UN4 Productions, Inc. v. Doe 1 et al, No. 2:2017cv00892 - Document 56 (W.D. Wash. 2019)

Court Description: ORDER granting in part and denying in part plaintiff UN4's Motions for Default Judgment against defendants Andrei Saar, Andrey Savin, and Eric McClain, (Dkts. 49 , 51 , 53 ). The Clerk of Court shall enter judgment in favor of plaintiff and against defendants in the amounts specified in this Order. Signed by Judge Robert S. Lasnik. (SWT)

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UN4 Productions, Inc. v. Doe 1 et al Doc. 56 1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 9 10 Case No. C17-0892RSL UN4 PRODUCTIONS, INC., 11 ORDER GRANTING IN PART UN4’S MOTIONS FOR DEFAULT JUDGMENT Plaintiff, 12 13 v. 14 LIBAN HARO, et al., 15 Defendants. 16 I. 17 INTRODUCTION 18 This matter comes before the Court on plaintiff UN4’s motions for default 19 judgment against defendants Andrei Saar (Dkt. #49), Andrey Savin (Dkt. #51), and Eric 20 21 McClain (Dkt. #53). Having reviewed the relevant briefing and the remainder of the 22 record, UN4’s motions for default judgment are GRANTED IN PART and DENIED IN 23 PART. 24 25 26 27 28 II. BACKGROUND The three motions for default judgment that are the subject of this Order are just a portion of the more than one hundred default judgment motions filed by plaintiff’s counsel in twenty-six cases before the undersigned. All of the cases assert essentially ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 1 Dockets.Justia.com 1 the same causes of action based on remarkably similar allegations, although the motion 2 picture at issue, the owner of the copyright, and the defendants vary. For purposes of 3 these motions, UN4 alleges that 60 individual defendants unlawfully infringed its 4 5 exclusive copyright to the motion picture Boyka Undisputed 4, which it developed and 6 produced, by copying and distributing the film over the Internet through a peer-to-peer 7 network using the BitTorrent protocol. Plaintiff served internet service providers 8 9 10 11 12 13 (“ISP”s) with subpoenas in order to identify the alleged infringers. Amended complaints identifying defendants by name were subsequently filed. Defendants Saar, Savin, and McClain (collectively “Defendants”) are named in the same complaint because, given the unique identifier associated with a particular 14 digital copy of Boyka Undisputed 4 and the timeframe in which the internet protocol 15 address associated with each Defendant accessed that digital copy, UN4 alleges the 16 17 named Defendants were all part of the same “swarm” of users that reproduced, 18 distributed, displayed, and/or performed the copyrighted work. According to UN4, 19 Defendants directly or indirectly shared, downloaded, and distributed a single unique 20 copy of Boyka Undisputed 4 that had been seeded to the torrent network at some 21 22 23 24 undefined point in the past. Defendants did not respond to UN4’s complaint. The Clerk of Court therefore entered default against Defendants at UN4’s request. See Dkts. #45-47. UN4 now seeks 25 26 judgment against each Defendant. 27 28 ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 2 III. 1 DISCUSSION 2 Federal Rule of Civil Procedure 55(b) authorizes a court to grant default 3 judgment. Prior to entering judgment in defendant’s absence, the Court must determine 4 5 whether the allegations of a plaintiff’s complaint establish his or her liability. Eitel v. 6 McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). The court must accept all well-pled 7 allegations of the complaint as established fact, except allegations related to the amount 8 9 of damages. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). 10 Where the alleged facts establish a defendant’s liability, the court has discretion, not an 11 obligation, to enter default judgment. Alan Neuman Productions, Inc. v. Albright, 862 12 13 14 15 16 17 F.2d 1388, 1392 (9th Cir. 1988). If plaintiff seeks an award of damages, it must provide the Court with evidence to establish the amount. TeleVideo Sys., 826 F.2d at 917-18. A. Liability Determination. The allegations in UN4’s complaint establish Defendants’ liability for direct 18 copyright infringement. To establish direct infringement, UN4 must demonstrate 19 ownership of a valid copyright and that Defendants copied “constituent elements of the 20 work that are original.” L.A. Printex Indus., Inc. v. Aeropostale, Inc., 676 F.3d 841, 846 21 22 (9th Cir. 2012) (quoting Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 23 (1991)). Here, UN4 alleges it owns the exclusive copyright to the motion picture Boyka 24 Undisputed 4 and that Defendants participated in a “swarm” to unlawfully copy and/or 25 26 distribute the same unique copy of Boyka Undisputed 4. These allegations were 27 established by entry of default against Defendants. Accordingly, UN4 has established 28 Defendants’ liability for direct copyright infringement. ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 3 1 B. Default Judgment is Warranted. 2 Having established liability, plaintiff must also show that default judgment is 3 warranted. Courts often apply the factors listed in Eitel, 782 F.2d at 1471-72, to make 4 5 6 7 8 9 10 this determination. Those factors are: “(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.” The majority of these factors weigh in favor of granting default judgment against 11 12 Defendants. UN4 may be prejudiced without the entry of default judgment as it will be 13 left without a legal remedy. See Landstar Ranger, Inc. v. Parth Enters., Inc., 725 F. 14 Supp.2d 916, 920 (C.D. Cal. 2010). UN4’s complaint sufficiently alleges a claim of 15 16 direct copyright infringement, and Defendants did not present any evidence or argument 17 to the contrary. Additionally, the Court finds there is a low probability that default against 18 Defendants was due to excusable neglect: Defendants were given ample opportunity to 19 20 respond to the filings in this matter between the time they were served with UN4’s 21 complaint and the date of this Order. Finally, although there is a strong policy favoring 22 decisions on the merits, the Court may consider Defendants’ failure to respond to UN4’s 23 24 requests for default and default judgment as admissions that the motions have merit. LCR 25 7(b)(2). 26 27 28 The Court acknowledges that a dispute concerning the material facts alleged by UN4, including the identity of the alleged infringers, could arise in this case. The Court ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 4 1 also acknowledges that the amount at stake may be significant depending on the means 2 of each Defendant. UN4 seeks enhanced statutory damages in the amount of at least 3 $1,500 along with attorneys’ fees in excess of $1,550 and costs in excess of $150 from 4 5 each individual Defendant. Notwithstanding these considerations, the Eitel factors 6 weigh in favor of granting default judgment against Defendants. 7 C. Appropriate Relief. 8 9 UN4 requests entry of a default judgment against each Defendant providing the 10 following three categories of relief: (1) permanent injunctive relief; (2) statutory 11 damages; and (3) attorney’s fees and costs. Each category is discussed below. 12 13 14 15 16 17 i. Permanent Injunctive Relief Permanent injunctive relief is appropriate. Section 502(a) of Title 17 of the United States Code allows courts to “grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.” As 18 part of a default judgment, courts may also order the destruction of all copies of a work 19 made or used in violation of a copyright owner’s exclusive rights. 17 U.S.C. § 503(b). 20 Given the nature of the BitTorrent protocol and Defendants’ participation therein, the 21 22 Court finds Defendants possess the means to continue infringing in the future. MAI Sys. 23 Corp. v. Peak Comput., Inc., 991 F.2d 511, 520 (9th Cir. 1993) (granting permanent 24 injunction where “liability has been established and there is a threat of continuing 25 26 violations.”). Consequently, the Court will issue a permanent injunction enjoining 27 Defendants from infringing UN4’s rights in Boyka Undisputed 4 and directing them to 28 destroy all unauthorized copies of Boyka Undisputed 4. ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 5 1 ii. Statutory Damages 2 Plaintiff requests an award of statutory damages in the amount of at least $1,500 3 against each Defendant for his or her participation in the BitTorrent swarm that resulted 4 5 in the unauthorized download and/or distribution of the seed file containing Boyka 6 Undisputed 4. Although the actual economic damages associated with a lost video rental 7 are likely minimal, plaintiff correctly points out that Congress has authorized statutory 8 9 damages in significant amounts to compensate for difficult-to-prove downstream losses 10 and to deter future infringement. Los Angeles News Serv. v. Reuters Int’l, Ltd., 149 11 F.3d 987, 996 (9th Cir. 1998) (quoting Peer Int’l Corp. v. Pausa Records, Inc., 909 F.2d 12 13 1332, 1336 (9th Cir. 1990)). Under 17 U.S.C. § 504(c)(1), the Court may award 14 statutory damages “for all infringements involved in the action, with respect to any one 15 work, . . . for which any two or more infringers are liable jointly and severally, in a sum 16 17 of not less than $750 or more than $30,000 as the court considers just.” The Court has 18 wide discretion when determining the amount of statutory damages and takes into 19 consideration the amount of money requested in relation to the seriousness of the 20 defendant’s conduct, whether large sums of money are involved, and whether “the 21 22 recovery sought is proportional to the harm caused by defendant’s conduct.” Curtis v. 23 Illumination Arts, Inc., 33 F. Supp.3d 1200, 1212 (W.D. Wash. 2014) (citing Landstar, 24 725 F. Supp. 2d at 921). 25 26 Copyright violations come in all shapes and sizes, from the unauthorized copying 27 of a Halloween word puzzle for a child’s party to the unauthorized manufacture and sale 28 of millions of bootleg copies of a new release. While Defendants’ alleged copyright ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 6 1 violation is of concern in that it represents a theft of intellectual property, it is a 2 relatively minor infraction causing relatively minor injury. UN4 has not shown that any 3 of the Defendants is responsible for the “seed” file that made UN4’s copyrighted work 4 5 available on the BitTorrent network, nor has UN4 presented evidence that Defendants 6 profited from the infringement in any way. Given the range of statutory damages 7 specified in the Copyright Act, the Court finds that an award of $750 for the swarm- 8 9 10 related infringements involved in this action is appropriate. Each of the Defendants is jointly and severally liable for this amount. 11 12 13 This award is in line with the awards made by other courts in the Ninth Circuit and appears adequate to deter Defendants from infringing on plaintiff’s copyright in the 14 future.1 Plaintiff argues that a significantly higher award is necessary to force people 15 like Defendants to appear and participate in these BitTorrent cases. Plaintiff apparently 16 17 wants the Court to raise the statutory damage award to an amount that is at or above the 18 anticipated costs of defending this action. A defendant may, however, decide that 19 conceding liability through default is the best course of action given the nature of the 20 claims and the available defenses. The “punishment” for that choice is the entry of 21 22 default judgment and an award of damages under the governing standards. As discussed 23 above, those standards lead to the conclusion that the minimum statutory penalty should 24 25 26 27 28 UN4 has presented no evidence that Defendants will not be dissuaded from infringing in the future. The judgment entered in this case, including statutory damages, attorney’s fees, and costs, may be recovered by garnishing Defendants’ wages and/or seizing and selling their non-exempt property. This is a steep penalty for having been too lazy to go to the local Redbox or too cheap to pay a few dollars for an authorized download. Plaintiff offers no evidence to support its contention that personal liability for a judgment in excess of $500 is of no consequence to the judgment debtor. 1 ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 7 1 apply in this case. Plaintiff offers no support for the proposition that participation in 2 federal litigation should be compelled by imposing draconian penalties that are out of 3 proportion to the harm caused by Defendants’ actions or any benefits derived therefrom. 4 5 Statutory damages are not intended to serve as a windfall to plaintiffs and will not be 6 used to provide such a windfall here. 7 The Court will award UN4 $750 in statutory damages for the infringements 8 9 involved in this action, for which defendants are jointly and severally liable. iii. 10 11 12 13 Attorneys’ Fees and Costs Finally, UN4 asks the Court to award between $1,551.00 and $1,796.00 in attorneys’ fees and $153.00 in costs against each Defendant in this matter. Pursuant to 14 17 U.S.C. § 505, the Court “in its discretion may allow the recovery of full costs by or 15 against any party,” and “may also award a reasonable attorney’s fee to the prevailing 16 17 party as part of the costs.” The Court agrees that UN4 should be awarded attorneys’ fees. Courts consider 18 19 several factors, including “(1) the degree of success obtained, (2) frivolousness, 20 (3) motivation, (4) objective unreasonableness (legal and factual), and (5) the need to 21 22 advance considerations of compensation and deterrence,” when making attorneys’ fee 23 determinations under the Copyright Act. Smith v. Jackson, 84 F.3d 1213, 1221 (9th Cir. 24 1996) (citing Jackson v. Axton, 25 F.3d 884, 890 (9th Cir. 1994)). Because UN4 has 25 26 succeeded on its non-frivolous direct infringement claim2 and because an award would 27 28 Despite the entry of default, the Court specifically declines to enter judgment in plaintiff’s favor on its indirect and contributory infringement claims. 2 ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 8 1 advance considerations of compensation and deterrence, UN4 is entitled to attorneys’ 2 fees. 3 However, despite counsel’s efforts to allocate the fees and costs to each 4 5 individual defendant, the overall fee request is problematic. Courts determine the 6 amount of a fee award by determining a “lodestar figure,” which is obtained by 7 multiplying the number of hours reasonably expended on a matter by a reasonable 8 9 hourly rate. Intel Corp. v. Terabyte Int’l, Inc., 6 F.3d 614, 622 (9th Cir. 1993). Courts 10 may then adjust the lodestar with reference to factors set forth in Kerr v. Screen Extras 11 Guild, Inc., 526 F.2d 67, 69-70 (9th Cir. 1975), to the extent those factors are not 12 13 already subsumed in counsel’s hourly rates or the number of hours expended on the 14 litigation. The relevant Kerr factors here are: (1) the time and labor required; (2) the 15 novelty and difficulty of the questions; and (3) the skill requisite to perform the legal 16 17 18 19 20 services properly. 1. Reasonableness of Rate Requested In the Ninth Circuit, the determination of a reasonable hourly rate “is not made by reference to rates actually charged the prevailing party.” Chalmers v. City of Los 21 22 Angeles, 796 F.2d 1205, 1210 (9th Cir. 1986). Instead, the reasonable hourly rate is 23 determined with reference to the prevailing rates charged by attorneys of comparable 24 skill and experience in the relevant community. Blum v. Stenson, 465 U.S. 886, 895 25 26 (1984). “Generally, when determining a reasonable hourly rate, the relevant community 27 is the forum in which the district court sits.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 28 973, 979 (9th Cir. 2008). Courts may also consider “rate determinations in other cases, ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 9 1 particularly those setting a rate for the plaintiffs’ attorney” as “satisfactory evidence of 2 the prevailing market rate.” United Steelworkers of Am. v. Phelps Dodge Corp., 896 3 F.2d 403, 407 (9th Cir. 1990). 4 5 Identifying counsel’s hourly rate is more challenging than it should be. His 6 hourly rate for “normal” intellectual property cases is now $545/hour, but he has agreed 7 to a reduced rate of $350/hour in this case. Dkt. #50 at ¶7. In a similar BitTorrent matter 8 9 involving another copyright holder, counsel stated that his reduced rate was $450/hour 10 (LHF Prods., Inc. v. Acosta, C16-1175RSM, Dkt. #71 at ¶7), which is the rate he posits 11 is “reasonable and warranted in the Seattle area” in this case (Dkt. #50 at ¶9). The Court 12 13 assumes, based on the fee calculation charts set forth in counsel’s declarations, that he 14 seeks an hourly rate of $350 in this case. This hourly rate is generally within the norm 15 for BitTorrent cases in this district and is a reasonable rate for the type of formulaic 16 17 18 19 20 legal work performed in these matters. 2. Reasonableness of Hours Requested Turning to the reasonableness of the hours requested, plaintiff has the burden of documenting the hours expended on this matter and establishing their reasonableness. 21 22 Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). The Court will exclude hours that are 23 “excessive, redundant, or otherwise unnecessary” and therefore not reasonably 24 expended. Id. at 434. Counsel has attempted to calculate the hours spent in connection 25 26 with UN4’s claims against each individual Defendant by dividing the total number of 27 hours spent on collective efforts by the total number of defendants at the time the action 28 was taken. Time spent working solely in pursuit of claims against an individual are ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 10 1 allocated wholly to that individual. Dkt. #50 at ¶10. Taking Saar as an example, counsel 2 seeks compensation for the following activities: 3 Activity 4 5 6 7 8 9 10 11 12 13 14 15 16 Attorney Time .4 hours Review evidence of BitTorrent activity giving rise to potential claims Prepare complaint and supporting exhibits Prepare and file motion to expedite discovery Communicate with client Review Court orders Prepare subpoena and letter to ISPs Review ISP response and prepare communications with Defendant Review Defendant’s “status and history” Prepare amended complaint and review Prepare, review, and file waivers and/or summons Review file Prepare and file motion for default Prepare and file motion for default judgment .3 hours .6 hours .9 hours ≈ .1 hours ≈ .2 hours 1 hour Total: 4.8 hours .4 hours .4 hours .1 hours .2 hours .1 hours .1 hours Legal Assistant Time .3 hours .2 hours .3 hours .8 hours 17 18 These seemingly modest time expenditures mask the reality of counsel’s fee request. 19 Until recently, the BitTorrent cases filed in this district all proceeded in a similar 20 21 manner.3 The original complaints list Doe defendants, identified only by IP addresses, 22 and allege infringement of the client’s exclusive rights in a specified motion picture. 23 Groups of Doe defendants are named in the same complaint because they allegedly 24 25 infringed the same digital copy of the copyrighted material by participating in the same 26 27 The Honorable Thomas S. Zilly has required certain additional disclosures or proffers in BitTorrent cases pending before him. See Venice PI, LLC v. O’Leary, C17-0988TSZ, Dkt. # 32. 3 28 ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 11 1 BitTorrent “swarm.” The nearly identical complaints are accompanied by nearly 2 identical motions for expedited discovery. Once the Court grants leave to conduct 3 expedited discovery, subpoenas are served on the ISP associated with the addresses 4 5 identified in the log attached to the complaint as Exhibit B. Once in possession of the 6 Doe defendants’ identities, counsel attempts to obtain a settlement of the claims and 7 files amended complaints against any non-settling defendants. Service, additional 8 9 settlements, and defaults/default judgments follow, with the exception of a handful of 10 defendants who are actively litigating the cases in this district. On occasion, counsel 11 seeks an extension of time in which to serve. 12 13 Almost every filing in this cause of action was essentially copied from scores of 14 other cases filed by the same counsel. There is nothing wrong with utilizing form 15 documents to pursue identical infringement claims arising from identical activities. As 16 17 has been previously noted, however, it is wrong for UN4’s counsel to file identical 18 complaints and motions with the Court and then expect the Court to believe that he 19 labored over each filing. LHF Prods., C16-1175RSM, Dkt. #73 at 12. To arrive at his 20 per Defendant fee request, counsel divided time entries related to specific activities by 21 22 the number of defendants then in the case. When the relatively small time allotments set 23 forth in counsel’s declaration related to Kirwan are multiplied by the number of 24 defendants, counsel is seeking compensation for an excessive number of hours. Counsel 25 26 apparently spent 5.6 hours studying the log of infringing transactions and IP addresses 27 28 ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 12 1 that gave rise to this particular lawsuit.4 He spent another 5.6 hours generating a 2 complaint that is virtually identical to the complaints UN4 filed in other cases (not to 3 mention the scores of BitTorrent cases filed on behalf of other clients). Altering the 4 5 form complaint to initiate a new lawsuit is, at this point, a word processing chore: the 6 preparer checks to make sure the correct plaintiff and film are identified, changes the 7 number of Doe defendants in the caption, inserts the correct IP addresses in the section 8 9 of the complaint describing the defendants, and attaches the investigator’s log regarding 10 the relevant swarm as Exhibit B. Charging 5.6 hours of attorney time for this task is 11 unreasonable. Counsel seeks to recover fees for another 4.2 hours spent preparing an 12 13 14 amended complaint that was identical to the original except for the caption and the correlation of the IP addresses with the subscribers’ names. A form pleading and motions practice such as this simply does not take the type 15 16 17 of expertise or time that is normally associated with intellectual property matters. Nor 18 does it justify the number of cumulative hours that counsel seeks here. Having reviewed 19 the billing records and dockets in this and other similar matters, the Court finds that the 20 bulk of the “legal” work in these cases was performed and compensated years ago, that 21 22 these actions now involve far more word processing than drafting or legal analysis, and 23 that the attorney time necessary to tailor documents to each case and/or individual is 24 minimal. The Court will award 1 hour, at an hourly rate of $350, to compensate UN4 25 26 for counsel’s time spent pursuing its claims against each named Defendant, and .8 27 28 4 This case was originally filed against fourteen Doe defendants. ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 13 1 hours, at an hourly rate of $145.00, to compensate UN4 for legal assistant time altering 2 pleadings, motions, and service documents. The Court is satisfied that an attorneys’ fee 3 of $466.00 per Defendant is reasonable and sufficient to cover the form-pleading work 4 5 required by this case. 3. 6 7 Costs UN4 requests $153.00 in costs from each Defendant. Recovery of a pro rata 8 9 10 portion of the filing fee and the individual costs associated with the third-party subpoena and service is appropriate. 11 IV. 12 CONCLUSION 13 The Court, having reviewed the motions for default judgment and the remainder 14 of the record, finds adequate bases for default judgment. Accordingly, the Court hereby 15 finds and ORDERS: 16 17 1. UN4’s motions for default judgment are GRANTED IN PART and DENIED IN PART. 18 19 20 21 22 23 24 25 26 27 2. Defendants Saar, Savin, and McClain are hereby permanently enjoined infringing UN4’s exclusive rights in the motion picture film Boyka Undisputed 4, including without limitation by using the Internet to reproduce or copy Boyka Undisputed 4, to distribute Boyka Undisputed 4, or to make Boyka Undisputed 4 available for distribution to the public, except pursuant to lawful written license or with the express authority of UN4; 3. To the extent any unauthorized reproduction or copy of Boyka Undisputed 4 is in Defendants’ possession or subject to their control, they are directed to destroy it; 4. Defendants are jointly and severally liable for statutory damages in the amount of $750; 28 ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 14 1 5. Defendant Andrei Saar is individually liable for attorneys’ fees in the amount of $466.00 and costs in the amount of $153.00. 2 3 6. Defendant Andrey Savin is individually liable for attorneys’ fees in the amount of $466.00 and costs in the amount of $153.00. 4 5 7. Defendant Eric McClain is individually liable for attorneys’ fees in the amount of $466.00 and costs in the amount of $153.00. 6 7 8 IT IS FURTHER ORDERED that the Clerk of Court shall enter judgment in favor of plaintiff and against defendants in the amounts specified in this Order. 9 10 11 Dated this 14th day of March, 2019. 12 A 13 Robert S. Lasnik United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDER GRANTING IN PART MOTIONS FOR DEFAULT JUDGMENT - 15

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