[House Report 117-494]
[From the U.S. Government Publishing Office]
117th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 117-494
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STATE ANTITRUST ENFORCEMENT VENUE ACT OF 2022
_______
September 26, 2022.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Nadler, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 3460]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 3460) to amend title 28 of the United States Code to
prevent the transfer of actions arising under the antitrust
laws in which a State is a complainant, having considered the
same, reports favorably thereon with amendments and recommends
that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for the Legislation.......................... 2
Hearings......................................................... 4
Committee Consideration.......................................... 5
Committee Votes.................................................. 5
Committee Oversight Findings..................................... 9
Committee Estimate of Budgetary Effects.......................... 9
New Budget Authority and Congressional Budget Office Cost
Estimate....................................................... 9
Duplication of Federal Programs.................................. 10
Performance Goals and Objectives................................. 10
Advisory on Earmarks............................................. 10
Section-by-Section Analysis...................................... 10
Changes in Existing Law Made by the Bill, as Reported............ 11
The amendments are as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``State Antitrust Enforcement Venue Act
of 2022''.
SEC. 2. AMENDMENTS.
Section 1407 of title 28 of the United States Code is amended--
(1) in subsection (g) by inserting ``or a State'' after
``United States'', and
(2) by striking subsection (h).
SEC. 3. EFFECTIVE DATE.
This Act and the amendments made by this Act, shall take effect on
June 1, 2021.
Amend the title so as to read:
A bill to promote competition by preventing the transfer of
actions arising under the antitrust laws in which a State is a
complainant.
Purpose and Summary
H.R. 3460, the ``State Antitrust Enforcement Venue Act of
2022,'' was introduced on May 21, 2021 by Representatives Ken
Buck (R-CO), Burgess Owens (R-UT), David Cicilline (D-RI), and
Dan Bishop (R-NC). H.R. 3460 updates the transfer rules for
multidistrict antitrust litigation when a state is a
complainant. The legislation exempts antitrust litigation
initiated in federal district court by a state from being
transferred to another venue or consolidated with other
antitrust claims by the Judicial Panel on Multidistrict
Litigation (JPML). H.R. 3460 ensures that states are afforded
deference when selecting an appropriate venue to enforce the
antitrust laws and protect the public from antitrust injury.
The bill also eliminates delays, inefficiencies, and associated
higher costs that states face enforcing the antitrust laws
under the current JPML process.
Background and Need for the Legislation
The JPML determines whether civil cases involving common
questions of fact that are pending in multiple federal
districts should be transferred to a single federal district
court for coordinated or consolidated pretrial proceedings.\1\
If the panel concludes such coordination or consolidation is
warranted, the JPML also selects the court and judge to conduct
these proceedings.\2\ Under current law, the JPML may not
transfer most antitrust enforcement actions brought by the
United States from one district court to another venue.\3\ Due
to this exemption, the United States is entitled to litigate
most antitrust actions in the federal district court where it
files its claim. Additionally, at least one court has ruled
that it is contrary to public policy to consolidate an
antitrust enforcement action brought by the United States with
tag-along litigation brought by private plaintiffs.\4\ As a
result, federal government enforcement actions can often
proceed more quickly than those brought by states or private
plaintiffs.
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\1\28 U.S.C. Sec. 1407(a).
\2\Id. Sec. 1407(b).
\3\Id. Sec. 1407(g).
\4\See United States v. Dentsply Int'l, Inc., 190 F.R.D. 140 (D.
Del. 1999) (denying motion to consolidate); see generally Sam Fox Pub.
Co. v. United States, 366 U.S. 683, 693 (1961) (noting ``the
unquestionably sound policy of not permitting private antitrust
plaintiffs to press their claims against alleged violators in the same
suit as the Government'').
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Unlike most antitrust claims brought by the United States,
antitrust claims brought by a state alleging a violation of the
federal antitrust laws are not exempt from consolidation or
transfer under the JPML process.\5\ The resolution of a state's
antitrust claim thus may be delayed because it is redirected to
another venue, or the state may be required to coordinate or
consolidate its case with slower-moving private antitrust
litigation. As a result, current law undermines the ability of
a state to litigate cases in federal court in its home state,
even when that court is an appropriate venue and has clear
jurisdiction.
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\5\28 U.S.C. Sec. 1407(h).
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H.R. 3460 exempts state claims brought under the federal
antitrust laws from transfer or consolidation by the JPML. This
change ensures that a state is afforded deference when
selecting the appropriate venue to file its antitrust claim and
eliminates the delay, inefficiency, and associated higher cost
that a state may encounter under existing law. But this
legislation does not impede antitrust defendants from seeking
to transfer a case to a more convenient forum under the federal
change-of-venue statute.\6\
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\6\Id. Sec. 1404.
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Congress exempted most antitrust actions brought by the
United States from being subject to transfer by the JPML to
avoid litigation delays. In 1968, Deputy Attorney General
Ramsey Clark explained that, if antitrust enforcement actions
by the United States were subject to complex, multidistrict
proceedings, there would likely be significant delay in
enforcing the antitrust laws.\7\ The legislative history shows
that Members of Congress agreed, declining to subject most
antitrust cases brought by the United States to JPML
consolidation because ``[g]overnment suits would then almost
certainly be delayed.''\8\ Delay is particularly undesirable in
antitrust cases brought by the government because, as Deputy
Attorney General Clark noted, ``the purpose of the governmental
[antitrust] suit differs from that of a private suit; the
Government seeks to protect the public from competitive injury,
while private parties are primarily interested in recovering
damages for injuries already suffered.''\9\
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\7\H.R. Rep. No. 90-1130, at 7 (1968).
\8\Id. at 5.
\9\Id. at 8.
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Delays in antitrust enforcement are also undesirable when
the antitrust laws are enforced by a state. Like federal
antitrust claims, state enforcement actions aim to protect
residents of the state from competitive injury. In May 2021, 45
state attorneys general wrote to antitrust leaders in Congress
explaining that states bring antitrust enforcement actions ``in
the public interest to protect consumers and the competitive
process in our states.''\10\ Additionally, like federal
antitrust enforcers and unlike private litigants, state
attorneys general have powerful tools to investigate antitrust
violations, rendering much of the pretrial discovery
proceedings in private actions superfluous in actions brought
by a state. Exempting state antitrust actions from the JPML
will eliminate unnecessary inefficiencies and delays and enable
more timely and cost-efficient resolutions of state antitrust
claims while also ensuring that a state can litigate claims in
an appropriate venue of its choice.
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\10\Letter from Nat'l Ass'n of State Att'ys Gen. to Hon. Amy
Klobuchar, Chair, Subcomm. on Competition Pol'y, Antitrust, & Consumer
Rts. of the S. Comm. on the Judiciary; Hon. Mike Lee, Ranking Member,
Subcomm. on Competition Pol'y, Antitrust, & Consumer Rts. of the S.
Comm. on the Judiciary; Hon. David N. Cicilline, Chair, Subcomm. on
Antitrust, Com., & Admin. L. of the H. Comm. on the Judiciary, & Hon.
Ken Buck, Ranking Member, Subcomm. on Antitrust, Com., & Admin. L. of
the H. Comm. on the Judiciary 2 (May 10, 2021) [hereinafter NAAG
Letter], https://docs.house.gov/meetings/JU/JU00/20210623/112818/HMKP-
117-JU00-20210623-SD015.pdf.
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Reducing the length of antitrust litigation, including by
eliminating unnecessary delays that are the result of the JPML
process, may strengthen enforcement of the antitrust laws.
Litigation costs increase as litigation drags on. John Thorne
of Kellogg, Hansen, Todd, Figel & Frederick, P.L.L.C. explained
in testimony to the Subcommittee on Antitrust, Commercial, and
Administrative Law (the Subcommittee) that ``cost and time''
are the ``biggest obstacles to [antitrust] enforcement.''\11\
Nebraska Attorney General Douglas Peterson testified to the
Subcommittee that the resources to support expensive antitrust
litigation ``are readily available for large corporate
defendants but are scarce for state and federal
enforcers.''\12\ Mr. Thorne underscored that, when enforcement
actions are delayed, competition and consumers suffer because
``[e]very extra year it takes to get to trial is an extra year
of monopoly.''\13\ The National Association of Attorneys
General has emphasized that antitrust enforcement is costly,
explaining that ``[a]dditional funding of antitrust enforcement
is required at both the federal and state levels. As our
nation's economy has grown, so too has the need to staff and
finance a greater number of antitrust enforcement actions that
are fundamentally more complex and resource-intensive than in
the past.''\14\ Reducing delays and inefficiencies in state
antitrust enforcement is likely to lower the costs of
enforcement, enabling states to investigate and bring more
cases to protect their residents from anticompetitive conduct
and monopolistic practices.
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\11\Reviving Competition, Part 1: Proposals to Address Gatekeeper
Power and Lower Barriers to Entry Online: Hearing Before the Subcomm.
on Antitrust, Com., & Admin. L. of the H. Comm. on the Judiciary, 117th
Cong. 58 (2021) [hereinafter Lowering Barriers to Entry Hearing],
https://www.govinfo.gov/content/pkg/CHRG-117hhrg47295/pdf/CHRG-
117hhrg47295.pdf (statement of John Thorne, Partner, Kellogg, Hansen,
Todd, Figel & Frederick P.L.L.C., at 1).
\12\Reviving Competition, Part 3: Strengthening the Laws to Address
Monopoly Power: Hearing Before the Subcomm. on Antitrust, Com., &
Admin. L. of the H. Comm. on the Judiciary, 117th Cong. 69 (2021)
[hereinafter Strengthening the Antitrust Laws Hearing], https://
www.govinfo.gov/content/pkg/CHRG-117hhrg47296/pdf/CHRG-117hhrg47296.pdf
(statement of Hon. Douglas J. Peterson, Att'y Gen., Nebraska, at 1).
\13\Lower Barriers to Entry Hearing at 60 (statement of John
Thorne, Partner, Kellogg, Hansen, Todd, Figel & Frederick P.L.L.C., at
3).
\14\NAAG Letter at 2.
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H.R. 3460 addresses these problems by exempting federal
antitrust claims brought by a state from the JPML. The
legislation ensures that a state receives deference when it
selects an appropriate venue for an antitrust claim. It also
eliminates unnecessary delay, inefficiency, and expenses that a
state may encounter under existing law.
Hearings
For the purposes of clause 3(c)(6)(A) of House rule XIII,
the following hearings were used to develop H.R. 3460:
The Subcommittee on Antitrust, Commercial, and
Administrative Law held a hearing entitled, ``Reviving
Competition, Part 1: Proposals to Address Gatekeeper Power and
Lower Barriers to Entry Online'' on February 25, 2021, to
consider proposals to strengthen antitrust enforcement in
digital markets and to explore potential legislative reforms to
address these concerns.\15\ The Majority witnesses at the
hearing were: Eric Gundersen, Chief Executive Officer, Mapbox;
Morgan Harper, Senior Advisor, American Economic Liberties
Project; Hal Singer, Managing Director, Econ One; and Charlotte
Slaiman, Competition Policy Director, Public Knowledge. The
Minority witnesses at the hearing were: John Thorne, Partner,
Kellogg, Hansen, Todd, Figel & Frederick, P.L.L.C.; and Tad
Lipsky, Director, Competition Advocacy Program, Global
Antitrust Institute, George Mason University.
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\15\Lowering Barriers to Entry Hearing.
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The Subcommittee on Antitrust, Commercial, and
Administrative Law held a legislative hearing entitled,
``Reviving Competition, Part 3: Strengthening the Laws to
Address Monopoly Power'' on March 18, 2021, to consider
proposals to strengthen the antitrust laws, including removing
barriers to state antitrust enforcement.\16\ The Majority
witnesses at the hearing were: the Honorable Rebecca Kelly
Slaughter, Acting Chairwoman, Federal Trade Commission; Mike
Walker, Chief Economic Advisor, United Kingdom Competition and
Markets Authority; the Honorable Philip J. Weiser, Attorney
General, Colorado; and the Honorable Diane P. Wood, Judge, U.S.
Court of Appeals for the Seventh Circuit. The Minority
witnesses at the hearing were: the Honorable Doug Peterson,
Attorney General, Nebraska; and the Honorable Noah Phillips,
Commissioner, Federal Trade Commission.
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\16\Strengthening the Antitrust Laws Hearing.
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Committee Consideration
On June 23, 2021, the Committee met in open session and
ordered the bill, H.R. 3460, favorably reported, with an
amendment, by a rollcall vote of 34 to 7, a quorum being
present.
Committee Votes
In compliance with clause 3(b) of House rule XIII, the
following rollcall votes occurred during the Committee's
consideration of H.R. 3460:
1. An amendment offered by Rep. Bishop to limit the type of
state antitrust actions falling within the exemption from JPML
consolidation was defeated by a rollcall vote of 11 to 31. The
vote was as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
2. A motion to order H.R. 3460 favorably reported to the
House, as amended, passed by a rollcall vote of 34 to 7. The
vote was as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Committee Oversight Findings
In compliance with clause 3(c)(1) of House rule XIII, the
Committee advises that the findings and recommendations of the
Committee, based on oversight activities under clause 2(b)(1)
of House rule X, are incorporated in the descriptive portions
of this report.
Committee Estimate of Budgetary Effects
Pursuant to clause 3(d)(1) of House rule XIII, the
Committee adopts as its own the cost estimate prepared by the
Director of the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974.
New Budget Authority and Congressional Budget Office Cost Estimate
Pursuant to clause 3(c)(2) of House rule XIII and section
308(a) of the Congressional Budget Act of 1974, and pursuant to
clause (3)(c)(3) of House rule XIII and section 402 of the
Congressional Budget Act of 1974, the Committee sets forth,
with respect to the bill, H.R. 3460, the following analysis and
estimate prepared by the Director of the Congressional Budget
Office:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Under current law, antitrust suits that are filed in more
than one federal court district may be transferred and
consolidated in a single venue at the request of a litigant or
the initiative of judiciary officials. Antitrust suits brought
by federal law enforcement agencies are exempt.
H.R. 3460 would exempt from transfer and consolidation
antitrust cases brought by state attorneys general, allowing
those cases to remain in the court district in which they were
filed. Over the 2016-2020 period, state attorneys general
brought, on average, 10 antitrust suits per year in federal
courts; few, if any, were consolidated.
Using information from the Administrative Office of the
U.S. Courts (AOUSC) and the Department of Justice, CBO
anticipates that although some cases affected by the bill might
be resolved more quickly if they remained in their original
venues, in many cases, the total workload for judiciary staff
members would increase if related suits were not consolidated.
Using information from the AOUSC, CBO estimates that, on
balance, administrative costs for the judiciary would increase
by a total of $1 million over the 2022-2026 period. Such
spending would be subject to the availability of appropriated
funds.
CBO's estimate is subject to significant uncertainty
concerning the number of antitrust cases that state attorneys
general would file each year, how many cases would be
consolidated in the absence of the legislation, and how staff
workload would be affected for each case.
On February 15, 2022, CBO transmitted a cost estimate for
S. 1787, the State Antitrust Enforcement Venue Act of 2021, as
reported by Senate Committee on the Judiciary on February 3,
2022. The two pieces of legislation are similar, and the
estimated budgetary effects are the same for both bills.
The CBO staff contact for this estimate is Jon Sperl. The
estimate was reviewed by Leo Lex, Deputy Director of Budget
Analysis.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of House rule XIII, no provision
of H.R. 3460 establishes or reauthorizes a program of the
federal government known to be duplicative of another federal
program.
Performance Goals and Objectives
The Committee states that, pursuant to clause 3(c)(4) of
House rule XIII, H.R. 3460 would enable a state to bring and
litigate claims under the federal antitrust laws in an
appropriate and convenient venue of its choosing, without the
prospect of transfer and consolidation under the multi-district
litigation statute. The bill would reduce unnecessary delays,
costs, and inefficiencies that result when state antitrust
actions are transferred to another venue or consolidated with
private antitrust claims by the JPML. It would ensure a state
can protect its residents from competitive injury by vigorously
enforcing the antitrust laws to stop and deter anticompetitive
conduct and illegal merger activity, thereby protecting
consumers and the public; preventing and unwinding excessive
concentrations of economic power; and promoting choice and
competition, innovation, and investment throughout the economy.
Advisory on Earmarks
In accordance with clause 9 of House rule XXI, H.R. 3460
does not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits as defined in clause 9(d),
9(e), or 9(f) of House rule XXI.
Section-by-Section Analysis
Sec. 1. Short Title. Section 1 sets forth the short title
of the bill as the ``State Antitrust Enforcement Venue Act of
2022''.
Sec. 2. Amendments. Section 2 amends section 1407 of title
28 of the United States Code.
Paragraph (1) exempts antitrust actions brought by a state
from being transferred for coordinated or consolidated pretrial
proceedings by the judicial panel on multidistrict litigation.
Paragraph (2) eliminates the ability of the judicial panel
on multi-district litigation to consolidate and transfer
actions brought under the Clayton Act by the attorney general
of a state on behalf of persons residing in the state.
Sec. 3. Effective Date. Section 3 sets June 1, 2021, as the
effective date for the Act and amendments made by the Act.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
TITLE 28, UNITED STATES CODE
* * * * * * *
PART IV--JURISDICTION AND VENUE
* * * * * * *
CHAPTER 87--DISTRICT COURTS; VENUE
* * * * * * *
Sec. 1407. Multidistrict litigation
(a) When civil actions involving one or more common questions
of fact are pending in different districts, such actions may be
transferred to any district for coordinated or consolidated
pretrial proceedings. Such transfers shall be made by the
judicial panel on multidistrict litigation authorized by this
section upon its determination that transfers for such
proceedings will be for the convenience of parties and
witnesses and will promote the just and efficient conduct of
such actions. Each action so transferred shall be remanded by
the panel at or before the conclusion of such pretrial
proceedings to the district from which it was transferred
unless it shall have been previously terminated: Provided,
however, That the panel may separate any claim, cross-claim,
counter-claim, or third-party claim and remand any of such
claims before the remainder of the action is remanded.
(b) Such coordinated or consolidated pretrial proceedings
shall be conducted by a judge or judges to whom such actions
are assigned by the judicial panel on multidistrict litigation.
For this purpose, upon request of the panel, a circuit judge or
a district judge may be designated and assigned temporarily for
service in the transferee district by the Chief Justice of the
United States or the chief judge of the circuit, as may be
required, in accordance with the provisions of chapter 13 of
this title. With the consent of the transferee district court,
such actions may be assigned by the panel to a judge or judges
of such district. The judge or judges to whom such actions are
assigned, the members of the judicial panel on multidistrict
litigation, and other circuit and district judges designated
when needed by the panel may exercise the powers of a district
judge in any district for the purpose of conducting pretrial
depositions in such coordinated or consolidated pretrial
proceedings.
(c) Proceedings for the transfer of an action under this
section may be initiated by--
(i) the judicial panel on multidistrict litigation
upon its own initiative, or
(ii) motion filed with the panel by a party in any
action in which transfer for coordinated or
consolidated pretrial proceedings under this section
may be appropriate. A copy of such motion shall be
filed in the district court in which the moving party's
action is pending.
The panel shall give notice to the parties in all actions in
which transfers for coordinated or consolidated pretrial
proceedings are contemplated, and such notice shall specify the
time and place of any hearing to determine whether such
transfer shall be made. Orders of the panel to set a hearing
and other orders of the panel issued prior to the order either
directing or denying transfer shall be filed in the office of
the clerk of the district court in which a transfer hearing is
to be or has been held. The panel's order of transfer shall be
based upon a record of such hearing at which material evidence
may be offered by any party to an action pending in any
district that would be affected by the proceedings under this
section, and shall be supported by findings of fact and
conclusions of law based upon such record. Orders of transfer
and such other orders as the panel may make thereafter shall be
filed in the office of the clerk of the district court of the
transferee district and shall be effective when thus filed. The
clerk of the transferee district court shall forthwith transmit
a certified copy of the panel's order to transfer to the clerk
of the district court from which the action is being
transferred. An order denying transfer shall be filed in each
district wherein there is a case pending in which the motion
for transfer has been made.
(d) The judicial panel on multidistrict litigation shall
consist of seven circuit and district judges designated from
time to time by the Chief Justice of the United States, no two
of whom shall be from the same circuit. The concurrence of four
members shall be necessary to any action by the panel.
(e) No proceedings for review of any order of the panel may
be permitted except by extraordinary writ pursuant to the
provisions of title 28, section 1651, United States Code.
Petitions for an extraordinary writ to review an order of the
panel to set a transfer hearing and other orders of the panel
issued prior to the order either directing or denying transfer
shall be filed only in the court of appeals having jurisdiction
over the district in which a hearing is to be or has been held.
Petitions for an extraordinary writ to review an order to
transfer or orders subsequent to transfer shall be filed only
in the court of appeals having jurisdiction over the transferee
district. There shall be no appeal or review of an order of the
panel denying a motion to transfer for consolidated or
coordinated proceedings.
(f) The panel may prescribe rules for the conduct of its
business not inconsistent with Acts of Congress and the Federal
Rules of Civil Procedure.
(g) Nothing in this section shall apply to any action in
which the United States or a State is a complainant arising
under the antitrust laws. ``Antitrust laws'' as used herein
include those acts referred to in the Act of October 15, 1914,
as amended (38 Stat. 730; 15 U.S.C. 12), and also include the
Act of June 19, 1936 (49 Stat. 1526; 15 U.S.C. 13, 13a, and
13b) and the Act of September 26, 1914, as added March 21, 1938
(52 Stat. 116, 117; 15 U.S.C. 56); but shall not include
section 4A of the Act of October 15, 1914, as added July 7,
1955 (69 Stat. 282; 15 U.S.C. 15a).
[(h) Notwithstanding the provisions of section 1404 or
subsection (f) of this section, the judicial panel on
multidistrict litigation may consolidate and transfer with or
without the consent of the parties, for both pretrial purposes
and for trial, any action brought under section 4C of the
Clayton Act.]
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[all]