Court Opinion

ID: 4395712
Source: CourtListenerOpinion
Date Created: 2019-05-10 12:01:32.51312+00
Date Added: 2024-06-11T14:23:59.063184
License: Public Domain

In the United States Court of Federal Claims
                                           No. 18-1255C
                                        Filed: May 9, 2019
                                     NOT FOR PUBLICATION

                                              )
 ASHLEY DAWN BRACKEN,                         )
                                              )
                        Plaintiff,            )
                                              )       RCFC 12(b)(1); Subject-Matter
 v.                                           )       Jurisdiction; RCFC 12(b)(6); Failure To
                                              )       State A Claim; Veterans Benefits; Illegal
 THE UNITED STATES,                           )       Exaction.
                                              )
                        Defendant.            )
                                              )

       Michael Stanski, Attorney of Record, Jacksonville, FL, for plaintiff.

      Jana Moses, Trial Attorney, Steven J. Gillingham, Assistant Director, Robert E.
Kirschman, Jr., Director, Joseph H. Hunt, Assistant Attorney General, Commercial Litigation
Branch, Civil Division, United States Department of Justice, Washington, DC, for defendant.

                         MEMORANDUM OPINION AND ORDER

GRIGGSBY, Judge

I.     INTRODUCTION

       Plaintiff, Ashley Dawn Bracken, brought this action seeking, among other things, to
recover certain funds that she alleges have been wrongfully recouped by the United States
Department of Veterans Affairs (the “VA”) pursuant to the Post-9/11 Veterans Educational
Assistance Act of 2008, 38 U.S.C. §§ 3301-3327 (the “Post-9/11 GI Bill”). See generally
Compl. The government has moved to dismiss this matter for lack of subject-matter jurisdiction
and for failure to state a claim upon which relief can be granted, pursuant to Rules 12(b)(1) and
(6) of the Rules of the United States Court of Federal Claims (“RCFC”). See generally Def.
Mot. For the reasons set forth below, the Court GRANTS the government’s motion to dismiss
and DISMISSES the complaint.
II.     FACTUAL AND PROCEDURAL BACKGROUND1

        A.      Factual Background

        Plaintiff, Ashley Dawn Bracken, is the ex-spouse of a former servicemember in the
United States Army Reserves (the “Army Reserves”) and she is the recipient of certain
educational assistance benefits provided by the VA pursuant to the Post-9/11 GI Bill. Compl. at
¶¶ 6-10; see also 38 U.S.C. §§ 3311, 3319. In this action, plaintiff alleges that the VA
wrongfully terminated and sought to recoup these benefits after her former spouse separated
from the Army Reserves. See generally Compl. As relief, plaintiff seeks, among other things:
(1) to “recover monies taken” by the VA; (2) the “forgiveness of monies owed” to the VA; (3)
the payment of certain funds that plaintiff owes to the university that she attended; and (4)
certain declaratory relief. Id. at ¶¶ 28-42, Prayer for Relief.

                1.      The Post-9/11 GI Bill

        As background, in 2008, Congress enacted the Post-9/11 Veterans Educational
Assistance Act to provide educational assistance for certain veterans of the United States Armed
Forces who served in the military on or after September 11, 2001. See generally 38 U.S.C. §§
3301-3327. Pursuant to the Post-9/11 GI Bill, eligible servicemembers may receive educational
assistance benefits if the servicemember satisfies certain conditions, including completing a
period of active duty service, followed by either continued active duty service, or a qualifying
discharge or release. See 38 U.S.C. § 3311(a)-(c).

        Specifically relevant to this case, an eligible servicemember may transfer a portion of the
educational assistance benefits to a spouse or child. 38 U.S.C. § 3319(a), (c). In this regard, the
Post-9/11 GI Bill requires that a servicemember enter “an agreement to serve at least four more
years as a member of the uniformed services” to transfer educational assistance benefits. 38
U.S.C. § 3319(b). The bill also provides that the amount of any transferred educational
assistance benefits that is used by a spouse or child shall be treated as an overpayment, should a
servicemember fail to complete the agreed-to service. 38 U.S.C. § 3319(i)(2). In addition, the
Post-9/11 GI Bill provides that a servicemember and the servicemember’s spouse or child are

1
  The facts recited in this Memorandum Opinion and Order are taken from the complaint (“Compl.”) and
the government’s motion to dismiss (“Def. Mot.”). Except where otherwise noted, all facts recited herein
are undisputed.

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considered jointly and severally liable to the government for any such overpayment. 38 U.S.C. §
3319(i)(1).

               2.      The Payment And Recoupment Of Plaintiff’s Benefits

       Plaintiff alleges in the complaint that her ex-spouse, Christopher Bazzle, transferred some
of his educational assistance benefits to plaintiff during their marriage. Compl. at ¶ 9. During
the period 2015 to 2017, plaintiff attended classes at Keiser University and the VA provided her
with educational assistance benefits, including funds for tuition, a housing allowance, and the
purchase of books and supplies. Id. at ¶¶ 11, 15.

       Although Mr. Bazzle incurred a four-year service obligation under the Post-9/11 GI Bill
when he transferred educational assistance benefits to plaintiff, he did not complete this service
obligation due to his involuntary discharge from the Army Reserves in September 2016. Id. at
¶¶ 12-13. And so, the VA has sought to recoup the educational assistance benefits provided to
plaintiff. Id. at ¶¶ 18-19, 21-26.

       B.      Procedural Background

       Plaintiff commenced this action on August 21, 2018. See generally id. On December 21,
2018, the government filed a motion to dismiss this matter pursuant to RCFC 12(b)(1) and (6).
See generally Def. Mot.

       On February 4, 2019, plaintiff filed a response and opposition to the government’s
motion to dismiss. See generally Pl. Resp. On February 19, 2019, the government filed a reply
in support of its motion to dismiss. See generally Def. Reply.

       This matter having been fully briefed, the Court resolves the pending motion to dismiss.

III.   LEGAL STANDARDS

       A.      Jurisdiction And RCFC 12(b)(1)

       When deciding a motion to dismiss upon the ground that the Court does not possess
subject-matter jurisdiction pursuant to RCFC 12(b)(1), this Court must assume that all
undisputed facts alleged in the complaint are true and must draw all reasonable inferences in the
non-movant’s favor. Erickson v. Pardus, 551 U.S. 89, 94 (2007); RCFC 12(b)(1). But, plaintiff
bears the burden of establishing subject-matter jurisdiction and she must do so by a

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preponderance of the evidence. Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748
(Fed. Cir. 1988). Should the Court determine that “it lacks jurisdiction over the subject matter, it
must dismiss the claim.” Matthews v. United States, 72 Fed. Cl. 274, 278 (2006).

       In this regard, the United States Court of Federal Claims is a court of limited jurisdiction
and “possess[es] only that power authorized by Constitution and statute. . . .” Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). The Tucker Act grants the Court
jurisdiction over:

       [A]ny claim against the United States founded either upon the Constitution, or any
       Act of Congress or any regulation of an executive department, or upon any express
       or implied contract with the United States, or for liquidated or unliquidated
       damages in cases not sounding in tort.

28 U.S.C. § 1491(a)(1). The Tucker Act is, however, “a jurisdictional statute; it does not create
any substantive right enforceable against the United States for money damages. . . . [T]he Act
merely confers jurisdiction upon [the United States Court of Federal Claims] whenever the
substantive right exists.” United States v. Testan, 424 U.S. 392, 398 (1976) (alterations original).
And so, to pursue a substantive right against the United States under the Tucker Act, a plaintiff
must identify and plead a money-mandating constitutional provision, statute, or regulation; an
express or implied contract with the United States; or an illegal exaction of money by the United
States. Cabral v. United States, 317 F. App’x 979, 981 (Fed. Cir. 2008) (citing Fisher v. United
States, 402 F.3d 1167, 1172 (Fed. Cir. 2005)); see also Martinez v. United States, 333 F.3d 1295,
1302 (Fed. Cir. 2003). “[A] statute or regulation is money-mandating for jurisdictional purposes
if it ‘can fairly be interpreted as mandating compensation for damages sustained as a result of the
breach of the duties [it] impose[s].’” Fisher, 402 F.3d at 1173 (quoting United States v. Mitchell,
463 U.S. 206, 217 (1983)).

       Specifically relevant to this dispute, this Court has recognized that “[c]laims for veterans’
benefits are not within the jurisdiction of the Court of Federal Claims.” See, e.g., Berkowitz v.
United States, No. 07-328C, 2014 WL 4387851, at *4 (Fed. Cl. Sept. 4, 2014) (citing Van Allen
v. United States, 66 Fed. Cl. 294, 296 (2005)). And so, “[d]isputes concerning veterans’ benefits
are handled internally by the VA” at the Board of Veterans Appeals, with appeal to the United
States Court of Appeals for Veterans Claims. Berkowitz, 2014 WL 4387851, at *4; see 38
U.S.C. §§ 7105, 7252.

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       B.      RCFC 12(b)(6)

       When deciding a motion to dismiss based upon failure to state a claim upon which relief
can be granted, pursuant to RCFC 12(b)(6), this Court similarly assumes that all undisputed facts
alleged in the complaint are true and must draw all reasonable inferences in the non-movant’s
favor. See Call Henry, Inc. v. United States, 855 F.3d 1348, 1354 (Fed. Cir. 2017) (quoting
Bell/Heery v. United States, 739 F.3d 1324, 1330 (Fed. Cir. 2014)). And so, to survive a motion
to dismiss under RCFC 12(b)(6), a complaint must contain facts sufficient to “state a claim to
relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see
also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

       When the complaint fails to “state a claim to relief that is plausible on its face,” the Court
must dismiss the complaint. Iqbal, 556 U.S. at 678 (citation omitted). On the other hand,
“[w]hen there are well-pleaded factual allegations, a court should assume their veracity,” and
determine whether it is plausible, based upon these facts, to find against the defendant. Id. at
678-79 (“A claim has facial plausibility when the pleaded factual content allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.”).

       C.      Illegal Exaction

       This Court possesses subject-matter jurisdiction to consider illegal exaction claims when
the alleged exaction “is based upon an asserted statutory power.” Norman v. United States, 429
F.3d 1081, 1095 (Fed. Cir. 2005) (citation omitted). The United States Court of Appeals for the
Federal Circuit has recognized that an illegal exaction occurs when a “‘plaintiff has paid money
over to the Government, directly or in effect, and seeks return of all or part of that sum’ that ‘was
improperly paid, exacted, or taken from the claimant in contravention of the Constitution, a
statute, or a regulation.’” Aerolineas Argentinas v. United States, 77 F.3d 1564, 1572-73 (Fed.
Cir. 1996) (quoting Eastport S.S. Corp. v. United States, 372 F.2d 1002, 1007 (Ct. Cl. 1967)).

       To assert a valid illegal exaction claim, a plaintiff must show that: (1) money was taken
by the government and (2) the exaction violated a provision of the Constitution, a statute, or a
regulation. Andres v. United States, No. 03-2654, 2005 WL 6112616, at *2 (Fed. Cl. July 28,
2005). In addition, a plaintiff must show that the statute or provision causing the exaction
provides, either expressly or by necessary implication, that the remedy for its violation is the

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return of money unlawfully exacted. Norman, 429 F.3d at 1095 (quoting Cyprus Amax Coal Co.
v. United States, 205 F.3d 1369, 1373 (Fed. Cir. 2000)).

       In this regard, the Federal Circuit has held that money may be exacted either “directly or
in effect.” Aerolineas Argentinas, 77 F.3d at 1572-73. An “in effect” exaction generally applies
in two situations. First, when the government requires a private party to pay money to a third,
non-governmental party. Andres, 2005 WL 6112616, at *3; see also Aerolineas Argentinas, 77
F.3d at 1569-70; Piszel v. United States, 121 Fed. Cl. 793, 801-02, aff’d, 833 F.3d 1366 (Fed.
Cir. 2016). Second, when the government takes and sells private property, thereby receiving
money and preventing the return of the property. Andres, 2005 WL 6112616, at *3; see also
Bowman v. United States, 35 Fed. Cl. 397, 401 (1996). And so, an illegal exaction occurs when
“the Government has the citizen’s money in its pocket.” Clapp v. United States, 127 Ct. Cl. 505,
512 (1954); Piszel, 121 Fed. Cl. at 802 (quoting Andres, 2005 WL 6112616, at *3).

IV.    LEGAL ANALYSIS

       The government has moved to dismiss this matter for lack of subject-matter jurisdiction
and for failure to state a claim upon which relief can be granted because: (1) plaintiff’s
challenge of the VA’s decision to terminate her educational assistance benefits is beyond the
purview of the Court’s jurisdiction and (2) plaintiff cannot demonstrate that she paid money to
the government, either directly or in effect, rendering her illegal exaction claim not actionable.
Def. Mot. at 3-4; Def. Reply at 1; see RCFC 12(b)(1) and (6). In her response and opposition to
the government’s motion to dismiss, plaintiff counters that the Court should not dismiss this case
because she has alleged a plausible illegal exaction claim in the complaint. Pl. Resp. at 6.

       For the reasons discussed below, a careful reading of the complaint shows that the Court
does not possess subject-matter jurisdiction to consider plaintiff’s challenge of the termination
and recoupment of her educational assistance benefits and that plaintiff fails to state a plausible
illegal exaction claim in the complaint. And so, the Court GRANTS the government’s motion to
dismiss and DISMISSES the complaint. RCFC 12(b)(1) and (6).

       A.      The Court May Not Consider Plaintiff’s Veterans’ Benefits Claims

       As an initial matter, the Court may not consider plaintiff’s challenge of the VA’s decision
to terminate and recoup her educational assistance benefits, because this claim should be

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resolved internally within the VA. In the complaint, plaintiff alleges that she seeks to “recover
monies for wrongful recoupment of Post-9/11 GI Bill education benefits” and that 38 U.S.C. §
3311 is the money-mandating statute that establishes jurisdiction under the Tucker Act and
“provides entitlement to recover pay and allowances for wrongfully terminated education
benefits.” Compl. at page 1, ¶¶ 29, 33, 37, 41. Plaintiff’s jurisdictional argument is flawed for
two reasons.

        First, it is well-established that this Court does not possess subject-matter jurisdiction to
consider plaintiff’s claim related to the termination and recoupment of her educational assistance
benefits, because her challenge of the termination and recoupment of these veterans’ benefits
falls within the sole purview of the VA. See Berkowitz v. United States, No. 07-328C, 2014 WL
4387851, at *4 (Fed. Cl. Sept. 4, 2014) (citing Van Allen v. United States, 66 Fed. Cl. 294, 296
(2005)); see also 38 U.S.C. §§ 7105, 7252. This Court has held that “[d]isputes concerning
veterans’ benefits are handled internally by the VA” at the Board of Veterans Appeals, with
appeal to the United States Court of Appeals for Veterans Claims. Berkowitz, 2014 WL
4387851, at *4; see 38 U.S.C. §§ 7105, 7252. And so, to the extent that plaintiff seeks to
challenge the VA’s decision to terminate and recoup her educational assistance benefits, plaintiff
must pursue that claim before the VA.2 See Berkowitz, 2014 WL 4387851, at *4; see also RCFC
12(b)(1).

        The government also persuasively argues that plaintiff cannot rely upon 38 U.S.C. § 3311
to provide the money-mandating source of law to establish jurisdiction to pursue her claim under
the Tucker Act. Def. Mot. at 3-4; see also Cabral v. United States, 317 F. App’x 979, 981 (Fed.
Cir. 2008) (citing Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005)). In the
complaint, plaintiff alleges that 38 U.S.C. § 3311 “provides entitlement to recover pay and
allowances for wrongfully terminated education benefits.” Compl. at ¶¶ 29, 33, 37, 41. But, to
establish jurisdiction under the Tucker Act, plaintiff must show that this statute “can fairly be
interpreted as mandating compensation for damages sustained as a result of the breach of the

2
 Plaintiff argues in her response and opposition to the government’s motion to dismiss that she “does not
challenge [the] VA’s decision to ‘terminate [her] education benefits.’” Pl. Resp. at 5. But, the complaint
makes clear that plaintiff seeks to recover monies from the government “for wrongfully terminated
education benefits.” Compl. at ¶¶ 29, 33, 37, 41.

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duties [that it] impose[s].” Fisher, 402 F.3d at 1173 (quoting United States v. Mitchell, 463 U.S.
206, 217 (1983)).

          Plaintiffs make no such showing in this case. Indeed, a reading of Section 3311 makes
clear that this statute cannot be fairly interpreted as mandating compensation for a breach of any
duties that the statute may impose, because Section 3311 simply sets forth the criteria for
entitlement to receive educational assistance benefits from the VA.3 See generally 38 U.S.C. §
3311. Given this, plaintiff’s reliance upon Section 3311 to establish jurisdiction in this case is
misplaced and the Court must dismiss plaintiff’s challenge of the VA’s decisions to terminate
and recoup her educational assistance benefits. RCFC 12(b)(1).

          B.       Plaintiff Fails To Allege A Plausible Illegal Exaction Claim

          The Court must also dismiss plaintiff’s illegal exaction claim because plaintiff fails to
state a plausible claim in the complaint. In her response and opposition to the government’s
motion to dismiss, plaintiff argues that the Court should not dismiss this case because she is
challenging the VA’s decision to recoup her educational assistance benefits and this claim “falls
well into the category of ‘illegal exaction’ cases heard by this Court.”4 Pl. Resp. at 5. A careful
reading of the complaint shows, however, that plaintiff does not state a plausible illegal exaction
claim in the complaint.

          The Federal Circuit has long recognized that an illegal exaction occurs when a “‘plaintiff
has paid money over to the Government, [either] directly or in effect, and seeks return of all or
part of that sum’ that ‘was improperly paid, exacted, or taken from the claimant in contravention
of the Constitution, a statute, or a regulation.’” Aerolineas Argentinas v. United States, 77 F.3d
1564, 1572-73 (Fed. Cir. 1996) (quoting Eastport S.S. Corp. v. United States, 372 F.2d 1002,
1007 (Ct. Cl. 1967)). And so, to assert a valid illegal exaction claim in this case, plaintiff must

3
    Section 3311 provides, in relevant part, that:

          (a) Entitlement. — Subject to subsections (d) and (e), each individual described in
          subsection (b) is entitled to educational assistance under this chapter. . . .

38 U.S.C. § 3311(a).

4
 Plaintiff argues that the VA engaged in an illegal exaction because the agency “demanded money and
obtained money from [plaintiff].” Pl. Resp. at 6.

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show that: (1) money was taken by the VA and (2) the exaction violated a provision of the
Constitution, a statute, or a regulation. Andres v. United States, No. 03-2654, 2005 WL
6112616, at *2 (Fed. Cl. July 28, 2005). In addition, plaintiff must also show that the statute or
provision causing the exaction provides, either expressly or by necessary implication, that the
remedy for its violation is the return of money unlawfully exacted. Norman v. United States, 429
F.3d 1081, 1095 (Fed. Cir. 2005) (quoting Cyprus Amax Coal Co. v. United States, 205 F.3d
1369, 1373 (Fed. Cir. 2000)). Again, plaintiff makes no such showing in this case.

        A careful reading of the complaint makes clear that the factual allegations in the
complaint establish that the VA has sought to recoup plaintiff’s educational assistance benefits in
accordance with the requirements of the Post-9/11 GI Bill. The Post-9/11 GI Bill conditions the
receipt and ability to transfer educational assistance benefits upon a servicemember’s
commitment to, among other things, enter “an agreement to serve at least four more years as a
member of the uniformed services.” 38 U.S.C. § 3319(b)-(c); Def. Mot. at 1; Compl. at ¶ 10.
This bill also requires that the amount of any transferred educational assistance benefits be
treated as an overpayment, should the servicemember fail to complete the agreed-to service. 38
U.S.C. § 3319(i)(2). In addition, the Post-9/11 GI Bill makes clear that a servicemember—and a
spouse or child who receives educational assistance benefits—are jointly and severally liable to
the government for the overpayment of these benefits. 38 U.S.C. § 3319(i)(1); see also 38
U.S.C. § 3685(a) (“[T]he amount of such overpayment shall constitute a liability of [the] veteran
or eligible person to the United States.”); 31 C.F.R. § 902.4(a) (“[A]gencies should pursue
collection activity against all debtors, as appropriate.”).

        Plaintiff acknowledges in the complaint that her ex-spouse “incurred a service obligation
of four (4) years” under the Post-9/11 GI Bill and that he “did not . . . satisfy his service
obligation for spousal transfer of Post-9/11 GI Bill education benefits.” Compl. at ¶¶ 10, 13.
Under such circumstances, the Post-9/11 GI Bill clearly provides that the VA may treat plaintiff
and her ex-spouse as jointly and severally liable to the government for the return of these funds.
38 U.S.C. § 3319(i)(1). Given this, the allegations in the complaint make clear that plaintiff has
not—and cannot—show that the alleged exaction in this case violates the Post-9/11 GI Bill or
any other law. Andres, 2005 WL 6112616, at *2. And so, the complaint fails to plausibly state
an illegal exaction claim.

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        The Court is also not persuaded by plaintiff’s argument that dismissal of this case is
unwarranted because the VA failed to counsel her ex-spouse about his four-year service
obligation under the Post-9/11 GI Bill. Pl. Resp. at 6-7; see also Compl. at ¶ 20. Even if true,
this factual allegation is insufficient to show that the remedy for the alleged violation of the Post-
9/11 GI Bill would be the return of money unlawfully exacted from plaintiff.5 Norman, 429 F.3d
at 1095 (quoting Cyprus Amax Coal Co., 205 F.3d at 1373).

        Indeed, as the government correctly observes in its reply brief, “[S]ection 3319(i) [of the
Post-9/11 GI Bill] authorizes the United States to seek recoupment of overpayment of
[educational assistance benefits], including overpayments due to the military member’s failure to
complete his service obligation, from either the military member or their dependent.” Def. Reply
at 3; see 38 U.S.C. § 3319(i). Given this, plaintiff cannot show that the VA’s recoupment of her
benefits violated the Post-9/11 GI Bill to pursue an illegal exaction claim in this case. Andres,
2005 WL 6112616, at *2; see RCFC 12(b)(6).

V.      CONCLUSION

        In sum, the most generous reading of the complaint makes clear that the Court does not
possess subject-matter jurisdiction to consider plaintiff’s veterans’ benefits claim and that
plaintiff has not plausibly alleged an illegal exaction claim in the complaint. And so, for the
foregoing reasons, the Court GRANTS the government’s motion to dismiss and DISMISSES
the complaint.

        The Clerk shall enter judgment accordingly.

5
  Plaintiff’s reliance upon the United States District Court for the Eastern District of Virginia’s decision in
Thompson v. United States, 119 F. Supp. 3d 462 (E.D. Va. 2015), is also misplaced. Pl. Resp. at 6-7. In
Thompson, the district court held that a servicemember could make an untimely transfer of educational
assistance benefits, because the VA failed to counsel him about the timing requirement for transferring
such benefits. Thompson, 119 F. Supp. 3d at 470-71. But, Thompson does not address the VA’s
authority to recoup educational assistance benefits, or illegal exaction claims. See generally id.
Plaintiff’s argument that the Court should exercise its equitable powers to “correct an obvious injustice”
is also misguided, because this Court does not possess the power to grant such equitable relief under the
Tucker Act. Pl. Resp. at 7; see also Compl. at ¶ 18; see generally 28 U.S.C. § 1491(a)(2).

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Each party to bear their own costs.

IT IS SO ORDERED.

                                      s/ Lydia Kay Griggsby
                                      LYDIA KAY GRIGGSBY
                                      Judge

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