PAQUIN v. The Prudential Insurance Company of America, a New Jersey Insurance Company
Filing
57
ORDER granting 44 Motion for Summary Judgment by Judge R. Brooke Jackson on 7/26/18. (jdyne, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge R. Brooke Jackson
Civil Action No. 16-cv-02142-RBJ
MICHAEL J. PAQUIN, an individual,
Plaintiff,
v.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey for-profit corporation,
Defendant.
ORDER
This case, which arises under the Employee Retirement Income Security Act of 1974, 29
U.S.C. § 1001 et seq., is a review of defendant Prudential Insurance Company of America’s
termination of plaintiff Michael J. Paquin’s long-term disability benefits. After considering the
arguments, applicable law, and administrative record, the Court reverses the termination of Mr.
Paquin’s benefits for the reasons stated herein, and therefore GRANTS Mr. Paquin’s motion for
summary judgment, ECF No. 48.
I. BACKGROUND
A. Factual and Procedural Background.
In 2003 Michael Paquin contracted encephalitis from a mosquito infected by the West
Nile virus. He sustained brain damage and cognitive difficulties that interfered with his
ability to continue his employment as a Business Development Director for Transistor
1
Devices, Inc. (“TDI”). TDI offered an employee benefits plan which was insured and
administrated by Prudential Insurance Company of America. The plan states, in relevant part:
You are disabled when Prudential determines that:
•
•
you are unable to perform the material and substantial duties of your regular
occupation due to your sickness or injury; and
you have a 20% or more loss in your indexed monthly earnings due to that
sickness or injury.
After 24 months of payments, you are disabled when Prudential determines that due to
the same sickness or injury, you are unable to perform the duties of any gainful
occupation for which you are reasonably fitted by education, training, or experience . . .
Material and substantial duties means duties that:
•
are normally required for the performance of your regular occupation; and
•
cannot be reasonably omitted or modified, except that if you are required to
work on average in excess of 40 hours per week, Prudential will consider you
able to perform that requirement if you are working or have the capacity to
work 40 hours per week.
•
gainful occupation means an occupation, including self-employment, that is or
can be expected to provide you with an income equal to at least 60% of your
indexed monthly earnings within 12 months of your return to work.
R. 2163.
Initially Prudential approved Mr. Paquin for short-term disability benefits in 2003.
In
2004 Mr. Paquin’s employment ended, and he applied for long-term disability (“LTD”)
benefits under the company’s employee benefits plan. Prudential approved his application
and provided him LTD benefits beginning in April 2004. R. 1803. However, when Mr.
Paquin attempted (unsuccessfully) to go back to work for a trial period, Prudential
terminated Mr. Paquin’s LTD benefits in May 2004. Mr. Paquin appealed this decision, and
after reviewing his file Prudential reversed its determination in 2006, reinstated Mr.
Paquin’s benefits, and paid back Mr. Paquin’s benefits from May 2004 through January
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2006.
From January 2006 until January 7, 2015—roughly eleven years—Prudential paid Mr.
Paquin LTD benefits. It regularly reviewed Mr. Paquin’s file throughout the years, and each
time it determined that Mr. Paquin’s disability warranted LTD benefits.
However, on January 8, 2015 Prudential terminated Mr. Paquin’s LTD benefits, due in
large part to one independent neuropsychological test (“NPT”) and Prudential’s conclusion
that there was no valid evidence of a continuing impairment that would prevent Mr. Paquin
from performing the duties of his regular occupation. Two internal appeals of that decision
were unsuccessful. On August 24, 2016 Mr. Paquin filed this suit challenging the denial of
his LTD benefits under the Employee Retirement Income Security Act of 1974, or ERISA.
Now before the Court is Mr. Paquin’s motion for summary judgment. ECF No. 48. The
motion has been fully briefed and is ripe for this Court’s review.
B. Medical Evidence in the Administrative Record.
The following is a summary of the medical evidence that was before Prudential when it
decided to terminate Mr. Paquin’s LTD benefits and when it denied Mr. Paquin’s subsequent
appeals.
•
September 2003: Neurologist Janice Miller, MD, treats Mr. Paquin for viral
encephalitis and meningitis after exposure to West Nile virus. During this hospital
stay, Mr. Paquin is also seen by infectious disease physician Nelson Ganz, MD. R.
22, 117.
•
November 2003: Upon referral by Dr. Miller, Mr. Paquin visits Mapletown
Rehabilitation Center for cognitive therapy and evaluation. Medical records from
these visits indicate notable cognitive impairments. R. 12, 29–65.
•
November 21, 2003: Speech language pathologist Melissa Hundley, MS, evaluates
Mr. Paquin for neurotrauma speech and language therapy, and she notes that he has
“a variety of cognitive deficits which include: decreased short term recall, impaired
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word finding, impaired processing, impaired executive functioning and an inability
to complete multiple tasks.” R. 36.
•
February 2003: Treating neurologist Michelle Ferguson, MD, certifies Mr. Paquin’s
West Nile virus exposure as encephalitis. R. 12.
•
June 2004: Dr. Ferguson again notes “[p]ersistent and worsening cognitive problems
after West Nile encephalitis last year.” R. 87.
•
May 2004: Marilyn Newsome, MD, PhD, evaluates and treats Mr. Paquin for sleep
disorder potentially resulting from West Nile virus. R. 11.
•
May 10, 2004: Prudential terminates Mr. Paquin’s LTD benefits after Mr. Paquin
returns to work for a trial period of 18 hours a week. Prudential upholds its
termination in February 2005. R. 210, 1817.
•
August 18, 2005: Mr. Paquin submits a formal administrative appeal of the LTD
denial. Included in this submittal are the following reports supporting his claim:
Report of Julie Stapleton, MD. R. 608–10.
Report of Nelson Ganz, MD. R. 613–15.
NPT evaluation conducted by neuropsychologist Jan Lemmon, PhD,
where Dr. Lemmon concluded that Mr. Paquin showed such
cognitive impairment that he could not work. R. 158–59, 587–95.
Brain SPECT scan imaging studies conducted and interpreted by
clinical neuroscientist S. Gregory Hipskind, MD, PhD of Brain
Matters. R. 93, 510.
Records from physicians Newsome, Ferguson, Politzer, and from
Boulder Community Hospital and Mapleton Rehabilitation Center.
R. 29–65, 489.
Mr. Paquin’s former employer, TDI’s, employment termination
documents reflecting its belief that Mr. Paquin’s “capabilities had
been (were) seriously affected by his illness, and he was incapable of
performing his job assignments to TDI standards.” R. 71, 490.
Vocational assessment by vocational rehabilitation expert Mark
Litvin, PhD. R. 152–87.
•
November 14, 2005: Prudential obtains its own NPT conducted by
neuropsychologist Donald Taylor, PhD, who found that Mr. Paquin had impaired
cognition and executive dysfunction. Dr. Taylor noted that Mr. Paquin’s
performance “did not consistently give evidence of impairment” but ruled out any
“magnification of cognitive symptoms” or “disingenuous effort.” Dr. Taylor
concluded that “Mr. Paquin’s cognitive deficits appear to stem from his West Nile
virus infection and the impact of West Nile-related chronic fatigue and chronic sleep
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deprivation on his cognitive functioning.” R. 938, 954–55.
•
January 17, 2006: Prudential reverses its termination of Mr. Paquin’s LTD benefits
and pays back benefits to the date on which it terminated Mr. Paquin’s benefits. R.
1849–50.
•
February 2006: Prudential internally reviews Mr. Paquin’s claim and notes that “ap
does not predict a rtw date. Per medical on file, medical supports td a/o” which Mr.
Paquin argues means “attending physician does not predict a return to work date.
Per medical on file, medical supports total disability any occupation.” R. 1955.
•
April 2006: Prudential determines that Mr. Paquin is disabled from any gainful
occupation, recognizing Mr. Paquin’s cognitive defects. R. 1955.
•
October 2008: Prudential reviews Mr. Paquin’s claim and again concludes that he is
totally disabled with regard to any gainful occupation. The review included Dr.
Julie Stapleton’s conclusion that Mr. Paquin was “chronically and permanently
disabled, that he had decreased cognitive stamina, decreased memory and has
inattention.” Prudential’s file also noted that Mr. Paquin’s “cognitive impairment
has not improved since [] almost 3 yrs ago, and would most likely be
permanent…lack of cognitive abilities, slow thought processes and inability to
multitask would prevent return to sustained employment.” R. 2026.
•
October 2010: Prudential reviews Mr. Paquin’s claim and affirms LTD benefits. It
notes that management determined it was to continue providing Mr. Paquin benefits
for “max duration” with a follow-up in 3 years. Under Mr. Paquin’s plan, “max
duration” means until age 66, which here would be 2026. R. 1957.
•
October 2013: Prudential reviews Mr. Paquin’s claim. It receives treatment records
from Dr. Stapleton and from Mr. Paquin’s primary care treating internist, David
Nuhfer, MD. Both doctors supplied four reports, and these reports concluded that
Mr. Paquin had chronic neurological problems resulting from his West Nile virus.
R. 1257–79, 1254–64.
•
2013 and 2014: Prudential conducts an internal audit of Mr. Paquin’s claim and
finds that Mr. Paquin is permanently disabled. This audit included the review and
opinions by claim managers, a registered nurse, and vocational rehabilitation
specialists. Claim Manager Mary Stratton noted in Mr. Paquin’s file that his
cognitive issues were not likely to improve and that there are no gainful employment
options for Mr. Paquin based on the evidence in the record. R. 1963
•
August 14, 2014: Mr. Paquin’s file includes an entry regarding a “settlement
calculation” concluding that Prudential has “total possible liability $641,668.” This
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indicates that Prudential was at least considering the possibility of paying Mr.
Paquin a lump sum payment for the duration of his disability period (until 2026). R.
1963.
•
September 10, 2014: Prudential orders Mr. Paquin to undergo another NPT test with
a neuropsychologist hired by Prudential via a third-party company. Dr. Julie
Rippeth, PhD, reviews Mr. Paquin’s records, examines him personally, and performs
battery exams.
•
January 7, 2015: In a 39-page report, Dr. Rippeth concludes that there is no evidence
to support Mr. Paquin’s limitations or medically necessary work restrictions.
Instead, she believed that Mr. Paquin “did not consistently perform to his true
capability over the course of the cognitive test battery.” She therefore found that
“Mr. Paquin’s test results do not have sufficient validity overall to ensure that they
are an adequate representation of his current level of cognitive functioning, and their
interpretation is significantly limited.” Therefore, in discounting much of the record
as unreliable, she assessed the records she found reliable and found that there was no
valid or compelling evidence to support clinically significant cognitive impairments.
R. 667.
•
January 8, 2015: Prudential terminates Mr. Paquin’s LTD benefits. In its
termination it stated: “Based on this recent NPT [Dr. Rippeth’s NPT], the clmt does
not have any r[estriction]s and l[imitation]s from a cognitive or psychiatric
perspective and so no further LTD benefits are payable. Terminating benefits at this
time and closing claim.” R. 1966.
•
July 6, 2015: Mr. Paquin appeals the termination of his benefits. Included in this
appeal are the following documents in support:
The 2005 appeal documents.
Dr. Stapleton’s June 12, 2015 disability examination where she again
found that Mr. Paquin is disabled and unable to return to
employment. R. 698.
A letter from neuropsychologist Mark Zacharewicz, PhD, who
treated Mr. Paquin in 2006. He stated that he disagreed with Dr.
Rippeth’s findings and disputed her methodology and interpretation.
To demonstrate why he believed Prudential’s use of NPT was
improper, he discussed of the proper use of NPT when validity
measures are triggered. R. 1437–42.
A letter from non-treating psychiatry professor Steven Dubrovsky,
MD, criticizing Prudential’s decision making as it deviated from
acceptable medical standards. He noted that “Prudential’s reliance on
Dr. Rippeth’s single invalid test without considering 10 years of
consistent clinical and neuropsychological findings or even a
consideration of factors that might have affected the results is not a
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valid basis for a decision to terminate benefits.” R. 1250.
A letter from non-treating neurology professor Kenneth Tyler, MD,
explaining the NPT testing often fails to capture the extent of West
Nile virus patients’ neurological impairments. R. 765–66.
•
October and November 2015: Prudential hires two doctors to review Mr. Paquin’s
file, Michael Villanueva, PsyD, and Howard Grattan, MD. Prudential had hired
these individuals to review Prudential claims many times before—Dr. Villanueva
reviewed files for Prudential at least 105 times in 2014–2015 and was paid at least
$7,368 to review Mr. Paquin’s file; Dr. Grattan reviewed files for Prudential at least
54 times in those same years and was paid $3,500 to review Mr. Paquin’s file.. R.
1700, 1796, 1717. After reviewing the medical records—including a 2008 NPT
assessment performed by Dr. Lemmon which Prudential says it had not been
provided with prior—Dr. Villanueva found that Mr. Paquin did not have any
psychological or cognitive impairments, and Dr. Grattan found “no evidence of any
neuromuscular deficits resulting in a physical impairment.” R 1714.
•
November 6, 2015: Prudential upholds the termination of Mr. Paquin’s LTD
benefits. R. 1923–29.
•
May 5, 2016: Mr. Paquin again appeals the termination, providing additional
evidence. The new evidence is:
A letter from Dr. Lemmon, PhD, dated December 19, 2015, who
disputes Prudential’s use of Dr. Rippeth’s report as grounds for
termination. She notes that she is troubled by NPT reports being
used to test for West Nile virus deficits. R. 1730.
A functional capacity evaluation (FCE) completed over three days by
Sherri Young, OTR. She concludes that Mr. Paquin’s memory
problems preclude him from work in positions where he could earn a
comparable income to that which he was making before his
disability. While she found that his overall cognitive test scores fell
within normal range, these scores were not high enough for Mr.
Paquin to perform the cognitive functions of his regular occupation.
R. 1743–82.
•
June 8, 2016: Prudential again upheld its determination after asking Drs. Villanueva
and Grattan to review the new information submitted by Mr. Paquin. The doctors
concluded that the new information did not alter their prior opinions. R. 1786, 1790.
II. STANDARD OF REVIEW
Parties may present a dispositive motion in an ERISA case such as this one either as a
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motion for a bench trial on the papers or as a motion for summary judgment. See Jewell v.
Life Ins. Co. of N. Am., 508 F.3d 1303, 1307 n.1 (10th Cir. 2007), cert denied, 553 U.S. 1079
(2008). Here, Mr. Paquin filed a motion for summary judgment, but the usual posture of
Federal Rule of Civil Procedure 56 does not apply. Rather, “summary judgment is merely a
vehicle for deciding the case; the factual determination of eligibility for benefits is decided
solely on the administrative record, and the non-moving party is not entitled to the usual
inferences in its favor.” LaAsmar v. Phelps Dodge Corp. Life, Accidental Death &
Dismemberment & Dependent Life Ins. Plan, 605 F.3d 789, 796 (10th Cir. 2010) (internal
quotation marks omitted).
When an employee benefits plan governed by ERISA gives the administrator
discretionary authority to determine eligibility for benefits, a district court reviews denials
using an abuse of discretion standard. 1 Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101,
115 (1989). Under this standard, the court considers whether the denial of a claim for benefits
was arbitrary and capricious. Murphy v. Deloitte & Touche Group Ins., 619 F.3d 1151, 1157
(10th Cir. 2010). The court will assess whether the administrator’s decision was reasonable
and made in good faith. Fought v. Unum Life Ins. Co. of America, 379 F.3d 997, 1003 (10th
Cir. 2004). An administrator’s decision is reasonable if the administrator based the decision
on substantial evidence in the administrative record before it, i.e., that evidence which a
reasonable mind might accept as adequate to support the conclusion reached. Sandoval v.
Aetna Life & Cas. Ins. Co., 967 F.2d 377, 381 (10th Cir. 1992) (noting that substantial
evidence is “more than a scintilla but less than a preponderance” of evidence).
1
In an order dated July 10, 2017 I determined that the proper standard of review in this case is the abuse of
discretion standard. ECF No. 18 at 2–4.
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Because ERISA relies on trust law principles, several factors must be considered
in reviewing an insurer’s denial of benefits. While no one factor is dispositive, "any one
factor will act a ‘tiebreaker’ when the other factors are closely balanced," Metro. Life Ins. Co.
v. Glenn, 554 U.S. 105, 106 (2008). These factors include any procedural irregularities, such
as where the insurer “cherry picked” the file for evidence to support a denial. Smith v.
Reliance Standard Ins. Co., 322 F. Supp. 2d 1168, 1177 (D. Colo. 2004). In cases like this
one, where Prudential both funds the Plan and adjudicates benefits claims, courts should
weigh the potential conflict of interest “as a factor in determining if there is an abuse of
discretion.” Glenn, 554 U.S. at 114.
An administrator is not precluded from denying a claimant benefits by virtue of the fact
that it previously paid benefits if the administrator becomes aware of new information about
the claimant’s eligibility. Williams v. Metro. Life Ins. Co., 459 F. App’x 719, 731 (10th Cir.
2012). However, “unless information available to an insurer alters in some significant way,
the previous payment of benefits is a circumstance that must weigh against the propriety of an
insurer’s decision to discontinue those payments.” Id. (quoting Kecso v. Meredith Corp., 480
F.3d 849, 854 (8th Cir. 2007) (emphasis added).
III. ANALYSIS
Mr. Paquin argues that in terminating his LTD benefits, Prudential ignored the clear
weight of the evidence regarding his disability. Prudential argues that the decision was
reasonable and supported by substantial evidence because it was based on the opinions of an
independent examining neuropsychologist and two other independent professionals who
reviewed his records. ECF No. 51 at 9.
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As laid out above, I find that the evidence in the administrative record
overwhelmingly supports the conclusion that Mr. Paquin’s cognitive ailments caused by
West Nile virus are permanent and disabling under the terms of the insurance policy. The
evidentiary scoreboard, if you will, reads as follows: 16 healthcare professionals (all doctors
of medicine or neuropsychology, aside from one occupational therapist and one speechlanguage pathologist, and including one doctor who was hired by Prudential) support a
finding that Mr. Paquin is disabled; three doctors hired by Prudential found that Mr. Paquin
is not disabled under the terms of the policy. 2 In addition, per ERISA case law the Court
views the fact that Prudential paid Mr. Paquin LTD benefits for 11 years while conducting
regular reviews as favorable to Mr. Paquin’s claim. As recently as February 2014 Prudential
Claim Manager Mary Stratton noted in Mr. Paquin’s file that his cognitive issues were not
likely to improve, and that there were no gainful employment options for Mr. Paquin based
on the evidence in Prudential’s record.
As such, the only way that Prudential can succeed under the applicable standard of
review is if it can show that new, material medical evidence indicates that Mr. Paquin is no
longer disabled under the terms of the Policy. I find that this has not been shown. Prudential
relies on three medical opinions—those of Drs. Rippeth, Villanueva, and Grattan. However,
Drs. Villanueva and Grattan only became involved in this case after Prudential decided to
terminate Mr. Paquin’s LTD benefits. The only “new” piece of evidence that Prudential
relied on to make its initial decision to terminate benefits was Dr. Rippeth’s opinion from
2
Medical records provided by the following medical professionals support Mr. Paquin: Dr. Miller;
Speech-language pathologist Hundley; Dr. Ferguson; Dr. Stapleton; Dr. Ganz; Dr. Lemmon; Dr.
Newsome; Dr. Hopskind; Dr. Politzer; Dr. Zacharewicz; Dr. Litvin; Dr. Taylor; Dr. Nuhfer; Dr.
Dubrovsky; Dr. Tyler; and Occupational Therapist Young.
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January 2015. Dr. Rippeth apparently suspected, based upon her interpretation of
neuropsychological test results, that Mr. Paquin intentionally underplayed his abilities, and
that many of his prior records were therefore unreliable. Having thus dismissed or devalued
test results that she found unreliable, she determined that Mr. Paquin’s cognitive abilities fell
within the normal range and rendered him able to work. I am not persuaded.
In the first place, none of the other professionals who had evaluated and treated Mr.
Paquin during the previous 11 years had thought that Mr. Paquin was malingering in any
way. Moreover, in appealing the termination of his benefits, Mr. Paquin provided letters
from three reputable doctors who reviewed Dr. Rippeth’s opinion and found her rationale to
be flawed if not outright incorrect. Dr. Rippeth determined that Mr. Paquin was not disabled
based in large part upon NPT evaluation results, but these three doctors noted that NPTs
often fail to capture the true extent of West Nile virus patients’ cognitive difficulties and are
therefore inappropriate grounds in and of themselves by which to establish Mr. Paquin’s
abilities.
The record was supplemented by the opinions of another neuropsychologist and a
medical doctor who apparently agree with Dr. Rippeth. I have noted that those doctors have
some history of working with Prudential. That history does not establish that they did
anything other than calling it as they saw it. 3 Nevertheless, I find that their opinions are too
little, too late, and too contrary to the weight of medical opinion and the history of this case
to support a drastic revision of the disability determination. I also note, again, that three
3
But see Black & Decker Disability Plan v. Nord, 538 U.S. 822, 832 (2003) (crediting the “concern that
physicians repeatedly retained by benefits plans may have an incentive to make a finding of ‘not disabled’
in order to save their employers money and to preserve their own consulting arrangements”).
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doctors who have examined their opinions disagree with them.
Prudential also argues that its decision to terminate benefits is supported by a 2008
NPT performed by Dr. Lemmon to which it only had access in 2015. Drs. Villanueva and
Grattan reviewed this NPT and found that it supported Dr. Rippeth’s finding. As a
preliminary note, it appears that Prudential was made aware of the 2008 NPT earlier than it
alleges. See R. 1276. However, putting the timing issue aside, I do not find this NPT to be
the ‘significant’ evidentiary bombshell Prudential alleges it to be. ECF No. 51 at 6. Even
after Dr. Lemmon performed the 2008 NPT in question, she maintained her belief that Mr.
Paquin is disabled. Indeed, in 2015 Dr. Lemmon wrote that Mr. Paquin “is not able to
consistently muster and sustain mental effort to successfully maintain gainful employment.”
R. 1730. As such, this NPT cannot explain why Prudential suddenly changed course in
recognizing the extent of Mr. Paquin’s disability.
“[A]n administrator’s decision is reasonable if the administrator based the decision on
substantial evidence in the administrative record before it, i.e., that which a reasonable mind
might accept as adequate to support the conclusion reached.” Sandoval, 967 F.2d at 381. I
do not find that an objectively reasonable mind would find that the Rippeth opinion,
supplemented later by the opinions of Drs. Villanueva and Grattan, and the 2008 NPT, in the
context of the record taken as a whole, support the termination decision. Prudential appears
to have reviewed that evidence with blinders on. The Court will not do so.
In sum, I conclude that Prudential’s termination decision, in light of the vastly
stronger body of evidence to the contrary, was an abuse of discretion. In reaching that
conclusion, I weigh, as the law permits, Prudential’s potential conflict of interest as a factor.
12
See Glenn, 554 U.S. at 114.
IV. ORDER
For the reasons set forth above, the Court ORDERS as follows:
1. Mr. Paquin’s Motion for Summary Judgment (ECF No. 48) is GRANTED.
2. The Clerk of Court shall enter judgment in Mr. Paquin’s favor. Mr. Paquin is entitled
to an award of past LTD benefits from the date of termination (January 8, 2015)
through the date of judgment, with interest. Further, Mr. Paquin’s LTD benefits shall
be reinstated as of the date of judgment and going forward.
3. Mr. Paquin may file an appropriate motion for attorneys’ fees and costs pursuant to
29 U.S.C. § 1132(g).
DATED this 26th day of July, 2018.
BY THE COURT:
___________________________________
R. Brooke Jackson
United States District Judge
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