Gilbert v. Federal National Mortgage Association et al
Filing
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ORDER (1) GRANTING APPLICATION TO PROCEED WITHOUT PREPAYING FEES AND COSTS 2 ; AND (2) DISMISSING COMPLAINT WITH LEAVE TO AMEND 1 . Signed by CHIEF JUDGE J. MICHAEL SEABRIGHT on 12/20/2017. (afc)Amended Complaint d ue no later than January 29, 2018. CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
ROBERT FREDERICK GILBERT,
Plaintiff,
vs.
FEDERAL NATIONAL MORTGAGE
ASSOCIATION; THE COMMISSIONER
ALAN KONISHI; TIMOTHY
MAYOPOULOS; DAVID C. BENSON;
OCWEN FINANCIAL CORP.; OCWEN
FINANCIAL SERVICING; RONALD M.
FARIS, CEO; MICHAEL R. BOURQE,
CEO; STEVEN T. IWAMURA; ROBERT
M. EHRHORN; KEN OHARA; M.
KENYON WONG; ALAN S. KONISHI,
CIV. NO. 17-00575 JMS-KSC
ORDER (1) GRANTING
APPLICATION TO PROCEED
WITHOUT PREPAYING FEES
AND COSTS; AND
(2) DISMISSING COMPLAINT
WITH LEAVE TO AMEND
Defendants.
ORDER (1) GRANTING APPLICATION TO PROCEED WITHOUT
PREPAYING FEES AND COSTS; AND (2) DISMISSING COMPLAINT
WITH LEAVE TO AMEND
I. INTRODUCTION
On November 30, 2017, pro se Plaintiff Robert Frederick Gilbert
(“Plaintiff”) filed a Complaint asserting claims pursuant to 42 U.S.C. § 1983, and
an Application to proceed in forma pauperis (“IFP”). ECF Nos. 1, 2. Plaintiff
alleges that Defendants Federal National Mortgage Association (“Fannie Mae”);
“The Commissioner Alan Konishi”; Timothy Mayopoulos; David C. Benson;
Ocwen Financial Corporation (“Ocwen”); Ronald M. Faris; Michael R. Bourqe;
Steven T. Iwamura; Robert M. Ehrhorn; Ken Ohara; and M. Kenyon Wong
(collectively, “Defendants”)1 violated his constitutional rights in connection with
the servicing and impending foreclosure of a mortgage.
The Court has screened the Complaint pursuant to 28 U.S.C.
§§ 1915(e)(2). Based on the following, the IFP Application is GRANTED, and the
Complaint is DISMISSED with leave to amend.
II. DISCUSSION
A.
IFP Application
Plaintiff’s IFP Application shows that he is a pauper within the meaning of
the statute, and it is GRANTED. The court will not order the Complaint served at
this time.
B.
The Complaint
1.
Background
As alleged in the Complaint, Plaintiff obtained a mortgage loan from
IndyMac Bank in 2005. Compl. at 9. On February 6, 2010, “the Bank forced the
take over of the payment of MY taxes.” Id. On January 29, 2013, the “attorneys
1
Nowhere in the body of the Complaint does Plaintiff refer by name to the individuals
named in the caption. The Complaint does, however, refer to “attorneys,” and the court is aware
that some individual Defendants are in fact attorneys admitted to the Hawaii bar with Hawaii
work addresses.
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brought forward an action of Foreclosure” in the State of Hawaii district court. Id.
Plaintiff sought to modify his loan, but the “attorneys and the Bank were only
prolonging the foreclosure process and not negotiating a true loan modification.”
Id. Meanwhile, “IndyMac Bank contracted the sell (sic) of my . . . loan,” without
Plaintiff’s knowledge or signature, therefore making the new loan contract “not
valid.” Id. at 9-10.
The Complaint also conclusorily alleges that the “Kingdom of Hawaii
. . . continues to be recognized as a subject of international law[.]” Id. at 4-6. It
further alleges that “under the doctrine of Ultra Vires, the attorneys are . . . acting
as third-party debt collectors.” Id. at 4. Finally, the Complaint alleges that “[t]he
attorneys . . . created the assumption that they have the authority to foreclose when,
their bonds and certificates to practice law in a foreign country are not lawful nor
legal and have not been endorsed with the signatures of the United States to do so.”
Id. at 10.
The Complaint asserts § 1983 claims for violation of Plaintiff’s right
to due process under the Fourteenth Amendment and of federal law proscribing the
failure to prevent the commission of wrongs against Plaintiff’s constitutional
rights, and possibly state-law claims based on the alleged invalid transfer of
Plaintiff’s loan to a new loan servicer and wrongful foreclosure. Id. at 4, 6-8.
Plaintiff alleges that Defendants’ actions have not caused “physical injuries . . .
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[but] the mental and physical tole (sic) of these past years has been very hard on
me . . . and my family.” Id. Plaintiff seeks relief in the form of an order enjoining
Defendants from further “litigation or judicial actions . . . against myself . . . and
my house and property.” Id.
2.
Standards of Review
The court may dismiss sua sponte a complaint for lack of subject-
matter jurisdiction. Fiedler v. Clark, 714 F.2d 77, 78-79 (9th Cir. 1983); Belleville
Catering Co. v. Champaign Mkt. Place, L.L.C., 350 F.3d 691, 693 (7th Cir. 2003)
(“[I]nquiring whether the court has jurisdiction is a federal judge’s first duty in
every case.”); Fed. R. Civ. P. 12(h)(3). “Federal courts are courts of limited
jurisdiction,” possessing “only that power authorized by Constitution and statute.”
United States v. Marks, 530 F.3d 799, 810 (9th Cir. 2008) (quoting Kokkonen v.
Guardian Life Ins. Co., 511 U.S. 375, 377 (1994)). Plaintiff bears the burden of
establishing subject-matter jurisdiction. Kokkonen, 511 U.S. at 377. At the
pleading stage, Plaintiff must allege sufficient facts to show a proper basis for the
court to assert subject-matter jurisdiction over the action. Johnson v. Columbia
Props. Anchorage, L.P., 437 F.3d 894, 899 (9th Cir. 2006); Fed. R. Civ. P. 8(a)(1).
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In addition, the court must subject each civil action commenced
pursuant to 28 U.S.C. § 1915(a)2 to mandatory screening, and order the dismissal
of any claims it finds “frivolous, malicious, failing to state a claim upon which
relief may be granted, or seeking monetary relief from a defendant immune from
such relief.” 28 U.S.C. § 1915(e)(2)(B); see, e.g., Calhoun v. Stahl, 254 F.3d 845,
845 (9th Cir. 2001) (per curiam) (holding that “the provisions of 28 U.S.C.
§ 1915(e)(2)(B) are not limited to prisoners”); Lopez v. Smith, 203 F.3d 1122,
1126-27 (9th Cir. 2000) (en banc) (stating that 28 U.S.C. § 1915(e) “not only
permits but requires” the court to sua sponte dismiss an in forma pauperis
complaint that fails to state a claim).
Screening under § 1915(e)(2) involves the same standard of review as
that used under Federal Rule of Civil Procedure 12(b)(6). Watison v. Carter, 668
F.3d 1108, 1112 (9th Cir. 2012). Under Rule 12(b)(6), a complaint must “contain
sufficient factual matter, accepted as true, to state a claim to relief that is plausible
on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks
omitted); Wilhelm v. Rotman, 680 F.3d 1113, 1121 (9th Cir. 2012). “Determining
whether a complaint states a plausible claim for relief [is] . . . a context-specific
2
Section 1915(a) governs IFP proceedings.
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task that requires the reviewing court to draw on its judicial experience and
common sense.” Iqbal, 556 U.S. at 679.
Rule 8 of the Federal Rules of Civil Procedure requires only “a short
and plain statement of the claim showing that the pleader is entitled to relief.” Fed.
R. Civ. P. 8(a)(2). Detailed factual allegations are not required, but “[t]hreadbare
recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Iqbal, 556 U.S. at 678. The “mere possibility of
misconduct” or an “unadorned, the defendant-unlawfully-harmed-me accusation”
falls short of meeting this plausibility standard. Id. at 678-79; see also Moss v.
U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009).
Pro se litigants’ pleadings must be liberally construed, and all doubts
should be resolved in their favor. Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir.
2010) (citations omitted). Leave to amend must be granted if it appears the
plaintiff can correct the defects in the complaint. Lopez, 203 F.3d at 1130. If the
complaint cannot be saved by amendment, dismissal without leave to amend is
appropriate. Sylvia Landfield Tr. v. City of L.A., 729 F.3d 1189, 1196 (9th Cir.
2013).
3.
Application of Legal Standards to Complaint
Even construing the Complaint liberally, it is largely a confusing,
sometimes unintelligible document that fails to (1) allege subject-matter
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jurisdiction, or (2) comply with the pleading requirements set forth in the Federal
Rules of Civil Procedure.
a.
Subject-matter jurisdiction
In general, Plaintiff may establish the court’s subject-matter
jurisdiction in one of two ways. First, Plaintiff may assert that Defendants violated
the Constitution, a federal law, or a treaty of the United States. See 28 U.S.C.
§ 1331 (“The district courts shall have original jurisdiction of all civil actions
arising under the Constitution, laws, or treaties of the United States.”).
Alternatively, Plaintiff may invoke the court’s “diversity jurisdiction,” which
applies “where the matter in controversy exceeds the sum or value of $75,000,
exclusive of interest and costs, and is between . . . citizens of different States.” 28
U.S.C. § 1332(a)(1).
i.
Federal-question jurisdiction
In order to establish federal-question jurisdiction, Plaintiff must do
more than merely assert that his claims arise under federal law — he must also
allege facts that are sufficient to state a plausible claim under that federal law. See
McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178 , 189 (1936)
(explaining that a plaintiff “must allege in his pleading the facts essential to show
jurisdiction. . . . [J]urisdiction may [not] be maintained by mere averment”).
Although Plaintiff asserts that this court has federal-question jurisdiction pursuant
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to 42 U.S.C. § 1983, the Complaint contains no factual allegations to support this
assertion.
To state a claim under 42 U.S.C. § 1983, a plaintiff must allege two
essential elements: (1) that a right secured by the Constitution or laws of the
United States was violated, and (2) that the alleged violation was committed by a
person acting under the color of state law. See West v. Atkins, 487 U.S. 42, 48
(1988); Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 924 (1982) (recognizing
that a § 1983 claim requires allegation that violation was committed by a person
acting “under color of any statute, ordinance, regulation, custom, or usage” of a
state). This requirement “excludes from [§ 1983’s] reach merely private conduct,
no matter how discriminatory or wrongful.” Am. Mfrs. Mut. Ins. Co. v. Sullivan,
526 U.S. 40, 50 (1999) (quotation marks and citation omitted).
Here, no Defendant appears to be a state actor. See, e.g., Smalls v.
Riviera Towers Corp., 2017 WL 4180115, at *4 n.4 (D.N.J. Sept. 21, 2017)
(“[Fannie Mae] . . . is not considered to be a state actor for purposes of Section
1983 or constitutional claims.”); Jung v. Bank of Am., N.A., 2016 WL 5929273, at
*6 (M.D. Pa. Aug. 2, 2016) (“[A]ttorney not a state actor merely based on role as
an officer of the court[.]” (citing Angelico v. Lehigh Valley Hosp., Inc., 184 F.3d
268, 277 (3d Cir. 1999)); Turner v. Ocwen Loan Servicing, LLC, 2014 WL
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12513892, at *4 (N.D. Ga. Apr. 10, 2014) (“Ocwen is a private party” for purposes
of § 1983 claim based on non-judicial foreclosure).
A private party may, under limited circumstances, act under the color
of state law when “he is a willful participant in joint action with the State or its
agents.” Dennis v. Sparks, 449 U.S. 24, 27 (1980). The Ninth Circuit recognizes
“at least four different criteria, or tests, used to identify state action: ‘(1) public
function; (2) joint action; (3) governmental compulsion or coercion; and
(4) governmental nexus.’” Kirtley v. Rainey, 326 F.3d 1088, 1092 (9th Cir. 2003)
(quoting Sutton v. Providence St. Joseph Med. Ctr., 192 F.3d 826, 835-36 (9th Cir.
1999)). “Satisfaction of any one test is sufficient to find state action, so long as no
countervailing factor exists.” Id. But under any of the four tests, “the central
question remains whether the alleged infringement of federal rights [is] fairly
attributable to the government.” Id. at 1096 (internal quotations omitted).
Even liberally construed, Plaintiff’s Complaint fails to allege any facts
from which the court might infer that one of the four tests for identifying state
action is met, or that Defendant is otherwise a state actor; therefore, it does not
state a plausible § 1983 claim for violation of a federal constitutional right.
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Accordingly, the Complaint fails to establish federal-question subject matter
jurisdiction pursuant to § 1983.3
ii.
Diversity jurisdiction
In order to establish diversity jurisdiction under § 1332, there must be
complete diversity of citizenship between the opposing parties — in other words,
Plaintiff must be a citizen of a different state than all of the defendants. See, e.g.,
Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553 (2005) (“[Section]
1332 . . . requir[es] complete diversity: In a case with multiple plaintiffs and
multiple defendants, the presence in the action of a single plaintiff from the same
[s]tate as a single defendant deprives the district court of original diversity
jurisdiction over the entire action.”); Morris v. Princess Cruises, Inc., 236 F.3d
3
The Complaint also asserts jurisdiction pursuant to 28 U.S.C. § 1343(a)(3), which
provides:
The district courts shall have original jurisdiction of any civil
action authorized by law to be commenced by any person . . . [t]o
redress the deprivation, under color of any State law . . . of any
right, privilege or immunity secured by the Constitution of the
United States or by any Act of Congress providing for equal rights
of citizens or of all persons within the jurisdiction of the United
States . . . .
(emphasis added). The Complaint’s failure to allege facts showing that Defendants are state
actors also precludes jurisdiction under § 1343. That is, because the Complaint fails to assert a
plausible § 1983 claim, jurisdiction under § 1343 cannot be maintained. Russell v. Redstone
Fed. Credit Union, 2017 WL 4390375, at *1 (11th Cir. Oct. 3, 2017) (explaining that if Ҥ 1983
does not encompass the claims asserted, then . . . § 1343 jurisdiction [is] defeated”) (citing
Chapman v. Houston Welfare Rights Org., 441 U.S. 600, 648 n. 6 (1979) (White, J.,
concurring)).
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1061, 1067 (9th Cir. 2001) (explaining that § 1332(a) “requires complete diversity
of citizenship; each of the plaintiffs must be a citizen of a different state than each
of the defendants”) (emphasis added). And when determining diversity
jurisdiction, a corporation is considered a citizen of both the state in which it is
incorporated and the state in which it has its principal place of business. 28 U.S.C.
§ 1332(c)(1).
Here, the Complaint itself does not contain any factual allegations
concerning the citizenship of any party. The Complaint lists a Hawaii address for
Plaintiff, but it lacks any information whatsoever about the individual Defendants.
The Civil Cover Sheet attached to the Complaint appears to claim that Plaintiff is a
resident of Hawaii as well as a citizen of another state, foreign country, and foreign
nation. See ECF No. 1-1. And the court is aware that some individual Defendants
are attorneys licensed to practice in Hawaii, and have Hawaii work addresses.
To the extent Plaintiff attempts to assert that he is not a citizen of
Hawaii based on the theory that the Kingdom of Hawaii is a sovereign nation that
is not under the jurisdiction of the State of Hawaii or the United States, such an
assertion is without merit. To state the obvious, Hawaii is a state of the United
States. The Ninth Circuit, this court, and Hawaii state courts have rejected similar
arguments. See United States v. Lorenzo, 995 F.2d 1448, 1456 (9th Cir. 1993)
(holding that the Hawaii district court has jurisdiction over Hawaii residents
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claiming they are citizens of the Sovereign Kingdom of Hawaii); United States v.
Lindsey, 2013 WL 7121226, at *1 (D. Haw. Aug. 8, 2013) (same); Hawaii v.
Kaulia, 128 Haw. 479, 487, 291 P.3d 377, 385 (2013) (finding that regardless of its
origins, the State of Hawaii is a lawful government and that “[i]ndividuals claiming
to be citizens of the Kingdom and not of the State are not exempt from application
of the State’s laws”); Hawaii v. French, 77 Haw. 222, 228, 883 P.2d 644, 649
(Haw. App. 1994) (“[P]resently there is no factual (or legal) basis for concluding
that the [Hawaiian] Kingdom exists as a state in accordance with recognized
attributes of a state’s sovereign nature.”) (quotations omitted).
Because Plaintiff failed to allege the citizenship of each Defendant, he
failed to establish diversity jurisdiction. And because both Plaintiff and at least
one Defendant most likely are Hawaii citizens, it appears that there is no diversity
jurisdiction. Having failed to establish diversity jurisdiction or federal-question
jurisdiction, the Complaint is DISMISSED for lack of subject-matter jurisdiction.
b.
Failure to state a claim
And even construed liberally, the Complaint fails to comply with
Federal Rule of Civil Procedure 8. The pleading neither asserts “simple, concise,
and direct allegations” against any specific Defendant, see Fed. R. Civ. P. 8, nor
states any federal claim that is remotely plausible. See Iqbal, 556 U.S. at 678
(explaining that to survive dismissal pursuant to Fed. R. Civ. P. 12(b)(6), “a
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complaint must contain sufficient factual matter . . . to state a claim to relief that is
plausible on its face” (internal citation and quotation marks omitted)).
The Complaint comprises several pages of rambling discourse on the
“doctrine of Ultra Vires” under which “attorneys . . . acting as third-party debt
collectors,” and who are not authorized “to practice law in a foreign country,”
violated Plaintiff’s due process rights in connection with a state-law mortgage
foreclosure proceeding. Compl. at 4-10. In short, the Complaint lacks any sort of
cognizable legal or factual basis. Accordingly, the Complaint is DISMISSED for
failure to state a plausible claim.
4.
Leave to Amend
It is unlikely that Plaintiff will be able to allege that Defendants acted
under color of state law. Nonetheless, Plaintiff is granted leave to amend his
Complaint to attempt to cure the deficiencies identified above, if possible. If
Plaintiff intends to assert a claim against one or more Defendants, he must name
each person and entity as a separate defendant.
If Plaintiff chooses to file an amended complaint, he must write short,
plain statements telling the court: (1) the constitutional or statutory right Plaintiff
believes was violated; (2) the specific basis of this court’s jurisdiction; (3) the
name of the defendant who violated that right; (4) exactly what that defendant did
or failed to do; (5) how the action or inaction of that defendant is connected to the
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violation of Plaintiff’s rights; and (6) what specific injury Plaintiff suffered
because of that defendant’s conduct. Plaintiff must repeat this process for each
person or entity that he names as a defendant. If Plaintiff fails to affirmatively link
the conduct of each named defendant with the specific injury he suffered, the
allegation against that defendant will be dismissed for failure to state a claim.
An amended complaint generally supersedes a prior complaint and
must be complete in itself without reference to the prior pleading. King v. Atiyeh,
814 F.2d 565, 567 (9th Cir. 1987), overruled in part by Lacey v. Maricopa Cty.,
693 F.3d 896 (9th Cir. 2012) (en banc). Claims dismissed without prejudice that
are not realleged in an amended complaint may be deemed voluntarily dismissed.
See Lacey, 693 F.3d at 928 (stating that claims dismissed with prejudice need not
be repled in an amended complaint to preserve them for appeal, but claims that are
voluntarily dismissed are considered waived if they are not repled).
The amended complaint must state that it is the “First Amended
Complaint,” and it may not incorporate any part of the original Complaint, but
rather, any specific allegations must be retyped or rewritten in their entirety.
Plaintiff may include only one claim per count. Any cause of action that is not
raised in the First Amended Complaint is waived. See id. (“[C]laims that have
been dismissed with leave to amend and are not repled in the amended complaint
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will be considered waived.”). Failure to file an amended complaint by January 29,
2018 will result in automatic dismissal of this action.
5.
Supplemental Jurisdiction over State Law Tort Claims
A federal court can have subject-matter jurisdiction under diversity of
citizenship (28 U.S.C. § 1332) or through a “federal question” (28 U.S.C. § 1331).
Peralta v. Hispanic Bus., Inc., 419 F.3d 1064, 1068 (9th Cir. 2005). If it has
federal jurisdiction, the court may exercise supplemental jurisdiction over state-law
claims. But under 28 U.S.C. § 1367(c)(3), “district courts may decline to exercise
supplemental jurisdiction . . . if . . . the district court has dismissed all claims over
which it has original jurisdiction[.]” Because the Complaint failed to allege any
basis for diversity jurisdiction, and the dismissed constitutional civil rights claim
provides the only other basis for federal jurisdiction, to the extent Plaintiff asserts
state-law claims, the court does not address them.
If Plaintiff does not file an amended complaint, the court will decline
jurisdiction over state-law claims pursuant to § 1367(c) and dismiss them without
prejudice. See City of Chicago v. Int’l Coll. of Surgeons, 522 U.S. 156, 173 (1997)
(“[W]hen deciding whether to exercise supplemental jurisdiction, ‘a federal court
should consider and weigh in each case, and at every stage of the litigation, the
values of judicial economy, convenience, fairness, and comity.’” (quoting
Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988))). “[I]n the usual case
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in which all federal-law claims are eliminated before trial, the balance of factors
will point towards declining to exercise jurisdiction over the remaining state-law
claims.” Acri v. Varian Assocs., Inc., 114 F.3d 999, 1001 (9th Cir. 1997) (en
banc).
If Plaintiff chooses to file an amended complaint that states a
cognizable federal claim against a Defendant, however, the court will retain
jurisdiction over related state-law claims included in the amended complaint and
address them at that time.
III. CONCLUSION
Based on the foregoing, the court GRANTS the IFP Application and
DISMISSES the Complaint with leave to amend. Plaintiff must file an amended
complaint, if he chooses to do so, addressing the deficiencies identified above, no
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later than January 29, 2018. Failure to file an amended complaint by January 29,
2018 will result in automatic dismissal of this action without prejudice.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, December 20, 2017.
/s/ J. Michael Seabright
J. Michael Seabright
Chief United States District Judge
Gilbert v. Fed. Nat’l Mortg. Ass’n, et al., Civ. No. 17-00575 JMS-KSC, Order (1) Granting
Application to Proceed Without Prepaying Fees and Costs, and (2) Dismissing Complaint With
Leave to Amend
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