Articles Posted in Whistleblower and Retaliation

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Harassment.Text.Box.Dollar.Photo.Club.7.29.15.jpgThe Appellate Division in New York State recently ruled that a whistleblower complaint under Section 740 does not bar a plaintiff filing a separate sexual harassment complaint. In Lee v. Woori Bank, two male employees reported allegations of sexual harassment to a supervisor. Specifically, both employees alleged that a supervisory employee (i) “consistently used foul language, profanity, talked dirty, and made sexual comments”; (ii) “made unwelcome homosexual advances and comments” towards one of the male employees; and (iii) made unwelcome physical touching of one of the employee’s buttocks and body. The employees allege they were demoted and fired after they complained of the supervisor’s conduct. Our New York Sexual Harassment Attorneys have represented many employees who have been subject to unwanted advances and/or been retaliated against because of their complaints.

What is Section 740 of the New York Labor Law and What is its Waiver Provision?

Whistleblower.Sign.Held.Up.Dollar.Photo.Club.7.29.15.jpgUnder Section 740, an employer may not take any “any retaliatory personnel action against [said] employee because such employee . . . discloses, threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer that is in violation of law, rule or regulation which violation creates and presents a substantial and specific danger to the public health or safety.” Labor Law § 740(2)(a). The law also precludes an employer from taking retaliatory action if an employee objects to or refuses to participate in any such activity. See Section 740(2)(c). The court dismissed plaintiffs’ claims under Section 740 because the alleged conduct did not create a substantial and specific danger to the public health and safety – it primarily focused on inappropriate conduct towards them.

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Thumbnail image for blow.the.whistle.bought.from.istock.photo.jpgOur Award Winning New York Whistleblower Lawyer has been asked to comment on a recent decision by the Appellate Division, which could be considered a victory for employees. Whistleblower cases in New York State often can be an uphill battle and difficult to navigate due to the procedural issues and the limitations of the law. Dr. Robert Blashka, a dentist, filed a whistleblower complaint in state court under Section 741 of the New York Labor Law wherein he alleged that his former employer terminated him in retaliation for his complaint about certain practices involving patient care. Specifically, he complained that another dentist had an alcohol addiction that could affect patient care. The employer denied any liability and filed a motion for summary judgment. In response, the trial court dismissed Dr. Blashka’s case and stated that he failed to identify any law, rule or regulation that he reasonably believed that his employer violated. The case did not end there as it does many times because Dr. Blashka filed an appeal.

What is a Section 741 of the New York Labor Law Whistleblower Claim?

This is sometimes referred to the healthcare whistleblower statute in New York as it is more specific than Section 740. In order to bring a claim under this section, a plaintiff must allege the following: 1) he or she is a covered employee within the meaning of the statute; 2) that he or she disclosed or threatened to disclose an activity, policy, or practice of the employer to a supervisor or a public body; 3) that he or she, in good faith, reasonably believed that the activity, policy, or practice constituted a violation of a law, rule, regulation, or declaratory ruling adopted pursuant to law; and 4) that the violation presented either a substantial and specific danger to public health or safety or a significant threat to the health of a specific patient Labor Law § 741; Minogue v Good Samaritan Hosp., 100 AD3d 64 (2012); and Webb-Weber v Community Action for Human Services, Inc., 98 AD3d 923 (2012), 20 NY3d 855 (2013). The employer can defend its action by stating that any adverse action such a termination or demotion was done for reasons other than the employee’s exercise of rights protected by this section.

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scaffolding.injury.bought.from.istock.photo.jpgOur New York Whistleblower Lawyer helps courageous employees, current and former, come forward and expose allegations of workplace safety and health. Sometimes it is not easy to blow the whistle and the process can be complicated and often times, the affected employee may be suffering from an illness caused by the workplace. The federal law, Occupational Safety and Health Act (“OSHA” or the “Act”), was passed in 1970 by President Nixon and was created to address rising workplace injuries and deaths and prevents employers from retaliating against whistleblowers. In recent years, well known businesses such as SeaWorld and Hershey’s Chocolate have been the subject of workplace safety complaints or inquiries. Employees have the right to a safe workplace and to be free of retaliation if they file a complaint or engage in protected activity under the Act. If you are concerned about your safety or believe there are hazards at your job, contact our Whistleblower Attorney at (800) 893-9645 for a confidential consultation. Because of an affected employee’s medical issues, these types of cases may also crossover with disability discrimination and leave of absence issues under employment law.

Who Can File a Complaint Under the Act

Most employers in the private sectors are covered under the federal law and required to comply with the Act. An employee can file a complaint — the term “employee” is defined broadly and includes an individual who is employed in the business of an employer which affects commerce. Most public sector employees, with the notable exception of postal workers, are not covered by the law but they may be covered by state law. Workers who are properly classified as indenpedent contractors may not be covered by the law. However, just because a worker is called an independent contractor does not mean that is accurate or correct – as we have discussed in prior blog posts, misclassification of employees as independent contractors is a common error made by businesses and is sometimes done intentionally to avoid providing employee protections such as filing OSHA complaints.

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Thumbnail image for Fraud.Whistleblower.Bought.From.IStock.Photo.jpgIn the preceding calendar year, the United States government paid over $5.5 billion dollars to whistleblowers pursuant to the federal False Claims Act. Whistleblowers pay a vital role in our society helping to unmask corruption and fraud and, in certain cases, can receive up to 30 percent of the monies paid by companies or individuals to the government. Not every case forms the basis for a whistleblower claim under a statute or applicable law – call our New York Whistleblower Attorney to learn your options and the strength (or weakness) of your potential claims. Not every case is the same and initial missteps can be fatal to claim. Learn your rights before you take any action. We have counseled employees in the financial and pharmaceutical industries. As you will see from the cases discussed below which describe the alleged conduct and amounts allocated towards whistleblowers – many cases involve the finance and pharmaceutical sectors.

FIRST: Johnson & Johnson — The company agreed to pay over 2 billion dollars to the federal government in a settlement to resolve criminal and civil liability regarding allegations relating to off-label use of certain prescription drugs. Specifically, it was alleged that one of the company’s subsidiaries had promoted three drugs (i.e., Risperdal, Invega and Natrecor) for uses that were not approved as safe by the Food and Drug Administration. This was one of the largest settlements in the health care industry. There were multiple whistleblowers in this case and their total allocation exceeded 167 million dollars. Multiple whistleblowers can be unusual because one of the hallmarks in a case is whether you have original high quality information not already known by the government.

SECOND: JP Morgan Chase — The financial institution agreed to pay over 610 million dollars as part of the settlement with the government for, as per the Department of Justice, its role in approving “thousands of FHA loans and hundreds of VA loans that were not eligible for FHA or VA insurance because they did not meet applicable agency underwriting requirements. [The Company] further admitted that it failed to inform the FHA and the VA when its own internal reviews discovered more than 500 defective loans that never should have been submitted for FHA and VA insurance.” The alleged fraud was widespread. The whistleblower was a former executive in the department that insured government loans and was allocated over 60 million dollars for his complaint and participation.

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Fraud.Whistleblower.Bought.From.IStock.Photo.jpgWhistleblowers play an important role in our country and reveal government corruption or theft that robs money from our society. In fact, a little over ten years ago, Time Magazine named whistleblowers as its people of the year. Recently, a former Vice-President at Countrywide Financial blew the whistle on the company’s alleged fraudulent practices. Specifically, the former employee, who oversaw loan quality, alleged that the mortgage lender defrauded government backed mortgage finance companies (i.e., Fannie May and Freddie Mac) by selling and churning shoddy mortgage products and related securities that were not as good as portrayed. Not only will the whistleblower collect more than fifty million dollars, Countywide Financial’s current owner – Bank of America – will pay over 16 billion dollars in a penalty as part of a settlement and a company executive to pay 1 million dollars as a fine. Our New York Whisteblower Attorney counsels employees (current or former) and witnesses who are potential whistleblowers – contact our office and to confidentially learn your rights and options. As evidenced by this case, whistleblowers can collect substantial rewards while unmasking fraud.

The whistleblower filed federal lawsuits under the Federal False Claims Act and provided information to federal prosecutors. After intervention from the United States Attorney for the Southern District, the case went to trial. One the key allegations in the case was that Countrywide had a program called “the hustle” wherein employees were rewarded for selling loans including shoddy loans. The whistleblower alleged that the company “continued to push loan production to record levels in spite of clear signals that there were problems with early loan repayment performance.”

Bank of America is not the only company to pay a penalty for allegations related to the 2008 financial crisis. JP Morgan Chase agreed to pay 2 billion dollars and Citigroup agreed to pay 4 billion dollars.

While the amount expected to be collected by this whistleblower is substantial, it is not the highest award. In fact, it is over 40 million dollars less than what the IRS paid to a former banker at UBS who provided information on an alleged tax avoidance scheme. In that case, the whistleblower in that case collected over 100 million dollars.

A common misperception people have is that all alleged fraudulent conduct can form the basis for a complaint – that is not true. It is critical to seek counsel at an early stage. Different statutes apply depending on the alleged conduct. For example, there is a different process to file a whistleblower complaint to the IRS than for other alleged fraud. The process to pursue a claim can be a daunting process and while many of the statutes provide for anti-retaliation protection – some whistleblowers suffer adverse employment actions (e.g., harassment, demotion, etc.). To learn if you qualify as a whistleblower, your options and how to best protect yourself, contact our office at (800) 893-9645 for a confidential consultation.
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above-the-bar-logo-no12Our Award-Winning Employment Attorneys were recently asked to comment on a whistleblower case involving a former New York DISH Network employee. According to the lawsuit, the employee worked in DISH’s marketing department from March 2007 through November 2008. In the summer of 2008, the employee informed his superior about his concerns that a vendor was submitting fraudulent invoices in an attempt to bill DISH for work that wasn’t performed. The employee even testified at a deposition about the possible fraud. After leaving the company, the former employee learned that he had been “blacklisted” by DISH in retaliation for reporting the suspected financial fraud. For example, the former employee received a negative job reference. In addition, DISH refused to conduct business with the former employee’s subsequent employer. Third, the network refused to carry a satellite channel after learning that the former employee represented the channel.

If you are an employee considering reporting suspected fraudulent activity within your company, you need the guidance of an experienced Employment Attorney to advise you in such matters. As was the case with the former DISH employee, employers can take retaliatory action against you–even if you are no longer an employee for the company. Call our office today at (800) 893-9645 to schedule a confidential consultation with our Award-Winning Employment Attorneys. Our Lead Employment Attorney can be found by clicking here.

After suspected of being blacklisted by DISH as a result of reporting possible fraud, the former employee filed a complaint with the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA). After conducting an extensive investigation, OSHA determined that the former employee’s complaint had merit and ordered DISH to pay $157,024 in back wages and $100,000 in compensatory damages for violating anti-retaliatory provisions designed to protect whistleblowers under the Sarbanes-Oxley Act. OSHA also ordered the company to expunge the employee’s file of any reference to the fraud case. The agency also ordered DISH not to retaliate against the employee and to post a notice in a visible place informing employees of whistleblower rights.

Commenting on the case, Robert Kulick, OSHA’s Regional Administrator in New York, stated, “A worker has a right to report wrongdoing to their employer without fear or retaliation during their employment and after. Blacklisting is a particularly insidious form of retaliation that can follow workers and even cost them new jobs. It is not only an unacceptable practice, it’s illegal.”

Our Award-Winning Whistleblower Attorneys pointed out that this case underscores a key and important fact: OSHA is responsible for enforcing the whistleblower provisions in 22 different laws, including the Sarbanes-Oxley Act, the Occupational Safety and Health Act, the Surface Transportation Assistance Act and the Affordable Health Care Act. Many people in the general public think that OSHA is simply tasked with enforcing workplace safety. However, this is not the case. OSHA has the power to investigate whistleblower complaints and even force companies to pay large fines for violating whistleblower provisions. Such whistleblower provisions can be found in laws pertaining to employees who report violations of laws governing airlines, commercial motor carriers, consumer products, the environment, financial reform, health care reform, food safety and worker safety. This is important information because workers are protected across a broad range of industries from retaliation when reporting suspected illegal activity within a company. For instance, an employee is protected by whistleblower provisions if he or she reports workplace safety violations. In addition, employees who report that truck drivers are being forced to drive longer than legally allowed are also covered by the whistleblower provisions enforced by OSHA.

Because the whistleblower provisions span across many laws, you need to consult with an experienced employment attorney before deciding to file a complaint or report against your company. Contact the law office of Villanueva & Sanchala at (800) 893-9645. Our attorneys will be able to assess your complaints and determine if you are protected under whistleblower provisions.

Links Used to Research This Article:
https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=25749
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above-the-bar-logo-no12Yes provided you have proof and first hand knowledge of a company’s failure to pay New York Sales Tax you may be able to file a claim under the False Claims Act (assuming no one else has already done so and the information is not publicly or otherwise known.) In March 2011, whistleblowers filed a lawsuit under the New York State False Claims Act alleging that the telecom giant Sprint-Nextel Corp. knowingly failed to collect and pay $130 million in New York and local sales taxes. After an extensive investigation by the Taxpayer Protection Bureau and the New York State Department of Taxation & Finance, the Attorney General took over the lawsuit on the behalf of taxpayers. If found liable of fraudulently failing to pay taxes, Sprint would be required to pay triple to amount of taxes owed, fines and attorneys fees, amounting to approximately $400 million. Under the False Claims Act, the whistleblowers may be entitled to receive up to 25 percent of money recovered as a result of the information they provided.

Under the New York False Claims Act, individuals, as well as the Attorney General or local governments, can file a lawsuit against a person or a company that is involved in fraud against the government, such as not paying taxes. Individuals or whistleblowers file such claims as “Qui Tam suits,” which are kept secret in order to allow the government to conduct an investigation into suspected fraudulent activity.

If you are working for a company that you believe is engaged in activity attempting to defraud the government, you need to arrange for a private, confidential consultation with our Award-Winning New York Employment Lawyers by clicking here or by calling our office at (800) 893-9645. Filing a whistleblower lawsuit under the False Claims Act can be a complicated process. First, many companies, as is the case with Sprint, have large legal departments and financial resources to defend themselves against allegations of fraud. Moreover, companies may try to retaliate against employees who are whistleblowers. Retaliation may take on many forms, including termination or a change in pay. Finally, under the New York False Claims Act, whistleblowers are entitled to receive a percentage–up to 25 percent–of money recovered by the government. Our Employment Lawyers will help you to receive the money you are entitled to under the law. The law firm of Villanueva & Sanchala will protect and guide you through the complex legal process involved in filing a false claims suit.

In February 2014, Attorney General Eric T. Schneiderman announced that his office was proceeding with a $400 million lawsuit against Sprint. Under current New York State tax laws, mobile phone carriers are required to collect and pay sales tax on the full amount of monthly access charges. For example, if a phone company charges $39.99 for 450 minutes, the carrier must collect and pay sales tax on the full amount of $39.99. However, since 2005, the Attorney General alleges that Sprint didn’t collect or pay such taxes on some of these access charges. Moreover, the suit alleges that the company repeatedly and knowingly submitted false documentation to New York State tax authorities. Even after being accused of illegal activity, Sprint still did not collect or pay taxes on access charges. As a result, Schneiderman stated that Sprint continues to increase its tax bill by $30,000 per day.

According to the lawsuit, Sprint made a conscious decision not to pay taxes in order to obtain an advantage over its competitors. Instead of cutting costs or providing better service to gain more customers, the carrier was able to provide cheaper service plans by not paying over $4 million in monthly New York taxes.

Speaking about an appeals court decision that allowed that allowed his office to move forward with the case, Schneiderman remarked, “Today’s decision allows my office to proceed in holding Sprint accountable for deliberately evading sales tax and costing state and local governments $130 million. As long as I am Attorney General, I’m committed to ensuring that taxpayers’ money is protected, and that honest businesses aren’t put at a disadvantage for collecting and paying their fair share.”

If you are working for a company that you believe is defrauding the government, you may be able to file a whistleblower lawsuit under the New York False Claims Act. Contact one of our Award-Winning Employment Attorneys by clicking here or by calling our office at (800) 893-9645.
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Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for above-the-bar-logo.jpgRepresentatives Jackie Speier and Todd Platts recently introduced a bipartisan bill (H.R. 6406) called the Non-Federal Employees Whistleblower Protection Act (“Bill”) which would provide whistleblower protection to non-federal government contractors and subcontractors who disclose information about the federal funds being misused. If you are aware of fraud being committed against the government, call our Whistleblower Attorneys to help you determine your best course of action.

The Bill would protect employees who blow the whistle on companies that receive federal agency funding from retaliation for opposing the improper use of federal funds. The Bill would also make it illegal to retaliate against an employee who disclosed information that he or she reasonably believes is evidence of gross mismanagement or waste of covered funds, a substantial and specific danger to public health or safety related to the use of government funds, abuse of authority related to the implementation of the covered funds, or a violation of law related to an agency contract, subcontract, or grant related to the covered funds.

An employee seeking protection under the Bill would have to show that he or she was retaliated against and that his or her whistleblowing activity was a contributing factor to the retaliation. The Bill gives an employer the opportunity to come up with clear and convincing evidence that he or she would have taken the same action even if the employee had not blown the whistle. Where an employer is found to have violated the Bill, he or she could be ordered to take steps to remedy his or her retaliatory actions, reinstate the employee with backpay and compensatory damages, reimburse the employee for costs and expenses as well as attorneys’ fees, post notice of the inspector general’s decision, and put in place a compliance program to prevent future instances of retaliation. An employer can even be ordered to pay the employee up to 10 times the amount of his or her lost wages as well as compensatory damages if he or she is found to have engaged in willful, wanton, or malicious acts of retaliation.

If passed, the Non-Federal Employees Whistleblower Protection Act could potentially save taxpayers billions of dollars. The final report by the Commission on Wartime Contracting estimated that at least $31 billion, and possible as much as $60 billion was lost to waste and fraud related to contracting in Iraq and Afghanistan. Keep in mind that fraud against the government or waste or misuse of government monies results in a loss of taxpayers’ monies.

If you are in a position to expose fraudulent conduct, don’t sit by and let your taxpayer dollars go to waste. Call our Whistleblower Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you figure out the best way to report and correct any wrongdoing Continue reading →

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Thumbnail image for above-the-bar-logo.jpgThe Department of Justice agreed this week to a $2.8 million settlement with Cypress Pharmaceuticals Inc. (“Cypress”), its subsidiary Hawthorn Pharmaceuticals Inc. (“Hawthorn”) and its CEO Max Draughn to resolve allegations of violating the False Claims Act. Robert Heiden, a district sales manager who worked at Hawthorn between October 2005 and October 2006, filed this whistleblower lawsuit in the U.S. District Court in Texas.

Heiden’s whistleblower complaint charged Cypress, Hawthorn and the CEO with illegally marketing drugs which were not FDA approved. If you have knowledge of fraud being committed against the government at your place of employment, call our attorneys to help you figure out if you have a qui tam whistleblower action under the False Claims Act.

The government had alleged that between 2003 and 2009, Cypress, Hawthorn, and Draughn marketed three drugs that were not approved by the FDA as safe and effective. The 3 drugs were Hylira, a gel marketed to treat dry skin, and Zaclir and Zacare which were both for the treatment of acne.

The government alleged that although the drugs did not have a “safe and effective” designation, pharmaceutical sales representatives improperly promoted the drugs to physicians and Medicaid officials. Sales reps were instructed to give pharmacists free samples to try to make them stock the drugs. This caused state Medicaid programs and TRICARE, the U.S. military health care program, to improperly pay for these drugs. This also resulted in false quarterly reports being filed with the Centers for Medicare and Medicaid Services, since the drugs did not qualify as outpatient drugs which could be covered for payment.

Heiden alleged that he was fired for refusing to offer “illegal inducements to pharmacies and pharmacists.” He will receive over $300,000 for his part in reporting the fraud. He stated that the “impact of this case goes beyond the money recovered . . . My case and the government response mean that children are now protected from the dangers of certain drugs whose safety and effectiveness haven’t been determined.”

Stuart F. Delery, the Acting Assistant Attorney General for the Justice Department’s Civil Division, stated that “The marketing and promotion of unapproved new drugs undermines the FDA’s important role in protecting the American public.”

The qui tam provision of the False Claims Act is a great weapon benefitting the government and the whistleblower for his or her trouble. The statute provides that an individual with knowledge of fraud being committed against the government can bring an action on behalf of the government. If liability is found, the Act imposes treble damages and penalties which range from $5,500 to $11,000 per claim. Depending on whether the government intervenes in the action, a whistleblower may be entitled to recover anywhere between 15% to 30% of the government’s recovery. Most importantly, you must be the first person to bring the fraud to the government’s attention. In other words, you cannot “blow the whistle” on the evening news and then file a qui tam action.

Heiden’s whistleblower complaint made a huge difference in not only saving the government money but also in stopping the false marketing of drugs which were not FDA approved as “safe and effective.” If you know of fraud being committed against the government, call our Whistleblower Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you determine if you have a claim under the False Claims Act.
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Thumbnail image for Thumbnail image for above-the-bar-logo.jpgThe U.S. Department of Justice (“DOJ”) recently announced that it is joining a whistleblower lawsuit charging AT&T for failing to prevent individuals from fraudulently using a subsidized telephone service intended for deaf people which resulted in the government losing millions of dollars. A former AT&T employee filed the original suit under the qui tam provision of the False Claims Act in October 2010 in the U.S. District Court in Pennsylvania.

The complaint charges the telecommunications giant with seeking payment from the U.S. Federal Communications Commission for Internet Protocol Relay (“IP Relay”) calls by international callers who were not eligible to receive this service. The DOJ has alleged that this amounted to millions of dollars. If you are aware of any fraud being committed against the government at your place of employment, our attorneys can help you figure out if you have a claim under the False Claims Act.

The whistleblower, Constance Lyttle, is a former communications assistant in one of AT&T’s IP Relay call centers. IP Relay allows a hearing impaired individual to make a telephone call by typing an internet message which is relayed by communication assistants. The deaf and hard of hearing receive this free service which allows them to place calls to hearing individuals through text messages over the Internet which are relayed by IP Relay provider employees. The FCC reimburses these providers, such as AT&T, about $1.30 per minute through a fund which is paid for by fees that are added to consumers’ phone bills.

The lawsuit charges AT&T with seeking payments from the FCC for IP Relay calls made by international callers who were not eligible for this service. In order to reduce fraud by foreign scammers using the system to defraud U.S. businesses with stolen credit cards, the FCC in 2009 required providers of this service to verify the accuracy of each registered user’s name and mailing address. AT&T, however, knowingly obtained a registration system that did not verify whether the user was located in the U.S. although it knew that 95% of its IP Relay calls were from foreign callers.

The qui tam provision of the False Claims Act allows an individual with knowledge of fraud being committed against the government to bring an action on behalf of the government. The Act requires that in order for you to file an action, you must be represented by an attorney. Although there is a very detailed process for filing violations under this statute, the recovery to the individual can be very rewarding. You can recover anywhere from 15% to 30% of the government’s recovery depending on whether the government intervenes in your action.

The whistleblower statute is one of the government’s best weapons in fighting fraud that would otherwise go undetected, costing taxpayers millions of dollars. For example, if Lyttle had not brought this whistleblower action, the fraud could have potentially gone on indefinitely. If you know of fraud being committed against the workplace, call our Whistleblower Attorneys at Villanueva & Sanchala at (800) 893-9645 to figure out if you have a claim under the False Claims Act. The monetary recovery as well as saving taxpayer monies can be worth the trouble.
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