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Telling the Kelo Story - Jeff Benedict's Little Pink House:

People interested in property rights issues generally or Kelo v. City of New London specifically should definitely read Jeff Benedict's new book, Little Pink House. Kelo generated a broader political backlash than any other modern Supreme Court decision, and Benedict's book is by far the most thorough account of the development project and condemnations that led to case.

Benedict doesn't focus much on the legal issues involved, which have already been beaten to death by a small army of legal scholars (myself included). He does, however, provide an in-depth account of New London's decision to condemn the plaintiff's homes and other property in order to promote "economic development" and the course of the political and legal struggle between the two sides. Although Benedict's sympathies are clearly with the property owners, he also conducted numerous interviews with the lawyers and officials on the other side, so their perspective gets extensive coverage in the book. For example, he provides a fascinating portrait of Claire Gaudiani, president of Connecticut College and of the New London Development Corporation - the quasi-governmental entity that decided to go forward with the condemnations.

Several aspects of Benedict's account are especially relevant to the broader debate over eminent domain sparked by Kelo.

First, Benedict establishes that the NLDC and state government officials who undertook the condemnations genuinely believed that they were serving the public interest and did not see themselves as advancing the objectives of the Pfizer Corporation which played a key role in instigating the takings and stood to benefit from them at the expense of the general public. I don't find this as comforting as many Kelo defenders seem to. As I have pointed out in various articles (e.g. - this one), most people have a strong tendency to convince themselves that anything that serves their self-interest or political advantage is also in the public interest. For example, I fully accept that Gaudiani believed that the Kelo takings would benefit the community and advance the cause of "social justice," as she put it. But I am skeptical that she reached these conclusions entirely uninfluenced by the fact that her husband was a Pfizer vice president, and that successful implementation of the project would have advanced her own career. The understandable human tendency to conflate one's own interest with the public interest undercuts the viability of proposals to distinguish between permissible and impermissible takings by focusing on the intent of government officials in order to determine if they were motivated by "favoritism" (as advocated by Justice Kennedy in his Kelo concurring opinion).

Second, the book shows the ways in which the targets of condemnation are often determined by their political weakness. Although the NLDC publicly insisted that their economic development project required the government to take over every bit of the targeted Fort Trumbull neighborhood, in fact the pattern of condemnations was largely driven by the political influence or lack thereof of the property owners involved. One of the best parts of Benedict's book describes how the NLDC decided to spare property belonging to the Italian Dramatic Club - an all-male social club that had a lot of clout in New London politics in part because many local elites were members. Susette Kelo and her neighbors (most of whom were working or lower middle class) lacked similar influence and so were out of luck. More generally, the book shows the great difficulty of resisting eminent domain when those targeted are relatively lacking in political influence. Although Kelo and the other targeted property owners put it an enormous effort and were aided by experienced political activists, they couldn't make any political headway in resisting the condemnations until the Institute for Justice - a prominent libertarian public interest firm - filed a legal case on their behalf and helped bring the case to the attention of the national media. Their experience illustrates the limits of the political process as a means for protecting the property rights of the poor and politically weak. Few targeted property owners are as persistent and determined as Susette Kelo, and fewer still have the good fortune to attract extensive media attention to their plight. These realities weaken claims that we don't need judicial intervention or new laws limiting eminent domain authority because individual property owners can protect their rights in the political process on a case by case basis.

Benedict also does an excellent job of portraying the human cost of going through an eminent domain case. Kelo and the other targeted property owners had their lives severely disrupted for several years, as they waited to see whether they would lose their homes. Perhaps even worse, the NLDC and the City subjected them to a variety of petty harrassment in order to force them to give in, including trying to charge them rent for living in their own homes, blowing up buildings on nearby lots (thereby spreading debris and dust on the resisting owners' land), and attempting to force out one of the owners' tenants in order to cut into his income. Realistically, few property owners of modest means can afford to go through such an ordeal. Moreover, the New London owners had the immense advantage of getting excellent pro bono legal representation from the Institute for Justice; they might not have been able to engage in a prolonged legal battle otherwise. Such problems cut against claims that eminent domain abuse can be prevented by granting property owners stronger procedural rights. To the contrary, the longer and more complicated the legal procedures for eminent domain, the greater the cost of going through them for owners and the greater the incentive to give in to the government's demands rather than resist.

Finally, Benedict highlights an often-overlooked aspect of Kelo-style "economic development" takings: their all too common failure to actually produce the economic development that supposedly justified them in the first place. As he points out, almost four years after the legal battle ended and nearly ten years after the NLDC's development project began, the City still hasn't built anything on the condemned land and there is no prospect of doing so anytime soon. So far, the net result of the NLDC's condemnation efforts has been to destroy an entire neighborhood and waste some $80 million in public funds. The failure of the Kelo condemnations to actually benefit the local economy is a predictable result of the perverse incentives facing the NLDC and other similar agencies.

Benedict's book does have a few shortcomings. In several places, he misstates a few of the legal issues involved in the case. For example, he claims that the Kelo decision "changed the rules" in favor of a more permissive standard for condemnations. In reality, as I explained in this article (pp. 224-25), previous Supreme Court precedent was so lax as to allow the government to condemn virtually any property for virtually any reason. The true effect of Kelo was not a "change in the rules," but heightened public awareness of the gross abuses permitted by existing legal doctrine.

Despite a few such errors, Little Pink House is an impressive account of the events leading up to the most controversial property rights decision in Supreme Court history.

CONFLICT OF INTEREST WATCH: As I have pointed out in previous posts about Kelo, I wrote an amicus brief in the case on behalf of the late Jane Jacobs, a famous urban development scholar. I also have done various pro bono work for the Institute for Justice in other eminent domain cases.

Related Posts (on one page):

  1. Dahlia Lithwick Reviews Little Pink House - Jeff Benedict's book on Kelo v. City of New London:
  2. Telling the Kelo Story - Jeff Benedict's Little Pink House:
man from mars:
The libertarian philosophical objections to unfair takings no longer have as much force as they would have had a decade ago because of the transition of the United States to a socialist economy.

Where private property is mostly acquired through private contract, that is through market contracts voluntarily entered into, its preservation is a bulwark against government intrusion into private freedom.

But where private property is mostly acquired through the exercise of government power, it is only an adjunct of government power and can fairly be removed by the government, just as it was given by the government.

In economies with weak private sectors, property, although nominally private, just comes from the government anyway.

After the stimulus bill, TARP, and related bills, it is doubtful whether the United States remains primarily capitalist. Who has the property is now determined by the government itself, not by the market. So the government can take it away.
2.21.2009 4:37am
Ilya Somin:
After the stimulus bill, TARP, and related bills, it is doubtful whether the United States remains primarily capitalist. Who has the property is now determined by the government itself, not by the market. So the government can take it away.

I am no fan of any of these bills. But the overwhelming majority of private property in the US (probably over 90%) is unaffected by them and is still owned by the same people as before.
2.21.2009 4:57am
cboldt (mail):
The Poletown case is another example of a public taking that didn't work out as planned.
2.21.2009 7:16am
Bama 1L:
This has really got nothing to do with socialism. Socialism seeks to do away with or restrict private property, not use government as a means to redistribute private property. If you do conceive--mistakenly--of socialism as redistributive, then you still have to explain how a system generally caricatured as "steal from the rich, give to the poor" can also be used to explain redistribution in the opposite direction. After all, it was the poor (Kelo and the other homeowners) who lost out and the rich (Pfizer) who gained--or were supposed to, anyway--in the Kelo taking.

You can explain the Kelo taking without any reference to socialism or anything else but democracy and capitalism. There is simply no reason to expect that elites within democracies would not use their influence to achieve outcomes favorable to themselves--public choice theory and all. That elites are not perfectly self-aware and sometimes genuinely believe that they act in the public's interest should not surprise anyone; we are poor judges of our own causes.

Success in a capitalist economy does not come from adherence to pro-market ideology but from accumulation of capital. The best capitalist is the one with the most goodies no matter how they were achieved. So if you can use non-market means to achieve an advantage in the market, there's no reason for you not to do so. If you can get the government to give you a tax break but not your competitor, you are a winner. If you can get the government to condemn the property you want and sell it to you for less than it would cost you to buy it from the private owner, you are a winner.

I don't have a solution to this problem. I see it as more of a political issue than a legal one. It would be better if the NLDCs of the world didn't try to take property from the Kelos and give them to the Pfizers, because as is pointed out, very few Kelos are going to be able to put up much of a fight.
2.21.2009 9:05am
josil (mail):
I was wondering if some of the Justices were surprised by the public reaction to the Kelo decision. The S.C. appears to be so cloistered that they are detached from the mundane concerns of the public (excluding the media). Some universities have that same cloistered characteristic, but then consider their roots.
2.21.2009 9:44am
Richard Aubrey (mail):
Forensic audits of everybody involved for the rest of their miserable lives.
And, Josil, our betters are always cloistered. See where the folks who forced low-income housing on Yonkers live.
Kennedy's famous sea view will not be sullied by wind generators. That's for the little people. As, come to think of it, are taxes.
2.21.2009 10:34am
neurodoc:
Kelo generated a broader political backlash than any other modern Supreme Court decision
Roe v Wade was a "pre-modern" decision?
2.21.2009 10:53am
pete (mail) (www):

Roe v Wade was a "pre-modern" decision?


I think the key word is broader. Almost everyone disagrees with Kelo, regardless of other beliefs they hold. About half the country disagrees with Roe v Wade. The opposition to Roe v Wade is more intense by those that hold it, but not broader.
2.21.2009 11:17am
Krahling (mail):
Pete, that's quite true. If I remember correctly, Maxine Waters said that she was working with members of congress she had never expected to work with before on this issue. Those members were no doubt equally surprised.
2.21.2009 11:25am
SenatorMark4 (mail) (www):
One of the things about the Kelo case that has always bothered me is the idea that the property ownership had to be exchanged with a developer in order for the project to come to fruition. Since it hasn't, who gathered up the benefits? Would the powers that be have had a harder time if the people involved had just made a counter offer of a long-term lease with adjustments based on taxable value or some other reasonable leasing clauses? It seems to me that it would have cost whomever much less than $80 million to sit on that lease for X years doing nothing.
2.21.2009 12:09pm
Eli Rabett (www):
Frankly Eli has never understood your jones for Kelo. The court in Kelo said that the legislature(s) could set the rules for eminent domain takings as long as the payment was fair. Just what a good, conservative court would say (and actually a reasonable thing). Property has a value, cash is fungible and courts can rule on whether an offer was fair.

The reaction has been to go after the court, rather than the legislature(s), which makes no sense.
2.21.2009 12:25pm
loki13 (mail):

Kelo generated a broader political backlash than any other modern Supreme Court decision


There are times I read statements like this, and I just shake my head. Having recently done the whole "law school experience" thing, I can tell you this:

Outside of the outraged libertarian circle, Kelo just isn't well known. Period.

While I am sure others (Prof. Somin?) might have more recent polling data, allow me to give you the following anecdote (which means you can choose to accept or deny the broader validity of it):

I was at law school for three years recently. During that time, I either took ConLaw (as a 1L) or helped tutor first year students in ConLaw or helped 2Ls/3Ls in Takings Courses. To a person, they were not familiar with Kelo. While there was an occasional person (the outraged libertarian, the policy wonk) who knew about it before learning it in class, this was *BY FAR* the exception.

Think about this- law school students are usually pretty bright, somewhat knowledgeable about current events (although young), and have some interest in, you know, the law. Out of any random group of eighty-some students, you might have five that had any knowledge of Kelo (not the case name- just the idea).

So I'm calling BS on this. Whatever the merits of the decision, and whatever momentary press-related and loony-special interest backlash created interest the case had (aka Souter's house in NH), it wasn't really on the radar for most Americans then, and it certainly isn't now. I'm sure most Americans know more about, say, Ledbetter or the Valdez case or Child Rape in La. than this.

Also- re: Roe v. Wade. While it was somewhat controversial at the time, because states were trending towards liberalized abortion laws &the nature of the Court at the time, it didn't immediately galvanize resistance. It did, however, allow the seeds of protest to begin growing. It was more controversial three years after the ruling than it was after it was announced.
2.21.2009 12:51pm
ChrisTS (mail):
Another ill effect of the whole Kelo mess was the hit that Conn. College's finances took, thanks to Gaudiani's ill-conceived - and terribly executed - efforts to use the College as a tool for social engineering. That she had hoped her efforts would also improve town-gown relations is especially ironic.
2.21.2009 12:55pm
phaedruscj:

The income and wealth inequality of the US so widely criticized by the party in power can only be rectified by massive involuntary redistribution of property. Kelo will be a blip on the screen after that redistribution is accomplished.
2.21.2009 1:04pm
fat tony (mail):
Eli Rabett,

It's been some time and my memory may be fuzzy, but wasn't much of the outrage over a distinction (or, rather, conflation) regarding "public use"and "public benefit"? I'm not sure people were as upset at the idea of of the government taking the homes as they were at the court's seeming indifference to whether it was all done to advantage Pfizer.
I consider anger directed at the Supreme Court entirely justified, although I agree that attention must be paid to shenanigans in various State Houses as well.
2.21.2009 1:44pm
pete (mail) (www):

Frankly Eli has never understood your jones for Kelo. The court in Kelo said that the legislature(s) could set the rules for eminent domain takings as long as the payment was fair. Just what a good, conservative court would say (and actually a reasonable thing).


The whole point of the opposition is that the bill of rights provides for eminent domain for "public use". Most people do not think using eminent domain to give someone else's property to a corporation or other private entity is a "public use" since it is going to a "private" entity. Lots of conservatives think that the bill of rights overrides the legislature, especially in cases where the language is that plain.

People get mad about eminent domain all the time, but the issue with Kelo is not just compensation, its that at least when you are building a freeway or a military base the public is getting use out of it. When you are taking a persons house to give it to Pfizer, the public is not getting any use and it is just an excuse to enrich the powerful and well connected at the expense of the powerless.
2.21.2009 2:04pm
Ronald Hayden (mail) (www):
It seems to me it is almost not possible for a fair value to be paid -- a fair value would be, in my market-oriented opinion, whatever it costs to get the person to leave voluntarily, preferably without the government having substantially lowered the value of the land by declaring their intent to use eminint domain.

Some large companies take an approach that would be relevant here: When they want to purchase all land in an area without using the hammer of government and without paying an inflated price by revealing their interest, they create a shell company or several to quietly negotiate for each parcel of the land.

The result in that case us likely much closer to a fair price.
2.21.2009 2:58pm
jsl (mail):
The "public use" requirement was already far more broadly defined than Kelo made it (especially as some portion of the Kelo block plan did incorporate parks and other undisputable public uses) - look at the Midkiff and Berman decisions, both of which incorporated broad (and pre-Kelo) definitions of "public use" to include private-private transfers to cure public harms. Kelo can be conceptualized this way (private-private transfer designed to reduce economic blight/increase local economy to benefit of the public).

As to the "fair market value" argument, it's impossible to determine ex post what someone would have wanted on the open market, as they have strong incentive to overprice in a takings-type situation (buyer has near-infinite money, seller has to sell but buyer has to buy) - allowing for the seller to set the price would remove the power of the takings clause by making it simple for the seller to say "Well, pay me $1 trillion for it". Since there's no fair or practical way to evaluate the non-financial value of a home (the things that make it your home, and not just your house), simply taking the assessed physical value is the only way to avoid the transactional problems involved in either a subjectively priced approach or a full value, objectively priced, approach. (Note that some of the proposals for FMV+10% or similar to try to account for the sentimental value of home avoid these problems as well, but have no particular justification for their numbers any more than +0% does - they are equally valid, but no more valid.)
2.21.2009 3:15pm
Cornellian (mail):
The whole point of the opposition is that the bill of rights provides for eminent domain for "public use". Most people do not think using eminent domain to give someone else's property to a corporation or other private entity is a "public use" since it is going to a "private" entity.

And the homeowners argued that it was NOT a public use, at which point the 5th Amendment is silent. The Constitution says nothing about taking your property for a non-public use, other than that the government has to give you "due process" before taking it. The idea that taking for a non-public use is prohibited is an inference not found in the actual text of the Constitution. One might even call it a penumbra.
2.21.2009 3:46pm
Ilya Somin:
Kelo generated a broader political backlash than any other modern Supreme Court decision


There are times I read statements like this, and I just shake my head. Having recently done the whole "law school experience" thing, I can tell you this:

Outside of the outraged libertarian circle, Kelo just isn't well known. Period.


This is utterly false. In my article on the Kelo backlash this post, I cite extensive survey data showing that over 80% of the public opposed Kelo, including well over 70% of self-described liberals. I also cite denunciations of Kelo by prominent liberal politicians and activists, such as Bill Clinton, Ralph Nader, and Maxine Waters. The case also resulted in the passage of new laws in 43 states - generating more reactive legislation than any other Supreme Court decision in history.
2.21.2009 4:26pm
Ilya Somin:
Kelo generated a broader political backlash than any other modern Supreme Court decision

Roe v Wade was a "pre-modern" decision?


Polls show that the majority of public approved of Roe. By contrast, over 80% opposed Kelo.
2.21.2009 4:27pm
Ilya Somin:
Frankly Eli has never understood your jones for Kelo. The court in Kelo said that the legislature(s) could set the rules for eminent domain takings as long as the payment was fair. Just what a good, conservative court would say (and actually a reasonable thing). Property has a value, cash is fungible and courts can rule on whether an offer was fair.

A "good court," conservative or otherwise, should enforce property rights enumerated in the Constitution, as well as other rights. The Constitution states that a taking must be for a "public use."
2.21.2009 4:29pm
Ilya Somin:
The "public use" requirement was already far more broadly defined than Kelo made it (especially as some portion of the Kelo block plan did incorporate parks and other undisputable public uses)

I agree with the first part of this sentence, but not the second. The Kelo plan sought to build parks and the like, but not on the property that was condemned. In the litigation, the city conceded that that land was to be transferred to a new private owner (as yet undetermined).
2.21.2009 4:32pm
Repeal 16-17 (mail):
The Constitution says nothing about taking your property for a non-public use, other than that the government has to give you "due process" before taking it. The idea that taking for a non-public use is prohibited is an inference not found in the actual text of the Constitution. One might even call it a penumbra.


The Takings Clause also doesn't expressly say eminent domain is permissible. Both the legality of eminent domain and that it could only be used for a "public use" were assumed at the time the Bill of Rights was adopted.
2.21.2009 5:02pm
wuzzagrunt (mail):
The Constitution says nothing about taking your property for a non-public use, other than that the government has to give you "due process" before taking it. The idea that taking for a non-public use is prohibited is an inference not found in the actual text of the Constitution. One might even call it a penumbra.


This seems to be the difference between those who believe government is permitted to do anything not explicitly prohibited by the Constitution vs. those who believe government is prohibited from doing anything not explicitly permitted by the Constitution.

I'd like to see a poll on how many people agree with Kelo, but think the Iraq war is illegal because it is conducted without a formal declaration by Congress (and vice versa). Libertarians, at least, tend to be internally consistent on such questions.
2.21.2009 5:51pm
Eli Rabett (www):
Just to be clear, Eli thinks the Supreme Court interpreted the law correctly in Kelo, but that does not mean that the taking was a good move, nor does it mean that it was not, merely that, as the court said, the issue was one for the state legislature and the local authorities. The courts have been pretty much in the same place on Iraq FWIW.
2.21.2009 8:56pm
loki13 (mail):

Outside of the outraged libertarian circle, Kelo just isn't well known. Period.

This is utterly false. In my article on the Kelo backlash this post, I cite extensive survey data showing that over 80% of the public opposed Kelo, including well over 70% of self-described liberals.


Two points:

1. I trust that the good editors at Minnesota are working with you on this Article; noticing that you have a "he" for a "the" on the first page among other typos was not a good sign. I'm not being snarky; that's what drafts are for- just remember that spellcheckers don't catch these things and (having done my time as a LR editor) it's annoying.

2. I think you're being a little misleading. My point was that the vast majority of people (and I mean *vast*) are not aware of the decision. Your data does not dispute that. Allow me to quote:


By contrast, the Saint Index survey asked respondents whether they agreed with the Court's decision "that local governments can take homes, business and private property to make way for private economic development if officials believe it would benefit the public."


I've seen brides led less on the first dance on their wedding day. You can generate large numbers for "awareness" by telling people that there is a Supreme Court case and then asking them their opinion on it. I stand by my original statement ("Kelo just isn't well known")- this is not to denigrate your scholarship; lack of public knowledge of, say, Chevron doesn't make it less important to the field of Administrative law, however you are being disingenuous if you are suggesting that there are large numbers of people who disagree with *Kelo* (as opposed to disagreeing with whatever a poll worker tells them Kelo means)- people don't know what Kelo is.

Uh- don't you write about political ignorance? How's that working?
2.21.2009 10:25pm
Perseus (mail):
And the homeowners argued that it was NOT a public use, at which point the 5th Amendment is silent. The Constitution says nothing about taking your property for a non-public use, other than that the government has to give you "due process" before taking it. The idea that taking for a non-public use is prohibited is an inference not found in the actual text of the Constitution. One might even call it a penumbra.

There is no need to resort to reading penumbras into the Constitution when the 10th amendment is quite explicit that the federal government only possesses delegated powers. But you do illustrate why Hamilton's argument against including a bill of rights was a pretty good one:

For why declare that things shall not be done which there is no power to do? Why, for instance, should it be said that the liberty of the press shall not be restrained, when no power is given by which restrictions may be imposed? I will not contend that such a provision would confer a regulating power; but it is evident that it would furnish, to men disposed to usurp, a plausible pretense for claiming that power.

E.g., the Constitution says nothing about taking your property for a non-public use, other than that the government has to give you "due process" before taking it. Therefore, the government may take your property for non-public use so long as the government provides due process. Voila!
2.21.2009 11:21pm
MikeB (www):
A small point, but it would be interesting to know how many of those who comment have ever been subject to eminent domain.

Speaking as someone actually fighting eminent domain in federal court with Houston-based Spectra Energy, I can confirm that, nowadays, eminent domain has less to do with projects for the "public good," and everything to do with the financial good of publicly held companies.

In Bedford County, Pennsylvania (about 2 hours from Washington), property owners are being hauled into federal court by Spectra Energy, backed by the power of the Federal Energy Regulatory Commission.

The "public good" argument is that this is an underground natural gas storage site (bring gas from somewhere else, charge a fee for storing it, then send it to the northeast via piplines). What goes missing is that the landowners' property is sitting on top of the gas-rich Marcellus Shale; but they can't develop that because Spectra Energy wants to use the Oriskany sands layer (which lies just beneath the Marcellus) for its underground gas storage facility.

In addition, Pennsylvania has more underground natural gas storage sites than any other state in the continental US, according to the Dept. of Energy.

Further, in its most recent motion, Spectra Energy asked that the federal judge exclude evidence that would argue "economic loss to the landowner" for fear that the jury would be "confused, misled and distracted ... waste time."

In adddition, Spectra Energy asked that the judge issue an order "... precluding defendant landowners from offering any evidence at trial of their alleged interests in the possible future development of natural gas reserves in the Marcellus Shale formation and other formations above or below the Oriskany Sandstone formation, and excluding defendant landowners from cross-examining plantiffs' valuation experts regarding their omissions of such matters from their own appraisals of value." (Both statements from p. 7 of the motion: Case 3:08-cv-00154-KRG, Document 59).

Here is the great conundrum in eminent domain: property owners possess the key asset that companies and government covet -- the land. But they are treated as a waste product in this process rather than as key stakeholders.

For info:
http://www.spectraenergywatch.com/blog/
2.22.2009 7:15am
loki13 (mail):
Prof. Somin,

After re-reading my post, I realize that it sounds a little harsher than I meant it to. So allow me to restate my main points in a better manner:

1. I believe you misunderstand what I was saying. When I write "Kelo just isn't well known" I mean precisely that- your polling data does not contradict my assertion because it is not timely and, more importantly, it tells the person being interviewed about the existence of the case. I think it is a true statement that 100% of the people polled were aware of the holding of Kelo *because they were told it*- well, for at least five minutes until Shot of Love with Tia Tequila came on and they forgot it again.

2. I am surprised that someone who writes so much and believes so fervently in the political ignorance (rational or not) of American voters suspends that belief in this case.
2.22.2009 9:27am
josil (mail):
Ignoring the Constitution for the moment, it seems clear that the main motivation for the exercize of eminent domain, where municipalities turn over the property for commercial development, is to enhance municipal income...or worse, the personal income of public officials. Even in a democracy we need protection from our rulers.
2.22.2009 11:38pm
FWB (mail):
It is and always has been about GREED. Those in power, including judges are always coopted by greed, be it for money, general wealth, of power.
2.23.2009 1:51pm
FWB (mail):
of = or
2.23.2009 1:52pm

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