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Stewart v. City of Red Wing: US District Court : CIVIL PROCEEDURE - no Article III standing; no actual or imminent injury from licensing ordinance

15
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
JESSE STEWART, et al.,
Plaintiffs,
v.
CITY OF RED WING, JAY OWENS,
and GENE DURAND,
Defendants.
Civil No. 06-4872 (JRT/FLN)
MEMORANDUM OPINION
AND ORDER
Lee U. McGrath, INSTITUTE FOR JUSTICE, Minnesota Chapter, 1600
Rand Tower, 527 Marquette Avenue, Minneapolis, MN 55402; Dana
Berliner, INSTITUTE FOR JUSTICE, 901 North Glebe Road, Suite 900,
Arlington, VA 22203-1854; William R. Maurer, INSTITUTE FOR
JUSTICE, 101 Yesler Way, Suite 603, Seattle, WA 98104-3448, for
plaintiffs.
John M. Baker and Pamela L. VanderWiel, GREENE ESPEL, PLLP, 200
South Sixth Street, Suite 1200, Minneapolis, MN 55402-1415, for
defendants.
Defendant City of Red Wing adopted an ordinance requiring landlords to obtain
licenses for rental properties. Plaintiffs filed this action pursuant to 42 U.S.C. 1983,
alleging that the ordinance violates their rights under the Fourth Amendment by, among
other things, conditioning the right to rent property on their consent to an illegal search.
This case is now before the Court on the parties cross-motions for summary judgment.
Plaintiffs have also filed a motion for a preliminary injunction enjoining a pending state
court proceeding. For the reasons discussed below, the Court denies plaintiffs motions
- 2 -
for a preliminary injunction and for summary judgment, and grants defendants motion
for summary judgment.
BACKGROUND
Plaintiffs are a group of landlords and tenants located in Red Wing, Minnesota.
In 2003, defendant City of Red Wing (the City) commissioned a Housing Study of
existing housing needs and conditions in the City (Study). The Study provided updated
demographic information and a variety of housing data, including data regarding the age
and condition of the existing housing inventory in the City. The Study identified a high
demand for rental housing, and determined that much of the Citys rental housing was
aging. According to the Study, thirty-six percent of occupied rental housing was built
prior to 1940, and forty-six percent was built prior to 1960. The Study also identified an
increased need for housing rehabilitation and repair as the available supply of rental
housing ages.
Based on these and other findings, the Study recommended that the City establish
a rental inspection program to assure that all rental units in Red Wing comply with
housing laws and codes and that all Red Wing rental units are safe and sanitary.1 The
Study recommended alternatively that the City review its housing code to determine
whether it needs to be updated to address the Citys rental unit needs. In 2004, the Red
Wing City Council adopted the Housing Study as part of its Comprehensive Guide Plan
1 The study also noted that rental inspection programs generally meet with controversy
and resistance from rental property owners. (Peterson Aff. Ex. A at 78.)
- 3 -
and formed a Housing Code Committee to consider an inspection and licensing program
for rental properties. The Committee drafted a proposed rental inspection and licensing
ordinance, and held public hearings on the draft ordinance in October 2004.
On February 28, 2005, the City adopted the rental inspection and licensing
ordinance as part of its revised Housing Maintenance Code (HMC) and Rental
Dwelling Licensing Code (RDLC). See Red Wing Ord. 4.30, 4.31. The HMC
establishes detailed minimum standards for rental housing in the City, including
provisions for the maintenance of exterior walls, fences, lighting, and walkways, among
other things. The HMC also establishes minimum standards for basic services and
utilities, including plumbing, heating, electrical, and ventilation, as well as standards for
the structural integrity and interior of rental housing.
The RDLC requires rental property owners to have their properties inspected for
compliance with the HMC every three years. The RDLC initially required rental
property owners to obtain a temporary permit within 120 days of enactment of the
ordinance. The permitting provision allowed the City to collect information for a
database of rental property owners and rental addresses in the City. No fee and no
inspection of the rental property were required to obtain the temporary permit.
For purposes of administering the rental inspections, the City was divided into
three different zones. Zone 1 rental properties were to be inspected in 2006, Zone 2 in
2007, and Zone 3 in 2008. Rental properties found to be in compliance with the HMC
and RDLC would receive a three-year operating license. Red Wing City Ord. 4.31,
subd. 1(1). Properties not in compliance would receive a written compliance order
- 4 -
setting forth the violations and allowing a reasonable time to cure them. 4.31, subd.
2(4). On February 28, 2006, the City sent letters to Zone 1 rental property owners,
including plaintiffs, requesting that the owners contact the City by March 17, 2006, to
schedule an inspection. Just one of the ten plaintiffs-landlords responded to this request.
City staff called landlords who had not responded to the requests and attempted to
schedule inspections. When these attempts proved unsuccessful, Red Wing City
Attorney Jay Squires sent letters to Zone 1 property owners who had not scheduled
inspections, stating that if they did not respond by August 15, 2006, the City would seek
the assistance of a court in gaining access to their properties for inspection.
Plaintiffs objected to the Citys request to inspect their rental properties and stated
that the City would need to obtain a warrant to do so.2 On November 1, 2006, the City
filed an application in Goodhue County state court to inspect various Zone 1 rental
properties, including plaintiffs rental properties. Plaintiffs responded by challenging the
warrant application on grounds that the ordinance did not by its terms authorize the zonebased
inspections sought by the City.
On November 15, 2006, plaintiffs filed a separate action in Goodhue County state
court pursuant to 42 U.S.C. 1983, challenging the Citys rental inspection ordinance on
Fourth Amendment grounds and asking the court to declare the ordinance
2 Plaintiff Timothy McKim initially scheduled an inspection, but then cancelled the
inspection and informed the City that it would need to obtain a warrant to inspect his rental
property.
- 5 -
unconstitutional and enjoin its enforcement. The City removed the action to this Court in
December 2006.
Following their commencement of the 1983 action, plaintiffs filed a motion to
stay the pending state court warrant proceeding, arguing that the state court should refrain
from taking any further action on the Citys warrant application because similar issues
were raised in the pending federal action. The state court denied plaintiffs motion for a
stay on March 2, 2007. The court determined that the warrant proceeding, and not the
pending federal action, provided the most comprehensive resolution of the issues and that
the federal case could never provide an opportunity for the City to obtain an
administrative warrant.3
On August 30, 2007, the state court denied the Citys warrant application on nonconstitutional
grounds, finding that the ordinance authorized an inspection only when
(1) a rental license application had been executed and (2) there was reason to believe a
code violation exists. Because neither condition existed with respect to plaintiffs, the
court denied the Citys warrant application.
The City subsequently amended the HMC and RDLC. The amended RDLC
specifically authorizes zone-based inspections of rental units, and continues to require
landlords in Red Wing to have an operating license or a temporary permit to lease rental
units. Landlords can obtain a temporary permit without paying a fee or undergoing an
inspection. The temporary permits are valid only until a license is obtained, or for three
3 The court also noted that a federal court might abstain from interfering in an ongoing
state court action in accordance with the abstention doctrine of Younger v. Harris, 401 U.S. 37,
91 (1971).
- 6 -
years for all temporary permits issued prior to October 8, 2007. Plaintiffs have obtained
three-year temporary permits that will remain in effect until 2009.
To obtain an operating license, the rental unit must be inspected by the City to
determine whether it complies with the HMC. The RDLC requires that the City first seek
the consent of the landlord and tenant. The inspection must occur during ordinary
business hours unless otherwise scheduled with the landlord and tenant, and is limited to
an inspection of that which is necessary to determine compliance with the HMC. Owners
and tenants may request to be present during the inspection, so long as they identify a
date and time within two weeks of the request for an inspection. If the City does not
obtain consent from the landlord and tenant, the RDLC requires the City to apply for an
administrative search warrant, and the reviewing court is specifically authorized to
condition or limit the scope of the warrant. To date, none of the plaintiffs has consented
to have his or her rental property inspected by the City, and none of those properties have
yet been searched or inspected by the City.4
Plaintiffs complaint asserts six causes of action against the City. Counts 1 and 2
allege that the Citys inspection ordinance is facially invalid under the Fourth
Amendment and the Minnesota Constitution because it conditions plaintiffs right to rent
property on their submission to an inspection. Counts 3 and 4 allege that the RDLC, as
applied to plaintiffs conduct, violates the Fourth Amendment and the Minnesota
Constitution because the searches it authorizes are not subject to traditional warrant
4 Plaintiffs Jesse Stewart and Ann Taylor the two tenant-plaintiffs in this case also
have not had their rental units inspected.
- 7 -
requirements. Finally, counts 5 and 6 allege that the RDLC violates the Fourth
Amendment and the Minnesota Constitution because it lacks reasonable administrative
and legislative standards, allowing the City to seek warrants without detailing how
properties are selected for inspection and without describing the particular places and
things to be searched. Plaintiffs seek a declaration that the Citys inspection ordinance
violates the Fourth Amendment and ask the Court to enjoin the City from enforcing the
ordinance. Plaintiffs also seek nominal damages as well as attorneys fees and costs.
Following defendants removal of the action to this Court, the parties filed cross-motions
for summary judgment on plaintiffs claims.
During the pendency of this action, the City began seeking consent from Zone 1
tenants and landlords to conduct rental inspections in accordance with the RDLC
amendments. On March 13, 2008, the City again filed an application in Goodhue County
state court for an administrative search warrant to inspect plaintiffs dwellings. Plaintiffs
then filed a motion for a temporary restraining order and preliminary injunction in this
action, asking this Court to enjoin any further state court proceedings with respect to the
Citys warrant application pending resolution of its constitutional challenge to the
inspection ordinance.5
5 A state court hearing on the warrant application was initially scheduled for April 11,
2008. Following plaintiffs motion for a temporary restraining order, the parties agreed to
reschedule the warrant application hearing for May 2, 2008, and submitted briefing to this Court
on plaintiffs motion for a preliminary injunction. The Court refers to plaintiffs motion in the
remainder of this order as a motion for a preliminary injunction.
- 8 -
ANALYSIS
I. CROSS-MOTIONS FOR SUMMARY JUDGMENT
A. Standard of Review
Summary judgment is appropriate in the absence of any genuine issue of material
fact and when the moving party can demonstrate that it is entitled to judgment as a matter
of law. Fed. R. Civ. P. 56(c). A fact is material if it might affect the outcome of the suit,
and a dispute is genuine if the evidence is such that it could cause a reasonable jury to
return a verdict for either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247
(1986). A court considering a motion for summary judgment must view the facts in the
light most favorable to the non-moving party and give that party the benefit of all
reasonable inferences that can be drawn from the facts. Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986).
B. Article III Standing
Defendants contend plaintiffs lack Article III standing to challenge the
constitutionality of the Citys inspection ordinance, either on its face or as applied to
plaintiffs conduct in this case. Article III of the Constitution limits the judicial power
of the United States to the resolution of Cases and Controversies, and Article III
standing . . . enforces the Constitutions case-or-controversy requirement. Hein v.
Freedom From Religion Found., Inc., 127 S. Ct. 2553, 2562 (2007) (internal citations
omitted). To establish Article III standing, a plaintiff must show three things. First, the
plaintiff must allege an injury in fact that is (a) concrete and particularized and (b) actual
or imminent, not conjectural or hypothetical. Jones v. Gale, 470 F.3d 1261, 1265 (8th
- 9 -
Cir. 2006) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)). Second,
the alleged injury must be traceable to the defendants challenged action. Id. Third, it
must be likely rather than speculative that a favorable decision will redress the
injury. Id.
The Court agrees with defendants that plaintiffs have not suffered an actual or
imminent injury in fact. Plaintiffs properties have not in fact been searched or inspected
by the City, and no search warrants have been issued by a reviewing state court judge.
To the extent plaintiffs contend that the RDLC coerces their consent to an illegal search,
none of the plaintiffs in this case has yet consented to a search of his or her rental
property. Rather, plaintiffs have insisted on exercising their Fourth Amendment rights,
demanding that the City seek an administrative warrant from a reviewing state court
judge. Indeed, plaintiffs successfully challenged the Citys first warrant application,
effectively insulating their constitutional rights from injury through state court litigation.
Further, plaintiffs continue to rent property through the use of temporary rental permits
that expire in 2009.
Nor have plaintiffs demonstrated that injury to their Fourth Amendment rights is
imminent. If landlords refuse consent to the Citys request for an inspection, the RDLC
requires the City to seek an administrative search warrant. The reviewing judge is
specifically authorized to condition or limit the scope of the warrant as appropriate.
Plaintiffs argument that the inspection ordinance creates an imminent constitutional
injury presumes that a state court judge, with the benefit of a full adversarial hearing, will
be unable to condition or limit the scope of the warrant in a manner that complies with
- 10 -
the Fourth Amendment. The Court finds the possibility of such injury to be highly
speculative. See City of Los Angeles v. Lyons, 461 U.S. 95, 105 (1983) (finding plaintiff
lacked standing to seek an injunction of a police chokehold procedure because he failed
to establish a real and immediate threat that he would be stopped by officers in the future
and subjected to the chokehold); Smook v. Minnehaha County, 457 F.3d 806, 816 (8th Cir.
2006) (holding that plaintiffs lacked Article III standing because attempting to anticipate
whether any of the plaintiffs would actually be detained and strip searched would take us
into the area of speculation and conjecture); Johnson v. State of Mo., 142 F.3d 1087,
1089-90 (8th Cir. 1998) (finding plaintiffs lacked Article III standing to challenge a state
statute imposing sanctions for frivolous inmate lawsuits because no court had yet
determined plaintiffs lawsuits to be frivolous); see also Tobin v. City of Peoria, 939
F. Supp. 628, 635 (C.D. Ill. 1996) (finding the possibility that defendant-city would
violate landlords Fourth Amendment rights, where defendant agreed to seek an
administrative warrant from a reviewing judge, too speculative to create an immediate
and real injury).
Nothing in the record suggests to this Court that a reviewing state court could not
adequately review and limit the Citys warrant application to ensure the warrant complies
with the Fourth Amendment. To the contrary, on August 30, 2007, the state court
quashed the Citys first application for an administrative warrant, resulting in the Citys
decision to amend the RDLC to authorize zone-based inspections. While the reviewing
judge did not reach constitutional issues with respect to the warrant application, these
- 11 -
proceedings suggest that a reviewing state judge will be sensitive to the constitutional
rights at stake for plaintiffs and wholly capable of protecting those rights.
Plaintiffs make several arguments in support of the contention that they have
Article III standing to pursue their claims. Plaintiffs first argue that defendants waived
this jurisdictional defense by removing the complaint to federal court. However, Article
III standing cannot be waived by the parties, nor can litigants consent to have the Court
issue a non-binding advisory opinion. See Sierra Club v. Robertson, 28 F.3d 753, 757
n.4 (8th Cir. 1994); see also Advantage Media, L.L.C. v. City of Eden Prairie, 456 F.3d
793, 799 (8th Cir. 2006) (stating that Article III standing is an inescapable threshold
question). Thus, even where a defendant removes a case to federal court, the party
asserting federal jurisdiction when it is challenged has the burden of establishing it.
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n.3 (2006); Mann v. GTCR Golder
Rauner, L.L.C., 483 F. Supp. 2d 884, 894 (D. Ariz. 2007) (stating that [t]he fact of
removal does not change plaintiffs burden as to standing).
Plaintiffs further argue that the very risk of litigation in this case is sufficient to
establish an injury in fact for Article III standing. However, the Columbia Basin case
cited by defendants cannot be read to support such a broad proposition. That case
involved a challenge to a city ordinance that conditioned landlords rental licenses on
submission to a mandatory inspection. See Columbia Basin Apt. Assn v. City of Pasco,
268 F.3d 791, 796 (9th Cir. 2001). The mere refusal to consent to a search in Columbia
Basin resulted in a violation of the ordinance and the commencement of civil eviction
proceedings, civil penalties, and the revocation of business licenses. Id. The Ninth
- 12 -
Circuit determined that plaintiff-tenants had Article III standing because eviction was a
concrete injury resulting from violation of the ordinance, and that the injury was
imminent because civil proceedings had been commenced against them. See id. at 797.
Here, by contrast, refusal to consent to an inspection is not a violation of the ordinance,
but rather requires the City to seek an administrative warrant and triggers a state court
hearing on the validity of the warrant. Unlike the litigation in Columbia Basin, these
proceedings are actually more protective of plaintiffs constitutional rights. The Court
therefore finds that the risk of litigation to plaintiffs in this case is not sufficient to
establish an actual or imminent injury for Article III standing.
Finally, plaintiffs contend that Article III standing exists to challenge an
unreasonable search before the search takes place where the municipality has a pattern
and practice of conducting illegal searches. See Lankford v. Gelston, 364 F.2d 197
(4th Cir. 1966). The Court disagrees. The issue in Lankford was whether the defendants
voluntary cessation of an illegal search practice rendered plaintiffs claims moot and thus
precluded the court from entering an injunction against the police department. See id. at
203 (Police protestations of repentance and reform timed to anticipate or to blunt the
force of a lawsuit offer insufficient assurance that similar raids will not ensue when
another aggravated crime occurs.) (citing United States v. W.T. Grant Co., 345 U.S. 629,
633 (1953)). At least one named plaintiff in Lankford had actually had his home
searched, and the court did not address the constitutional requirements for Article III
standing. See id. at 200. Here, by contrast, no searches have been conducted and no
plaintiff has yet consented to a search.
- 13 -
In sum, plaintiffs have failed to establish a sufficient injury in fact either actual
or imminent to support Article III standing in this case.6 A reviewing state court judge
stands between the Citys power to search and the plaintiffs Fourth Amendment rights,
making plaintiffs constitutional injury too speculative for this Court to afford relief
under Article III. Because plaintiffs lack Article III standing, the Court need not address
the substance of plaintiffs facial and as-applied challenges to the Citys rental inspection
ordinance, which present difficult questions of Fourth Amendment doctrine. The Court
notes, however, that the very things that deprive plaintiffs of Article III standing in this
case including the presence of a reviewing judge and the RDLCs administrative
warrant requirement may also stand in the way of plaintiffs substantive claims by
rendering the inspection ordinance reasonable under the Fourth Amendment. See, e.g.,
Camara v. Municipal Court, 387 U.S. 523, 536-37 (1967) (finding that an area-wide
housing code inspection conducted pursuant to an administrative warrant or with owners
consent is reasonable, balancing the need to search against the invasion that the search
entails); Marshall v. Barlows, Inc., 436 U.S. 307, 323 (1978) (finding that warrantless
OSHA inspections violated Fourth Amendment, but that [a] warrant . . . would provide
assurances from a neutral officer that the inspection is reasonable under the Constitution,
is authorized by statute, and is pursuant to an administrative plan containing specific
neutral criteria).
6 Given the strength of defendants argument as to the injury in fact standing requirement,
the Court need not address in detail the two remaining standing requirements under Lujan. See
504 U.S. at 560. However, the Court notes that, for many of the same reasons discussed with
respect to the injury requirement, it is speculative that a favorable decision from this Court would
redress the alleged Fourth Amendment violation, since that injury is itself hypothetical.
- 14 -
Ultimately, however, this Court lacks the power to adjudicate those claims. For
these reasons, the Court grants defendants motion for summary judgment, denies
plaintiffs motion for summary judgment, and dismisses plaintiffs complaint without
prejudice.
II. PLAINTIFFS MOTION FOR A PRELIMINARY INJUNCTION
On March 13, 2008, while the parties cross-motions for summary judgment were
pending before this Court, the City filed an application for an administrative search
warrant in Goodhue County state court. Plaintiffs then filed a motion for a preliminary
injunction, asking this Court to enjoin the Citys application for a search warrant pending
resolution of their constitutional challenge to the inspection ordinance.7 In determining
whether a party is entitled to a preliminary injunction, the Court must consider (1) the
threat of irreparable harm to the movant; (2) the state of the balance between this harm
and the injury that granting the injunction will inflict on other parties litigant; (3) the
probability that movant will succeed on the merits; and (4) the public interest.
Dataphase Sys., Inc. v. C.L. Sys., Inc., 640 F.2d 109, 113 (8th Cir. 1981).
Because the Court grants defendants motion for summary judgment and dismisses
plaintiffs complaint, plaintiffs motion for a preliminary injunction is effectively moot.
Even applying the Dataphase factors, however, plaintiffs are not entitled to an injunction
for the same reasons discussed with respect to the parties cross-motions for summary
7 Plaintiffs also filed a motion to dismiss without prejudice plaintiff Michele McCaughtry
from this action. Because the Court grants defendants motion for summary judgment and
dismisses this action for lack of subject matter jurisdiction, plaintiffs motion is denied as moot.
- 15 -
judgment.8 Plaintiffs have not shown an actual or imminent violation of their Fourth
Amendment right to be free from unreasonable searches and seizures, and thus lack
Article III standing to pursue their claims in this Court. See Lujan, 504 U.S. at 560. As
such, plaintiffs cannot succeed on the merits of their underlying constitutional claims at
this time, and the impending constitutional violation is too speculative and conjectural to
afford injunctive relief. See Goff v. Harper, 60 F.3d 518, 521 (8th Cir. 1995) (finding that
even where the harm alleged would be irreparable, plaintiff failed to show a threat of
irreparable harm where the threat of harm was too remote).
Further, because the threat of harm to plaintiffs constitutional rights is highly
speculative, it is necessarily outweighed by the potential injury to the City caused by
8 Defendants also argue the Court should abstain from exercising jurisdiction over an
ongoing state court proceeding under the doctrine of Younger v. Harris, 401 U.S. 37, 44 (1971),
which establishes three general requirements for abstention. Because plaintiffs have not
established Article III standing, this Court lacks subject matter jurisdiction to consider their
constitutional claims and need not decide whether it should decline to exercise jurisdiction on the
alternative ground of abstention. See Saatchi & Saatchi Bus. Commcns v. Just for Feet, Inc., 64
F. Supp. 2d 207, 209 (W.D.N.Y. 1999). The Court notes, however, that the City likely satisfies
the second and third requirements of Younger. There is little question that the warrant
application implicates an important state interest in ensuring that rental housing does not
endanger the health or safety of tenants and the community as a whole. See, e.g., Columbia
Basin Apt. Ass'n, 268 F.3d at 801 (finding defendant City has a strong interest in maintaining
habitable dwellings for its residents). Further, the state court proceeding provides an adequate
opportunity to litigate constitutional issues with respect to the Citys search warrant application.
A closer question arises with respect to whether there is an ongoing state judicial
proceeding in this case. Although this 1983 action was commenced well in advance of the
Citys second warrant application, the Court notes that plaintiffs commenced this action two
weeks after the Citys initial warrant application. While the Citys application was eventually
denied, the City has effectively been engaged in securing an administrative warrant for zonebased
inspections ever since, making amendments to the RDLC and filing the second warrant
application on March 13, 2008. The Citys actions arguably give rise to an ongoing state
proceeding, making abstention appropriate under Younger. Ultimately, however, the Court need
not decide at this time whether to abstain because the Court lacks subject matter jurisdiction to
adjudicate plaintiffs claims.
- 16 -
granting plaintiffs motion. In particular, the Court notes that the City has been engaged
in the process of beginning zone-wide property inspections for the better part of three
years. Granting injunctive relief would only delay that process further. Finally, the
public interest factor weighs in favor of the City. The implementation of a rental
inspection ordinance designed to ensure safe and clean rental housing is surely in the
public interest. In sum, the Dataphase factors weigh against granting plaintiffs motion
for a preliminary injunction. Accordingly, plaintiffs motion is denied.
ORDER
Based on the foregoing, all the files, records and proceedings herein, IT IS
HEREBY ORDERED that:
1. Defendants Motion for Summary Judgment [Docket No. 43] is
GRANTED.
2. Plaintiffs Motion for Summary Judgment [Docket No. 53] is DENIED.
3. Plaintiffs Motion to Dismiss without Prejudice [Docket No. 271] is
DENIED as moot.
4. Plaintiffs Motion for a Temporary Restraining Order and Preliminary
Injunction [Docket No. 281] is DENIED.
5. Plaintiffs Complaint is DISMISSED without prejudice.
LET JUDGMENT BE ENTERED ACCORDINGLY.
DATED: May 1, 2008 s/ John R. Tunheim _
at Minneapolis, Minnesota. JOHN R. TUNHEIM
United States District Judge
 

 
 
 

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