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`Case No.
`MAC Docket No. M-17-2922
`ALJ Appeal No. 1-1056003206
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`Case 4:21-cv-11350-MFL-CI ECF No. 1, PageID.1 Filed 06/09/21 Page 1 of 7
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`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
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`
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`Plaintiff,
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`GENERAL MEDICINE, P.C.,
`A Michigan professional corporation,
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`
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`-vs-
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`
`
`XAVIER BECERRA, in his official capacity
`as Secretary of the U.S. Department of
`Health and Human Services,
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`Defendant.
`
`_____________________________________/
`Barry M. Rosenbaum (P26487)
`David Hansma (P71056)
`Attorneys for Plaintiff
`2000 Town Center, Suite 1500
`Southfield, MI 48075
`(248) 353-7620
`_____________________________________/
`
`
`COMPLAINT
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`NOW COMES Plaintiff General Medicine, P.C., by and through its
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`
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`attorneys, Seyburn, Kahn, P.C., and states the following:
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`1.
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`Plaintiff General Medicine, P.C.
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`is a Michigan professional
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`corporation with its principal office located in the City of Novi, County of
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`Oakland, in the Eastern District of Michigan of the United States District Court.
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`{01670973.DOC }
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`Case 4:21-cv-11350-MFL-CI ECF No. 1, PageID.2 Filed 06/09/21 Page 2 of 7
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`2.
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`Defendant Xavier Becerra is the current Secretary of the Department
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`of Health and Human Services.
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`3.
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`Jurisdiction is based upon 42 U.S.C. §405(g) providing for judicial
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`review of the final decision of the Secretary made after a hearing.
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`4.
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`Venue is based upon 42 C.F.R. §405.1136(b) because Plaintiff has its
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`principal place of business in the Eastern District of Michigan.
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`5.
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`6.
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`The amount in controversy exceeds the sum of $800,000.00.
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`The review is sought from a final decision of the Medicare Appeals
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`Council (“MAC”) dated May 7, 2021 and received on May 22, 2021; a copy of
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`which is attached hereto as Exhibit A.
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`7.
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`Plaintiff is a post-hospitalist company that employs board-certified
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`physicians and nurse practitioners who specialize in the care of patients residing in
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`post-acute, long-term care and assisted living facilities.
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`8.
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`In 2010, the Centers for Medicare and Medicaid Services (CMS)
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`conducted a post-payment audit of claims submitted by Plaintiff to Medicare for
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`payment for services rendered to patients covered by Medicare.
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`9.
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`The services were rendered to residents of long-term care facilities
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`located in Louisiana in 2004-2006.
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`10. Most of the services were rendered in the months before, during and
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`immediately after the disaster of Hurricane Katrina that devastated parts of
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`{01670973.DOC }
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`Case 4:21-cv-11350-MFL-CI ECF No. 1, PageID.3 Filed 06/09/21 Page 3 of 7
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`Louisiana.
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`11. CMS selected 90 claims at random and determined that Plaintiff had
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`been overpaid on most of the claims.
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`12. CMS then extrapolated the statistical sampling of the overpaid claims
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`which resulted in an overpayment demand amount of $804,653.00.
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`13. Plaintiff, in its own right and not on behalf of any beneficiary,
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`appealed the overpayment determination through the Medicare administrative
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`appeal process, culminating in a Request for Hearing before an Administrative
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`Law Judge (ALJ) filed on November 11, 2010.
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`14. One of Plaintiff’s primary defenses to the overpayment determination
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`was that payment for the services rendered prior to and during Hurricane Katrina
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`should not have been denied under a CMS policy that relaxed normal Medicare
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`requirements for payments, due to the destruction caused by the storm to facilities
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`and records kept therein.
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`15. On September 1, 2011, the ALJ conducted a hearing on Plaintiff’s
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`appeal of the overpayment determination, as to 73 of the claims that were still
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`unfavorable to Plaintiff.
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`16. The ALJ discovered that not all of the claims had been reviewed by
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`the CMS Medicare Qualified Independent Contractor (QIC), so those claims were
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`remanded to the QIC and no further testimony or argument was presented to the
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`{01670973.DOC }
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`Case 4:21-cv-11350-MFL-CI ECF No. 1, PageID.4 Filed 06/09/21 Page 4 of 7
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`ALJ pending the QIC’s decision on the remand order.
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`17. On December 5, 2013, more than two years after the remand, the ALJ
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`notified Plaintiff in writing that its Request for Hearing was defective because
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`Plaintiff had failed to send a copy of the Request for Hearing to each of the
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`seventy-three (73) residents of the facilities to whom Plaintiff had rendered
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`medical services some seven to nine years earlier.
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`18. The ALJ stated that 42 C.F.R. §405.1014(b)(2) required Plaintiff to
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`send copies of the Request to all of the other “parties” to the appeal, and that the 73
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`beneficiaries were “parties” to the appeal.
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`19. The ALJ ordered Plaintiff to present proof that each of the 73
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`beneficiaries was sent a copy of the Request within 60 days or the appeal may be
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`dismissed (See Exhibit B attached hereto).
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`20. On December 13, 2013, Plaintiff sent a letter to the ALJ arguing that
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`the beneficiaries were not “parties” to the appeal under the definitions provided in
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`the Medicare regulations, and citing a prior decision of the Medicare Appeals
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`Council which supported Plaintiff’s position, as well as the fact that CMS had not
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`treated the beneficiaries as “parties” in the earlier appeals (See Exhibit C attached
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`hereto).
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`21.
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`In Plaintiff’s response, Plaintiff also requested that that ALJ advise
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`Plaintiff if it disagreed with Plaintiff’s position.
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`{01670973.DOC }
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`Case 4:21-cv-11350-MFL-CI ECF No. 1, PageID.5 Filed 06/09/21 Page 5 of 7
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`22. On September 28, 2016, nearly three years later, and more than five
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`years from the date that Plaintiff filed its Request for Hearing, and 10 to 12 years
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`after the services were rendered, the ALJ dismissed Plaintiff’s appeal for failure to
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`serve the 73 beneficiaries (See Exhibit D attached hereto).
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`23. On November 29, 2016, Plaintiff filed a timely appeal of the ALJ’s
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`dismissal to the Medicare Appeals Council (MAC).
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`24.
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`In its appeal, Plaintiff argued the following:
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`a.
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`the beneficiaries are not “parties” to the appeal as defined by
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`the Medicare regulations because Plaintiff was appealing on its
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`own behalf as the provider and not on behalf of the
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`beneficiaries, and they were not required to be served with the
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`Request for Hearing to the ALJ;
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`b.
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`if the beneficiaries were “parties”, then the QIC would have
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`been required to serve them with its decision, which it did not
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`do;
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`c.
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`the MAC had previously held in an unrelated case that a failure
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`to notify beneficiaries who have no interest in overpayment
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`cases is not a basis for dismissal; and
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`d.
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`any notice, even if required by the regulations, was rendered
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`meaningless by the delay of seven to nine years between the
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`{01670973.DOC }
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`Case 4:21-cv-11350-MFL-CI ECF No. 1, PageID.6 Filed 06/09/21 Page 6 of 7
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`date that services were provided and the date when the ALJ
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`raised the issue.
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`25. On May 7, 2021, the MAC issued its order denying Plaintiff’s appeal,
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`simply stating, without any analysis, that beneficiaries are parties to an appeal
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`under 42 C.F.R. § 405.1014(b)(2), and that a failure to serve them with copies of
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`the Request is grounds for dismissal of the appeal (Exhibit A).
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`26. The ALJ erred in dismissing Plaintiff’s Request for Hearing and the
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`MAC erred in denying Plaintiff’s Request for Review for the following reasons:
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`a.
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`Because Plaintiff is a provider of services who was assessed an
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`overpayment, Plaintiff is the only party to the appeal pursuant
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`to 42 C.F.R. § 405.1014(b)(2) and 42 C.F.R. § 405.906(a) and
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`(b);
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`b.
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`The beneficiaries who received the services did not file a claim
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`nor did Plaintiff file a claim for payment on their behalf;
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`Plaintiff’s claim was its own claim to appeal the overpayment
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`determination;
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`c.
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`The beneficiaries were not served by the QIC with copies of the
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`QIC decision because they were not parties pursuant to 42
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`C.F.R. § 405.906(b);
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`d.
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`Because the beneficiaries were not parties to the appeal as
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`{01670973.DOC }
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`Case 4:21-cv-11350-MFL-CI ECF No. 1, PageID.7 Filed 06/09/21 Page 7 of 7
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`defined above, Plaintiff was not required to send each of them a
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`copy of the Request for Hearing nor provide proof of having
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`done so to the ALJ; and
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`e.
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`The ALJ abused her discretion in not permitting Plaintiff an
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`opportunity to serve the beneficiaries, despite Plaintiff’s request
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`to be immediately advised if she disagreed with Plaintiff’s
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`argument.
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`27. Because the decision of the MAC is a final decision following a
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`hearing before the ALJ, Plaintiff is entitled to judicial review of the MAC decision
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`pursuant to 42 U.S.C. §§405(g).
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`WHEREFORE, Plaintiff requests that this Honorable Court vacate the
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`decision of the Medicare Appeals Council and remand this matter to the ALJ to
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`complete the hearing on Plaintiff’s appeal of the overpayment determination.
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`Respectfully submitted,
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`SEYBURN & KAHN, P.C.
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`By:/s/ Barry M. Rosenbaum (P26487)
`Barry M. Rosenbaum (P26487)
`David F. Hansma (P71056)
`Attorneys for Plaintiff
`2000 Town Center, Suite 1500
`Southfield, MI 48075-1195
`(248) 353-7620
`brosenbaum@seyburn.com
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`Dated: June 9, 2021
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`{01670973.DOC }
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`7
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