Florida

Florida Man Lawsuit: DeSantis' War on Disney Is Unconstitutionally Raising My Taxes

Three state residents argue a new state law eliminating Disney's self-governing status unfairly makes taxpayers responsible for over $1 billion of the company's debt.

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Three Florida residents claim in a new lawsuit that Republican Gov. Ron DeSantis' war with Disney over the state's so-called Don't Say Gay law is unconstitutionally raising their taxes.

The latest shot in that war happened in late April when DeSantis signed into law a bill dissolving Disney's Reedy Creek Improvement District—a self-governing entity that gave the company the power to levy taxes and set their own land-use regulations on 25,000 acres in and around its Disney World theme park.

Those are some sweeping powers given to Disney by the Florida state government—powers DeSantis has argued are not justified given the company's opposition to the law that limits discussion of sexual orientation in public schools.

"I'm just thinking to myself, you're a corporation based in Burbank, California, and you're going to marshal your economic might to attack the parents of my state," said DeSantis when signing the bill eliminating the Reedy Creek district. "We view that as a provocation, and we're going to fight back against that."

The governor's comments might be good culture war fodder. But the dissolution of Reedy Creek has presented some thorny fiscal and legal issues—in particular, the matter of who will have to pay off some $1 billion in the district's debt.

Originally that debt was serviced by property taxes and other fees that Disney, through Reedy Creek, levied on itself. But with the district going away, that $1 billion now falls on the governments of neighboring Orange and Osceola counties. Property taxes could have to increase by as much as 25 percent to cover the new debt burden, according to one local official's estimate.

Tuesday's lawsuit, filed by Orange County and Osceola County residents Michael Foronda, Edward Foronda, and Vivian Gorsky in federal district court, argues that shifting this burden onto taxpayers is not just onerous, but unconstitutional. William Sanchez, the attorney who filed the lawsuit, is also a Democratic candidate running to replace Sen. Marco Rubio (R–Fla.).

"DeSantis and certain Republican lawmakers welcome a fight with Disney on this matter," reads the complaint. But "they appear to not want to follow constitutional guidelines and previous legally enforceable agreements involving over $1 billion in bond issuances."

Their lawsuit argues that the dissolution of Reedy Creek violates promises Florida made when it created the district in the first place, and as a result, taxpayers are being unfairly penalized.

The 1967 law creating Reedy Creek contained a commitment to bondholders that the taxing powers of the district would not be "limited" or "altered" until its debts had been paid off.

But by eliminating Reedy Creek, "the state of Florida has eliminated the government entity that backed the various bonds while violating its own explicit promise not to do so," wrote Florida-based attorney Jacob Schumer for Bloomberg Tax last month. "It is hard to imagine a way that the state could successfully argue that this did not violate its own contractual obligations or unconstitutionally impair the contract between Reedy Creek and the bondholders."

That would seem to give bondholders a good case for suing over the dissolution of Reedy Creek. Taxpayers face an uphill battle in challenging the abolition of the district, however, says Joe Bishop-Henchman of the National Taxpayers Union.

The plaintiffs in Tuesday's lawsuit argue that they have standing because the law creating Reedy Creek is effectively a contract and they, as third-party beneficiaries of that contract, can sue to enforce it.

That will be a long shot, says Bishop-Henchman. They'll be required to prove that they're primary beneficiaries of the Reedy Creek district despite living outside of it. Their lawsuit, he notes, "quotes the statute [creating Reedy Creek] saying that its purpose is to benefit those within the District."

Both the U.S. and Florida supreme courts have also rejected "'generalized taxpayer standing,' the idea that any taxpayer can sue about a violation by a government they pay taxes to," says Bishop-Henchman. Individual taxpayers will generally have to prove that they're harmed in some particular way in order to have standing to sue, which will also be hard in this case, he says.

Bishop-Henchman says that other arguments raised in the lawsuit—for example, that Florida is violating the Contracts Clause of the Constitution, or that it's violating Disney's First Amendment rights by effectively punishing it for speaking out about legislation—might have some merit. But again, a court will wonder why taxpayers, and not bondholders or Disney, are suing.

There are also a few basic errors in the complaint that suggest it's not entirely thought out. Reedy Creek is referred to as "Ready Creek" at one point. There's also what appears to be a bolded note from the author marking a place where a missing DeSantis quote is supposed to be inserted.

The sloppiness of the lawsuit against DeSantis shouldn't obscure the governor's own willingness to forgo the details of policy in favor of a crusade against Disney.

The governor is representing himself as a defender of Floridians and conservative values. But the primary effect of his support for the dissolution of Reedy Creek is that some state taxpayers will have to pay out money to cover debts accrued by Disney.

A DeSantis spokesperson told the Los Angeles Times that taxpayers would not end up seeing their bills go up as a result of eliminating Reedy Creek. How exactly they'll be spared some massive tax hikes has yet to be fleshed out, however.

In the meantime, central Florida taxpayers will have to depend on long-shot lawsuits to defend their interests.

NEXT: When Ted Kennedy Was Pro-Life and Ronald Reagan Was Expanding Abortion Access

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  1. This has to be the most LOL take this week, maybe this month. Maybe even this year.

    1. They could at least argue that all corporations should be able to have tax free incorporation. But they don't.

      Instead they pretend annexation haven't been happening for over 100 years.

    2. Take a look at the attorney who filed the suit, William Sanchez, candidate running against Marco Rubio.

      https://sanchezforsenate.com/

      Ugly mofo and Marxist up and down. He does not have a prayer hence this political legal stunt

      1. And reason promotes it.

        1. Reason no longer has much of an issue with Marxists. LIBERTARIAN MOMENT!!!

          1. How long do we think it will be before there will be some version of “The Reason Case for Totalitarian Marxism”? A year? Two years?

            We should start a pool.

            1. I'm putting $20 on the 4th of July!

        2. There is such a thing as Libertarian Marxist.

          1. "There is NO such thing as Libertarian Marxist."

            FTFY

      2. Criminalize Marxism and end the democrat party.

        1. How about not criminalizing ideas? Thought crimes aren't very libertarian.

  2. So just who is funding this suit? Certainly not the plaintiffs.

    1. William Sanchez, the attorney who filed the lawsuit, is also a Democratic candidate running to replace Sen. Marco Rubio (R–Fla.)"

      1. Must be completely legally bulletproof if he is running for office.

  3. The libs still trying to get ahead of former prez desantis?

    1. future*

      1. I'm not interested in voting for someone who feels they have to punish though-crimes. Disney has every right to speak their piece and Fidel DeSantis has zero right to punish them for it.

  4. So here's the score:

    Three weeks later, and Reason Editors are still complaining about DeSantis' WAR ON THE FREE SPEECH.
    One week later, and the new ministry of truth is already down the memory hole.

    1. But Floridamanbad, Moonrocks.
      TeenReason has an agenda and free speech issues just aren't at the top. Build your own libertarian magazine.

      1. It’s less a political journal and more “high times” at this point.

    2. Don't forget ignoring the US giving intelligence to Ukraine that allowed them to sink Russia's flagship, the Moskva. That is totes kosher for the anti-war movements.

    3. Obviously, the only explanation is that Reason doesn't truly believe in free speech. It can't be the case that Reason wrote some clickbait-y coverage that wouldn't bear close or sustained scrutiny, and has basically dropped the alarming headlines as it's moved on to other clickbait-y topics that serve their foundation funders' interests.

  5. "Property taxes could have to increase by as much as 25 percent to cover the new debt burden, according to one local official's estimate."

    Look, this is a stupid take. And I think DeSantis's actions here to punish Disney for political speech were stupid in the first place.

    If Disney was taxing itself to pay this debt, then these counties can tax Disney to pay this debt. Be clear about how this works: Normally, when a locality takes on bonds, they levy fees and taxes on visitors. Ever see a "District Improvement Levee" on your hotel room fees? That's what it is. I can guarantee that when you go to Disneyworld and stay at their hotel resorts, you get something similar. And now, the local counties who take over the districts will do the same thing- they will look at what fees were being levied, and they will just enact the same thing.

    There is nothing in a bond that says "We will pay this back using the following very specific fee". Bonds work by saying "We will pay back this amount, and here is how we are planning to close that gap." If those fees don't work (say, a resort that was planned is late to open) the district STILL needs to make its payments. Likewise, the fact that Disney is no longer entitled to tax its guests for these bonds doesn't invalidate the bonds. It just means the city/county/state is going to need to find the money elsewhere.

    1. This is a dumb argument for even reason. Reason wants its readers to believe that these counties will not tax Disney and expect them to pay their own way but instead will tax their voters to pay for the services due Disney. Why they would do this is something the author never bothers to contemplate. It is just a given that localities won't tax rich, out of state, corporations who don't vote in elections but will tax actual voters instead.

      It is just pathetic.

    2. "And now, the local counties who take over the districts will do the same thing- they will look at what fees were being levied, and they will just enact the same thing."

      This is the obvious rebuttal to these arguments. The fact that Britshgi didn't even try to make this point makes me think poorly of his reasoning skills. Frankly, Reason is still going down hill. It doesn't take a genius to avoid an obvious strawman article like this.

      1. How does it not occur to a "Libertarian Magazine" that a local government would tax a big corporation before it taxed local property owners? How is that possible? Aren't Libertarians supposed to be more aware of governments' propensity to screw private corporations than the average person?

        1. The locality isn't ultimately axing the corporation, any such taxes will be passed directly on to the customers.

          Which is precisely why corporations exist at all - they are a means for the government to tax people they otherwise could not reach.

          The notion that this burden will be paid for by the residents is absurd. It never was before, it certainly will not now.

          1. Except the taxes to the corporation already exist. The point of this article is to worry that instead of the corporation charging its customers for the taxes it levied upon itself, somehow those taxes will be levied upon property owners 20 miles away.

      2. Frankly, Reason is still going down hill.

        And someone seems to have recently greased the wheel bearings because it's picking up speed fast.

    3. I'm wondering who the bond was issued to. It seems like if Disney was running things it was Disney who borrowed the money. Why would the taxpayers be on the hook for that?

      1. Right, exactly. As far as issuing bonds, if Disney issued bonds and had used the money for themselves, not the entire county, then Disney is still on the hook for that. Even in the hypothetical world where Disney issued municipal bonds rather than corporate bonds that would be shady anyway and unlikely to void their responsibility for the bonds.

    4. In Florida, local governments are prohibited from levying taxes unequally so they couldn't recreate Reedy Creek. They have to add taxes on all property owners.

  6. "in particular, the matter of who will have to pay off some $1 billion in the district's debt.
    Originally that debt was serviced by property taxes and other fees that Disney, through Reedy Creek, levied on itself. But with the district going away, that $1 billion now falls on the governments of neighboring Orange and Osceola counties. Property taxes could have to increase by as much as 25 percent to cover the new debt burden, according to one local official's estimate."

    What utter garbage. The intellectual gymnastics performed to try and make this an issue must have been exhausting.
    The debt was incurred by Disney and serviced by property taxes and other fees that Disney levied on itself through Reedy Creek, and now the debt will be paid by Disney and serviced by property taxes and other fees that will be paid by Disney, to Orange and Osceola counties.

    "William Sanchez, the attorney who filed the lawsuit, is also a Democratic candidate running to replace Sen. Marco Rubio (R–Fla.)... The plaintiffs in Tuesday's lawsuit argue that they have standing because the law creating Reedy Creek is effectively a contract and they, as third-party beneficiaries of that contract, can sue to enforce it... That will be a long shot, says Bishop-Henchman. They'll be required to prove that they're primary beneficiaries of the Reedy Creek district despite living outside of it.

    Oh! It's just another Democratic Party stunt.

    1. So instead of Disney using money in it's left pocket to pay the right pocket "taxes", Florida counties can take actual tax money from Disney and pay the debt.
      This is about as logically sound as saying overturning Roe "bans abortion".

      1. Yeah, why is the assumption that Disney just won't pay property taxes anymore?

  7. If DeSantis and the Rs were at all not hypocritical then they'd be dismantling the Villages and every other special district across the state.

    But that would require even the smallest shred of integrity.

    1. Explain the libertarian position on targeted relief of laws compared to universal application.

    2. But that would require even the smallest shred of integrity.

      Send your resume to DeSantis.

    3. Didn't that bill also get rid of all other special districts that weren't covered by the '68 changes to the Florida constitution? Another seven apart from Disney?

      1. I thought it was a total of ten, I know it wasn't just Disney like Reason keeps stating. My biggest problem was DeSantis specifically naming Disney, but like Trump the difference between what he said and what he actually did matters a lot in this case.

        1. I’m really tired of Reason writer’s lies and distortions. At first it was just slipshod reporting. But we’re past that now.

      2. Yeah ML, 7 out of 1800 in Florida. Seems pretty targeted to me.

    4. Yeah? Nobody ever expected integrity. From them or Disney. And we didn't get it.

      They're just returning fire baby.

  8. If they can take Giulianni's law license away, then this clown should be disbarred for filing such tripe. He just wants this 'lawsuit' to be pending so he can use it to run for office.

  9. First of all, I like this tactic and if it works it could send a precedent for suing the state government for doing ANYTHING that ends up costing you any amount of money.

    As a libertarian I very much like this.

  10. Look, I don’t know who this Christian Britschgi guy is (nice fake news name you got there, lib) but he obviously isn’t a libertarian. No, standing up for corporations against big government might have been consistent with a 1970s libertarian, but today’s libertarian is more about virtue signalling about how much you hate Twitter and gay rights. Get out of the disco era, Christian. Libertarianism has changed for the better and is now just about doing whatever the GOP thinks is cool. It’s the 21st Century Christian and it’s time to rethink things and to snuggle up beside Dear Leader and whatever 14 year old he’s trying to rape. Geesch.

    1. That is the saddest bit of trolling I have seen in a long time. Go to trolling school or something dude.

      1. It's like an attempt to mirror OBL but without the wit or soul that makes OBL great.

        1. Yeah, OBL has this earnest charm and optimism about the posts that makes them funny.

        2. Obl is a trolling satirist? I thought he was a seuth sayer

      2. I don’t know the rumor has started that I am some kind of troll or that I am a normal White guy who wants good snd effective government and doesn’t want to spend money on the DOD rathole. I am not, ok? Stop saying that! I AM A BLACK AND GAY MAN WHO IS GOP PROUD AND BELONG YO THE POLITICAL PARTY THAT HAS ADVANCED THE AGENDA FOR GAY AND BLACK MEN LIKE ME MORE THAN ANY OTHER POLITICAL PARTY EVER. I REFER HERE TO, OF COURSE, THE REPUBLICAN PARTY UNDER THE LEADERSHIP OF HONORARY GAY AND BLACK MAN, DONALD J. TRUMP.

        Stop with the homophobia, ok?

        1. Just embarrassing.

        2. For fuck's sake, Shrike. Stop being so desperate.

        3. You’re a failing faggot.

          1. He's a very successful faggot. Everybody tops him.

    2. So terrible at this shrike. How are you not embarrassed?

  11. Indications a web site might be leftist, not libertarian:
    Always referring to a bill titled "An act relating to parental rights in education" as "so called don't say gay".

    1. Only thing is that it doesn't actually increase parental rights in education as it claims.

      1. Fuck off, fifty cents.

  12. Why are we listening to Joe Bishop-Henchman, disgraced and resigned former LP chair, as if he has credibility?

    This is the guy who tried to help the lefties in the NH Party steal the party from the rightfully elected officers, and then tried to deny it, and then resigned to avoid exposure.

    1. That story is nuts.

  13. So if you don't have to pay a government's debt any more when you no longer control the government, I guess that means that I, as someone who has never controlled a government, cannot ever be held responsible for any government's debt. Sounds good to me.

  14. My summary:
    1. Florida passes "Don't Say Gay" law. Disney makes no statement. I assumed because it's none of their business either way.
    2. The SJW's are enraged at the silence. Disney makes weak a statement in support. SJW's happy.
    3. Butt-hurt politicians cancel special treatment of Disney property.
    4. Disney's books are now relieved of a $1B liability. That'll teach 'em to take the wrong side!

    Overall, this confirms what we all know.
    - Politicians are the stupidest critters Zeus ever made.
    - SJW's are a close second.
    - Disney is an evil genius.

      1. Yep. Disney’s market cap is down form about $240 billion to barely $200 billion. So this was really a winning strategy.

        Go woke, go broke.

        1. It has more to do with macro-economic factors which have dragged down valuations across the entire media/telco sector. Not so much about woke-y policies.

      1. That is a godawful poll. Push polling that would make a Democratic strategist blush.

        1. Gotta agree with Overt on this one. Looked at that "poll". Wow. Not even pretending to be objective or fact finding.

          1. Oh, ok. I can see why you said that considering the question but it is accurate I guess. Still, not the best wording but I'm not sure how else to word it considering the statements by Disney's own employees.

        2. Why? Trafalgar isn't a fly by night polling outfit. However, I take all polls with a large grain of salt after the recent implosions.

    1. Corrections:
      1. The bill is HB 1557, "An act relating to parental rights in education". The word "gay" is not in the bill.
      3. The bill, HB3C "An act relating to independent special districts", is NOT restricted to Reedy Creek Development District, but covers " . . . any independent special district established by a special act prior to the date of ratification of the Florida Constitution on November 5, 1968 and which was not reestablished, re-ratified, or otherwise reconstituted by a special act or general law after November 5, 1968 . . . "

      There are six special districts who meet both of the criteria listed in the bill.

      4. False. The debt was never in Disney's books. It belongs to the special district. It was always going to be paid by tax revenues, and it still will be.

      1. On 4. If I have this correct Disney will pay taxes to the counties in which it resides and part of that revenue will be used to pay the bondholders of the District so they will be paid? Who holds these bonds I wonder.

    2. It wasn't. Weak statement. And they further double and tripled down in recorded and leaked meetings regarding their politics.

    3. The “cancellation of Disney was underway prior to the anti grooming bill. It also effected about ten other special districts.

  15. This is not a lawsuit, it is a campaign stunt by a sleazeball democrat.
    There will not be standing until the three shills have actually sustained harm, as in an actual tax increase they can trace directly to the elimination of Reedy Creek Improvement District.

  16. So I am a little confused, I thought they wer not going to renew the special district designation

  17. Can we please have a working 'loser pays' system?

    There's lots to argue about the wisdom of the Reedy Creek decision but this lawsuit is just silly. It deserves to get laughed out of court and the lawyers participating in it put up for sanctions or disbarment for failure of their responsibility as officers of the court.

    1. Too many lawyers in congress, and state legislatures.

  18. Fuck you, Mickey (they, them).

    /s/
    Florida Man

  19. Why should it be ok for Disney to not be subject to the same laws as any other company? They've already extended the copyright laws "to infinity and beyond" to protect their income stream from the mouse.
    In direct contradiction to the intent of the Constitution - which saw temporary monopolites (copyrights, patents) as a neccessary and time limited evil.

    1. PS The legislation will lose in court. Phony libertarians aside, you can't pass legislation because you don't like what someone said. We have a 1st amendment, if you haven't heard of it.

      1. It won’t, because that isn’t actually what happened. You see, in court, evidence is required. Not bullshit statements made by retarded Marxist shills, such as yourself.

        Feel free to fuck off.

        1. You seem to call a lot of people Marxist. Look up what it actually is. When you just hear something and think scary and then go around calling everyone by this scary term, it loses its meaning. IE groomer.

  20. Well, well, the mask is off these "libertarians" They have no problem with a governor and legislature punishing the exercise of free speech by targeting the offending with legislation, as long as the governor is full on MAGA and the legislature is lapdog GOP.

    There were no committee hearings or the usual public and expert input and the governor's office claims it has a plan toexecute this legislation, but not in writing. WTF?

    Meanwhile, you MAGA hypocrites posing as libertarians are applauding bringing the full weight of the State down on a person and organization for criticizing the State. Beautiful!

    1. You really are a failing faggot.

      1. uncalled for comment

    2. Dude, what? Disney itself decided to speak out against the Legislature and it's proposed law so they brought this on themselves. They gambled they were big enough to browbeat the State with no repercussions and lost. The Gov is just signing a law treating Disney the same as other corporations in the state.
      Play stupid woke games, win stupid woke prizes. Your ire should be directed towards Disney's radical woke Board of Directors who thought this was a good idea in the first place.

      1. Wally, read what you just wrote:

        "Disney itself decided to speak out against the Legislature and it's proposed law so they brought this on themselves."

        The CEO spoke out. That's it. They had not taken legal action, but if and when they did, how is that not within his/their rights? How are you not an enemy of the 1st amendment? How do you dare call yourself a libertarian?

        1. The CEO of a company that held special and unfair privileges in the state decided to show his ass to a legislature that already did like him. After trying to drag the legislators through the mud they decided to revoke those special privileges and but the company on even ground with everyone else.

          The lesson here is not that DeSantis is some authoritarian punishing companies for free speech. The lesson is know who has done you a favor and don't piss on their shoes.

  21. It’s less a political journal and more “high times” at this point.

  22. I find the logic behind the lawsuit strange. The original law stated that the bondholders would be paid because the special tax status would never be changed until they were paid off. This leaves Disney to just keep issuing bonds forever so it would never have the law changed. That makes no sense.
    This is just a political stunt by that guy running for office. If corporations would keep their mouths shut on social or political issues and concentrate on running their companies this all could have been avoided. Disney is reaping the benefits right now as its stock price has collapsed since this nonsense started.
    Besides, I am entirely against special tax giveaways for companies.

    1. Wally, you are missing the point because you are not apparently aware of how this happened.

      There was no movement in favor of this legislation by the Governor or the legislature, no study, no discussion, no advocacy - NOTHING previously as a real issue. This was purely a result of the Governor getting pissed off at opposition and coming back with a punitive bill not previously considered. It was worded so some other special districts would be included so he could pretend it wasn't what it is - aimed at Disney. He claims to know what the results will be and that increasing taxes for adjacent counties is not part of it, but there is no written study, policy, or bullet point presentation available demonstrating that. They are faking it. Since it doesn't come into effect for a year, they have time to cut deals and even make it go away, but they don't know what will happen or why.

      You should quit pretending this represents some real issue about corporations and favors - it doesn't. Disney has responsibilities for it's district which local government will have to take up if this truly sticks and there is no coherent argument about whether that is good or bad BECAUSE NO ONE KNOWS!

      1. You clearly have no clue about central fl politics. This has been in the works for a long time. Disney just shot itself in the foot making it politically advantageous to drop the hammer NOW.

        1. That makes sense.

        2. CLM, I am very cognizant of Florida politics. If what you say is true then you should be able to link a couple of articles from before this year discussing possibly taking away Disney's special district. You can't.

          Here are the results from when I googled "remove disney special district history" with dates for dearch from 5/1/2016 to 12/31/2021.

          https://www.google.com/search?q=remove+disney+special+district+history&rlz=1C1GCEA_enUS958US958&biw=1707&bih=811&sxsrf=ALiCzsZtmk2f4_jmlxZii5X8aPqd3Kiu4A%3A1652100256741&source=lnt&tbs=cdr%3A1%2Ccd_min%3AMay+1+2016%2Ccd_max%3ADec+31+2021&tbm=

          You'll note there are NO RESULTS discussing removing the special district.

          1. That is specious because it is a known fact that news doesn’t report on everything - like the democrat that sponsors a bill to remove presidential term limits every time a new congress meets.

            To know the truth here, you’d have to sift through the Florida legislature’s dockets to find when the bill was sponsored.

            It is not a factor in government legislation for a bill to be sponsored and voted on in the time between the Disney speaking up against the parents rights act and their special provision being revoked. That’s efficiency the government has never been accused of.

  23. DeSantis can perhaps be confident that dissolving the Reedy Creek Improvement District will not raise anyone's taxes because that dissolution will never occur.

    Trump taught the world how to negotiate with politicians in his mold. He takes unilateral action, triggering a crisis that harms both sides to a dispute. The other side provides an "off-ramp" that allows Trump to claim a "win" - that will not be closely examined or considered by his supporters - at minimal cost to themselves. Trump takes the "win" and brags about his negotiating prowess.

    That's what he did on NAFTA, NATO funding, China. That's what Abbott did in Texas with the border. And that's what DeSantis is doing, here.

    They passed a law that will dissolve Reedy Creek in 2023, unless the special district is re-authorized prior to then. So all Disney needs to do is negotiate an understanding with DeSantis that allows him to claim a "win." A public statement expressing some shared understanding about the Don't Say Gay law, perhaps. In any event, what they provide will be peanuts from Disney's perspective - a minor concession that allows Disney management to refocus on core competencies, and not fight political battles? That's surely worth an extension of their special district. Once DeSantis has that in hand, he'll turn around and brag about how he faced down Disney.

    That's how this will play out, and the gullible idiots here will just lap it up as another notch in the "win" column. None of you understand how you're being played.

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