIRUFHDEOHSDUWO\RUDOSDUWO\ZULWWHQFRQWUDFWZKLFKLQFOXGHGDWOHDVWWKHIROORZLQJ WHUPV D 3/$,17,))DQG3(8*(27ZRXOGZRUNLQFORVHFROODERUDWLRQWR LQWHJUDWH3(8*(27EDGJLQJDQGRWKHUWUDGHGUHVVLQWRWKHGHVLJQRI .¶VVSLQQHU E 2QFHWKH.6SLQQHUEDGJLQJDQGIHDWXUHGHVLJQVZHUHDSSURYHGE\ 3(8*(27WKH\ZRXOGEHORFNHGDQG3(8*(27ZRXOGQRWEHDEOHWR FKDQJHRUGLVDSSURYHWKHPODWHU DQGWKHEDGJLQJDQGIHDWXUHGHVLJQV ZHUHDFWXDOO\DSSURYHGE\3(8*(27QRODWHUWKDQ-DQXDU\ F 7KHILQLVKHG%5ILOPZRXOGLQFOXGHDWOHDVWWHQ VHFRQGVRI &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 104 of 132 Page ID #:104 IRRWDJHLQZKLFK3(8*(27¶6ORJRDQGEDGJLQJZRXOGEHFOHDUO\ YLVLEOHWRWKHDXGLHQFH DOWKRXJKLI$/&21IRUFUHDWLYHRURWKHU UHDVRQVGLGQRWLQFOXGHD3(8*(27SODFHPHQWWKHQWKLVZDVQRW QHFHVVDULO\DEUHDFKE\$/&21EXWWKHSDUWLHVZHUHH[SHFWHGDQG REOLJDWHGWRQHJRWLDWHZLWKHDFKRWKHULQJRRGIDLWKDERXWZKDWWRGRLQ VXFKHYHQW G 7KHDWOHDVWWHQ VHFRQGVRIIRRWDJHZDVWREHDSSRUWLRQHGDFURVV PXOWLSOHVHTXHQFHVLQWKHPRYLH ZLWKDFOHDUUHFRUGWKDW3(8*(27 KDGLWH[SODLQHGWRWKHPWKDWDVHTXHQFHRUVFHQHFRXOGLQFOXGHPRUH WKDQRQHFDPHUDVKRW±$/&21DQG&70*H[SUHVVO\GHFOLQHGWREH ERXQGE\PHDVXULQJWLPLQJE\VLQJOHVKRWVEXWUDWKHUZRXOGRQO\DJUHH WR³VHTXHQFHV´RU³VFHQHV´PHDQLQJUHODWHGDJJUHJDWLRQVRIVKRWV H 7KHDWOHDVWWHQ VHFRQGVRIIRRWDJHZDVWREHDSSRUWLRQHGDFURVV WZRW\SHVRIVHTXHQFHV EDGJLQJRQ.¶VVSLQQHUDQG DWOHDVWRQH VHTXHQFHZKHUHWKH3HXJHRWORJRZRXOGDSSHDULQWKH%5ZRUOG VXFKDVLQDQRXWGRRUDGYHUWLVHPHQWLQWKHEDFNJURXQG I 2IWKHWZRW\SHVRIVHTXHQFHVWKH.VSLQQHUEDGJLQJVHTXHQFHVZHUH PRUHLPSRUWDQWWR3(8*(27DQGWKHRXWGRRUZDOODGVHTXHQFHV RU ³KRORJUDSKLFDGYHUWLVHPHQWV´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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 105 of 132 Page ID #:105 YLVLELOLW\GHOLYHULHVLILWKDGWR DQGLQIDFWLWGLGVR K 7KHH[HFXWLRQRIWKHWHQ VHFRQGVRISODFHPHQWIRRWDJHZDVVXEMHFW WR3(8*(27¶6FRPPHUFLDOO\UHDVRQDEOHDQGJRRGIDLWKUHYLHZDQG DSSURYDOZKLFKZDVWREHSURPSWDQGZLWKLQWKHFUHDWLYHDQGDUWLVWLF SDUDPHWHUVRIWKHILOPZKLFKZHUHXQGHUVWRRGQRWWREHLQ 3(8*(27¶6SXUYLHZ3(8*(27¶6UHYLHZDQGDSSURYDOZDVWREH FRQGXFWHGE\3(8*(27ZLWKRXWXQUHDVRQDEOHGLVUXSWLRQRIWKHILOP¶V VFKHGXOHLQFOXGLQJSLFWXUHORFNILOPGHOLYHU\DQGUHOHDVHGDWHDQG DOVRHDUO\HQRXJKVXFKWKDWWKHFRSURPRWLRQFRXOGEHSODQQHGDQG H[HFXWHG L 7KH3HXJHRWVSLQQHUEDGJLQJZRXOGEHDVVRFLDWHGZLWK5\DQ*RVOLQJ¶V FKDUDFWHU. M 5\DQ*RVOLQJ¶VFKDUDFWHU.ZRXOGQRWEHDVVRFLDWHGZLWKDQ\ULYDO DXWRPRELOHEUDQG N 7KH3HXJHRWEUDQGZRXOGQRWEHSUHVHQWHGLQDSHUMRUDWLYHFRQWH[W 3(8*(27DFNQRZOHGJHGWKDWLWKDGUHYLHZHGWKH%5VFULSWDQG NQHZXQGHUVWRRGDQGDJUHHGWKDWWKH%5LQYROYHGRQHRUPRUH FUDVKHVRI.¶VVSLQQHUDQGWKDWWKHVHFUDVKHVZHUHDJUHHGDVQRW YLRODWLYHRIDQ\WHUPRIWKHSDUWLHV¶DJUHHPHQW O XSRQUHYLHZ3(8*(27ZDVQRWUHDVRQDEO\DQGLQJRRGIDLWK VDWLVILHGZLWKDSURSRVHGH[HFXWLRQRIWKHIRRWDJHSODFHPHQWWKHQ 3(8*(27ZDVWRHQJDJHZLWK$/&21UHDVRQDEO\DQGLQJRRGIDLWK RQFKDQJHVRUHQKDQFHPHQWVVXFKWKDW3(8*(27ZRXOGEHDEOHWR JLYHLWVUHDVRQDEOHDQGJRRGIDLWKDSSURYDODOVRDJDLQZLWKLQWKH FUHDWLYHDQGDUWLVWLFSDUDPHWHUVRIWKHILOPDQGZKLFKZDVWREH FRQGXFWHGE\3(8*(27ZLWKRXWXQUHDVRQDEOHGLVUXSWLRQRIWKHILOP¶V VFKHGXOHLQFOXGLQJSLFWXUHORFNILOPGHOLYHU\DQGUHOHDVHGDWH P3(8*(27H[SUHVVO\DFNQRZOHGJHGWKDWLWKDGEHHQSURYLGHGZLWKWKH &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 106 of 132 Page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±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¶6ZULWWHQFRQILUPDWLRQWR 3(8*(27WKDWWKHSODFHPHQWVZRXOGEHLQWKHILQDO3LFWXUH±ZKLOH WKHSODFHPHQWIHHFRXOGEHSDLGE\3(8*(27DIWHUUHOHDVHRIWKH &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 107 of 132 Page ID #:107 3LFWXUHLWZDVHDUQHGE\$/&21DQGRZHGE\3(8*(27HDUOLHURQ $/&21¶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³$7/´ 6SHQGDQG PLOOLRQLQ%HORZ7KH/LQH ³%7/´ 6SHQG ZLWKLWXQGHUVWRRGDQG DJUHHGWKDWWKH$7/DQG%7/GHILQLWLRQVZHUHWKHDGYHUWLVLQJLQGXVWU\ VWDQGDUGGHILQLWLRQVRIWKHVHWHUPV±YHU\JHQHUDOO\$7/6SHQGUHIHUV WRPHGLDWKDWPDVVWDUJHWVODUJHDXGLHQFHVOLNHWHOHYLVLRQDQGUDGLR DQGPDQ\IRUPVRI,QWHUQHWPHGLD%7/6SHQGUHIHUVWRPHGLDWKDW PRUHVSHFLILFDOO\WDUJHWVDOLPLWHGVHWRIFRQVXPHUVOLNHIO\HUV GLVWULEXWHGIURPDSDUWLFXODUUHWDLOVWRUHRUPRVWIRUPVRIHYHQW PDUNHWLQJOLNHDIDQFRQYHQWLRQRUDXWRVKRZ X $/&21KDGDUHYLHZDQGDSSURYDOULJKWRYHUWKHFRSURPRWLRQ¶V VSHFLILFH[HFXWLRQVRQDFDVHE\FDVHEDVLV Y 7KHFRSURPRWLRQZDVWRLQFOXGHDGHGLFDWHGSUHVHQFHRQ 3(8*(27¶6ZHEVLWH ZZZSHXJHRWIU &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 108 of 132 Page ID #:108 Z3(8*(27ZDVREOLJDWHGWRFUHDWHDQGWKHFRSURPRWLRQZDVWR LQFOXGHDWOHDVWRQHWKLUW\VHFRQGWHOHYLVLRQVSRWXQOHVV*RVOLQJ UHIXVHGWRDSSURYHXVHRIKLVOLNHQHVVLQWKHVSRWLQZKLFKFDVH 3(8*(27ZDVUHOLHYHGRIWKHWHOHYLVLRQVSRWREOLJDWLRQ EXWQRWRI WKHHQWLUHFRSURPRWLRQ *RVOLQJDJUHHGLQSULQFLSDOWRSRWHQWLDOXVH RIKLVOLNHQHVVLQDWHOHYLVLRQVSRWIRU3(8*(27DQG3(8*(27 QHYHUVRXJKW*RVOLQJ¶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¶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¶VLPSOLHGFRYHQDQWRIJRRGIDLWKDQG IDLUGHDOLQJLQDWOHDVWWKHIROORZLQJZD\V D 3(8*(27PDQLSXODWHGWKHQHJRWLDWLRQDQGVLJQDWXUHSURFHVVRIORQJ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 109 of 132 Page ID #:109 IRUPGUDIWLQJDQGZLWKKHOGLWVVLJQDWXUHRQDOOORQJIRUPGUDIWVLQEDG IDLWKIRUWKHSXUSRVHRIDWWHPSWLQJWRFUHDWHDEDGIDLWKH[FXVHQRWWR SHUIRUPDQ\REOLJDWLRQRUFRQGLWLRQ E 3(8*(27SXUSRUWHGLQEDGIDLWKWRGHQ\WKDWLWKDGJLYHQILQDO DSSURYDORYHUGHVLJQDQGEDGJLQJRI.¶VVSLQQHU F 3(8*(27LQEDGIDLWKDWWHPSWHGWRPDNHWKHDOORFDWLRQRIWKHWHQ VHFRQGVRIYLVLELOLW\DPRYLQJWDUJHWWKDW$/&21FRXOGQHYHUKLWIRU WKHSXUSRVHRI3(8*(27KROGLQJRQWRDEDGIDLWKH[FXVHIRULWVRZQ QRQSHUIRUPDQFH G 3(8*(27UHIXVHGDQGIDLOHGWRHQJDJHLQJRRGIDLWKDQG FRPPHUFLDOO\UHDVRQDEOHUHYLHZRIWKHYLVLELOLW\IRRWDJHIRUWKH SXUSRVHRI3(8*(27KROGLQJRQWRDEDGIDLWKH[FXVHIRULWVRZQQRQ SHUIRUPDQFH H 3(8*(27SXUSRUWHGWRGLVDSSURYHWKHSODFHPHQWHYHQRQLVVXHV ZKHUHWKHSODFHPHQWIROORZHG3(8*(27FUHDWHGDQG3(8*(27 DSSURYHGGHVLJQHOHPHQWV e.g.WKHVSLQQHU¶VWULSOHFODZEUDNHOLJKWV DQGWKHVXEWOHW\RIDUHFHVVHG3(8*(27EODFNOHWWHUZRUGORJRRQWKH GULYHU¶VVLGHGDVKERDUG I 3(8*(27UHIXVHGWRFRQGXFWLWVUHYLHZVDQGDSSURYDOVRQDSURPSW EDVLVRUDWDOO J 3(8*(27UHIXVHGWRFRQGXFWLWVUHYLHZVDQGDSSURYDOVRQD FRPPHUFLDOO\UHDVRQDEOHDQGJRRGIDLWKEDVLV K 3(8*(27GHQLHGLQEDGIDLWKWKDWLWKDGHYHUPDGHDQ\FRSURPRWLRQ FRPPLWPHQWDQGFOHDUO\FRPPXQLFDWHGWKDWLWUHIXVHGWRILQDQFHDQG FRSURPRWLRQHYHQLIWKHSODFHPHQWZDVIXOO\VDWLVIDFWRU\ L 3(8*(27UHIXVHGWRPDNHLWVQHFHVVDU\LQWHULPSHUIRUPDQFHVWR SUHSDUHWRH[HFXWHWKHFRSURPRWLRQLQFOXGLQJIDLOLQJDQGUHIXVLQJWR SUHVHQW$/&21DQG&70*ZLWKFRSURPRWLRQSODQV &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 110 of 132 Page ID #:110 M 3(8*(27IDLOHGDQGUHIXVHGWRSD\DQ\WKLQJDWDOOIRUWKHSODFHPHQW N 3(8*(27GLGQRWUXQDQ\FRSURPRWLRQGXULQJWKHDJUHHGFR SURPRWLRQDOSHULRGRUHYHU O 3(8*(27GLGQRWPDNHPHGLDVSHQGLQFOXGLQJQR$7/6SHQGDQG QR%7/6SHQG P3(8*(27IDLOHGWRLQFOXGHDGHGLFDWHG%5SUHVHQFHRQ 3(8*(27¶6ZHEVLWH ZZZSHXJHRWIU Q 3(8*(27IDLOHGDQGUHIXVHGWRSURGXFHWKH79VSRW R 3(8*(27IDLOHGDQGUHIXVHGWRSURGXFH%HORZ7KH/LQHVSHQG VSRWV S 3(8*(27IDLOHGDQGUHIXVHGWRLVVXHDSUHVVUHOHDVHWRWKHPHGLD UHJDUGLQJWKHFRSURPRWLRQ T 3(8*(27PDQLSXODWHGUHYLHZDQGDSSURYDOFRPPXQLFDWLRQVDQG SURFHVVHVLQEDGIDLWKLQFOXGLQJLQZD\VWKDWFDXVHG$/&21DQG &70*WRLQFXUZDVWHGH[SHQVHVLQFOXGLQJIRUDWOHDVWRQHZDVWHGWULS E\WKH&70*WHDPWR3DULVDQGWKHSUHSDUDWLRQVIRULW 3(8*(27¶6EUHDFKHVGDPDJHG3/$,17,)) 3(8*(27LVOLDEOHWR3/$,17,))LQWKHDPRXQWRIDWOHDVW PLOOLRQH[FOXVLYHRISUHMXGJPHQWLQWHUHVWDWWRUQH\V¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 111 of 132 Page ID #:111 7+,5'&/$,0)255(/,() Promissory Estoppel against Automobiles Peugeot SA and Does 1 through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³XSWRPLOOLRQ´ E 6XEVHTXHQWO\IURP$XJXVWWKURXJKDQGXQWLODWOHDVW-DQXDU\ 3(8*(27PDGHWKHIROORZLQJSURPLVHV F 3/$,17,))DQG3(8*(27ZRXOGZRUNLQFORVHFROODERUDWLRQWR LQWHJUDWH3(8*(27EDGJLQJDQGRWKHUWUDGHGUHVVLQWRWKHGHVLJQRI .¶VVSLQQHU G 2QFHWKH.6SLQQHUEDGJLQJDQGIHDWXUHGHVLJQVZHUHDSSURYHGE\ 3(8*(27WKH\ZRXOGEHORFNHGDQG3(8*(27ZRXOGQRWEHDEOHWR FKDQJHRUGLVDSSURYHWKHPODWHU DQGWKHEDGJLQJDQGIHDWXUHGHVLJQV ZHUHDFWXDOO\DSSURYHGE\3(8*(27QRODWHUWKDQ-DQXDU\ H 7KHILQLVKHG%5ILOPZRXOGLQFOXGHDWOHDVWWHQ VHFRQGVRI IRRWDJHLQZKLFK3(8*(27¶6ORJRDQGEDGJLQJZRXOGEHFOHDUO\ YLVLEOHWRWKHDXGLHQFH DOWKRXJKLI$/&21IRUFUHDWLYHRURWKHU UHDVRQVGLGQRWLQFOXGHD3(8*(27SODFHPHQWWKHQWKLVZDVQRW &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 112 of 132 Page ID #:112 QHFHVVDULO\DEUHDFKE\$/&21EXWWKHSDUWLHVZHUHH[SHFWHGDQG REOLJDWHGWRQHJRWLDWHZLWKHDFKRWKHULQJRRGIDLWKDERXWZKDWWRGRLQ VXFKHYHQW I 7KHDWOHDVWWHQ VHFRQGVRIIRRWDJHZDVWREHDSSRUWLRQHGDFURVV PXOWLSOHVHTXHQFHVLQWKHPRYLH ZLWKDFOHDUUHFRUGWKDW3(8*(27 KDGLWH[SODLQHGWRWKHPWKDWDVHTXHQFHRUVFHQHFRXOGLQFOXGHPRUH WKDQRQHFDPHUDVKRW±$/&21DQG&70*H[SUHVVO\GHFOLQHGWREH ERXQGE\PHDVXULQJWLPLQJE\VLQJOHVKRWVEXWUDWKHUZRXOGRQO\DJUHH WR³VHTXHQFHV´RU³VFHQHV´PHDQLQJDJJUHJDWLRQVRIUHODWHGVKRWV J 7KHDWOHDVWWHQ VHFRQGVRIIRRWDJHZDVWREHDSSRUWLRQHGDFURVV WZRW\SHVRIVHTXHQFHV EDGJLQJRQ.¶VVSLQQHUDQG DWOHDVWRQH VHTXHQFHZKHUHWKH3HXJHRWORJRZRXOGDSSHDULQWKH%5ZRUOG VXFKDVLQDQRXWGRRUDGYHUWLVHPHQWLQWKHEDFNJURXQG K 2IWKHWZRW\SHVRIVHTXHQFHVWKH.VSLQQHUEDGJLQJVHTXHQFHVZHUH PRUHLPSRUWDQWWR3(8*(27DQGWKHRXWGRRUZDOODGVHTXHQFHV RU ³KRORJUDSKLFDGYHUWLVHPHQWV´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¶6FRPPHUFLDOO\UHDVRQDEOHDQGJRRGIDLWKUHYLHZDQG &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 113 of 132 Page ID #:113 DSSURYDOZKLFKZDVWREHSURPSWDQGZLWKLQWKHFUHDWLYHDQGDUWLVWLF SDUDPHWHUVRIWKHILOPZKLFKZHUHXQGHUVWRRGQRWWREHLQ 3(8*(27¶6SXUYLHZ3(8*(27¶6UHYLHZDQGDSSURYDOZDVWREH FRQGXFWHGE\3(8*(27ZLWKRXWXQUHDVRQDEOHGLVUXSWLRQRIWKHILOP¶V VFKHGXOHLQFOXGLQJSLFWXUHORFNILOPGHOLYHU\DQGUHOHDVHGDWHDQG DOVRHDUO\HQRXJKVXFKWKDWWKHFRSURPRWLRQFRXOGEHSODQQHGDQG H[HFXWHG N 7KH3HXJHRWVSLQQHUEDGJLQJZRXOGEHDVVRFLDWHGZLWK5\DQ*RVOLQJ¶V FKDUDFWHU. O 5\DQ*RVOLQJ¶VFKDUDFWHU.ZRXOGQRWEHDVVRFLDWHGZLWKDQ\ULYDO DXWRPRELOHEUDQG P7KH3HXJHRWEUDQGZRXOGQRWEHSUHVHQWHGLQDSHUMRUDWLYHFRQWH[W 3(8*(27DFNQRZOHGJHGWKDWLWKDGUHYLHZHGWKH%5VFULSWDQG NQHZXQGHUVWRRGDQGDJUHHGWKDWWKH%5LQYROYHGRQHRUPRUH FUDVKHVRI.¶VVSLQQHUDQGWKDWWKHVHFUDVKHVZHUHDJUHHGDVQRW YLRODWLYHRIDQ\WHUPRIWKHSDUWLHV¶DJUHHPHQW Q XSRQUHYLHZ3(8*(27ZDVQRWUHDVRQDEO\DQGLQJRRGIDLWK VDWLVILHGZLWKDSURSRVHGH[HFXWLRQRIWKHIRRWDJHSODFHPHQWWKHQ 3(8*(27ZDVWRHQJDJHZLWK$/&21UHDVRQDEO\DQGLQJRRGIDLWK RQFKDQJHVRUHQKDQFHPHQWVVXFKWKDW3(8*(27ZRXOGEHDEOHWR JLYHLWVUHDVRQDEOHDQGJRRGIDLWKDSSURYDODOVRDJDLQZLWKLQWKH FUHDWLYHDQGDUWLVWLFSDUDPHWHUVRIWKHILOPDQGZKLFKZDVWREH FRQGXFWHGE\3(8*(27ZLWKRXWXQUHDVRQDEOHGLVUXSWLRQRIWKHILOP¶V VFKHGXOHLQFOXGLQJSLFWXUHORFNILOPGHOLYHU\DQGUHOHDVHGDWH R 3(8*(27H[SUHVVO\DFNQRZOHGJHGWKDWLWKDGEHHQSURYLGHGZLWKWKH RSSRUWXQLW\WRUHYLHZWKHYLVXDOGHSLFWLRQVRIWKHSODFHPHQWLWHPVDQG KDGDSSURYHGWKHP S ,I$/&21GHOLYHUHGVDWLVIDFWRU\SODFHPHQWIRRWDJHWKHQ3(8*(27 &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 114 of 132 Page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¶6ZULWWHQFRQILUPDWLRQWR 3(8*(27WKDWWKHSODFHPHQWVZRXOGEHLQWKHILQDO3LFWXUH±ZKLOH WKHSODFHPHQWIHHFRXOGEHSDLGE\3(8*(27DIWHUUHOHDVHRIWKH 3LFWXUHLWZDVHDUQHGE\$/&21DQGRZHGE\3(8*(27HDUOLHURQ $/&21¶6FRQILUPDWLRQWKDW$/&21LQWHQGHGWRSHUIRUPWKH SODFHPHQW ZKLFKFRQILUPDWLRQE\$/&21ZDVUHSHDWHGO\JLYHQ W 7KHDJUHHGFRSURPRWLRQDOSHULRG WKHWLPHGXULQJZKLFKWKHFR SURPRWLRQZRXOGDFWXDOO\EHOLFHQVHGWRUXQ ZRXOGEHIURP 6HSWHPEHUWR1RYHPEHU RUVL[W\GD\VDIWHUWKH LQLWLDOWKHDWULFDOUHOHDVHGDWHRIWKH3LFWXUHLI$/&21KDGWRFKDQJH &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 115 of 132 Page ID #:115 WKHUHOHDVHGDWHRIWKH3LFWXUHIRUDQ\UHDVRQ X 7KHGHILQHGFRSURPRWLRQDOWHUULWRU\ZDVWKHHQWLUHZRUOGH[FOXGLQJ WKH8QLWHG6WDWHVDQG&DQDGDDQGWKHLUUHODWHGWHUULWRULHV EXWLWZDV XQGHUVWRRGWKDW3(8*(27ZRXOGQRQHWKHOHVVUHFHLYHWKHEUDQGLQJ DQGJRRGZLOOEHQHILWVRIWKH86DQG&DQDGDUHOHDVHRI%5DV WKH3(8*(27SODFHPHQWVZRXOGEHDQGZHUHLQDOOYHUVLRQVRIWKH ILOPLQDOOWHUULWRULHV Y 7KHDJUHHGPLOOLRQJXDUDQWHHGPLQLPXPPHGLDVSHQGZDVWREH GLYLGHGPLOOLRQLQ$ERYH7KH/LQH ³$7/´ 6SHQGDQG PLOOLRQLQ%HORZ7KH/LQH ³%7/´ 6SHQG ZLWKLWXQGHUVWRRGDQG DJUHHGWKDWWKH$7/DQG%7/GHILQLWLRQVZHUHWKHDGYHUWLVLQJLQGXVWU\ VWDQGDUGGHILQLWLRQVRIWKHVHWHUPV±YHU\JHQHUDOO\$7/6SHQGUHIHUV WRPHGLDWKDWPDVVWDUJHWVODUJHDXGLHQFHVOLNHWHOHYLVLRQDQGUDGLR DQGPDQ\IRUPVRI,QWHUQHWPHGLD%7/6SHQGUHIHUVWRPHGLDWKDW PRUHVSHFLILFDOO\WDUJHWVDOLPLWHGVHWRIFRQVXPHUVOLNHIO\HUV GLVWULEXWHGIURPDSDUWLFXODUUHWDLOVWRUHRUPRVWIRUPVRIHYHQW PDUNHWLQJOLNHDIDQFRQYHQWLRQRUDXWRVKRZ Z$/&21KDGDUHYLHZDQGDSSURYDOULJKWRYHUWKHFRSURPRWLRQ¶V VSHFLILFH[HFXWLRQVRQDFDVHE\FDVHEDVLV [ 7KHFRSURPRWLRQZDVWRLQFOXGHDGHGLFDWHGSUHVHQFHRQ 3(8*(27¶6ZHEVLWH ZZZSHXJHRWIU \ 3(8*(27ZDVREOLJDWHGWRFUHDWHDQGWKHFRSURPRWLRQZDVWR LQFOXGHDWOHDVWRQHWKLUW\VHFRQGWHOHYLVLRQVSRWXQOHVV*RVOLQJ UHIXVHGWRDSSURYHXVHRIKLVOLNHQHVVLQWKHVSRWLQZKLFKFDVH 3(8*(27ZDVUHOLHYHGRIWKHWHOHYLVLRQVSRWREOLJDWLRQ EXWQRWRI WKHHQWLUHFRSURPRWLRQ *RVOLQJDJUHHGLQSULQFLSDOWRSRWHQWLDOXVH RIKLVOLNHQHVVLQDWHOHYLVLRQVSRWIRU3(8*(27DQG3(8*(27 QHYHUVRXJKW*RVOLQJ¶VUHYLHZRUDSSURYDORIDQ\SURSRVHGVSRW &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 116 of 132 Page ID #:116 LQFOXGLQJEHFDXVH3(8*(27QHYHUFUHDWHGRQH ] 3(8*(27ZDVWRFUHDWHDQGSURGXFH%HORZ7KH/LQHVSHQGVSRWV DD3(8*(27ZDVWRFUHDWHDQGLVVXHDSUHVVUHOHDVHWRWKHPHGLD UHJDUGLQJWKHFRSURPRWLRQ 3/$,17,))FRPSOHWHO\RUVXEVWDQWLDOO\SHUIRUPHGDOOFRQGLWLRQV FRYHQDQWVDQGSURPLVHVUHTXLUHGRQLWVSDUWWREHSHUIRUPHGLQDFFRUGDQFHZLWKWKH FRQWUDFWH[FHSWWRWKHH[WHQWWKDWVXFKREOLJDWLRQVKDYHEHHQH[FXVHGRUGHIHQGDQWV SUHYHQWHG3/$,17,))IURPSHUIRUPLQJWKHPDQGRUPDGHWKHPLPSRVVLEOHDQGDOO FRQGLWLRQVSUHFHGHQWWR3(8*(27¶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¶VVSLQQHU G 3(8*(27LQEDGIDLWKDWWHPSWHGWRPDNHWKHDOORFDWLRQRIWKHWHQ VHFRQGVRIYLVLELOLW\DPRYLQJWDUJHWWKDW$/&21FRXOGQHYHUKLWIRU WKHSXUSRVHRI3(8*(27KROGLQJRQWRDEDGIDLWKH[FXVHIRULWVRZQ QRQSHUIRUPDQFH &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 117 of 132 Page ID #:117 H 3(8*(27UHIXVHGDQGIDLOHGWRHQJDJHLQJRRGIDLWKDQG FRPPHUFLDOO\UHDVRQDEOHUHYLHZRIWKHYLVLELOLW\IRRWDJHIRUWKH SXUSRVHRI3(8*(27KROGLQJRQWRDEDGIDLWKH[FXVHIRULWVRZQ SHUIRUPDQFH I 3(8*(27SXUSRUWHGWRGLVDSSURYHWKHSODFHPHQWHYHQRQLVVXHV ZKHUHWKHSODFHPHQWIROORZHG3(8*(27FUHDWHGDQG3(8*(27 DSSURYHGGHVLJQHOHPHQWV e.g.WKHVSLQQHU¶VWULSOHFODZEUDNHOLJKWV DQGWKHVXEWOHW\RIDUHFHVVHG3(8*(27EODFNOHWWHUZRUGORJRRQWKH GULYHU¶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¶6ZHEVLWH ZZZSHXJHRWIU R 3(8*(27IDLOHGDQGUHIXVHGWRSURGXFHWKH79VSRW S 3(8*(27IDLOHGDQGUHIXVHGWRSURGXFH%HORZ7KH/LQHVSHQG &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 118 of 132 Page ID #:118 VSRWV T 3(8*(27IDLOHGDQGUHIXVHGWRLVVXHDSUHVVUHOHDVHWRWKHPHGLD UHJDUGLQJWKHFRSURPRWLRQ U 3(8*(27PDQLSXODWHGUHYLHZDQGDSSURYDOFRPPXQLFDWLRQVDQG SURFHVVHVLQEDGIDLWKLQFOXGLQJLQZD\VWKDWFDXVHG$/&21DQG &70*WRLQFXUZDVWHGH[SHQVHVLQFOXGLQJIRUDWOHDVWRQHZDVWHGWULS E\WKH&70*WHDPWR3DULVDQGWKHSUHSDUDWLRQVIRULW 3/$,17,))DFWXDOO\UHOLHGRQ3(8*(27¶6SURPLVHVLQFKDQJLQJLWV SRVLWLRQWRLWVGHWULPHQWLQFOXGLQJE\ D )RUHJRLQJRWKHUSODFHPHQWDQGFRSURPRWLRQELGVLQFOXGLQJWKH $XWRPRWLYH%UDQG=ELGZKLFKZDVIRUDWOHDVWDSOXVPLOOLRQ PHGLDVSHQG E ,QFXUULQJVXEVWDQWLDOSURGXFWLRQH[SHQGLWXUHVWRSUHSDUHWRSHUIRUPWKH SODFHPHQWLQFOXGLQJZLWKRXWOLPLWDWLRQGHVLJQFKDQJHVWR.¶VVSLQQHU DQGWKHYDOXHRIDWOHDVWRQHSURGXFWLRQGD\LQEULQJLQJ3(8*(27 H[HFXWLYHVWR%XGDSHVW+XQJDU\WRPRYHIRUZDUGZLWKQHJRWLDWLRQV DQGWRSUHSDUHWRSHUIRUPDSODFHPHQWDQGFRSURPRWLRQGHDO F 3ODQQLQJDQHQWLUHPDUNHWLQJDQGSURPRWLRQVWUDWHJ\WRVXSSRUWWKH 2FWREHUGD\DQGGDWHUHOHDVHRIWKH3LFWXUHWKDWUHOLHGDQG GHSHQGHGRQD3(8*(27PLOOLRQRUPRUHPHGLDVSHQGLQDFR SURPRWLRQ G &UHDWLQJPDUNHWLQJPDWHULDOVLQFOXGLQJRQHVKHHWVWKDWIHDWXUHGWKH VSLQQHUZLWK3(8*(27EDGJLQJDQGRUWUDGHGUHVV 3/$,17,))¶6UHOLDQFHRQWKHDOORIWKHDERYHSURPLVHVIURP 3(8*(27ZDVUHDVRQDEOHDQGIRUHVHHDEOHDQGLQGHHG3(8*(27PDGHWKH SURPLVHVWR3/$,17,))IRUWKHLQWHQGHGSXUSRVHRIFDXVLQJ3/$,17,))WRUHO\RQ WKHSURPLVHVVXEVWDQWLDOO\LQWKHPDQQHUWKDW3/$,17,))GLG &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 119 of 132 Page ID #:119 3/$,17,))¶6UHOLDQFHRQ3(8*(27¶6SURPLVHVFDXVHG3/$,17,)) VXEVWDQWLDOGHWULPHQWLQFOXGLQJZLWKRXWOLPLWDWLRQLQWKHIRUPRIORVLQJWKHYDOXHRI WKHPLOOLRQELGIURP$XWRPRWLYH%UDQG=DQGLQLQFXUULQJDOORIWKHH[SHQVHV DQGORVWRSSRUWXQLWLHVVHWIRUWKLPPHGLDWHO\DERYH+DG3/$,17,))QRWDFWHGLQ UHOLDQFHRQ3(8*(27¶6SURPLVHV3/$,17,))ZRXOGKDYHHQWHUHGLQWRD SODFHPHQWDQGFRSURPRWLRQGHDOZLWK$XWRPRWLYH%UDQG=RUDQRWKHUELGGHU ZRXOGQRWKDYHLQFXUUHGH[SHQVHVWRSUHSDUHWRSHUIRUPZLWK3(8*(27DQGZRXOG QRWKDYHSODQQHGDJOREDOPDUNHWDQGSURPRWLRQVWUDWHJ\IRUUHOHDVHRIWKH3LFWXUH WKDWGHSHQGHGRQDQGUHOLHGRQDPLOOLRQFRSURPRWLRQPHGLDVSHQGE\ 3(8*(27%\UHO\LQJRQ3(8*(27¶6SURPLVHV3/$,17,))LQFXUUHGWKHVH FRVWVDQGVXIIHUHGWKHVHORVWRSSRUWXQLWLHVLUUHYRFDEO\ ,I3/$,17,))KDGNQRZQWKDW3(8*(27ZRXOGQRWSHUIRUPLWV SURPLVHVWR3/$,17,))HVSHFLDOO\WKDW3(8*(27QHYHULQWHQGHGWRFRPPLWWRD JXDUDQWHHGPHGLDVSHQGFRSURPRWLRQXQGHUDQ\FLUFXPVWDQFHVDQGZDVXQDEOHWR GRVR3/$,17,))ZRXOGQRWKDYHDJUHHGHYHQWRQHJRWLDWHZLWK3(8*(27DWDOO ZRXOGQRWKDYHIRUHJRQHWKH$XWRPRWLYH%UDQG=PLOOLRQELGRURWKHUELGV DQGZRXOGQRWKDYHWDNHQDQ\RIWKHIXUWKHUVWHSVWKDW$/&21LQIDFWWRRNLQ UHOLDQFHRQ3(8*(27¶6SURPLVHV 8QGHUWKHVHFLUFXPVWDQFHVLQMXVWLFHFDQRQO\EHDYRLGHGE\ HQIRUFHPHQWRI3(8*(27¶6SURPLVHVWR3/$,17,)) $VDUHVXOWRI3(8*(27¶6FRQGXFW3(8*(27LVOLDEOHWR 3/$,17,))IRUJHQHUDOGDPDJHVVSHFLDOGDPDJHVSUHMXGJPHQWLQWHUHVWFRVWVRI VXLWDQGVXFKRWKHUUHOLHIDVPD\EHMXVW )2857+&/$,0)255(/,() Breach of Duty to Negotiate in Good Faith against Automobiles Peugeot SA and Does 1 through 10 3/$,17,))UHSHDWVUHDOOHJHVDQGLQFRUSRUDWHVKHUHLQE\UHIHUHQFH HDFKDQGHYHU\DOOHJDWLRQVHWIRUWKLQDOORIWKHIRUHJRLQJSDUDJUDSKVDQGHDFK &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 120 of 132 Page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¶6LQWHQWLRQDOSXUSRVHRI DWWHPSWLQJWRPDLQWDLQEDGIDLWKH[FXVHVQRWWRSHUIRUP G ,QWHQWLRQDOO\DQGIDOVHO\GHQ\LQJWKHH[LVWHQFHDQGVFRSHRIDXWKRULW\ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 121 of 132 Page ID #:121 RILWVGHVLJQDWHGDJHQWVIRUQHJRWLDWLRQ H )DOVHO\DQGLQEDGIDLWKOHDGLQJ$/&21DQG&70*WREHOLHYHWKDWLI 3(8*(27¶6&(2ZHUHSURYLGHGDQRSSRUWXQLW\WRUHYLHZPDWHULDOV WKDW3(8*(27PLJKWSHUIRUPDWOHDVWVRPHSDUWVRIWKHGHDOZKHQLQ IDFW3(8*(27 DQG0(1'(=VSHFLILFDOO\ KDGQRLQWHQWLRQRI DOORZLQJWKH&(2WRLQWHUDFWGLUHFWO\ZLWK$/&21RU&70*DQGWKH &(2SOR\ZDVMXVWDIXUWKHUVWDOO $VDUHVXOWRI3(8*(27¶6EUHDFKRIGXW\$/&21VXIIHUHG GDPDJHVLQFOXGLQJDWDPLQLPXPWKHYDOXHRIWKHPLOOLRQSOXVGHDOIRUD %5SURGXFWSODFHPHQWDQGFRSURPRWLRQWKDWZDVEHLQJRIIHUHGWR$/&21E\ $XWRPRWLYH%UDQG=SULRUWR3(8*(27¶6SURPLVHVDQGUHSUHVHQWDWLRQVWKDWLW ZRXOGQHJRWLDWHLQJRRGIDLWKZLWK$/&21RQWKHWHUPVVHWIRUWKDERYH$/&21 DOVRORVWWKHYDOXHRIWKHFRVWVDQGH[SHQVHVLWLQFXUUHGLQSHUIRUPLQJDQGSUHSDULQJ WRSHUIRUPWKHDFWXDODQGRUWREHQHJRWLDWHGGHDOZLWK3(8*(27LQFOXGLQJ PRGLILFDWLRQVWR.¶VVSLQQHUDQGWKHYDOXHRIDWOHDVWRQHORVWSURGXFWLRQGD\RQWKH VHW$/&21DOVRORVWDWOHDVWDERXWWKUHHPRQWKVRIWLPHLQRUDERXWWKHODWH -DQXDU\WRHDUO\0D\SHULRGE\3(8*(27LQEDGIDLWKFRQFHDOLQJWKH GLIIHUHQFHVIURPWKHUHSUHVHQWHGVLWXDWLRQWRWKHDFWXDOVLWXDWLRQIURP$/&21WR $/&21¶6SUHMXGLFHDQGGHWULPHQW+DGWKLVWLPHQRWEHHQZDVWHG$/&21DQG &70*PLJKWKDYHEHHQDEOHWRXVHLWEHWWHUWRSODQDPDUNHWLQJDQGSURPRWLRQ VWUDWHJ\IRUWKH3LFWXUH¶VUHOHDVHWKDWZDVOHVVGHSHQGHQWRQDPHGLDVSHQGIURP 3(8*(27$/&21DQG&70*DOVRORVWWKHH[SHQVHVLQFXUUHGLQ&70*¶6 ZDVWHG-XQHWULSWR3DULVIRU3(8*(27¶6EDGIDLWKQRQPHHWLQJZLWKLWV &(2 3(8*(27LVWKXVOLDEOHWR$/&21IRUJHQHUDODQGRUVSHFLDO GDPDJHVLQDQDPRXQWWREHSURYHQDWWULDOEXWDWOHDVWSOXVPLOOLRQ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 122 of 132 Page ID #:122 ),)7+&/$,0)255(/,() Fraud against Automobiles Peugeot SA, Isabel Salas Mendez and Does 1 through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³XSWRPLOOLRQ´,QIDFW0(1'(=DQGRU 3(8*(27NQHZWKDWWKHUHZDVQRVXFKFRPPLWPHQWE\3(8*(27 &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 123 of 132 Page ID #:123 IRUDQ\PHGLDVSHQGDQGLQGHHGQHYHUZRXOGEH E 0(1'(=DQGRU3(8*(27FDXVHG38%/,&,6 WKURXJK&DVDEODQFD¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 124 of 132 Page ID #:124 KDGQRLQWHQWLRQRIDOORZLQJ3(8*(27WRSHUIRUPWKHPDQGRU 3(8*(27KDGQRLQWHQWLRQRISHUIRUPLQJWKHPDWOHDVWDVDQ\ FRPPLWWHGFRQWUDFWXDOREOLJDWLRQEXWUDWKHUDWPRVWRQO\LQWHQGHGWR SHUIRUPWKHPLIWKH\IHOWOLNHLWODWHU±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¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 125 of 132 Page ID #:125 FRSURPRWLRQFRXOGFRQWLQXHWRPRYHIRUZDUG,QIDFW0(1'(= QHYHULQWHQGHGWRFDXVH%(7&WRVHQGDQ\VXFKSODQV7KHSXUSRVHRI WKHVHIDOVHVWDWHPHQWVDQGRPLVVLRQVE\0(1'(=DWWKLVWLPHZDVWR DOORZ0(1'(=LQEDGIDLWKWRFRQWLQXHWRNHHSFRQWURORIWKH%5 RSSRUWXQLW\ERWKHQWLUHO\IRU3(8*(27YHUVXVDQ\RWKHUDXWRSDUWQHUV DQGWRNHHSFRQWURORILWKHUVHOIZLWKLQWKH3(8*(27FRUSRUDWH RUJDQL]DWLRQIRUKHURZQH[SHGLHQFLHV0(1'(=LQWHQGHGWRGRVR IRUDVORQJDVSRVVLEOHXQWLOVKHHLWKHUFKRVHWRDEDQGRQWKHGHDORUKDG VRPXFKOHYHUDJHGXHWRWLPHSUHVVXUHWRIRUFH$/&21WRUHQHJRWLDWH I ,QRUDERXW0D\0(1'(=SHUVRQDOO\YLDHPDLO DQGRUYLD HPDLOVIURPKHUVXERUGLQDWHV PDGHIDOVHVWDWHPHQWVDQGRPLVVLRQVWR &70*H[HFXWLYHVWRWKHHIIHFWWKDWLI&70*SXWWRJHWKHUSODFHPHQW GHPRQVWUDWLRQPDWHULDOVDQGWUDYHOHGWR3(8*(27¶63DULVRIILFHVWR VKRZWKHPWKDW0(1'(=ZRXOGDUUDQJHDQGKDGDUUDQJHGIRU 3(8*(27¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 126 of 132 Page ID #:126 3(8*(27DQG0(1'(=PDGHWKHDIILUPDWLYHUHSUHVHQWDWLRQVIDOVH SURPLVHVDQGDFWVRIVXSSUHVVLRQDQGFRQFHDOPHQWRIPDWHULDOIDFWVZLWKWKHLQWHQW DQGIRUWKHSXUSRVHRIFDXVLQJ3/$,17,))WRFKDQJHLWVSRVLWLRQWRLWVGHWULPHQW 3/$,17,))DFWXDOO\DQGMXVWLILDEO\UHOLHGRQWKHDIILUPDWLYH PLVUHSUHVHQWDWLRQVIDOVHSURPLVHVDQGWKHIDFWVDVWKH\VWRRGJLYHQWKHVXSSUHVVLRQ DQGFRQFHDOPHQWRIRWKHUPDWHULDOIDFWVLQFKDQJLQJLWVSRVLWLRQWRLWVGHWULPHQW LQFOXGLQJDWDPLQLPXPWKHORVWYDOXHRIWKHPLOOLRQSOXVGHDOIRUD%5 SURGXFWSODFHPHQWDQGFRSURPRWLRQWKDWZDVEHLQJRIIHUHGWR$/&21E\ $XWRPRWLYH%UDQG=SULRUWR3(8*(27¶6SURPLVHVDQGUHSUHVHQWDWLRQVWKDWWKH\ ZRXOGQHJRWLDWHLQJRRGIDLWKZLWK$/&21RQWKHWHUPVVHWIRUWKDERYH$/&21 DOVRORVWWKHYDOXHRIWKHFRVWVDQGH[SHQVHVLWLQFXUUHGLQSHUIRUPLQJDQGSUHSDULQJ WRSHUIRUPWKHDFWXDODQGRUWREHQHJRWLDWHGGHDOZLWK3(8*(27LQFOXGLQJ PRGLILFDWLRQVWR.¶VVSLQQHUDQGWKHYDOXHRIDWOHDVWRQHORVWSURGXFWLRQGD\RQWKH VHW$/&21DOVRORVWDWOHDVWDERXWWKUHHPRQWKVRIWLPHLQRUDERXWWKHODWH -DQXDU\WRHDUO\0D\SHULRGE\3(8*(27LQEDGIDLWKFRQFHDOLQJWKH GLIIHUHQFHVLQWKHUHSUHVHQWHGVLWXDWLRQIURPWKHDFWXDOVLWXDWLRQIURP$/&21WR $/&21¶6SUHMXGLFHDQGGHWULPHQW+DGWKLVWLPHQRWEHHQZDVWHG$/&21DQG &70*PLJKWKDYHEHHQDEOHWRXVHLWEHWWHUWRSODQDPDUNHWLQJDQGSURPRWLRQ VWUDWHJ\IRUWKH3LFWXUH¶VUHOHDVHWKDWZDVOHVVGHSHQGHQWRQDPHGLDVSHQGIURP 3(8*(27$/&21DQG&70*DOVRORVWWKHH[SHQVHVLQFXUUHGLQ&70*¶6 ZDVWHG-XQHWULSWR3DULVIRU3(8*(27¶6EDGIDLWKQRQPHHWLQJZLWKLWV &(2 3/$,17,))¶6UHOLDQFHRQWKHDIILUPDWLYHPLVUHSUHVHQWDWLRQVIDOVH SURPLVHVDQGWKHIDFWVDVWKH\VWRRGJLYHQWKHVXSSUHVVLRQDQGFRQFHDOPHQWRIRWKHU PDWHULDOIDFWVZDVDSUR[LPDWHFDXVHRIDFWXDOGDPDJHWR3/$,17,)) 3/$,17,))DFWXDOO\UHOLHGRQGHIHQGDQWV¶SURPLVHVDQG UHSUHVHQWDWLRQVLQFKDQJLQJLWVSRVLWLRQWRLWVGHWULPHQWLQFOXGLQJE\JLYLQJXSWKH $XWRPRWLYH%UDQG=PLOOLRQSOXVELGDQGRUWKHRSSRUWXQLW\WRGREXVLQHVVZLWK &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 127 of 132 Page ID #:127 RWKHUDXWRPRWLYHSDUWQHUVZKRZHUHDFWLQJLQJRRGIDLWK$/&21DOVRORVWWKH YDOXHRIWKHFRVWVDQGH[SHQVHVLWLQFXUUHGLQSHUIRUPLQJDQGSUHSDULQJWRSHUIRUP WKHDFWXDODQGRUWREHQHJRWLDWHGGHDOZLWK3(8*(27LQFOXGLQJPRGLILFDWLRQVWR .¶VVSLQQHUDQGWKHYDOXHRIDWOHDVWRQHORVWSURGXFWLRQGD\RQWKHVHW$/&21 DOVRORVWDWOHDVWDERXWWKUHHPRQWKVRIWLPHLQRUDERXWWKHODWH-DQXDU\WRHDUO\0D\ SHULRGE\ERWK3(8*(27DQG38%/,&,6LQEDGIDLWKFRQFHDOLQJWKH GLIIHUHQFHVEHWZHHQWKHUHSUHVHQWHGVLWXDWLRQDQGWKHDFWXDOVLWXDWLRQIURP$/&21 WR$/&21¶6SUHMXGLFHDQGGHWULPHQW+DGWKLVWLPHQRWEHHQZDVWHG$/&21DQG &70*PLJKWKDYHEHHQDEOHWRXVHLWEHWWHUWRSODQDPDUNHWLQJDQGSURPRWLRQ VWUDWHJ\IRUWKH3LFWXUH¶VUHOHDVHWKDWZDVOHVVGHSHQGHQWRQDPHGLDVSHQGIURP 3(8*(27$/&21DQG&70*DOVRORVWWKHH[SHQVHVLQFXUUHGLQ&70*¶6 ZDVWHG-XQHWULSWR3DULVIRU3(8*(27¶6EDGIDLWKQRQPHHWLQJZLWKLWV &(2 3/$,17,))¶6UHOLDQFHRQWKHDOORIWKHDERYHSURPLVHV UHSUHVHQWDWLRQVDQGIDFWVDVWKH\ZHUHXQGHUVWRRGLQOLJKWRIGHIHQGDQWV¶PDWHULDO RPLVVLRQVZDVUHDVRQDEOHDQGIRUHVHHDEOHDQGLQGHHGGHIHQGDQWVPDGHWKHIDOVH UHSUHVHQWDWLRQVIDOVHSURPLVHVDQGPDWHULDORPLVVLRQVIRUWKHLQWHQGHGSXUSRVHRI FDXVLQJ3/$,17,))WRUHO\RQWKHPVXEVWDQWLDOO\LQWKHPDQQHUWKDW3/$,17,)) GLG +DG3/$,17,))QRWDFWHGLQUHOLDQFHRQGHIHQGDQWV¶ PLVUHSUHVHQWDWLRQVIDOVHSURPLVHVDQGIDFWVDVWKH\ZHUHXQGHUVWRRGLQOLJKWRI GHIHQGDQWV¶PDWHULDORPLVVLRQV3/$,17,))ZRXOGQRWKDYHLQFXUUHGWKHGHWULPHQWV DERYH%\UHO\LQJRQGHIHQGDQWV¶PLVUHSUHVHQWDWLRQVIDOVHSURPLVHVDQGIDFWVDV WKH\ZHUHXQGHUVWRRGLQOLJKWRIGHIHQGDQWV¶PDWHULDORPLVVLRQV3/$,17,)) VXIIHUHGWKRVHFRVWVH[SHQVHVDQGORVWRSSRUWXQLWLHVLUUHYRFDEO\ 3(8*(27DQG0(1'(=DUHWKXVOLDEOHWR3/$,17,))IRUJHQHUDO GDPDJHVDQGVSHFLDOGDPDJHVDVZHOODVFRVWVDQGRWKHUUHOLHIDOOLQDPRXQWVWREH SURYHQDWWULDOEXWQRWOHVVWKDQPLOOLRQ &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 128 of 132 Page ID #:128 'HIHQGDQWVDQGHDFKRIWKHPGLGWKHWKLQJVKHUHLQDOOHJHG PDOLFLRXVO\NQRZLQJO\ZLOOIXOO\DQGZLWKWKHGHOLEHUDWHLQWHQWLRQRILQMXULQJDQG RSSUHVVLQJ3/$,17,))DQGZLWKFRQVFLRXVDQGUHFNOHVVGLVUHJDUGRI 3/$,17,))¶6ULJKWV'HIHQGDQWV¶FRQGXFWZDVIUDXGXOHQWPDOLFLRXVDQG RSSUHVVLYHDQGE\UHDVRQWKHUHRI3/$,17,))LVHQWLWOHGWRH[HPSODU\DQG SXQLWLYHGDPDJHVLQDQDPRXQWDFFRUGLQJWRSURRIDWWULDO 6,;7+&/$,0)255(/,() Reasonable Value of Services against Automobiles Peugeot, SA and Does 1 through 5 3/$,17,))UHSHDWVUHDOOHJHVDQGLQFRUSRUDWHVKHUHLQE\UHIHUHQFH HDFKDQGHYHU\DOOHJDWLRQVHWIRUWKLQDOORIWKHIRUHJRLQJSDUDJUDSKVDQGHDFK SDUDJUDSKRIWKLV&RPSODLQWKHUHDIWHUDVLIVHWIRUWKKHUHLQLQIXOO 7RWKHH[WHQWDQ\RIWKHDOOHJDWLRQVRUWKHRULHVLQWKLV6L[WK&ODLPIRU 5HOLHIDUHLQFRQVLVWHQWZLWKRWKHUDOOHJDWLRQVRUWKHRULHVSOHGLQWKLV&RPSODLQW WKH\DUHSOHGLQWKHDOWHUQDWLYH 3/$,17,))SURYLGHGYDOXDEOHVHUYLFHVWR3(8*(27DW 3(8*(27¶6UHTXHVWDQGRUZLWK3(8*(27¶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ase 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 129 of 132 Page ID #:129 IRUWKHYDOXHRIWKHVHUYLFHVDQG3/$,17,))KDVUHIXVHGWRSD\3/$,17,)) DQ\WKLQJDWDOOIRUWKHP 6(9(17+&/$,0)255(/,() Quantum Meruit against Automobiles Peugeot, SA and Does 1 through 10 3/$,17,))UHSHDWVUHDOOHJHVDQGLQFRUSRUDWHVKHUHLQE\UHIHUHQFH HDFKDQGHYHU\DOOHJDWLRQVHWIRUWKLQDOORIWKHIRUHJRLQJSDUDJUDSKVDQGHDFK SDUDJUDSKRIWKLV&RPSODLQWKHUHDIWHUDVLIVHWIRUWKKHUHLQLQIXOO 7RWKHH[WHQWDQ\RIWKHDOOHJDWLRQVRUWKHRULHVLQWKLV6HYHQWK&ODLP IRU5HOLHIDUHLQFRQVLVWHQWZLWKRWKHUDOOHJDWLRQVRUWKHRULHVSOHGLQWKLV&RPSODLQW WKH\DUHSOHGLQWKHDOWHUQDWLYH 3(8*(27UHFHLYHGDEHQHILWSURYLGHGE\3/$,17,))WR 3/$,17,))¶6GHWULPHQW7KHYDOXHRIWKHSODFHPHQWWKDW3(8*(27DFWXDOO\ UHFHLYHGLQWKH3LFWXUHLIYDOXHGVROHO\DVDSODFHPHQWLVDWOHDVWPLOOLRQSDLG GLUHFWO\E\3(8*(27WR$/&21 8QGHUWKHIDFWVDQGFLUFXPVWDQFHVKHUHLWZRXOGEHXQMXVWIRU 3(8*(27WRUHWDLQWKHEHQHILWRULWVYDOXHDW3/$,17,))¶6H[SHQVH 3/$,17,))LVWKXVHQWLWOHGWRGDPDJHVDQGRUUHVWLWXWLRQIURP 3(8*(27 3UD\HUIRU5HOLHI :+(5()25(3/$,17,))SUD\VMXGJPHQWEHHQWHUHGLQLWVIDYRUDQG DJDLQVW'HIHQGDQWVDQGHDFKRIWKHPDVIROORZV 2QWKH)LUVW&ODLPIRU5HOLHIIRU%UHDFKRI&RQWUDFW )RUJHQHUDOGDPDJHVLQDQDPRXQWWREHSURYHGDWWULDOEXWDWOHDVW PLOOLRQ )RUVXFKRWKHUJHQHUDOGDPDJHVDVPD\EHVKRZQE\SURRIDWWULDO )RUVSHFLDOGDPDJHV &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 130 of 132 Page ID #:130 )RUSUHMXGJPHQWLQWHUHVWDWWKHOHJDOUDWHIURPDWOHDVW2FWREHU )RU3/$,17,))¶6FRVWVRIVXLW )RUVXFKIXUWKHUUHOLHIDVWKH&RXUWGHHPVMXVWDQGSURSHU 2QWKH6HFRQG&ODLPIRU5HOLHIIRU%UHDFKRI,PSOLHG&RYHQDQWRI*RRG )DLWKDQG)DLU'HDOLQJ )RUJHQHUDOGDPDJHVLQDQDPRXQWWREHSURYHGDWWULDOEXWDWOHDVW PLOOLRQ )RUVXFKRWKHUJHQHUDOGDPDJHVDVPD\EHVKRZQE\SURRIDWWULDO )RUVSHFLDOGDPDJHV )RUSUHMXGJPHQWLQWHUHVWDWWKHOHJDOUDWHIURPDWOHDVW2FWREHU )RU3/$,17,))¶6FRVWVRIVXLW )RUVXFKIXUWKHUUHOLHIDVWKH&RXUWGHHPVMXVWDQGSURSHU 2QWKH7KLUG&ODLPIRU5HOLHIIRU3URPLVVRU\(VWRSSHO )RUJHQHUDOGDPDJHVDFFRUGLQJWRSURRIDWWULDO )RUSUHMXGJPHQWLQWHUHVWDWWKHOHJDOUDWHIURPDWOHDVW2FWREHU )RU3/$,17,))¶6FRVWVRIVXLW )RUVXFKIXUWKHUUHOLHIDVWKH&RXUWGHHPVMXVWDQGSURSHU 2QWKH)RXUWK&ODLPIRU5HOLHIIRU%UHDFKRI'XW\WR1HJRWLDWHLQ*RRG )DLWK )RUJHQHUDODQGRUVSHFLDOGDPDJHVLQDQDPRXQWWREHSURYHGDWWULDO EXWDWOHDVWPLOOLRQ )RUSUHMXGJPHQWLQWHUHVWDWWKHOHJDOUDWHIURPDWOHDVW2FWREHU )RU3/$,17,))¶6FRVWVRIVXLW )RUVXFKIXUWKHUUHOLHIDVWKH&RXUWGHHPVMXVWDQGSURSHU &203/$,17 Case 2:19-cv-00245-CJC-AFM Document 1 Filed 01/10/19 Page 131 of 132 Page ID #:131 2QWKH)LIWK&ODLPIRU5HOLHIIRU)UDXG )RUJHQHUDOGDPDJHVDFFRUGLQJWRSURRIDWWULDO )RUSXQLWLYHGDPDJHV )RUSUHMXGJPHQWLQWHUHVWDWWKHOHJDOUDWHIURPDWOHDVW2FWREHU )RU3/$,17,))¶6FRVWVRIVXLW )RUVXFKIXUWKHUUHOLHIDVWKH&RXUWGHHPVMXVWDQGSURSHU 2QWKH6L[WK&ODLPIRU5HOLHIIRU5HDVRQDEOH9DOXHRI6HUYLFHV )RUJHQHUDOGDPDJHVDFFRUGLQJWRSURRIDWWULDO )RUSUHMXGJPHQWLQWHUHVWDWWKHOHJDOUDWHIURPDWOHDVW2FWREHU )RU3/$,17,))¶6FRVWVRIVXLW )RUVXFKIXUWKHUUHOLHIDVWKH&RXUWGHHPVMXVWDQGSURSHU 2QWKH6HYHQWK&ODLPIRU5HOLHIIRU4XDQWXP0HUXLW )RUJHQHUDOGDPDJHVDQGRUUHVWLWXWLRQGDPDJHVDFFRUGLQJWRSURRIDW WULDO )RUSUHMXGJPHQWLQWHUHVWDWWKHOHJDOUDWHIURPDWOHDVW2FWREHU )RU3/$,17,))¶6FRVWVRIVXLW )RUVXFKIXUWKHUUHOLHIDVWKH&RXUWGHHPVMXVWDQGSURSHU '$7('-DQXDU\ $1'(5621<(+3& (GZDUG0$QGHUVRQ 5HJLQD '(0$1')25-85<75,$/ 3XUVXDQWWR)HG5&LY3RQLWVFODLPVDJDLQVWGHIHQGDQWV $87202%,/(63(8*(276$,6$%(/6$/$60(1'(=DQG'2(6 WKURXJK3ODLQWLII$/&21(17(57$,10(17//&KHUHE\GHPDQGVDWULDOE\ MXU\RIDOOPDWWHUVWULDEOHWRDMXU\ '$7('-DQXDU\ $1'(5621<(+3& (GZDUG0$QGHUVRQ 5HJLQD '(0$1')25-85<75,$/