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Bar Counsel Report: March 2009

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MARCH 2009
NEVADA LAWYER
SUPREME COURT OF NEVADA
In re: Glen Lerner Bar No: 4314 Docket No: 49331 Filed December 24, 2008 In re Lerner, 124 Nev. Adv. Op. 100, December 24, 2008 OPINION
Public reprimand warranted for violating Nevada Rule of Professional Conduct 5.5, which prohibits a lawyer from assisting in the unauthorized practice of law. Due to space limitation this opinion cannot be reproduced in its entirety, but the following excerpts have been extrapolated from the original opinion. The complete opinion and various footnotes can be viewed on at the Nevada Supreme Court’s website at: www.nvsupremecourt.us/documents/advOpinions/ 124NevAdvOpNo100.html. By the Court, HARDESTY, J.: In this case, we engage in an automatic de novo review of a Southern Nevada Disciplinary Board hearing panel’s recommendation that attorney Glen Lerner receive a public reprimand for violating Nevada Rule of Professional Conduct (RPC) 5.5, which prohibits a lawyer from assisting in the unauthorized practice of law. The violation was based on certain activities by Lerner’s employee, who was a licensed attorney in Arizona but not in Nevada. In deciding whether clear and convincing evidence supports this violation, we are primarily concerned with the issue of whether the employee engaged in the “practice of law.” Here, consideration of the key principle – exercise of legal judgment on a client’s behalf, together with ample authority from other jurisdictions faced with similar facts – demonstrates that Lerner’s employee, without doubt, engaged in the practice of law. Also, the employee worked in Lerner’s Las Vegas office for Nevada clients, so he was not engaged in limited, incidental, multijurisdictional practice related to his representation of clients in Arizona, where he is licensed. Consequently, the employee’s practice of law was unauthorized. The employee’s activities were further performed as part of his regular duties, in conformity with the policies and practices of Lerner’s firm, and thus, Lerner assisted in the unauthorized practice of law. We therefore conclude that clear and convincing evidence supports the
violation of RPC 5.5. We further agree with the hearing panel’s recommendation of a public reprimand as the appropriate discipline. Facts and Procedural History Attorney Glen Lerner focuses his practice on personal injury cases. From 1998 until 2005, Kevin Rowe was employed as a paralegal/law clerk in Lerner’s Las Vegas office. In March 2005, Rowe was admitted to practice law in the state of Arizona. He is not and never has been admitted to practice law in Nevada. Testimony at the hearing indicates that Rowe is now a partner in Lerner’s Bullhead City, Arizona office and that he splits his time between the Las Vegas and Bullhead City offices. In April 2005, Lerner’s Las Vegas firm was retained to represent injured plaintiffs in two separate cases. The defendants in both cases were insured by Progressive Insurance Company. Rowe appears to have been assigned primary responsibility for these plaintiffs’ cases, despite his lack of a Nevada license, while regularly working in the Las Vegas office. He conducted negotiations with Progressive, including preparation and transmission of policy limits demand letters between April and June 2005, after he was licensed in Arizona. He signed the letters as “Kevin Rowe, Esq.” In June 2005, Progressive contacted the State Bar of Nevada to determine whether Rowe was a licensed Nevada lawyer, and upon learning that he was not, it filed a grievance against Lerner. A hearing was conducted before a Southern Nevada Disciplinary Board hearing panel. At the hearing, Lerner indicated that it was common practice for Rowe and other law clerks and paralegals to handle prelitigation negotiations with an insurance company’s nonlawyer claims adjustor. Rowe testified that he did not believe that he has engaged in any improper activity because the claim was in the prelitigation stage, and he essentially acted as the counterpart to the insurance claims adjustor, also a nonlawyer. Lerner similarly distinguished between litigation, which must be handled by a lawyer, and negotiation of a claim, which he contended was not the practice of law and could be handled by nonlawyer staff. Finally, Lerner asserted the RPC 5.5 is unconstitutionally vague and ambiguous because it was not clear what actions were permissible for Rowe. Lerner has received several private reprimands, including three for identical conduct. One of these reprimands concerned Rowe himself and one was issued pursuant to a stipulation between Lerner and the state bar. Lerner also maintained that Rowe was a lawyer, and so RPC 5.3, pertaining to supervision of nonlawyer staff, did not apply.
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The state bar argued that valuing a client’s claim was the practice of law, and that Rowe was not an insurance claims adjustor, a role which is subject to regulation by the insurance commissioner, and therefore, his actions constituted the unauthorized practice of law. The state bar further asserted that a lawyer who is not licensed in Nevada is a nonlawyer for purposes of Nevada’s professional conduct rules and thus requires supervision by a Nevadalicensed lawyer. Finally, the state bar maintained that RPC 5.5 was not impermissibly vague and was properly enforced in this instance. The hearing panel determined that since Rowe was licensed in Arizona, he did not meet the definition of a “nonlawyer.” Thus, the duty of supervision set for in RPC 5.3 did not apply to him. But the panel rejected Lerner’s constitutional challenges to RPC 5.5 and concluded that his conduct impermissibly assisted Rowe’s unauthorized practice of law. The panel recommended a public reprimand and payment of costs. This appeal followed. After initial consideration of the parties’ arguments, this court invited participation by a broad cross-section of bar organizations on the issue of how best to define the practice of law. Two entities responded to the invitation and filed amicus briefs, the Estate Planning Council of Northern Nevada and the State Bar of Nevada’s Real Property Section. DISCUSSION Our de novo review of this lawyer disciplinary matter begins with the language of RPC 5.5(a)(2), which provides that “[a] lawyer shall not …[a]ssist another person in the unauthorized practice of law.” As an initial matter, then, we must determine whether Rowe engaged in the unauthorized practice of law. We conclude that what constitutes the practice of law must be determined on a case-by-case basis, and under ample authority from other jurisdictions, Rowe’s conduct was the practice of law. Rowe is not a licensed attorney in Nevada, and his conduct was therefore unauthorized. And since Rowe’s actions were in conformity with the policies of Lerner’s firm, Lerner assisted in his unauthorized practice of law. Accordingly, clear and convincing evidence supports the violation found by the hearing panel. We also consider and reject Lerner’s vagueness challenge to the enforceability of RPC 5.5. Finally, we agree with the panel’s recommendation of a public reprimand as the appropriate discipline in this case. Rowe’s conduct constitutes the practice of law This court held that it has the inherent power to define the practice of law. On only one occasion, however, has the issue been explored in Nevada. In the 1958 decision Pioneer Title v. State Bar, 74 Nev. 186, 326 P.2d 408, the
State Bar of Nevada had obtained an injunction against Pioneer Title Company from preparing documents for parties to a typical real estate sales transaction, and Pioneer appealed. This court engaged in a thoughtful discussion of the purposes served by prohibiting the unauthorized practice of law and the factors that impacted whether certain tasks should be viewed as the practice of law. First, the Pioneer Title opinion identified the purpose of the prohibition on the unauthorized practice of law as protecting the public. For this reason, high standards of training and ethics are imposed on lawyers. Other courts have similarly emphasized the overreaching reason for requiring that only lawyers engage in the practice of law: to ensure that the public is served by those who have demonstrated training and competence and who are subject to regulation and discipline. But, the Pioneer Title court noted, the public is not well-served by defining the practice of law in such a manner as to require a person faced with a routine transaction to incur the expense of a lawyer unnecessarily. And those transactions that may be considered “routine” evolve over time: as new areas involving legal rights develop, expert legal advice becomes important, and as certain transactions become standardized, specific legal advice becomes less necessary. But this court also emphasized that a person’s decision not to obtain legal counsel must be one based on the person’s self-reliance, not reliance on a nonlawyer third party. Under Pioneer Title, then, the practice of law is implicated whenever a person is faced with a legal issue that cannot be handled by resort to routine forms or customs, and when the person makes the decision not to rely on his or her judgment but to obtain assistance from someone else, a stranger to the situation. In the interest of public protection, Pioneer Title holds, this “someone else” must be qualified to render such assistance. Pioneer Title is consistent with cases from other jurisdictions. A key distinction drawn by many courts in determining whether a given activity is the practice of law is whether the services include the application of the general body of legal knowledge to a client’s specific problem. As stated by the Colorado Supreme Court, a “touchstone” of whether an activity constitutes the unauthorized practice of law is whether an unlicensed person offers “advice or judgment about legal matters to
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another person for use in a specific legal setting.”1 Similarly, a bankruptcy court applying Tennessee law stated that the practice of law “relates to the rendition of services for other that call for the professional judgment of a lawyer,” that is, the lawyer’s “educated ability to relate the general body and philosophy of law to a specific legal problem of a client.”2 The Ninth Circuit, applying Oregon law, likewise held that “the “practice of law” means the exercise of professional judgment in applying legal principles to address another person’s individualized needs through analysis, advice or other assistance.”3 For example, simply providing forms or offering a service to type client-provided information onto the forms was not the practice of law, but advising the client about how to complete a form, e.g., what information to include and on what portions of the form, was the practice of law. In determining what constitutes the practice of law, the public interest should be of primary concern – both protecting of the public from incompetent legal services and also ensuring that regulation of the practice of law is not so strict that the public good suffers. As the New Jersey Supreme Court held, “[I]n cases involving an overlap of professional discipline we must try to avoid arbitrary classifications and instead focus on the public’s realistic need for protection and regulation.”4 Turning then to cases involving conduct similar to that engaged by Rowe, it becomes clear that Rowe’s activities were the practice of law. The record reflects that Rowe routinely conducted initial client consultations and decided whether the representation should be accepted, negotiated clients’ claims (which included making legal arguments in support of the clients’ position), and served as the clients’ sole contact for the firm. All of these activities have been held by other courts to constitute the practice of law. For example, the decision whether to represent a particular client calls for an exercise of professional judgment.5 Also, evaluating a personal injury claim, advising clients of the claim’s merits, and negotiating the claim with insurance companies constitutes the practice of law.6 Notably, the Florida Supreme Court held that a paralegal engaged in the unauthorized practice of law by engaging in settlement negotiations, including discussion of case authority and legal strategy with clients, speaking on clients’ behalf, and arguing the legal merits of the clients’ cases.7 Moreover, both the Kansas Supreme Court and the New Jersey Supreme Court have stated that attorneys must maintain direct relationships
with their clients.8 Specific examples of activities found to constitute the practice of law include advising a client about his or her legal rights and recommending future actions, negotiating settlement of a client’s claims and preparing and signing demand letters. Moreover, Lerner was aware that such conduct constituted the practice of law because he had previously received three private reprimands for similar activities, including one for identical actions by Rowe. While we agree with Lerner that he is not estopped from arguing the issue in this case by his conditional guilty plea to the conduct underlying one of his prior reprimands, certainly this prior discipline demonstrates his awareness that such conduct constituted the practice of law. Clearly, Rowe engaged in the practice of law. Since he was not licensed in Nevada, his conduct would be authorized only if allowed by RPC 5.5(b), which permits lawyers licensed in other states to perform legal services in Nevada under certain conditions, primarily any Nevada services be incidental to the lawyer’s representation of the client in the lawyer’s state of licensure and not as a regular or repetitive course of business. Here, Rowe regularly worked in Lerner’s Las Vegas office and acted on behalf of Nevada clients. He did not perform isolated services in Nevada on behalf of an Arizona client related to his representation of that client in Arizona. Accordingly, Rowe’s practice of law in Nevada was unauthorized. A public reprimand is the appropriate discipline The panel recommended a public reprimand. Lerner argues that, at most, a private reprimand is sufficient. The American Bar Association Standards for Imposing Lawyers Sanctions suggest an analysis of four factors to be considered in determining an appropriate disciplinary sanction: the duty violated, the lawyer’s mental state, the potential or actual injury caused by the lawyer’s misconduct, and the existence of aggravating or mitigating factors. And specifically with respect to violations involving the unauthorized practice of law, the standards recommend a public reprimand when a lawyer negligently engages in a violation that causes injury or potential injury to a client or the public, while a private reprimand is generally appropriate if the lawyer engages in an isolated instance of nonwillful misconduct that causes little or no actual or potential injury. Finally, the standards note that when a lawyer has received a private reprimand for similar misconduct, another private reprimand is not appropriate. Here, Lerner violated a duty to the public and to the profession to refrain from assisting in the unauthorized practice of law, and he did so knowingly. But the record does not indicate that any harm was suffered by the firm’s clients, and evidence of potential harm is at most speculative. Other specifically listed aggravating circumstances are
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applicable here: a pattern of misconduct, a refusal to acknowledge the wrongful nature of the misconduct, and substantial experience in the practice of law. Despite the lack of apparent harm, which could possibly indicate that a private reprimand would be sufficient under the standards discussed above, Lerner did not engage in an isolated instance of misconduct. To the contrary, he has been privately reprimanded three times for similar or identical misconduct and does not dispute that Rowe’s conduct was consistent with the firm’s policies. Since a private reprimand has not had any effect on his conduct and in light of the aggravating factors, we agree with the hearing panel that a public reprimand is the appropriate discipline. CONCLUSION What constitutes the practice of law must be determined on a case-by-case basis, in light of the “touchstone” principle that the practice of law includes activities calling for the exercise of trained judgment in applying the general body of legal knowledge to the specific problem of a client and recommending a course of action. In this case, based on ample authority from other jurisdictions, Rowe engaged in the practice of law. Moreover, since his conduct was not incidental to his representation of clients in his licensing jurisdiction, his conduct was unauthorized. Lerner assisted Rowe’s unauthorized practice, which was undertaken in accordance with Lerner’s usual policies and practices. Thereafter, Lerner violated RC 5.5. For this violation, a public reprimand is the appropriate discipline. Accordingly, Lerner is hereby publicly reprimanded. He shall also pay the disciplinary proceedings’ costs, as set forth in the state bar’s bill of costs.
In re: T. Lincoln Peterson Bar No: 8608 Docket No: 52884 Filed January 20, 2009 ORDER OF SUSPENSION
Suspension warranted when attorney continued to engage in the practice of law while suspended for failure to pay bar dues and to complete continuing legal education requirements. This is an automatic review of a Southern Nevada Disciplinary Board hearing panel’s recommendation of six-month-and-one-day suspension of attorney T. Lincoln Peterson. The State Bar of Nevada filed a disciplinary complaint against Peterson based on an allegation that he engaged in the unauthorized practice of law by continuing to practice while he was suspended for failure to pay his bar
fees and to complete continuing legal education requirements. The complaint set forth violations of RPC 3.3 (Candor Toward the Tribunal), RPC 5.5 (Unauthorized Practice of Law), RPC 8.1(b) (Bar Admission and Disciplinary Matters) and RPC 8.4(d) (Misconduct: Engaging in conduct prejudicial to the administration of justice). Peterson failed to respond to the disciplinary complaint or appear at the disciplinary hearing. As a result, the disciplinary hearing proceeded on a default basis and all allegations set forth in the disciplinary complaint were deemed admitted, pursuant to SCR 105(2). Based upon these circumstances, the disciplinary panel found rule violations as set forth in the disciplinary complaint and recommended that Peterson be suspended for six months and one day, which would require Peterson to file a petition for reinstatement before he would be permitted to practice law in Nevada again. SCR 116. The disciplinary panel also recommended that Peterson be required to pay the State Bar’s costs and staff salaries related to this disciplinary matter, as provided for by SCR 120. While a disciplinary panel’s findings and recommendations are persuasive, this court reviews the record de novo to determine whether discipline is proper. In re Discipline of Schaefer, 117 Nev. 496, 515, 25 P.3d 191, 204, as modified by 31 P.3d 365 (2001). Peterson failed to file a brief with this court disputing the disciplinary panel’s recommendations. Having reviewed the record, we approve the recommendations of the disciplinary panel. Peterson is hereby suspended from the practice of law in Nevada for six months and one day. Peterson is required to petition for reinstatement following the period of suspension, if he chooses, pursuant to SCR 116. Additionally, Peterson is responsible for the payment of the disciplinary proceeding’s costs. SCR 120.
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In re: Douglas Macmillan Borthwick Bar No: 6232 Docket No: 52852 Filed January 8, 2009 ORDER IMPOSING RECIPROCAL DISCIPLINE
Reciprocal discipline imposed on attorney based upon a one-year stayed suspension, with two-year probation and actual 60-day suspension.
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This is a petition under SCR 114 to reciprocally discipline attorney Douglas MacMillan Borthwick, based on discipline imposed upon him in California. Borthwick has not responded to the petition. The California Supreme Court approved a stipulation calling for a one-year stayed suspension, placing Borthwick on probation for two years, and imposing a 60-day actual suspension. The stipulation also requires Borthwick to satisfy several conditions: he must pay the costs of the disciplinary proceeding; he must submit quarterly reports to the California State Bar’s probation unit and respond promptly and completely to any inquiries by the probation unit; he must pass the Multi-State Professional Responsibility Examination within one year; and he must attend California State Bar Ethics School. The discipline was based on Borthwick’s violation of California Business and Professions Code Section 6101, which is essentially equivalent to RPC 8.4(c) (Engaging in misconduct involving dishonesty, fraud, deceit, or misrepresentation). Specifically,
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Borthwick’s resumé included outdated, misleading information about his most recent employment. Based on this resumé, Borthwick interviewed fro a position, did not correct the misleading information during the interview, submitted a revised resumé that did not clearly correct the misstatements in the original version, and was hired. He was shortly thereafter terminated from the position. One aggravating circumstance, actual harm to the hiring employer, and three mitigating circumstances – remorse, lack of prior discipline and good character as demonstrated by letters from individuals in the community – were also considered. SCR 114(4) provided that this court shall impose identical reciprocal discipline unless the attorney demonstrates or this court determines that one of four exceptions applies. Discipline elsewhere is res judicata, as SCR 114(5) also provides, “[i]n all other respects, a final adjudication in another jurisdiction that an attorney has engaged in misconduct conclusively establishes the misconduct for the purposes of a disciplinary proceeding in this state.”9 None of the exceptions applies to this case, and so we grant the petition for reciprocal discipline. Borthwick shall be suspended for one year, with the suspension stayed, and Borthwick shall be placed on probation for two years. In addition, Borthwick shall serve a 60-day actual suspension.10 Finally, Borthwick shall copy State Bar of Nevada bar counsel on all reports submitted to the California State Bar probation unit, proof that he has attended ethics school, and his MPRE score. Borthwick and the State Bar of Nevada shall comply with SCR 115 and SCR 121.1.
IN RE: THEODORE D. GAMBOA BAR NO: 669 DOCKET NO: 52853 Filed January 8, 2009 ORDER OF TRANSFER TO DISABILITY INACTIVE STATUS
Attorney transferred to disability inactive status. Bar counsel for the State Bar of Nevada and attorney Theodore D. Gamboa have jointly petitioned this court for an order transferring Gamboa to disability inactive status. Gamboa and his counsel have signed the joint petition.
Visit the Family Law Section Visit the Family Law Section website: http://www.nvbar.org/ website: http://www.nvbar.org/ sections/sections_family_law.htm sections/sections_family?law.htm or call the State Bar of Nevada : or call the State Bar of Nevada: Phone: (702) 382-2200 Phone: (702) 382-2200 Toll-Free(800) 254-2797 Toll-Free (800) 254-2797
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The parties have stipulated that Gamboa is presently incapacitated under the terms of SCR 117 from continuing the practice of law. Having reviewed the petition and its attachments, we conclude that the relief requested in the joint petition is warranted under the circumstances. Accordingly, Theodore D. Gamboa is transferred to disability inactive status. Gamboa may resume the active practice of law only after he has complied with SCR 117(4) and (5). The state bar shall effect notice of this order as required under SCR 121.1. Bar counsel shall provide this court with proof that notice has been served.
Bar of Nevada Bar Counsel if they are subjected to professional disciplinary action in another jurisdiction. Borthwick did not notify Nevada bar counsel of his California discipline, which was discovered by bar counsel’s office review of public discipline imposed in California. Borthwick claimed not to be aware of the rule’s requirements. We do not view Borthwick’s ignorance of SCR 114’s provision as excusing his conduct. 10. Under SCR 115(7), the suspension is effective 15 days from this order’s date. Borthwick may wind up his representation of any existing clients during this time, but may not accept any new matters.
BAR COUNSEL REPORT BAR COUNSEL REPORT
DISCIPLINE KEY
Resignation with charges pending: SCR 98(5)(b) Types of possible discipline listed generally: SCR 102 Attorneys convicted of crimes: SCR 111 Conditional guilty plea agreements (discipline by consent): SCR 113 Reciprocal discipline: SCR 114 Disbarred/Suspended attorneys: SCR 115 Reinstatement: SCR 116 Disability Inactive: SCR 117
Supreme Court Rules (SCRs): http://www.leg.state.nv.us/CourtRules/SCR.html DISBARMENT – License to practice revoked. SUSPENSION – License suspended for a time certain, ineligible to practice. More than 6 months requires petition for reinstatement and court order. DISABILITY INACTIVE – Ineligible to practice until further order of the Court. In the interim, disciplinary proceedings held in abeyance. INTERIM TEMPORARY SUSPENSION – Interim suspension based on showing of a substantial threat of serious harm to the public, in effect until further Court order, usually after hearing. RESIGNATION WITH CHARGES PENDING – Ineligible to practice. Requires Bar Counsel approval. Resignation is irrevocable, with readmission only possible upon application as a new admittee. PUBLIC REPRIMAND – Misconduct found and public censure issued, including attorney’s name and the underlying facts and charges. Published in Nevada Lawyer and made available to the press. Remains eligible to practice law. LETTER OF PRIVATE REPRIMAND – Lowest level of discipline. Not published, but disclosed upon request under the new rules. May also include up to a $1,000 fine. Remains eligible to practice. ADMINISTRATIVE SUSPENSION/INACTIVE STATUS – Attorneys may be administratively suspended for failure to pay bar fees (SCR 98(12)), and/or placed on CLE inactive status for failure to complete and report the required Continuing Legal Education hours (SCR 212). While these are not disciplinary suspensions, the attorney is ineligible to practice law until the deficiency is remedied and the procedures to transfer back to active status completed as set forth in the applicable rules.
RESIGNATIONS (VOLUNTARY, NO DISCIPLINE PENDING)
S.C.R. 98(5)(a) states: Any member of the state bar who is not actively engaged in the practice of law in this state, upon written application on a form approved by the state bar, may resign from membership in the state bar if the member: (1) has no discipline, fee dispute arbitration, or clients’ security fund matters pending and (2) is current on all membership fee payments and other financial commitments relating to the member’s practice of law in Nevada. Such resignation shall become effective when filed with the state bar, accepted by the board of governors, and approved by the supreme court. The following member resigned pursuant to this Rule: Robert Edd Lee Bar No. 2066 Order 52716 Filed 12/29/2008
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People v. Shell, 148 P.3d 162, 174 (Colo. 2006). In re Rose, 314 B.R. 663, 703 (Bankr. E.D. Tenn. 2004). Taub v. Weber, 366 F.3d 966, 970 (9th Cir. 2004). In re Opinion No. 24, 607 A.2d 962, 966 (N.J. 1992). See Louisiana State Bar Ass’n v. Edwins, 540 So. 2d. 294, 301 (La. 1989). 6. Louisiana Claims Adj. Bureau v. State Farm, 877 So.2d 294, 299 (La. Ct. App. 2004); see also People v. Stewart, 892 P.2d 875, 876 (Colo. 1995); Mays v. Neal, 938 S.W.2d 830, 835-36 (Ark. 1997); In re Flack, 33 P.3d 1281, 1287 (Kan. 2001). 7. The Florida Bar v. Neiman, 816 So. 2d 587, 596 (Fla. 2002). 8. Flack, 33 P.3d, at 1287; Opinion No. 24, 607 A.2d, at 969; see also People v. Milner, 35 P.3d 670, 686 (Colo. Office of Presiding Disc. J. 2001) (agreeing to represent a client is the practice of law). 9. SCR 114(1) requires attorneys licensed in this state to inform State 1. 2. 3. 4. 5.
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