Complaint
Public Court Documents
May 6, 1977
17 pages
-
Case Files, Hatcher v. Methodist Hospital - Hardbacks. Complaint, 1977. bc885e35-5484-f111-ab0f-7ced8d2181dd. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/233715e8-0f66-4710-b3d4-9768d8a63b1a/complaint. Accessed October 10, 2026.
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
RICHARD GORDON HATCHER,
WILLIE LEE PAGE,
METRO CORPS OF GARY, INC., A
Not-For-Profit Corporation
and others similarly situated,
Plaintiffs
VS.
METHODIST HOSPITAL OF GARY, INC.,
An Indiana Not-For-Profit
Corporation and DENIS E. RIBORDY,
as President of the Board of .
Directors,
JOSEPH CALIFANO, as United States
Secretary of Health, Education
and Welfare,
WILLIAM T. PAYNTER, M.D., as
State Health Commissioner for the
Indiana State Board of Health,
JAMES WHITE, as Director of the
Division of Hospital and
Institutional Services of the
Indiana State Board of Health,
DAVID J. EDWARDS, M.D., as
Director of the Health Facilities,
Services and Review Development
Bureau of the Indiana State Board
of Health, and
KIPTON KAPLAN, as Executive
Director of the Northern Indiana
Comprehensive Health Systems
Agency, Inc.,
Defendants
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Civil Action No.
fy 7-7/5
COMPLAINT
1.
Nature of Proceedings
1. This is a class action for declaratory and injunctive
relief brought by individuals and organizations representing
Black, Hispanic and handicapped residents of Gary, Indiana
against defendants' default of their obligations under Title
. VI of the Civil Rights Act of 1964, 42 U.S.C. 8 20004
(hereinafter Title VI); Title VI of the Public Health Services
Act, 42 U.S.C. 8 29 (hereinafter Hill-Burton); 8 314 of the
Public Health Services Act, 42 U.S.C. 8 246 (hereinafter 8
314); 8 504 of the Rehabilitation Act as amended in 1973,
29 U.S.C. 8 794 (hereinafter § 504); § 1122 of the Social
Security Act, as amended in 1972, 42 U.S.C. 8 1320a-1
(hereinafter s 1122); and to redress the deprivation of
plaintiffs' rights under the Fifth and Fourteenth Amendments
to the Constitution of the United States and the Civil Rights
Act of 1871, 42 U.S.C. 8 1983. This action challenges the
existence, perpetuation, and expansion of segregated and
unequal hospital facilities operated by Methodist Hospital of
Gary, Inc. It also challenges the approval of and granting of
federal financial assistance to said facilities by defendants
Secretary Califano, Commissioner Paynter, Richard Thompson,
Deloris Wakefield and Director Kaplan.
Il.
2+ Jurisdiction is conferred on this Court by 28 U.S.C.
88 1331, 1343 and 1361. Plaintiffs' claim for a declaration
of rights is authorized by 28 U.S.C. 88 2201 and 2202. The
amount in controversy exceeds, exclusive of interest and
costs, the sum or value of $10,000.
Til.
3. (a) Plaintiffs bring this action as Rule 23 (a)
and (b) (2) of the Federal Rules of Civil Procedure. Plaintiffs
sue on behalf of themselves and all persons similarly
ie 5} &
»
situated. The plaintiff class, for causes of action under
| Title VI and 42 U.S.C. & 1983, is composed of all Black and
Hispanic residents of Gary, Indiana who use, have used, or
will use Gary Methodist Hospital and who are, have been, or
will be injured by the creation, perpetuation, and expansion
of a segregated hospital system. The plaintiffs' class for
causes of action under Section 504 is composed of all
handicapped residents of Gary, Indiana who use, have used or
will use and are better served by facilities at Gary Methodist
Hospital, and who are, have been or will be injured by the
placement, removal to or expansion of facilities at Broadway
Methodist Hospital.
(b) the requirements of Rule 23 (a) and (b) (2) are
satisfied:
i) the class represented by plaintiffs is so
numerous that joinder of all members is impracticable;
ii) there are questions of law and fact common
to all class members;
1311) the claims of the named plaintiffs are
typical of the claims of class members;
iv) the named plaintiffs will fairly and
adequately protect the interests of the class;
Vv) final injunctive and declaratory relief
with respect to the class as a whole is appropriate
since defendants have acted or refuse to act on
grounds generally applicable to the class.
IV.
Parties Plaintiff
4, Plaintiff Richard Gordon Hatcher is a Black citizen
and a resident of Gary. It is likely that he will require
use of health facilities in the future. Plaintiff Hatcher
is the duly elected Mayor of the City of Gary. As the chief
executive officer of Gary, plaintiff Hatcher is responsible,
inter alia, for assuring that the social service and health
needs of his constituency, including members of the plaintiff
class, are met. The enforcement of that responsibility is
directly obstructed by the actions of defendants complained
of herein. Plaintiff Hatcher has been harmed and will continue
" to be harmed by the segregation and discrimination in the
provision of health services by Methodist Hospital of Gary,
Inc.
Se Plaintiff Willie Lee Page is a 66 year old Black
resident of Gary who has used the facilities of Gary Methodist
Hospital. She has required and does require hospital treatment
and it is likely that she will require use of hospital
facilities in the future. She requires outpatient treatment
that is unavailable at Gary Methodist Hospital and is injured
by the necessity of having to have herself transported to
Broadway Methodist Hospital in order to receive essential
treatment. Plaintiff Page has been harmed and will continue
to be harmed by the segregation of and discrimination in the
provision of hospital services by defendant Methodist Hospital
of Gary, Inc. :
6. Plaintiff Metro Corps, Inc. is a not-for-profit
corporation organized for the purposes, inter alia, of providing
services for and helping meet the needs of the elderly, poor,
handicapped and sick residents of Gary, including plaintiff
Page and members of the plaintiff class. The constituency of
plaintiff Metro Corp, Inc. includes the minority and handicapped
residents of Gary who directly elect persons as their
representatives to the Board of Directors of Metro Corps, Inc.
In addition, members of the Board of Directors represent
organizations whose members include elderly, handicapped and
minority residents of Gary. Among the programs which Metro
Corps, Inc. operates are Telecare and Escort Services.
- Telecare is a program to contact senior citizens and handicapped
persons, including members of the plaintiff class, to assure
that their health needs are being met. Escort Services
provides transportation and assistance without charge to
the poor, elderly, handicapped, minority and sick persons
of Gary, including members of the plaintiff class, who
. require and are unable otherwise to obtain transportation
to health facilities. Since the opening of Broadway Methodist
Hospital, Escort Services has provided transportation to
that facility for persons who require treatment at Broadway
Methodist Hospital that is unavailable at Gary Methodist
Hospital. Plaintiff Metro Corps, Inc. has in the past and
will continue to be injured by the necessity of expending
resources from its limited funds in order to transport persons
to Broadway Methodist Hospital. Plaintiff Metro Corps, Inc.
and its constituency, including members of the plaintiffs
class, have been injured and will continue to be harmed by
the segregation of an discrimination in the provision of
health services by Methodist Hospital of Gary, Inc.
V.
Parties Defendant
Defendant METHODIST HOSPITAL OF GARY, INC., is a
not for-prot it corporation organized under the laws of the
State of Indiana, which currently operates a 419-bed facility
in the City of Gary (hereinafter "Gary Methodist") and a
165-bed facility in Merrillville, a suburb of Gary (hereinafter
"Broadway Methodist"). Methodist Hospital of Gary, Inc., is
a recipient of federal funds under the Hill-Burton Act and
the Medicare and Medicaid programs, and other federal programs.
Methodist Hospital has received more than three million dollars
in direct construction grants and more than eight million
dollars in loan guarantees with interest subsidies under the
Hill-Burton Program, including a grant and loan guarantee
for the construction of Broadway Methodist. As a condition
for the receipt of all federal funds, Methodist Hospital is
subject to the requirements of Title VI and Section 504. In
order to be eligible for reimbursement for capital expenditure
under Medicare and Medicaid, Methodist Hospital of Gary is
required to obtain approval of such expenditures pursuant to
8 1122. Defendant DENIS E. RIBORDY is President of the Board
of Directors of Methodist Hospital.
8. Defendant JOSEPH CALIFANO is the United Statds
Secretary of Health, Education and Welfare (hereinafter HEW)
and has the responsibility for all federal programs administered
by the United States Department of Health, Education and
Welfare. Defendant HEW is responsible for the administration
and enforcement of Title VI and s 504 pertaining to the
disbursement of federal financial assistance to programs
administered by HEW, including Hill-Burton grants and loan
guarantees, health planning grants pursuant to % 314, and
funds to local and state agencies which have entered into
contracts under 8 1122.
9. Defendant WILLIAM T. PAYNTER, M.D., is State Health
Commissioner of the Indiana State Board of Health (hereinafter
"State Agency"). Pursuant to a contract with the federal
government under 8B 1122, a division of the State Agency,
the Health Facilities, Services and Review Development Division
(hereinafter "HFSRD"), has the duty to make and submit to HEW
findings and recommendations with respect to the propriety
of capital expenditures proposed by any health care facility
in the State of Indiana which receives federal reimbursements
under Medicare and Medicaid. Another division of the State
Agency, the Division of Hospital and Institutional Services,
has the duty to make and submit to HEW findings and recommendations
with respect to application for Hill-Burton grants and loan
guarantees with interest subsidies for hospital and medical
facilities. Pursuant to § 314, the State Agency receives federal
funds for the purpose of comprehensive and continued planning
for current and future health needs.
10. Defendant KIPTON KAPLAN, as Executive Director of
the Northern Indiana Health Systems Agency, Inc., (hereinafter
"HSA") has the responsibility under 8 1122 to make and submit
to the HFSRD findings and recommendations with respect to the
propriety of capital expenditures proposed by any health care
facility in Lake County, Indiana, which receives federal
reimbursement under Medicare and Medicaid. Pursuant to the
contract between the HFSRD and HEW, the HSA receives federal
funds from HEW to perform this function pursuant to § 1122
of the Social Security Act. The HSA also receives federal
funds for the purpose of developing comprehensive regional,
metropolitan area, or other local area plans for coordination
of existing and planned health services, including the
facilities and persons required for provision of such services.
VI.
Statement of Facts
A.
il. Methodist Hospital of Gary, Inc., has operated the
Gary Methodist Hospital, located in the City of Gary, since 1923.
12. In the early 1970's Methodist Hospital of Gary, Inc.,
committed itself to constructing a second hospital facility
in a suburb of Gary.
13. The first stage of the planned facility was construction
of a 150-bed acute care general hospital, named Broadway
Methodist Hospital, which was completed in December, 1975, at a
cost of approximately 18 million dollars. Methodist Hospital
of Gary, Inc., has plans to expand the facility to a 450-bed
hospital complex. y
14. Broadway Methodist Hospital is located in Merrillville,
Lake County, Indiana, an overwhelmingly white suburb approximately
fifteen miles south of Gary Methodist Hospital. Approximately
63% of the population of Gary, Indiana is Black and Hispanic.
Approximately 72% of the elderly residents of the areas served
by both facilities reside in the City of Gary; many of them
suffer physical disabilities which substantially limit life
activities within the meaning of 5 504.
15. Eighty percent of the patients treated at Gary
Methodist Hosoital are Black and Hispanic while only 10% of
the patients treated at Broadway Methodist Hospital are Black
and Hispanic. Similarly, the overwhelming majority of the
staff at each facility mirrors the race of the patients served.
B.
16. The construction of the Broadway Methodist Hospital,
and its proposed expansion, have had and will continue to
have the purpose and effect of creating a hospital system
which excluded persons from, denies them the benefit of; and
otherwise discriminates against and segregates them on the
basis of race, national origin and physical handicap:
(a) defendants located the new Broadway facility
in an area populated overwhelmingly by whites and removed from
the City of Gery with its concentration of Blacks, Hispanics
and elderly and handicapped persons;
(b) defendants have assigned and otherwise employed
personnel in he Broadway and Gary facilities on a racially
segregated an otherwise discriminatory basis;
(c) defendant have installed at the Broadway facility
modern and cr tical facilities (e.g., radiation equipment for
the treatment of cancer) which are not available at the Gary
facility, and not accessible to the minority and handicapped
residents of Gary by public transportation;
(d) defendants have adopted policies and practices
and have designed the new facility so as to-assure racial
segregat: ind discrimination (e.g., the Broadway facility offers
private-i occupancy only).
C.
17, hodist Hospital of Gary, Inc., constructed
Broadway >dist Hospital with a Hill-Burton grant of
$1,152,50 1 a Hill-Burton guarantee on a loan for $14,336,000
"with an i: st subsidy totalling $6,900,000. When Methodist
Hospital o! ry, Inc., submitted its Hill-Burton application
for approval neither the local agency which was the predecessor
of the HSA nc - the State Agency considered the impact of the
new facility on the minority and handicapped residents of
Gary before they recommended that the application be approved.
18. HEW approved the Hill-Burton loan and grant
application of Methodist Hospital of Gary, Inc., to construct
Broadway Methodist Hospital without considering whether the
new hospital would create a segregated, dual hospital system
which would discriminate against the minority and handicapped
residents of Gary.
19. Methodist Hospital of Gary, Inc., submitted another
application in 1976 for 8 1122 approval and a Hill-Burton
grant and loan guarantee for an $8,143,370 project. The
majority of the funds in this project are to be used to expand
the facilities at Broadway Methodist Hospital.
20. The HSA recommended to the State Agency that it
recommend to HEW, approval of the expansion plan and the
Hill-Burion application. The HSA made no findings as to the
effect of the grant of the application on the minority and
handicapp residents of Gary, the effect since the opening
of the Br dway Methodist Hospital on the minority and
handicapp residents of Gary, or the comparative quality
of care a Gary Methodist Hospital and Broadway Methodist
Hospital.
21. Thereafter, the State Agency recommended to the
Secretar of HEW that he approve Methodist Hospital of Gary,
Inc.'s, « xpansion plan and Hill-Burton application. The
State Ag ncy made no findings as to the effect of the grant
of the aj blication on the minority and handicapped residents
of Gary, the effect since the opening of Broadway Methodist
Hospital »n the minority and handicapped residents of Gary,
or the comparative quality of care at Gary Hospital and
Broadway ethodist Hospital.
22, HEW received objections from several sources,
including some of the named plaintiffs, to the approval of
Hill-Burt )n funds for the Methodist Hospital of Gary, Inc.
The objec ions specifically opposed the approval of the application
on the grounds, inter alia, that Methodist Hospital of Gary,
Inc., was operating a dual, segregated hospital system and
was provi ing inferior health care to the poor and minority
residents of Gary. In its reply to these objections, HEW
admitted nat racial segregation "is a reality;" that it
relies up 1 the HSA for evaluations; and that the HSA "made
no attemp to compare the quality of care at both institutions
[Broadway 1ethodist Hospital and Gary Methodist Hospital]."
HEW has cc‘ 1tinued to refuse to find that a segregated hospital
system vic lates the civil rights of plaintiffs and the class
they repr« sent.
23. [EW gave civil rights' clearance to the 1976 proposal,
and granted the Hill-Burton application. In so doing, HEW
approved the continuation and expansion of a hospital system
which discriminates against persons, including the named
plaintiffs, on the basis of race, color, national origin or
physical handicap.
24. Plaintiffs believe that in light of HEW's approval
of the 1976 application over the objections of numerous residents
ll
of Gary, including some of the named plaintiffs and HEW's view
of its responsibilities under controlling law, any further
efforts to seek HEW enforcement of Title VI, to protect their
statutory and constitutional rights would be futile.
vil.
Causes of Ac¢tion
25. Defendant Methodist Hospital of Gary, Inc., is
violating Title VI and its implementing regulations, 42 U.S.C.
1983, 42 C.P.R., 53.112 and 8 504 by:
(a) having engaged and engaging in policies and
practices which discriminate against and segregate persons on
the basis of race, color, national origin, or physical
handicap;
(b) failing to comply with specific assurances which
it made to HEW regarding its obligations under Title VI.
26. Defendant HEW has violated its duties to enforce
Title VI, and the rights of plaintiffs and the plaintiff
class by:
(a) approving and providing federal funds for
the construction of Broadway Methodist Hospital by Methodist
Hospital of Gary, Inc., which violated and is violating
Title VI and its implementing regulations and 8 504;
(b) failing to enforce the assurances submitted
by the Methodist Hospital of Gary, Inc.;
(c) approving the $8.1 million loan guarantee
and interest subsidy under the Hill-Burton Act;
(d) failing to enforce the civil rights provision
of regulations under the Hill-Burton Act, 42 C.F.R. § 53.112;
(e) continuing to grant federal financial assistance
to defendant Methodist Hospital of Gary under Medicare and
Medicaid;
(f) approving the recommendation of the 8 1122 Agency
for proposed capital expenditure of Broadway Methodist Hospital;
(g) approving regulations under 8 1122 of the Social
Security Act which fail to require that proposals under 8 1122
“ll
comply with Title VI and its implementing regulations, and
8 504;
(h)’ entering into an agreement with defendant State
Agency which does not include methods of administration to
ensure that proposals under 8 1122 and applications for
Hill-Burton funds are not approved unless they comply with
Title VI, and 8 504.
(1) failing to enforce the site selection provision
to civil rights' regulations, 45 C.F.R. 88 80.3 (b) (3), 84.4
(b) (5) against recipients of federal financial assistance
including the defendant Methodist Hospital of Gary, Inc., and
failing to require State and local agencies receiving federal
financial assistance, including the State Agency and the HSA, to
enforce the site selection provision of civil rights'
regulations; and
(3) failure to enforce Title VI and its implementing
regulation against State and local planning agencies developed
pursuant to 8 314(a) and 8 314(b), and Title XV of the National
Health Planning and Resource Development Act of 1974, 42 u.s.C.
8 300k et seq.
27. Defendant Paynter, State Health Commissioner for the
State Agency, defendant White, as Director of the Division of
Hospital and Institutional Services, and defendant Edwards,
as Director of the Health Facilities, Services and Review
Development Division, have violated Title VI, and 8 504 by:
(a) recommending the approval of the application
of defendant Methodist Hospital of Gary, Inc., for an $8.1
million loan guarantee; |
(b) recommending the approval ol the Methodist
Hospital of Gary, Inc.'s, proposal for capital expenditure
pursuant to 8 1122; |
(c) failing to adopt methods of administration
under the Hill-Burton program, 8 314 and § 1122 which assure
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4
health facilities such as Broadway Methodist Hospital not be
approved unless they comply with Title VI, and 8 504.
28. Defendant Kaplan, Director of the HSA has violated
Title VI by:
(a) approving the 8 1122 application of defendant
Methodist Hospital of Gary which is in violation of Title VI,
‘and § 504;
(b) performing their functions pursuant to 8 314 (b)
and Title XV without consideration of and in violation of
Title VI.
Vill.
Prayer For Relief
29. WHEREFORE, plaintiffs respectfully pray that this
Court enter judgment:
(a) declaring that the policies of Methodist
Hospital of Gary, Inc., complained of herein violate rights
secured by Title V1 of the Civil Rights Act of 1964, 42 U.S.C.
8 20004, the Civil Rights Act of 1871, 42 u.s.C. B 1983, and
Section 504 of the Rehabilitation Act as amended in 1973,
29 U.S.C. § 794.
(b) declaring that HEW's grant of federal financial
assistance of Gary Methodist Hospital, which discriminates
against and segregates persons on the basis of race, color,
national origin, or physical handicap violates rights guaranteed
by Title VI, and § 504;
(c¢) declaring that the Hill-Burton and § 314 State
plans, including the plans of defendant State Agency, approved
by HEW and which lack methods of administration to assure
civil rights compliance, violate Title VI;
(d) declaring that the § 1122 agreement between
the Secretary and State Agency, whieh lacks methods of
administration to assure civil rights compliances and means
of avoiding segregation and discrimination, violates Title
VI, and § 504;
-]l3=~
6 |
(e) declaring that the findings and recommendations
of the State Agency and the Health Facilities, Services and
Development Review Division under 8 1122 with respect to the
1976 proposal of Methodist Hospital of Gary, Inc., are
deficient under Title VI, and 8 504;
(f) declaring that the development of comprehensive
' regional metropolitan and local health service and facility
plans by State and local agencies, pursuant to 8 314 and
Title XV of the Public Health Services Act, 42 U.S.C. 88 246
and 300(d), which do not consider methods and plans of
avoiding segregation and discrimination, violate Title VI;
(g) enjoining Methodist Hospital of Gary from
engaging in policies and practices which discriminate against
and segregate persons on the basis of race, color, national
origin or physical handicap in violaiton of the rights of
plaintiffs and the class they represent under Title VI, 42
U.S.C. 8 1983, and § 504;
(h) enjoining Methodist Hospital of Gary to take
affirmative action to overcome the effects of their present
and past discriminatory actions, such affirmative action to
include, inter alia:
i) ceasing all planned and future expansion
of Broadway Methodist Hospital;
ii) placing all new equipment and services
in Gary Methodist Hospital;
iii) submission of a plan to the Court and
HEW outlining steps which shall be taken to assure
the desegregation of the staff and patient popu-
lations at Gary Methodist Hospital and Broadway
Methodist Hospital;
iv) providing transportation to minority
and handicapped patients, visitors and employees
who are residents of Gary who desire to go to or
to work at Broadway Methodist Hospital;
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i b
(1) enjoining the Secretary from engaging in
policies and practices which deprive the plaintiffs and the
class they represent of rights secured by Title VI, and §
504, including, but not limited to, orders:
1) enjoining the Secretary from refusing or
failing to ensure that recipients of federal financial
assistance, including Methodist Hospital of Gary,
Inc., do not segregate or discriminate against
persons on the basis of race, color, national origin
or physical handicap;
ii) enjoining the Secretary to enforce the
site selection provision of the Title VI regulations
45 C.F.R. 8B 80.3(b) 3 with respect to all recipients
of federal financial assistance, including Methodist
Hospital of Gary, Inc.;
iii) enjoining the Secretary from granting
federal financial assistance to Methodist Hospital
of Gary, Inc., in connection with grants and loan
guarantees for use at Broadway Methodist Hospital
as long as it segregates and discriminates against
persons in the provision of services on the basis
Of race, color, national origin, and physical handicap;
iv) enjoining the Secretary, in administering
the Hill-Burton Act and its successor law, Title
XVI of the Public Health Services Act, 42 U.S.C. §
3000 et seqg., & 314 and its successor law Title XV
of the Public Health Services Act, 42 U.S.C. S§
300k, et seq., and § 1122 to assure that requirements
of Title VI and 8 504 are met;
Vv) enjoining the Secretary to amend methods
of administration, programs, operations and
procedures to assure that all recipients of federal
financial assistance comply with the requirements
of Title VI and Section 504;
% w
vi) enjoining the Secretary to require all
State and local agencies receiving federal financial
assistance under continuing programs, including the
Indiana State Board of Health and the Northern Indiana
Health Systems Agency, Inc., and others to enforce
the site selection provisions of the Title VI
regulations;
vii) enjoining the Secretary to ensure that the
development of comprehensive regional, metropolitan
and local health service and facility plans by State
and local agencies pursuant to 8 314 and Title XV
of the Public Health Services Act, 42 U.S.C. 88 246
and 300k, consider methods and plans to avoid
segregation and discrimination;
viii) enjoining the Secretary from refusing or
failing to have the State agency promulgate methods
of administration which assure that all recipients
of federal financial assistance comply with the
requirements of Title VI and Section 504;
ix) enjoining the Secretary from granting and
continuing federal financial assistance to Methodist
Hospital of Gary, Inc. in connection with grants
and loan guarantees for use at Broadway Methodist
Hospital, until the actions listed in sub-paragraph
24 (h) above are met.
(J) awarding costs and reasonable attorneys' fees;
(k) granting such additional relief as the Court
deems just and equitable.
Respectfully submitted,
JACK GREENBERG
MELVYN R. LEVENTHAL
BETH J. LIEF
10 Columbus Circle
New York, New York 10019
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JULIAN B. ALLEN
CHARLES B. MILLER
2009 Broadway
Gary, Indiana 46407
MARILYN G. ROSE
CHRISTINE B. HICKMAN
1751 N. Street, N.WV.
Washington, D.C. 20036
Attorneys for Plaintiffs
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