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Brody v. Village of Port Chester

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK


March 12, 2007

WILLIAM BRODY, PLAINTIFF,
v.
VILLAGE OF PORT CHESTER, ET. AL., DEFENDANTS.

The opinion of the court was delivered by: Harold Baer, Jr., District Judge

OPINION AND ORDER

Plaintiff William Brody ("Plaintiff" or "Brody"), in this long-running litigation to challenge the taking of his property, brings, pursuant to his Amended Complaint of August 28, 2006, constitutional claims against Defendants Village of Port Chester (the "Village"), G&S Port Chester LLC ("G&S"), Village of Port Chester Industrial Development Agency ("Village IDA"), and Hudson United Bank Co. ("Hudson") (collectively, "Defendants"). Brody's remaining claim alleges, pursuant to 42 U.S.C. § 1983, violations of procedural due process by Defendants relating to the condemnation of his property by the Village under N.Y. E.D.P.L. § 201 et. seq.*fn1

Brody now moves for partial summary judgment on his procedural due process claims against Defendants. Brody seeks a declaratory judgment that his procedural due process rights were, in fact, violated, and an award of nominal damages of $1.*fn2

Because genuine issues of material fact remain as to whether Brody had "actual notice" of the condemnation proceedings, Brody's motion for partial summary judgment is denied.

I. BACKGROUND

Familiarity is assumed with facts and prior opinions in this litigation.*fn3 A brief recounting of the facts germane to this motion follows.

A. Environmental Review Process

In 1996, Plaintiff William Brody purchased commercial property in an area of the Village of Port Chester that had long been slated for redevelopment. See Brody v. Village of Port Chester, 434 F.3d 121, 124 (2d Cir. 2005) ("Brody III"). In 1998, according to Brody, he heard that the property might be part of another proposed redevelopment plan. Brody avers he called the Port Chester mayor over twenty times and went to the library to look up eminent domain law. See Affidavit of Plaintiff William Brody, December 29, 2006 ("Brody Aff."), at ¶¶ 7, 12-13.

On November 18, 1998, the Village published and made available for public review and comment a Supplemental Draft Environmental Impact Statement ("Draft EIS"), pursuant to the New York State Environmental Quality Review Act, which requires local governments to prepare an environmental impact statement for any proposed action that may have an effect on the environment. See N.Y. ENVTL. CONSERV. § 8-0109(2) (2007). The Village, in Section 2.3.8 of that Draft EIS, summarized (albeit not entirely correctly) the then-operative sections of New York Eminent Domain Procedure Law relevant to a potential challenge to a taking of property. The Village's summary read as follows:*fn4

"The EDPL requires the condemnor to review the public purpose of a proposed condemnation at a public hearing held at least ten (10) but no more than thirty (30) days prior notice by publication. At the hearing, the condemnor must outline the purpose and proposed location or alternate locations of the public project.

"The hearing may be adjourned without limit from time to time. Within ninety (90) days after the close of the hearing the condemnor must issue its determination and findings, which must minimally specify (a) the public purpose of the project, (b) the location of the project and the reasons for selection of that location and (c) the general impact of the project on the environment and residents of the locality.

"The determination and findings are reviewable by the Appellate Division in an Article 78 proceeding commenced within thirty (30) days after the completion of the publication of the determinations."

Declaration of Brian Belowich, January 9, 2007 ("Belowich. Decl."), at Ex. A. As Brody points out, the Village incorrectly stated that the Determination and Findings are reviewable in an Article 78 proceeding. Rather, the Determination and Findings are exclusively reviewable in a proceeding pursuant to N.Y. E.D.P.L. § 207.

N.Y. E.D.P.L. § 207(B). Aside from that incorrect statement of jurisdiction, the Village more or less stated the applicable procedural requirements of E.D.P.L. § 207 correctly. An E.D.P.L. § 207 proceeding must, in fact, be brought in the Appellate Division. See id. The time limit for such an EDPL proceeding is, in fact, 30 days. See id.

Conversely, however, the period to seek Article 78 review is 120 days, not 30. Also, Article 78 relief is sought in the Supreme Court, not the Appellate Division. N.Y. C.P.L.R. §§ 217, 7804.*fn5

In any case, Brody submitted a letter of comment in response to the Draft EIS, dated January 11, 1999, in which he asked, inter alia, "[D]oes this seizure violate my rights under the state constitution." Brody Aff., Ex. B. In March 1999, the Village published and made available for public review and inspection a Supplemental Final Environmental Impact Statement ("Final EIS"). See Belowich Decl., Exs. B, C. The Final EIS repeated the partially incorrect statements made in Section 2.3.8 of the Draft EIS regarding a challenge to a Determination and Findings under New York eminent domain law. The Final EIS also incorporated by reference the Appendix of the Draft EIS that included verbatim sections of the N.Y.

E.D.P.L. See id. The Final EIS also specifically responded to Brody's comment letter, stating generally that the "redevelopment of a designated urban renewal area is a public purpose," but did not, in that response, address procedures to challenge the taking. See Affidavit of Dana Berliner, December 29, 2006 ("Berliner Aff."), Ex. C at 6-2.

Brody hired the attorney Garrison Corwin to represent him in the environmental review process. Brody Aff. ¶ 9. Corwin reviewed the SFEIS and "three volumes of" the SDEIS. Brody Aff., Ex. A at 5-6. On March 18, 1999, Corwin and Brody attended the Village's public hearing regarding the SFEIS, at which Corwin spoke on Brody's behalf. Brody Aff., Ex. A at 5-8. Brody avers, and the transcript of the hearing appears to bear him out, that at the March 18, 1999 hearing, neither the EDPL, the date of issuance of the determination and findings, nor the attendant 30-day review period was discussed. Brody Aff., Ex. A.

Corwin subsequently sent a one-page letter to Brody on March 19, 1999, outlining his possible legal options regarding the environmental review process. Belowich Decl., Ex. E. Corwin recommended that Brody take "no specific action until we have the actual approval resolution in connection with the [Final EIS]," and that Corwin would meet with the Village's special counsel regarding the urban renewal proceedings to "discuss the situation, generally." Id. Generally, Corwin avers that he did not represent Brody in connection with eminent domain proceedings and did not give him advice regarding New York eminent domain procedures. Berliner Aff., Ex. H.

B. Public Hearings

On May 22, 1999, the Village published notice of a public hearing to be held on June 7, 1999 regarding the public use of the redevelopment project. Brody Aff. Ex. C. The hearing notice stated the time, place, and subject matter of the hearings, and cited to Article 2 of the EDPL (albeit not EDPL § 207 specifically). Id. Brody heard about the June 7, 1999 hearing, attended, and spoke for four minutes. Brody Aff. ¶ 16. Brody generally avers that he thought this hearing was "just an intermediate step" and that "anything that happened would happen much later." Brody Aff. ¶ 21-22. Defendants admit that Brody and the other attendees were not told that the hearing would result in a "determination and findings." Defendant's Response to Plaintiff's Local Rule 56.1 Statement ("Def. Facts"), ¶ 26.

Shortly after the June 7, 1999 hearing, the Village published notice of a second public use hearing, which was held on July 6, 1999. See Brody I, 261 F.3d 288, 290 (2d Cir. 2001). Brody avers that he did not receive notice of this hearing. Brody Aff. ¶ 24. In any event, it is undisputed that Brody did not attend it. Id. Brody's comments at the first hearing were included as part of the overall record of the July 6, 1999 hearing. See Brody III, 434 F.3d 121, 125 (2d Cir. 2005).

C. Publication of Determination and Findings

On July 14, 1999, a public meeting (which the Village avers, and Brody does not contest, was duly noticed) was held with respect to the redevelopment project. See Berliner Aff., Ex. J. At this meeting, the Village adopted its Determination and Findings regarding the project. Berliner Aff., Ex. J; Belowich Decl., Ex. R.

On July 18 and 19, 1999, the Village published in the local newspaper a synopsis of the Determination and Findings. Brody Aff., Ex. G. The synopsis stated the public use of the project, and identified Brody's property by tax block and lot number. Id. The synopsis did not state that its publication commenced the 30-day period to challenge a taking under the EDPL. Id.

It is undisputed that the Village did not send Brody personal notice of the Determination and Findings. Brody Aff. ¶ 26. Brody avers that he did not know the Determination and Findings existed, and would have challenged them if he knew he could have challenged them. Id. at ¶¶ 27-28. Defendants dispute Brody's contentions. These disputes form the crux of this motion.

D. Stanley Perelman Conversation

In late July or early August 1999, Stanley Perelman, a principal of G&S Port Chester LLC, called Brody with respect to his property. Berliner Aff., Ex. F at 17-19. (Perelman and Brody had previously met at Brody's property towards the end of 1998, during which Perelman spoke with Brody about the SDEIS and the public hearings. Berliner Aff., Ex. F at 20-22.) During this conversation in 1999, Perelman averred that Brody made it clear that he "didn't want to fight" and "wanted to come to a mutually agreeable number and settle out and go on with life." Berliner Aff., Ex. F at 34.

Perelman stated that he explained to Brody that "we received approval on July 14" -- indeed, "all of [his] approvals on July 14," and that "we got the finding." Berliner Aff., Ex. F at 34-35. Perelman stated that Brody asked him "have the appeals expired[?]" Id. at 35-36. Perelman responded, "no, and then we talked about not fighting." Id. at 36.*fn6 Perelman, when asked at his deposition to clarify "what appeals," responded, "there are different appeal periods for different approvals. Some are thirty days." Id. at 61. It is not established that Perelman passed this information regarding the thirty-day period on to Brody. Generally, Perelman stated that he "didn't tell [Brody] anything" about eminent domain procedures law. Id. at 35.

Brody, for his part, testified at his deposition that "If [Perelman] had told me in 1999 that the Village had adopted its Determination and Findings, I certainly wouldn't have understood what he meant. [H]e's not from the Village, he's not in a position to make a determination of findings, so if he had said something in conversation, I wouldn't have paid any attention to it." Belowich Decl., Ex. N at 84-86.

In any event, Brody did not challenge the Determination and Findings within the required thirty-day period, thus losing his rights to challenge the condemnation of his property on constitutional or statutory grounds. Brody Aff. ¶ 28; see N.Y. E.D.P.L. § 207.

E. State Court Proceedings

On April 25, 2000, the Village filed a petition in state court pursuant to N.Y.

E.D.P.L. § 402 to acquire title to the redevelopment project area, including Brody's property. Brody III, 434 F.3d at 125. On May 17, 2000, Brody challenged the petition and interposed several affirmative defenses. His defenses related exclusively to compensation. Brody's new counsel, Charles McGroddy, had correctly informed Brody that he had lost the opportunity to challenge the taking on constitutional grounds, because the 30-day window to do so had already closed.*fn7

Eventually, on January 24, 2006, New York state Supreme Court awarded Brody $2.57 million as just compensation for the taking of his property, pursuant to Article 5 of the EDPL. See In the Matter of the Village of Port Chester, No. 006448/00 (N.Y. Sup. Ct. Jan. 26, 2006) (Rosato, J.). Brody has appealed that order. His appeal remains pending. See generally Opinion and Order of March 7, 2007.

F. Federal Court Proceedings

On October 4, 2000, Brody (joined by other Port Chester property owners) commenced a lawsuit in this Court that challenged the Village's taking of his property on constitutional grounds. Brody alleged that the notice of the taking that the Village provided was constitutionally insufficient to satisfy procedural due process. Several years of litigation followed, which is summarized in prior opinions.

On December 5, 2005, the Second Circuit held that the process afforded by the Village to Brody regarding its Determination and Findings was indeed constitutionally inadequate. Brody III, 434 F.3d 121, 123 (2d Cir. 2005). The Second Circuit held that due process required the Village to provide personal notice (such as a letter by mail), where practicable, of the commencement of the exclusive thirty-day challenge period.*fn8

See Brody III, 434 F.3d 121, 128, 132 ("[W]here, as here, a condemnor provides an exclusive procedure for challenging a public use determination, it must also provide notice in accordance with the rule established by Mullane and its progeny.. '[R]easonable notice' under these circumstances must include mention of the commencement of the thirty-day challenge period.)*fn9 It is undisputed that the Village did not provide such personal notice, such as a letter by mail, to Brody of the publication of the Determination and Findings.*fn10 The Second Circuit thus remanded Brody's case to this Court for a determination of whether Brody received "actual notice" of the Determination and Findings, as well as Brody's resultant damages, if any, from any due process violation. Brody III at 124.*fn11

II. STANDARD OF REVIEW

A court will not grant a motion for summary judgment unless it determines that there is no genuine issue of material fact and the undisputed facts are sufficient to warrant judgment as a matter of law. Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed. 2d 265 (1986); Anderson v. Liberty Lobby Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed. 2d 202 (1986). The moving party bears the burden of demonstrating the absence of a material factual question.*fn12 Anderson v. Liberty Lobby, 477 U.S. 242, 247. In determining whether there is a genuine issue of material fact, the Court must resolve all ambiguities, and draw all inferences, against the moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed. 2d 176 (1962) (per curiam); Donahue v. Windsor Locks Bd. of Fire Comm'rs, 834 F.2d 54, 57 (2d Cir. 1987). However, a disputed issue of material fact alone is insufficient to deny a motion for summary judgment; the disputed issue must be "material to the outcome of the litigation," Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986), and must be backed by evidence that would allow "a rational trier of fact to find for the non-moving party." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed. 2d 538 (1986); see also Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520, 523 (2d Cir. 1992).

III. DISCUSSION

Brody seeks partial summary judgment on his claim that his procedural due process rights to notice of the Village's Determination and Findings were violated.*fn13 Due process requires that a deprivation of property be preceded by notice that is "reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action." Brody III at 127, citing Mullane v. Cent. Hanover Bank & Trust, 339 U.S. 306, 314 (1950). As noted, the Second Circuit has found that the notice of the Determination and Findings that the Village afforded to condemnees was constitutionally inadequate. See Brody III at 124. Thus, the remaining salient issue on remand is whether Brody possessed "actual notice." "If a party receives actual notice that apprises it of the pendency of the action and affords an opportunity to respond, the due process clause is not offended." Baker v. Latham Sparrowbush Assocs., 72 F.3d 246, 254 (2d Cir. 1995), citing United States v. One 1987 Jeep Wrangler, 972 F.2d 472, 482 (2d Cir. 1992) (summarizing Mullane and Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 798-800 (1983), as "impliedly holding that actual notice satisfies demands of due process"); see also Lopes v. United States, 862 F. Supp. 1178, 1188 (S.D.N.Y. 1994) (".[W]here there is actual notice there is no due process violation.").*fn14

Because genuine issues of fact remain as to whether Brody possessed "actual notice" of the Determination and Findings, I must deny summary judgment. After addressing the threshold issue of the definition of "actual notice," I will address each genuine issue of fact in turn.

A. Definition of "Actual Notice"

As a threshold matter, the parties dispute the definition of "actual notice" that governs our inquiry on remand. Although genuine issues of fact remain as to "actual notice" under either party's construction of the term, I will explicate relevant principles to guide the parties as we proceed towards trial.

First, Brody argues that "actual notice" is equivalent to "actual knowledge." This is incorrect. "Actual notice" is a legal term of art that refers to "notice given directly to, or received personally by, a party." Black's Law Dictionary 1087 (7th ed. 1999), cited by Dusenbery v. United States, 534 U.S. 161, 170 n.5 (U.S. 2002) (equating "actual notice" with "receipt of notice").*fn15 "Actual knowledge" refers to a subjective state of mind (here, the state of mind of the purported recipient of notice).

Although the two concepts overlap, they are not equivalent. "Actual knowledge" is generally a sufficient, but not necessary, condition for a finding of "actual notice." One who possesses "actual knowledge" of a fact will invariably, as a logical necessity, have received "actual notice" of that fact (although perhaps not from the party charged with the responsibility of providing "notice" in a constitutional sense). See, e.g., GAC Enters. Inc. v. Medaglia, 52 F.3d 451, 455 (2d Cir. 1995) ("where a claimant demonstrated actual knowledge of the seizure of property in an administrative forfeiture proceeding the government's failure to provide published notice." did not violate due process), citing United States v. One 1987 Jeep Wrangler, 972 F.2d 472, 482.

However, one who has been given "actual notice" of a fact may not have "actual knowledge" of that fact. For example, one could be given notice, but deliberately refuse to receive it. See Committee on Grievs. of the United States Dist. Court v. Feinman, 239 F.3d 498, 499 (2d Cir. 2001) (where attorney refused receipt of envelope containing complaint, Court held that "a party's constitutional right to receive actual notice of certain claims against him is not violated when he has himself intentionally and successfully thwarted service of the very notice that he claims not to have received."), citing Cherry v. Heffernan, 182 So. 427, 429 (Fla. 1938) ("Having been returned "refused". it would be ridiculous to assume that [service] was not received.) Or, one could be given notice, but ignore or fail to understand it. See Buzinski v. Brown, 6 Vet. App. 360, 365 (Vet. App. 1994) ("Under [plaintiff's] theory, a lack of knowledge [of foreclosure proceedings] is tantamount to a lack of notice and thus a violation of due process. To the contrary. [t]he constitutionality of a foreclosure procedure depends not on the subjective understanding of the property owner, but on the objective propriety of the procedures used.") Indeed, Defendants argue that an analogous situation happened here when Brody allegedly received notice of the publication of the Determination and Findings and resultant 30-day review period from Perelman and, summarizing Brody's words, "[didn't] pa[y] any attention to it."

Caselaw and statutes make clear that these two concepts of "actual notice" and "actual knowledge," although related, are distinct. For example, the U.S. Bankruptcy Code specifically provides that if a creditor has either "notice or actual knowledge" (emphasis added) of bankruptcy proceedings, such "notice or actual knowledge" may preclude that creditor's objection to a discharge of a debt that the debtor failed to list in his bankruptcy filing.*fn16 See 11 U.S.C.S. § 523 (a)(3)(B); see also Wheeler v. Newton, 168 A.D. 782 (N.Y. App. Div. 1915) (precursor to bankruptcy statute "requires such personal notice of the proceedings, or actual knowledge equivalent to such personal notice, as would be required in any court where it was proposed to deprive a man of his property [under due process of law].")*fn17 Again, although "actual knowledge" may suffice to establish "actual notice," the constitutional inquiry remains "actual notice."

Accordingly, although Brody's "actual knowledge" of the eminent domain proceedings will inform (and if found, in all likelihood conclude) the inquiry of whether he received "actual notice," this Court's inquiry on remand, as the Second Circuit directed, will be Brody's "actual notice."

That said, the parties do not dispute that Brody's "actual notice" must be equivalent to constitutionally sufficient notice for due process to be satisfied. Here, the Second Circuit has held that constitutionally sufficient notice must include notice of the commencement of the exclusive thirty-day period in which to challenge the taking of property. See Brody III at 128-132. Thus, this Court's inquiry on remand will be whether Brody received "actual notice" of these constitutionally sufficient elements of notice articulated by the Second Circuit. As Defendants note, however, "property owners are generally charged with knowledge of the laws relating to property ownership," see Brody III at 132, citing North Laramie Land Co. v. Hoffman, 268 U.S. 276, 283, and "notice is not required to inform its reader of the procedures for challenging the public use determination." Brody III at 132, citing City of West Covina v. Perkins, 525 U.S. 234, 241 (1999).

B. Genuine Issues of Material Fact

With these general principles in mind, I turn to the genuine issues of material fact that remain regarding Brody's "actual notice" of the condemnation proceedings.

1.Perelman Conversation

As a general matter, oral notice can suffice to provide constitutionally sufficient notice, although "oral notice must be equivalent to written notice." Ebbert v. DaimlerChrysler, 319 F.3d 103, 116 (3rd Cir. 2003).

Brody argues that Perelman, in his conversation with Brody subsequent to the publication of the Determination and Findings, but (most likely) prior to the expiration of the 30-day challenge period, did not provide Brody with notice of the commencement of the exclusive thirty-day period in which to challenge the taking of his property. At most, Brody argues, Perelman gave him vague information that "approvals" had been granted on July 14, that a "finding" had been "gotten," and that although Perelman told him that "appeals had not expired," and Perelman himself knew that some of these appeals expired within 30 days, Perelman never specifically told Brody that his opportunity to challenge the taking of his property commenced by publication on July 18, 1999 and ended 30 days later.*fn18

Defendants argue that given the totality of the circumstances of Brody's involvement in the proceedings relating to his property, including Brody's research of eminent domain law, hiring of counsel during the environmental review process, and his counsel's (if not Brody's) review of the Village's SDEIS which included a (procedurally erroneous) mention of the 30-day challenge period,*fn19

Brody possessed, following his conversation with Perelman, "actual knowledge," and thus "actual notice," of the condemnation proceedings. Additionally, Defendants argue that it is entirely plausible that even if Brody did, as he avers, lack "actual knowledge" of the condemnation proceedings, Perelman gave Brody "actual notice" of the publication of the Determination and Findings and resultant 30-day challenge period and Brody "didn't pay any attention" to what Perelman told him. Such "actual notice" would obviate any due process violation here.

Genuine issues of fact remain as to the content of the "actual notice" Perelman provided to Brody during this conversation, and the "actual knowledge" Brody possessed of the eminent domain proceedings at this time, insofar as it bears on the issue of Brody's "actual notice." Additionally, a genuine issue of fact remains as to the exact date of Perelman's conversation with Brody.*fn20 For this reason, I must deny summary judgment to both parties on this issue.*fn21

2. Environmental Review Process

Brody notes, correctly, that even if he possessed "actual knowledge" that a 30-day challenge period existed in the abstract, from his (or his counsel's) involvement in the environmental review process and review of relevant statutes, such "actual knowledge" does not obviate the requirement that he be given notice of the actual commencement of the 30-day challenge period affecting his particular rights.*fn22 See Tioronda, LLC v. New York, 386 F. Supp. 2d 342, 354 n.12 (S.D.N.Y. 2005) ("[A]lthough Defendants may have given Plaintiff a pamphlet outlining, in general terms, the Special Procedure (as well as other indications that its property might be taken), there is nothing to indicate that Defendants gave notice of its actual, final decision to take Plaintiff's property by the Special Procedure."); cf. Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 800 (U.S. 1983) ("a mortgagee's knowledge of delinquency in the payment of taxes is not equivalent to notice that a tax sale is pending."); Mullane, 339 U.S. 306, 318 ("sending [beneficiaries] a copy of the [relevant] statute months and perhaps years in advance" does not substitute for personal notice).*fn23

Additionally, Brody notes that notice of one type of proceeding does not constitute notice of a different, but related, proceeding. See SEC v. Sekhri, 2006 U.S. Dist. LEXIS 53668, at *5 (S.D.N.Y. 2006) (given Defendant's layman status, notice of filing of criminal insider trading charges does not constitute notice of companion SEC civil proceeding).

Defendants do not argue that Brody's involvement in the environmental review process, in and of itself, establishes "actual notice" of the 30-day period to challenge the taking of his property. Rather, Defendants argue that Brody (and his counsel's) involvement in the environmental review process provided "actual knowledge" of the eminent domain procedures, and therefore, after Brody's conversation with Perelman, "actual notice" of the 30-day period to challenge the taking of his property.

Brody is correct in that his (and his counsel's) involvement in the environmental review process does not, in and of itself, establish "actual notice" of the commencement of the 30-day challenge period, pursuant to the Second Circuit's directives on remand. To the extent that Brody's (and his counsel's) involvement in the environmental review process informs Brody's "actual knowledge" and "actual notice" of the commencement of the 30-day challenge period, however, those factual issues will be considered at trial.

IV. CONCLUSION

Because genuine issues of material fact remain as to whether Brody received "actual notice," Brody's motion for partial summary judgment on his procedural due process claim is denied. Trial of the issue will commence on March 19, 2007.

The Clerk of the Court is directed to close this motion and remive it from my docket.

SO ORDERED.

Dated: March 12, 2007


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