Beckwith et al v. General Elec Co et al

Filing 35

ORDER denying 12 Motion to Remand to State Court. Signed by Judge Alvin W. Thompson on 3/30/2010. (Lynch, C.)

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UNITED STATES DISTRICT COURT D I S T R I C T OF CONNECTICUT -----------------------------------x A N N BECKWITH, ADMINISTRATOR FOR : T H E ESTATE OF ROBERT BECKWITH AND : A N N BECKWITH PERSONALLY; : A L B E R T COON; ALLEN BARKER; : J O S E P H VENDITTO; ROY J. SMITH; : L O U I S PERRAS; ROBERT WATZ; : S A M U E L F. FYFE; GEORGE GAVITT; : J A M E S PONT; RAYMOND DUNKELBARGER; : M A N U E L ARRUDA; BRYAN MERFELD; : J O H N E. SMITH; ELAINE MITCHELL; : J O Y C E JERVIS; and CONNIE HOLCOMB, : : Plaintiffs, : v. : : G E N E R A L ELECTRIC COMPANY, and : BUFFALO PUMPS, INC., : : Defendants. : -----------------------------------x CASE NO. 3:09CV0216 (AWT) RULING ON MOTION TO REMAND T h e above-named plaintiffs brought this action in Connecticut S u p e r i o r Court, setting forth negligence and product liability c l a i m s based on the defendants' use of asbestos. Buffalo Pumps, I n c . ("Buffalo Pumps") removed this case pursuant to 28 U.S.C. § 1442(a), and General Electric ("GE") joined in the removal. p l a i n t i f f s have moved to remand. t h e motion is being denied. I . BACKGROUND T h e plaintiffs filed their complaint in Connecticut Superior C o u r t , Judicial District of Fairfield at Bridgeport. Every The For the reasons set forth below, -1- plaintiff worked at General Dynamics Corp./Electric Boat Division i n Groton, Connecticut, and some of the plaintiffs, including the l e a d plaintiff, who is now deceased, served in the U.S. Navy. a l l e g e injuries from asbestos-related diseases resulting from e x p o s u r e while the plaintiffs worked with products provided by the d e f e n d a n t s in constructing and maintaining ships for the U.S. Navy. Specifically, defendant Buffalo Pumps manufactured All c e n t r i f u g a l pumps, while defendant GE manufactured marine steam t u r b i n e s , both of which the companies supplied to the Navy. The d e f e n d a n t s do not challenge here the plaintiffs' contention that t h e y were exposed to asbestos, but contend that the Navy dictated t h e specifications for all equipment that it procured and dictated w h a t warnings were to appear on the equipment. Thus, the d e f e n d a n t s argue that they have a basis to assert a military c o n t r a c t o r defense and that fact entitles them to litigate this c a s e in federal court. II. DISCUSSION T h e federal officer removal statute permits removal from s t a t e court of cases against "any officer (or any person acting u n d e r that officer) of the United States or any agency thereof, s u e d in an official or individual capacity for any act under color o f such office. . . ." 28 U.S.C. § 1442(a)(1). A defendant who i s not a federal officer or agency must show (1) that it is a p e r s o n within the meaning of the statute, (2) that it was "acting -2- under" a federal officer and that there was a "causal connection" b e t w e e n the charged conduct and the asserted official authority, a n d (3) that it has a "colorable" federal defense. See California v . Atlantic Richfield Co. (In re Methyl Tertiary Butyl Ether P r o d s . Liab. Litig.("MTBE")), 488 F.3d 112, 124 (2d Cir. 2007). The statute should be construed broadly and "should not be f r u s t r a t e d by a narrow, grudging interpretation. . . ." Arizona v . Manypenny, 451 U.S. 232, 242 (1981) (citation omitted). Furthermore, a defendant is not required "virtually to win his c a s e before he can have it removed." Jefferson County, Ala. v. A c k e r , 527 U.S. 423, 431 (1999) (citation and internal quotation omitted). As to the first element, it is undisputed that the See, e.g., Winters v. d e f e n d a n t s are "persons" under the statute. D i a m o n d Shamrock Chem. Co., 149 F.3d 387, 398 (5th Cir. 1998) ( c o r p o r a t e entities qualify as "persons" under § 1442(a)(1)). A . Acting Under and Causal Connection T o establish the second element, a defendant must show that " ` t h e acts that form the basis for the state civil or criminal s u i t were performed pursuant to an officer's direct orders or to c o m p r e h e n s i v e and detailed regulations.'" MBTE, 488 F.3d at 124 ( q u o t i n g Ryan v. Dow Chem. Co., 781 F.Supp. 934, 947 (E.D.N.Y. 1992)). In examining whether defendants satisfy this requirement, c o u r t s should look to the extent to which defendants "acted under f e d e r a l direction at the time they were engaged in the conduct now -3- being sued upon." Id. at 125 (citation omitted). Acts that are p e r f o r m e d under the "general auspices" of a federal officer, or t h e mere participation of a corporation in a regulated industry, a r e insufficient to support removal based on federal officer jurisdiction. Id. (citation omitted). "The words `acting under' a r e to be interpreted broadly, and the statute as a whole must be l i b e r a l l y construed." Isaacson v. Dow Chem. Co., 517 F.3d 129, "In the context of a 1 3 6 (2d Cir. 2008) (citations omitted). f a i l u r e to warn claim, the defendant must establish that the g o v e r n m e n t ' s control over warnings directly interfered with the d e f e n d a n t ' s ability to fulfill its state law obligation to warn of s a f e t y hazards." Nesbiet v. Gen. Elec. Co., 399 F. Supp. 2d 205, 2 1 1 (S.D.N.Y. 2005). The plaintiffs argue that, for two reasons, the defendants h a v e not established that they were acting under federal direction a t the time of the actionable conduct. First, the plaintiffs a r g u e that the defendants' affidavits do not address the fact that t h e plaintiffs are alleging injuries sustained as a result of t h e i r employment as civilian employees at a private shipyard run b y General Dynamics, not injuries suffered as the result of their e m p l o y m e n t in a naval shipyard or during service in the U.S. Navy, a n d that the defendants' affidavits provide "only tangential e v i d e n c e or anecdotal reference to [their] contractual r e l a t i o n s h i p [ s ] with Electric Boat and are entirely unclear as to -4- the communications, association and fulfillment of [their] c o n t r a c t s with Electric Boat." (Response to Defendant Buffalo Pump I n c . ' s Opposition to Plaintiffs' Motion to Remand (Doc. No. 18) ( " P l s . ' Resp.") 2.) 1 After reviewing the affidavits submitted by Buffalo Pumps and G E , the court concludes that the defendants have met their burden a s to this element. In response to the plaintiffs' argument that t h e y were not serving as employees of the Navy and thus "may not h a v e been acting under a federal officer at all but under control a n d contract with Electric Boat," (Motion to Remand (Doc. No. 12) 2 0 . ) , the defendants have provided evidence that they were acting u n d e r the Navy's control and direction and pursuant to c o m p r e h e n s i v e and detailed orders. R e a r Admiral, avers: T h r o u g h o u t the twentieth century, the U.S. Navy has c o n s t r u c t e d warships in both government owned and operated N a v a l Shipyards and in commercially owned and operated c i v i l i a n shipyards. This is true for various types of warships including aircraft carriers, destroyers, cruisers, submarines, amphibious and auxiliary s h i p s . . . . In both Naval shipyards and commercial s h i p y a r d s the Navy exercised strict control over the c o n s t r u c t i o n of the ships, installation of all equipment, a n d testing of the ship and systems prior to acceptance a n d commissioning of the ship. Control in Naval shipyards w a s accomplished through the shipyard commander who was a uniformed Naval Officer, typically either [a] Navy a d m i r a l or senior Navy captain. In civilian shipyards, David P. Sargent, a retired T h e plaintiffs' Response to Defendant General Electric C o m p a n y ' s Opposition to Plaintiffs' Motion to Remand (Doc. No. 19) c o n t a i n s the same argument. 1 -5- similar oversight and control was accomplished through a r e s i d e n t Supervisor of Shipbuilding, Construction, and R e p a i r (SUPSHIPS), also typically a Navy admiral or senior c a p t a i n , with a staff of Navy uniformed and civil service p e r s o n n e l . The SU[P]SHIP staff was comprised of personnel w i t h expertise in technical, contractual, logistics, o p e r a t i o n a l and other relevant skills. The resident S U P S H I P S reported to the [Chief], Bureau of Ships ( B U S H I P S , now NAVSEA) and was the on[site] manager of the N a v y contract with responsibility for day to day m a n a g e m e n t and inspection of all work involved in the c o n s t r u c t i o n of warships at that facility, and for r e s p o n d i n g to all technical and contractual questions and r e q u i r e m e n t s raised by the shipbuilding contractor. The S u p e r v i s o r of Shipbuilding had authority to require c h a n g e s , rework, or even stop-work orders in the event t h a t the Navy contract requirements were not being fully met. . . . Major propulsion, auxiliary and weapons equipment for i n s t a l l a t i o n in warships was procured from industry by the N a v y and delivered to the submarine constructing shipyard, G e n e r a l Dynamics/Electric Boat Division as Government F u r n i s h e d Equipment (GFE), either through direct BUSHIPS c o n t r a c t s or directed contracts utilizing the construction y a r d as the Navy procurement agent. A few examples of GFE e q u i p m e n t include components such as . . . turbines . . . [and] pumps . . . . GFE equipment such as these was c o n t r a c t e d for directly by the Navy who had Navy Resident I n s p e c t o r s at manufacturing plants to monitor, inspect, a n d accept or reject the equipment prior to shipment. ( S a r g e n t Aff. (Doc. No. 14, Ex. 3) ¶¶ 36-37.) Thus, contrary to t h e plaintiffs' assertions, the defendants' affidavits address w h a t happened in commercially owned and operated civilian s h i p y a r d s in general and at General Dynamics Corp./Electric Boat D i v i s i o n in particular. S e c o n d , the plaintiffs argue that the affidavits submitted by t h e defendants do not show that the Navy forbade the defendants f r o m fulfilling their state law duty to warn or that the Navy -6- dictated the contents of the warnings. However, there is no r e q u i r e m e n t that the Navy go so far in order to provide removal j u r i s d i c t i o n .2 It can be sufficient that "the acts that form the b a s i s for the state civil or criminal suit were performed pursuant t o . . . comprehensive and detailed regulations." a t 124. MBTE, 488 F.3d Although the Second Circuit has noted that the "line b e t w e e n the absence and presence of `direct control' by a federal o f f i c e r is a fine one, depending heavily on the facts of each c a s e , " id. at 125, the court cited with approval a court's finding t h a t removal was appropriate in a situation combining detailed s p e c i f i c a t i o n s by the government, the defendant's compulsion to p r o v i d e the product to those specifications, and the government's o v e r s i g h t over the manufacturing process. e l e m e n t s are present here. T h e defendants have also produced evidence as to the causal c o n n e c t i o n between the charged conduct and the official authority b y showing that the Navy dictated the contents of warnings a s s o c i a t e d with its ships. David Hobson, the former manager of See id. at 126. Those N a v y Customer Service for GE's Navy and Small Turbine Department a v e r s that "[t]he U.S Navy had precise specifications as to the n a t u r e of any communication affixed to machinery supplied by GE to C f . infra note 3 (discussing a similar argument with respect t o the test for a colorable federal defense established by Boyle v . United Techs. Corp., 487 U.S. 500 (1998)). 2 -7- the Navy. GE would not have been permitted, under the s p e c i f i c a t i o n s , associated regulations and procedures, nor under t h e actual practice as it evolved in the field, to affix any type o f warning or caution statement to a piece of equipment intended f o r installation onto a naval vessel, beyond those required by the Navy." (Hobson Aff. (Doc. No. 15, Ex. 3) ¶ 23.) Also, retired R e a r Admiral of the U.S. Navy, Ben J. Lehman avers that "the Navy d i c t a t e d every aspect of the design, manufacture, installation, o v e r h a u l , written documentation, and warnings associated with its s h i p s and did not permit deviation by any of its contractors." ( L e h m a n Aff. (Doc. No. 15, Ex. 8) ¶ 6.) Lehman states that "[a]ny d e v i a t i o n from military specifications of equipment to be i n s t a l l e d on ships resulted in significant problems and rejection o f the equipment." (Id. ¶ 3.) Buffalo Pumps has submitted the a f f i d a v i t of retired Rear Admiral Roger Horne, who avers that " [ a ] n y attempt by a manufacturer to affix a cautionary statement c o n c e r n i n g asbestos to pumps would have been futile, and would h a v e been contrary to Navy protocols for instruction and training r e l a t i n g to use of asbestos materials." ¶ 22.) Thus, the evidence produced by the defendants establishes t h a t the Navy had complete control over the manufacture and design o f every piece of equipment on its ships, as well as the nature of w a r n i n g s issued, and contractors, such as Buffalo Pumps and GE, (Horne Aff. (Doc. No. 14) -8- would not have been permitted by the Navy to place warning labels o r cautionary language on products containing asbestos aboard Navy ships. Therefore, the defendants were "acting under" a federal a g e n c y when they supplied products to the Navy, and the requisite c a u s a l nexus exists between the defendants' conduct under the d i r e c t i o n of a federal officer and the plaintiffs' claim that the d e f e n d a n t s failed to warn them of the hazards associated with asbestos. B . Colorable Defense T h e defendants must show that they have a colorable defense. To establish this element, a defendant must show that (1) "the U n i t e d States approved reasonably precise specifications" for the m i l i t a r y equipment supplied by the contractor; (2) "the equipment c o n f o r m e d to those specifications; and (3) the [military c o n t r a c t o r ] warned the United States about the dangers in the use o f the equipment that were known to the [contractor] but not to t h e United States." 5 1 2 (1988). Boyle v. United Techs. Corp., 487 U.S. 500, To establish that any state law duty to warn has been d i s p l a c e d under Boyle, a defendant "must show that the applicable f e d e r a l contract includes warning requirements that significantly c o n f l i c t with those that might be imposed by state law." Grispo v. E a g l e Picher Indus., Inc. (In re Joint E. & S. Dist. N. Y. A s b e s t o s Litig.), 897 F.2d 626, 630 (2d Cir. 1990). However, " [ t ] h e conflict with federal policy need not be as sharp as that -9- which must exist for ordinary pre-emption when Congress legislates i n a field which the States have traditionally occupied. Or to p u t the point differently, the fact that the area in question is o n e of unique federal concern changes what would otherwise be a c o n f l i c t that cannot produce pre-emption into one that can." Boyle, 487 U.S. at 507-08. In addition, a contractor "must show t h a t whatever warnings accompanied a product resulted from a d e t e r m i n a t i o n of a government official, and thus that the G o v e r n m e n t itself `dictated' the content of the warnings meant to a c c o m p a n y the product." Id. (internal citations omitted). "For t h e military contractor defense to apply, government officials u l t i m a t e l y must remain the agents of decision." 1. Reasonably Precise Specifications T h e Second Circuit has stated that "answering the question w h e t h e r the [g]overnment approved reasonably precise s p e c i f i c a t i o n s for the design feature in question necessarily a n s w e r s the question whether the federal contract conflicts with s t a t e law. If such specifications are present, the contractor's Id. f e d e r a l contractual duties will inevitably conflict with alleged s t a t e tort duties to the contrary because complying with the f e d e r a l contract will prevent compliance with state tort law as t h e plaintiffs have alleged that it exists." Twinam v. Dow Chem. C o . (In re "Agent Orange" Prod. Liab. Litig.), 517 F.3d 76, 93 (2d C i r . 2008) (internal quotations and citation omitted). -10- Defendants asserting the defense must demonstrate that the g o v e r n m e n t made a discretionary determination about the m a t e r i a l it obtained that relates to the defective design f e a t u r e at issue. Where the government merely rubber s t a m p s a design, or where the government merely orders a p r o d u c t from stock without a significant interest in the a l l e g e d design defect, the government has not made a d i s c r e t i o n a r y decision in need of protection, and the d e f e n s e is therefore inapplicable. Id. at 90 (internal quotation, citation, and alterations omitted). Buffalo Pumps has submitted Admiral Horne's affidavit, in w h i c h he avers that the Navy had detailed specifications over many t h i n g s , including the "form and content of written materials to be d e l i v e r e d with equipment, including pumps, supplied to the Navy." ( H o r n e Aff. ¶ 13.) Admiral Horne also avers that the "Navy b e l i e v e d that excessive warnings for common shipboard hazards led t o apathy and resulting disregard of hazard by Navy personnel." ( H o r n e Aff. ¶ 22.) Therefore, "the Navy would not have permitted . . . a vendor such as Buffalo Pumps to attach any type of warning o r cautionary statement not required and approved by the Navy, i n c l u d i n g any statement related to asbestos." (Id.) An attempt b y a manufacturer to affix a warning label "would have been f u t i l e , and would have been contrary to Navy protocols for i n s t r u c t i o n and training relating to the use of asbestos materials." (Id.) Admiral Lehman states that "the Navy had s p e c i f i c a t i o n s as to the nature and content of all written m a t e r i a l that was delivered with each piece of equipment, i n c l u d i n g turbines and turbine manuals . . . the Navy dictated -11- every aspect of the design, manufacture, installation, overhaul, w r i t t e n documentation, and warnings associated with its ships and d i d not permit deviation by any of its contractors." (Lehman Aff. ¶ 6.) Admiral Sargent avers that "the Navy would not have p e r m i t t e d Buffalo Pumps or other equipment suppliers to place a s b e s t o s - r e l a t e d warnings on packaging or containers for pumps or r e l a t e d parts or items supplied during the 1940s, 1950s, and 1 9 6 0 s . " (Sargent Aff. ¶ 55.) Finally, Lawrence Stillwell Betts, a r e t i r e d Navy Captain and president of a medical corporation, c o n c l u d e s , after an extensive review of the relevant literature, t h a t "[i]t would be unreasonable to assume that the Navy would h a v e accepted gratuitous comments from equipment manufacturers a b o u t hazards associated with a product it neither made nor sold a n d about which the Navy was already aware." N o . 15, Ex. 7) ¶ 33.) T h e plaintiffs have submitted the affidavit of retired U.S. N a v y Captain Robert Woodruff, who avers that "there is i n s u f f i c i e n t printed documentation to fully substantiate the o p i n i o n that supports the concept that the U.S. Navy would not h a v e included warning labels if they had been suggested by the vendors." (See Woodruff Aff. (Doc. No. 17) ¶ 3.) Woodruff avers (Betts Aff. (Doc. t h a t he has identified warning labels and safety precautions about h a z a r d o u s materials and dangerous procedures and that his review o f the materials in these other circumstances shows that these -12- warnings were "clearly marked and highlighted whenever the vendor f e l t it necessary. Given the presence of these warning labels, o n e can infer that the Navy did not challenge these warnings and c a u t i o n labels that no doubt came straight from the vendor." a t 11, ¶ 5.) N o t w i t h s t a n d i n g the inferences urged by Woodruff, the a f f i d a v i t s and other evidence submitted by the defendants support t h e conclusion that the Navy would not have permitted a m a n u f a c t u r e r to place its own warning on equipment without a p p r o v a l from the Navy. Taken together, the defendants' evidence (Id. i s more persuasive in material respects than the countervailing e v i d e n c e submitted by the plaintiffs. In addition, at this stage t h e federal defense need only be colorable­-it does not have to be s u f f i c i e n t to prevail at trial. See Isaacson v. Dow Chem. Co., 5 1 7 F.3d 129, 139 (2d Cir. 2008) (quoting Willingham v. Morgan, 3 9 5 U.S. 402, 407 (1969)) ("To be `colorable,' the defense need n o t be `clearly sustainable,' as the purpose of the statute is to s e c u r e that the validity of the defense will be tried in federal court."). Nor are the defendants required to disclose the exact g o v e r n m e n t specifications or contracts stating specifically that t h e defendants were not to affix their particular asbestos w a r n i n g s or communications concerning an actual time when the a s b e s t o s warnings were actually rejected by the government. See B a l l e n g e r v. Agco Corp., No. C 06-2271 CW, 2007 U.S. Dist. LEXIS -13- 47042, at *11 (N.D. Cal. June 22, 2007)("Just as [the defendant] i s not required to produce contracts from decades past, it is not r e q u i r e d to produce such detailed declarations concerning whether t h e Navy directed the exact manner of installation and a f f i r m a t i v e l y prohibited any kind of warning in order to d e m o n s t r a t e that it worked under the direction of federal o f f i c e r s ; such requirement would frustrate the purpose of section 1442(a)(1)."). 2 . Equipment conforms to specifications T h e defendants have made the requisite threshold showing that t h e products supplied to the Navy conformed to its detailed specifications. It appears to be undisputed that the Navy a c c e p t e d the manufactured products of GE and Buffalo Pumps. 3 . Contractor warning U.S. about known dangers Boyle also requires that the a contractor must "warn[] the U n i t e d States about the dangers in the use of the equipment known t o the supplier but not to the United States." 512. Boyle, 487 U.S. at The Second Circuit has observed that "[i]t would be i m p r a c t i c a l to require that a manufacturer compile and present to t h e government in advance a list of each and every risk associated w i t h a product it is producing for the government." O r a n g e " , 517 F.3d at 98. In re "Agent If the "government did not need the w a r n i n g s because it already possessed that information", id. at -14- 99, then the third Boyle requirement is satisfied. 3 In Contois v. A b l e Indus., Inc., 523 F.Supp.2d 155, 160-61 (D. Conn. 2007) this c o u r t reviewed the affidavits of Captain Betts and Doctor Samuel F o r m a n and concluded that that evidence "establishe[d] the s u p e r i o r knowledge of potential hazards on the part of the Navy v i s - a - v i s equipment manufacturers . . . ." Id. At 161. Substantially the same evidence has been submitted in this case. Compare id. at 160-61 with (Betts Aff. ¶ 33 & Forman Aff. (Doc. N o . 14, Ex. 4) ¶ 14). c o n c l u s i o n here.4 Consequently, the court reaches the same In addition, in his affidavit, Captain Woodruff T h e plaintiffs argue that the defendants' affidavits failure t o disclose "any government specifications or contracts that p r e v e n t e d asbestos warnings that were actually rejected by the g o v e r n m e n t , " should defeat the defendant's basis for removal b e c a u s e of language in the Second Circuit's decision in Grispo v. E a g l e - P i c h e r Industries, Inc. (In re Joint Eastern and Southern D i s t r i c t New York Asbestos Litigation), 897 F.2d 626 (2d Cir. 1 9 9 0 ) . (Pls.' Resp. 9.) Faced with similar arguments, the Seventh C i r c u i t noted that it "c[ould ]not accept as consistent with Boyle t h e suggestion that there is any strict requirement that the g o v e r n m e n t `prohibit' warnings altogether or `dictate' the c o n t e n t s of the warnings actually incorporated." Oliver v. O s h k o s h Truck Corp., 96 F.3d 992, 1004 n.8 (7th Cir. 1996). The c o u r t also expressed doubt as to whether the Second Circuit's p o s i t i o n was as stringent as had been suggested. See id. The S e c o n d Circuit's discussion in In re "Agent Orange", quoted above, d e m o n s t r a t e s that the Seventh Circuit's assessment was correct. See also In re "Agent Orange", 517 F.3d at 98 ("It would be i m p r a c t i c a l to require that a manufacturer compile and present the g o v e r n m e n t in advance a list of each and every risk associated w i t h a product it is producing for the government. The operation o f a tank or a transport plane . . . involves . . . virtually l i m i t l e s s risks."). T h e plaintiffs also point to what is termed as SECNAV I n s t r u c t i o n 5100.8 ("Uniform Labeling Program ­ Navy," dated 4 3 -15- concedes that "[t]he U.S. Navy did play the primary role in g a t h e r i n g information and examining the hazards of asbestos, g a u g e d primarily by the documents reviewed during this period." (Woodruff Aff. ¶ 4.) III. CONCLUSION F o r the reasons set forth above, the plaintiffs' Motion to R e m a n d (Doc. No. 12) is hereby DENIED. I t is so ordered. S i g n e d this 30th day of March, 2010 at Hartford, Connecticut. ________/s/AWT______________ A l v i n W. Thompson U n i t e d States District Judge S e p t e m b e r 24, 1956 ("ULP")) to argue that the defendants needed to p l a c e warnings and labels consistent with state law. In Contois, t h e court dismissed substantially the same argument: T h i s document states that the instructions regarding l a b e l i n g requirements for hazardous chemical products d u r i n g the usage stage are "not intended to govern" the " t y p e of labels to be affixed by the manufacturer." However, the Uniform Labeling Program-Navy would not have a p p l i e d to product manufacturers, such as Buffalo Pumps a n d GE, that contracted with the Navy because, by its t e r m s , it "governed the labeling of hazardous chemicals b y Navy personnel, not outside product manufacturers." C o n t o i s , 532 F.Supp.2d at 162 (citation omitted). The court a d o p t s that reasoning here. -16-

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