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Anschutz Entertainment Group, Inc. v. Snepp

February 25, 2009; as modified March 3, 2009 and March 23, 2009


APPEAL from an order of the Superior Court of Los Angeles County, Robert L. Hess, Judge. Affirmed in part; reversed in part with directions. (Los Angeles County Super. Ct. Nos. BC370870 & BC372675).

The opinion of the court was delivered by: Turner, P. J.



Civil Code section 48a, subdivision (1) provides that a "[p]laintiff," in order to recover general damages in a defamation case, must serve a retraction demand. What happens when a "plaintiff" is not named in the retraction demand? Can the plaintiff recover actual damages because a wholly owned subsidiary is identified as the party demanding retraction? We conclude that in order for a valid Civil Code section 48a, subdivision (1) retraction demand to preserve the right to pursue general damages, the plaintiff must be actually named or so described that the media defendant fairly knows who is objecting to the challenged publication. As we shall explain, merely identifying a wholly owned subsidiary who it is commonly known is owned by a potential plaintiff in a retraction demand does not comply with the statutory language and purposes embodied in Civil Code section 48a, subdivision (1).

Defendants, Frank W. Snepp III, NBC Universal, Inc., and NBC Subsidiary (KNBC-TV), Inc. (the station), appeal after their special motions to strike two complaints filed by plaintiffs, Anschutz Entertainment Group (the group) and its subsidiary L.A. Arena Company LLC (the arena owner), was denied. We reverse the order denying the special motion to strike as to all of the group‟s claims in the second complaint filed June 14, 2007. Upon remittitur issuance, the special motion to strike the second complaint is to be granted as to the group. The trial court is to apportion the amount of the attorney fees due to defendants incurred litigating the group‟s defamation claims in the second complaint filed June 14, 2007. The order denying the special motion to strike is affirmed in all other respects.


A. The First Complaint And Answer

On May 9, 2007, plaintiffs filed their slander complaint against defendants. The arena owner owns Staples Center (the arena) in Los Angeles. Between December 15 and 18, 2006, "[d]efendants" repeatedly broadcast a segment that touted an ""exclusive investigation‟" concerning the arena. The segment began with an exterior shot of the arena and its familiar red sign. The first complaint then alleges in paragraph 9: "The camera then zoomed in to focus on visitors strolling calmly around the building. Moments later, viewers heard a menacing voice posing the question: 'But when you go inside STAPLES Center, are you safe?'The question was immediately answered with the ominous phrase, 'It isn't fire that kills the people. It's the smoke.'A fraction of a second later, viewers heard an explosion and saw tongues of fire fill the screen. The next image was a sustained shot of dense black billowing smoke. Viewers then heard the words, 'We knew that fire systems weren't working.'After a montage of slamming fire doors and close-ups of a "fire control panel,‟ the final alarm was sounded with the·phrase, 'Paul Moyer uncovers documents that will make you ask: What would really happen if a fire broke out?'" (Original bold and italics.) The purpose of the segment was to have viewers understand the arena is unsafe and likely to undergo a major conflagration.

The foregoing was alleged to be defamatory per se because it conveyed the false messages that: the arena is likely to experience a conflagration because of inadequate fire safety systems; the arena is not currently safe for use as an entertainment venue; and visitors are exposed to the likelihood of a serious fire while occupying the arena. Plaintiffs further allege: the promotional segment subjected them to obloquy, contempt, hatred, and ridicule and had a tendency to injure their business; the broadcast was aired with actual malice and ill-will, knowledge the contents were false, and with a reckless disregard for the truth; and plaintiffs had served a retraction demand but defendants had failed to correct or retract the untrue allegations in the first complaint. Attached as an exhibit to the first complaint is a compact disc video of the promotional segment. Plaintiffs sought general, special, and exemplary damages.

On June 13, 2007, defendants answered the first complaint. The answer consisted of a general denial and various affirmative defenses: plaintiffs were not damaged; the challenged statements were privileged by the United States and California Constitutions; the alleged defamatory statements were "protected" because they were newsworthy; the broadcasts were privileged accounts pursuant to Civil Code section 47, subdivision (d) because they were true and fair accounts of public documents and official proceedings; the complained of statements were privileged fair comment on matters of public interest; plaintiffs‟ claims were barred by the doctrines of "in pari delicto" and unclean hands; estoppel; and the complained of conduct constituted neutral reportage.

B. The Second Complaint

On June 14, 2007, plaintiffs filed their second slander complaint against defendants. In a preliminary statement preceding the substantive allegations of the second complaint, the following appears: "This action was made necessary when the network willfully ignored copious evidence that [the arena‟s] fire protection systems function effectively and the arena is safe. [¶] The network received much of this evidence after it broadcast a deceptive and sensationalistic promotion for a news report about the purported inadequacy of [the arena‟s] fire protection measures. The promotion presented viewers with stock footage of billowing smoke and leaping flames as it informed them that [the arena‟s] "fire systems weren‟t working.‟ and that "smoke‟ "kills people.‟ The conditions portrayed in the promotion have never existed at [the arena] and the likelihood that they could in fact occur is infinitely remote. Nevertheless, the promotion inculcated viewers with the false notion that visitors to [the arena] run a serious risk of succumbing to a deadly conflagration. [¶] KNBC etched that notion in stone when it aired its news report. In that report, KNBC and producer [Mr.] Snepp expanded upon the promotion‟s false message and further exploited viewers‟ fears by falsely asserting that [the arena‟s] smoke control system has never been tested and "doesn‟t work.‟ They did not stop there: [Defendants] baselessly informed viewers that [the arena] "is not safe to occupy.‟ Despite knowledge that the allegations in the promotional segment and the report were untrue, on May 17, 2007, defendants urged viewers to watch the "original investigation‟ on"

The allegations in the second complaint concerning the parties‟ identities are the same as in the first complaint filed May 9, 2007. The heading above the claim for relief adverts to a May 17, 2007 internet posting which refers to and expands on the December 19, 2006 news report. The second complaint then alleges in detail the untruths of the December 2006 broadcast. The December 19, 2006 broadcast was produced by Mr. Snepp and "moderated" by Mr. Moyer. The December 19, 2006 report began, ""[T]here are new questionsabout the safety of [the arena], questions investigated by [Mr.] Snepp and NBC4‟s Paul Moyer.‟" (Original bold and italics.) The broadcast continued: "Atthe outset of the News Report, Moyer stated: 'Now, six years later[i.e. six years after [the arena] was opened to the public,] we can report, based on the City‟s own records, that a critical component of the fire protection system at [the arena] - the smoke evacuation system - has never been fully tested or proven.'" (Original bold and italics.) According to the second complaint, Mr. Moyer‟s statement was false. In fact, the arena‟s smoke control system had been tested, was code compliant, and was fully operational.

After Mr. Moyer‟s lead in, Alfred Babayans, described to viewers as an ""engineer‟" who was "in charge of checking construction plans for the arena for the Los Angeles building and safety department stated, ""[I]f this [the 'smoke evacuation system'] doesn't work, it means the other components don't work, which means the building is not safe, period.'" (Original bold and italics.) The second complaint alleges Mr. Babayans‟ statement was false in three respects: it was false because it was predicated on Mr. Moyer‟s false statement the arena‟s smoke evacuation system had not been fully tested; in fact, the arena‟s smoke control system was fully operational and code-compliant and the facility was safe; and the "other components" of the arena‟s fire protection systems would not cease to function even if the smoke control system became inoperative. Further, defendants knew Mr. Babayans‟ statement was premised upon false or incomplete information.

Then the broadcast featured Randall Ackers, described as a former building and safety inspector. Mr. Ackers stated, ""It isn't the fire that kills people - It's the smoke'" (Original bold and italics.) Then Mr. Moyers falsely stated that the arena‟s smoke evacuation system had received only partial approvals from the building and safety department. Mr. Moyer then asked Mr. Babayans, ""[I]f the smoke evacuation system has not passed a final test, what does that mean?‟" Mr. Babayans responded to Mr. Moyer‟s question, ""It means the building is not safe to occupy.‟" (Original bold and italics.) Mr. Moyer‟s statement was false in that: as noted, the arena‟s smoke control system had been fully tested and had been approved in accord with the applicable building code; it misstated the contents of relevant records; and it misstated the code mandated testing requirements for smoke control systems. Mr. Babayans‟ statement was false: as it was predicated on Mr. Moyer‟s untrue statements; the arena‟s smoke evacuation system was fully operational; and the arena was safe to occupy.

The second complaint further alleges in connection with the December 19, 2006 broadcast: "Viewed together in the context of the News Report as a whole, the above referenced statements send the false message that [the arena‟s] smoke control system has never been tested in accordance with the code, has never been proven to be operational and effective and that these conditions render [the arena] unsafe today. In truth and in fact, [the arena‟s] smoke control system was subjected to, and successfully completed, extensive testing and was determined to be code compliant and fully operational. There is no factual basis for the assertion that [the arena] is not currently "safe to occupy.‟ The likelihood that visitors to [the arena] will succumb to smoke in a deadly conflagration is virtually nil." Additionally, the second complaint alleged: the aforementioned statements were defamatory per se; the challenged statements exposed plaintiffs to contempt, hatred, and obloquy; and the statements had a tendency to injure plaintiffs‟ business operations and profits. The second complaint alleged: "Defendants intended viewers to understand that [the arena‟s] fire protection system currently does not work or is not in compliance with the building code that the owners and operators of the arena are aware of those conditions, that the arena is currently unsafe and that visitors to the arena are exposed to a high risk of succumbing to smoke in a deadly conflagration."

From December 11, 2006, until May 5, 2007, defendants were provided with "reliable information" that the arena‟s smoke control system had been successfully tested and was code compliant, fully operational, and safe. On May 17, 2007, "[d]efendants‟" nightly broadcast urged viewers to watch the "original investigation" on According to plaintiffs, this May 17, 2007 republication of the December 19, 2006 broadcast was done with malice and prior to filing the second complaint, they requested a retraction or correction. Plaintiffs sought general, special, and punitive damages. Attached to the second complaint is a compact disc video depicting the December 19, 2006 broadcast. No answer was filed to the second complaint as the parties were litigating the special motions to strike.


A. Grounds

On June 13, 2007, defendants filed their special motion to strike the first complaint. Defendants asserted the causes of action arose from the exercise of their free expression rights pursuant to Code of Civil Procedure section 425.16, subdivisions (e)(2) and (e)(3). In the statement of grounds in the notice of the special motion to strike, defendants asserted that the two complaints must be stricken because: the challenged communications were protected by Civil Code section 47, subdivisions (d) and (e) and the federal and state constitutional free expression provisions as the broadcast was a fair and true report of official proceedings and records which benefited the public; the broadcast did not contain a statement of fact and the implication asserted by plaintiffs was unreasonable; nothing in the broadcast was false; the broadcast was not of and concerning plaintiffs; the second complaint was an improper amendment; and the broadcast only mentioned the "quality of property" which could not support a defamation claim. On July 31, 2007, defendants filed their special motion to strike the second complaint. Defendants reiterated the previously asserted grounds for striking the first complaint as reasons to specially strike the second complaint. In addition, defendants asserted the second complaint amounted to an impermissible amendment and there were defects in the retraction demand.

B. The Evidence

1. Overview

Both sides made substantial evidentiary showings. Included in the evidentiary showings were compact disc videos of the: promotional segment; December 19, 2006 broadcast; and May 17, 2007 posting on the station‟s website. Also, both sides interposed evidentiary objections. All of defendants‟ evidentiary objections were overruled. Certain of plaintiffs‟ objections were sustained. The following summary of the evidence includes only those matters considered by the trial court.

2. The Promotional Segment

The promotional segment began with the printed text "(EXCLUSIVE STAPLES CENTER INVESTIGATION) TUESDAY AT 5 AND 11 PM" with a photograph of flames in the background against the KNBC logo. This was followed by these words and visual images which, as noted, are bracketed: "Tuesday at 5 and 11. From the Lakers to Springsteen. It‟s an entertainment mecca."

[Announcer‟s voice-over against video of the Lakers playing and Bruce Springsteen in concert and then of people standing outside the arena to buy tickets or enter the facility]

"But when you go inside Staples Center are you safe?" [Announcer‟s voice over with video of exterior and interior of the arena] "It isn‟t the fire that kills the people. It‟s the smoke." [Video of Mr. Akers being interviewed and an explosion and smoke fill the screen] "Was Staples open for business before a critical fire protection system was proven?"

[Video of the interior of the arena and smoke control system fire doors, control panels]

"We knew that the fire systems weren‟t working." [Video interview of Greg Nelson] "We never asked for any favors. We never cut any corners." [Video of Tim Leiweke interview]

But Paul Moyer uncovers documents that will make you ask: "What would really happen if a fire broke out?"

[Announcer‟s voice over, video of smoky interior ending with flames.] the voice over concludes "Exclusive Staples Center investigation Tuesday on the Channel 4 news at 5 and 11."

3. The December 19, 2006 Broadcast

The following is the December 19, 2006 broadcast. The identities of the persons who are speaking and the description of the visual images are bracketed. [Colleen Williams]:

So we begin tonight at 5 with that major channel 4 news investigation. Staples Center. [Video of exterior of the arena in the background] It‟s been a beacon of light in the redevelopment of downtown Los Angeles drawing hundreds of thousands of people to concerts and sporting events every year. But tonight there are new questions about the fire safety systems at Staples Center. Questions investigated by producer [Mr.] Snepp and [Mr.] Moyer. [Mr. Moyer:]

For the past year and a half we‟ve been telling you a story that raises serious questions of safety involving the Playa Vista development next door to Marina del Rey. [Video of exterior of the arena] The L.A. Department of Building and Safety is a central character in that drama and it‟s making an encore appearance in the story we‟re going to tell you tonight. With the L.A. Fire Department playing a supporting role in our Staples Center investigation. [¶] It is the people‟s playground, where the rich and merely passionate gather to gaze upon greatness. But high above the arena, a sobering reality check. [Video of Lakers] Video instructions on how to evacuate the place in case of an emergency like fire. [Video of interior of the arena showing evacuation video on central ceiling monitors.] [Greg Nelson:]

We knew that the fire systems weren‟t working. [Mr. Moyer:]

Greg Nelson was aide to City Councilman Joel Wachs in early 2000. [Video of Mr. Wachs] Six months after Staples opened, at Wachs's initiative, the city council investigated Staples fire controls and reported, quote "their fire systems are not operating." [Photograph of March 15, 2000 Los Angeles City Council committee report]

[Mr. Nelson:]

There was a tremendous rush to get that arena open for the beginning of the Lakers and the Kings season. When we heard that the fire system wasn‟t completely operable, we understood how that would be possible." [Video of interior construction of the arena] [Mr. Moyer outside the arena]:

Remarkably the city council findings got very little attention. But now, six years later, we can report, based on the city‟s own records, that a critical component of the fire protection system at Staples, the smoke evacuation system, has never been fully tested or proven. [Interior video of the arena, Lakers and showing the smoke control system and central ceiling monitors where emergency evacuation videos are played.] [Alfred Babayans:]

If this doesn‟t work it means the other components don‟t work, which means that the building is not safe, period. [Mr. Moyer walking outside with Mr. Babayans:]

Alfred Babayans, now a private engineer, was in charge of checking construction plans for Staples and the L.A. Department of Building and Safety. [Photograph of plan check for Building and Safety] He says his then boss, Andrew Adelman, [video of Mr. Adelman] pushed hard to get the arena up and running and told his staff "that this place should open no matter what. It means that you rubberstamp things, basically you ignore the safety standards." [Video of people in the arena] [Mr. Leiweke:]

We never asked for any favors. We never cut any corners. [Mr. Moyer interviewing Mr. Leiweke:]

Tim Leiweke, president of Staples, insists he got no special treatment from city inspectors or officials. But the individuals involved in the matter told us that Mayor Richard Riordan‟s staff [video of press conference with Mr. Riordan and others] had fire inspector Monty Buckner [photo of Mr. Buckner] removed from the Staples project after Buckner refused to fast track inspections. [Interior of the arena] At about the same time, in October of 1999, Adelman‟s Department of Building and Safety [montage of fanned out documents] issued temporary certificates of occupancy, [temporary occupancy certificates] known as tco‟s, to allow Staples to open, unfinished so the games could begin. Handwritten tco notes show that virtually every important safety inspection was deferred until later. [Photograph of documents with handwritten notes] [Mr. Snepp:]

When they were issuing the tco‟s, was it safe or not? [Mr. Babayans:]

No, it wasn‟t. [Mr. Moyer:]

Fire Marshal Jimmy Hill [photograph of Mr. Hill] signed off on the tcos for the fire department. The actual fire inspector on the ground, Neal Reitzell, wrote in his log [photo of log] that the sign off was done without his concurrence and that fire protections were incomplete. [¶] [Video of Bruce Springsteen in concert] Bruce Springsteen opened Staples on October 17, 1999. [Video of crowds entering the arena] A fire department memo [photo of memorandum] had advised the mayor and his then deputy, now City Attorney Rocky Delgadillo, [photographs of mayor and Mr. Delgadillo] that fire protections were incomplete [photograph of document log] and that fire marshals would be in attendance at events as a stop gap measure. [Video of man wearing official badge] [Mr. Leiweke:]

I remember Bruce Springsteen, he had a candle in his locker room on the night of his concert and we had to blow it out "cause the fire marshals didn‟t want a candle lit. [Mr. Moyer:]

And no wonder the fire marshals were so concerned, says former Building and Safety Inspector Randall Ackers who examined our Staples files. [Video of crowds outside the arena] [Mr. Ackers:]

That building is nearly a million square feet and has an occupancy load of 22,000. I was a little surprised at reading that four fire watchers were going to be adequate to deal with the potential emergencies caused by a lack of a smoke control system. [Video of Mr. Ackers reading "Staples Arena Inspection Analysis" report] [Mr. Moyer:]

Fire Inspector Reitzell later wrote [video of Inspector Reitzell‟s signature on document] that the biggest obstacle to completing critical safety tests was Staples insistence on keeping the events going, nonstop. Leiweke complains that the fire department‟s inspections got in the way of business. [Mr. Leiweke:]

Once we opened the building, they would have preferred we would have cleared everyone out of the building when they were doing their live safety checks and that wasn‟t going to happen. We were an operating concern. We had the Clippers practicing and playing. [Video of basketball practice] We had artists in there so there [video of rock artist] were times we had to restrict the testing. [Mr. Moyer standing outside the arena:]

One of the critical fire protections for any large building is the smoke evacuation system, a combination of fire doors, ducts, dampers, fans, pressurized stairwells and other components that expel the smoke in case of fire. [Video of fire doors being tested, ducts, fans, dampers] [Mr. Akers:]

It isn‟t the fire that kills the people. It‟s the smoke. [Video of fans] [Mr. Moyer:]

If the components don‟t work in unison, experts say, the smoke settles into a deadly pall. [Video of ceiling and arena] [Mr. Akers:]

Well you have people passing out from smoke inhalation, the building would fill quickly with smoke, blocking people‟s ability to see the exit and the exits signs causing panic." [Video of empty arena] [Mr. Babayans:]

Put this all together and you will see a big catastrophe on hand. [Mr. Moyer:]

According to this building and safety log [video of department log], components of the smoke evacuation system for Staples were installed and partially tested in late 1999 and early 2000, as the games continued. And constantly, the components received only quote partial approval from building inspectors. [Video of crowd inside the arena] [Mr. Babayans:]

Something was always wrong. They tried to fix it many times. [Mr. Moyer:]

Based on this fire department schedule, another round of tests began in February of 2000. They were special tests, known as performance or acceptance tests, mandated by city codes and conducted by special fire inspectors with the help of building and safety engineers. [Photographs of documents, logs] Running these tests is like putting the Lakers through their paces to see if all the players can pull together. If one player falters, the team falters. [Mr. Moyer outside the arena] Reitzell‟s own test notes show [photograph of highlighted note] one problem after another, especially with the fire doors [video of fire doors] right up to February 15, 2000. [Exterior view top of the arena] On that day, he issued a report [photograph of report] that indicated by an empty check off box [video of check off box circled in red] that the system had not passed its final test. Records from the Department of [photograph of document] Building and Safety tell the same story with inspectors giving only quote partial approvals to the smoke evacuation system right up to the 15th. There were no further entries, not then, not up to the present. [Photograph of document log] [Mr. Snepp:]

If the smoke evacuation system didn‟t pass a final test, what does that mean? [Mr. Babayans:]

It means the building is not safe to occupy. [Mr. Moyer:]

[Video of document montage] Despite the incomplete smoke test results, Fire Marshal Jimmy Hill and building and safety engineers signed off on a final inspection report on February the 15th. [Video of report] And a permanent certificate of occupancy [photo of occupancy certificate] was issued the next day. A fire department statement says all fire and life safety inspections met the applicable provisions of fire and building codes. [Video of fire truck and sirens] The safety of the general public or the Staples employees was never compromised. And Building and Safety Chief Adelman and his deputies [video of Mr. Adelman] tell us in a written statement the sign offs meant that all installation and testing of the smoke evacuation system were completed and approved by the appropriate inspector. But informed sources close to Hill and Reitzell say that Hill signed off on the Staples inspections without Reitzell‟s final input [photographs of Mr. Hill and Mr. Reitzell] and when Hill did talk to his inspector later, Reitzell told him there were many safety violations still outstanding. [Mr. Moyer outside Staples] This is supported by a fire department status report issued two weeks after the sign off. [Photograph of back of fire truck] It shows the smoke control system still had only a partial test rating with corrections still pending on it and many other fire safety systems. [Photograph of "Staples Fire Life Safety Status" report] In addition, Reitzell wrote a blistering report [photograph of report] for city officials saying the inspection schedule established by the Department of Building and Safety and the arena contractors was not practical or achievable. There was not enough time allowed for re-testing deficiencies to meet the proposed certificate of occupancy. [Mr. Snepp:]

One system doesn‟t work in the chain, is the whole chain broken? [Mr. Babayans:]

It may cause for the whole system to fail that means yes, it‟s broken. [Mr. Leiweke:]

We absolutely passed all of the tests as they were required by building and safety and the fire department to us otherwise they wouldn‟t have signed off on the certificate of occupancy." [Photograph of occupancy certificate] [Mr. Moyer:]

Inspector Reitzell, Neal Reitzell, you‟re familiar with him, "Yes," notes the fire doors are not yet certified or properly installed. That‟s the day the c of o was issued. That‟s not final approval. [Mr. Leiweke:]

Well, we had final approval from his boss and we‟ve been told now by Chief Hill there was miscommunication within their department. [Mr. Moyer:]

[Video of building and safety department documents] It‟s this miscommunication plus poor building and safety paperwork says Leiweke, that caused all the confusion. [Photograph of Mr. Reitzell] He also dismisses Reitzell as one particular gentleman, who, by the way, has a disagreement with his boss, they got to have a better system so they don‟t have people within their own ranks disagreeing with the chief. [Video of Mr. Leiweke and Mr. Moyer] [Mr. Moyer:]

So you‟re telling me that they messed it up, you didn‟t. [Mr. Leiweke]:

Everything we were told we had to do, we not only complied with over a six month period of time, but they would not have signed off on that certificate of occupancy had we not finished every test to their satisfaction. [Mr. Moyer:]

Didn‟t you know at the time the [occupancy certificate] was issued, there was a flaw in the system?

[Mr. Leiweke :]

No. [Mr. Moyer:

A note from Reitzell tells a different story. A day after the [occupancy permit] was issued, Reitzell wrote, "The arena owners have agreed to provide qualified personnel to monitor the fire control room functions until the central station dialer, a direct link to the fire department, is installed in order to get the fire marshal to sign off on the CO." [photo of document with quote highlighted] [¶] In other words, Staples negotiated with the fire department to get the final certificate despite the incomplete fire system. [Exterior view of the arena; video of Bono] [Mr. Leiweke:]

We have a fire marshal at every event we do in this building. We were the most heavily scrutinized building and arena I‟ve ever been a part of and our company manages 30 or 40 of these arenas all over the world. We are one of the few arenas I know of that had to have such an extensive sprinkling system. [Mr. Moyer:]

[Video of Mr. Moyer outside the arena] About that sprinkler system. The building department says its sign off of Staples certificate of occupancy verifies the sprinklers were completed and approved. But we discovered building and safety documents that show no final approval even now, for more than a thousand sprinklers at the arena leaving open the question, are they properly inspected and installed? [video of documents, superimposed on arena footage] [Mr. Leiweke:]

We‟re the safest building in any arena I know anywhere in the country and our experts and our consultants verify that. [Mr. Moyer:]

[Video of control panels] Every year, Staples‟ own consultants test hundreds of components of the fire system and the fire department performs a single walk through inspection [video of occupied arena] with little follow up because the head of the inspection unit says he lacks the necessary manpower. [Mr. Leiweke:]

We always have a problem with some components within the system and you know what those are? A burned out light bulb, an exit sign that may have been twisted, an exit sign ...

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