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United States of America and State of California v. Montrose Chemical Corp. of California

August 22, 2012

UNITED STATES OF AMERICA AND STATE OF CALIFORNIA, PLAINTIFFS,
v.
MONTROSE CHEMICAL CORP. OF CALIFORNIA, ET AL., DEFENDANTS.



PARTIAL CONSENT DECREE

(Construction of the Dual Site Groundwater Operable Unit Treatment System) KAMALA D. HARRIS Attorney General of the State of California MARK BRECKLER Chief Assistant Attorney General SALLY MAGNANI Senior Assistant Attorney General BRIAN HEMBACHER Supervising Deputy Attorney General CATHERINE M. WIEMAN Deputy Attorney General 300 South Spring Street Los Angeles, CA 90013 Telephone: (213) 897-2638 Brian.Hembacher@doj.ca.gov Catherine.Wieman@doj.ca.gov Attorneys for Plaintiff State of California

TABLE OF CONTENTS

I. BACKGROUND

..................................................................................................1

II. JURISDICTION ...................................................................................................6

III. PARTIES BOUND...............................................................................................7

IV. DEFINITIONS .....................................................................................................8

V. GENERAL PROVISIONS .................................................................................12

VI. ESTABLISHMENT AND USE OF DUAL SITE TRUST FUND....................14

VII. PERFORMANCE OF THE WORK BY SETTLING DEFENDANTS.............19

VIII. QUALITY ASSURANCE, SAMPLING, AND DATA ANALYSIS................24

IX. ACCESS AND INSTITUTIONAL CONTROLS..............................................26

X. REPORTING REQUIREMENTS......................................................................29

XI. EPA APPROVAL OF PLANS, REPORTS, AND OTHER DELIVERABLES31

XII. PROJECT COORDINATORS ...........................................................................33

XIII. CERTIFICATION OF COMPLETION OF THE WORK.................................34

XIV. EMERGENCY RESPONSE ..............................................................................36

XV. PAYMENT OF WORK OVERSIGHT COSTS ................................................37

XVI. INDEMNIFICATION AND INSURANCE.......................................................39

XVII. FORCE MAJEURE............................................................................................41

XVIII. DISPUTE RESOLUTION..................................................................................43

XIX. STIPULATED PENALTIES..............................................................................48

XX. COVENANTS BY PLAINTIFFS ......................................................................53

XXI. COVENANTS BY SETTLING DEFENDANTS ..............................................57

XXII. EFFECT OF SETTLEMENT; CONTRIBUTION.............................................58

XXIII. ACCESS TO INFORMATION..........................................................................60

XXIV. RETENTION OF RECORDS ............................................................................62

XXV. NOTICES AND SUBMISSIONS ......................................................................64

XXVI. RETENTION OF JURISDICTION....................................................................66

XXVII. APPENDICES ....................................................................................................67

XXVIII. COMMUNITY RELATIONS............................................................................67

XXIX. MODIFICATION...............................................................................................68

XXX. LODGING AND OPPORTUNITY FOR PUBLIC COMMENT ......................68

XXXI. SIGNATORIES/SERVICE ................................................................................69

XXXII. FINAL JUDGMENT..........................................................................................70

I.BACKGROUND

A. In December 1999, the United States and the State of California ("State"), on behalf of the California Department of Toxic Substances Control ("DTSC"), filed a Third Amended Complaint ("Complaint") in this matter, pursuant to Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. §§ 9607 - 9675, seeking, inter alia, recovery of response costs in connection with releases of the pesticide DDT and other hazardous substances into the environment at and from the former manufacturing facility located at 20201 Normandie Avenue in Los Angeles, California, which was operated by Montrose Chemical Corporation of California ("Montrose Plant Property"). This Partial Consent Decree constitutes a partial resolution of the claims asserted in the Complaint, as described further below.

B. In the First Claim for Relief of the Complaint, the United States and DTSC asserted a claim under Section 107(a)(1-4)(C) of CERCLA, 42 U.S.C. § 9607(a)(1- 4)(C), for alleged natural resource damages relating to discharges of DDT through Los Angeles County's sanitation system and into the Pacific Ocean. The First Claim was settled in a Consent Decree entered by the Court on March 15, 2001.

C. In the Second Claim for Relief of the Complaint, the United States and DTSC asserted a claim for recovery of costs incurred and declaratory judgment for costs to be incurred by EPA and DTSC in response to the release or threatened release of hazardous substances into the environment at and/or from the Montrose Plant Property pursuant to Section 107(a)(1-4)(A) of CERCLA, 42 U.S.C. § 9607(a)(1-4)(A).

D. The Complaint specified that the Second Claim included costs related to contamination in ocean sediment at the Palos Verdes Shelf, as well as a number of specified water bodies. This portion of the Second Claim was also settled in the Consent Decree entered on March 15, 2001.

E. Pursuant to a Partial Consent Decree for Past Costs, entered by the Court on October 20, 2000, the United States and DTSC recovered $5.125 million as reimbursement and settlement of claims for specified past response costs. In addition, Montrose Chemical Corporation of California ("Montrose") had previously paid $1,354,612.37 to EPA as reimbursement of past response costs incurred by the United States with respect to portions of the Montrose Superfund Site.

F. Trial in this action commenced on October 17, 2000. On October 18, 2000, the Court took under submission the issue of liability of the Settling Defendants for certain areas to which Plaintiffs contended that hazardous substances had been released from the Montrose Plant Property. The Parties subsequently lodged and the Court entered two separate consent decrees for those areas. Specifically, on June 26, 2002, the Court entered a "Partial Consent Decree (relating to the Neighborhood Areas)," which resolved Settling Defendants' liability to the United States and DTSC for response costs related to the Neighborhood Areas, as defined in that agreement. On the same day, the Court entered a "Partial Consent Decree (relating to the Current Storm Water Pathway)," which resolved Settling Defendants' liability to the United States, DTSC, and the California Regional Water Quality Control Board, Los Angeles Region, for response costs relating to the Current Storm Water Pathway, as defined in that agreement.

G. This Court has already considered certain liability issues related to the groundwater contamination emanating from the Montrose Superfund Site and issued an Order on Summary Judgment (Order Granting United States' Motion for Partial Summary Judgment, April 24, 2000, as amended by Joint Stipulation and Order, July 18, 2000). In these Orders, the Court concluded that Montrose, Atkemix Thirty-Seven, Inc., and Aventis CropScience USA, Inc. are jointly and severally liable for all costs of removal or remedial action incurred by the United States or DTSC with respect to the Montrose Plant Property.

H. Addressing the Montrose Superfund Site groundwater contamination is complicated by the fact that EPA believes that the Montrose-related groundwater plume is commingled with contamination from a nearby site, the Del Amo Superfund Site. EPA therefore refers to the commingled contamination as the Dual Site Groundwater Operable Unit of the Montrose Chemical and Del Amo Superfund Sites, in Los Angeles County, California ("Dual Site"), and issued a joint Record of Decision ("ROD") for the Dual Site on March 31, 1999.

I. In accordance with the National Contingency Plan, 40 C.F.R. Part 300 (as amended) ("NCP") and Section 121(f)(1)(F) of CERCLA, 42 U.S.C. § 9621(f)(1)(F), EPA notified DTSC on February 4, 2010, of negotiations with potentially responsible parties ("PRPs") regarding the completion of the Remedial Design and implementation of the Remedial Action for the Dual Site. EPA has provided DTSC with an opportunity to participate in such negotiations and be a party to this Partial Consent Decree.

J. In accordance with Section 122(j)(1) of CERCLA, 42 U.S.C. § 9622(j)(1), EPA notified the U.S. Department of Commerce, National Oceanic and Atmospheric Administration, and the U.S. Department of the Interior, Fish and Wildlife Service and National Park Service on November 17, 2010, of these negotiations and invited the trustee(s) to participate in the negotiation of this Partial Consent Decree.

K. The defendants that have entered into this Partial Consent Decree ("Settling Defendants") do not admit any liability to Plaintiffs arising out of the transactions or occurrences alleged in the Complaint, nor do they acknowledge that the release or threatened release of hazardous substances at or from the Dual Site constitutes an imminent and substantial endangerment to the public health or welfare or the environment. Settling Defendants do not admit, and reserve the right to controvert in subsequent proceedings, except as otherwise provided herein, the validity of any findings of fact or conclusions of law stated in this Partial Consent Decree.

L. Pursuant to Section 105 of CERCLA, 42 U.S.C. § 9605, EPA placed the Montrose Chemical Superfund Site on the National Priorities List, set forth at 40 C.F.R. Part 300, Appendix B, by publication in the Federal Register on October 4, 1989, 54 Fed. Reg. 41015. By the same authority, EPA included the Del Amo Site on the NPL on September 7, 2002. 67 Fed. Reg. 56760.

M. In response to a release or a substantial threat of a release of a hazardous substance(s) at or from the Dual Site, Montrose undertook Remedial Investigation ("RI") activities in 1986. In 1998, EPA took over the Montrose investigation and completed a Remedial Investigation Report in May 1998, pursuant to 40 C.F.R. § 300.430; and Shell Oil Company ("Shell") issued a separate Remedial Investigation Report for the Del Amo Study Area the same month. EPA had already assumed responsibility for the Feasibility Study ("FS") and issued a Feasibility Study Report for the Groundwater OU in May 1998.

N. Pursuant to Section 117 of CERCLA, 42 U.S.C. § 9617, EPA published notice of the completion of the FS and of the proposed plan for Remedial Action for the Dual Site on June 1, 1998, in a major local newspaper of general circulation. EPA provided an opportunity for written and oral comments from the public on the proposed plan. A copy of the transcript of the public meeting is available to the public as part of the administrative record upon which the Assistant Director of the Superfund Division, as the delegate of the Regional Administrator of EPA Region 9, based the selection of the response action.

O. After issuance of the ROD, Remedial Design work began. Initially, EPA undertook a groundwater modeling effort to assess the direction and flow of groundwater in and near the Dual Site. In 2003, EPA issued separate Administrative Orders to Montrose and Shell for the Interim Remedial Design. See In The Matter of the Montrose Chemical Superfund Site and the Del Amo Superfund Site, Los Angeles, California, Groundwater Operable Unit, U.S. EPA Docket Number 2003-06, and In The Matter of the Del Amo Superfund Site and Montrose Chemical Superfund Site, Los Angeles, California, Groundwater Operable Unit, U.S. EPA Docket Number 2003-08. Montrose and Shell complied with those orders. EPA subsequently issued another order, EPA Administrative Order Number 2008-04A ("EPA Order 2008-04A"), requiring completion of certain elements of the Remedial Design. Completion of the work required under EPA Order 2008-04A is currently anticipated by mid-2012.

P. To facilitate the resolution of this matter and the prompt and early commencement of the Remedial Action for the Dual Site, EPA, after consultation with DTSC, has determined that, based on the information currently available, it is appropriate to enter into this Partial Consent Decree, which addresses only one element of the multi-step remedy selected in the ROD. The ROD concludes that three plumes of groundwater contamination have become partially commingled or merged in the Harbor Gateway area of Los Angeles County. This Partial Consent Decree addresses the construction of the treatment system for the chlorobenzene plume, as defined in the ROD ("Chlorobenzene Plume"), and one element of the remedy as to that plume: the construction of the groundwater treatment system.

Q. Solely for the purposes of Section 113(j) of CERCLA, 42 U.S.C. § 9613(j), the Work shall constitute a response action taken or ordered by the President for which judicial review shall be limited to the administrative record.

R. The Plaintiffs are continuing to negotiate with the Settling Defendants and other parties to resolve the remaining issues as to the groundwater remedy, which include, but are not limited to, operation and maintenance of the Chlorobenzene Plume groundwater treatment system, payment of response costs (other than EPA Work Oversight Costs and DTSC Work Oversight Costs), and implementation of all remaining elements of the remedy. These negotiations involve numerous additional parties and issues. Plaintiffs and Settling Defendants to this Partial Consent Decree believe it is both feasible and appropriate to begin the construction of the Chlorobenzene Plume treatment system prior to reaching agreement on a broader, all-party consent decree.

S. The Parties recognize, and the Court by entering this Partial Consent Decree finds, that this Partial Consent Decree has been negotiated by the Parties in good faith and implementation of this Partial Consent Decree will expedite the cleanup of the Dual Site and will avoid further prolonged and complicated litigation between the Parties, and that this Partial Consent Decree is fair, reasonable, and in the public interest.

NOW, THEREFORE, it is hereby Ordered, Adjudged, and Decreed:

II.JURISDICTION

1. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. §§ 1331 and 1345, and 42 U.S.C. §§ 9606, 9607, and 9613(b). This Court also has personal jurisdiction over Settling Defendants.

Solely for the purposes of this Partial Consent Decree and the underlying complaints, Settling Defendants waive all objections and defenses that they may have to jurisdiction of the Court or to venue in this District. Settling Defendants shall not challenge the terms of this Partial Consent Decree or this Court's jurisdiction to enter and enforce this Partial Consent Decree.

III.PARTIES BOUND

2. This Partial Consent Decree applies to and is binding upon the United States, DTSC, and upon Settling Defendants and their successors and assigns. Any change in ownership or corporate status of a Settling Defendant including, but not limited to, any transfer of assets or real or personal property, shall in no way alter Settling Defendants' responsibilities under this Partial Consent Decree.

3. Settling Defendants shall provide a copy of this Partial Consent Decree to each contractor hired by the Settling Defendants to perform the Work required by this Partial Consent Decree and to each person representing any Settling Defendant with respect to the Dual Site or the Work, and shall condition all contracts entered into hereunder upon performance of the Work in conformity with the terms of this Partial Consent Decree. Settling Defendants or their contractors shall provide written notice of the Partial Consent Decree to all subcontractors hired to perform any portion of the Work required by this Partial Consent Decree. Settling Defendants shall nonetheless be responsible for ensuring that their contractors and subcontractors perform the Work in accordance with the terms of this Partial Consent Decree. With regard to the activities undertaken pursuant to this Partial Consent Decree, each contractor and subcontractor shall be deemed to be in a contractual relationship with Settling Defendants within the meaning of Section 107(b)(3) of CERCLA, 42 U.S.C. § 9607(b)(3).

IV.DEFINITIONS

4. Unless otherwise expressly provided in this Partial Consent Decree, terms used in this Partial Consent Decree that are defined in CERCLA or in regulations promulgated under CERCLA shall have the meaning assigned to them in CERCLA or in such regulations. Whenever terms listed below are used in this Partial Consent Decree or in the appendices attached hereto and incorporated hereunder, the following definitions shall apply solely for purposes of this Partial Consent Decree:

"CERCLA" shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. §§ 9601 -- 9675.

"Chlorobenzene Plume" shall mean the entire distribution of chlorobenzene in groundwater at the Dual Site and all other contaminants that are commingled with the chlorobenzene, in accordance with the definition set forth in the ROD. See ROD at 7-10.

"Day" shall mean a calendar day unless expressly stated to be a working day. The term "working day" shall mean a day other than a Saturday, Sunday, or federal holiday. In computing any period of time under this Partial Consent Decree, where the last day would fall on a Saturday, Sunday, or federal or State holiday, the period shall run until the close of business of the next working day.

"DTSC" shall mean the California Department of Toxic Substances Control, its officers, employees, and representatives, all of its divisions and branches, any predecessor agency in interest, and the Hazardous Substances Account, as defined in California Health and Safety Code § 25330.

"DTSC Work Oversight Costs" shall mean costs that DTSC incurs in monitoring and supervising Settling Defendants' performance of the Work to determine whether such performance is consistent with the requirements of this Partial Consent Decree, including costs incurred in reviewing plans, reports, and other deliverables submitted pursuant to this Partial Consent Decree, as well as costs incurred in overseeing implementation of the Work, including, inter alia: the costs incurred by DTSC pursuant to Sections IX (Access and Institutional Controls) and XIV (Emergency Response), and the costs incurred by DTSC in enforcing the terms of this Partial Consent Decree, including all costs incurred in connection with Dispute Resolution pursuant to Section XVIII (Dispute Resolution) and all litigation costs.

"Dual Site" shall mean the Dual Site Groundwater Operable Unit of the Montrose Chemical and Del Amo Superfund Sites, in Los Angeles County, California, and depicted generally on the map attached as Appendix C.

"Effective Date" shall be the date upon which this Partial Consent Decree is entered by the Court as recorded on the Court docket, or, if the Court instead issues an order approving the Partial Consent Decree, the date such order is recorded on the Court docket.

"EPA" shall mean the United States Environmental Protection Agency and any successor departments or agencies of the United States.

"EPA Work Oversight Costs" shall mean costs that EPA incurs in monitoring and supervising Settling Defendants' performance of the Work to determine whether such performance is consistent with the requirements of this Partial Consent Decree, including costs incurred in reviewing plans, reports, and other deliverables submitted pursuant to this Partial Consent Decree, as well as costs incurred in overseeing implementation of the Work, including, inter alia: the costs incurred by the United States pursuant to Sections IX (Access and Institutional Controls) and XIV(Emergency Response), and the costs incurred by the United States in enforcing the terms of this Partial Consent Decree, including all costs incurred in connection with Dispute Resolution pursuant to Section XVIII (Dispute Resolution) and all litigation costs.

"Interest" shall mean interest at the rate specified for interest on investments of the EPA Hazardous Substance Superfund established by 26 U.S.C. § 9507, compounded annually on October 1 of each year, in accordance with 42 U.S.C. § 9607(a). The applicable rate of interest shall be the rate in effect at the time the interest accrues. The rate of interest is subject to change on October 1 of each year.

"National Contingency Plan" or "NCP" shall mean the National Oil and Hazardous Substances Pollution Contingency Plan promulgated pursuant to Section 105 of CERCLA, 42 U.S.C. § 9605, codified at 40 C.F.R. Part 300, and any amendments thereto.

"Paragraph" shall mean a portion of this Partial Consent Decree identified by an Arabic numeral or an upper or lower case letter.

"Partial Consent Decree" or "Decree" shall mean this Partial Consent Decree and all appendices attached hereto (listed in Section XXVII). In the event of conflict between this Partial Consent Decree and any appendix, this Partial Consent Decree shall control.

"Parties" shall mean the United States, the State, on behalf of DTSC, and Settling Defendants.

"Plaintiffs" shall mean the United States and the State, on behalf of DTSC.

"RCRA" shall mean the Solid Waste Disposal Act, as amended, 42 U.S.C. §§ 6901 -- 6992 (also known as the Resource Conservation and Recovery Act).

"Record of Decision" or "ROD" shall mean the EPA Record of Decision relating to the Dual Site Groundwater Operable Unit signed on March 30, 1999, by the Regional Administrator, EPA Region IX, or his/her delegate, and all attachments thereto. The ROD is attached as Appendix A.

"Remedial Design" shall mean those activities related to the remedy selected in the ROD that are being completed under EPA Order 2008-04A.

"Remaining Work" shall mean, collectively, all activities, excluding the Work, that will be necessary to implement the remedy selected in the ROD.

"Section" shall mean a portion of this Partial Consent Decree identified by a Roman numeral.

"Settling Defendants" shall mean Montrose, Bayer CropScience Inc., News Publishing Australia Limited, and Stauffer Management Company LLC, and includes all predecessors in interest that have entered into Consent Decrees in this matter, as described in Section I (Background). Those predecessors include Aventis CropScience USA Inc. and Rhone Poulenc Ag Company Inc. (for Bayer CropScience Inc.), Chris-Craft Industries, Inc. (for News Publishing Australia Limited), and Atkemix Thirty-Seven Inc. (for Stauffer Management Company LLC).

"State" shall mean the State of California and each department, agency, and instrumentality of the State of California, including DTSC.

"Statement of Work" or "SOW" shall mean the statement of work for implementation of the Work at the Dual Site, as set forth in Appendix B to this Partial Consent Decree and any modifications made in accordance with this Partial Consent Decree.

"Supervising Contractor" shall mean the principal contractor retained by Settling Defendants to supervise and direct the implementation of the Work under this Consent Decree.

"Trust Payment" shall mean the $14,599,048 to be paid by Settling Defendants to the Dual Site Trust Fund pursuant to Section VI of this Consent Decree.

"United States" shall mean the United States of America and each department, agency, and instrumentality of the United States, including EPA and any federal natural resource trustee.

"Waste Material" shall mean (1) any "hazardous substance" under Section 101(14) of CERCLA, 42 U.S.C. § 9601(14); (2) any pollutant or contaminant under Section 101(33) of CERCLA, 42 U.S.C. § 9601(33); (3) any "solid waste" under Section 1004(27) of RCRA, 42 U.S.C. § 6903(27); and (4) any hazardous substance under California Health and Safety Code § 25316.

"Work" shall mean all activities and obligations that Settling Defendants are required to perform under this Partial Consent Decree, except the activities required under Section XXIV (Retention of Records).

"Work Plan" shall mean the document developed pursuant to Paragraph

3.1(a) through (f) of the SOW and approved by EPA, and any modifications thereto.

V.GENERAL PROVISIONS

5. Objectives of the Parties. The objectives of the Parties in entering into this Partial Consent Decree are to protect public health, welfare, and the environment by providing for the performance of the Work by Settling Defendants, the payment by Settling Defendants of EPA Work Oversight Costs and DTSC Work Oversight Costs, and the resolution of certain claims of Plaintiffs against Settling Defendants and certain claims of Settling Defendants against Plaintiffs with regard to this Dual Site, as set forth in Sections XX and XXI ("Covenants by Plaintiffs" and "Covenants by Settling Defendants").

6. Commitments by Settling Defendants.

a. Settling Defendants shall finance and perform the Work in accordance with this Partial Consent Decree, the Remedial Design, the applicable portions of the ROD, the SOW, and the Work Plan and other plans, standards, specifications, and schedules set forth in this Partial Consent Decree or approved by EPA.

b. The obligations of Settling Defendants to finance and perform the Work are joint and several. In the event of the insolvency of any Settling Defendant or the failure by any Settling Defendant to implement any requirement of this Partial Consent Decree, the remaining Settling Defendants shall complete all such requirements.

c. The Work shall include, and Settling Defendants shall finance and perform, any further response actions related to construction of the groundwater treatment system for the Chlorobenzene Plume that are required under Section VII of this Partial Consent Decree and any additional activities required pursuant to Paragraph 46 (Completion of the Work) in accordance with this Partial Consent Decree, the applicable portions of the ROD, the SOW, and the Work Plan and other plans, standards, specifications, and schedules set forth in, or developed pursuant to, this Partial Consent Decree.

7. Compliance With Applicable Law. All activities undertaken by Settling Defendants pursuant to this Partial Consent Decree shall be performed in accordance with the requirements of all applicable federal and state laws and regulations. Settling Defendants must also comply with all applicable or relevant and appropriate requirements of all federal and state environmental laws as set forth in the ROD and the SOW. The activities conducted pursuant to this Partial Consent Decree, if approved by EPA, shall be deemed to be consistent with the NCP.

8. Permits.

a. As provided in Section 121(e) of CERCLA, 42 U.S.C. § 9621(e), and Section 300.400(e) of the NCP, no permit shall be required for any portion of the Work conducted entirely on-site (i.e., within the areal extent of contamination or in very close proximity to the contamination and necessary for implementation of the Work). Settling Defendants may seek the assistance of the United States and DTSC with respect to permits proposed by any State, county, municipal, or other governmental bodies. Where any portion of the Work that is not on-site requires a federal or state permit or approval, Settling Defendants shall submit timely and complete applications and take all other actions necessary to obtain all such permits or approvals.

b. Settling Defendants may seek relief under the provisions of Section XVII (Force Majeure) for any delay in the performance of the Work resulting from a failure to obtain, or a delay in obtaining, any permit or approval referenced in Paragraph 8.a and required for the Work, provided that they have submitted timely and complete applications and taken all other actions necessary to obtain all such permits or approvals.

c. This Partial Consent Decree is not, and shall not be construed to be, a permit issued pursuant to any federal or state statute or regulation.

VI.ESTABLISHMENT AND USE OF DUAL SITE TRUST FUND

9. Generally. As provided by this Section and Appendix E (the Dual Site Trust Fund Agreement), a Dual Site Trust Fund, to be known as the "Trust," shall be established by Settling Defendants for the benefit of EPA to provide sources of funds for payment and reimbursement of Work under this Partial Consent Decree, pursuant to the procedures specified in Appendix E.

10. Establishment of the Trust. Within 15 days of the Effective Date, Settling Defendants shall transfer the Trust Payment to be deposited into the Trust. The Parties agree that the Trust is established pursuant to the order of the Court for the sole purpose of ...


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