FDA Economic Impact Analysis

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Jan 19, 2014
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I'd agree. I sent this to Bill G - no reply and SJ - he likes it. If the options are still in play as Zeller said, then the 'final rule' date would include at least everything in existence up to that date and substantial equivalence for new products would be MUCH easier.

The question is how they actually implement it. They can't change the law. But they can change how they enforce it. There may be some interesting equal protection issues, however.
 

Bobbilly

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My point is that if the FDA screws vapers and Congress is kissing a certain part of the anatomy of rich folks who smoke premium cigars, then we can perhaps argue to the public and Congress that we are getting a particularly raw deal. Whereas if vapers get nailed along with the premium cigar smokers, then we don't have that basis for claiming that we deserve different treatment.

It's a small point, and YMMV on it.

What is the saying? " life isn't fair" they fear vapourizers. Not cigars.
 

Kent C

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The question is how they actually implement it. They can't change the law. But they can change how they enforce it. There may be some interesting equal protection issues, however.

The fact that Zeller said that the options are open indicates that the date itself is only one option - as does the impact doc - an fda publication from April 2014.

The more important factor to us, is that Zeller said that their decision would take into account the information they get during the comment period, so unless that was just fluff and there's already a foregone conclusion, we're good to go - we really don't have any evidence that (foregone conclusion) is the case - although the deeming doc would tend to suggest that - but the comments he made were after the deeming doc release, so we have to conclude by his own words that the options are still open and that our comments may very well make a difference in what option is chosen. Just in case anybody doesn't know - the Regulation Alternative 3 - is what imo, we should be aiming at - where all existing products are grandfathered - ie. no applications by vendors necessary (again, as stated in the doc) upon the 'final rule'.
 

DC2

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The fact that Zeller said that the options are open indicates that the date itself is only one option - as does the impact doc - an fda publication from April 2014.

The more important factor to us, is that Zeller said that their decision would take into account the information they get during the comment period, so unless that was just fluff and there's already a foregone conclusion, we're good to go - we really don't have any evidence that (foregone conclusion) is the case - although the deeming doc would tend to suggest that - but the comments he made were after the deeming doc release, so we have to conclude by his own words that the options are still open and that our comments may very well make a difference in what option is chosen. Just in case anybody doesn't know - the Regulation Alternative 3 - is what imo, we should be aiming at - where all existing products are grandfathered - ie. no applications by vendors necessary (again, as stated in the doc) upon the 'final rule'.
I'm having a hard time reconciling this with the fact that he said the FDA did not believe they had the authority to change the grandfather date.
 

Kent C

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My point is that if the FDA screws vapers and Congress is kissing a certain part of the anatomy of rich folks who smoke premium cigars, then we can perhaps argue to the public and Congress that we are getting a particularly raw deal. Whereas if vapers get nailed along with the premium cigar smokers, then we don't have that basis for claiming that we deserve different treatment.

It's a small point, and YMMV on it.

It's not just 'rich people'. For one thing, and iirc, you even pointed this out - rich people will find a way to get their cigars regardless of any laws. And that's generally true. The larger point, for premium cigars was brought out, if only peripherally, by Sen. Alexander (and agreed by Zeller) that those products aren't for kids - one, they don't have the money or the knowledge of what might be worth $15-30+.

Unfortunately, the same is not true for ecigs - although, what is true and what is the law with cigarettes and with alcohol would be the same with ecigarettes wrt kids. Vendors get fined, go to jail and I would add, that the kids attempting, and their parents, get the same fines or jail time. And also that underage "agents" that are sent by law enforcement into vendors to purchase contraband also go to jail.
 

Kent C

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I'm having a hard time reconciling this with the fact that he said the FDA did not believe they had the authority to change the grandfather date.

Of course they can't change the date of the bill being introduced, but I don't recall where the FDA said they couldn't chose one date over another - in fact, in the impact doc - they state that they can and went to the trouble of making about 4 or 5 tables with explanations of how one date would affect the results, what applications would have to be made by vendors with one or the other, and how another one would be different.

It isn't just in the 'alternative 3' that I site in the posts but if you read before and after, there are other dates, including the Feb 15, 2007 date that are so assessed. If that date was already in stone, why would they go about listing and explaining all the other options and not only that, have Zeller state explicitly, that those options still are open and that which one is picked will be decided after the comment period?

And frankly, while I hope that Bill G and CASAA would chime in on this and perhaps they have a reason why this wouldn't be the case. I will compose my comments along these lines. I can read. I can understand what Zeller said. I can make the case to them and they can accept or reject it or not even read it. Those things are beyond my control. What is in my control, is what I can comment to them :)

And I can't control what others may do but the point of all this discussion is to make people aware of what is in the docs and what argument could be made according to the data that we have.
 
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As I keep saying, it's simple. They just don't have to enforce the law against products introduced prior to a particular time. No siezures, no C&D letters etc. After all, they are already proposing to be flexible about their enforcement authority, with regards to the two year window and their failure to require premarket approval. What the heck, they could increase the window to ten years, right?

(Although I suspect the vaping 2-year window was meant to mirror the 21-month window for SE applications under the original statute, the fact that the vaping 2-year window is there at all, means that they can basically pick and choose what they decide to enforce, and when.)

DC2, you are right - they did make that comment about the law itself on p.119.

Of course they can't change the date of the bill being introduced, but I don't recall where the FDA said they
couldn't chose one date over another - in fact, in the impact doc - they state that they can and went to the trouble of making about 4 or 5 tables with explanations of how one date would affect the results, what applications would have to be made by vendors with one or the other, and how another one would be different.

It isn't just in the 'alternative 3' that I site in the posts but if you read before and after, there are other dates, including the Feb 15, 2007 date that are so assessed. If that date was already in stone, why would they go about listing and explaining all the other options and not only that, have Zeller state explicitly, that those options still are open and that which one is picked will be decided after the comment period?

And frankly, while I hope that Bill G and CASAA would chime in on this and perhaps they have a reason why this wouldn't be the case. I will compose my comments along these lines. I can read. I can understand what Zeller said. I can make the case to them and they can accept or reject it or not even read it. Those things are beyond my control. What is in my control, is what I can comment to them :)

And I can't control what others may do but the point of all this discussion is to make people aware of what is in the docs and what argument could be made according to the data that we have.
 

Kent C

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As I keep saying, it's simple. They just don't have to enforce the law against products introduced prior to a particular time. No siezures, no C&D letters etc. After all, they are already proposing to be flexible about their enforcement authority, with regards to the two year window and their failure to require premarket approval. What the heck, they could increase the window to ten years, right?

(Although I suspect the vaping 2-year window was meant to mirror the 21-month window for SE applications under the original statute, the fact that the vaping 2-year window is there at all, means that they can basically pick and choose what they decide to enforce, and when.)

DC2, you are right - they did make that comment about the law itself on p.119.

Thanks for the page. Does state that but all throughout the doc the 'rule' is described as the 'proposed deeming rule'. There is also many references to the 'impact study' - which is my source as well as Zeller's comments and the RFA - flexibility doc. In the deeming doc, there is this:
"11. As explained in the Initial Regulatory Flexibility Analysis, FDA finds that this rule would
have a significant economic impact on a substantial number of small entities. FDA is seeking
comments about any unique challenges faced by small manufacturers of proposed deemed
tobacco products and how they should be addressed."

And re: comments pg 124 - a proposed question - "Are there other legal interpretations of the substantial equivalence grandfather provision that FDA should consider?

Pg. 189
In addition to the benefits and costs of both options for the proposed rule, we assess the
benefits and costs of several alternatives to the proposed rule, although we note that some may
be outside of our current legal authority:
deeming only, but exempt proposed deemed products
from all labeling changes and premarket submission requirements; enforce premarket
requirements only for machine-made cigars; change the grandfather date for new products to the
date of final regulation;
 

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The role of an economic impact analysis vis a vis the proposed FDA regs, has engendered much confusion (I know it's bedeviled me since I started to explore the issue and post on this thread). So, for whatever it's worth, here goes ...

While I don't know what the FDA can legally do regarding the "alternatives," after some research I do have a better understanding why they included the alternatives in the first place, i.e., they are legally required to do so.

*****

Prior to publishing a new regulation, an agency must submit its draft to OIRA for review as required by Executive Order 12866:

"Executive Order 12866 describes OIRA’s role in the rulemaking process. In it, the President directs agencies, to the extent permitted by law, to follow certain principles in rulemaking. These principles include consideration of alternatives to the rulemaking and analysis of the rule’s effects on society, both its benefits and costs. As the Executive Order directs, OIRA reviews agency draft regulations before publication to ensure agency compliance with this Executive Order."

taken from: Office of Information and Regulatory Affairs (OIRA) Q&A’s | The White House

This is apparently the results of the OIRA review of FDA's proposed regs. Note the section entitled "alternatives."

View Rule

*****

In addition to the review under Executive Order 12866, an agency must also comply with the Regulatory Flexibility Act:

"The Regulatory Flexibility Act (RFA), enacted in September 1980, requires agencies to consider the impact of their regulatory proposals on small entities, to analyze effective alternatives that minimize small entity impacts, and to make their analyses available for public comment."

"In essence, the RFA asks agencies to be aware of the economic structure of the entities they regulate and the effect their regulations may have on small entities. It requires agencies to analyze the economic impact of proposed regulations when there is likely to be a significant economic impact on a substantial number of small entities, and to consider regulatory alternatives that will achieve the agency’s goal while minimizing the burden on small entities."

"During the preparation of a proposed rule, an agency must prepare an initial regulatory flexibility analysis (IRFA) if it determines that a proposal may impose a significant economic impact on a substantial number of small entities. The RFA requires agencies to publish the IRFA, or a summary, in the Federal Register at the same time it publishes the proposed rulemaking."

taken from: http://www.sba.gov/sites/default/files/RFA_in_a_Nutshell2010.pdf

Included in the below is the IRFA for FDA's proposed regs:

http://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/UCM394933.pdf

*****

If you've read up to here, you can skip the rest unless you're curious ...

Are these similar processes? Yes, that's why OIRA and the SBA signed a memorandum of understanding in 2002 to work together on these analyses:

"The Office of Advocacy of the U.S. Small Business Administration (Advocacy) and the
Office of Information and Regulatory Affairs of the Office of Management and Budget
(OIRA) recognize that small entities (including small businesses, non-profit organizations
and small governmental jurisdictions), as defined in 5 U.S.C. § 601, often face a
disproportionate share of the Federal regulatory burden compared with their larger
counterparts. Advocacy and OIRA further recognize that the best way to prevent
unnecessary regulatory burden is to participate in the rulemaking process at the earliest
stage possible and to coordinate both offices to identify draft regulations that likely will
impact small entities."

"Inasmuch as Advocacy and OIRA share similar goals, the two agencies intend to enhance
their working relationship by establishing certain protocols for sharing information and
providing training for regulatory agencies on compliance with the Regulatory Flexibility
Act (RFA) and various other statutes and Executive orders that require an economic
analysis of proposed regulations."

taken from: http://www.sba.gov/sites/default/files/MOU_OIRA.pdf
 
Jan 19, 2014
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Maybe it's late, but I'm getting lost here.

-- The pp.189-90 thing is really confusing (see n.10 on p.190) because they're listing a bunch of stuff and not even giving us a hint about which one of these things may not be "legally permissible" according to them. The Fed is easier to figure out sometimes, talk about speech of the Sphinx. (And no kent, let's not get into this "end the Fed" stuff okay? We have enough trouble :D

-- About the Qs on the top of p.124 ... you list the second one (""Are there other legal interpretations of the substantial equivalence grandfather provision that FDA should consider?") but note the first one: "what other alternative pathways or policy options should FDA consider if in fact no predicate is avail?". Now to my way of reading these tea leaves (and really, that's kinda what we're doing here), the two are in the same place because they're related. Seems to me the most obvious answer to both is just enforcement. Kent or Fitze (or anyone), why are you in doubt that they can enforce as little they like? My only issue there would be the APA guideline that the final rule cannot differ "substantially" or "significanty" from the proposed rule (whatever that language is, I'm too tired now to recall it). And incidently who would have standing to gripe if the final rule was more inclusive (i.e. involved less by way of compliance costs and enforcement)? Not the ANTZ, they don't have standing to do diddly squat, methinks. So what I'm saying - if in fact I'm making any sense at all here, which I prob'ly am not - is that we could suggest that they simply use their enforcement authority to effectively grandparent anything introduced as of some date. And frankly I don't think it much matters legally what date we suggest as long as it's greater than or equal to Feb '07 (because again, no one has standing to complain, right?). Altough obviously it matters to us as vapers what that date might be. Again - this is not changing the statute, it's changing enforcement: which they are already doing, in the proposed rule, right? Am I crazy or what? (I'm open to hearing an argument to the effect that I am ;-)

-- p.13 (item #11) That's what you're quoting which begins with "as explained in the regulatory flexibility analysis" ... but also see p.128 which fleshes it out a bit more I think. I guess my answer there is the same. If we really want to help out this cute lil' itty-bitty teeny tiny adorable cuddly small entities ... why not grandparent like crazy w/ enforcement authority? Can we suggest this? No enforcement for a century, heck. :laugh: No, really - I mean for at least five years based on some yardstick industry (and I don't know what that would be), if we can find evidence that the public health impact of vaping as a whole is better than it used to be, becauase more recent products are more satisfying to smokers and thus lead to more cessatin? Do we have the public health evidence to make an argument like that? (I think we might.) So now we're hitting them on both economic impact and public health. It's kinda squirrely because I don't even know what the "legal standard" is for them accepting a comment. In other words, how could the fact that they've ignored a comment be used in subsequent litigation, for ex. over a rejected appl.? (Maybe it doesn't have to be usable in that way, it might only be relevant to fighting in the public policy arena and congress.)

Geez, this is nuts. I'm beat. Anyway if I'm not making sense just ignore me :laugh:

--
Thanks for the page. Does state that but all throughout the doc the 'rule' is described as the 'proposed deeming rule'. There is also many references to the 'impact study' - which is my source as well as Zeller's comments and the RFA - flexibility doc. In the deeming doc, there is this:
"11. As explained in the Initial Regulatory Flexibility Analysis, FDA finds that this rule would
have a significant economic impact on a substantial number of small entities. FDA is seeking
comments about any unique challenges faced by small manufacturers of proposed deemed
tobacco products and how they should be addressed."

And re: comments pg 124 - a proposed question - "Are there other legal interpretations of the substantial equivalence grandfather provision that FDA should consider?

Pg. 189
In addition to the benefits and costs of both options for the proposed rule, we assess the
benefits and costs of several alternatives to the proposed rule, although we note that some may
be outside of our current legal authority:
deeming only, but exempt proposed deemed products
from all labeling changes and premarket submission requirements; enforce premarket
requirements only for machine-made cigars; change the grandfather date for new products to the
date of final regulation;
 
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Fitzie

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"Seems to me the most obvious answer to both is just enforcement. Kent or Fitze, why are you in doubt that they can enforce as they like?"

To be honest, Roger, I haven't even considered the issue of enforcement. It took me this long just to understand the purpose of "alternatives" and why FDA included them in the IFRA (and that an agency is required to make a similar analysis under both the law and an executive order). Frankly, this stuff makes my head spin too.

I am curious about the retroactivity question. So I did some research on that as well. I'm not going to hazard any opinion on retroactivity (can they use the 2007 date?) as it's complicated. I found an excellent law review article on the topic. I skimmed it and my guess is maybe. I know real definitive. As I said, my legal expertise is limited to federal personnel law. And I happily left that behind (as well as "the law" in general) when I retired.

I doubt anyone wants to read it, but just in case ...

http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=3139&context=dlj

Just trying to understand all the components of the rule making process is a major headache. What you do with whatever "knowledge" you finally gain is a whole 'nother ball of wax.
 
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sonicdsl

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Again, the restriction of ex post facto laws stops the gov't from fining or imprisoning people for actions that were not crimes prior to legislation. That doesn't cover laws that 'disrupt business'. Look at any EPA regulations that affect businesses. In some cases it puts them out of business. Also true of every other regulatory agency in existence. Taxi cab laws put jitney drivers out of business. Cosmetology laws put cornrow stylists out of business. From Stossel, flower arrangement laws put flower arrangers out of business (lobbied by 'Big Flowers' :) It may seem 'new or unusual' to you and others because we're focused on ecigs, but this stuff happens all the time and moreso as gov't grows. It will likely hit the snack foods (to prevent/stop) obesity more than it is already. They use the same junk science to justify that as well. Saturated fats are actually good for you:

The Questionable Link Between Saturated Fat and Heart Disease - WSJ.com

"Critics have pointed out that Dr. Keys violated several basic scientific norms in his study. For one, he didn't choose countries randomly but instead selected only those likely to prove his beliefs, including Yugoslavia, Finland and Italy. Excluded were France, land of the famously healthy omelet eater, as well as other countries where people consumed a lot of fat yet didn't suffer from high rates of heart disease, such as Switzerland, Sweden and West Germany. The study's star subjects—upon whom much of our current understanding of the Mediterranean diet is based—were peasants from Crete, islanders who tilled their fields well into old age and who appeared to eat very little meat or cheese.

As it turns out, Dr. Keys visited Crete during an unrepresentative period of extreme hardship after World War II. Furthermore, he made the mistake of measuring the islanders' diet partly during Lent, when they were forgoing meat and cheese."
picard-facepalm-o.gif



iow, Dr. Atkins was right :)

Were we in a different forum, I'd like that post to the sky & back. For here, I'll settle for the one. :D

See post #259.... 258. Odd, seems like it was 259 at one point ?? And have noted that elsewhere :facepalm: I'm guessing people will find it :)

I didn't go back, but if a post is deleted, all following posts will move up in number.
 

Kent C

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Just scanned your post. Basically, since the most recent 'data' we have is what Zeller said in the hearing where he was explaining to Sen. Alexander of the options available - the exact quote is in post #258 and to me it's quite clear. That and the 'proposed rule' and although they say in the deeming doc, that they think they have complied with Exec Order 12866, I think that could be a point of contention (by lawyers) since the main reason for the order seems to make sure the impact of legislation doesn't affect small businesses, in the same way the same point is made in the RFA doc and the impact doc as again, stated in #258.
 

Kent C

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Were we in a different forum, I'd like that post to the sky & back. For here, I'll settle for the one. :D



I didn't go back, but if a post is deleted, all following posts will move up in number.


I considered that but didn't check. No big deal. However, the one thread that went into tin foil hat (which I can't access) I wish that would be brought back before whatever the 'offending post' was - pretty sure it wasn't mine but there was some good 'background stuff' that I posted in that I can't access. I know that probably won't happen but it sucks when I do a search with terms I knew I used and can't find it. lol.
 
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OIC where you're going here. APA policy not con law. At least it doesn't look like it from the article. (WHIch was my general point in posting those wiki links). Quite a find there. Although it's really old. Wonder what would come up if Greene was shepardized, since it seems to be the seminal APA case. Or just googled WTH :laugh:

This seems like more of a general argument against the entire exercise of rulemaking in this case, although it could also be used as a basis for advocting specific answers to particular Qs. Surely FDA must have looked into this problem, although there's little indication of that in the PDF.

Take a look at p.28 - that would seem to imply that notice-and-comment under APA means no retroactivity.

p.30 - cong'l intent. Did cong intend the tobacco act to be applied to other products? FDA would argue yes, due to the broad def'n of tobacco products. Therefore they presumably envisioned rulemaking that would extend the scope. Put that together with the hard-coded 2007 and 2011 dates ... and you get an argument that cong. intended this. If so, then that overrides any presumption or disfavoring of allegedly-retroactive rule making or other actions under the APA, right?

p.38 Scalia's concurrance in Bowen - this is prospective, the FDA might say.

This secondary retroactivity thing is confusing me.

Anyway I'm at p.53 (almost done) and right now I'm satisfied that I'm beat LOL and also maybe 75% convinced that either FDA will say this is not retroactive by definition due to the rulemaking and comment etc. cycle, or that congress clearly intended it to be "retroactive" to the extent that it is, which means APA is irrelevant since cong can obviously overrule the APA in a particular more specific statute right? (APA doesn't bind congress in any way).

Not a very close read there, just my :2c:

"Seems to me the most obvious answer to both is just enforcement. Kent or Fitze, why are you in doubt that they can enforce as they like?"

To be honest, Roger, I haven't even considered the issue of enforcement. It took me this long just to understand the purpose of "alternatives" and why FDA included them in the IFRA (and that an agency is required to make a similar analysis under both the law and an executive order). Frankly, this stuff makes my head spin too.

I am curious about the retroactivity question. So I did some research on that as well. I'm not going to hazard any opinion on retroactivity (can they use the 2007 date?) as it's complicated. I found an excellent law review article on the topic. I skimmed it and my guess is maybe. I know real definitive. As I said, my legal expertise is limited to federal personnel law. And I happily left that behind (as well as "the law" in general) when I retired.

I doubt anyone wants to read it, but just in case ...

http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=3139&context=dlj

Just trying to understand all the components of the rule making process is a major headache. What you do with whatever "knowledge" you finally gain is a whole 'nother ball of wax.
 
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DC2

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Of course they can't change the date of the bill being introduced, but I don't recall where the FDA said they couldn't chose one date over another - in fact, in the impact doc - they state that they can and went to the trouble of making about 4 or 5 tables with explanations of how one date would affect the results, what applications would have to be made by vendors with one or the other, and how another one would be different.

It isn't just in the 'alternative 3' that I site in the posts but if you read before and after, there are other dates, including the Feb 15, 2007 date that are so assessed. If that date was already in stone, why would they go about listing and explaining all the other options and not only that, have Zeller state explicitly, that those options still are open and that which one is picked will be decided after the comment period?

And frankly, while I hope that Bill G and CASAA would chime in on this and perhaps they have a reason why this wouldn't be the case. I will compose my comments along these lines. I can read. I can understand what Zeller said. I can make the case to them and they can accept or reject it or not even read it. Those things are beyond my control. What is in my control, is what I can comment to them :)

And I can't control what others may do but the point of all this discussion is to make people aware of what is in the docs and what argument could be made according to the data that we have.
Yeah, that's why I'm having a hard time reconciling it.
:/
 

Fitzie

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OIC where you're going here. APA policy not con law.

Yeah, there's a lot of interesting stuff in that article (if you're a lawyer or law student). "Secondary retroactivity" jumped out at me too. We ECF vapers may not be the only ones looking for a way to get the effective date of the regs pushed back to the effective date in the statute. I hope some clever lawyer finds an answer on the retroactivity issue and presents a convincing argument to FDA during the comment period.

I wouldn't have a clue how to shepardize without Lexis/Nexis or whatever lawyers are using these days. I'm surprised someone who's not a lawyer or paralegal has even heard of shepardizing. Are you sure you're not a lawyer? You sure argue like one (and I mean that in a positive way) :)
 
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