LAKE v. AETNA LIFE INSURANCE COMPANY et al
Filing
25
OPINION. Signed by Judge Joseph E. Irenas on 10/21/2014. (TH, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
MARIA LAKE, Executor for the
Estate of Ronald Lake, and
Surviving Spouse of Decedent
Ronald Lake,
HONORABLE JOSEPH E. IRENAS
CIVIL ACTION NO. 13-5889
(JEI/KMW)
Plaintiff,
OPINION
v.
AETNA LIFE INSURANCE COMPANY,
JOHN DOE, and JOHN DOE
INSURANCE COMPANY,
Defendants.
APPEARANCES:
THE LAW OFFICES OF RICHARD SPARACO
By: Jennifer L. Gottschalk, Esq.
1920 Fairfax Avenue
Cherry Hill, New Jersey, 08003
Counsel for Plaintiff Maria Lake
ELLIOTT GREENLEAF & SIEDZIKOWSKI, P.C.
By: Eric J. Bronstein, Esq.
Union Meeting Corporate Center
925 Harvest Drive, Suite 300
Blue Bell, Pennsylvania 19422
Counsel for Defendant Aetna Life Insurance Company
IRENAS, Senior District Judge:
Plaintiff Maria Lake brings this action to recover
accidental death benefits under a policy underwritten by
Defendant Aetna Life Insurance Company (“Defendant” or “Aetna”).
1
Currently pending before the Court are Plaintiff’s motion
for judgment on the pleadings and Defendant’s motion for summary
judgment.
For the reasons explained herein, Plaintiff’s motion
is DENIED and Defendant’s motion is GRANTED.
I.
FACTS
The Court recites those facts relevant to deciding the
pending motions for judgment on the pleadings and summary
judgment and resolves any disputed facts or inferences in
regards to each motion in favor of the nonmoving parties.
On September 28, 2011, Ronald Lake (“Decedent”) was killed
as a result of a single-car crash when his vehicle veered off a
road and struck a tree.
(Plaintiff’s Counter Statement of
Material Facts (“P.C.S.M.F.”) ¶ 1; Medical Examiner’s Report,
Ex. A to Defendant’s Motion for Summary Judgment (D.M.S.J.) at
158-60)
The accident occurred around 1:00 a.m. and Decedent was
pronounced dead approximately three hours later at 4:08 a.m. at
Cooper University Hospital in Camden, New Jersey.
Examiner’s Rpt., Ex. A at 159)
(Med.
He was forty-six years old.
(Id.)
A New Jersey Police Crash Investigation Report (“Police
Report”) described the relevant roadway as straight, level, and
clearly marked with painted lines.
132-33)
(Police Report, Ex. A at
At the time of the incident, it was raining slightly,
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the roadway was wet, and it was dark in the area.
(Id. at 133)
There was no traffic on the road when Decedent crashed.
(Id.)
The police investigation of the incident revealed the
following sequence of events:
Vehicle #1 was traveling southbound on North Main Street
when Vehicle #1 crossed over the northbound lane and ran
off the left side of the roadway. Vehicle #1 continued
in motion with the driver side tires off the roadway in
a grassy graded ditch and then struck a tree with the
front driver’s side.
(Id.)
Decedent sustained massive internal injuries as a
result of the crash and died as a result of those injuries.
A Toxicology Report issued by the Burlington County Medical
Examiner’s office found that Decedent’s blood alcohol
concentration (“BAC”) was 0.133% w/v.
Ex. A at 162)
0.08% w/v.
(Toxicology Report,
The legal limit under New Jersey law is
See NJ Stat. Ann. 39:4-50.
Plaintiff states
that the Toxicology Report was based on blood drawn at
approximately 2:30 a.m.
(P.C.S.M.F. ¶ 28)
The Toxicology
Report indicates that the blood was drawn postmortem.
(Ex.
A, at 162)
At the time of his death, Decedent was a participant
in the IBEW Local 269 Welfare Fund benefit plan (the
“Plan”), which is funded by a group life insurance policy
(the “Policy”) issued by Defendant.
Defendant is a
“fiduciary” under the Policy with the “discretionary
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authority” to “determine whether and to what extent members
and beneficiaries are entitled to benefits.” (Aetna Group
Life and Accident and Health Insurance Policy, Ex. A at
123)
The Policy is governed by the Employment Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et
seq.
(Id. at 83)
The Policy provides a Life Insurance sum of $20,000,
and Accidental Death and Dismemberment (“AD&D”) benefits,
which include a principal benefit amount of $20,000 and an
Education Benefit Maximum for dependent children in the
amount of 5% of the principal sum not to exceed $5,000 per
year per child for up to four years.
(Id. at 79)
To
secure payment of AD&D benefits, an insured must meet
certain requirements.
Specifically, the benefits are
payable if “you suffer a bodily injury caused by an
accident; and if, within 365 days after the accident and as
a direct result of the injury, you lose . . . your life.”
(Id. at 60-61)
The Policy puts forth certain restrictions on the
payment of AD&D benefits as well.
Benefits are not payable
for a loss “caused or contributed to by . . . [a]n
intentionally self-inflicted injury . . . . [or] [a]
covered person’s being intoxicated or being under the
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influence of narcotics unless administered or consumed on
the advice of a physician.”
(Id. at 65)
On November 28, 2011, following Defendant’s receipt of
a completed Proof of Death claim form, Beneficiary
designation, certified Death Certificate, and Death Notice
from the internet, Defendant accepted Plaintiff’s claim for
life insurance benefits of $20,000 and sent her a check in
that amount, but referred Plaintiff’s claim for AD&D
benefits to a claim analyst.
(D.S.U.M.F. ¶¶ 9-12)
Defendant denied Plaintiff’s claim for AD&D benefits on
April 20, 2012 after completing its review of the Police
Report and Toxicology Report. 1
(Id. at ¶ 30)
On that same day, Defendant sent Plaintiff a letter
stating that Defendant was denying AD&D benefits because
the Plan’s language precluded coverage where an accident
was caused or contributed to by Decedent’s intoxication.
(Id. at ¶ 32)
The letter explained that Defendants made
this decision based on its review of the police and
toxicology reports, among other documents.
AD&D Coverage, Ex. A at 170-73)
(Letter Denying
Defendant also advised
Plaintiff that she had the right to request a review of
1 According to Defendant’s statement of facts, the delay in coming to a
decision on Plaintiff’s claim was due to Defendant’s not receiving the Police
Report until January 10, 2012, when Decedent’s employer provided a copy of
the report, and Plaintiff’s not signing the necessary release for the
Toxicology Report until March 20, 2012. (D.S.U.M.F. ¶¶ 22-25)
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Defendant’s decision within sixty days of the receipt of
the letter, and to file a civil action under ERISA if the
denial was upheld on appeal.
(Id.; D.S.U.M.F. ¶¶ 34-35)
Plaintiff states that she recalls having mailed a
letter to Defendant “in or around April 20, 2012”
requesting that Defendant reconsider its decision to deny
AD&D benefits.
(P.C.S.F. ¶ 36)
Defendant claims it did
not receive any correspondence from Plaintiff until
December 28, 2012, when Plaintiff’s counsel contacted
Defendant and requested a copy of the Plan.
36)
(D.S.U.M.F. ¶
Plaintiff did not retain a copy of her alleged letter.
(Aff. of Maria Lake ¶ 6)
On July 31, 2013, Plaintiff commenced this action
against Defendant in Burlington County Superior Court
asserting state law claims for entitlement to AD&D benefits
under the Plan.
(State Court Compl., D.M.S.J. at Ex. B)
Defendant removed to this Court without Plaintiff’s
objection on the grounds that ERISA, which governs the
Plan, preempted the relevant state law.
(D.S.U.M.F. ¶ 11)
Plaintiff presently moves for judgment on the pleadings,
and Defendant presently moves for summary judgment.
The Court
addresses each party’s motion in turn. 2
2
Although Plaintiff waited almost five months to file opposition papers to
Defendant’s motion for summary judgment and her reply to Defendant’s papers
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II.
Plaintiff’s Motion for Judgment on the Pleadings
A.
Judgment on the pleadings under Rule 12(c) will not be
granted “unless the movant clearly establishes that no material
issue of fact remains to be resolved and that he is entitled to
judgment as a matter of law.”
Kruzits v. Okuma Mach. Tool,
Inc., 40 F.3d 52, 54 (3d Cir. 1994) (internal citations and
punctuation omitted).
As a result, a plaintiff’s Rule 12(c)
motion will not be granted if defendant’s answer “raises issues
of fact that, if proved, would defeat recovery.”
5C Charles
Alan Wright & Arthur R. Miller, Federal Practice & Procedure
(“Wright & Miller”) § 1368 (3d ed. 2004).
In reviewing a Rule
12(c) motion, the Court “must view the facts in the pleadings
and the inferences therefrom in the light most favorable to the
nonmoving party.”
Jablonski v. Pan American World Airways,
Inc., 863 F.2d 289, 290-91 (3d Cir. 1988) (internal quotations
and citation omitted).
As a threshold matter, this Court must decide how to
evaluate Plaintiff’s Rule 12(c) motion.
District courts have
the discretion to treat a motion for judgment on the pleadings
opposing her motion for judgment on the pleadings, this Court considers both
submissions, as well as Defendant’s subsequent reply to Plaintiff’s
opposition papers.
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as a motion for summary judgment by accepting evidence submitted
by the parties outside the pleadings.
see Wright & Miller, at § 1371.
Fed. R. Civ. P. 12(d);
A district court need not
convert a Rule 12(c) motion if the court excludes all matters
outside the pleadings when deciding the motion.
Id.; see
McBurney v. Cuccinelli, 616 F.3d 393, 409-10 (4th Cir. 2010)
(“‘[N]ot considering’ such matters is the functional equivalent
of ‘excluding’ them.”) (citation omitted).
In her moving papers, Plaintiff refers to her motion
interchangeably as one for summary judgment and/or judgment on
the pleadings, but cites Rule 12(c) as the basis for her motion.
In support of the motion, she presents only the pleadings and a
letter brief containing a short statement of facts in which she
mentions some facts not contained in the pleadings.
Plaintiff
does not attach any exhibits in support of these additional
facts.
In its opposition papers, Defendant cites to exhibits it
filed along with its accompanying motion for summary judgment.
Since Plaintiff filed her motion pursuant Rule 12(c) and
presents no documentary evidence outside the pleadings, this
Court will not convert Plaintiff’s motion into one for summary
judgment.
In evaluating the motion, this Court will not
consider matters outside the pleadings contained in the parties’
moving papers.
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B.
Plaintiff’s present Rule 12(c) motion must be denied
because Defendant’s Answer clearly raises issues of material
fact and asserts affirmative defenses that preclude judgment on
the pleadings.
In her Amended Complaint, Plaintiff alleges that Defendant
did not conduct a “thorough investigation that the Decedent’s
accidental death resulted from being ‘intoxicated.’”
Compl. ¶ 17)
(Amend.
She further suggests that her husband was not
intoxicated at the time of his accident.
(Id.)
Defendant
denies these averments and asserts an affirmative defense that
its decision to deny benefits was not arbitrary or capricious.
(Answer ¶ 17)
Plaintiff would not be able to recover under this
Court’s review of her claim for denial of benefits if the
evidence supports Defendant’s position that the Decedent was
intoxicated and that his intoxication caused or contributed to
his death.
Plaintiff also claims in her Amended Complaint that she had
sent a letter to Defendant requesting reconsideration of the
initial denial of her claim for benefits.
(Amend. Compl. ¶ 10)
Defendant denied receiving that letter and asserted among its
defenses that Plaintiff failed to exhaust her administrative
remedies.
(Answer ¶¶ 10-11)
Plaintiff would not be able to
recover if she did not send such a letter, as, excepting limited
9
circumstances, courts do not entertain ERISA claims unless
plaintiffs have exhausted remedies available under the relevant
plans.
Harrow v. Prudential Ins. Co. of Am., 279 F.3d 244, 249
(3d Cir. 2002).
Since Defendant’s Answer raises issues of material fact as
to the level of decedent’s intoxication at the time of his
accident, and whether Plaintiff exhausted her administrative
remedies, judgment on the pleadings would be inappropriate.
This Court now turns to Defendant’s motion for summary
judgment.
III. Defendant’s Motion for Summary Judgment
A.
Federal Rule of Civil Procedure 56(c) provides that summary
judgment should be granted if “pleadings, depositions, answers
to interrogatories, and admissions on file, together with
affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a
judgment as a matter of law.”
See also Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986).
In deciding a motion for
summary judgment, the court must construe all facts and
inferences in the light most favorable to the nonmoving party.
See Boyle v. Allegheny Pennsylvania, 139 F.3d 386, 393 (3d Cir.
1998).
The moving party bears the burden of establishing that
10
no genuine issue of material fact remains.
Catrett, 477 U.S. 317, 322-23 (1986).
See Celotex Corp. v.
A fact is material only
if it will affect the outcome of a lawsuit under the applicable
law, and a dispute of a material fact is genuine if the evidence
is such that a reasonable fact finder could return a verdict for
the nonmoving party.
See Anderson, 477 U.S. at 252.
The nonmoving party must present “more than a scintilla of
evidence showing that there is a genuine issue for trial.”
Woloszyn v. Cnty. of Lawrence, 396 F.3d 314, 319 (3d Cir. 2005).
“If the evidence is merely colorable . . . or is not
significantly probative . . . summary judgment may be granted.”
Anderson, 477 U.S. at 249-50 (internal citations omitted).
The
court’s role in deciding the merits of a summary judgment motion
is to determine whether there is a genuine issue for trial, not
to determine the credibility of the evidence or the truth of the
matter.
Anderson, 477 U.S. at 249.
B.
Defendants move for summary judgment on two grounds: (1)
Plaintiff failed to exhaust her administrative remedies because
she did not appeal Defendant’s denial of benefits, and (2) even
had Plaintiff exhausted her administrative remedies, she has not
presented facts sufficient to show that Defendant’s decision to
deny Plaintiff’s claim for benefits was arbitrary and
capricious.
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This Court will first address Plaintiff’s argument as to
the merits of Defendant’s decision to deny benefits.
1. Standard of Review under ERISA
Plaintiff filed suit under § 502(a)(1)(B) of ERISA, which
allows the beneficiary of a covered policy to bring a civil
action to recover benefits due under the terms of the relevant
plan.
29 U.S.C. § 1132(a)(1)(B)
Courts review the denial of
benefits under ERISA “under a de novo standard unless the
benefit plan gives the administrator or fiduciary discretionary
authority to determine eligibility for benefits.”
Firestone
Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).
When the
plan grants a fiduciary discretionary authority to determine
eligibility for benefits, courts will not disturb that
determination absent an abuse of discretion.
Id.
In other
words, such a decision is subject to review under the “arbitrary
and capricious” standard.
See Heasley v. Belden & Blake Corp.,
2 F.3d 1249 (3d Cir. 1993) (“[I]f a plan contains a clear
statement of discretion, it warrants arbitrary and capricious
review under Firestone.”)
“An administrator’s decision is arbitrary and capricious if
it is without reason, unsupported by substantial evidence or
erroneous as a matter of law.”
Fleisher v. Standard Ins. Co.,
679 F.3d 116, 121 (3d Cir. 2012) (internal quotations omitted).
Courts have defined “substantial evidence” as “such relevant
12
evidence as a reasonable mind might accept as adequate to
support a conclusion.”
Id. (internal quotations omitted)
(citing Soubik v. Dir., Office of Workers’ Comp. Programs, 366
F.3d 226, 233 (3d Cir. 2004)).
“[U]nder most circumstances,
‘the record for arbitrary-and-capricious review of ERISA
benefits denial is the record made before the plan
administrator, and cannot be supplemented during litigation.’”
Howley v. Mellon Financial Corp., 625 F.3d 788, 793 (3d Cir.
2010) (quoting Kosiba v. Merck & Co., 384 F.3d 58, 67 n.5 (3d
Cir. 2004).
When the administrator has both discretionary authority and
makes payments under the plan, there is a conflict of interest
that courts must “weigh as a factor” in reviewing the
administrator’s decision for abuse of discretion.
Metropolitan
Life Ins. Co. v. Glenn, 554 U.S. 105, 115 (2008); Howley, 625
F.3d at 792-93.
Courts may consider evidence outside the
administrative record to determine the scope of any potential
conflict of interest.
Id. at 793-94.
In the present case, as clearly stated in the Plan
documents, Defendant is a fiduciary with discretionary authority
to determine Plaintiff’s eligibility for benefits under the
Plan.
(Ex. A at 123)
As a result, the arbitrary and capricious
standard applies to Defendant’s decision to deny benefits.
At
the same time, Defendant also pays out benefits under the Plan
13
and thus has a financial interest in decisions to grant or deny
coverage.
This Court thus considers that inherent conflict of
interest when reviewing Defendant’s decision for an abuse of
discretion.
2. Analysis
To obtain summary judgment in its favor on Plaintiff’s
ERISA claim, Defendant must show that, based on the record
before the Court, a reasonable factfinder could not determine
that Defendant’s decision to deny AD&D benefits was arbitrary
and capricious.
Defendant points to the Plan’s language, which expressly
precludes AD&D coverage for deaths resulting from bodily
injuries caused or contributed to by a person’s being
intoxicated.
According to Defendant, the administrative record,
which includes the Police Report, Medical Examiner’s Report, and
Toxicology Report, provided evidence sufficient for the
determination that Decedent’s intoxication caused or contributed
to his car accident on September 30, 2011.
The evidence supporting Defendant’s decision is, indeed,
substantial.
Decedent’s BAC, taken some time after the
accident, was 0.133% (w/v), which far exceeds New Jersey’s legal
intoxication limit of 0.08% (w/v).
162)
(Toxicology Report, Ex. A at
The Police Report established that Decedent was the only
vehicle involved in the accident, which occurred on a straight
14
and level roadway with properly painted lines and free of any
hazards.
(Police Report, Ex. A at 132-33)
According to the
report, Decedent was travelling southbound on the roadway when
he crossed the center line into the northbound lane, ran off the
side of the northbound lane into a grassy graded ditch, and then
struck a tree.
(Id. at 133)
Defendant came to its
determination that Plaintiff’s claim for AD&D benefits was not
payable only after receiving and reviewing these reports.
(D.S.U.M.F. ¶¶ 29-32)
Plaintiff presents two factual issues in dispute in arguing
that Defendant made only a “cursory review” of Plaintiff’s claim
for AD&D benefits.
(P.’s Memo. In Opposition at 4)
First,
Plaintiff suggests that her husband was not intoxicated at the
time of the incident.
She states that the BAC reading did not
provide a factual basis for concluding that Decedent was
intoxicated at the time of the car crash because his blood was
not drawn until at least ninety minutes after the incident. 3
(Id.)
According to Plaintiff, a proper review would have
analyzed Decedent’s BAC at the time of the accident. 4
3
(Amen.
Plaintiff has not provided evidence, and this Court cannot find any evidence
in the record, specifying the time Decedent’s blood was actually drawn. The
Toxicology Report indicates that the BAC reading was based on blood drawn
postmortem, and Decedent died nearly three hours after the accident. (Def.’s
Reply Brief in Support of its Motion for Summary Judgment at 12)
4 Plaintiff states that such an analysis would have considered the time that
passed between the accident and the blood test, and the effect of any
“medicinal substances rendered to decedent” when he was treated by first
responders. (Amen. Compl. ¶ 17)
15
Compl. ¶ 17)
Second, Plaintiff claims she sent a letter to
Defendant in April 2012 raising the issue of the delayed blood
test and asking Defendant to re-evaluate its determination,
which Defendant allegedly refused to do.
(Id. at 4-5)
Making all inferences in Plaintiff’s favor, this Court
holds that a reasonable jury could not find these facts
sufficient to conclude that Defendant’s decision to deny
Plaintiff’s claim for benefits was arbitrary and capricious.
Plaintiff submitted no evidence during either the administrative
process or to this court in support of her argument that the BAC
reading from blood drawn ninety minutes, or even three hours,
following Decedent’s car crash did not provide a factual basis
for determining his level of intoxication at the time of the
incident. 5
Plaintiff could have presented evidence regarding
when Decedent consumed alcohol, how much he consumed, and
whether he had eaten a meal before driving – information that
could have called Defendant’s reliance on the Toxicology Report
into question. 6
Significantly, these are pieces of evidence to
which Plaintiff, not the Defendant, presumably had access.
5
Plaintiff claims in her opposition papers to have proposed to Defendant’s
counsel to engage an expert to testify as to decedent’s lower BAC at the time
of the crash, but Plaintiff has neither offered as evidence any report of
such an expert and has not applied to this Court to delay judgment on
Defendant’s motion while Plaintiff pursues further discovery.
6 Studies show that alcohol continues to absorb into the body, and thus an
individual’s BAC rises, from a half-hour to as long as three hours after
consumption. See Lawrence Taylor and Steven Oberman, Drunk Driving Defense
(7th ed. 2014) § 6.03. Once absorption is complete, BAC begins to decline at
16
Yet, Plaintiff presented not even a scintilla of evidence
indicating that the BAC reading did not reflect Decedent’s BAC
at the time of the accident, or any other reason to believe that
Decedent’s accident was not caused or contributed to by his
intoxication.
A reasonable factfinder would determine that
Aetna was therefore entitled to rely on the official Toxicology
Report, which was not disputed when Aetna reviewed Plaintiff’s
claim for benefits.
See Guthrie v. Prudential Ins. Co. of Am.,
No. 12-7358 (JLL), 2014 WL 3339549 (D.N.J. July 8, 2014)
(finding that an insurer who denied AD&D benefits reasonably
relied on a toxicology report where there was “no evidence
suggesting that such results are inaccurate or otherwise
compromised,” even though plaintiff challenged the chain of
custody of blood samples used for the report).
Plaintiff’s
suggestion that her husband was not intoxicated is mere
speculation and not sufficient for her claim to withstand
summary judgment.
Defendant evaluated the AD&D claim for a man who crossed
over the center line on an empty, properly painted road, ran off
the road into a ditch, and crashed into a tree.
That man’s BAC,
measured by blood drawn postmortem, was significantly above the
a rate that varies widely from person to person. Id. Here, there is no
telling how long before the accident Decedent consumed alcohol, and Decedent
could theoretically have had a lower or higher BAC at the time of the crash
than during the postmortem blood test.
17
legal limit.
Perhaps the rain and darkness that night played a
role in the incident.
But, based on the above facts, it would
be unreasonable to find that Defendant’s determination that
Decedent’s intoxication at least “contributed to” the accident
was arbitrary and capricious.
This Court acknowledges the conflict of interest inherent
in the fact that Defendant has a financial interest in the Plan
under which Plaintiff applied for benefits.
However, there is
no basis for concluding that Defendant’s role in interpreting
and making payments pursuant to the Plan infected its decision
to deny benefits.
Defendant did not render its decision until
it obtained and reviewed all relevant reports concerning
Decedent’s crash.
These reports provided substantial evidence
supporting Defendant’s decision to deny AD&D benefits.
Even
considering the inherent conflict of interest, a reasonable
factfinder could not determine that Defendant’s denial of
Plaintiff’s benefits to be erroneous as a matter of law.
Since this Court holds that a reasonable factfinder could
not find Defendant abused its discretion in denying benefits
under the Plan, it will not need to reach the question of
whether Plaintiff exhausted her administrative remedies.
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IV.
For the reasons set forth above, the Court will DENY
Plaintiff’s Motion for Judgment on the Pleadings, and GRANT
Defendant’s Motion for Summary Judgment.
An appropriate Order
accompanies this Opinion.
Date: October 21st, 2014
s/ Joseph E. Irenas
_
JOSEPH E. IRENAS, S.U.S.D.J.
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