Waid et al v. Snyder et al
JOINT ORDER DIRECTING ATTORNEY LOYST FLETCHER TO SUBMIT A PROPOSED CORRECTIVE COMMUNICATION FOR COURT APPROVAL AND FURTHER ORDERS. Signed by District Judge Judith E. Levy. (WBar)
Case 5:16-cv-10444-JEL-MKM ECF No. 1431, PageID.54987 Filed 02/18/21 Page 1 of 22
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
In re Flint Water Cases.
Judith E. Levy
United States District Judge
This Order Relates To:
STATE OF MICHIGAN
IN THE CIRCUIT COURT FOR THE COUNTY OF GENESEE
IN RE FLINT WATER LITIGATION
CASE NO. 17-108646-NO
JUDGE JOSEPH J. FARAH
JOINT ORDER RE
At a session of said Court held in the City of
Flint, County of Genesee, State of Michigan
on the 18th day of February, 2021.
PRESENT: HONORABLE JOSEPH J. FARAH, CIRCUIT JUDGE
JOINT ORDER DIRECTING ATTORNEY LOYST FLETCHER TO
SUBMIT A PROPOSED CORRECTIVE COMMUNICATION FOR
COURT APPROVAL AND FURTHER ORDERS
Case 5:16-cv-10444-JEL-MKM ECF No. 1431, PageID.54988 Filed 02/18/21 Page 2 of 22
The subject of this Order is Loyst Fletcher, Jr. of the law firm Loyst
Fletcher, Jr. & Associates located in Flint, Michigan. On approximately
January 17, 2021, Mr. Fletcher mailed a packet related to the Flint Water
Cases1 and partial settlement to 298 individuals and/or entities in the
Flint, Michigan area. This incident was first brought to both the Federal
Court and the Genesee County Circuit Court in the State of Michigan’s
(the State Court) (the Federal and State Court are jointly referred to in
this opinion as “the Court”) attention after several Plaintiffs’ attorneys
in the Flint Water Cases case informed the Court that Mr. Fletcher had
solicited their clients through this packet.
Upon careful review of the packet, the supplemental information
that Mr. Fletcher provided to the Federal Court under seal (No. 16-10444;
ECF No. 1420), and the Special Master’s report and analysis of that
information (No. 16-10444; ECF No. 1426), the Court finds that: (1) the
packet contains incorrect and misleading information regarding the
partial settlement, which is highly likely to have a detrimental effect on
many individuals’ decision regarding whether to join the settlement; (2)
The Flint Water Cases include many separate lawsuits pending in the
Genesee County Circuit Court, the Michigan Court of Claims, and the United States
District Court for the Eastern District of Michigan.
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Mr. Fletcher likely violated the Michigan Rules of Professional Conduct
by, for his own pecuniary gain, improperly soliciting various individuals
who had already retained law firms other than Mr. Fletcher’s; and (3)
Mr. Fletcher’s retainer agreement contains an illegally excessive
contingency fee provision in likely violation of the Michigan Court Rules
and the Michigan Rules of Professional Conduct.
Accordingly, Mr. Fletcher is ORDERED to mail a Federal and State
Court-approved retraction and corrective communication to the 298
individuals and entities who received his initial letter. To effectuate this
corrective communication, Mr. Fletcher is first ORDERED to file a draft
communication with the Federal and State Courts for review and
approval for the reasons and in the manner set forth below.2 Finally, Mr.
Fletcher is ORDERED to dissolve all attorney retainers that resulted
from this improper communication.
Mr. Fletcher is counsel to a group of Plaintiffs in the State Court Flint Water
cases who are known as the Collins Plaintiffs. The Collins Plaintiffs allege unjust
enrichment against the City of Flint based on their payment of water bills during the
Flint Water Crisis. The Collins Plaintiffs filed a motion to intervene in the Federal
Court cases (No. 16-10444; ECF No. 1355), which the Federal Court denied. (No. 1610444; ECF No. 1400.) On February 9, 2021, the Collins Plaintiffs filed a Notice of
Appeal of that Order, which is pending with the Sixth Circuit Court of Appeals. (No.
16-10444; ECF No. 1421.)
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Recently, the Court learned that Mr. Fletcher sent an unsolicited
packet through U.S. Mail to at least one resident of Flint, Michigan
concerning the Flint Water Crisis. (See No. 16-10444; ECF No. 1409.) The
recipient, Mr. Mitchell Harris, had already retained counsel of his
choosing (the law firm Napoli Shkolnik PLLC) to represent him in the
Flint Water Cases. (Id. at PageID.54547.) The packet Mr. Harris received
from Mr. Fletcher, which will be discussed in further detail below,
contains several false, misleading, and improper statements related to
the partial settlement in these cases. The packet also presented Mr.
Harris with a retainer agreement that included a 40% contingent fee for
representation in connection with the “Flint Water Crisis.”
The Court then learned that approximately five other residents of
Flint, Michigan, at least some of whom had retained counsel of their
choosing (other than Mr. Fletcher or his firm), also received nearly
identical packets from Mr. Fletcher. These individuals also indicated
through their counsel that the packets from Mr. Fletcher were
unsolicited. (No. 16-10444; ECF No. 1409.) To date, the Federal Court
has received at least six of these packets—which the individuals signed
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and forwarded to the Federal Court’s Ann Arbor address as directed by
Mr. Fletcher—including signed retainer agreements for three people.
On February 5, 2021, the Court held a hearing on this matter, with
both the Hon. Judith E. Levy and the Hon. Joseph J. Farah presiding,
which Mr. Fletcher attended. At the hearing, Mr. Fletcher admitted that
he had mailed the packets at issue. He also stated at the hearing that he
had sent similar packets to approximately 200 other individuals and/or
On February 8, 2021, the Federal Court issued an Order requiring
that Mr. Fletcher file under seal a list of all of the names and contact
information for all of the individuals and/or entities included in Mr.
Fletcher’s mailing, as well as a list of those who signed his retainer
agreement as a result of the mailing. (No. 16-10444; ECF No. 1418.) Mr.
Fletcher submitted this information to the Federal Court on February 9,
2021. (No. 16-10444; ECF No. 1420.)
At the time Mr. Fletcher made this statement at the hearing, the Court
expressed concern that 200 was large number of individuals and/or entities to have
received a packet with incorrect and misleading information regarding the partial
settlement. Worse yet, however, 200 turned out to be a gross underestimate: Mr.
Fletcher sent the packet to 298 individuals and/or entities.
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Special Master Deborah Greenspan maintains census data in the
Federal Flint Water Cases under the Amended Order Regarding
Collection of Data. (No. 16-10444; ECF No. 673.) The census data
includes lists of individuals who have retained lawyers in these cases. At
the Federal Court’s request, Special Master Greenspan compared Mr.
Fletcher’s list of 298 names, addresses, and other contact information
against the information in census data. Special Master Greenspan issued
a written report regarding her results on February 16, 2021. (No. 1610444; ECF No. 1426.)
Of the 298 names on Mr. Fletcher’s mailing list, 103 of them match
names and addresses of persons listed as clients of firms other than Mr.
Fletcher’s. Thirty-four match by name only, or by similar names and
addresses to persons listed as clients of various firms other than Mr.
Fletcher’s. (Id. at PageID.54976.)
Mr. Fletcher also submitted a list of “clients” who signed his
retainer agreement contained in the packet. (No. 16-10444; ECF No.
1420.) There are 51 names on that list. In short, 104 of the mailed
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represented by other firms at the time that Mr. Fletcher solicited and/or
retained them. (Id.)
In cases such as this where there is a class component, the Court
has a special duty to ensure that attorney communications are clear,
accurate, free of misrepresentations, and made in the interest of
providing proper legal representation. This is particularly true where, as
here, a final ruling has not been made regarding class certification.
“Misrepresentations or other misconduct in communicating with the
class may impair the fairness and adequacy of representation under Rule
23(a)(4), may affect the decision to appoint counsel under proposed Rule
23(g), and may be prohibited and penalized under the court’s Rule
23(d)(2) plenary protective authority.” Manual for Complex Litigation, §
21.12 page 249. (4th Ed. 2004).
The Court has broad power under Rule 23 of the Federal Rules of
Civil Procedure to manage pre-certification notice and communication.
Rule 23(d)(1) provides that “in conducting an action under this rule, the
court may issue orders that . . . (C) impose conditions on the
representative parties or on intervenors; . . . or (E) deal with similar
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procedural matters.” Fed. R. Civ. P. 23(d)(1)(C), (E). Inherent in these
powers is the ability to limit, modify, or otherwise manage notice to and
communication with actual or putative class members.
“Because of the potential for abuse, a district court has both the
duty and the broad authority to exercise control over a class action and
to enter appropriate orders governing the conduct of counsel and parties.”
Gulf Oil Co. v. Bernard, 452 U.S. 89, 100 (1981). Where the Court uses
its discretion to limit communications, such an order should be based on
a clear record and specific findings that reflect a weighing of the need for
a limitation and the potential interference with the rights of the parties.”
Id. at 101. Proper analysis by the district court “should result in a
carefully drawn order that limits speech as little as possible, consistent
with the rights of the parties under the circumstances.” Id. at 102.
The Sixth Circuit has identified three categories of potential abuse
associated with an attorney’s communications to potential class
members: “(1) the susceptibility of nonparty class members to solicitation
amounting to barratry; (2) the increased opportunities of the parties or
counsel to ‘drum up’ participation in the proceeding; and (3) unapproved
communications to class members that misrepresent the status or effect
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of the pending action.” Williams v. U.S. Dist. Court, 658 F.2d 430, 436
(6th Cir. 1981) (citing Gulf Oil Co., 452 U.S. at 100 n.12).
Additionally, lawyers are governed by rules of professional
responsibility and ethics when communicating with individuals and
entities who are not their clients. For example, under the Michigan Rules
of Professional Conduct, “a lawyer shall not solicit professional
employment from a prospective client with whom the lawyer has no
family or prior professional relationship when a significant motive for the
lawyer’s doing so is the lawyer’s pecuniary gain.” Mich. R. Prof. Cond.
7.3(a). Lawyers are also governed by the Michigan Court Rules related to
contingency fees. Rule 8.121 states:
(A) Allowable Contingent Fee Agreements. In any claim or
action for personal injury or wrongful death based upon the
alleged conduct of another . . . , in which an attorney enters
into an agreement, expressed or implied, whereby the
attorney’s compensation is dependent or contingent in whole
or in part upon successful prosecution or settlement or upon
the amount of recovery, the receipt, retention, or sharing by
such attorney, pursuant to agreement or otherwise, of
compensation which is equal to or less than the fee stated in
subrule (B) is deemed to be fair and reasonable. The receipt,
retention, or sharing of compensation which is in excess of
such a fee shall be deemed to be the charging of a “clearly
excessive fee” in violation of MRPC 1.5(a), unless such fee is
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received as a result of an award of attorney fees payable
pursuant to MCL 500.3148, or other award or sanction made
pursuant to statute, court rule, or the common law.
(B) Maximum Fee. The maximum allowable fee for the claims
and actions referred to in subrule (A) is one-third of the
Mr. Fletcher’s communication to the 298 individuals and/or entities
must be corrected for three reasons. First, Mr. Fletcher’s letter contains
patently incorrect and misleading statements related to the Master
particularly damaging because it interferes with the recipients’ ability to
meaningfully engage in the time-limited, important decision-making
process of whether to participate in the partial settlement. Second, based
on the representations by Co-Lead Class Counsel and Co-Liaison Counsel
for Individual Plaintiffs, at least some of their clients who received Mr.
Fletcher’s packets had never contacted Mr. Fletcher and did not have a
familial or prior professional relationship with him before receiving the
packet, which raises a serious potential breach of the Michigan Rules of
Professional Conduct. Third, Mr. Fletcher’s 40% contingency fee in his
retainer agreement violates Michigan Court Rule 8.121(b), which caps
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contingency fees in cases that involve personal injury and wrongful death
—such as this one—to a maximum of one-third of the amount recovered.4
The Court will address each violation below.
A. Incorrect, Misleading, and Improper Information
Regarding the Proposed Settlement
Mr. Fletcher’s packet contains a letter that Mr. Fletcher encourages
its recipients to send to the Federal Court. That letter states, in relevant
Flint Water Crisis
Dear Judge Levy and all concerned,
I am a resident of the City of Flint. I paid water bills between
January 1st, 2017 and June 2019. I acknowledge that I have
no medical records, nor have I had a lead test or bone lead test
between May 16, 2015 and August 2016. I have no proof of
any damages to my residential property as is required in
Section V., p. 38 and 39 entitled “Property Damages and
Business Economic Loss Categories.”
As such, given the $1,000.00 maximum limit, I intend to opt
out of the Settlement Agreement and request of you the 2%
relief as filed by my Attorney Loyst Fletcher, Jr.
The “Flint Water Crisis” litigation before both the Federal and State Court
seeks damages for personal injury, property damage, and commercial losses.
Case 5:16-cv-10444-JEL-MKM ECF No. 1431, PageID.54998 Filed 02/18/21 Page 12 of 22
Further, as a water paying adult resident of the City of Flint,
I object to the Amended Settlement Agreement as being
totally unfair to the adults that also suffered.
(ECF No. 1409-1, PageID.54567.)
This letter is rife with material misrepresentations. First is the
statement, “I have no proof of any damages to my residential property as
is required in Section V., p. 38 and 39 entitled ‘Property Damages and
Business Economic Loss Categories.’” This statement incorrectly states
that a person or entity will be unable to recover under the partial
settlement if they do not have proof of “damages to [their] residential
property,” The MSA speaks for itself, where it plainly states, on the very
pages cited by Mr. Fletcher, that recovery can be had based on “any
document showing proof of residential real property ownership or of
being a residential lessee in the City of Flint” during the relevant time
period. There is nothing whatsoever in the MSA that indicates
individuals or entities filing a claim under the property recovery category
must have proof of damages to their property in order to recover.5
It is also possible that the statements in the letter could be detrimental to the
individual in a future proceeding.
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Second, the letter also contains the statement “I intend to opt-out
of the settlement.” The Federal Court’s order granting preliminary
approval of the partial settlement adopts the MSA’s processes and
procedures for opting out of the settlement and specifies the deadline for
doing so; and this letter could not, in any way, be construed to satisfy
those procedures. Individuals who sent the Federal Court this letter may
falsely believe that they have submitted their official opt-out, when they
have not in fact done so. This misrepresentation is particularly egregious
because it could detrimentally impact some individuals’ abilities to
pursue significant legal claims in the future.
Third, the letter states: “[I] request of you the 2% relief as filed by
my Attorney Loyst Fletcher, Jr.” The Fletcher letter could therefore have
misled some individuals into thinking that this “2% relief” was
forthcoming. However, at the hearing, Mr. Fletcher acknowledged that
he had filed no such request for relief. (ECF No. 1425.)
Fourth, the letter also states, “[A]s a water paying adult resident of
the City of Flint, I object to the Amended Settlement Agreement as being
totally unfair to the adults that also suffered.” This statement is
misleading because there is a clear process and procedure in the MSA for
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objecting to the settlement – and this procedure has been embodied in
the Federal Court’s order of preliminary approval; the Fletcher-authored
letter is not the proper form for an objection and it will not serve as an
objection. People sending this letter to the Federal Court could very
reasonably believe that it constitutes their objection when it does not.
Further, as set forth above, the letter already contains a supposed optout provision. Under the MSA individuals who exercise an opt-out cannot
also object to the settlement; Fletcher’s letter incorrectly indicates that
individuals can do both.
Fifth, Mr. Fletcher also admitted at the hearing that he did not
know whether people who received his packet had medical records or not;
yet his form letter would have individuals represent to the Federal Court
that they “have no medical records.” If a person indeed has medical
records, and has made the representation to the Federal Court that Mr.
Fletcher authored for them, those individuals could be deeply harmed if
they would have otherwise qualified for settlement money or other
recovery in litigation based on their medical history.
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Sixth, Mr. Fletcher also acknowledged at the hearing that he did
not know whether the individuals sending his letter had a bone-lead or
blood lead-level test, which is problematic for the reason just described.
In other words, every sentence that Mr. Fletcher encouraged these
individuals to state to the Federal Court are either unverified, incorrect,
misleading, or improper.
B. Potential Violations
Michigan Rule of Professional Conduct 7.3 states:
(a) A lawyer shall not solicit professional employment from a
person with whom the lawyer has no family or prior
professional relationship when a significant motive for the
lawyer’s doing so is the lawyer’s pecuniary gain. The term
“solicit” includes contact in person, by telephone or telegraph,
by letter or other writing, or by other communication directed
to a specific recipient, but does not include letters addressed
or advertising circulars distributed generally to persons not
known to need legal services of the kind provided by the
lawyer in a particular matter, but who are so situated that
they might in general find such services useful, nor does the
term “solicit” include “sending truthful and nondeceptive
letters to potential clients known to face particular legal
problems” as elucidated in Shapero v Kentucky Bar Ass'n, 486
US 466, 468; 108 S Ct 1916; 100 L Ed 2d 475 (1988).
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(b) A lawyer shall not solicit professional employment from a
person by written or recorded communication or by in-person
or telephone contact even when not otherwise prohibited by
paragraph (a), if:
(1) the person has made known to the lawyer a desire
not to be solicited by the lawyer; or
(2) the solicitation
At the hearing, Mr. Fletcher indicated that he sent the packet only to
individuals who are not his clients. He stated that he included the
retainer with the packet so that individuals could become his clients.
Mr. Fletcher claimed that the individuals who received the letters
all called him first before he sent out his letter. He admitted that he did
not ask any of the individuals whether they already had a lawyer. He
also disagreed with the Court that it was his duty to ascertain this
information before talking with any potential clients. However, Michigan
Rule of Professional Conduct 4.2 states:
4.2 Communication with a Person Represented by Counsel
(a) In representing a client, a lawyer shall not communicate
about the subject of the representation with a person whom
the lawyer knows to be represented in the matter by another
lawyer, unless the lawyer has the consent of the other lawyer
or is authorized by law to do so.
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It is unclear how Mr. Fletcher could know whether he is in violation of
Rule 4.2 if he disagrees that it imposes a duty to ask an individual
whether they are already represented by other counsel.
Moreover, the fact remains that at least some individuals advised
their lawyers that they did not contact Mr. Fletcher in any way before
receiving the unsolicited packet. Mr. Fletcher’s sealed submission to the
Federal Court did not include any indications or annotations regarding
when the individuals allegedly called him. If the remaining 292
individuals did in fact call Mr. Fletcher before he mailed them the packet,
he has not provided a basis for that assertion.
The Michigan Attorney Grievance Commission (“AGC”) is the
investigative and prosecutorial arm for allegations of attorney
misconduct; not the Court. The AGC has jurisdiction over all Michiganlicensed attorneys. Whether Mr. Fletcher violated the Michigan Rules of
Professional Conduct or any other ethical rules is up to that entity to
decide. But at the very least, Mr. Fletcher does not appear to the Federal
and State Court to have practiced the highest standards of
professionalism and integrity, as is required for all licensed attorneys in
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C. Illegal Contingency Fee
Mr. Fletcher’s retainer agreement contains a 40% contingency fee.
Taken as a whole, Mr. Fletcher seeks 2% of the $641,500,000 proposed
settlement, which comes to $12,830,000. A 40% contingency fee on
$12,830,000 would result in $5,132,000 for Mr. Fletcher. Particularly
when Mr. Fletcher would stand to gain potentially over $5 million in
attorney fees, it is quite likely that a significant purpose of the mailing
is his own pecuniary gain.
As set forth above, Michigan Court Rule 8.121 prohibits
contingency fees that are greater than one-third of the amount recovered
for personal injury and wrongful death cases. Such fees are “clearly
excessive fees” in violation of Michigan Rule of Professional Conduct
1.5(a), which states, in relevant part, “A lawyer shall not enter into an
agreement for, charge, or collect an illegal or clearly excessive fee.”
At the hearing, Mr. Fletcher indicated that 40% is his standard
contingency fee for non-personal injury cases. But the facts here do not
indicate that Mr. Fletcher views these potential Flint Water clients as
purely non-personal injury clients. First, his retainer agreement states
that the representation would be for the “Flint Water Crisis, and
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empowers [Mr. Fletcher’s] action as may be advisable in his judgment.”
(ECF No. 14-1, PageID.54568.) The “Flint Water Crisis” cases include
personal injury and wrongful death cases, and Mr. Fletcher’s description
does not limit his representation to non-personal injury or non-wrongful
death cases in any way.
At the hearing, Mr. Fletcher indicated that he represents other
individuals in the Flint Water Cases beyond the Collins Plaintiffs—such
as children. He made clear that these clients are “separate and apart”
from his water bill-related clients. He also stated that he has clients
“under the class action” that have retained him. (No. 16-10444; ECF No.
1425.) Accordingly, by his own admission, Mr. Fletcher’s role as an
attorney as it relates to these individuals is not limited to non-personal
injury or wrongful death cases. Accordingly, Mr. Fletcher’s 40%
contingency fee, if used in those cases, is inappropriate and clearly
excessive even by his own standard.
For the many foregoing reasons, Mr. Fletcher’s retainer agreement
must be dissolved. If those individuals still wish to retain Mr. Fletcher
given these facts, any such retainer agreement must be rewritten to
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either limit the representation to non-personal injury and wrongful
death, or to limit Mr. Fletcher’s fee to one that is not excessive.
For the reasons set forth above, Mr. Fletcher is ORDERED to
submit to the Federal and State Court a draft corrective response to the
298 individuals and/or entities for both Courts’ approval no later than
Monday February 22, 2021 at noon. The letter should explain and
retract all misstatements as set forth above. Mr. Fletcher must also
submit a separate draft addressing the individuals who signed his illegal
retainer agreement indicating that the retainer is dissolved.
Another Order will follow with further direction once the Courts
have reviewed and approved the corrective communication.
All other provisions in the Federal Court’s February 8, 2021 Order
remain in full force and effect, including the provisions that enjoin Mr.
Fletcher from making, providing, or disseminating any future
communications with or to any and all putative class members, including
members of the proposed settlement class or any individuals currently
represented by other lawyers in the proposed partial settlement, where
such contact or communication contains information that is incorrect,
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misleading, or improper related to the Flint Water litigation or partial
The Special Master is authorized to post in a secure electronic site
the list of individuals on Mr. Fletcher’s list who are represented by
counsel other than Mr. Fletcher according to the census data collected by
the Special Master. The relevant law firms shall be given access to the
site so that they may identify the clients who received the letter. Mr.
Fletcher shall also be given access to the site so that he is informed of the
individuals who are represented by other counsel.
IT IS SO ORDERED.
Dated: February 18, 2021
Ann Arbor, Michigan
s/Judith E. Levy
JUDITH E. LEVY
United States District Judge
/s Joseph J. Farah
JOSEPH J. FARAH
Genesee County Circuit Court
CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served
upon counsel of record and any unrepresented parties via the Court’s
ECF System to their respective email or First Class U.S. mail addresses
disclosed on the Notice of Electronic Filing on February 18, 2021.
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