Flynn et al v. Directv, LLC
Filing
56
ORDER. The motions to dismiss (Docs. # 22 , # 47 ) are GRANTED as to the class claim alleging trespass (Count Two), and DENIED as to both the individual and class CUTPA claims (Counts Three and Four). See attached ruling. Signed by Judge Jeffrey A. Meyer on 8/23/16. (Adriance, S)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
JEAN M. FLYNN et al.,
Plaintiffs,
v.
No. 3:15-cv-1053 (JAM)
DIRECTV, LLC and MAS TEC, INC.,
Defendants.
RULING ON DEFENDANTS’ MOTIONS TO DISMISS
AND TO STRIKE CLASS ALLEGATIONS
Plaintiffs are owners of a residential rental property with tenants who have purchased
television services from defendant DIRECTV, LLC (DIRECTV). Plaintiffs claim that DIRECTV
and its contractor, defendant Mas Tec Inc. (Mas Tec), installed satellite dishes on the exterior of
plaintiffs’ property without their consent and in accordance with a business practice that was
designed to circumvent their right to withhold consent. Plaintiffs seek to represent a class of
similarly situated property owners, alleging state law claims of common law trespass and
violation of the Connecticut Unfair Trade Practice Act (CUTPA).
Defendants have now moved to dismiss plaintiffs’ CUTPA claim on the ground that
plaintiffs have not pleaded a requisite business relationship with defendants. For the reasons set
forth below, I will deny the motion to dismiss the CUTPA claim on the ground that plaintiffs
have adequately alleged facts that suffice to meet any business relationship requirement that may
be required to sustain a CUTPA claim.
Defendants have further moved to strike plaintiffs’ class action allegations on the ground
that plaintiffs cannot meet the so-called “commonality” and “ascertainability” requirements to
maintain a class action under Rule 23 of the Federal Rules of Civil Procedure. For the reasons set
forth below, I will grant the motion to strike insofar as plaintiffs seek class-action status to
litigate their claim of common law trespass, because it is clear that individual issues of consent
will predominate over the adjudication of any trespass claims. I will otherwise deny the motion
to strike insofar as plaintiffs seek class-action status to litigate their CUTPA claim, because it is
premature to conclude that plaintiffs cannot satisfy the commonality and ascertainability
requirements for their CUTPA claim.
BACKGROUND
Plaintiffs are joint owners of a multi-unit building that they rent out to tenants in
Waterbury, Connecticut. DIRECTV furnishes satellite-based television programming by means
of signals that it broadcasts through the air to satellite receptor “dishes” that are installed at its
customers’ locations. Mas Tec installs DIRECTV’s dishes by means of drilling holes in the
exterior walls or roof of the property where dishes are installed.
Plaintiffs allege that defendants installed at least one satellite dish on their property
without their consent. According to plaintiffs, this was a product of DIRECTV’s business
practices that are designed to circumvent a landlord’s consent. DIRECTV allegedly provides the
tenant customer with a form that instructs the customer to obtain consent from his or her landlord
to place a satellite dish on the property. The new customer must then sign the form, which
represents that the customer has obtained landlord consent. DIRECTV does not, however,
independently confirm with the landlord that consent was actually given. Plaintiffs further
contend that Mas Tec technicians are trained never to seek any kind of approval from landlords
while installing the dishes. After a customer terminates her service, DIRECTV allegedly has a
policy of abandoning the dishes, leaving the landlords to expend the effort to remove and dispose
of them.
2
Plaintiffs claim that DIRECTV and Mas Tec have installed and subsequently abandoned
dishes without landlord consent on numerous buildings in Connecticut. Accordingly, they seek to
bring this action on behalf of all others similarly situated, with the following class definition:
All persons and/or entities (“Landlords”) that own and lease residential multiple
dwelling units (“MDU’s”) in the State of Connecticut, upon which Defendants, by
their agents, servants and/or employees have, on at least on occasion during the
applicable statutory period [3 years prior to filing], without first receiving prior
written Landlord authorization and/or permission, installed DIRECTV equipment
on the roof and/or exterior walls of said MDU.
Amended Complaint, Doc. #28, ¶ 7.
On behalf of themselves and the class, plaintiffs allege two causes of action: that defendants
have trespassed on plaintiffs’ and the class members’ property (Counts 1 and 3) and that defendants
have violated CUTPA with respect to plaintiffs and the class as a whole (Counts 2 and 4).
Defendants now move to dismiss the CUTPA claims and move to strike the class allegations. Docs.
#22; #47.1
DISCUSSION
The principles governing this Court’s consideration of a motion to dismiss under Fed. R.
Civ. P. 12(b)(6) are well established. First, the Court must accept as true all factual matter
alleged in a complaint and draw all reasonable inferences in the plaintiffs’ favor. See Johnson v.
Priceline.com, Inc., 711 F.3d 271, 275 (2d Cir. 2013). But, “‘[t]o survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is
plausible on its face.’” TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 505 (2d Cir. 2014)
(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
1
Although DIRECTV has moved to strike—rather than to dismiss—the class allegations, it is within my
discretion to treat this as a motion to dismiss. See Wray v. Edward Blank Associates, Inc., 924 F. Supp. 498, 501
(S.D.N.Y. 1996). I will treat the motion to strike the class allegations as a motion to dismiss the two class-based
counts of the complaint (Counts 2 and 4).
3
Motion to Dismiss CUTPA Claims
CUTPA prohibits the use of “unfair or deceptive acts or practices in the conduct of any
trade or commerce.” Conn. Gen. Stat. § 42–110b(a). The statute “provides a private cause of
action to [a]ny person who suffers any ascertainable loss of money or property, real or personal,
as a result of the use or employment of a [prohibited] method, act or practice.” Harris v. Bradley
Mem'l Hosp. & Health Ctr., Inc., 296 Conn. 315, 351 (2010). CUTPA claims can be based on
either an “actual deceptive practice” or an unfair practice—that is, a “practice amounting to a
violation of public policy.” Ulbrich v. Groth, 310 Conn. 375, 409 (2013). Here, plaintiff claims
that defendants’ practices as recounted above amount to a violation of public policy.
Connecticut law has long recognized three factors that determine whether a particular
business practice violates CUTPA:
(1) [W]hether the practice, without necessarily having been
previously considered unlawful, offends public policy as it has
been established by statutes, the common law, or otherwise—in
other words, it is within at least the penumbra of some common
law, statutory, or other established concept of unfairness; (2)
whether it is immoral, unethical, oppressive, or unscrupulous; (3)
whether it causes substantial injury to consumers, [competitors or
other businesspersons].
Artie’s Auto Body, Inc. v. Hartford Fire Ins. Co., 317 Conn. 602, 609 n.7 (2015). There is no
requirement, however, that all three criteria be met “to support a finding of unfairness” for
purposes of a CUTPA claim. Ibid.
Relying on the Connecticut Supreme Court’s decision in Ventres v. Goodspeed Airport,
275 Conn. 105 (2005), defendants argue that plaintiff’s CUTPA claims (both individually and as
a class) must be dismissed because plaintiffs do not plausibly allege the existence of a business
relationship between themselves and defendants. I do not agree and conclude that Ventres is
readily distinguishable from this case.
4
The parties in Ventres included a land trust that asserted a CUTPA claim against an
airport arising from the airport’s trespass upon the land trust’s property to cut down trees and
remove vegetation. The Ventres court principally ruled that the airport’s actions did not
constitute an “unfair trade practice” within the meaning of CUTPA, because the controversy did
not amount to a business dispute but to a property dispute between neighbors:
Even if we assumed that the land trust defendants are in the business
of protecting natural resources, we cannot conclude that the
interference with that business by a trespasser constitutes an unfair
trade practice. Such a conclusion would convert every trespass claim
involving business property into a CUTPA claim . . . . Rather, before
the clear-cutting, the relationship was merely one of neighboring
landowners. After the clear-cutting, the relationship was one of
landowner and trespasser. Accordingly, we reject the land trust
defendants’ argument that they had a business relationship with the
airport defendants.
Id. at 157. Only after this analysis did the court further reject the land trust’s alternate argument
that it did not need to allege any business relationship, and only then did it do so on the grounds
that the land trust failed to cite any authority for the proposition, see ibid., rather than on any
reasoned explanation why a plaintiff-defendant business-relationship predicate is or should be
required to maintain a CUTPA action.
To the extent that some of the language in Ventres may be read to suggest a businessrelationship prerequisite for a CUTPA action, I conclude that this was dicta and well beyond the
rationale that supported and was necessary to the court’s decision in Ventres. At bottom, the court
in Ventres was faced with a property dispute between neighbors that did not involve business
practices at all. The facts in Ventres are nothing like the facts here, where DIRECTV and Mas Tec
are alleged to have engaged as a regular course of business practice in the perpetration of a scheme
to enrich themselves by means of victimizing and sacrificing the property interests of landlords to
control what fixtures are installed on and remain on the landlords’ property.
5
The Connecticut Supreme Court has otherwise made clear that a CUTPA plaintiff need
not have a consumer relationship with the defendant. See, e.g., Macomber, 261 Conn. 620, 643
(2002). At the least, “a competitor or other business person can maintain a CUTPA cause of
action without showing consumer injury.” Ibid.; see also Ganim v. Smith & Wesson Corp., 258
Conn. 313, 372 (2001) (declining to resolve whether CUTPA standing is limited only to those
with consumer, competitor, business, or other commercial relationships with the defendant).
Defendants correctly note that these cases do not control the issue before me. But they
do reflect the Connecticut Supreme Court’s consistent view that CUTPA should be broadly
construed to protect against unfair business practices in many shapes and forms. See, e.g., Kim v.
Magnotta, 249 Conn. 94, 108 (1999) (“[W]e have interpreted the statute generously to
implement its remedial purposes even without a specific statutory basis for our decision.”);
Larsen Chelsey Realty Co. v. Larsen, 232 Conn. 480, 497 (1995) (“The legislative history of
CUTPA reveals that, although consumers were expected to be a major beneficiary of its passage,
the act was designed to provide protection to a much broader class.”); Heslin v. Connecticut Law
Clinic of Trantolo & Trantolo, 190 Conn. 510, 520 (1983) (noting “the liberal construction to
which a remedial statute such as CUTPA is entitled”); see also In re Trilegiant Corp., Inc., 11 F.
Supp. 3d 132, 142 (D. Conn. 2014) (“CUTPA’s legislative history indicates that the Connecticut
legislature intended that the statute be implemented broadly to stamp out the practice of
fraudulent, deceptive, and unfair business conduct generally. . . . The Connecticut Supreme
Court has also consistently interpreted CUTPA broadly.”).
To be sure, CUTPA’s reach is not “limitless.” Ganim, 258 Conn at 373. The Ventres
court therefore thought it absurd that “every trespass claim involving business property” might
be converted “into a CUTPA claim.” Ventres, 275 Conn. at 157. But that is not the situation here.
6
The only material similarity between the facts of Ventres and the instant case is that both involve
trespass. Unlike the airport, defendants here have a broad business strategy that directly
implicates plaintiffs’ property. This is not two neighbors bickering over their property line.2
According to plaintiffs’ allegations, defendants engage in a systematic practice designed
to carry out commercial activities while avoiding their duties under the law: Defendants know
they may only install satellite dishes when they have owner consent, but they train their
employees to subvert this requirement and to remain intentionally ignorant of whether such
consent has been given. This is precisely the kind of slippery business practice that CUTPA was
broadly designed to remedy.
Indeed, defendants’ practice succeeds by exploiting the very lack of their direct business
relationship with the actual property owners and by taking advantage instead of the pre-existing
business relationship between tenants and landlords. Accordingly, even if I were to conclude that
some business relationship is required for a CUTPA claim (an issue that I need not decide), it is
clear that an adequate business relationship exists here and that this relationship has allegedly
been subject to exploitation by defendants in this case.
Nor does other case law convince me that plaintiffs are not entitled to the protection of
CUTPA. A number of courts have found that certain classes of plaintiffs cannot maintain
CUTPA claims. These cases are often fact-bound, and it is difficult to extract consistent
principles from them that help to resolve this case. Some courts, for example, have found that
2
Nor do I take Ventres to have definitively resolved the issue left open in Ganim v. Smith & Wesson Corp.,
258 Conn. 313 (2001). In Ganim, the Connecticut Supreme Court held that the plaintiff did not have standing under
CUTPA because of the remoteness doctrine. In so holding, it explicitly declined to resolve “whether CUTPA
standing is confined to consumers, competitors and those in some business or commercial relationship with the
defendants.” Id. 372. Ventres held that—whatever relationship a CUTPA plaintiff must have to the defendant—the
plaintiffs on those specific facts could not maintain a CUTPA action. It did not elucidate the outer bounds of
CUTPA standing.
7
plaintiffs do not have standing under CUTPA if their injuries are very remote effects of the
defendant’s conduct. See Ganim, 258 Conn. at 372; Conn. Pipe Trades Health Fund v. Phillip
Morris, 153 F. Supp. 2d 101, 113-14 (D. Conn. 2001) (increased healthcare costs that health
funds must pay as a result of smoking too remote an injury to give rise to CUTPA liability
against tobacco companies). But there is no question here that defendants’ alleged conduct
directly affected plaintiffs—they allegedly entered plaintiffs’ property and affixed satellite dishes
without permission, and then they left the dishes there to be removed by plaintiffs.
Still other cases have denied CUTPA claims if there was no commercial relationship
between the parties whatsoever, and the plaintiffs did not suffer harm in their capacity as
consumers or businesspeople. For instance, in Gersich v. Enterprise Rent A Car, 1995 WL
904917 (D. Conn. 1995), the court held that plaintiffs, who had suffered personal injury after a
crash with a car rented from the defendant, were “not within the class of persons that CUTPA
intended to protect.” Id. at *5; see also Aviles v. Wayside Auto Body Inc., 49 F. Supp. 3d 216,
232 (D. Conn. 2014) (niece of car owner could not maintain a CUTPA claim where it was her
uncle’s car that was being repossessed and any harm she suffered was merely the result of being
present at the repossession); Goldsich v. City of Hartford, 571 F. Supp. 2d 340, 346-47 (D. Conn.
2008) (victim of fight in parking lot outside concert, to which he did not purchase a ticket, could
not bring a claim under CUTPA against promoters of the concert). These cases are readily
distinguishable from the instant case, where plaintiffs allegedly suffered an injury as business
people when defendants employed a business practice to alter plaintiffs’ business property
without permission.
In short, I reject defendants’ argument that plaintiffs have failed to allege an actionable
CUTPA claim. I conclude that CUTPA does not require a direct business relationship between a
8
plaintiff and a defendant and that, on the facts presented here, involving alleged exploitation by
defendants of a business relationship between plaintiffs and third-parties, any business
relationship requirement for a CUTPA claim has been adequately established.3
Motion to Strike Class Allegations
Courts are generally reluctant to dismiss class allegations at the pleading stage. See, e.g.,
Chenesky v. New York Life Ins. Co., 2011 WL 1795305, at *1 (S.D.N.Y. 2011). Such allegations
must, however, at least plausibly suggest that plaintiffs will produce enough evidence to justify
class certification. See Kassman v. KPMG, 925 F. Supp. 2d 453, 464 (S.D.N.Y. 2013). Under Fed.
R. Civ. P. 23(c)(1)(A), a court may determine whether the class can be certified “[a]t an early
practical time,” and may make this determination even before the plaintiffs have moved for
certification. See also Pilgrim v. Universal Health Care, LLC, 660 F.3d 943, 949 (6th Cir. 2011).
At this stage, the essential question before me is whether plaintiffs’ class claims cannot be
certified as a matter of law. See Chen-Oster v. Goldman, Sachs & Co., 877 F. Supp. 2d 113, 117
(S.D.N.Y. 2012). If any plausibly discoverable facts could render the class appropriate for
certification, then plaintiffs would be entitled to proceed at this time and to seek discovery that
might support their class-wide allegations. See Reynolds v. Lifewatch, Inc., 136 F. Supp. 3d 503,
515 (S.D.N.Y. 2015).
DIRECTV argues that plaintiffs’ proposed class cannot be certified because the class
cannot satisfy Rule 23’s requirements of predominance and ascertainability. For reasons set forth
below, I agree with defendants as to plaintiffs’ trespass claims, because it is clear to me that
3
Nor will I strike the claim for punitive damages at this stage. The Connecticut Supreme Court has
consistently held that courts may award punitive damages in CUTPA claims when a defendant’s conduct was
recklessly indifferent. See Fairchild Heights Residents Ass'n, Inc. v. Fairchild Heights, Inc., 310 Conn. 797, 824
(2014). Courts also have broad discretion in the imposition of punitive damages under CUTPA. Ibid. At this stage of
the litigation, plaintiffs have alleged sufficient facts to make it plausible that DIRECTV acted with reckless
indifference toward the plaintiff landlords in failing to seek their consent.
9
issues of individual consent would necessarily predominate over any common issues. But I do
not agree as to plaintiffs’ CUTPA claims, because it is premature at this time to conclude that
issues of individual consent will predominate or that the class will not be ascertainable.
In order to be certified, a putative class must comport with the requirements of Rule 23.
Plaintiffs here will eventually seek to have their class certified under Rule 23(b)(3), which,
among other things, requires that “questions of law or fact common to class members
predominate over any questions affecting only individual members.” Fed. R. Civ. P. 23(b)(3).
The first class claim concerns common law trespass. The elements of a trespass action in
Connecticut are: “(1) ownership or possessory interest in land by the plaintiff; (2) invasion,
intrusion or entry by the defendant affecting the plaintiff's exclusive possessory interest; (3) done
intentionally; and (4) causing direct injury.” City of Bristol v. Tilcon Minerals, Inc., 284 Conn.
55, 87 (2007). If a property owner gives her consent to enter a property, there can be no trespass.
See Hanson v. Carroll, 133 Conn. 505, 508 (1947). Consent may be given in any number of
ways, and consent need not be written down, or even spoken. See, e.g., Restatement (Second) of
Torts, § 892 & com. b (“[Consent] need not . . . be so manifested by words or affirmative action.
It may equally be manifested by silence or inaction.”).
It is an essential element of an action for trespass that the alleged trespasser had no right
to enter or damage the property at issue. Here, defendants’ alleged business practice entails
having a tenant certify that the tenant has obtained the landlord’s consent. Although some tenants
might well falsely certify that such consent has been granted (and defendants may well count on
some tenants doing so), many tenants will doubtlessly seek and obtain the consent of their
landlords. Because the issue of consent will require an individual-by-individual consideration of
10
the interaction (if any) between tenant and landlord, the issue of consent cannot be adjudicated
on a class-wide basis.
Nor does it alter the analysis—contrary to plaintiffs’ arguments—if consent is
characterized as a defense instead of as an element of the claim. See Myers v. Hertz Corp., 624
F.3d 537, 551 (2d Cir. 2010) (“[C]ourts must consider potential defenses in assessing the
predominance requirement.”). With respect to the trespass claim, common questions thus do not
predominate over individual questions. The class allegations regarding trespass will therefore be
dismissed.
Defendants argue that the same logic dictates dismissing the class CUTPA claim. But the
CUTPA claim differs from the trespass claim in a key respect. With trespass, by far the most
significant question of liability is whether the landlords consented to defendants entering their
property. By contrast, CUTPA forbids business practices that violate public policy. See Ventres,
275 Conn. at 155. Plaintiffs allege that defendants employ a policy to remain willfully ignorant
of whether landlord have provided consent. That some landlords may have consented to having
the dishes affixed to their property does not make the alleged practice as a whole any more
scrupulous or proper, given the likelihood that many landlords will not consent and still be
victim to defendants’ trespass.
Of course, any plaintiff seeking to recover would have to show that she suffered
ascertainable loss as a result of the practice. See Hinchliffe v. American Motors Corp., 184 Conn.
607, 615 (1981). But the predominance requirement does not require that every significant
question in the case be subject to class-wide resolution. It is enough that an issue that is “central
to the validity of each one of the claims” can be resolved “in one stroke,” and that such questions
predominate over individual ones. Wal-Mart v. Dukes, 564 U.S. 338, 350 (2011); see Weiner v.
11
Snapple Beverage Corp., 2010 WL 3119452, at *5 (S.D.N.Y. 2010) (“[P]laintiff need not show
the exclusivity of common questions[;] it must show their predominance.”). Indeed, “[e]ven if
there are defenses that affect Class Members differently, that alone does not compel a finding
that individual issues predominate over common ones.” Karic v. Major Auto. Companies, Inc.,
2016 WL 1745037, at *12 (E.D.N.Y. 2016).
Perhaps plaintiffs will not be able to show ascertainable loss on behalf of all the class
members in one stroke. But it also may be that plaintiffs, after conducting discovery, can refine
the class to mitigate these concerns. They could, for example, restrict the class definition to
landlords who, in their leases, specifically forbid tenants from altering the common areas,
including the exterior of the building. Such a definition could reduce the salience of
individualized concerns, even if defenses may be applicable to certain members. See In re Air
Cargo Shipping Servs. Antitrust Litig., 2014 WL 7882100, at *45 (E.D.N.Y. 2014) (“Courts
presiding over class actions are certainly capable of dealing with the fact that a class may have a
few outliers that went undamaged. And . . . [remaining] problem[s] should be solved by refining
the class definition rather than by flatly denying class certification on that basis.”); see also
Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016) (“When one or more of the
central issues in the action are common to the class and can be said to predominate, the action
may be considered proper under Rule 23(b)(3) even though other important matters will have to
be tried separately, such as damages or some affirmative defenses peculiar to some individual
class members.”). In any case, further proceedings may resolve whether defendants
systematically committed unfair trade practices toward all the class members.
To be sure, “the ascertainable loss requirement is a threshold barrier which limits the
class of persons who may bring a CUTPA action seeking either actual damages or equitable
12
relief.” Hinchliffe, 184 Conn. at 615. Where individualized proof is required to establish
ascertainable loss, individual issues may predominate over common ones. Cf. Collins v. Anthem
Health Plans, Inc., 275 Conn. 309, 335 (2005) (declining to certify CUTPA class action under
Connecticut procedural law because of “the need to examine each class member’s individual
position to determine whether he or she suffered an injury in fact”). At this early stage, however,
it would be premature to dismiss the CUTPA class claim on this basis. See, e.g., Chen–Oster,
877 F. Supp. 2d at 117 (“Generally speaking ... motions [to strike class allegations] are deemed
procedurally premature.”). Defendants may raise this argument again (if warranted) at the
certification stage following further factual development.
Defendants further argue that the proposed class definition is overbroad and not
ascertainable. “The Second Circuit has cautioned against certifying overbroad classes.” Estate of
Gardner v. Continental Cas. Co., 2016 WL 806823, at *8 (D. Conn. 2016). The Second Circuit
also recognizes an “implied requirement of ascertainability” in Rule 23. Brecher v. Republic of
Argentina, 806 F.3d 22, 24 (2d Cir. 2015). This requirement hinges on administrative concerns,
and the question is whether a court will be able to readily determine if a given individual is a
member of the class. “A class is ascertainable when defined by objective criteria that are
administratively feasible and when identifying its members would not require a mini-hearing on
the merits of each case.” Id. at 24-25.
It is possible that plaintiffs’ proposed class at this stage—which includes all relevant
Connecticut landlords who did not provide written consent—is overbroad because it may include
class members who gave their consent in another fashion. Defendants also appear to argue that if
plaintiffs’ definition were refined to include only landlords who did not consent to dish
installation, the class would no longer be ascertainable by objective criteria. In substance,
13
defendants are essentially making the same argument they made with regard to predominance: in
their view, there are too many thorny, individualized issues to permit class certification. For the
same reasons that I cannot yet conclude that common issues do not predominate, I also cannot
yet conclude that the class is fatally overbroad or not ascertainable. At the least, plaintiffs should
have the opportunity to refine their proposed class definition to address the concerns raised here.
See In re: Libor-Based Fin. Instruments Antitrust Litig., 2016 WL 2851333, at *2 (S.D.N.Y.
2016) (“[W]ith an overbroad class, reformation of the class definition, if possible, is the
appropriate response.”). Again, defendants may reargue these points at class certification.
CONCLUSION
The motions to dismiss (Docs. #22, #47) are GRANTED as to the class claim alleging
trespass (Count Two), and DENIED as to both the individual and class CUTPA claims (Counts
Three and Four).
It is so ordered.
Dated at New Haven this 22d day of August 2016.
/s/ Jeffrey Alker Meyer
Jeffrey Alker Meyer
United States District Judge
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