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Case 1:24-cv-00001 Document 1 Filed on 01/04/24 in TXSD Page 1 of 25
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`UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF TEXAS
`BROWNSVILLE DIVISION
`
`Civil Action No. _______
`
`SPACE EXPLORATION
`TECHNOLOGIES CORP.,
`Plaintiff,
`v.
`NATIONAL LABOR RELATIONS
`BOARD, a federal administrative agency,
`JENNIFER ABRUZZO, in her official
`capacity as the General Counsel of the
`National Labor Relations Board, LAUREN
`M. McFERRAN, in her official capacity as
`the Chairman of the National Labor
`Relations Board, MARVIN E. KAPLAN,
`GWYNNE A. WILCOX, and DAVID M.
`PROUTY, in their official capacities as
`Board Members of the National Labor
`Relations Board, and JOHN DOE in his
`official capacity as an Administrative Law
`Judge of the National Labor Relations
`Board,
`Defendants.
`
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`Plaintiff Space Exploration Technologies Corp. (“SpaceX”) brings this action for
`
`declaratory and injunctive relief, alleging as follows:
`
`INTRODUCTION
`
`1. This action stems from an unlawful attempt by the National Labor Relations Board
`
`(“NLRB”) to subject SpaceX to an administrative proceeding whose structure violates Article II,
`
`the Fifth Amendment, and the Seventh Amendment of the Constitution of the United States.
`
`2. Article II vests all executive power in the President, “who must ‘take Care that the
`
`Laws be faithfully executed.’” Seila L. LLC v. CFPB, 140 S. Ct. 2183, 2191 (2020).
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`

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`3. To discharge that responsibility, the President must have the power to remove
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`subordinate officers who assist in carrying out the President’s duties. Free Enter. Fund v. PCAOB,
`
`561 U.S. 477, 513–14 (2010).
`
`4. The Fifth Circuit has held that this removal power extends to administrative law
`
`judges (“ALJs”) who “perform substantial executive functions.” Jarkesy v. SEC, 34 F.4th 446, 463
`
`(5th Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023).
`
`5. Article II requires that the President “have sufficient control over the performance
`
`of [such ALJs’] functions, and, by implication, . . . be able to choose who holds the positions.” Id.
`
`This constitutionally required degree of control is lacking when the ALJs are insulated by “[t]wo
`
`layers of for-cause protection”—that is, when the ALJs are removable only for cause, by officials
`
`who themselves are removable only for cause. Id.; see Free Enter. Fund, 561 U.S. at 492–508.
`
`The Fifth Circuit therefore held that the removal restrictions for ALJs set forth in 5 U.S.C.
`
`§ 7521(a) are unconstitutional as applied to ALJs for the Securities and Exchange Commission
`
`(“SEC”). Jarkesy, 34 F.4th at 465.
`
`6. The same reasoning applies to the ALJs of the NLRB, including the ALJ assigned
`
`to preside over the pending NLRB proceedings against SpaceX. Like the SEC ALJs in Jarkesy,
`
`NLRB ALJs are “inferior officers” who “have substantial authority” within agency investigations
`
`and enforcement actions. Jarkesy, 34 F.4th at 464; see also Westrock Servs., Inc., 366 N.L.R.B.
`
`No. 157, slip op. at 1 (Aug. 6, 2018) (“Board judges, like SEC judges, are inferior officers[.]”).
`
`And like SEC ALJs, NLRB ALJs are covered by two layers of removal protection, which insulate
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`them from oversight by the President. See 5 U.S.C. §§ 1202(d), 7521(a); 29 U.S.C. § 153(a). So,
`
`like the SEC ALJs in Jarkesy, NLRB ALJs are unconstitutionally insulated from the President’s
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`2
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`

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`oversight, and the Court should declare that the NLRB ALJs’ having two layers of removal
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`protection is unconstitutional. See Jarkesy, 34 F.4th at 464.
`
`7. Neither the Fifth Circuit nor the Supreme Court has decided whether the NLRB
`
`Members’ layer of removal protection is unconstitutional. But the correct answer, given the
`
`relevant Supreme Court precedent and nature of the NLRB Members’ functions, is a resounding
`
`yes.
`
`8. The NLRB may argue that its Members’ removal protections are constitutional
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`under the reasoning of Humphrey’s Executor v. United States, 295 U.S. 602, 627–28 (1935). That
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`ruling, particularly as the Supreme Court has recently clarified it, does not apply to the NLRB’s
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`Members today.
`
`9. Humphrey’s Executor applies only to agency officials who do not exercise
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`“executive power in the constitutional sense,” as the Court concluded about the Commissioners of
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`the Federal Trade Commission (“FTC”) in 1935. Id. at 628; see also Seila L., 140 S. Ct. at 2198;
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`Jarkesy, 34 F.4th at 465 n.19. Whatever might have been true of the FTC’s Commissioners in
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`1935, it is quite clear today that the NLRB’s Members exercise substantial executive power under
`
`the Constitution. There is no justification for extending Humphrey’s Executor to them.
`
`10. The existence of unconstitutional removal protections inflicts twofold harm. It
`
`limits the President’s constitutional authority, of course. But it also produces an administrative
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`bureaucracy that operates on regulated parties without the constitutionally required “degree of
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`electoral accountability.” Collins v. Yellen, 141 S. Ct. 1761, 1784 (2021).
`
`11. Because such removal protections affect not just the President, but also ordinary
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`Americans who must interact with the administrative state, it makes no legal difference whether
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`the President objects to a given statutory limit on his removal powers: “the separation of powers
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`3
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`

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`does not depend on the views of individual Presidents, nor on whether ‘the encroached-upon
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`branch approves the encroachment.’” Free Enter. Fund, 561 U.S. at 497 (citations omitted).
`
`12. When a party is regulated by administrative officials who are shielded by
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`unconstitutional removal protections, Supreme Court precedent teaches that the party is “entitled
`
`to declaratory relief sufficient to ensure that the [administrative] standards to which they are
`
`subject will be enforced only by a constitutional agency accountable to the Executive.” Id. at 513.
`
`13. To prevent SpaceX from undergoing protracted administrative proceedings before
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`an unconstitutionally structured agency—after which SpaceX is unlikely to have a chance to secure
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`meaningful retrospective relief—the Court should stay or enjoin the current agency proceedings,
`
`declare that the NLRB’s structure violates the separation of powers under Article II of the
`
`Constitution, and permanently enjoin the NLRB and its General Counsel from pursuing unfair
`
`labor practice charges against SpaceX before agency officials that are unconstitutionally insulated
`
`from presidential oversight.
`
`14. The NLRB proceedings against SpaceX also suffer from another constitutional
`
`infirmity. They violate the Seventh Amendment, which preserves the right to trial by jury “[i]n
`
`Suits at common law.” U.S. CONST. amend. VII.
`
`15. The right to trial by jury “is a ‘fundamental’ component” of the American legal
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`system and “remains one of our most vital barriers to governmental arbitrariness.” Jarkesy, 34
`
`F.4th at 452 (quoting Reid v. Covert, 354 U.S. 1, 9–10 (1957)).
`
`16. SpaceX does not take issue with the NLRA’s express authorization of backpay, see
`
`29 U.S.C. § 160(c), which is a form of equitable relief when it is restitutionary in nature, see
`
`Chauffeurs, Teamsters & Helpers, Loc. No. 391 v. Terry, 494 U.S. 558, 570–73 (1990).
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`4
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`

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`17. But the NLRB has recently claimed for itself the authority to award a broader range
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`of relief, including traditional forms of legal relief that go far beyond the equitable restitutionary
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`backpay remedy permitted by the statute. See Thryv, Inc., 372 N.L.R.B. No. 22 (Dec. 13, 2022).
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`18. Indeed, the NLRB’s administrative complaint against SpaceX seeks these expanded
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`remedies.
`
`19. These new remedies, however, are nothing short of compensatory damages
`
`intended “to compensate [unlawfully terminated] employees for all direct or foreseeable pecuniary
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`harms that these employees suffer as a result of” the unlawful termination. Id. at 1.
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`20. Money damages designed to compensate for losses are “the classic form of legal
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`relief.” Mertens v. Hewitt Assocs., 508 U.S. 248, 255 (1993).
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`21. But not even Congress can “conjure away the Seventh Amendment by mandating
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`that traditional legal claims” proceed before “an administrative tribunal.” Granfinanciera, S.A. v.
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`Nordberg, 492 U.S. 33, 52 (1989).
`
`22. As the Fifth Circuit has held with respect to similar SEC proceedings, when an
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`administrative agency seeks legal relief for an alleged statutory violation, the Seventh Amendment
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`prohibits it from substituting an ALJ hearing for a trial by jury. See Jarkesy, 34 F.4th at 451–55.
`
`23. Finally, the NLRB is also unconstitutionally structured because its Members
`
`exercise all three constitutional powers—legislative, executive, and judicial—in the same
`
`administrative proceedings.
`
`24. This case brings the problem into clear focus: the NLRB’s Regional Office for
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`Region 31 (the “Region”) has conveyed to SpaceX that it plans to ask for the NLRB Members’
`
`approval to go to federal district court to request injunctive relief against SpaceX—a
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`quintessentially prosecutorial act of the Executive—even though the same NLRB Members would
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`5
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`

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`later preside in a quasi-legislative, quasi-judicial capacity in the unfair labor practice proceeding
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`involving the same alleged violations of the NLRA.
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`25. Even after acting as prosecutor by charging SpaceX with violations of federal labor
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`law before an Article III tribunal, the same NLRB Members would then issue the agency’s ultimate
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`order on whether SpaceX has violated federal labor law.
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`26. In that adjudication, the NLRB Members would have significant leeway to adopt
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`new interpretations of the NLRA as a policy matter and adjudicate whether the evidence supports
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`a determination that SpaceX violated the statute as they interpret it.
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`27. On top of that, the agency would then insist that subsequent judicial review before
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`an Article III court must give significant deference to the NLRB Members’ interpretations of the
`
`NLRA and findings of fact.
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`28. The NLRB’s current way of functioning is miles away from the traditional
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`understanding of the separation of powers, which views “[t]he accumulation of all powers
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`legislative, executive and judiciary in the same hands” as “the very definition of tyranny.” THE
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`FEDERALIST NO. 47 (James Madison).
`
`29. And although the Supreme Court upheld aspects of the NLRB’s basic structure
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`nearly a century ago, NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 47 (1937), the Court has
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`subsequently clarified that the Constitution’s due process guarantee precludes an individual from
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`serving as prosecutor and adjudicator in the same case, Williams v. Pennsylvania, 579 U.S. 1, 8
`
`(2016).
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`30. If the current Members of the NLRB are asked to make a prosecutorial
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`determination about whether SpaceX is in violation of the NLRA, there is an objectively high risk
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`that they would not later be able to provide the neutral adjudicative forum that the Constitution
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`6
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`

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`Case 1:24-cv-00001 Document 1 Filed on 01/04/24 in TXSD Page 7 of 25
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`demands, and so would need to recuse from further participation in any agency adjudication
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`against SpaceX.
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`31. For this reason, too, SpaceX is entitled to declaratory and injunctive relief to ensure
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`that it is not subjected to unlawful proceedings before an unconstitutionally structured agency.
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`JURISDICTION AND VENUE
`
`32. This action arises under the Constitution and laws of the United States. This Court
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`has federal question jurisdiction under 28 U.S.C. § 1331 over SpaceX’s claims that fundamental
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`aspects of the NLRB’s structure violate the Constitution. See, e.g., Axon Enter., Inc. v. FTC, 143
`
`S. Ct. 890, 900 (2023).
`
`33. The Court has authority to grant declaratory and injunctive relief under the
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`Declaratory Judgment Act, 28 U.S.C. §§ 2201–2202, under the Administrative Procedure Act,
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`5 U.S.C. §§ 701–706, and under the Court’s inherent equitable powers.
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`34. Venue is proper in this district under 28 U.S.C. § 1391(e)(1)(B). Defendants are
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`officers of an agency of the United States acting in their official capacity; and a substantial part of
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`the events or omissions giving rise to the claim occurred in Boca Chica, Texas, where SpaceX
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`maintains its Starbase rocket development and launch facility, its fastest-growing facility and a
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`key component to its operations and overall success. The NLRB’s administrative proceeding
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`targets a variety of SpaceX actions and policies that allegedly occurred across its many U.S.
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`facilities, including in response to an “Open Letter” that was broadly distributed to employees at
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`all SpaceX facilities across the country. For example, the administrative complaint alleges unfair
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`labor practices based on the company President’s June 15 and June 16, 2022 emails to all
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`employees companywide, and seeks certain remedies that would affect all of SpaceX’s facilities.
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`Moreover, a significant portion of the employees who interacted with the Open Letter were based
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`7
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`Case 1:24-cv-00001 Document 1 Filed on 01/04/24 in TXSD Page 8 of 25
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`at Starbase (in addition to employees who interacted with the Open Letter while based at SpaceX’s
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`Houston facility, which is also located in this judicial district).
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`PARTIES
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`35. Plaintiff SpaceX, a privately held Delaware corporation, is a pioneer in the
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`aerospace industry, employing more than 13,000 employees in Texas, California, Florida,
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`Washington, and Washington, D.C. SpaceX has facilities and employees in several cities in Texas,
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`including the Starbase rocket development and launch facility in Boca Chica.
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`36. Defendant NLRB is an administrative agency of the United States, headquartered in
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`Washington, D.C. The National Labor Relations Act (“NLRA”) empowers the NLRB to initiate
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`administrative proceedings to prevent unfair labor practices. See 29 U.S.C. § 160.
`
`37. Defendant Jennifer A. Abruzzo is General Counsel of the NLRB. She is sued in her
`
`official capacity.
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`38. Defendant Lauren M. McFerran is Chairman of the NLRB. She is sued in her official
`
`capacity.
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`39. Defendant Marvin E. Kaplan is a Member of the NLRB. He is sued in his official
`
`capacity.
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`40. Defendant Gwynne A. Wilcox is a Member of the NLRB. She is sued in her official
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`capacity.
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`41. Defendant David M. Prouty is a Member of the NLRB. He is sued in his official
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`capacity.
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`42. Defendant John Doe is an Administrative Law Judge of the NLRB assigned to
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`preside over the NLRB proceedings against SpaceX, whose identity has not yet been disclosed to
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`SpaceX. He is sued in his official capacity.
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`8
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`Case 1:24-cv-00001 Document 1 Filed on 01/04/24 in TXSD Page 9 of 25
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`FACTS
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`43. On June 15, 2022, a small group of SpaceX employees using the company’s internal
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`communications platforms sent an Open Letter to thousands of SpaceX employees, during working
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`hours.
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`44. The Open Letter demanded that SpaceX take certain actions addressing perceived
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`shortcomings, and solicited the thousands of recipient-employees to support the Open Letter’s
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`demands and fill out a linked survey hosted externally.
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`45. The Open Letter caused significant distraction to SpaceX employees around the
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`country.
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`46. SpaceX discharged several employees involved with the Open Letter for violating
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`numerous company policies.
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`47. On November 16, 2022, former SpaceX employees (collectively, the “Charging
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`Parties”) filed charges with the NLRB alleging that SpaceX committed unfair labor practices in
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`violation of the NLRA when it terminated their employment (the “Charges”).
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`48. On March 16, 2023, the NLRB sought SpaceX’s response to the Charges. SpaceX
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`submitted its position statement and supporting evidence refuting the Charging Parties’ allegations
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`on April 28, 2023.
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`49. On December 14, 2023, the Region informed SpaceX that it had made
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`determinations on all eight Charges and authorized a complaint against SpaceX.
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`50. On January 3, 2024, the Regional Director for Region 31 issued an order
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`consolidating the administrative cases, together with a consolidated administrative complaint and
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`notice that an administrative hearing would occur on March 5, 2024 before an ALJ.
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`9
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`Case 1:24-cv-00001 Document 1 Filed on 01/04/24 in TXSD Page 10 of 25
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`COUNT I – THE NLRB’S ALJS ARE UNCONSTITUTIONALLY
`INSULATED FROM REMOVAL
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`51. SpaceX restates and incorporates by reference each and every allegation of the
`
`preceding paragraphs, as if fully set forth herein.
`
`52. NLRB ALJs are “Officers of the United States” under the Constitution’s
`
`Appointments Clause—not mere employees—because among other things, they hold continuing
`
`offices through which they preside over adversarial hearings, receive testimony, shape the
`
`administrative record, and prepare proposed findings and opinions. See Lucia v. SEC, 138 S. Ct.
`
`2044, 2053–55 (2018); Jarkesy, 34 F.4th at 464; Westrock Servs., 366 N.L.R.B. No. 157, slip op.
`
`at 1.
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`53. At the same time, the NLRB may attempt to remove its ALJs “only for good cause
`
`established and determined by the Merit Systems Protection Board [(“MSPB”)] on the record after
`
`opportunity for hearing before the [MSPB].” 5 U.S.C. § 7521(a). In turn, by statute, Members of
`
`the MSPB are removable only for “inefficiency, neglect of duty, or malfeasance in office.” 5
`
`U.S.C. § 1202(d). And under the NLRA, Board Members are removable only “for neglect of duty
`
`or malfeasance in office, but for no other cause.” 29 U.S.C. § 153(a).
`
`54. Given NLRB ALJs’ status as “officers” of an executive agency, “they are
`
`sufficiently important to executing the laws that the Constitution requires that the President be able
`
`to exercise authority over their functions.” Jarkesy, 34 F.4th at 464.
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`55. The statutes’ provision of at least two layers of removal protection prevents that
`
`exercise of presidential authority and thus violates Article II of the Constitution. See Free Enter.
`
`Fund, 561 U.S. at 492–508; Jarkesy, 34 F.4th at 463–65.
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`56. But for these unlawful removal restrictions, either the ALJ assigned to SpaceX’s
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`administrative case or the NLRB Members who bear responsibility to supervise and exercise
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`10
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`Case 1:24-cv-00001 Document 1 Filed on 01/04/24 in TXSD Page 11 of 25
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`control over the ALJ would face the prospect of removal by the President based on their conduct
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`during the proceedings.
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`57. Being subject to unconstitutional agency authority—including proceedings before
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`unconstitutionally insulated agency officials—qualifies as a “here-and-now injury” under well-
`
`settled precedent. Axon Enter., 143 S. Ct. at 903 (citation omitted); see also, e.g., Cochran v. SEC,
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`20 F.4th 194, 210 n.16, 212–13 (5th Cir. 2021) (en banc), aff’d and remanded sub nom. Axon
`
`Enter., 143 S. Ct. 890.
`
`58. Accordingly, SpaceX is “entitled to declaratory relief sufficient to ensure that the
`
`[administrative] standards to which [SpaceX is] subject will be enforced only by a constitutional
`
`agency accountable to the Executive.” Free Enter. Fund, 561 U.S. at 513.
`
`59. Moreover, without interim injunctive relief from this Court, SpaceX will be
`
`required to undergo an unconstitutional proceeding before an insufficiently accountable agency
`
`official.
`
`60. SpaceX bears a strong likelihood of success on this claim for the reasons detailed
`
`above.
`
`61. Yet, unless the NLRB is enjoined from proceeding against SpaceX before an ALJ
`
`unconstitutionally insulated from presidential oversight, SpaceX will be irreparably harmed.
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`62. Further, if the NLRB Members, on recommendation from the ALJ, issue a final
`
`order against SpaceX, the constitutional injury will likely be irremediable. The Supreme Court has
`
`stated that those subject to an unconstitutional proceeding by improperly insulated administrative
`
`agency officials often have no retrospective redress after the fact. See Collins, 141 S. Ct. at 1787–
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`89.
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`11
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`Case 1:24-cv-00001 Document 1 Filed on 01/04/24 in TXSD Page 12 of 25
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`63. The harm to SpaceX, in the event declaratory and injunctive relief is not granted,
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`far outweighs any harm, or mere inconvenience, to the NLRB if such relief is granted. In contrast
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`to the NLRB, which did not file the adjudicative proceedings until 18 months after the allegedly
`
`unlawful conduct, SpaceX has filed this action as quickly as possible—as soon as the NLRB gave
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`notice of an ALJ hearing.
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`64. The grant of injunctive and declaratory relief on this claim will serve the public
`
`interest by protecting Americans’ constitutional rights.
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`COUNT II – THE NLRB’S MEMBERS ARE UNCONSTITUTIONALLY
`INSULATED FROM REMOVAL
`
`65. SpaceX restates and incorporates by reference each and every allegation of the
`
`preceding paragraphs, as if fully set forth herein.
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`66. The NLRB’s Members may be removed by the President only “upon notice and
`
`hearing, for neglect of duty or malfeasance in office, but for no other cause.” 29 U.S.C. § 153(a).
`
`67. Yet the NLRB’s Members exercise substantial executive power under the
`
`Constitution in administering and enforcing the provisions of the NLRA.
`
`68. For example, Section 10(j) of the NLRA, 29 U.S.C. § 160(j), gives the Board
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`authority to exercise quintessentially prosecutorial power in federal district courts: “The Board
`
`shall have the power, upon issuance of [an administrative] complaint as provided in [29 U.S.C.
`
`§ 160(b)] charging that any person has engaged in or is engaging in an unfair labor practice, to
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`petition any United States district court, within any district wherein the unfair labor practice in
`
`question is alleged to have occurred or wherein such person resides or transacts business, for
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`appropriate temporary relief or restraining order.” 29 U.S.C. § 160(j); see, e.g., Overstreet v. El
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`Paso Disposal, L.P., 625 F.3d 844, 852 (5th Cir. 2010) (“Petition power under § 10(j) is
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`prosecutorial in nature[.]”).
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`Case 1:24-cv-00001 Document 1 Filed on 01/04/24 in TXSD Page 13 of 25
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`69. More generally, the NLRB also enforces and implements the NLRA in many ways,
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`including by determining appropriate units for the purpose of collective bargaining, directing
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`representation elections, deciding unfair labor practice charges, and seeking enforcement of its
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`unfair labor practice orders in federal court. 29 U.S.C. §§ 159, 160.
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`70. In these and other ways, the NLRB wields substantial prosecutorial, rulemaking,
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`policymaking, and adjudicative authority.
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`71. The Supreme Court has made clear, moreover, that even when “the activities of
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`administrative agencies ‘take “legislative” and “judicial” forms,’ ‘they are exercises of—indeed,
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`under our constitutional structure they must be exercises of—the “executive Power.”’ Seila L., 140
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`S. Ct. at 2198 n.2 (citation omitted).
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`72. Also, the removal protections for NLRB Members are unusually strict. In contrast
`
`to more common provisions that permit removal “for inefficiency, neglect of duty, or malfeasance
`
`in office,” Humphrey’s Ex’r, 295 U.S. at 620 (quoting 15 U.S.C. § 41), the NLRA permits removal
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`only “for neglect of duty or malfeasance in office,” and explicitly prohibits removal for any other
`
`cause, like inefficiency, 29 U.S.C. § 153(a).
`
`73. The combination of the NLRB Members’ strict removal protections and exercise
`
`of substantial executive power violates Article II of the Constitution.
`
`74. But for these unlawful removal restrictions, the NLRB Members would face the
`
`prospect of removal by the President—including based on their conduct during the proceedings
`
`against SpaceX.
`
`75. Being subject to proceedings before unconstitutionally insulated agency officials is
`
`a “here-and-now injury” justifying pre-enforcement judicial intervention. Axon Enter., 143 S. Ct.
`
`at 903 (citation omitted); Cochran, 20 F.4th at 210 n.16, 212–13.
`
`13
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`Case 1:24-cv-00001 Document 1 Filed on 01/04/24 in TXSD Page 14 of 25
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`76. So, here too, SpaceX is “entitled to declaratory relief sufficient to ensure that the
`
`[administrative] standards to which [SpaceX is] subject will be enforced only by a constitutional
`
`agency accountable to the Executive.” Free Enter. Fund, 561 U.S. at 513.
`
`77. Moreover, without interim injunctive relief from this Court, SpaceX will be
`
`required to undergo an unconstitutional proceeding before an insufficiently accountable agency
`
`official.
`
`78. SpaceX bears a strong likelihood of success on this claim for the reasons detailed
`
`above.
`
`79. Yet, unless the NLRB is enjoined from proceeding against SpaceX before an NLRB
`
`whose Members are unconstitutionally insulated from presidential oversight, SpaceX will be
`
`irreparably harmed.
`
`80. Further, if the NLRB Members, on recommendation from the ALJ, issue a final
`
`order against SpaceX, the harm will likely be irremediable because of the difficulty of obtaining
`
`retrospective redress for an unconstitutional proceeding by improperly insulated administrative
`
`agency officials. See Collins, 141 S. Ct. at 1787–89.
`
`81. The harm to SpaceX, in the event declaratory and injunctive relief is not granted,
`
`far outweighs any harm, or mere inconvenience, to the NLRB if such relief is granted. Unlike the
`
`NLRB, which did not file the adjudicative proceedings until 18 months after the allegedly unlawful
`
`conduct, SpaceX has filed this action as quickly as possible—as soon as the NLRB gave notice of
`
`an ALJ hearing.
`
`82. The grant of injunctive and declaratory relief on this claim will serve the public
`
`interest by protecting Americans’ constitutional rights.
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`Case 1:24-cv-00001 Document 1 Filed on 01/04/24 in TXSD Page 15 of 25
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`COUNT III – THE NLRB ALJ’S ADJUDICATION OF PRIVATE RIGHTS
`WITHOUT A JURY TRIAL VIOLATES THE SEVENTH AMENDMENT
`
`83. SpaceX restates and incorporates by reference each and every allegation of the
`
`preceding paragraphs, as if fully set forth herein.
`
`84. The Seventh Amendment to the Constitution of the United States provides that, “[i]n
`
`Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial
`
`by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court
`
`of the United States, than according to the rules of the common law.” U.S. CONST. amend. VII.
`
`85. The term “Suits at common law” “include[s] all actions akin to those brought at
`
`common law as those actions were understood at the time of the Seventh Amendment’s adoption.”
`
`Jarkesy, 34 F.4th at 452.
`
`86. “The term can include suits brought under a statute as long as the suit seeks common-
`
`law-like legal remedies.” Id.
`
`87. The NLRA authorizes the Board to remedy unfair labor practices through an “order
`
`requiring [the] person to cease and desist from such unfair labor practice, and to take . . . affirmative
`
`action including reinstatement of employees with or without back pay.” 29 U.S.C. § 160(c).
`
`88. Although the statute thus permits backpay as “an incident to equitable relief,” Jones
`
`& Laughlin, 301 U.S. at 48, today’s NLRB currently asserts much broader authority to award
`
`monetary damages.
`
`89. For example, Defendant Jennifer Abruzzo, General Counsel of the NLRB, has
`
`ordered Regional Directors to “request from the Board the full panoply of remedies available to
`
`ensure that victims of unlawful conduct are made whole for losses suffered as a result of unfair
`
`labor practices.” Nat’l Lab. Rels. Bd., Office of the Gen. Counsel, Memorandum 21-06 at 1 (Sept.
`
`8, 2021).
`
`15
`
`

`

`Case 1:24-cv-00001 Document 1 Filed on 01/04/24 in TXSD Page 16 of 25
`
`90. Ms. Abruzzo later elaborated on the “full panoply of remedies” that Regions should
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`seek. See Nat’l Lab. Rels. Bd., Office of the Gen. Counsel, Memorandum 21-07 at 1 (Sept. 15,
`
`2021). She contended that “[a] monetary remedy comprised only of backpay and lost benefits often
`
`fails to truly make whole victims of an unfair labor practice,” and urged that “Regions should
`
`always make sure to seek compensation for any and all damages, direct and consequential,
`
`attributable to an unfair labor practice,” including housing, medical, or training expenses relating
`
`to the allegedly unlawful employment practice. See id. at 2–4 (listing examples).
`
`91. Recently, in Thryv, a divided Board determined that it has authority to issue
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`monetary awards “to compensate affected employees for all direct or foreseeable pecuniary harms
`
`that these employees suffer as a result of the [employer’s] unfair labor practice.” 372 N.L.R.B.
`
`No. 22, slip op. at 1.
`
`92. Such compensation goes far beyond the statutory category of backpay. According
`
`to the Board, it encompasses such items as “interest and late fees on credit cards” and other “credit
`
`card debt,” “penalties” based on “early withdrawals” from a “retirement account” to cover living
`
`expenses, compensation for loss of a “car” or “home” based on an inability “to make loan or
`
`mortgage payments” or “rent,” and new or increased “transportation or childcare costs,” among
`
`other things. Id. at 9–10 (citation omitted).
`
`93. In substance, this expanded remedy permits a broad range of consequential damages,
`
`although the Thryv majority sought to avoid that label on the ground that it “refer[s] to a specific
`
`type of legal damages.” Id. at 8.
`
`94. Even the Thryv majority, however, acknowledged that the expanded remedy
`
`provides monetary relief for compensatory purposes. See id. (“[M]aking employees whole should
`
`16
`
`

`

`Case 1:24-cv-00001 Document 1 Filed on 01/04/24 in TXSD Page 17 of 25
`
`include, at least, compensating them for direct or foreseeable pecuniary harms resulting from the
`
`respondent’s unfair labor practice.”).
`
`95. Although restitutionary backpay (through which an employer disgorges money that
`
`it wrongfully holds and that rightfully belongs to the employee) is categorized as a form of
`
`equitable relief, Chauffeurs, Teamsters & Helpers, Loc. No. 391 v. Terry, 494 U.S. 558, 570
`
`(1990), nonrestitutionary compensatory damages are not.
`
`96. On the contrary, “compensatory damages,” or “monetary relief for all losses . . .
`
`sustained as a result of the alleged breach of . . . duties,” are “the classic form of legal relief.”
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`Mertens, 508 U.S. at 255 (some emphasis omitted).
`
`97. The Board’s newly expanded remedy goes beyond the vindication of public rights,
`
`“the public interest in effecting federal labor policy,” and instead focuses on “the wrong done the
`
`individual employee.” Terry, 494 U.S. at 573 (citation omitted).
`
`98. Indeed, the Thryv majority expanded the Board’s traditional remedy precisely
`
`because it determined that backpay is not enough, on its own, “to restore the wronged to the
`
`position he would have occupied but for the action of the wrongdoer.” Id. at 10 (citation omitted);
`
`see also id. at 12.
`
`99. In accordance with Thryv and Ms. Abruzzo’s directives, the NLRB’s administrative
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`complaint against SpaceX specifies that the General Counsel seeks all relief as may be just and
`
`proper to remedy the unfair labor practices alleged.
`
`100. The fact that the administrative complaint also seeks equitable relief does not strip
`
`SpaceX of its jury-trial right. Jarkesy, 34 F.4th at 454 (“the Seventh Amendment applies to
`
`proceedings that involve a mix of legal and equitable claims”).
`
`17
`
`

`

`Case 1:24-cv-00001 Document 1 Filed on 01/04/24 in TXSD Page 18 of 25
`
`101. Nor does the fact that NLRB proceedings are administrative in nature. “Congress
`
`cannot eliminate a party’s Seventh Amendment right to a jury trial merely by relabeling the cause
`
`of action to which it attaches and placing exclusive jurisdiction in an administrative agency” like
`
`the NLRB. Granfinanciera, 492 U.S. at 61.
`
`102. Without interim injunctive relief from this Court, SpaceX’s claims will be
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`improperly adjudicated by an administrator instead of a jury.
`
`1

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