City of Knoxville v. Entertainment Resources, LLC. ( 2005 )

IN THE SUPREME COURT OF TENNESSEE
AT KNOXVILLE
January 4, 2005 Session
CITY OF KNOXVILLE v. ENTERTAINMENT RESOURCES, LLC.
Appeal by Permission from the Court of Appeals
Chancery Court for Knox County
No. 140736-2 Daryl Fansler, Chancellor
No. E2002-01143-SC-R11-CV - Filed June 29, 2005
We granted this appeal to determine the constitutionality of a Knoxville city ordinance regulating
the location of adult businesses. The chancery court upheld the ordinance and enjoined operation
of the defendant’s video store after finding that it fit the definition of an adult bookstore and was
located within 1,000 feet of prohibited areas and therefore was operating in violation of the
ordinance. The Court of Appeals reversed on the grounds that the ordinance’s definition of adult
bookstores is unconstitutionally vague. Because we have also determined that the ordinance is
unconstitutionally vague under the United States and Tennessee Constitutions, we affirm the
decision of the Court of Appeals but on the separate grounds set forth herein. We remand to the trial
court for an assessment of the amount of damages incurred by the defendant as a result of the
chancery court’s injunction.
Tenn. R. App. P. 11 Appeal by Permission; Judgment of the Court of Appeals
Affirmed
E. RILEY ANDERSON , J., delivered the opinion of the court, in which ADOLPHO A. BIRCH , JR., JANICE
M. HOLDER , and WILLIAM M. BARKER, JJ., joined. FRANK F. DROWOTA , III, C.J., filed a concurring
opinion.
Angela R. Bolton and W. Morris Kizer, Knoxville, Tennessee, for the Appellant, City of Knoxville.
Philip N. Elbert and W. David Bridgers, Nashville, Tennessee, and Richard L. Gaines, Knoxville,
Tennessee, for the Appellee, Entertainment Resources, LLC.
OPINION
In 1979, the Knoxville City Council adopted an ordinance regulating, among other things,
the location of “adult businesses.” At all times relevant to this appeal, Knoxville City Code section
16-468 (“the ordinance”) provided that adult businesses could not be located within 1,000 feet of:
a residentially-zoned district; an area devoted to recreational activity; or an establishment selling
alcoholic beverages. The ordinance included adult bookstores in its definition of adult businesses.
An adult bookstore was defined as:
an establishment having as a substantial or significant portion of its
stock and trade books, magazines and other periodicals, videotapes
or other electronic media which are distinguished or characterized by
their emphasis on matter depicting, describing or relating to specified
sexual activities or specified anatomical areas, or an establishment
with a segment or a section devoted to the sale or display of such
material.
Knoxville City Code § 16-468(a) (emphasis added). The parties dispute whether the phrase
“substantial or significant portion of its stock and trade” is impermissibly vague under the United
States and Tennessee Constitutions.
Background
The City of Knoxville filed a complaint in Knox County Chancery Court seeking to enjoin
the defendant, Entertainment Resources, from operating its store in alleged violation of the
ordinance. The following facts were developed before the chancery court and stipulated by the
parties.
On August 3, 1998, Entertainment Resources opened a store called Fantasy Video at 6422
Papermill Road in Knoxville, Tennessee. Entertainment Resources also operated two stores in
Nashville and one in Columbia, Tennessee. It planned to open two Knoxville stores in addition to
Fantasy Video.
Fantasy Video, like Entertainment Resources’ other stores, rented and sold videotapes for
off-site viewing. When Fantasy Video opened, its inventory consisted of 80% adult or sexually
explicit, “X-rated” videos and 20% family or general videos. General videos were displayed in the
store’s “front room.” Adult videos were displayed in the store’s “back room,” which was restricted
to patrons 18 years of age and older.
Under the spacing provisions of the Knoxville ordinance, an “adult business” could not
legally locate at the site of the Fantasy Video store. It was stipulated that the site was located next
door to the New Mexicali Rose restaurant, which sold beer and liquor; within 1,000 feet of a Boy
Scouts administrative building, and within 1,000 feet (as the crow flies) of a residentially zoned
district, although the residential district was separated from the store by Interstate 40. Entertainment
Resources did not believe that the Boy Scouts building qualified as a building devoted to recreational
activity and did not believe it was within 1,000 feet of a residential district. Although Entertainment
Resources had full knowledge that the New Mexicali Rose restaurant sold beer and liquor, it chose
to locate Fantasy Video on Papermill Road because its lawyer had advised the company that the
Knoxville ordinance was unconstitutional.
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Shortly after Fantasy Video opened in August 1998, the Knoxville Police Department began
inspecting the store and issuing citations for violation of the ordinance on an almost daily basis. The
citations alleged that Fantasy Video was an adult bookstore within the meaning of the ordinance
because a substantial or significant portion of its stock and trade constituted videotapes containing
material within the ambit of the ordinance.
In response to the citations, Entertainment Resources attempted to gain clarification from the
police and from the City’s law director as to what constituted a “substantial or significant” portion
of stock and trade under the ordinance, but no guidance was provided.
At a hearing on some of the citations in Knoxville City Court, three of the officers involved
in the inspections of Fantasy Video testified that they had received no guidance or training in
interpreting the ordinance. When asked to define the terms in the ordinance, Sergeant Ferguson
testified that he could not define “substantial” other than, “substantial means substantial as red
means red; I know red when I see it, but I can’t describe red.” He further testified that “significant
to me means a quantity of something that, compared to something else [sic].” Officer Major testified
that “substantial is substantial. I don’t really have an opinion on the definition of substantial, it is
self-explanatory.” He further explained, “significant is just like substantial, I mean, significant is
significant, just as substantial is substantial.” Officer Shelton similarly testified that “substantial
means substantial just like the color blue means the color blue. I can’t provide any other [sic].” He
also testified that “significant means significant.” It was stipulated that if called to testify further,
the officers would testify that in making the evaluation of “substantial” and “significant” they would
look to what appeared to them to be the “important part of the business.”
By November 1998, Entertainment Resources had altered the composition of Fantasy
Video’s inventory. A police inventory on November 17, 1998, revealed that approximately 57% of
the stock was general feature videos and approximately 43% of the stock was adult-oriented videos.
The balance was later adjusted again; the tally from a count on December 8, 1998, was 70% general
feature and 30% adult feature. Despite these alterations, the City police continued to issue citations
up until the date that the preliminary injunction was entered. As of November 1998, Entertainment
Resources had been cited and found guilty of fifty-three separate violations of the ordinance. As of
November 16, 1998, at least 75% of Fantasy Video’s revenues were generated by the “back room”
videos.
The record indicates that at least one other business in Knoxville rents and sells videos that
fall within the purview of the ordinance. It was stipulated that Gemstone Video Stores have separate
back rooms devoted to adult-oriented videotapes and magazines. It was stipulated that the City takes
the position that Gemstone Video Stores are not “adult bookstores” within the meaning of the
ordinance and that the back room stock is not a substantial or significant portion of Gemstone
Video’s stock and trade, but the record does not show the percentage breakdown between adult
videos and general videos.
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In spite of the repeated citations, Entertainment Resources continued to operate Fantasy
Video. Therefore, on November 4, 1998, the City of Knoxville filed a complaint for injunctive relief
seeking to enjoin Entertainment Resources from operating in violation of the ordinance. In its
answer, Entertainment Resources averred numerous defenses, including the claim that the ordinance
is impermissibly vague under the United States and Tennessee Constitutions.
On December 10, 1998, the chancery court granted the City’s motion for a temporary
injunction restraining Entertainment Resources from operating an adult bookstore at the Papermill
Road location. The chancery court reasoned that a temporary injunction was appropriate because
Entertainment Resources had opened the Fantasy Video store on Papermill Road with full
knowledge of the ordinance, and it was not disputed that the adult videos offered for sale and rental
at Fantasy Video were within the purview of the ordinance. The chancery court further noted that
over 75% of the store’s revenue and at least 85% of its customers were attributable to the adult
videos. The court opined that the general video inventory was, “despite its number . . . insignificant
and insubstantial to this business’s stock in trade.”
For two years after the entry of the temporary injunction there was little movement on the
merits of the case. Fantasy Video’s general video business eventually dwindled to the point that it
was only open two hours per week. In January 2001, Entertainment Resources lost its lease on the
Papermill Road location and the City moved to dismiss the suit as moot. The chancery court granted
that motion on July 9, 2001, except with respect to Entertainment Resources’ claim for damages.
Entertainment Resources argued that it was entitled to damages not only as to the Fantasy Video
store, which had only operated for four months on Papermill Road prior to entry of the injunction,
but also as to the two additional stores it had planned to open in Knoxville.
Nine months later, on April 15, 2002, the chancery court entered an order upholding the
injunction and denying damages. The court held that because Entertainment Resources was in
“direct violation” of the ordinance, it was not entitled to challenge it as vague. The court also held
that the ordinance was a constitutional time, place and manner restriction aimed at combating the
secondary effects of adult businesses.
Entertainment Resources appealed. The Court of Appeals reversed the chancery court,
reasoning that because neither the City nor the enforcing officers could define the terms “substantial”
or “significant,” and because the imprecision of the terms prevented “‘men of common intelligence’”
from understanding the ordinance, the ordinance was “unconstitutionally vague and, therefore,
unenforceable.” The Court of Appeals remanded to the trial court for a determination of damages
and attorney’s fees. The appellate court rejected the City’s argument that Entertainment Resources’
damages as to the Fantasy Video store were too speculative for recovery. The court declined,
however, to instruct the trial court to award damages for the second and third planned, but unopened,
stores, finding that those damages were too speculative to permit recovery. We granted review and
now affirm the Court of Appeals on the separate grounds set forth below.
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Analysis
Standard of Review
Interpretation of statutes and ordinances is a question of law which we review de novo. See
State ex rel. Pope v. U.S. Fire Ins. Co., 145 S.W.3d 529, 533 (Tenn. 2004).
The Vagueness Doctrine
The Fourteenth Amendment to the United States Constitution prohibits states from
“depriv[ing] any person of life, liberty, or property, without due process of law.” Article I, section
8 of the Tennessee Constitution provides an identical protection; as we have often observed, “the
‘law of the land’ proviso of our constitution is synonymous with the ‘due process of law’ provisions
of the federal constitution.” State ex rel. Anglin v. Mitchell, 596 S.W.2d 779, 786 (Tenn. 1980)
(citing Daugherty v. State, 393 S.W.2d 739 (Tenn. 1965)).
Due process of law requires, among other things, notice of what the law prohibits. Laws
must “give the person of ordinary intelligence a reasonable opportunity to know what is prohibited,
so that he may act accordingly.” Grayned v. City of Rockford, 408 U.S. 104, 108 (1972). Criminal
statutes “must ‘define the criminal offense with sufficient definiteness that ordinary people can
understand what conduct is prohibited . . . .’” Davis-Kidd Booksellers, Inc. v. McWherter, 866
S.W.2d 520, 532 (Tenn. 1993) (quoting Kolender v. Lawson, 461 U.S. 352, 358 (1983)). A statute
is unconstitutionally vague, therefore, if it does not serve sufficient notice of what is prohibited,
forcing “‘men of common intelligence [to] necessarily guess at its meaning.’” Davis-Kidd, 866
S.W.2d at 532 (quoting Broadrick v. Oklahoma, 413 U.S. 601, 607 (1973)); see also Leech v. Am.
Booksellers Ass’n, Inc., 582 S.W.2d 738, 746 (Tenn. 1979).
In addition to the requirement of notice, the vagueness doctrine requires that statutes provide
“minimal guidelines to govern law enforcement.” Davis-Kidd, 866 S.W.2d at 532. Because “[a]
vague law impermissibly delegates basic policy matters to policemen, judges, and juries for
resolution on an ad hoc and subjective basis, with the attendant dangers of arbitrary and
discriminatory application,” Grayned, 408 U.S. at 108-09, “the requirement that a legislature
establish minimal guidelines to govern law enforcement” is the more important aspect of the
vagueness doctrine. Smith v. Goguen 415 U.S. 566, 574 (1974).
Vague laws implicating the First Amendment to the United States Constitution and Article
I, section 19 of the Tennessee Constitution are subject to a more stringent standard than laws in other
contexts because of the danger of chilling protected speech. Davis-Kidd, 866 S.W.2d at 531.
“Where a statute’s literal scope, unaided by a narrowing state court interpretation, is capable of
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reaching expression sheltered by the First Amendment, the doctrine demands a greater degree of
specificity than in other contexts.” Smith, 415 U.S. at 573.1
With these principles in mind, we turn to the question of whether the ordinance is
unconstitutionally vague.
Validity of the Ordinance
The City argues that the terms “substantial” and “significant” are familiar terms capable of
ready understanding by persons of ordinary intelligence. Moreover, argues the City, we must
construe “substantial” and “significant” in the context of the statute as a whole. Entertainment
Resources argues that “substantial” and “significant” are unconstitutionally vague because the terms
have no fixed meaning.
In evaluating a law, such as the Knoxville ordinance, that “affects communication protected
by the First Amendment,” we may consider a challenge to its facial validity regardless of whether
or not the law is vague as applied to the defendant if “the statute’s deterrent effect on legitimate
expression is . . . both real and substantial and if the statute is [not] readily subject to a narrowing
construction by the state courts.” Young v. Am. Mini-Theaters, 427 U.S. 50, 60 (1976) (internal
quotations omitted);2 see also U. S. v. Mazurie, 419 U.S. 544, 550 (1975); NAACP v. Button, 371
U.S. 415, 432-33 (1963). Here, the deterrent effect was indeed substantial; Entertainment Resources
was forced to close its doors and abandon its plans to open a second and third store. Moreover, as
we explain below, the ordinance is not susceptible to a narrowing construction. For the reasons that
follow, we conclude that the Knoxville ordinance is vague and invalid on its face.
First, the inability of the officers charged with enforcing the ordinance to define its key terms
weighs heavily against the ordinance’s constitutionality. Knoxville Police Officers Ferguson, Major,
and Shelton all testified that they were unable to define “substantial.” The officers testified that the
City had not instructed them as to what constituted a substantial portion of sexually-explicit material
but that they, personally, knew what “substantial” meant. As Entertainment Resources points out,
however, “I know it when I see it” is not a constitutionally-sound standard. Particularly when speech
1
The concurring opinion suggests that this is a case involving an overbreadth analysis. The issue before this
Court, however, is not whether the ordinance reaches both protected and unprotected conduct, but whether the ordinance
is unclear in its prohibitions. Although “vagueness and overbreadth [are] logically related and similar doctrines,”
Kolender, 461 U.S. at 358 n.8, they are distinct concepts. See, e.g., Davis-Kidd, 866 S.W .2d at 523-29, 531-32.
2
The concurring opinion notes that the Court in Young refused to consider the defendants’ vagueness challenge
because the challenged ordinances “unquestionably” applied to the defendants. The Court so held, however, only after
first concluding that the ordinances at issue did not create a significant deterrent effect and were “readily subject to a
narrowing construction by the state courts.” Young, 427 U.S. at 60-61. The concurring opinion also notes that the
ordinance upheld by the Court in Young contained the same “substantial or significant” definition with regard to adult
bookstores as does the Knoxville ordinance we consider here. However, Young addressed a challenge to an entirely
separate section of the ordinance, and the Court in Young did not pass on the constitutionality of the definition at issue
in this case.
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is being regulated, the Constitution demands that government bodies make a greater attempt to
define what conduct is prohibited to avoid chilling protected speech.
As written, the determination of what constitutes a “substantial or significant portion” of a
business’s “stock and trade” under the ordinance is an entirely subjective one. The ordinance gives
no objective guidance to businesses regulated by the ordinance or officials charged with its
enforcement. “Accordingly, it neither gives notice to ordinary people . . . nor sufficient guidance to
law enforcement officials to prevent arbitrary law enforcement.” Davis-Kidd, 866 S.W.2d at 532.
This type of vague, “standardless” drafting is precisely what the Due Process clause prohibits,
because it “allows policemen, prosecutors, and juries to pursue their personal predilections.
Legislatures may not so abdicate their responsibilities for setting the standards of the criminal law.”
Smith, 415 U.S. at 575.
We note that the City objects to using the testimony of Officers Ferguson, Major, and Shelton
to demonstrate that the ordinance is unconstitutionally vague. The City points out that the content,
meaning and application of the ordinance is not a matter of fact to be proven by witness testimony
but is rather a matter of law to be construed by the Court. State ex rel. Pope, 145 S.W.3d at 533; see
also Dempsey v. Correct Mfg. Corp., 755 S.W.2d 798, 806 (Tenn. Ct. App. 1988). As the Court of
Appeals correctly held, however, here the witnesses’ testimony illustrates the issue at the very heart
of the vagueness challenge: enforcement of the ordinance was left to the “personal predilections”
of the police. Smith, 415 U.S. at 575. The officers’ confusion demonstrates that the ordinance fails
to provide ascertainable standards for law enforcement.
Second, the terms as used in the context of the ordinance cannot be defined with any degree
of precision. In our view, the fact that the terms “substantial” and “significant” are common and
familiar terms does not support the argument that they are constitutional as used in the ordinance.
The words “big” and “small” are certainly common and familiar as well, but if used to describe
prohibited conduct, they would no more pass constitutional muster than do the terms in this
ordinance. For it is not the words themselves that must be capable of ready understanding by
persons of ordinary intelligence, but the conduct that is prohibited that must be readily understood.3
To bolster its argument that “substantial” and “significant” are constitutional when used in
statutes, the City points out that the terms appear hundreds of times in state and federal statutes. See
15192 Thirteen Mile Rd., Inc. v. City of Warren, 626 F. Supp. 803, 820 (E.D. Mich. 1985). As the
City itself notes, however, we must read those terms in the context of the ordinance. The terms
“substantial” and “significant” in this ordinance merely tell us that if a business has a certain,
undefined amount of sexually-explicit material, then it is subject to the location restrictions of the
ordinance. What is “substantial” or “significant” to one person may just as easily be “unsubstantial”
3
The concurring opinion asserts that “substantial” is capable of definition, noting that this Court defined
“substantial” in In re Valentine, 79 S.W.3d 539, 548-49 (Tenn. 2002). The definition of substantial offered in that case
was “‘of real worth and importance.’” Id. at 548 (quoting Black’s Law Dictionary 1428 (6 th ed. 1990)). It is difficult
to see how substituting “of real worth and importance” for “substantial” would clarify what portion of adult-oriented
stock and trade a business could carry without being subject to the ordinance.
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or “insignificant” to another. The fact that the City itself was unsure what amount of material the
terms were intended to reach is demonstrated both by the City’s failure to offer guidance to
Entertainment Resources and by the confusion of the officers charged with enforcing the ordinance.
Third, the City declined to give any limiting construction to the ordinance, and we are unable
to impose a narrowing definition to salvage its constitutionality. As the concurring opinion notes,
this Court has cautioned that “[c]ourts should consider any limiting instructions of the challenged
statute that state authorities have proffered.” State v. Burkhart, 58 S.W.3d 694, 697 (Tenn. 2001).
In this case, however, no such instruction has been proffered, either to Entertainment Resources or
to this Court. Entertainment Resources requested that the City tell it how to reapportion its stock
in order to comply with the ordinance. The City refused. Entertainment Resources then altered the
composition of the Fantasy Video stock from 80% adult-oriented material to 57%, and finally to
30%. After each alteration, the City continued to maintain that Fantasy Video was in violation of
the ordinance. In our view, requiring a party to engage in this sort of guessing game is a clear
violation of due process. The “absence of any ascertainable standard for inclusion and exclusion is
precisely what offends the Due Process Clause.” Smith, 415 U.S. at 578.
The concurring opinion states that we failed to “consider whether the ordinance is readily
susceptible to a narrowing construction which would alleviate any perceived unconstitutional
vagueness.” But in the absence of any hint from the City, we are at a loss as to how to impart
meaning to the terms “substantial” and “significant” without rewriting the ordinance. The
concurring opinion points out that a similar Nashville ordinance defines an adult video store as an
“establishment having a majority of its stock or a majority of its floor space dedicated to” adult
material. A previous version of that ordinance, invalidated as unconstitutionally vague in Ellwest
Stereo Theater, Inc. v. Boner, 718 F. Supp. 1553, 1581 (M.D. Tenn. 1989), had used the terms
“substantial” and “significant.” While we agree that “majority” is clearer than “substantial,” such
a drastic revision by this Court would amount to impermissible judicial legislation. “[C]ourts may
supply words when reasonably called for. Nevertheless, it is the prerogative of the legislature, and
not the courts, to amend statutes.” In re Swanson, 2 S.W.3d 180, 186-87 (Tenn. 1999) (citations
omitted). In the Nashville case, it was the Nashville City Council, a legislative body, that supplied
the narrowing construction, not the courts.
It is difficult to understand the City’s reluctance to further clarify the ordinance. “Although
due process does not require impossible standards of clarity, this is not a case where further precision
in the statutory language is either impossible or impractical.” Kolender, 461 U.S. at 361 (internal
quotation and citation omitted). Surely the City must have had some idea of what amount of
sexually-explicit material was tolerable under the ordinance, particularly given the fact that the
record shows that the City takes the position that Gemstone Video Stores, which also stock sexually-
explicit videotapes, was not in violation of the ordinance. See, e.g., Vill. of Hoffman Estates v.
Flipside, Hoffman Estates, Inc., 455 U.S. 489, 503-04 (1982) (ordinance regulating sale of drug
paraphernalia not vague, in part because village attorney issued guidelines to businesses affected by
ordinance).
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In the absence of any articulable standards from the City, we must conclude that the
ordinance is vague “not in the sense that it requires a person to conform his conduct to an imprecise
but comprehensible normative standard, but rather in the sense that no standard of conduct is
specified at all.” Coates v. City of Cincinnati, 402 U.S. 611, 614 (1971).
Finally, the City argues that Entertainment Resources may not challenge the ordinance as
facially vague because the Fantasy Video store was clearly within the purview of the ordinance.
Burkhart, 58 S.W.3d at 699. As we have explained, however, in some circumstances even a party
who is within the ambit of an ordinance may challenge it as facially vague if protected
communication is at issue. Young, 427 U.S. at 59-60. Moreover, the facts of this case belie the
City’s insistence that Entertainment Resources fell within the purview of the ordinance, because, as
we have explained, the ordinance has no boundaries. Entertainment Resources reduced its stock
from 80% adult videos to 30% without, evidently, locating the upper edge of what constituted an
acceptable portion of stock devoted to adult-oriented material. Given the City’s inability to articulate
any constitutionally-meaningful standards for the ordinance’s definition of adult bookstores, we
conclude that the ordinance is unconstitutionally vague and unenforceable.
Remaining Issues
Having determined that the definition of “adult bookstores” in Knoxville City Code section
16-468 is void for vagueness, we need not reach the parties’ arguments as to the validity of the
injunction entered by the trial court. We also decline to reach Entertainment Resources’ arguments
that such an ordinance is not a valid time, place and manner regulation, that it failed to provide
reasonable alternative avenues of communication, that such an ordinance may never be justified
using the “secondary effects” doctrine under Article 1, section 19 of the Tennessee Constitution, and
that the injunction was an unconstitutional prior restraint.
Damages
Because the chancery court held that Entertainment Resources had been properly enjoined
from operating Fantasy Video pursuant to the ordinance, it did not address Entertainment Resources’
damages. We agree with the Court of Appeals that Entertainment Resources is entitled to a
determination of damages as to the Fantasy Video Store on Papermill Road, but that it is not entitled
to damages as to the planned, but unopened, second and third Knoxville stores. We remand to the
chancery court to assess the amount of Entertainment Resources’ damages and to determine the
propriety of awarding attorney’s fees.
Conclusion
Having considered the record and applicable authority, we hold that Knoxville City Code
section 16-468 is vague and unenforceable under the United States and Tennessee Constitutions.
We remand to the chancery court for a determination of Entertainment Resources’ damages flowing
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from that court’s injunction. Costs of the appeal are taxed to the appellant, City of Knoxville, and
its surety, for which execution may issue if necessary.
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E. RILEY ANDERSON, JUSTICE
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