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Stanton v. Astra Pharmaceutical Products Inc.

decided: September 26, 1983.

HARRIKAH I. STANTON, A MINOR, BY RUBY BROOKS (NEE STANTON), HER PARENT AND GUARDIAN, AND RUBY BROOKS, APPELLEES IN NO. 82-3364, CROSS-APPELLANTS IN NO. 82-3380,
v.
ASTRA PHARMACEUTICAL PRODUCTS, INC., APPELLANT IN NO. 82-3364, CROSS-APPELLEE IN NO. 82-3380



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA.

Adams, Weis, and Becker, Circuit Judges.

Author: Becker

Opinion OF THE COURT

BECKER, Circuit Judge.

On December 2, 1971, Harrikah I. Stanton, then eight months old, suffered an adverse reaction to Xylocaine, a local anesthetic, and experienced cardiac and respiratory arrest, resulting in severe and irreversible brain damage. Ruby Brooks, Harrikah's mother, brought this diversity negligence and products liability action on behalf of herself and her daughter (the "plaintiffs") against Xylocaine's manufacturer, Astra Pharmaceutical Products, Inc. The suit alleged, inter alia, that Astra had been negligent in failing to file with the Food and Drug Administration (the "FDA") certain reports concerning Xylocaine, as required by federal statutes and regulations, and that the failure to file the reports also rendered Xylocaine a defective product within the meaning of Restatement (Second) of Torts § 402A. Mrs. Brooks further asserted that the failure to file and the defective nature of the drug were substantial factors in causing her daughter's injuries. After an eight-week trial, the jury found Astra liable to plaintiffs on the above bases and awarded compensatory but not punitive damages. When the Pennsylvania Supreme Court subsequently changed the law regarding calculation of damages, however, the district court granted a new trial limited to computation of compensatory damages. Plaintiffs obtained a jury verdict of $2,367,032, on which judgment was entered.

Astra appeals from that judgment, claiming (a) that the federal statutes and regulations asserted as the basis for liability did not apply to Xylocaine and that, at all events, the evidence was insufficient to support the verdict on liability; (b) that the district court erred in resubmitting "special questions" on liability to the jury after the jury had returned the questionnaire containing answers inconsistent with its award of damages; (c) that the court abused its discretion in granting a new trial limited only to damages; and (d) that the court erred in denying Astra's motion for a mistrial based on prejudicial comments by plaintiffs' counsel in his opening statement during the retrial on damages. On cross-appeal, plaintiffs contend that several evidentiary rulings by the district court allegedly prejudiced their ability to prevail on their claim for punitive damages.

For the reasons that follow, we conclude that Astra did have an obligation to comply with the relevant statutes and regulations and that, although the question of causation is extremely close, plaintiffs introduced sufficient evidence to support the verdict in their favor. We also conclude that the district court acted within its discretion in resubmitting the "special question" to the jury. However, because we hold that the court abused its discretion in granting a new trial limited only to damages, we will vacate the judgments as to liability and damages and remand for a new trial on both issues. Because several of the procedural and evidentiary questions raised in these appeals are likely to recur on retrial, we address those matters as well.

II. Factual and Procedural Background

Harrikah Stanton was an eight-month-old infant on December 2, 1971, when she entered Harrisburg Hospital and submitted to a bone-marrow test to determine the cause of the hemolytic anemia from which she had suffered since birth. In performing the test, the hematologist, Dr. Herbert S. Bowman, injected a two-percent solution of Xylocaine into Harrikah's right posterior iliac crest to anesthetize the area from which he would aspirate bone marrow. The Xylocaine, known generically as lidocaine hydrochloride, was a local anesthetic manufactured by Astra.

Shortly after the procedure, Harrikah began convulsing and experienced cardiac and respiratory arrest. Dr. Marita Fabian, a senior resident at the hospital, and other hospital employees attempted to resuscitate her, but to little avail. The cardiac arrest resulted in severe and irreversible brain damage. Harrikah cannot walk, talk, or stand; her development has not progressed beyond that of a three- to four-month old child. She will require constant care for the rest of her life.

On October 24, 1973, plaintiffs commenced this negligence and product-liability action against Astra, Harrisburg Hospital, and Drs. Bowman Fabian.*fn1 Plaintiffs pressed a host of claims against Astra, charging that the company had been negligent in (a) failing adequately to warn Dr. Bowman and the physician-employees at Harrisburg Hospital of a possible toxic reaction to Xylocaine, even in a proper pharmacological dose, when administered to a child of Harrikah's age; (b) failing adequately to warn Dr. Bowman and the Hospital's physician-employees of the need for immediate availability of resuscitative equipment and short-acting barbiturates when Xylocaine is administered; (c) " overpromoting" Dr. Bowman and the physician-employees so that they no longer heeded the warnings actually given; (d) failing adequately to warn Dr. Bowman and the physician-employees that Xylocaine should not be administered in a two-percent solution to an eight-month-old child; (e) failing to file annual reports and unexpected-adverse-reaction reports with the FDA, as required by 21 C.F.R. § 130.35(e) and (f) (1972);*fn2 (f) marketing a product that was defective because the manufacturer's failure to file the adverse-reaction reports pursuant to section 130.35(f) deprived the FDA of the information it needed to make an informed judgment concerning the conditions under which Xylocaine safely could be marketed; (g) failing to provide Dr. Bowman with adequate directions for computing a safe dosage of Xylocaine for an eight-month old infant; (h) failing to conduct studies adequate to determine what in fact would be a safe dosage for a child of Harrikah's age; and (i) failing to exercise reasonable care to monitor and investigate fully the adverse reactions associated with Xylocaine in order to determine the risks involved in the use of that drug.

After an eight-week trial, the case was submitted to the jury on "special questions." On January 10, 1980, the jury returned a verdict against Astra alone.*fn3 In response to the "special questions," see infra Part III, the jury found that Harrikah had suffered an adverse reaction to Xylocaine; that Astra had acted negligently in failing to file the annual and adverse-reaction reports required by subsections 130.35(e) and (f); that the failure to file these reports rendered Xylocaine a defective product; and that Astr's negligence and the product's defective nature were substantial factors in causing Harrikah's injury. The jury also found that Astra negligently had failed both to conduct adequate dosage studies and to monitor and investigate fully the clinical adverse-reaction experiences, but it did not deem this negligence to have been a substantial factor in causing the child's injuries. Finally, the jury rejected plaintiffs' claims that Astra had failed to issue adequate warnings to users of Xylocaine; that Astra had "overpromoted" those users; and that Astra had failed to provide adequate directions to the users. The jury awarded Mrs. Brooks $60,000 in her own right and $255,000 on behalf of her daughter but refused to award punitive damages, finding that Astra had not acted "with a bad motive or with reckless indifference to the interests of person who might be administered the drug." The district court entered judgment on the verdict on January 11, 1980.

Before the district court had ruled on post-trial motions, the Pennsylvania Supreme Court decided the case of Kaczhowski v. Bolubasz, 491 Pa. 561, 421 A. 1027 (1980), which held that a jury may consider lost future productivity in awarding damages for future losses and that such losses should not be discounted to present value. In the wake of this change in Pennsylvania law, the district court granted plaintiffs' motion for a new trial on compensatory damages but denied it in all other respects.*fn4 Stanton v. Astra Pharmaceutical Products, Inc., Civ. No. 73-610 (M.D. Pa. Oct. 19, 1981) (" Stanton I "). The court denied Astra's motion in toto. Stanton v. Astra Pharmaceutical Products, Inc., Civ. No. 73-610 (M.D. Pa. Oct. 19, 1981) ("Stanton II").*fn5

The new trial on compensatory damages resulted in a jury verdict awarding Mrs. Brooks $256,000 in her own right and $1,652,371 as Harrikah's parent and guardian. The court awarded damages for delay and molded the award to $2,367,032, pursuant to Pa. R. Civ. P. 238.*fn6 On April 14, 1982, Astra moved for a new trial, claiming that the district court had erred (a) in refusing to dismiss the panel of jurors after the court made allegedly improper remarks in its introductory statement to the panel, and (b) in refusing to declare a mistrial following allegedly improper and prejudicial statements by plaintiffs' counsel in his opening and closing arguments.*fn7 The court denied Astra's motion, Stanton v. Astra Pharmaceutical Products, Inc., Civ. No. 73-610 (M.D. Pa. June 28, 1982) (" Stanton III "), and Astra appealed. Plaintiffs filed a cross-appeal on August 6, 1982, challenging the court's denial of their motion for a new trial on punitive damages.

We now turn to the merits of the various claims raised on appeal, focusing primarily on those relating to the sufficiency of the evidence to support the verdict on liability, the court's resubmission to the jury of the "special questions" used during the first full trial, and the propriety of the granting of a new trial on damages alone. In a final section, we will consider more summarily the propriety of the remarks made by plaintiffs' counsel as well as plaintiffs' claims of error relating to the denial of punitive damages.*fn8

II. Sufficiency of Evidence of Liability

The verdict in plaintiffs' favor was predicated upon the jury's conclusion that Astra had acted improperly when it failed to file with the FDA the annual and adverse-reaction reports required by 21 C.F.R. § 130.35(e) and (f) (1972). Astra initially argues that section 130.35 does not apply to Xylocaine and that the company therefore had no obligation to file any of the specified reports. But even assuming that the regulation does apply, Astra contends, the company did not act negligently when it decided not to file the requisite reports, and the failure to file therefore did not render Xylocaine defective or unreasonably dangerous. Moreover, Astra argues, even if a jury could find that the company either had acted negligently in failing to file the reports or had marketed a defective product, neither the negligence nor the section-402A violation could have been a substantial factor in causing Harrikah's injuries.

We first will consider the question of the applicability of section 130.35; in the course of our discussion, we will outline the rather complex statutory and regulatory schema governing marketed drugs. Because we conclude that Astra had a duty to file the reports required by section 130.35, we then will proceed to the consequences of noncompliance. The jury determined that noncompliance with the FDA's regulations engendered liability based on negligence as well as strict liability under Restatement (Second) of Torts § 402A (1965). We will discuss separately each basis of liability. We conclude that the jury had sufficient evidence to find that Astra's conduct was negligent per se and that such conduct proximately caused Harrikah's injuries; we further conclude that the jury could find that Xylocaine was a defective product within the meaning of section 402A and that the defective product also was a proximate cause of the harm.*fn9

A. Applicability of 21 C.F.R. § 130.35

In 1938, Congress enacted the Federal Food, Drug and Cosmetic Act, which prohibits the introduction into commerce of any "new drug" for which a new-drug application has not been filed with and approved by the FDA.*fn10 See Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U.S. 609, 612-15, 37 L. Ed. 2d 207, 93 S. Ct. 2469 (1973). Pursuant to this Act, Astra submitted to the FDA in 1948 an application for approval of its new anesthetic, Xylocaine. The FDA approved Astra's application on November 19, 1948; marketing of Xylocaine in 0.5%, 1%, and 2% solution commenced in 1949.

The Thalidomide tragedies of the early 1960s triggered the next wave of drug-related legislation: the Drug Act Amendments of 1962, 76 Stat. 780 (1962). It is these amendments with which we are principally concerned. Central to the amendments was section 103(a), which provides in relevant part:

In the case of any drug for which an approval of an application filed pursuant to this section is in effect, the applicant shall establish and maintain such records, and make such reports to the Secretary, of data relating to clinical experience and other data or information, received or otherwise obtained by such applicant with respect to such drug, as the Secretary may by general regulation, or by order with respect to such application, prescribe on the basis of a finding that such records and reports are necessary in order to enable the Secretary to determine, or facilitate a determination, whether there is or may be ground for invoking subsection (e) of this section. . . .*fn11

21 U.S.C. § 355 (j)(1) (1976).*fn12 Pursuant to this authorization, the Secretary promulgated regulations on May 28, 1964. These regulations, as we noted above, require companies marketing registered drugs to submit to the FDA annual reports, 21 C.F.R. § 130.35(e) (1971),*fn13 as well as immediate reports of all unexpected adverse reactions to those drugs, id. § 130.35(f).*fn14

Between May 28, 1964, and the end of 1970, Astra received 202 reports of adverse reactions allegedly related to Xylocaine.*fn15 These reactions ranged from minor, temporary effects to death. Yet Astra forwarded none of these reports to the FDA, relying upon the advice of its counsel, Alan H. Kaplan, that Xylocaine was not a "new drug"*fn16 and therefore was exempt from the reporting requirements embodied in 21 C.F.R. § 130.35(e) and (f).*fn17 However, the company prepared the reports and made them a part of the Establishment Inspection Reports seen by non-medical FDA inspectors who came to inspect Astra's facilities between 1964 and 1971.

In deciding not to file the reports ostensibly required by section 130.35, Astra also relied on a letter, dated October 2, 1963, from John F. Palmer, M.D., the Chief of the Department of Health, Education and Welfare's ("HEW's") New Drug Status Branch, in which Dr. Palmer advised Astra that two-percent Xylocaine was "not now regarded" by the Division of Drugs as a "new drug" within the meaning of 21 U.S.C. § 321(p), see supra note 16. App. at A559. On April 25, 1968, however, Arthur M. West, M.D., Acting Director of HEW's Division of Surgical Dental Drugs and Adjuncts, wrote to Astra and requested that the company file all reports prescribed in regulations promulgated pursuant to 21 U.S.C. § 355(j).*fn18

Upon receipt of this letter, Astra wrote back and reminded the FDA of both the 1963 letter from Dr. Palmer and the FDA's announcement on September 12, 1964, postponing the effective date of § 130.35(b)'s reporting requirements, see 29 Fed. Reg. 12,872 (1964). Dr. West responded in July 1969 by referring Astra to a statement published in the Federal Register on May 20, 1968, in which the FDA formally had revoked "all opinions previously given by the [FDA] to the effect that an article is 'not a new drug' or is 'no longer a new drug.' "*fn19 Dr. West further informed Astra that, "since these drugs are presently under review by the National Academy of Sciences-National Research Council ["NAS-NRC"], we are deferring any final decision on the new drug status until the findings of the review are published."*fn20 Letter from Arthur M. West, M.D., to Astra (July 30, 1969), App. at A572. Thus, Astra knew, or should have known, by May 20, 1968, three and one-half years before Harrikah Stanton's adverse reaction, that the FDA deemed Xylocaine to be a "new drug" for purposes of compliance with the reporting requirements of 21 U.S.C. § 355(j) and 21 C.F.R. § 130.35.

Despite the above exchanges between Astra and the FDA, Astra contends that 21 U.S.C. § 355(j) and 21 C.F.R. § 130.35(f) apply only to "new drugs," see supra note 16 (defining "new drug"), and not to "old drugs," or drugs that are generally recognized by experts as safe and effective; Astra further claims that Xylocaine had achieved such recognition by 1964. The district court disagreed and, in a pretrial order, granted plaintiffs' partial motion for summary judgment "to the extent that the court concludes that the regulation 21 C.F.R. § 130.35 . . . was applicable to Astra . . . as sponsor of the drug Xylocaine." Stanton v. Astra Pharmaceutical Products, Inc., Civ. No. 73-610 (M.D. Pa. Oct. 10, 1979) (Order).

We agree with the district court's ruling, for the very language of section 130.35 does not admit of the exclusion urged by Astra. Section 130.35 applies to "each applicant for whom a new-drug application or supplement . . . became effective or was approved at any time prior to June 20, 1963 . . . ." 21 C.F.R. § 130.35(a), (b) (emphasis added). This language appears to encompass Xylocaine, which was approved by the FDA in 1948. Moreover, application of section 130.35 to a drug approved in 1948 would seem essential in light of the FDA's statutory obligation continually to monitor drugs already on the market in order to determine whether to withdraw FDA approval pursuant to 21 U.S.C. § 355(e).*fn21

Astra relies both on the 1963 letter from the FDA, see supra, in which the agency advised Astra that it did not consider Xylocaine to be a new drug, as well as on the FDA's 1964 suspension of the effectiveness of certain regulations pending the resolution of a court challenge, see 29 Fed. Reg. 12,872 (1964). But neither the 1963 letter nor the 1964 suspension can avail Astra. While we concede that Astra initially was entitled to rely on the 1963 letter, the FDA effectively nullified the assertions contained in that letter when it announced in 1968, well before Harrikah Stanton's bone-marrow test in 1971, that "all opinions previously given by the [FDA] to the effect that an article is 'not a new drug' or is 'no longer a new drug' are hereby revoked," 33 Fed. Reg. 7758 (1968), see supra note 19. And as for the 1964 suspension: that declaration stayed the enforcement of only 21 C.F.R. § 130.35(b), without any mention of subsections 130.35(e) and (f). Moreover, Astra does not appear to contend that it filed with the FDA the information required in order to qualify for the postponement of section-130.35(b) obligations.

Astra also argues that it had no obligation to file the adverse-reaction reports with the FDA because section 130.35(f) applies only to unexpected adverse reactions, and the reactions reported to Astra were not unexpected. The regulations define "unexpected" as

conditions or developments not previously submitted as part of the new-drug application or not encountered during clinical trials of the drug, or conditions or developments occurring at a rate higher than shown by information previously submitted as part of the new-drug application, or than encountered during such clinical trials.

21 C.F.R. § 130.13(b)(2)(i). Thus, Astra would argue that the FDA already had been apprised of all relevant information and that it was not necessary to add to that data base.

This argument must fail as well. Astra itself contended before the district court that the character of those reactions was a question of fact for the jury. Despite the grant of summary judgment in favor of plaintiffs as to the applicability of section 130.35(f), the district court clearly submitted the question of expectedness to the jury, Transcript, vol. 30, at 114-15, and the jury resolved it adversely to Astra in finding that Astra should have filed the reports. In examining the district court's denial of Astra's motion for judgment n.o.v., we must view the record in this case in the light most favorable to plaintiffs and affirm the judgment unless the record lacks even that minimum quantum of evidence on which a jury reasonably might have based its verdict. Black v. Stephens, 662 F.2d 181, 187-88, 190 (3d Cir. 1981), cert. denied, 455 U.S. 1008, 71 L. Ed. 2d 876, 102 S. Ct. 1646 (1982). We certainly cannot say that no rational jury could have believed the reports received by Astra to have related to unexpected adverse reactions. Moreover, it does not appear from the record that Astra previously had informed the FDA of the full import of the adverse reactions reported to Astra during the 1960s.

Accordingly, we conclude that the district court did not err in ruling that subsections 130.35(e) and (f) applied to Astra; to the extent that the jury decided, in reaching its finding of liability, that the unreported adverse reactions were "unexpected," its verdict is supported. We now turn to the bases on which the jury found Astra liable.

B. Liability Based on Negligence

1. Was Astra Negligent ?

Under Pennsylvania law, the violation of a governmental safety regulation constitutes negligence per se if the regulation "was, in part, intended to protect the interest of another as an individual [and] the interest of the plaintiff which was invaded . . . was one which the act intended to protect."*fn22 Majors v. Brodhead Hotel, 416 Pa. 265, 268, 205 A.2d 873, 875 (1965); accord Frederick L. v. Thomas, 578 F.2d 513, 517 (3d Cir. 1978); Hunziker v. Scheidemantle, 543 F.2d 489, 497 (3d Cir. 1976); Millard v. Municipal Sewer Authority, 442 F.2d 539, 541 (3d Cir. 1971); D'Ambrosio v. City of Philadelphia, 354 Pa. 403, 405-07, 47 A.2d 256, 258-59 (1946). Astra cannot seriously dispute that section 130.35 was promulgated to protect individuals such as Harrikah Stanton from precisely the type of harm that here occurred -- an unexpected adverse reaction to Xylocaine. It thus would appear that Astra's failure to file the reports constituted negligence per se.*fn23

Astra points out, however, that noncompliance with safety regulations does not result inexorably in a finding of negligence because Pennsylvania law appears to follow the Restatement (Second) of Torts in recognizing a class of "excused violations."*fn24 In particular, Astra argues that its failure to comply with the applicable statutes and regulations is excused by three circumstances: (1) Astra neither knew nor should have known of the need to comply; (2) Astra's counsel advised the company that there was no need to file the reports with the FDA; and (3) the reports actually had been prepared and were available to FDA plant inspectors. We agree that Pennsylvania law allows a defendant to offer excuses for a statutory or regulatory violation; however, the record permitted the jury to reject each of the excuses proffered by Astra.

First, even assuming that Astra at one time had reason to believe that 21 C.F.R. § 130.35 did not apply to Xylocaine, the FDA formally revoked in 1968 all previous opinions as to new-drug status and expressly informed Astra in 1969 that the FDA expected compliance with section 130.35. Thus, at least as of 1968, Astra knew, or should have known, that the FDA expected Astra to file the reports prescribed by section 130.35.

Second, the mere fact that Astra's attorneys interpreted section 130.35 incorrectly does not negate Astra's negligence in failing to comply with the regulations. Astra took a chance, and it is liable for the consequences of its acts. And even assuming that advice of counsel does constitute a legally cognizable excuse, that excuse could insulate Astra from liability only between the time that the FDA promulgated the regulations in 1964 and the time that the agency revoked all private letter-rulings as to new-drug status in 1968. Astra still had three and one-half years before the December 1971 tragedy to file the reports.

Nor can we accept the availability of the reports to plant inspectors as an excuse for Astra's conduct. Plant inspectors are not physicians and do not possess the expertise necessary to facilitate a full evaluation of the reports. Indeed, the jury heard testimony from Dr. Alan K. Done, a Professor of Pediatrics and Pharmacology who had served as Special Assistant to the Director of the FDA's Bureau of Drugs, that "it's not likely that [FDA field investigators] would go and look at those reports." Transcript, vol. 6, at 78. Moreover, the statute requires that manufacturers file reports with the FDA, 21 U.S.C. § 355(j)(1), and make them available to inspectors, id. § 355(j)(2), see supra note 12. It is no answer to say that compliance with section 355(j)(2) excuses a breach of section 355(j)(1).

Under Pennsylvania law, therefore, this case falls within section 288B(1) of the Second Restatement: "The unexcused violation of a legislative enactment or an administrative regulation which is adopted by the court as defining the standard of conduct of a reasonable man, is negligence in itself." The jury therefore had sufficient evidence upon which to find that Astra had acted negligently in failing to file the reports required by section 130.35.*fn25

2. Did the Negligence Proximately Cause the Harm ?

That Astra was negligent in failing to file the reports is not in itself sufficient to sustain the finding that Astra was liable. The negligence must also have been a proximate cause of Harrikah Stanton's injury.

It is well established in Pennsylvania that in order to find that defendant proximately caused an injury it must be found that his allegedly wrongful conduct was a substantial factor in bringing about plaintiff's injury even though it need not be the only factor. [Citations omitted.] It is equally well established that defendant's negligent conduct is not a substantial factor in bringing about plaintiff's injury if it would have been sustained even if the actor had not been negligent.

Majors v. Brodhead Hotel, supra, 416 Pa. at 271-72, 205 A.2d at 877; accord Hunziker v. Scheidemantle, supra, 543 F.2d at 496, 498; Greiner v. Volkswagenwerk Aktiengesellschaft, 429 F. Supp. 495, 496-97 (E.D. Pa. 1977); Kaplan v. Philadelphia Transportation Co., supra, 404 Pa. [147] at 149-51, 171 A.2d [166] at 167-68; Restatement (Second) of Torts, supra, §§ 431-32. The next question, then, is whether plaintiffs introduced sufficient evidence to support the jury's determination that Astra's failure to file the annual and adverse-reaction reports had been a substantial factor in causing Harrikah's injury.*fn26

In order to establish the requisite causal link between Astra's tortious conduct and Harrikah's injury, plaintiffs relied heavily on the testimony of Drs. Alan K. Done, Henry L. Price, Marvin Seife, and John Adriani.

Dr. Done, at the time of the trial, was a Professor of Pediatrics and Pharmacology and Adjunct Professor of Pharmacy at Wayne State University, as well as Director of the Division of Clinical Pharmacology and Toxicology at Children's Hospital of Michigan. Author of 300 articles, Dr. Done was certified by the American Board of Pediatrics and the American Board of Medical Toxicology. From 1972 to 1975, he served as Special Assistant to the Director of the FDA's Bureau of Drugs. Dr. Done testified that he had reviewed the adverse-reaction reports received by Astra between 1964 and 1970 and had found descriptions of twenty-two fatalities, thirteen near-fatalities,*fn27 twenty-five life-threatening incidents, and forty-five "unknown or nil life threat" instances among the medical cases. Transcript, vol. 4, at 169-70. The dental cases revealed four fatalities, four near-fatalities, thirty-five life-threatening cases, and 152 "unknown or nil threat to life" cases. Id. at 170. Dr. Done ...


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