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Case 2:16-cv-00912-BCW Document 5 Filed 08/30/16 Page 1 of 15

John W. Huber, United States Attorney (#7226)


Amanda Berndt, Assistant U.S. Attorney (#15370)
District of Utah
185 South State Street, #300
Salt Lake City, Utah 84111-1506
(801) 325-3267
Email: Amanda.Berndt@usdoj.gov
Associated Local Counsel
M. Patricia Smith, Solicitor of Labor
James E. Culp, Regional Solicitor
John Rainwater, Associate Regional Solicitor
Karen E. Bobela, Trial Attorney, CO #37190 (Pro Hac Vice Pending)
Lydia Tzagoloff, Senior Trial Attorney and
Special Assistant United States Attorney, NY #2631299 (Pro Hac Vice Pending)
1244 Speer Boulevard, Suite 515
Denver, CO 80204
(303) 844-1745
Email: bobela.karen.e@dol.gov; tzagoloff.lydia@dol.gov
Attorneys for Plaintiff
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH CENTRAL DIVISION
THOMAS E. PEREZ, SECRETARY OF
LABOR, UNITED STATES
DEPARTMENT OF LABOR,

Civil Action No. 2:16-cv-00912-BCW

PLAINTIFF,
v.
PHAZE CONCRETE, INC. a/k/a JACK
DANIELS CONSTRUCTION, INC.
DEFENDANT.

PLAINTIFFS MOTION FOR


PRELIMINARY INJUNCTION AND
SUPPORTING MEMORANDUM
Judge Brooke C. Wells

Defendant has illegally employed minor children in the construction industry for nearly a
decade. These children have been removed from their families to live and work out of state for
Defendant. Instead of attending school, the children work on average between 60-80 hours a
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week for little to no pay. They work in an occupation prohibited to minors and much of their
work is performed using equipment deemed hazardous under the child labor regulations.
Defendants concerted effort to conceal its employment of these children by masking the
insufficient wages paid to them, keeping them off of payroll and time records, and lying to
authorities about their ages to avoid liability underscores the willfulness of its conduct.
Defendant must be enjoined from continuing to violate the child labor, minimum wage,
overtime, and record keeping provisions of the Fair Labor Standards Act (FLSA). The publics
interest is directly harmed by Defendants practice of exploiting young and vulnerable children,
who are not aware of their rights, to work for grossly substandard wages in a dangerous
environment. The publics interest is also harmed by the competitive advantage Defendant gains
by engaging in such illegal practices over employers who comply with the law.
A preliminary injunction is necessary to immediately bring Defendants unlawful child
labor, wage, and record keeping practices to a halt. Plaintiff moves the Court to issue a
preliminary injunction pursuant to F.R.C.P. 65 to enjoin and restrain Defendant, its officers,
agents, servants, employees, and those persons in active concert or participation with Defendant,
from violating all of the requirements of the Fair Labor Standards Act including the minimum
wage, overtime, record-keeping, and child labor provisions. 29 U.S.C. 206, 207, 211(c), 212,
& 215(a)(2), 215(a)(4) and 215(a)(5) (FLSA or Act). As set forth below, there is a
substantial likelihood that Plaintiff will prevail on the merits; and requiring Defendant to do what
the FLSA requires anyway comply with the law poses no injury or danger to Defendant.
Moreover, entry of a preliminary injunction serves the publics interest in eradicating child labor
and leveling the playing field for construction contractors who comply with the law.
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I. FACTUAL BACKGROUND
Defendant is a Utah corporation that operates in multiple states in the concrete and
construction business. Plaintiff recently learned that between at least 2007-2014, Defendant
employed minor children in construction performing various job duties including excavation
work, building concrete forms, tying rebar, pouring concrete, operating motorized equipment,
and hauling gravel. Plaintiffs complaint seeks back wages for two minor children for minimum
wage and overtime violations. A preliminary injunction is also warranted because Defendants
pattern and practice of FLSA violations extends far beyond the circumstances surrounding the
employment of these two children. It infiltrates to an entire community of children who are
exposed to and affected by Defendants egregious employment practices. These children are
members of the Fundamentalist Church of Jesus Christ of Latter-Day Saints (FLDS Church).
Defendant is regarded as an FLDS-company; it is owned by FLDS church members and operates
largely for the benefit of the FLDS Church. As set forth below, Defendants labor pool comes
from the FLDS Church, including the minor children it employs, and its profits are returned to
the FLDS Church.
A.

The Case of N.S.

From January 2013 through September 2014, when N.S. was 14-15 years old, he was sent
to Kansas, Nebraska, and Missouri to work for Defendant. See Declaration of N.S. (N.S. Decl.)
attached hereto as Exhibit A at 5. N.S. started in Kansas where he worked on a Scheels
Sporting Goods store for Defendant doing excavation work, pouring concrete, and working on
the pan deck (a suspended concrete floor). Id. at 6. N.S. was then sent to Nebraska to work on a
Hobby Lobby store for Defendant where he performed similar work. Id. at 8. N.S. also traveled
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to Missouri where he worked on a Walmart for Defendant doing excavation work, building
forms, and resurfacing dock walls. Id. at 7. For all of these jobs, N.S. operated motorized
equipment including a track hoe, skidder, forklift and manlift. Id. at 9. He also regularly
operated skill and arbor saws to cut rebar. Id.
N.S. worked on average 12-13 hours a day, between 7:00 a.m. and 9:00 p.m., six days a
week, Monday through Saturday. Id. at 10. On days the crew was pouring concrete, N.S.
started working around 3:00 or 4:00 a.m. until they finished the job, often late in the evening. Id.
Defendant agreed to pay N.S. a bi-weekly stipend of $200.00. Id. at 11. However, he was not
paid regularly and Defendant often missed paychecks. Id. Defendant also provided housing,
meals, and transportation. Id. N.S. resided in various homes or apartments with other members of
the work crew. Id. He did not attend school during the months that he worked for Defendant. Id.
N.S. worked with several other minors on the jobs he did for Defendant, including his little
brother who was 13 years old at the time. Id. at 12. One of Defendants owners and several
supervisors told N.S. to lie about his age (and say he was 18 years old) if he was ever asked or if
OSHA ever showed up at a job site. Id. at 13.
B.

The Case of R.J.

R.J. began working for Defendant in 2011, when he was 12 years old, in Hildale, UT. See
Declaration of R.J. (R.J. Decl.) attached hereto as Exhibit B, at 5. He worked full-time from
8:00 a.m. to 5:00 p.m. cleaning out the yard and doing scrap work (i.e. removing brass from
coils). Id. He was not paid for his work, and he did not attend school during this time. Id.
Towards the end of 2013 to July 2014, when he was 13-14 years old, R.J. was sent to
Casper, WY, to work for Defendant. Id. at 6. He lived out of state away from his family and
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did not attend school. Id. R.J.s duties entailed pouring concrete, tying rebar, and building
concrete forms. Id. He regularly used a demolition steel saw to cut rebar. Id. Defendant paid R.J.
a $200.00 stipend every two weeks. Id. R.J. worked from 7:00 a.m. to 9:00 p.m., six days a
week, Monday through Saturday. Id. Defendant provided room, board, and transportation. Id. In
July, R.J. got caught communicating with his brother who left the FLDS community and lived in
Casper. Id. at 7. Defendant reacted by sending R.J. to Kansas to work on a different job site. Id.
From July through September 2014, R.J. worked on various jobs for Defendant in
Kansas, Missouri, and Arizona. Id. at 8. Defendant continued to pay him approximately
$200.00 every two weeks and provided room, board, and transportation. Id. R.J. worked from
approximately 7:00 a.m. to 9:00 p.m., six days a week, Monday through Saturday. Id. On days
when he poured concrete he started very early in the morning and worked much longer hours. Id.
R.J. did not attend school during these months. Id.
R.J. worked on the Scheels All Sports sporting goods store in Kansas where he tied rebar,
worked on the pan decks, and poured concrete. Id. at 9. He also operated backhoes and
skidsters to haul gravel. Id. At some point during the summer, R.J. returned to Southern Utah for
a doctors appointment. Id. at 10. He was home for one week before being sent to work for
Defendant in Phoenix, Arizona, for one week. Id. Defendant then sent him back to work in
Kansas. Id. After the Scheels project was complete Defendant sent R.J. to a job site in Missouri
to work on an apartment building where he laid rebar and poured concrete. Id. at 11. While
employed by Defendant, R.J. resided in various homes or apartments with other members of the
work crew. Id. at 12. He did not reside with his parents. Id. One of Defendants owners and
various supervisors told R.J. to lie and to tell anyone who asked that he was 18 years old. Id. at
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13. They also told him to disappear if he ever caught wind of an OSHA inspector at a job site. Id.
A few times an OSHA inspector did show up at a job site and R.J. did his best to hide. Id.
On September 18, 2014, a Kansas police officer pulled over N.S. and R.J.s work crew
when they were driving home from a job site. See N.S. Decl. at 14 and R.J.s Decl. at 14.
N.S., R.J., and others were illegally riding in the back of the pickup truck. Id. During the stop,
the police officer became suspicious. After a series of events, N.S., R.J., and others were placed
into foster care for a few days. Id. Ultimately, they were released to their families and returned to
Southern Utah. Id. Dan Jessop told R.J. that he destroyed all records of his employment with
Defendant following this incident because he was worried about a government investigation. See
R.J. Decl. at 16.
C.

Wage Hours Involvement After the September 18, 2014 Incident

The Federal Bureau of Investigations (FBI) informed Wage Hour about potential child
labor violations when N.S. and R.J. were taken into custody on September 18, 2014. See
Declaration of Jeffrey Depew (Depew Decl.) attached hereto as Exhibit C, at 2. Wage Hour
opened an investigation but immediately hit roadblocks when Defendants employees either
refused to be interviewed or indicated that they did not want to cooperate. Id. at 3. Wage
Hours investigator was told that the minors returned to Utah. Id. He was forced to rely on the
Defendant for information. Id.
Defendant gave Wage Hour a story that was very different than the one summarized
above. Paul Beagley, the President of Phaze Concrete, stated that N.S., R.J., and one other minor
child worked approximately 25 hours a week after school picking up trash on the job site. Id. at
4. He claimed that the minors were the relatives of one of his employees who brought them on
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the job site without his knowledge. Id. He confirmed that Defendant did not maintain time
records or keep the minor children on its payroll. Id. Finally, Mr. Beagley claimed that the
minors only worked for Defendant for a few weeks. Id. Based on this information, Wage Hour
determined that Defendant violated various child labor regulations ranging from under the legal
age of employment, prohibited occupation, and hours and times standards. Id. at 5. Wage Hour
assessed a civil money penalty, which Defendant paid, and closed its investigation file. Id. at 6.
D.

Defendants Unlawful Child Labor Practices Have Continued for Years

N.S. and R.J.s experiences with Defendant are consistent with the experiences of many
young boys over nearly a decade. Wallace Jeffs was employed by Defendant from 2007 through
2010. See Decl. of Wallace Jeffs, attached hereto as Exhibit D at 5. He worked as a project
manager in several states before he was asked to manage a re-bar company for Defendant. Id. at
6-7. According to Mr. Jeffs, Defendant routinely employs children under the age of 16 to
work for the company. Id. at 8. Children under the age of 16 operate forklifts and other
machines, and do general construction labor. Id. They work the same schedule as the rest of the
work crew, often 12-15 hours a day, six days a week. Id. Defendant does not keep any records
relating to its underage workers as far as payroll or time cards. Id.
Defendant is affiliated with the Fundamentalist Church of Latter-Day Saints and is
considered an FLDS company. Id. at 4. It is owned by FLDS church members largely for the
benefit of the FLDS Church. Id. In practice, Lyle Jeffs, the bishop of the FLDS Church, or other
church leadership, sends children from the FLDS church on work missions to help Defendant
and other FLDS-companies make money for the church. Id. at 7-8. Defendant provides room
and board to these children but many of them were not paid for their labor. Id. at 8. The
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expectation, and practice, is that Defendant donates the money earned back to the church. Id.
While Mr. Jeffs worked for Defendant, Lyle Jeffs would contact project managers or
business owners to assess their labor needs. Id. at 9. Project managers would say how many
people were needed for a particular job and Lyle Jeffs would send them out. Id. The typical labor
force provided by Lyle Jeffs comprised of young men between the ages of 14-18 years old. Id.
The custom and expectation in the FLDS community was for these people to donate their time,
labor, or paychecks to the church. Id. at 10. This custom resulted in many of Defendants
employees working as volunteers for Defendant to benefit the FLDS Church by foregoing or
keeping only a fraction of their wages. Id.
Mathew Barlow also worked for Defendant from 2008-2012, first as a concrete worker
and equipment operator and then as a project manager. See Decl. of Mathew Barlow attached
hereto as Exhibit E, at 4-5, 7. Mr. Barlow also observed minor children under the age of 16
working for Defendant. Id. at 7-8. He observed them operating equipment, pouring concrete,
tying rebar, and doing the same work as the rest of the work crew. Id. The minor children
worked between 12-16 hours a day (and sometimes more), six days a week. Id. at 7-8. Defendant
provided room and board and transportation to and from job sites, but did not always pay wages.
Id. at 8. When Defendant did pay wages, the FLDS church forced employees to sign their
paychecks over to the church under the direction of Defendants managers. Id. at 7.
Between 2011 and 2012, the FLDS Church began sending their delinquent kids to work
for Defendant. Id. at 11. For one particular job in Lincoln, Nebraska, Defendant employed a
number of young boys between the ages of 11 and 16 years old. Id. Defendant sent the younger
kids, between 11-14 years old, to work at a yard located about 2.5 miles away from the job site.
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Id. Management felt it was safe to work at this location because the boys were out of sight from
the public. Id. Other young boys between 14-16 years old were allowed to work on the job site if
they looked more mature and could pass for an older age. Id. According to Mr. Barlow, many of
the young boys working for Defendant between 14-18 years old had nowhere else to go. Id. at
12. They were not allowed to return home because they were deemed not to be worthy of
returning to the church community they came from. Id. They had no choice but to work for
Defendant while they tried to get back in good graces with the FLDS Church. Id.
II. ARGUMENT
Defendants practice of employing minors who are legally required to attend school but
instead are removed from their families to work full-time in hazardous occupations for
exceptionally substandard pay is reprehensible and must immediately be brought to a halt. In the
Tenth Circuit, a party requesting preliminary injunctive relief must clearly establish the
following: (1) there is a substantial likelihood of success on the merits; (2) the party will suffer
irreparable injury unless the injunction issues; (3) the threatened injury outweighs whatever
damage the proposed injunction may cause the opposing party; and (4) the injunction, if issued,
would not be adverse to the public interest. See GTE Corp. v. Williams, 731 F.2d 676, 678 (10th
Cir. 1984). The limited purpose of a preliminary injunction is merely to preserve the relative
positions of the parties until a trial on the merits can be held. Schrier v. Univ. of Colo., 427 F.3d
1253, 1258 (10th Cir. 2005) (citing Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981)).
A.

There is a substantial likelihood of success on the merits

The allegations made by N.S. and R.J. and the statements from Defendants former
project managers depict Defendants wide spread child labor violations dating back to at least
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2007. As a matter of law, the entire construction industry is a prohibited occupation for minors
under the age of 16. See 29 C.F.R. 570.33(n)(4). Minors under the age of 16 are also prohibited
from operating certain power driven machinery or working in occupations that involve the use of
hoisting apparatuses. See 29 C.F.R. 570.33(c) & (e). Moreover, persons under the age of 18 are
prohibited from working in certain occupations, which have been declared by the Secretary to be
particularly hazardous or detrimental to their health and well-being. See 29 C.F.R. 570, Subpart
E. These are known as Hazardous Occupation Orders (HOs) for nonagricultural employment.
Id. Here, the evidence supports a finding that Defendant unlawfully employed minors, including
N.S. and R.J., in a prohibited occupation (construction). And the manner in which the minors
were employed violated at least three HOs, including: (i) HO 7 Power-driven hoisting
apparatus, including forklifts; (ii) HO 14 Power-driven circular saws, bandsaws, chain saws,
etc.; and (iii) HO 17 Excavation operations. Id.; Decl. of N.S. at 9; Decl. of R.J. at 6, 9.
The evidence also supports a finding that Defendant violated Child Labor Regulation No.
3, which limits the hours and times of day that 14- and 15-year-olds may work. Minors under the
age of 16 are prohibited from working more than three hours on a school day; more than eight
hours on a non-school day; more than 18 hours during a week when school is in session; more
than 40 hours during a week when school is not in session; and before 7:00 a.m. and after 7:00
p.m. (except between June 1 and Labor Day when the evening hour is extended to 9:00 p.m.).
See 29 C.F.R. 570.35. The hours and times of day that N.S. and R.J. worked for Defendant
between 40-60 hours a week, six days a week are far outside the bounds set by this regulation.
See Decl. of N.S. at 10; Decl. of R.J. at 6, 8.

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Moreover, Defendants meager and irregular $200.00 bi-weekly stipend to N.S. and R.J.
falls short of the basic minimum wage and overtime requirements of the FLSA. See 29 U.S.C.
206 & 207. These provisions require a minimum wage of at least $7.25 an hour and for any
hours over forty hours in a workweek not less than one and one-half times the regular rate. Id.
N.S. and R.J. worked on average 12-13 hours a day, between 7:00 a.m. and 9:00 p.m., six days a
week, and their wages never exceeded $200.00 every two weeks. See Decl. of N.S. at 11; Decl.
of R.J. at 6, 8, 12. At a minimum, if they worked 12 hours a day, six days a week, they would
be owed $638.16 each week.1
Finally, the evidence also supports a finding that Defendant violated the record-keeping
provisions of the FLSA by failing to maintain timesheets and payroll records for N.S. and R.J.
Section 211(c) of the FLSA requires Defendant to make, keep, and preserve such records of the
persons employed by him and of the wages, hours, and other conditions and practices of
employment maintained by him, and to preserve such records. The related regulation requires
employers to maintain and preserve payroll records, time and hour records, wage rates, and other
detailed records. See 29 C.F.R. 516.2. Defendant either did not maintain, or improperly
destroyed, all such records in this case. See Depew Decl. at 4; Decl. of R.J. at 15.
Based on the foregoing, the Court should find that Plaintiff has a substantial likelihood of
success on the merits regarding child labor, minimum wage, overtime, and record keeping
violations under the FLSA to support the issuance of the preliminary injunction.

The minimum computation would be 12 hours a day x 6 days a week = 72 hours; 40 hours a
week x $7.25 = $290 + 32 additional overtime hours at $10.88/hour = $348.16, for a total of
$638.16.
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B.

The party will suffer irreparable injury unless the injunction issues

Because section 17 of the FLSA specifically provides for injunctive relief Plaintiff need
not establish irreparable harm. Trailer Train Co. v. State Bd. of Equalization, 697 F.2d 860, 869
(9th Cir. 1983); Marxe v. Jackson, 833 F.2d 1121, 1128 n.3 (3rd Cir. 1987) (finding that a moving
party need not satisfy the requirements for equitable relief when an injunction is sought to
prevent the violation of a federal statute, and the statute specifically provides for injunctive
relief).2 Even so, it is worth noting that upon information and belief Defendant has not changed
its employment practices and in all likelihood it has continued to employ minors in the manner
described herein. Defendants ability to develop a sophisticated scheme comprising a cheap labor
force provided by the FLDS Church that results in windfall profits attests to the nature of its
business. Absent injunctive relief, irreparable harm will occur to any employees adversely
affected by Defendants employment practices, to the Secretary, to the public, and to
Defendants competitors.
Wage Hour investigated Defendant once before when N.S. and R.J. were picked up by
the local police in Overland Park, KS. Defendant was not forthcoming to the investigator and
inaccurately justified the boys involvement at the job site in an apparent attempt to dodge or
minimize liability under the FLSA. The information Defendant provided in 2014 is against the
weight of evidence that has surfaced since the time of that investigation. It is now evident that
Defendant cannot be relied on to comply with the FLSA without additional safeguards. Indeed,

See also Harris v. Oak Grove Cinemas, et al., 2013 WL 3456563 (D. Oregon, May 2, 2013)
(unpublished decision in FLSA context granting preliminary injunction without requiring a
finding of irreparable harm).
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Defendants failure to provide accurate information to Wage and Hour underscores the need for
injunctive relief.
C.

The threatened injury outweighs whatever damage the proposed injunction may
cause the opposing party

Plaintiff seeks a preliminary injunction for current or future violations of the FLSA,
including the child labor provisions of the Act and not for monetary relief. Similar to the
issuance of a permanent injunction in this context, the purpose is remedial rather than punitive
and such injunctions do not place any substantive hardship on employers because they require[]
[them] to do what the Act requires anyway to comply with the law. Metzler v. IBP, Inc., 127
F.3d 959, 963 (10th Cir. 1997). A preliminary injunction focused on child labor violations and
compliance with the FLSA will not damage Defendant.
D.

An injunction will serve the public interest

The public interest is served by granting Plaintiffs request for a preliminary injunction.
The purpose of the injunctive relief provision is to insure effective enforcement of the public
policy underpinning the FLSA. See Wirtz v. L.A. Swann Oil Co., 293 F. Supp. 211 (E.D. Pa.
1968). The Department of Labor is the sole federal agency that monitors child labor and enforces
child labor laws for the public interest. Indeed, minor children are the class of person whom the
[FLSA] is designed to protect. McLaughlin v. McGee Bros. Co., Inc., 681 F. Supp. 1117, 1132
(W.D.N.C. 1988 affd sub nom. Brock v. Wendells Woodword, Inc., 867 F.2d 196 (4th Cir.
1989). When minors perform adults work without pay or proper pay, they are manifestly being
exploited by their employer. Id.

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The public interest in administration of the FLSA is promoted by taking timely steps
when necessary to prevent violations when they are about to occur or prevent their continuance
after they have begun. Walling v. Brooklyn Braid Co., 152 F.2d 938 (2nd Cir. 1945). Further, the
public interest in enforcing the FLSAs requirements leans in favor of injunctive relief and
against the individual concerns of the litigants. See Mitchell v. Bland, 241 F.2d 808 (5th Cir.
1957); Walling v. Panther Creek Mines, 148 F.2d 604 (7th Cir. 1945). Defendants efforts to
conceal the unlawful employment of minor children from timesheets and payroll records and
from the purview of federal agencies is against the public interest in that it impedes the
Plaintiffs ability to investigate and enforce the FLSA. The seriousness of the allegations and the
need to bring any ongoing violations to a halt warrants the issuance of a preliminary injunction.
III. CONCLUSION
Based on the foregoing, the Court should grant Plaintiffs motion for preliminary
injunction against Defendant and enter the attached proposed order requiring Defendant to take
affirmative steps to comply with the FLSA.
Dated this 30th day of August, 2016.
Respectfully submitted,
M. Patricia Smith, Solicitor of Labor
James E. Culp, Regional Solicitor
John Rainwater, Associate Regional Solicitor
Lydia Tzagoloff, Trial Attorney and Special
Assistant United States Attorney
Alicia A.W. Truman, Trial Attorney
Karen E. Bobela, Trial Attorney
United States Department of Labor
Attorneys for Plaintiff

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John W. Huber, United States Attorney,


District of Utah
/s/ Amanda A. Berndt
Amanda Berndt, Assistant U.S. Attorney
Signed with permission by John K. Mangum,
Assistant U.S. Attorney
Associated Local Counsel for Plaintiff

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