American Logistics Archive

LA’s City Attorney Sues 3 Port Trucking Companies

NEWS ROUND UP

On January 8th, Los Angeles City Attorney Mike Feuer filed lawsuits against three leading port trucking companies, all owned by NFI Industries. In the suits, City Attorney Feuer alleges that the companies intentionally misclassified hundreds of truckers as independent contractors, rather than employees, to avoid providing benefits and paying applicable taxes.

January 8th

January 9th

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January 11th

LA City Attorney Files Lawsuits Against Three Port Trucking Companies for Misclassification of Truck Drivers

Justice for Port Drivers Press Release

PRESS RELEASE FOR: Monday, January 8, 2018

PRESS CONTACT: Barb Maynard

Los Angeles, CA – Today, Los Angeles City Attorney Mike Feuer filed lawsuits against three leading port trucking companies, all owned by NFI Industries, which purchased the conglomerate from the Bob Curry family (California Cartage) in 2017. In the suits, City Attorney Feuer alleges that the companies intentionally misclassified hundreds of truckers as independent contractors, rather than employees, to avoid providing benefits and paying applicable taxes.

Click here to download the complaints (scroll to bottom of press release).

“The Teamsters applaud Los Angeles City Attorney Mike Feuer for taking aggressive action against these market leading companies – K&R Transportation, CMI, and California Cartage Express – which continue to violate the law even after determinations by the California Labor Commissioner that they are openly violating the law. We hope this will send a strong message that not only these companies, but the entire port trucking industry must stop breaking labor laws. Thousands of drivers at many of LA’s port trucking companies have filed private lawsuits and wage and hour claims alleging illegal misclassification; and drivers have gone on strike 15 times to demand change. And every government agency that has conducted an investigation has determined that port trucking companies are violating the law. Yet, despite the legal evidence, LA Port officials have effectively sanctioned their behavior by allowing them to continue to conduct business on public property. This must end,” said Fred Potter, Vice President, International Brotherhood of Teamsters and Director of the Teamsters’ Port Division.

“With these lawsuits, Los Angeles City Attorney Mike Feuer has made it clear that if you break the law by misclassifying drivers as “independent contractors” at LA’s port then there will be consequences. Unfettered lawbreaking unfairly undercuts the companies that are following the law,” said Eric Tate, Secretary-Treasurer, Teamsters local 848, which represents more than 500 port truck drivers at America’s largest port complex.

“After years of telling the leaders of Los Angeles’ Port that these companies are blatantly breaking the law on public property – with no action – we are pleased to see LA’s City Attorney file lawsuits against these companies to demand an end to misclassification and wage theft that hurts our families,” Gustavo Villa, misclassified driver, California Cartage Express.

BACKGROUND

NFI/California Cartage, based in Wilmington, CA, is one of the largest goods movement companies in America, with warehouses and port trucking operations across the U.S.  Referred to herein as “NFI/Cal Cartage,” this family of companies was recently acquired by the New Jersey-based National Freight Industries (NFI).[1] Previous to this acquisition, Cal Cartage was owned and managed by Robert Curry, Sr. and his family. NFI/Cal Cartage represents the largest trucking operation at the Ports of Los Angeles and Long Beach by a wide margin.

Cal Cartage Port Trucking Operations

The NFI/Cal Cartage family of companies includes five major trucking operations at the Ports of LA and Long Beach. The four largest – K&R Transportation, California Cartage Express, ContainerFreight EIT and California Multimodal LLC (CMI) – have been facing multiple claims in the courts and government agencies for misclassifying their drivers. In several instances, agencies have already determined that drivers were, in fact, employees. K&R and California Cartage Express operate out of the same property as the Cal Cartage warehouse (described in the following section), CMI operates out of a nearby Wilmington yard, and ContainerFreight operates out of a yard in Long Beach. Combined, more than 600 alleged misclassified drivers work for these companies.

Agency Investigations and Determinations:

California Labor Commissioner:

Employee determinations:

  • Over the past two years, there have been at least 12 decisions issued by the California Labor Commissioner in individual claims filed by NFI/Cal Cartage drivers working for K&R Transportation, Cal Cartage Express, ContainerFreight, and CMI. All of these claims found that the drivers were, in fact, employees, and not independent contractors. Together, those decisions ordered NFI/Cal Cartage to pay those 12 drivers a total of $1,419,102.62 for Labor Code violations including unlawful deductions and unreimbursed expenses. NFI/Cal Cartage has appealed nine of these cases, settling eight of them, while one remains pending in Superior Court. For the other three cases, it is as yet unknown if NFI/Cal Cartage will appeal the decisions as it is within the appeal time frame.

Pending claims:

  • here have been an additional 30 Labor Commissioner claims that drivers have filed against NFI/Cal Cartage, all of which appear to be pending (of these, 15 were filed by K&R drivers and 15 by CMI drivers). 10 of the K&R drivers had their hearings in December 2017. The total liability for those 30 claims is $5,620,338.16.

California Employment Development Department (EDD)

  • At least four K&R drivers have been determined to have been employees – not independent contractors – by the California EDD in individual benefits determinations.
  • In June and September of 2017, the California EDD filed at least two tax liens against K&R Transportation.

Los Angeles City Attorney

  • On January 8, 2018, Los Angeles City Attorney Mike Feuer announced that his office had filed lawsuits against Cal Cartage Express, CMI, and K&R Transportation for violation of Unfair Competition Law by misclassifying port truck drivers as independent contractors and evade paying taxes and providing benefits to drivers.

Private Litigation:

  • In recent years, NFI/Cal Cartage has faced four class action lawsuits in California Superior Court for multiple Labor Code violations, including willful misclassification, unlawful deductions, unreimbursed expenses, unpaid minimum wages, and failure to provide meal and rest breaks, along with violation of California’s Unfair Competition Law. In December 2017, the last pending case settled for $3.5 million and a motion for final approval is scheduled for April 2018.[2] The company recently settled three similar suits.[3]
  • NFI/Cal Cartage also recently settled two “mass action” lawsuits for misclassification and wage theft in CA Superior Court involving 55 drivers.[4]

Cal Cartage Warehouse

Cal Cartage Container Freight Station in Wilmington is a warehouse and freight center on Port of LA property and employs approximately 500 workers, with 80 percent of the workforce being employed through a temp agency. While Cal Cartage warehouse workers used to have good paying jobs that provided benefits, they have not had representation from a union in over 30 years and conditions have suffered. Workers are now paid the state minimum wage with little or no benefits (even though they are entitled to a higher wage under the Los Angeles Living Wage Ordinance), and work in health and safety conditions that are deplorable. The company has been cited for serious health and safety violations twice in the past three years, and workers face serious retaliation resulting in unfair labor practices charges and five strikes.

Health & Safety:

The warehouse facility has health and safety issues. The building was built in the 1940s and is poorly maintained. Several workers have been hurt just trying to walk around the facility due to potholes and poor infrastructure. The machines, including forklifts, are not maintained and often have faulty brakes and horns—leading to accidents. Workers filed a formal complaint with Cal/OSHA in June 2015, triggering an investigation at the facility. In November 2015, over $21,000 in citations were issued—4 serious and 6 general penalties. It was noted in these citations that the chipped paint at this facility contains lead.

Cal/OSHA reinvestigated the facility a year later, resulting in additional serious citations in November 2016 amounting $67,150 for the warehouse and $51,275 for the staffing agency. Citations included not providing workers with steel toed boots, not properly attaching shipping containers to the dock, and repeat violations for unsafe brakes on forklifts. The investigation regarding the company’s abatement of these citations is still active.

National Labor Relations Board:

On June 12, 2017, a trial began at the National Labor Relations Board (NLRB)’s Region 21 on several Unfair Labor Practice Charges (ULPs), summarized below:

  • Region 21 found merit to Unfair Labor Practice charges filed in September and October 2015 and issued a complaint and notice of hearing on March 21, 2016.
  • The NLRB began its investigation in September 2015, when the Warehouse Worker Resource Center (WWRC) filed an unfair labor practice (ULP) charge with the NLRB, alleging that California Cartage had interfered with workers’ concerted and protected activities by threatening supporters with discharge and attempting to initiate a physical altercation with a worker due to a worker delegation.
  • The NLRB continued their investigation in October 2015 when new ULPs were filed alleging that California Cartage had interfered with workers’ concerted and protected activities. The company instituted unlawful workplace rules to limit workers’ ability to petition and delegate management.
  • In April 2016, WWRC filed charges alleging that California Cartage and Associated Management Resources, Inc. (AMR staff agency) interfered with workers’ protected activities by threatening and interrogating supporters with termination. Additionally, the charges alleged that Cal Cartage violated federal labor laws by retaliating against a supporter by discharging Manuel Reyes for his protected concerted activities.

Additionally, in 2016, the Teamsters filed ULP charges against California Cartage for several unfair labor practices including the Company Owner Bob Curry threatening to close the warehouse if workers unionized. These charges are pending.

Private Litigation:

On December 17, 2014, workers from the California Cartage warehouse on Pacific Coast Highway at the Port of Los Angeles filed a class action lawsuit alleging millions of dollars in wage theft.[5] The workers, many of whom are paid the state minimum wage and have worked through a staffing agency for years, are entitled to the benefits of the Los Angeles Living Wage Ordinance because the warehouse where they work is operated on City of Los Angeles property. Despite this, the workers at the warehouse have not been paid the applicable living wage rate in the 18 years since the ordinance passed.

Under the City of Los Angeles Living Wage Ordinance, Cal Cartage is currently required to provide each worker with either $12.52 per hour for an all-cash wage or $11.27 per hour plus $1.25 per hour in health benefits and as of July 1, 2017, it will go up to be $12.73 all-cash wage or $11.48 plus $1.25 in health benefits. Further, each worker is entitled to 12 paid days off per year. The law extends the obligation to any staffing agencies that are contracted by Cal Cartage and that directly employ more than 50 percent of the workers in the warehouse facility.

The case is currently in mediation proceedings.

NFI/Cal Cartage’s key customers include: Lowe’s, Amazon, TJ Maxx, Home Depot, Kmart, and Sears, as well as the U.S. Department of Defense.

[1] California Cartage Co. Acquired by NFI Industries. (2017, October 3). Retrieved from http://labusinessjournal.com/news/2017/oct/03/california-cartage-co-acquired-nfi-industries/

[2] Campos v. California Cartage Company LLC et al, Case No. BC570310

[3] Constanza v. K&R Transportation, ContainerFreight, et al, Case No. CIVDS1615424; Martinez v. California Multimodal LLC, Case No. BC583858; Varela et al v. K&R Transportation LLC, Case No. BC643325

[4] Alonso Jimenez Torres et al v. K & R Transportation LLC, Case No. BC660910; Jose Luis Aguilar Et Al v. California Cartage Company LLC, Case No. BC577440

[5] Ayala, et al. v. California Cartage Company, Inc., et al, Case No. BC566992

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Asleep at the wheel – Companies risk lives by putting sleep-deprived port truckers on the road

USA Today – December 28, 2017

“Every day, port trucking companies around Los Angeles put hundreds of impaired drivers on the road, pushing them to work with little or no sleep in violation of federal safety regulations, a USA TODAY Network investigation found.

They dispatch truckers for shifts that last up to 20 hours a day, six days a week, sometimes with tragic results.”

Read full article here. 

Port of Charleston Drivers Vote to Join Teamsters

PRESS RELEASE FOR: Wednesday, December 13, 2017

PRESS CONTACT: Barb Maynard

PORT OF CHARLESTON DRIVERS VOTE TO JOIN TEAMSTERS LOCAL 509

Drivers Seek Living Wages, Fair Treatment on the Job

(NORTH CHARLESTON, S.C.) – In a national move to modernize the port trucking industry to respect the rights of drivers and stabilize their families’ income, drivers at a South Carolina port drayage company have voted to join Teamsters Local 509.

The 53 drivers at Container Maintenance Corporation (CMC) Logistics transport shipping containers between the Port of Charleston and a railyard in North Charleston.

“Local 509 believes this victory is a monumental win because it will pave the way for many others at the Charleston ports,” said James Todd, Local 509 President. “We want to thank everyone for the hard work and dedication to make this campaign successful.”

“This is a victory for all port drivers who are fighting for justice. Despite the company’s vicious anti-worker campaign, these drivers remained strong and united in their fight to win decent, living wages and fair treatment,” said Fred Potter, Director of the Teamsters Port Division. “The Port Division worked hand in hand with Local 509 on this victory and stands ready to help negotiate a strong first contract to improve these workers’ lives.”

“We’re all happy because we know we will have a strong voice at work as Teamsters,” said Antoin Jenkins, who has worked at CMC since 2015. “With a strong voice, we can improve things at work. It’s very exciting to be a Teamster.”

“The final straw that led us to unite as Teamsters was in August when the company changed our pay from hourly to ‘production,’ and then cut our pay. I applied for a home loan and when the underwriter called the company to verify my income, the company told them I’m ‘just a production worker’ with no verifiable income so I was rejected. Now as Teamsters, we can negotiate a pay and benefits package that works for families like mine,” said Reggie McQueen, who has worked at CMC since 2015.

Port drivers across America – both those misclassified as independent contractors and employee drivers who are being driven into despair by low wages and unpredictable income – are fighting back against a system that is rigged by America’s largest corporations. The system creates wealth for the CEOs at the expense of working men and women like the drivers who haul cargo from America’s seaports.

The Port of Charleston drivers’ victory is the fourth recent win for workers at intermodal companies. On December 1, 133 workers at ITS ConGlobal in Harvey, Ill., voted to join Teamsters Local 710 in the Chicago area. In November 2016, 777 workers at Parsec, Inc. in Commerce, Calif., voted to join Teamsters Local 986 and this past July, 507 workers at Parsec in Elwood, Ill. voted to join Teamsters Local 179.

LA City Council Passes Motion in Support of Port Drivers

PRESS RELEASE FOR: Tuesday, December 12, 2017

PRESS CONTACT: Barb Maynard

After 15 strikes, unambiguous legal rulings, and national media attention….

Los Angeles City Council Unanimously Takes Steps to End the “American Nightmare” of “Indentured Servitude” at America’s Largest Port Complex

Los Angeles, CA – Responding to escalating public pressure and ongoing labor unrest at America’s largest port complex – home of what Senator Bernie Sanders has called “The American Nightmare” – today the Los Angeles City Council unanimously approved a motion (File No. 17-0725-S1) sponsored by Councilmembers Joe Buscaino, Bob Blumenfield, and Mike Bonin to request that City Attorney Mike Feuer actively investigate options to ban trucking and warehousing companies operating on City property that break local, state, and federal laws.

“We urge the City of LA to move quickly,” stated Daniel Aneseko “Seko” Uaina, who is employed by Intermodal Bridge Transport, a subsidiary of Chinese-government-owned COSCO Shipping Lines, which last month was ordered by an NLRB Administrative Law Judge to reclassify its drivers as employees. “Every week, drivers like me at LA’s port are losing millions of dollars from wage theft due to misclassification. That’s hundreds of millions of dollars in wages that are going into the pockets of trucking company owners and retail giant CEOs, and not into our communities.”

“The illegal employment practices endured by 12,000 port truck drivers, and the poor working conditions faced by tens of thousands of warehouse workers who are the next link in the supply chain, has gone on for far too long,” said Randy Cammack, President of Teamsters Joint Council 42, which includes 23 Teamsters Union Locals representing 250,000 working Teamsters and retirees in So. California, So. Nevada, Guam, Saipan, and Hawaii. “More than a thousand claims for wage theft, 15 strikes in the last four years, and 3,500 drivers involved in lawsuits has yet to spur the change needed for these workers. It is past time for the City of Los Angeles to stand up to greedy corporations that are breaking the law and exploiting workers on City property.”

“I don’t understand why, after the USA Today and a number of other media outlets have publicized these companies’ illegal activity, they are still doing business at the ports,” said René Flores, a misclassified ‘independent contractor’ truck driver who was fired by his employer, Morgan Southern, for exposing the company’s demands to routinely work beyond the DOT hours of service regulations resulting in pay well below the Federal minimum wage. “We get kicked out of the ports if we even run a stop sign, yet these companies are breaking the law and are still allowed by LA’s port to do business there. Why the double standard? Why do the laws apply to people like me and not to these corporations?”

 

The abusive working conditions at the Ports of LA and Long Beach have drawn considerable attention across the county. Unfair and illegal employment practices were exposed in USA Today’s “Rigged” investigative series. More recently, USA Today uncovered how Federal agencies “helped fuel labor abuse” by contracting with companies guilty of labor infractions. In Congress, legislation has been introduced targeting working conditions at Ports, and US Senator Bernie Sanders has called on President Trump to sign an Executive Order ending exploitation of port truck drivers.

USA Today Exposes Port Trucking as Modern Day Servitude

The USA Today has done extensive investigations into port trucking and has produced a number of critical news reports that look at how port drivers are treated and the stakeholders that allow this system of exploitation to continue.

 

City of LA’s Trade, Travel, Tourism Committee approves motion to end “modern day sharecropping”

PRESS RELEASE FOR: Tuesday, November 28, 2017

PRESS CONTACT: Barb Maynard

After hearing testimony from exploited workers at LA’S Port, City of LA’s Trade, Travel, and Tourism Committee approves motion to explore solutions to end “modern day sharecropping” at Port of Los Angeles

Port of Los Angeles, CA – After 15 strikes, more than 1,000 claims for wage theft, numerous lawsuits, a national exposé unequivocally validating port workers’ demands for justice, and a global backlash to the abuse of Amazon warehouse workers and drivers in light of the announcement that Amazon CEO Jeff Bezos now has the “single largest personal fortune on the planet,” misclassified port truck drivers and warehouse workers experiencing wage theft, racism, and discrimination on Port of LA property provided emotional testimony to the City of LA’s Trade, Travel, and Tourism Committee. After hearing the pleas of the workers and community supporters, the Committee unanimously adopted the motion, which now moves to the full City Council for a vote. A vote is anticipated in approximately two weeks.

“It is not acceptable for companies to be profiting off people who are being exploited on public property. We are going to do everything we can to help,” said Council Member Joe Buscaino.

“I remain haunted by the first gentleman who spoke tonight. The stories we’ve heard are moving and appalling and disgusting. This is modern day sharecropping,” said Council Member Mike Bonin. “It is incumbent on us to do whatever we can to try to fix this.”

Click here to watch a full video of the hearing.

Background

On October 13, 2017, Los Angeles City Councilmembers Joe Buscaino (CD15) and Bob Blumefield (CD3) publicly recognized that “all workers that contribute to the operations at the Port of Los Angeles be afforded a safe work environment, fair wages, and guaranteed rights and benefits,” specifically introducing legislation to:

  • “Review the conditions of leases of any trucking or warehousing companies operating on port property;
  • “Report on the feasibility of denying access to companies that are in violation of local, state, and federal laws, including labor and employment laws; and developing alternative solutions than can be implemented to enhance the employee rights of Port truck drivers and ensure that trucking companies comply with labor and employment laws;” and
  • Direct the Bureau of Contract Administration “to investigate and report back on wage theft claims due to minimum wage and paid sick day violations by trucking companies operating on Port property.”

The motion was referred to the City’s Trade, Travel, and Tourism Committee, as well as the Economic Development Committee. On Tuesday evening, November 28, 2017, Los Angeles City Councilmembers Joe Buscaino and Bob Blumenfeld convened a Special Meeting of the Trade, Travel, and Tourism Committee to hear firsthand accounts of the systematic exploitation of the port drivers and warehouse workers who handle cargo from the Ports of Los Angeles and Long Beach.

The abusive working conditions at the Ports of LA and Long Beach have drawn considerable attention across the county. Unfair employment practices were exposed in USA Today’s “Rigged” investigative series. More recently USA Today uncovered how Federal agencies “helped fuel labor abuse” by contracting with companies guilty of labor infractions. In Congress, legislation has been introduced targeting working conditions at Ports, and US Senator Bernie Sanders has called on President Trump to sign an Executive Order ending exploitation of port truck drivers.

Amazon workers in the U.S. and around the globe are pushing back against a system that is rigged to make Amazon CEO Jeff Bezos the first $100 Billionaire in the world.

  • Recent reports show that Amazon’s “last mile” drivers are among the most exploited. “Near the very bottom of Amazon’s complicated machinery is a nearly invisible workforce over two years in the making tasked with getting those orders to your doorstep. It’s a network of supposedly self-employed, utterly expendable couriers enrolled in an app-based program which some believe may violate labor laws. That program is called Amazon Flex, and it accomplishes Amazon’s “last-mile” deliveries—the final journey from a local facility to the customer.”
  • On Black Friday, thousands of Amazon workers in Germany and Italy went on strike to protest low wages.
  • In England, the “brutal” working conditions of Amazon workers have been exposed. The Mirror reports: “Alan Selby went undercover at the firm’s Tilbury warehouse in Essex where ambulances are regularly called and where workers face the sack if they fail to pack at least two items per minute.”
  • In Minnesota, Amazon subcontracted workers are rising up to demand an end to wage theft.

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Target’s trucking contractor ordered by judge to reclassify contract drivers

PRESS RELEASE: Thursday, November 30, 2017

PRESS CONTACT: Barb Maynard

Target’s trucking contractor ordered by judge to reclassify contract drivers as employees; judge rules that misclassification is an illegal scheme to stop drivers from forming a union and drivers must be reclassified

Ports of Los Angeles/Long Beach, CA –An Administrative Law Judge (ALJ) has issued a decision in the case based on charges originally filed in 2015 by the International Brotherhood of Teamsters alleging violations of the National Labor Relations Act (NLRA) by Intermodal Bridge Transport (IBT), specifically to stop drivers from exercising their right to form a union to improve their wages, benefits, and working conditions. The charges filed by the Teamsters included an allegation that misclassifying workers as “independent contractors” is in and of itself a violation of the NLRA. On November 28, 2017, Administrative Law Judge Dickie Montemayor issued a detailed ruling in which he agreed with the Teamsters that “misclassifying employees as independent contractors” is an “unfair labor practice” and a violation of their rights under the NLRA (which only covers employees, not legitimate independent contractors).

The ALJ ordered the company “within 21 days after service” (Nov. 28, 2017) to “cease and desist” from “misclassifying employees as independent contractors,” “interrogating,” threatening,” and “coercing” employees. The company is ordered to rescind in writing any company documents such as predatory lease agreements that “purport to classify employees as independent contractors,” and to post a notice stating “WE WILL NOT misclassify employees as independent contractors.”

The ALJ’s ruling comes after multiple strikes by drivers at IBT, claims for wage theft, a class action lawsuit, and a national exposé unequivocally validating port drivers’ demands for justice. In fact the company lost an account with one its customers, Michael Kors, purportedly due to the prolonged labor dispute.

“Every day, I move containers filled with products destined for Target, Amazon, or General Electric from the docks to local warehouses, where they begin their journey to homes across the country. I’m proud to be a vital part of our local and national economy but Intermodal Bridge Transport has made it increasingly difficult for me to make a living by illegally, and immorally, classifying me as an independent contractor instead of an employee. As a result, I am saddled with debilitating costs – everything from fuel to insurance to the lease for the truck are deducted from my paycheck leaving me with barely enough to get by – and deprived of my essential rights as a worker and a human being.  With this ruling, justice has been served and the company can no longer deny me my employee rights.”

Daniel Aneseko Uaina, driver, Intermodal Bridge Transport

Background

Intermodal Bridge Transport (IBT) – a subsidiary of COSCO Group, which is owned by the Chinese Government – specializes in the movement of containers and trailers from major ports and inland railroad hubs to customers. The company is headquartered in New Jersey and has operations at the Port of New York/New Jersey, as well as at the Ports of Los Angeles/Long Beach, Charleston, and Savannah. There are about 85 misclassified drivers working for IBT’s operations at the Ports of Los Angeles/Long Beach, where IBT is among the top 20 port trucking companies in terms of cargo movement.  IBT’s main customers include , Target, General Electric, Trek Bicycle,  Sony and Amazon.

IBT’s misclassification of its drivers has been under scrutiny by government agencies, which have found upon investigation that IBT drivers are employees, not independent contractors. In addition, IBT is facing significant liability from several private legal actions related to misclassification. The California Division of Labor Standards Enforcement (DLSE) issued a decision on April 20, 2017 on wage claims filed by three IBT drivers, determining them to be employees – not independent contractors – and therefore owed a total of $127,835. IBT has appealed these decisions, which are now pending in CA Superior Court. IBT is also facing a major pending class action lawsuit filed by drivers alleging wage theft and illegal misclassification. In addition, at least 40 drivers have filed separate individual and “mass action” claims in California Superior Court against IBT for the same violations of the California Labor Code, which also remain pending.

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