Lowinger v. MGM Mirage et al
Filing
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ORDER Granting in part and denying in part 141 Motion to Strike Defendants' Notice of Death of a Party. (See Order for Details). FURTHER ORDERED that 153 Motion for Hearing is DENIED. Signed by Judge Gloria M. Navarro on 6/14/12. (Copies have been distributed pursuant to the NEF - MMM)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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In re MGM MIRAGE
SECURITIES LITIGATION.
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Case No.: 2:09-cv-1558-GMN-RJJ
ORDER
INTRODUCTION
Before the Court is Lead Plaintiff Arkansas Teacher Retirement System’s (hereinafter
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Lead Plaintiff) Motion to Strike Defendants’ Notice of Death of a Party (ECF No. 141).
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Defendants James J. Murren, Daniel J. D’Arrigo and Robert C. Baldwin filed a Response (ECF
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No. 143) and Lead Plaintiff filed a Reply (ECF No. 150).
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Also before the Court is Plaintiffs Arkansas Teacher Retirement System, Luzerne County
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Retirement System, Philadelphia Board of Pensions and Retirement, Stichting Pensioenfonds
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Metaal en Techniek’s (collectively “Plaintiffs”) Motion for Hearing (ECF No. 153).
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FACTS AND BACKGROUND
On July 20, 2011, Defendants James J. Murren, Daniel J. D’Arrigo and Robert C.
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Baldwin filed a Notice of Death stating that Defendant J. Terrance Lanni had died during the
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pendency of the action. (See Notice of Death, ECF No. 139.) Lead Plaintiff’s counsel contacted
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Defendants’ counsel, Irell & Manella LLP (“Irell”) on October 13, 2011, to ask Irell for a
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stipulation to substitute an unnamed “appropriate party” for Lanni. (Noroozi Decl. ¶2, ECF No.
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143–1.) Irell had represented Lanni in this case as reflected in the docket. However, Irell could
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not agree on a stipulation because it was not counsel for Lanni’s estate and further claimed that
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it had no knowledge about the identity of the executor of Lanni’s estate. (Id. at ¶¶ 3, 4.) On
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October 18, 2011, Lead Plaintiff filed the instant Motion to Strike the Notice of Death. (Mtn to
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Strike, ECF No. 141.)
On April 17, 2012 Plaintiffs filed an Amended Complaint. Immediately following the
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filing of the Amended Complaint, Plaintiffs filed a motion for hearing regarding the newly filed
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complaint and the pending Notice of Death. (Mtn for Hearing, ECF No. 153).
DISCUSSION
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A.
Motion to Strike
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1.
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Federal Rule of Civil Procedure 25 governs a motion for substitution and a notice of
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Legal Standard
death. The Rule provides:
(a)
Death
(1) Substitution if the Claim is Not Extinguished. If a party dies and the claim
is not extinguished, the court may order substitution of the proper party. A
motion for substitution may be made by any party or by the decedent’s
successor or representative. If the motion is not made within 90 days after
service of a statement noting the death, the action by or against the decedent
must be dismissed.
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(3) Service. A motion to substitute, together with a notice of hearing, must be
served on the parties as provided in Rule 5 and on nonparties as provided in
Rule 4. A statement noting death must be served in the same manner. Service
may be made in any judicial district.
Fed. R. Civ. P. 25(a).
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The rule requires two affirmative steps in order to trigger the running of the 90-day
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period. Barlow v. Ground, 39 F.3d 231, 233 (9th Cir. 1994). “First, a party must formally
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suggest the death of the party upon the record.” Id. (citing Anderson v. Aurotek, 774 F.2d 927,
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931 (9th Cir. 1985); Grandbouche v. Lovell, 913 F.2d 835 (10th Cir. 1990)). “Second, the
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suggesting party must serve other parties and nonparty successors or representatives of the
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deceased with a suggestion of death in the same manner as required for service of the motion to
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substitute.” Barlow, 39 F.3d 233; Fed. R. Civ. P. 25(a).
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2.
Analysis
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Plaintiff argues that the notice failed to fulfill the two requirements and thus the 90-day
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time period to substitute a party was never triggered. First, Lead Plaintiff argues notice of death
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must identify the successor or representative who may be substituted for the decedent. Dummar
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v. Lummis, 2:07-cv-459-JCM-PAL, 2007 U.S. Dist. LEXIS 95288, at *7–*8 (D. Nev. Dec. 26,
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2007). The Dummar case relied on three cases from other jurisdictions that have held that the
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suggestion of death must identify the successor or representative who may be substituted for the
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decedent. See Smith v. Planas, 151 F.R.D. 547, 549 (S.D.N.Y. 1993); Kessler v. Se. Permanente
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Med. Group of N.C., P.A., 165 F.R.D. 54, 56 (E.D.N.C. 1995); Rende v. Kay, 134 U.S. App.
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D.C. 403, 415 F.2d 983, 985 (D.C. Cir. 1969). However, other cases in the Ninth Circuit do not
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require the suggestion of death to identify a person who may be substituted. See Jackson v.
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Rowlett, No. CIV S–04–0741 DFL DAD P, 2007 U.S. Dist. LEXIS 11300, at *2 (E.D. Cal. Jan
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31, 2007) (“Rule 25’s sole requirement concerning the content of a suggestion of death on the
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record is that it must contain ‘a statement of the fact of the death.’”).
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Regardless of whether or not the suggestion of death is defective because it does not
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identify a person who may be substituted, the 90 days may not have been triggered by the
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suggestion of death if it was not properly served on the nonparty successor. See Barlow, 39 F.3d
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233; Fed. R. Civ. P. 25(a)(1) & (3). Defendants argue that they do not have to meet this
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requirement because the information is not “readily available to them.” See, e.g., Barlow, 39
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F.3d at 234 (noting that the noticing party “clearly” knew the name and address of the nonparty
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who should have been served with the notice of death because the noticing party had been
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provided with a copy of the decedent’s will, which identified the name and address of the
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executor); Bertam Music Co. v. P & C Enters., Case No. 09–2253, 2011 U.S. Dist. LEXIS
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74913, at *4 (C.D. Ill. May 25, 2011) (notice should list the name of an executor or
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administrator of the estate when “the information is readily available to the person filing the
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statement”) (emphasis added). Defendants further argue that the Ninth Circuit has not imposed
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a requirement that the suggestion identify a nonparty that may be substituted when, as here, the
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notice of death was filed by the surviving defendants rather than by the decedent’s
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representative or successor. See Scott v. Vasquez, Case No. CV 02–05296 GAF (AJW), 2009
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U.S. Dist. LEXIS 116071, at *6–7 (C.D. Cal. Dec. 9, 2009); see also In re Cardoza, 111 B.R.
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906, 909 (S.D. Cal. 1990) (notice of death must include the identity of the estate representative
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only when the notice is filed by the representative; that rule does not apply when another party
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to the action files and serves the notice).
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There is clearly a split in this circuit regarding whether or not a district court will require
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a defendant who files a suggestion of death to either identify a successor or to serve the notice
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on the nonparty successor. The court in Scott correctly recognized that the Ninth Circuit has not
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imposed the requirement of identifying a successor and the court in Jackson likewise recognized
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that Rule 25 does not specifically include this requirement. However, the Jackson court also
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followed the guidance of Barlow which stated that the appropriate representative of the estate
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must be served with the suggestion of death.
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In Barlow, the defendants who filed the suggestion of the plaintiff’s death on the record
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knew the identity of the executor of the deceased plaintiff’s estate. Thus, Barlow does not
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address the situation where the suggestion of death must be served on a nonparty successor or
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the representative of the estate when the appropriate person cannot be ascertained at the time the
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suggestion is filed. Several courts have required a defendant who has filed the suggestion of
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death to try to discover the identity of a successor or representative. See Jackson, 2007 U.S.
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Dist. LEXIS 11300, at *7–*8 (requiring defendant’s counsel to make a reasonable investigation
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into the statutes of defendant’s estate and file a declaration of his efforts if he in unable to obtain
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information about a successor or representative); Bertam, 2011 U.S. Dist. LEXIS 74913, at *3
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(allowing a 56 day extension for plaintiffs to respond after defendants’ counsel notifies the
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proper party to substitute); Gruenberg v. Maricopa County Sheriff’s Office, No. CV 06–0397–
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PHX–SMM (DKD), 2008 U.S. Dist. LEXIS 40342, at *2 (D.Ariz. May 6, 2008)(court ordered
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defense counsel to submit an affidavit describing her efforts to obtain information of plaintiff’s
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successor or representative from the Arizona Department of Corrections for the purpose of
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effecting service under Rule 4).
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Defendants claim that they have done a reasonable search to discover Lanni’s successors
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or representative. Kayvan B. Noroozi, counsel for Defendants, filed a declaration explaining his
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efforts in trying to identify a successor or representative. He declares that his colleague, Glenn
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K. Vanzura, made an inquiry of MGM Resorts International to determine if it had any
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information concerning the identity of and contact information for the executor of Lanni’s
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estate, but has not been able to obtain the information. (Noroozi Decl. at ¶ 5.) Nevertheless, the
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Court is not impressed with Mr. Noroozi’s efforts. Likewise, the Court notes that it is also not
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impressed with Lead Plaintiff’s counsel’s eleventh-hour efforts to identify an appropriate party
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when there was a possibility that the 90 day time period to file a substitution was nearing an end.
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Accordingly, the Court will direct Defendants’ counsel to investigate the status of Lanni’s
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estate. If counsel is able to obtain information regarding the representative of the estate or an
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appropriate successor, counsel shall serve the notice of suggestion of death on the proper
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nonparty. If counsel is unable to obtain this information, then he may file a new declaration in
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which he describes the efforts made to comply with this order.
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However, this does not relieve Plaintiff’s duty to also make a reasonable inquiry
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regarding the representative of the estate or an appropriate successor. If Plaintiff discovers the
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name and address of a successor or representative of Lanni, Plaintiff shall file a motion for
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substitution without delay.
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In the alternative, Lead Plaintiff asks the Court to grant its motion to substitute Lanni’s
estate as the proper defendant in this case. However, Lead Plaintiff’s motion also fails to satisfy
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the requirements of Rule 25. The motion to substitute must be served on nonparties as provided
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in Rule 4. There is no indication that Lead Plaintiff has done this and accordingly this request is
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DENIED.
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B.
Motion for Hearing
Plaintiffs’ motion for hearing requests a status conference to address: (i) the amended
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complaint; (ii) Plaintiffs’ Motion to Strike Defendants’ Notice of Death; and (iii) the most
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efficient manner in which to move forward with this litigation. As reflected herein, the Court
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has addressed Plaintiff’s Motion to Strike. It is premature to have a status conference to address
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the amended complaint and the manner in which to move forward with this litigation when the
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time for filing an answer has yet to expire1. Furthermore, it is unclear what Plaintiffs hope to
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achieve with a status conference because following an answer to the complaint, the next step is
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to file a discovery plan. Any issues in that regard will be addressed by Magistrate Judge
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Johnston and, accordingly, that would be the proper time for the parties to address how to “move
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the case forward.”
CONCLUSION
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IT IS HEREBY ORDERED that Lead Plaintiff Arkansas Teacher Retirement System’s
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Motion to Strike Defendants’ Notice of Death of a Party (ECF No. 141) is GRANTED in part
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and DENIED in part.
Defendants’ counsel shall make a reasonable investigation into the status of defendant
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Lanni’s estate and if a representative of the estate or successor is discovered shall serve the
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suggestion of death in accordance with Rules 4 and 25 on the representative or successor.
Defendant’s counsel shall, within 30 days of the date of this order, file proof of service
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reflecting proper service of death on the representative or successor of Lanni or, if counsel is
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Defendants’ Joint Motion to Dismiss is due May 30, 2012. (ECF No. 156)
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unable to effect such service, Defendant’s counsel shall file a declaration concerning his efforts
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to comply with this Order.
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IT IS FURTHER ORDERED that Plaintiffs Arkansas Teacher Retirement System,
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Luzerne County Retirement System, Philadelphia Board of Pensions and Retirement, Stichting
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Pensioenfonds Metaal en Techniek’s (collectively “Plaintiffs”) Motion for Hearing (ECF No.
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153) is DENIED.
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DATED this 14th day of June, 2012.
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________________________________
Gloria M. Navarro
United States District Judge
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