Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-02014/USCOURTS-azd-2_09-cv-02014-0/pdf.json

Nature of Suit Code: 450
Nature of Suit: Interstate Commerce
Cause of Action: 15:1601 Truth in Lending

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WO

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

WILLIAM MICHAEL TOMPKINS;

KIMBERLY J. TOMPKINS, husband and

wife, 

Plaintiffs, 

vs.

BANK OF AMERICA NATIONAL

ASSOCIATION; LASALLE BANK,

N.A.; WASHINGTON MUTUAL HOME

LOAN, INC.; JPMORGAN CHASE

INVESTMENT BANKER; ARIZONA

TITLE AGENCY; CITICORP HOME

EQUITY, INC.; CALIFORNIA

RECONVEYANCE COMPANY;

Undisclosed Mortgage Aggregators,

Mortgage Originators, Loan Seller,

Trustee of Pooled Assets, Trustee for

holders of Certificates of Collateralized

Mortgage Obligations, et al., individually,

jointly, or severally, RESPA, 

Defendants. 

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No. CV-09-2014-PHX-GMS

ORDER

Three motions are pending before the Court: (1) a Motion to Remand filed by

Plaintiffs (Dkt. # 15), (2) a Motion to Dismiss or, in the Alternative, for More Definite

Statement filed by CitiMortgage, Inc. (“CitiMortgage”) (Dkt. # 1, Ex. 1) and (3) a Motion

to Dismiss filed by Defendants JPMorgan Chase Bank, N.A. (“Chase”), an acquirer of certain

assets and liabilities of Washington Mutual Bank (“WaMu”) from the Federal Deposit

Case 2:09-cv-02014-GMS Document 25 Filed 01/28/10 Page 1 of 12
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1

 It appears that CitiMortgage refers to Defendant CitiCorp Home Equity, Inc., while

Chase refers to Defendant JPMorgan Chase Investment Banker. Because the parties do not

address the issue of improperly-named parties, the Court need not address it either.

2

 Although the parties have not formally informed the Court of this event, the Court

considers the fact given that the parties do not dispute it.

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Insurance Corporation (“FDIC”) acting as receiver, Bank of America, N.A. (“B of A”),

successor by merger to LaSalle Bank, N.A. (“LaSalle”), and California Reconveyance

Company (“CRC”) (Dkt. # 9).1

 For the following reasons, the Court denies the Motion to

Remand, grants Chase’s Motion to Dismiss in part and denies it in part as moot, and grants

CitiMortgage’s Motion to Dismiss in part and denies it in part as moot.

BACKGROUND

In August 2006, Plaintiffs took out a $1.3 million-loan from WaMu, evidenced by a

promissory note and secured by a deed of trust that listed WaMu as lender and CRC as

trustee. At the time, Defendants (although the Complaint does not specify which

Defendants) did not disclose certain information to Plaintiffs, including Plaintiffs’ likelihood

of default, the possibility of foreclosure and deficiency judgments, WaMu’s intent to retain

ownership and servicing responsibilities of the loan, the loan’s transfer to third parties, and

other general information relating to the lending agreement. At some point, Defendants

transferred the loan into a mortgage-backed securities market without notice. On September

25, 2008, the FDIC became WaMu’s receiver, and Chase ultimately received a large portion

of WaMu’s assets.2

In early 2009, Plaintiffs allege that WaMu made an “unlawful trespass” on Plaintiffs’

property, causing personal property damage and causing Plaintiffs to send a cease and desist

letter to WaMu. (Dkt. # 1, Ex. 1 at 54.) In March 2009, WaMu “failed to take corrective

action” and “proceeded to force the Plaintiff[s] into an alleged default.” (Id.) Although the

Complaint is unclear, it appears that a notice of trustee’s sale was issued in July 2009. (Dkt.

# 12 at 2.) 

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On August 18, 2009, Plaintiffs filed this action in Maricopa County Superior Court.

On August 27, 2009, Plaintiffs served B of A, CRC, and CitiCorp Home Equity, Inc.

(“CitiCorp”), and on September 3, 2009, Plaintiffs served Chase and WaMu. At the time the

Complaint was filed, the FDIC apparently was acting as receiver for WaMu, but neither party

has indicated that the FDIC was named or formally substituted as a party under Federal Rule

of Civil Procedure 25(c). Furthermore, it appears that Plaintiffs have served neither the

Arizona Title Agency nor LaSalle, although B of A apparently is LaSalle’s successor via

merger.

although B of A apparently is LaSalle’s successor via merger, nor the Arizona Title Agency.

On September 25, 2009, Chase, B of A, and CRC removed the case to this Court (Dkt. # 1),

and CitiMortgage consented to the removal on October 20, 2009 (Dkt. # 19, Ex. A). At the

time of removal, several motions for entries of default were pending in state court, but default

had not yet been granted.

DISCUSSION

I. The Court Denies Plaintiff’s 28 U.S.C. Section 1447 Motion to Remand.

“[A]ny civil action brought in a State court of which the district courts of the United

States have original jurisdiction, may be removed by the defendant . . . to the district court

of the United States for the district and division embracing the place where such action is

pending.” 28 U.S.C. § 1441(a). In other words, “[o]nly . . . actions that originally could have

been filed in federal court may be removed to federal court by the defendant.” Caterpillar,

Inc. v. Williams, 482 U.S. 386, 392 (1987). “If at any time before final judgment it appears

that the district court lacks subject matter jurisdiction, the case shall be remanded.”

28 U.S.C. § 1447(c). There is a “strong presumption” against removal, and “[f]ederal

jurisdiction must be rejected if there is any doubt as to the right of removal in the first

instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citing Libhart v. Santa

Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)).

/ / /

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A. The Court Has Federal Question Jurisdiction.

The Court has federal question jurisdiction under 28 U.S.C. § 1331, which provides,

“The district courts shall have original jurisdiction of all civil actions arising under the

Constitution, laws, or treaties of the United States.” The Complaint expressly lists claims

arising under three federal statutes: (1) the Real Estate Settlement Procedures Act

(“RESPA”), 12 U.S.C. §§ 2601, et seq.; (2) the Truth in Lending Act (“TILA”), 15 U.S.C.

§§ 1601, et seq. and Regulation Z, 12 C.F.R. §§ 226, et seq.; and (3) the Fair Credit

Reporting Act (“FCRA”), 15 U.S.C. §§ 1681, et seq. Each of these claims arises under the

laws of the United States.

B. The Removal Petition Was Procedurally Proper.

Aside from the jurisdictional question, Plaintiffs contend removal is inappropriate

because not all Defendants joined in the removal. Generally, under 28 U.S.C. § 1446, “[a]ll

defendants in a state action must join in the petition for removal, except for nominal,

unknown or fraudulently joined parties[,]” and except for those defendants that have not been

properly served. Emrich v. Touche Ross & Co., 846 F.2d 1190, 1193 n. 1 (9th Cir. 1988); see

also Hewitt v. City of Stanton, 798 F.2d 1230, 1232 (9th Cir. 1986) (requiring that all

defendants join in the removal petition); Salveson v. W. States Bankcard Ass’n, 731 F.2d

1423, 1429 (9th Cir. 1984), superceded on other grounds as noted by Ethridge v. Harbor

House Rest., 861 F.2d 1389 (9th Cir. 1988) (noting that “a party not served need not be

joined” in a petition for removal). 

Here, Chase, B of A, and CRC filed the removal petition on September 25, 2009.

CitiMortgage, LaSalle, Arizona Title Agency, and WaMu did not join the petition at that

time. The removal petition, however, was nonetheless proper. CitiMortgage ultimately

consented to the removal. Meanwhile, LaSalle apparently has merged with B of A, and it

does not appear that LaSalle was served, so it was not required to join the removal petition

separately. It also appears that Arizona Title Agency was never served, so it was not

required to join the removal petition. Salveson, 731 F.2d at 1429 (noting that unserved parties

need not join the removal petition).

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Nor was WaMu required to join the petition because WaMu was not a proper party

in the first instance. At the time Plaintiffs initiated this action, WaMu was in receivership

with the FDIC, and Chase ultimately acquired certain assets and liabilities of WaMu from

the FDIC. Because of WaMu’s receivership, 12 U.S.C. § 1821(d) sets out specific

procedures for determining claims involving WaMu. 12 U.S.C. § 1821(d)(5)(A) (discussing

procedures for determining claims). Unless a plaintiff follows these procedures, a district

court lacks jurisdiction to resolve such a case. 12 U.S.C. § 1821(d)(13)(D) (“Except as

otherwise provided . . . no court shall have jurisdiction over – (i) any claim or action for

payment from, or any action seeking a determination of rights with respect to, the assets of

any depository institution for which the [FDIC] has been appointed receiver, including assets

which the [FDIC] may acquire from itself as such receiver; or (ii) any claim relating to any

act or omission of such institution or the [FDIC] as receiver.”); see also New Orleans

Employees’ Ret. Sys. v. FDIC, 2009 WL 1034895 at *2 (W.D. Wash. Apr. 16, 2009) (“The

Ninth Circuit has consistently held that district courts lack jurisdiction if a claimant does not

exhaust [the] administrative process.”) (citing Intercont’l Travel Mktg., Inc. v. FDIC, 45 F.3d

1278, 1283 (9th Cir. 1994) (“Because [the Plaintiff] failed to properly exhaust the statutorily

mandated exhaustion requirements of [12 U.S.C.] § 1821(d), no jurisdiction exists over its

action.”)). 

Similarly, in other cases where plaintiffs have named WaMu as a party, courts have

allowed the remaining defendants to remove to federal court despite WaMu’s absence. See,

e.g., Shnell v. Wash. Mut. Bank, 2009 WL 4646908 at *1 (E.D. Mich. Dec. 8, 2009) (noting

that Chase removed the case because it was the “real party in interest” by virtue of its

acquisition of certain assets and liabilities of WaMu from the FDIC); Camillo v. Wash. Mut.

Bank, F.A., 2009 WL 3614793 at *1 (E.D. Cal. Oct. 27, 2009) (noting that Chase and CRC

removed the case because Chase stated in the notice of removal that it had acquired certain

assets and liabilities of WaMu from the FDIC). Therefore, because it appears that WaMu

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3

 Plaintiffs also suggest that Defendants did not file a copy of the state court records

and proceedings. The Court, however, has received the state court records, and Plaintiffs do

not explain which documents are purportedly missing.

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was improperly sued in this lawsuit, the remaining served parties may remove the case in

WaMu’s absence.3

II. The Chase Defendants’ Motion to Dismiss

To survive dismissal for failure to state a claim pursuant to Federal Rule of Civil

Procedure 12(b)(6), a complaint must contain more than “labels and conclusions” or a

“formulaic recitation of the elements of a cause of action[;]” it must contain factual

allegations sufficient to “raise a right to relief above the speculative level.” Bell Atl. Corp.

v. Twombly, 550 U.S. 544, 555 (2007). While “a complaint need not contain detailed factual

allegations . . . it must plead ‘enough facts to state a claim to relief that is plausible on its

face.’” Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 2008) (quoting

Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual

content that allows the court to draw the reasonable inference that the defendant is liable for

the misconduct alleged.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Twombly,

550 U.S. at 556). The plausibility standard “asks for more than a sheer possibility that a

defendant has acted unlawfully. Where a complaint pleads facts that are ‘merely consistent

with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of

entitlement to relief.’” Id. (quoting Twombly, 550 U.S. at 555) (internal citations omitted).

Similarly, legal conclusions couched as factual allegations are not given a presumption of

truthfulness, and “conclusory allegations of law and unwarranted inferences are not sufficient

to defeat a motion to dismiss.” Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). 

Furthermore, “[a]lthough [the Court] construe[s] pleadings liberally in their favor, pro

se litigants are bound by the rules of procedure. Ghazali v. Moran, 46 F.3d 52, 54 (citing

King v. Atiyeh, 814 F.2d 565, 567 (9th Cir. 1986). Even “a liberal interpretation of a . . .

complaint may not supply [the] essential elements of [a] claim that were not initially pled.”

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4

 The Court notes this is an alternative holding even though Defendants do not raise

this argument.

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Bruns v. Nat’l Credit Union Admin., 122 F.3d 1251, 1257 (9th Cir. 1997) (internal quotations

omitted).

A. RESPA

The Complaint cites two portions of RESPA, only one of which is discussed in the

actual claim for relief. Plaintiffs contend that “[i]n violation of 12 [U.S.C. § 2607], and in

connection with the mortgage loan to plaintiff[s][,] Defendants accepted charges for the

rendering of real estate which were in fact for other than services actually performed.” (Dkt.

# 1, Ex. 1 at 63.) This statement is nothing more than a “legal conclusion” combined with

a “recitation of [some of the] elements of a cause of action,” neither of which is sufficient to

survive dismissal. See Twombly, 550 U.S. at 555. The allegation refers generally to

“Defendants,” without explaining what actions each Defendant took. The Complaint does

not explain what charges were accepted or the circumstances of those alleged charges. This

is especially relevant because Section 2607 lists multiple types of prohibited activities, such

as business referrals and splitting charges. The facts provided fail to put Defendants or the

Court on notice of Plaintiffs’ claims and fail to raise a “reasonable inference” that Defendants

are liable. See Iqbal, 129 S. Ct. at 1949.

In addition to Section 2607, another portion of the Complaint indicates that WaMu

transferred a loan in violation of 12 U.S.C. § 2604. This claim fails for several reasons.

First, as discussed above, WaMu is not a valid party to this lawsuit. Even so, it is legally and

factually unclear whether Plaintiffs intended to raise a Section 2604 claim at all, as no

supporting facts for such a claim are listed in the portion of the Complaint listing the RESPA

claim. Additionally, Plaintiffs’ claims would fail because there is no private right of action

under Section 2604.4 See 12 U.S.C. § 2614 (creating rights of action only for sections 2605,

2607, and 2608); see also Collins v. FMHA-USDA, 105 F.3d 1366, 1367–68 (11th Cir. 1997)

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(finding no implied right of action for Section 2604); Bloom v. Martin, 865 F. Supp. 1377,

1385 (N.D. Cal. 1994) (same). Accordingly, the Court dismisses the RESPA claim.

B. TILA

Plaintiffs’ TILA cause of action is one sentence, stating, “Defendants failed to provide

the required disclosures as stipulated in TILA (Regulation Z) 226.17 and 226.18(a)(b)

Subpart ‘C’.” (Dkt. # 1, Ex. 1 at 64.) This is merely a legal conclusion that does not inform

anyone of facts explaining which Defendants failed to make which disclosures. See Iqbal,

129 S. Ct. at 1949; Twombly, 550 U.S. at 555. Another part of the Complaint mentions that

“Defendants . . . failed to reveal the true sources of the funds for the alleged loan transaction,

further preventing Plaintiff[s]’ three day right of rescission under [12 C.F.R. § 226.15]

because the real lender has not been revealed.” (Dkt. # 1, Ex. 1 at 52.) This statement

likewise omits too much factual detail, namely an explanation of which Defendants failed

to reveal which information and how that nondisclosure would prevent Plaintiffs from

seeking rescission within three days.

Furthermore, the TILA claim fails because Plaintiffs have not pled facts showing that

the Defendants are “creditors” under TILA and only “creditors” are subject to TILA

disclosure requirements. See, e.g., 15 U.S.C. § 1635(a) (“The creditor shall clearly and

conspicuously disclose . . . the rights of the obligor . . . . The creditor shall also provide . . .

appropriate forms for the obligor to exercise his right to rescind . . . .”); 12 C.F.R. §

226.15(b) (“[A] creditor shall deliver two copies of the notice of the right to rescind.”); 12

C.F.R. § 226.17(a)(1) (“The creditor shall make the disclosures required . . . .”); 12 C.F.R.

§ 226.18 (“[T]he creditor shall disclose the following information . . . .”). Section 1602(f)

defines a “creditor” as:

a person who both (1) regularly extends, whether in connection with loans,

sales of property or services, or otherwise, consumer credit which is payable

by agreement in more than four installments or for which the payment of a

finance charge is or may be required, and (2) is the person to whom the debt

arising from the consumer credit transaction is initially payable on the face of

the evidence of indebtedness or, if there is no such evidence of indebtedness,

by agreement.”

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15 U.S.C. § 1602(f). This requires both that the defendant regularly extend consumer credit

and be the person to whom the debt is initially payable on the face of the evidence or by

agreement. Cetto v. LaSalle Bank Nat’l Ass’n, 518 F.3d 263, 269 (4th Cir. 2008). The TILA

section of the Complaint, however, does not allege that any of the Defendants are creditors,

nor does it allege facts showing why any of the Defendants regularly extend consumer credit

and are owed payments on the face of the lending agreement. Accordingly, the Court

dismisses the TILA claim.

C. FCRA

Plaintiffs contend “Defendants” provided “negative information” about Plaintiffs’

credit to various credit reporting agencies. Plaintiffs do not specify which section of FCRA

applies, but it appears that Plaintiffs intend to invoke 15 U.S.C. § 1681s-2 regarding

furnishers’ responsibilities in reporting to consumer reporting agencies. A private right of

action, however, exists only for a violation of “reinvestigation” procedures under 15 U.S.C.

§ 1681s-2(b), but not for improper initial reporting to credit agencies under Section 1681s2(a). See Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1154 (9th Cir. 2009) (“§

1681s-2[c] limits [any] private right of action to claims arising under [§ 1681s-2(b)], the

duties triggered upon notice of a dispute from a [credit reporting agency].”); Nelson v. Chase

Manhattan Mortgage Corp., 282 F.3d 1057, 1059 (9th Cir. 2002) (discussing the lack of a

private right of action under Section 1681s-2(a)). Section 1681s-2(b) “requires a furnisher

of credit information to conduct an investigation ‘[a]fter receiving notice pursuant to section

1681i(a)(2) . . . of a dispute’ regarding the accuracy of information provided to a consumer

reporting agency.” Aklagi v. Nationscredit Fin., 196 F. Supp.2d 1186, 1193 (D. Kan. 2002)

(citing 15 U.S.C. § 1681s-2, § 1681i(a)(2)) (emphasis omitted). In other words, no duty

exists until “after the furnisher receives notice of the dispute from a consumer reporting

agency, not just the consumer.” Id. In this case, Plaintiffs not only have failed to specify

which Defendants disclosed credit information and to which credit reporting agencies, but

also Plaintiffs do not allege that Defendants are furnishers who received notice of a dispute

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from a consumer reporting agency. The FCRA claim, therefore, lacks factual support to

survive dismissal. 

III. CitiMortgage’s Motion to Dismiss

The Complaint mentions CitiMortgage in only one paragraph, stating that

“[CitiMortgage] is named as a separate defendant in that it hold[s] a second Deed of Trust

on the disputed property.” (Dkt. # 1, Ex. 1 at 57.) At least as it relates to Plaintiffs’ RESPA,

TILA, and FCRA claims, it is unclear how this allegation pleads any valid claims. The

Complaint generally refers to “Defendants” in all allegations, but this general allegation is

insufficient to put each Defendant on notice of the particular claims against it. See Jackson

v. Nelson, 405 F.2d 872, 873 (9th Cir. 1968) (affirming dismissal where the complaint did

not specify which defendants took which actions); Allied Steel & Tractor Prods., Inc. v. First

Nat’l Bank of N.Y., 54 F.R.D. 256, 260 (N.D. Ohio 1971) (discussing that even under

“liberalized pleading requirements[,]” “merely identifying a party as a defendant without

alleging more” violates Federal Rule of Civil Procedure 8). Nor is it clear how CitiMortgage,

merely as the alleged holder of a second deed of trust, would necessarily be liable for any of

the asserted RESPA, TILA, or FCRA claims. For example, Plaintiffs do not plead facts

explaining why CitiMortgage accepted charges for rendering of real estate in violation of

RESPA, what, if any, facts CitiMortgage failed to disclose in violation of TILA, or what, if

any, credit information CitiMortgage improperly disclosed.

Plaintiffs’ responses are inapposite. Plaintiffs discuss Federal Rules of Civil

Procedure 18 and 20, but those rules relate to joinder of claims and parties, not to whether

the Complaint has stated a claim upon which relief may be granted under Federal Rules of

Civil Procedure 8(a) and 12(b)(6). Plaintiffs also suggest that they may respond more fully

once discovery is completed, but Plaintiffs must at least plead facts supporting a claim in the

Complaint, even though Plaintiffs are not yet required to support these claims with evidence.

Therefore, the Court dismisses all federal claims against CitiMortgage without prejudice.

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IV. The Court Declines To Exercise Pendent Jurisdiction.

As the Court discusses supra, Plaintiffs’ federal claims do not survive dismissal under

Federal Rule of Civil Procedure 12(b)(6), leaving only state claims for resolution. “[A]

district court has discretion to remand to state court a removed case involving pendent claims

upon a proper determination that retaining jurisdiction over the case would be inappropriate.”

Carnegie-Mellon University v. Cohill, 484 U.S. 343, 351 (1988). In this determination,

courts consider “economy, convenience, fairness, and comity.” Id. Only in the “unusual

case” should federal courts retain jurisdiction over the state law claims. Gini v. Las Vegas

Metro. Police Dept., 40 F.3d 1041, 1046 (9th Cir. 1994). This is not an unusual case, and

it is appropriate to remand the state law claims. In the interest of comity, the Court remands

to allow state courts to decide state law. Moreover, economy, convenience, and fairness all

favor remand because this case is only at the motion-to-dismiss stage, so presumably the

parties have not yet conducted substantial discovery. In addition, no court has become so

intimately involved with the case that remand would be inefficient. Therefore,

IT IS HEREBY ORDERED that Plaintiffs’ 28 U.S.C. Section 1447 Motion to

Remand (Dkt. # 15) is DENIED. 

IT IS FURTHER ORDERED that the Chase Defendants’ Motion to Dismiss (Dkt.

# 9) is GRANTED WITHOUT PREJUDICE with respect to Counts I–III of the

Complaint.

IT IS FURTHER ORDERED that CitiMortgage’s Motion to Dismiss (Dkt. # 1, Ex.

1) is GRANTED WITHOUT PREJUDICE with respect to Counts I–III of the Complaint.

Plaintiffs may file an amended complaint on or before February 26, 2010.

/ / /

/ / /

/ / /

/ / /

/ / /

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IT IS FURTHER ORDERED that If Plaintiffs do not file an Amended Complaint

by February 26, 2010, the Clerk of the Court is directed to remand the state law claims (all

claims other than Counts I–III) to the Maricopa County Superior Court without further

notice.

DATED this 28th day of January, 2010.

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