Mazzola v. Southern New England Telephone Co.
Mazzola v. Southern New England Telephone Co.
Opinion of the Court
The plaintiff brought an action in the Superior Court seeking (1) injunctive relief, under § 35-34 of the General Statutes, against the defendant’s continuing termination and interruption of his telephone service, and (2) money damages and attorney’s fees and costs, under § 35-35 of the General Statutes, all as provided for in the Connecticut Anti-Trust Act, hereinafter referred to as the act. General Statutes §§ 35-24 to 35-44. The complaint alleges, inter alia, that the defendant’s practices in enforcing certain specified policies were “unlawful as they are for the purpose or have the effect of: (a) Fixing, controlling or maintaining prices, rates or quotations; (b) Refusing to deal or coercing, persuading or inducing third parties to refuse to deal with another person.” The Superior Court, however, refused to assume jurisdiction over the matters complained of and the plaintiff appealed.
The proceedings on appeal as followed by the parties raise only the question of the jurisdiction of the trial court to adjudicate the plaintiff’s complaint, a question which can be determined on the
I
Since the court declined to rule on the merits of the plaintiffs complaint, we need only determine whether its conclusion that it did “not have jurisdiction with this matter” was erroneous. It appears that the court based this conclusion upon two alternative theories: (1) that the public utilities commission (hereinafter the PUC) had “primary” jurisdiction of the matters complained of; or (2) that the activities of the defendant challenged by the plaintiff were “immune” from antitrust liability. We consider whether either of these theories, which are interrelated in antitrust cases involving a regulated industry, is a proper basis for the trial court’s decision as presented to us and as briefed by the parties and the amicus curiae.
Enacted in 1971,
II
The doctrine of primary jurisdiction is a rule of judicial administration created by court decision in order to promote “proper relationships between the courts and administrative agencies charged with particular regulatory duties.” United States v. Western Pacific R. Co., 352 U.S. 59, 63, 77 S. Ct. 161, 1 L. Ed. 2d 126. Its basis is the concept that courts and administrative agencies are, as Justice Frankfurter suggested, “collaborative instrumentalities of justice.” United States v. Morgan, 313 U.S. 409, 422, 61 S. Ct. 999, 85 L. Ed. 1429.
A premise upon which the primary jurisdiction doctrine is invoked is that the court itself has original “subject matter” jurisdiction of the questions raised in the complaint filed in that court. “ ‘Primary jurisdiction’ . . . applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case the judicial process is suspended pending referral of such issues to the administrative body for its views.” United States v. Western Pacific R. Co., supra, 64. The doctrine is thus distinguished from the concept of exclusive agency jurisdiction, which refers to matters which an agency alone has the power to adjudicate and of which the court has no jurisdiction. Terminal Warehouse Co. v. Pennsylvania R. Co., 297 U.S. 500, 514, 56 S. Ct. 546, 80 L. Ed. 827; see also Hughes Tool Co. v. Trans World Airlines, 409 U.S. 363, 93 S. Ct. 647, 34 L. Ed. 2d 577, reh. denied, 410 U.S. 975, 93 S. Ct. 1434, 35 L. Ed. 2d 707. Similarly, a court may not refer a controversy within its jurisdiction to an agency under this doctrine where the agency itself lacks jurisdiction; the court’s jurisdiction in such cases is exclusive. Collens v. New Canaan Water Co., 155 Conn. 477, 480-81, 234 A.2d 825; 73 C.J.S., Public Administrative Bodies and Procedure, § 40.
In addition, the primary jurisdiction doctrine is distinguishable from the concept of “exhaustion of administrative remedies.” The latter requires a party to exhaust such remedies before seeking judicial relief and “contemplates the situation in which
B
Within the context of antitrust law enforcement, it has been stated that all that the doctrine of primary jurisdiction is designed to do, “and all that it properly does is to assure that the substantive exemptions from the antitrust laws created by . . . [the legislature] or required by the logic and structure of the regulatory scheme are not destroyed through by-passing the forum chiefly concerned with the regulation of the industry in question.” Von Mehren, “The Antitrust Laws and Regulated Industries: The Doctrine of Primary Jurisdiction,” 67 Harv. L. Rev. 929, 932. However, the mere existence of a “special regulatory scheme for particular aspects of an industry” does not, without more, “render the more general provisions of the antitrust laws wholly inapplicable to that industry,” so that the court need not stay its hand
In this ease, the complaint filed in the Superior Court alleged that the plaintiff is a subscriber to the telephone service provided by the defendant (a “public service company” as defined by General Statutes § 16-1
The complaint further alleged that the defendant requires the subscriber to lease this protective link apparatus even if the answering devices obtained privately do not damage the defendant’s property or interfere with its service. The plaintiff claimed that he obtained from a private supplier a telephone answering and message taking device; upon his refusal to comply with the defendant’s demand that he lease a coupler, interface, or protective link to
On the basis of these allegations, the plaintiff claimed that the defendant’s cited practices constituted “price-fixing” and “refusal's to deal” of the kind prohibited by the act, which makes unlawful “every contract, combination, or conspiracy” when such are “for the purpose, or have the effect, of: (a) Fixing, controlling, or maintaining prices, rates, quotations, or fees in any part of trade or commerce; (b) fixing, controlling, maintaining, limiting, or discontinuing the production, manufacture, mining, sale, or supply of any part of trade or commerce; (c) allocating or dividing customers or markets, either functional or geographical, in any part of trade or commerce; or (d) refusing to deal, or coercing, persuading, or inducing tMrd parties to refuse to deal with another person.” General Statutes § 35-28. Jurisdiction to adjudicate claimed violations of this statute is vested in the Superior Court by § 35-33.
A
The act “applies to every contract, combination, or conspiracy in restraint of any part of trade or commerce or every contract, combination or conspiracy to monopolize, or every attempt to monopolize, or every monopolization of any part of trade or commerce when any part thereof was entered into or effectuated in whole or in part in this state.” General Statutes § 35-30. The Public Service Companies Act, as amended, does not expressly confer on the PUC the power to exempt activities of the defendant, such as those challenged by the plaintiff, from the reach of the act.
Nonetheless, the act itself contains four classes of express “exceptions” from liability under the act. General Statutes § 35-31. Such exceptions are to be strictly construed. United States v. McKesson & Robbins, 351 U.S. 305, 316, 76 S. Ct. 937, 100 L. Ed.
1
The immunity recognized in Parker, supra, related to a program expressly authorized under the California Agricultural Prorate Act. The plaintiff there, unlike the plaintiff in this case, did not allege particular violations of the antitrust laws by a regulated private company but claimed, rather, that the entire state regulatory scheme itself was
2
Under this analysis, the process provided in General Statutes § 16-19 whereby the PUC approves and thereby renders effective tariffs such as that proposed by the defendant in this case clearly does not amount to the kind of “state action” which invites application of the Parker doctrine. Section 16-19 requires the defendant to “file any proposed amendment of its existing rate schedule with the commission in such form and in accordance with such reasonable regulations as the commission may prescribe.” None of the published regulations promulgated by the PUC applicable to the initial filing and approval of such tariffs, however, requires the defendant to submit with its proposal any facts specifically designed to make out a sufficient showing that the proposal is necessary, for example, to sat
Under these circumstances, the role that is statutorily assigned to the PUC in rendering effec
Practical Approach to the Allocation of Functions,” 55 Geo. L.J. 812.
B
Implied power on the part of the PUC to determine the defendant’s liability under the act cannot be inferred from any of the pertinent provisions of the Public Service Companies Act. Such power can be implied only in cases of “plain repugnancy” between the regulatory scheme and the antitrust law. Otter Tail Power Co. v. United States, 410 U.S. 366, 372, 93 S. Ct. 1022, 35 L. Ed. 2d 359, reh. denied, 411 U.S. 910, 93 S. Ct. 1523, 36 L. Ed. 2d 201; United States v. Philadelphia National Bank, 374 U.S. 321, 350-51, 83 S. Ct. 1715, 10 L. Ed. 2d 915; see also King, op. cit., pp. 648-49 n.143. The necessary repugnancy is sometimes found to be inherent in the fact, inter alia, that the regulatory scheme in question was enacted after the antitrust law in question went into effect (although such “repeals” of the antitrust laws are “strongly disfavored”); Ricci v. Chicago Mercantile Exchange, 409 U.S. 289, 301, 93 S. Ct. 573, 34 L. Ed. 2d 525, reh. denied, 410 U.S. 960, 93 S. Ct. 1411, 35 L. Ed. 2d 697; Otter Tail Power Co. v. United States, supra; United States v. Philadelphia National Bank, supra; or where the agency is under a specific obligation to consider the potentially anticompetitive effects of a practice proposed
In this case, the Public Service Companies Act provisions in question antedated the enactment of the Connecticut Anti-Trust Act, so that no “repeal” of the latter can be inferred therefrom. Moreover, the PUC has no obligation under the Public Service Companies Act to take into account the possibly anticompetitive effects of proposed tariffs filed with
In sum, no “repeal” of the Connecticut Anti-Trust Act can be inferred from the provisions of the Public Service Companies Act. Nor is there any binding requirement on the part of the PUC to take into account antitrust law policies when reviewing the validity of such activities of a regulated telephone company as those purportedly authorized by the defendant telephone company’s tariff in this case. Accordingly, we find no “plain repugnancy” between the Connecticut Anti-Trust Act and the Public Service Companies Act warranting a conclusion that the PUC has an “implied”
C
The courts in Carter, Macom Products, and Chastain, supra, in referring the antitrust controversies therein to the primary jurisdiction of the FCC, also attached great significance to the fact that specific procedures existed empowering the plaintiffs to raise before the commission factual issues of decisive importance to the resolution of the antitrust suits in question. Carter v. American Telephone & Telegraph Co., supra, 499 n.27; Macom Products Corporation v. American Telephone & Telegraph Co., supra, 976; Chastain v. American Telephone & Telegraph Co., supra, 1323, citing Carter, supra; cf. Ricci v. Chicago Mercantile Exchange, supra, 304-305 n.14. However, there is no way that a person in the plaintiff’s position can raise before the PUC any of the critical factual questions in this case arguably within the PUC’s competence, viz., whether the activities of the telephone company challenged in this case are so essential to the public interest as to override any possibly anticompetitive effects on the communications industry in the private sector of the economy, or whether the privately obtained devices secured by the plaintiff would in some way be harmful to the defendant’s network. See Macom Products Corporation v. American Telephone & Telegraph
IV
Neither the Public Service Companies Act nor the Connecticut Anti-Trust Act expressly or impliedly confers power upon the PUC to immunize from antitrust liability activities such as those complained of in this case. Moreover, no procedure exists empowering the plaintiff to raise before the PUC the kind of factual issue whose determination would be of crucial importance to the court in its resolution of the antitrust controversy. Accordingly, the trial court should not have declined to take jurisdiction of this controversy on the grounds stated.
The case is remanded to the Superior Court for further action according to law.
In this opinion MacDonald, Longo, and Speziale, Js., concurred.
Public Acts 1971, No. 608 (as amended).
26 Stat. 209, 15 U.S.C. § 1.
38 Stat. 731, 15 U.S.C. § 14.
76 Stat. 548, 15 U.S.C. § 1312.
4 C.C.H. Trade Reg. Rep. ¶ 30,101.
Public Acts 1911, c. 185.
In the occasional- eases where a court having original jurisdiction of the subject matter stays or dismisses the proceedings and refers the controversy, or some portion thereof, to the agency to exercise jurisdiction deemed to be “primary,” “[c]ourt jurisdiction is not thereby ousted, but only postponed.” United States v. Philadelphia National Bank, 374 U.S. 321, 353, 83 S. Ct. 1715, 10 L. Ed. 2d 915; Carnation Co. v. Pacific Westbound Conference, 383 U.S. 213, 223, 86 S. Ct. 781, 15 L. Ed. 2d 709.
For example, where the activities challenged by the plaintiff are “arguably lawful” within the meaning of applicable terms in the agency statute, or arguably have been approved as lawful by the agency. Ricci v. Chicago Mercantile Exchange, 409 U.S. 289, 362, 93 S. Ct. 573, 34 L. Ed. 2d 525, reh. denied, 410 U.S. 960, 93 S. Ct. 1411, 35 L. Ed. 2d 697; Carnation Co. v. Pacific Westbound Conference, 383 U.S. 213, 221-22, 86 S. Ct. 781, 15 L. Ed. 2d 709; King, “The 'Arguably Lawful’ Test of Primary Jurisdiction in Antitrust Litigation Involving Regulated Industries,” 40 Tenn. L. Rev. 617,
The agency’s findings of fact are generally subject to judicial review on direct appeal, where appropriate statutory provisions permit. See, e.g., Carter v. American Telephone & Telegraph Co.,
“[General Statutes] Sec. 16-1. definitions. Terms used in this title shall be construed as follows, unless another meaning is expressed or is clearly apparent from the language or context: . . . ‘public service company’ includes . . . telephone . . . companies . . . .”
“[General Statutes] See. 35-33. superior court jurisdiction. The superior court of this state is hereby vested with jurisdiction to prevent and enjoin violations of this part. Any action or proceeding brought by the state, or any private party, for violation of the provisions of this part shall be brought in the superior court of the county where the offense, or any part thereof, is committed, or in any county where any of the alleged offenders reside or are
Since the statute specifically empowered the plaintiff to seek relief from the alleged violations of the act initially in Superior Court, the doctrine of “exhaustion of administrative remedies” did not apply. Mitchell, “Primary Jurisdiction—What It Is and What It Is Not,” 13 Proceedings A.B.A. Section of Antitrust Law 26, 29; 73 C.J.S., Public Administrative Bodies and Procedure, §40; see discussion, supra, section II, part A.
Compare Federal Communications Commission Act, § 221 (a), 47 U.S.C. § 221 (a), which in its provision relating to mergers of companies subject to supervision under it, states: “If the Commission finds that the proposed consolidation, acquisition, or control will be of advantage to the persons to whom service is to be rendered and in the public interest, it shall certify to that effect; and thereupon any Act or Acts of Congress making the proposed transaction unlawful shall not apply.”
“[General Statutes] See. 16-19. amendment of bate schedule; INVESTIGATION AND FINDINGS BY COMMISSION; HEARINGS; DEFERRAL OF municipal rate increases; refunds. Each public service company shall file any proposed amendment of its existing rate schedule with the commission in such form and in accordance with such reasonable regulations as the commission may prescribe. The commission, if in its opinion such action appears necessary or suitable in the public interest, may, and, upon written petition or complaint of the state, under direction of the governor, shall, make such investigation of such schedule of rates or proposed amendment as, in the opinion of the commission, is necessary to determine whether the rates specified in any schedule are unreasonably discriminatory or more or less than just, reasonable and adequate, or that the service furnished by such company is inadequate to or in excess of public necessity and convenience, and shall, in the case of a proposed amendment increasing the rate schedule of a gas or electric company, make such investigation and hold at least one public hearing thereon, provided the commission may approve without public hearing an interim rate increase under bond and subject to refund with interest if the rate approved after hearing is less than the interim rate and provided further the commission may, in its discretion, hold such hearing or hearings upon any increase in the rates charged by a gas or electric company resulting from the application of a fuel cost adjustment or purchased gas adjustment clause pursuant to section 16-19b. If the commission finds any rate to be unreasonably discriminatory or more or less than just, reasonable and adequate to enable such company to provide properly for the public convenience, necessity and welfare, or the service to be inadequate or excessive, it may determine and prescribe an adequate service to be furnished and just and reasonable maximum rates and charges to be made by such company. The commission may, in its discretion, pending its conclusion upon an amendment increasing any rate, suspend the effective date of such increase for not more than one
No federal statutory provision on point has been briefed or argued. In 1968, however, the federal communications commission in its Carterfone decision declared void tariffs filed with the FCC and with state regulatory commissions by all domestic telephone companies prohibiting the interconnection of subscriber-owned devices with the carrier’s telephone system. In re Carterfone, 13 F.C.C.2d 420, 42A-26. Forthwith the regulated telephone companies filed tariffs (similar to that of the defendant in this case) with the appropriate regulatory agencies providing for interconnection of such equipment so long as the telephone company furnished, installed and maintained the interconnect. International Telephone & Telegraph Corporation v. General Telephone & Electronics Corporation, 351 F. Sup. 1153, 1179 (D. Hawaii), rev’d, 518 F.2d 913 (9th Cir.). The National Academy of Sciences has since reported to the FCC that its study of the technical factors affecting interconnection suggests that while the use of telephone company provided protection apparatus may have been temporarily expedient, there should ultimately be an equipment certification program conducted by the FCC. Id., 1179 n.59. In the meantime, courts have proceeded to adjudicate on the merits the validity of such apparatus requirements under federal antitrust laws. See, e.g., International Telephone & Telegraph Corporation v. General Telephone & Electronics Corporation, supra.
In contrast, two other exceptions provided in § 35-31 have federal statutory equivalents: § 35-31 (a) is modeled after § 6 of the Clayton Act, 15 U.S.C. § 17; and § 35-31 (d) parallels § 1 of the Capper-Volstead Act, 7 U.S.C. § 291 et seq.
See, e.g., Ariz. Rev. Stat. Ann. § 40-286; Cal. Pub. Util. Code §8107; Ill. Rev. Stat., c. 38, §60-5(3); Md. Ann. Code, art. 83, § 39 (3); N.J. Stat. Ann. § 56:9-5 (3).
The trial court relied extensively on the reasoning in Business Aides. The court in that case, however, had adopted the theory of “state action” immunity articulated in Washington Gas Bight Co. v. Virginia Electric Power Co., 438 F.2d 248 (4th Cir.), which was also relied upon by both the trial court and the defendant in this case. The Washington Gas Light theory is that mere acquiescence by an agency in actions taken by companies subject to public regulation constitutes a grant of immunity under Parker. The validity of that theory was recently undermined by the United States Supreme Court in Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S. Ct. 2004, 44 L. Ed. 2d 572, a case reversing a Fourth Circuit Court of Appeals decision whose outcome had hinged on the Washington Gas Light theory. Goldfarb v. Virginia State Bar, 497 F.2d 1, 5 (4th Cir.). See also Communication Brokers v. Chesapeake & Potomac Telephone Co. of Virginia, 370 F. Sup. 967, 969 (W.D. Va.), where a district court in the Fourth Circuit declined to apply the Parker analysis of Washington Gas Light in a suit by a plaintiff engaged in the business of selling, leasing, installing, and repairing communication equipment, who alleged, inter alia, that the defendant tele
In this connection, it is likewise significant that the Connecticut act does not purport to immunize activities merely “approved” or “permitted” by regulatory agencies, a measure adopted in several other jurisdictions. See, e.g., Minn. Stat. § 325.8017.2; Va. Code of 1950 § 59.1-9.4 (b) (1974 Cum. Sup.); Wash. Rev. Code § 19.86.170.
The investigation is, however, mandatory “upon written petition or complaint of the state, under direction of the governor.” No claim or showing of such a petition or direction has been made in this case.
It is also well to note that different rules apply to investigations into proposals submitted by a gas or electric company under § 16-19 of the General Statutes.
The term “may” in § 16-19 of the General Statutes is permissive and does not mean “shall,” inasmuch as the word “shall” is used in an explicitly contrasting manner throughout the same provision. See Shulman v. Zoning Board of Appeals, 154 Conn. 426, 428-29, 226 A.2d 380.
Procedures are available under the Public Service Companies Act whereby the continuing validity of rates and services of a regulated telephone company may be adjudicated by the PUC. See, e.g., General Statutes §§ 16-9, 16-13, 16-20, 16-21. Except where complaints of unsafe conditions at the site of regulated companies are substantiated in a proceeding conducted pursuant to $ 16-13, however, action taken by the PUC upon these procedures is, again, merely discretionary. See n.21, infra.
“[General Statutes] See. 16-9. orders. All decisions, orders and. authorizations of the commission shall be in writing and shall specify the reasons therefor, shall be filed and kept in the office of the commission and recorded in a book kept by it for that purpose and shall be public documents. Said commission may, at any time, for cause shown, upon hearing had after notice to all parties in interest, rescind, reverse or alter any decision, order or authorization by it made. Written notice of all orders, decisions or authorizations issued by the commission shall be given to the company or person affected thereby, by personal service upon such company or person or by registered or certified mail, as the commission determines.”
“[General Statutes] Sec. 16-20. rates and service aeeecting a single person. If any public service company unreasonably fails or refuses to furnish adequate service at reasonable rates to any person within the territorial limits within which such company has, by its charter, authority to furnish sueh service, such person may bring his written petition to the commission alleging such failure or refusal. Thereupon the commission shall fix a time and place for a hearing upon such petition and shall mail notice thereof to the parties in interest at least one week prior to such hearing. Upon such hearing, the commission may, if it finds that such company has unreasonably failed or refused to furnish sueh person with adequate service at reasonable rates, prescribe the service to be furnished by such company to such person and the conditions under which, and maximum rates or charges at which, such service shall be furnished. Such company shall thereafter furnish sueh service to such person in
“[General Statutes] Sec. 16-21. change of bates fixed pursuant to charter OR contract. Whenever any rate of any public service company chartered by or organized under the laws of this state exists or is charged pursuant to charter, contract or any agreement or understanding, and is in whole or in any respect discriminatory or more or less than just, reasonable and adequate to provide properly for the public convenience, necessity and welfare, such company or any town, city or borough within which, or between which and any other town, city or borough in this state, any such company is furnishing service, or any ten patrons of any such company, may bring a written petition to the commission alleging that such rate is discriminatory or more or less than just, reasonable and adequate. Thereupon the commission shall fix a time and place for a hearing upon such petition and shall mail notice thereof to the parties in interest and give public notice thereof at least one week prior to such hearing. Upon such hearing, the commission may, if it finds such rate to be discriminatory or more or less than just, reasonable and adequate to enable such company to provide properly for the public convenience, necessity and welfare, determine and prescribe just and reasonable maximum rates or charges to be thereafter made by such company.”
See note 21, supra. The plaintiff as an individual is similarly not specifically entitled to participate in a proceeding initiated by the PUC sua sponte under § 16-9.
See note 21, supra. Similarly, proceedings conducted pursuant to § 16-13 are limited to the airing of complaints of unsafe conditions at the site of a regulated company.
Dissenting Opinion
(dissenting). I do not agree with the conclusion reached in the majority opinion and think that an order should be entered dismissing the appeal since it is not taken from a final judgment—or from any judgment whatsoever. It is an appeal from an interlocutory ruling of a judge of the Superior Court denying an application for a
The law as it has been established up until the present decision was well expressed by Chief Justice King in Devine Bros., Inc. v. International Brotherhood, 145 Conn. 77, 79, 139 A.2d 60. In that case the trial court issued a temporary injunction forbidding the picketing of the plaintiff’s place of business until there would be a trial on the merits and the defendant appealed on many grounds. This court, in a unanimous opinion, stated the law thusly: “At the outset we are faced with a jurisdictional question as to whether an appeal is possible in this case. This question must be resolved before we can consider the appeal on the merits. Riley v. Board of Police Commissioners, 145 Conn. 1, 6, 137 A.2d 759. The taking of an appeal from the granting or denial of a temporary injunction is ordinarily impossible, since such an order is not a final judgment. Olcott v. Pendleton, 128 Conn. 292, 295, 22 A.2d 633. . . . [S]uch an appeal lies if, but only if, the injunction was granted in a ease ‘involving or growing out of a labor dispute.’ H. O. Canfield Co. v. United Construction Workers, 134 Conn. 358, 360, 57 A.2d 624. Unless the present case falls in that category, this appeal must be dismissed.”
In the present case, the plaintiff sought a temporary and a permanent injunction by a writ, summons and complaint dated August 27, 1974, and returnable to the Superior Court in Windham
Not only were the pleadings never closed but no judgment whatsoever was ever entered and, for obvious reasons in this state of the record, no finding ever requested or filed. The only action taken by the presiding judge was to make an interlocutory ruling which denied “without prejudice” the application for a temporary injunction. Under our heretofore settled law, no appeal lies from such an interlocutory ruling and the majority opinion cites no authority of this court to the contrary.
It suffices to conclude with a quotation from the opinion of Chief Justice Maltbie in Marcil v. Merriman & Sons, Inc., 115 Conn. 678, 682, 163 A. 411: “There is no warrant in law for such an appeal as the one before us. Whenever the absence of juris
The appeal from the denial, without prejudice, of the plaintiff’s application for a temporary injunction should be dismissed.
Reference
- Full Case Name
- Alan Mazzola v. the Southern New England Telephone Company
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- 52 cases
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- Published