Stewardship, Enforcement and Legal Defense Costs, Policies and Procedures –General Recommendations1IntroductionA land trus...
were resolved by the courts. Major violations included boundary disputes, timber harvest and/or structures being built out...
with landowners and maintain clear, consistent baseline and monitoring reports. It is highly advised that landowners and l...
4.   determine if it is a violation and the severity of violation in relation to the purpose of the easement,    5.   iden...
Within the land trust community there is some disagreement on how often a land trust should consider an amendment; fromalm...
A land trust should consider costs associated with enforcement and legal defense as components of its stewardshipprogrammi...
ideas explored below are to instigate discussion within the land trust community. Communal approaches have not been fullye...
ReferencesAldrich, R. and J. Wyerman. 2005. National Land Trust Census Report. Land Trust Alliance.Bates, Sylvia. 2007. Co...
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Policies and procedures 2009 18 foothills land trust $24,420 1 of 5

  1. 1. Stewardship, Enforcement and Legal Defense Costs, Policies and Procedures –General Recommendations1IntroductionA land trust holding a conservation easement (CE) is responsible for ensuring the purpose of the easement is maintained bymonitoring for violations, enforcing the CE when a violation occurs and defending the CE in the event of a legal challenge.Enforcement and defense are essential components of a land trusts stewardship system. Enforcement is the result of thediscovery of a violation and the resolution of the violation in a manner that upholds the purpose of the CE. There are manytools at a landowner’s disposal to help settle violations amicably, although in rare cases a land trust may be in a situationwhere to uphold the purpose of the CE litigation becomes necessary. Legal defense is a response by a land trust when the CEis challenged by legal action from a landowner, neighbor or a third party, usually to modify or terminate the CE.A CE is a legally binding contract between the landowner and a land trust that holds the CE. Ideally this relationship is one thatis cultivated and maintained over time and is initiated as soon as possible with new landowners. However, it is likely inevitablethat over time disagreements may arise between the land trust responsible for upholding the terms of the CE and thelandowner. The issue may be a disagreement in interpreting the CE restrictions, an intentional or accidental violation to the CEby the landowner, neighbor or third party and/or a legal challenge to the CE. The risk of a land trust having to defend aneasement due to violations or a legal challenge is real and acquiring financial resources or putting plans in place to addresslegal defense is a key component to a land trusts long term financial planning. A land trust must ensure they have the funds toenforce and defend a CE should they need to.How common are violations?It is difficult to calculate the risk a land trust faces in holding CE’s, especially in Canada where the CE is a relatively new tool(the oldest CE legislation in Canada is only 15 years old (1995)). There are no official statistics in Canada on how often minor ormajor violations occur, the number of cases settled out of court or cases that have gone to trial. These statistics are importantfor land trusts to cost out the expenses associated with enforcement and legal defense. However, lessons can be drawn fromthe United States where CE’s have been used as a conservation tool for over 100 years.The majority of easement violations are caused by the landowner or a third party who did not understand the easementrestrictions or were not aware of the conservation easement. A 2007 research project by the LTA suggests that for every 20 CEheld by a land trust; the land trust should expect one violation to some degree annually. The LTA suggests as a guide, “a landtrust can expect 1 litigated easement violation over a 10-year period for every 300 easements it holds. A land trust can alsoexpect 1 easement enforcement action (not necessarily litigated) costing more than $2,500 to resolve, over a 10-year period,for every 100 easements it holds.” A review of this guideline by Land Trusts suggested easement violation rate will increase inthe future and the above guidelines are modest. Interestingly, a 2008 conservation defense insurance survey reported anincrease in the rate of easement violations over previous years; this was likely due to a recent increase in land transfers to anext generation of landowners.In most cases landowners are willing to correct the mistake. However sometimes this is not the case and a land trustresponsible for resolution of the violation may need to use a series of approaches, such as communication and education,letters, amendments to CE, mediation and in extreme cases, legal action to uphold the CE. In 2004, a Conservation EasementViolation and Amendment Study tracked the results of 75 major violations in the US, 52 were resolved outside of court while 231 This document was originally written by the Miistakis Institute on behalf of The Foothills Land Trust as an Appendix to “Enforcement andLegal Defense, Module 3” produced by Paskwa Consulting for the Alberta Land Trust Alliance with funding from the Calgary Foundation andThe Alberta Real Estate Foundation. www.foothillslandtrust.org
  2. 2. were resolved by the courts. Major violations included boundary disputes, timber harvest and/or structures being built outsideCE designated building envelopes. Of the 23 reported cases that were decided by the courts 20 had good conservationresults.The most common major violations included: • prohibited surface alterations, • prohibited cutting of vegetation, and • construction of prohibited or unauthorized structures.From these cases land trusts learned they needed to change polices and documentation including: • documenting the landowner’s intent at the signing of the CE, • very clear language in easement documents, • a notification process for new landowners, and • increased efforts to maintain open and communicative relationship with landowners and • more frequent monitoring.Variables influencing violation ratesThere are a number of variables that can influence a land trusts easement violation rate, many of which the land trust cancontrol.The Land Trust Alliance (LTA) has identified a number of variables that may influence risk to a land trust: • Number of CE’s held by a land trust (more easements = more risk), • Types of restrictions (affirmative obligations = more risk), • Quality of CE, baseline agreement and monitoring reports (clearly written CE, baseline and monitoring report that follow a consistent policy = less risk), • Consistency in monitoring (regular monitoring = less risk), • Record keeping (well kept, clearly written records = less risk), and • Relationship with landowner (open and communicative relationships with landowner = less risk).Many of these variables can be influenced by land trusts to reduce the risk associated with a CE. A land trust can reduce therisk of easement violations and increases its ability to defend an easement by maintaining healthy relationships with thelandowner, ensuring good record keeping and developing a violation resolution policy and procedure to guide enforcement ofconservation easements. healthyMaintain healthy landowner relationsLand trust experts consulted in Canada and the Land Trust Alliance literature stress the importance of building andmaintaining healthy landowner relationships. Violations and challenges are often associated with second or third generationlandowners who did not enter into the CE with the land trust. A policy geared toward new landowners, such as meeting andreviewing the CE with new landowners as soon as possible is important. Surveys in the US indicate violations by newlandowners often occur prior to meetings held with the land trust holding the easement. Often, land trusts are not notifiedhand of an owner change and many land trust do not have a mechanism to be notified when there is a new owner. Regularcommunication with the landowner will help to increase the likelihood that a land trust is aware of an ownership change.Regular communication with the landowner is the first line of enforcement and legal defense and should be considered a highstewardship priority. Many land trusts work with landowners on habitat management projects (weed pulls, fence mending,and water systems), publish newsletters and host workshops to help communicate best management practices. Outreachactivities with the landowner help to strengthen the relationship between landowners and land trusts and also establishcommunication channels reducing the risk of violations and challenges to the CE.Clarity of language and Record KeepingOther areas where a land trust can help to reduce risk relates to the development and implementation of protocols around CE,baseline documentation and monitoring reports. All of these documents may be needed to help uphold the easement in court.A land trust needs to consider all official documents as lines of defense and therefore remove all vague language fromtemplates and protocols, ensure the intent or purpose of the CE is well defined, maintain good records of all communications www.foothillslandtrust.org
  3. 3. with landowners and maintain clear, consistent baseline and monitoring reports. It is highly advised that landowners and landtrusts sign baselines and monitoring reports to help document communication and agreement over the condition of the land.The wording of easement restrictions should be carefully considered. A landowner should be able to easily interpret therestrictions to increase likelihood of compliance. In addition, a land trust needs to have detailed documentation on how theyare monitoring the property to determine if restrictions have been violated. Some CE’s have affirmative obligations, whereby aclause in the CE outlines management goals or conditions that need to be met. For example an affirmative obligation may bethat range health condition must be maintained at a certain score. A land trust with affirmative obligations needs to considerhow they will monitor and measure the clause to ensure property is in compliance.Developing protocols for maintaining, storing and destroying records also represents an important line of defense for a landtrust.Creating a Conservation Easement Violation PolicyIt is advisable for a land trust to develop a conservation easement violation policy and outline a procedure for responding toviolations (see Handling Violation below). Conservation easement violation policies typically revolve around two key premises,a land trust seeks to communicate and address violations with a landowner in a non adversarial way and a land trust seeks toaddress violations quickly to uphold and protect the purpose of the easement. The policy includes information about whowithin the land trust - staff, volunteer or board member, is responsible for reporting the violation and communicating with thelandowner. In addition the land trust should outline a procedure for resolving violations that would include at which point inthe process a land trust contacts an attorney or seeks legal advice.All violations are not created equally and it is advisable that a land trust be able to rate the severity of the violation in relationto the CE purpose or intent. To assist in rating the severity and scope of a violation the LTA has identified different types ofviolations, such as minor, moderate and major.A minor violation includes activities that negatively impacts the CE purpose but can be restored to original condition at minorcosts or activities where a slight amendment to the CE to accommodate the violation would have little to no effect on theoverall purposes of the CE. For example a minor violation may include a building that occurs only slightly outside the permittedbuilding envelope. Minor amendments can provide the land trust with more flexibility for resolving a violation but the land trustneeds to be aware of Environment Canada requirements for amendments when the CE was first granted under the Eco-giftprogram.A moderate violation includes activities that negatively impact the purpose of the CE, but can often be mitigated and mayoccur on a small area, such as prohibited improvements to a road. A major violation includes activities that have a significantnegative impact on CE purpose and are often relatively permanent. For example construction of a house that is not permittedwithin the CE agreement or subdivision of the land when it is not permitted.There are also violations where the terms or purposes of the CE are not impacted by the violation; these are often referred toas technical lapses. For example, a landowner may replace a structure as permitted in the CE but fail to notify the land trust asper the agreement. In this case there is no impact to the conservation value of the property and the intent of the CE is upheld.The conservation easement violation policy can be designed to address violations according to their level of severity andscope.Another factor to consider when developing a conservation easement violation policy is if the landowner is required toreimburse the land trust in the event of a violation requiring remediation. Some land trusts have clauses in the CE whereby thelandowner is required to reimburse the costs associated with enforcement by a land trust, ViolationsHandling ViolationsThe LTA suggests seven steps for addressing violations: 1. identify a potential violation (through monitoring), 2. document the potential violation, 3. review documentation, www.foothillslandtrust.org
  4. 4. 4. determine if it is a violation and the severity of violation in relation to the purpose of the easement, 5. identify potential mitigation factors and choose the appropriate action, 6. work with the landowner to address violations, and 7. record the final resolution and lessons learned.The goal for a land trust is to implement a violation resolution with the landowner that ensures the purpose of the CE is upheld.There are a number of violation resolution tools that a land trust can employee to help resolve a violation, such as education,negotiation, remediation, amendments, mediation or judicial. Likely a land trust will use a combination of these tools toaddress each situation and the line between these tools is often blurred.Violations are typically caused by landowners, who do not understand or have misinterpreted the CE. Having a positiveconversation with the landowners about their goals and needs and engaging in creative problem solving with the landownercan help to build relationships. If the violation is a result of a misinterpretation it may help to walk through the CE with thelandowner again.It is important that a land trust have a person they trust negotiate with the landowner to resolve the violation. Negotiationinvolves understanding the landowners needs and goals and working with them to develop a solution that remediate theviolation. Remediation is a process for ensuring the conservation value of the property is restored should the violation havenegative impact. It is important for the land trust to be flexible when developing solutions, for example, a violation where alandowner builds outside of the building envelop may be resolved through mitigation or offsets else where on the property,such as giving up an areas where development was permitted in the CE. This resolution would require amending the CE toremove the building areas from the CE and permit activity in the building envelope where the violation occurred. Over all theintent or purpose of the CE is upheld. If the CE is part of the Ecogift program, the land trust may need to seek advice from theprogram to ensure the amendment is acceptable.If a resolution between the landowner and land trust can not be reached, an independent third party mediator may beappropriate. Mediation is not binding, so if a resolution is not achieved, the land trust may consider litigation.Litigation is a tool of last resort, when all other options to work with a landowner have failed. Taking a landowner to court iscostly, time consuming and damaging to relationship building. However, in rare cases there may be no other options.Many land trusts have developed flowcharts on how to handle easement violations that assist the land trust in addressing theviolation. In addition, some have developed procedural templates for dealing with violations (for examples of these templatesrefer to Managing CEA’s in Perpetuity published by the LTA). Procedures for addressing violations should consider whodetermined the best course of action and who in the land trust organization should be in contact with the landowner topresent a resolution. For violations deemed major, land trusts should consider legal advice before approaching a landowner.A land trust should also identify who pays for the costs of addressing violations, in some cases the landowner is required topay the costs back to the land trust associated with enforcement of easement violations or legal defense. However some landtrusts prefer not to charge the landowner if a violation is settled through communication between a landowner and land trustas a way of maintaining good relations. However, many land trust have a clause in the CE that requires the landowner pay forthe legal costs associated with a law suit.Amending a CEA land trust may recognize that an amendment to a CE may strengthen the CE or improve the ability of a land trust to defendthe CE. Usually a land trust has a policy that all amendments result in a neutral or positive change to the conservation value ofthe property. For example a landowner may want to remove the building rights from a CE or change the location of a buildingenvelope and it does not result in a negative impact to the intent of the CE. The landowner in this case may request anamendment to the CE. Most land trusts will face the issue of having to amend an easement to clarify language or intent of CEor resolve a violation where there is no loss of conservation value to CE. Amending a CE is an evolving field and requires eachsituation to be assessed in the context of the CE, local law and requires a balance approach of upholding the conservationinterests of the property and maintaining good landowner relations. www.foothillslandtrust.org
  5. 5. Within the land trust community there is some disagreement on how often a land trust should consider an amendment; fromalmost never (it should always be discouraged), to amend at will. A land trust needs to engage in discussion with the board todecide on their philosophy and develop an amendment policy to guide future decisions.External RisksIn addition to variables the land trust can control, a survey by the University of Wisconsin (Betterley Risk Consultants, 2008)highlights some external variables influencing the risk to a CE being challenged legally, such as, • Increasing real estate prices as a result of alternative land uses, • Conversion rate: changes in surrounding land use, such as development pressure or cultivation • Sales of conserved land to successor owners, and • Third party trespassA land trust may not be able to control external variables, but understanding these variables in the context of the local settingcan assist a land trust in assessing the risk to a CE. For example, although not a common occurrence, a property’s value fordevelopment may become so high, it becomes a possibility that a developer may purchase the land and try to terminate the CEin court. The amount a developer could make from a development on the CE property would enable the developer to justify theexpense of litigation. Even though it is likely the CE would be upheld, the land trust would need to have a substantial amount offunding available for legal defense in this case. Therefore a CE associated with areas where land prices and land useconversion rates are high are at a higher risk and need more attentive monitoring and communication with landowners thanother CE properties.Risk also increases with landowner succession, therefore a land trust should have a mechanism in place whereby they knowwhen land exchanges hands and are able to communicate and meet with the new landowner to review the CE as soon aspossible. Land trusts have identified higher levels of violations associated with new landowners especially wherecommunication between the landowner and land trust didn’t occur in a timely fashion.In addition, there are cases where a third party trespasses and violates an easement, such as a neighbor, oil and gasdevelopment and/or utility company removing vegetation or trees. Many land trusts stress the importance of getting to knowneighbors to CE properties they hold. This can be done through meet and greet events or workshops hosted by the land trust.In addition, designing best practice manuals and working with the landowner and utilities or resource extraction companiescan help to reduce the impact on the conservation value of the CE.How much is enough for enforcement and legal defense.The costs to a land trust of addressing a violation is difficult to determine, the LTA suggests a land trust can expect to 1violation per 20 conservation easements annually. The costs associated depend on a variety of factors, severity and scope ofviolation, relationship with landowner and tool used to resolve the violation. It is prudent that a land trust think aboutincorporating some funds into their stewardship calculations to cover enforcement of violations that are settled out of court.Guidelines from the LTA suggest that a land trust should have $5000 put away for enforcement actions (not litigation) and anaddition 150-300 per easement once the land trust holds more than 15 easements.Although a land trust aims to avoid going to court, sometimes to enforce a CE or defend against a challenge a land trust mayfind it has no other choice. This can be costly for a land trust. A review in 2005 of US land trusts indicated that the averagelitigation costs “range from $25,000 to $250,000 for a typical trial in a typical jurisdiction. The average historic cost of all claimswas $38,000 including those that did not go to a full trial. This does not capture the risk of an appeals process.” Althoughthese are average costs, there are several examples where land trusts spent well over $250,000 on outside litigation fees toprotect or enforce an easement.The Land Trust Alliance has a guideline for legal defense for litigation purposes, whereby a land trust acquires at a minimumamount of $50,000. After a land trust has acquired fifteen CE an additional $1,500-3,000 should be added to the fund for eachCE. www.foothillslandtrust.org
  6. 6. A land trust should consider costs associated with enforcement and legal defense as components of its stewardshipprogramming. Many land trusts have developed dedicated stewardship funding to cover the costs of managing a land trust inperpetuity which includes funding for enforcement and defense. Most of the costs associated with stewardship can beaccurately estimated, while costs associated with enforcement and legal defense are difficult to assess. If a land trust usesthe principle of a stewardship fund to pay for legal defense, they need to have a plan in place to replenish it. Alternatively, aland trust may create a separate legal defense fund and institute a defense fund policy on how the money can be spent. Thereis some consideration that a dedicated legal defense fund may help to deter legal challenges by landowners.There are various mechanisms for generating funds for defense funding and likely a combination of fundraising approachescan be used (refer to Module 3 for fundraising ideas). The Ontario Heritage Trust moves some of the interest generatedannually from their stewardship endowment for each property (5 %) and transfers it to a legal defense fund to help the fundgrow over time.Defense Fund PolicyIt is recommended that a land trust develop a policy around legal defense funding, that highlights how funds are acquired,identifies a financial model and when a land trust accesses legal defense funding. If a land trust develops separatestewardship and legal defense funds, there needs to be clarity on when an activity is considered stewardship vs. legaldefense. Through consultation with individuals running land trusts in Alberta, the general consensus was that minor,moderate and major violations resolved between the land trust and landowner and legal council relating to interpretations ofthe CE, amendments to the CE are all considered stewardship. When an enforcement action requires mediation or litigation, orif the land trust is challenged legal defense funding is utilized.Funding Legal DefenseLand trusts address enforcement and legal defense through different methods, such as 1. Self insuring- A land trust secured fund specifically set aside for legal defense. 2. In-house counsel 3. Retained and/or pro bono counselA common practice is for a land trust to self insure whereby they set up a fund for legal defense. However, a survey of the USland trust community in 2005 noted that many land trusts did not currently have adequate funding put aside to address legaldefense. Only 19% of interviewed land trusts had sufficient funds to address one major legal defense resulting in a trial (basedon $70,000 as a conservative cost for going to trial). It is important to consider how the land trust plans to raise funds for legaldefense and how they might reimburse the funds should the funds be used.Larger land trusts will usually have legal council on staff to provide advice and address challenges and enforcement issues.Smaller land trusts may consider acquiring board members that can provide some legal council pro bono.A small land trust may not have the resources to adequately address legal defense. The LTA has been investigatingcommunity approaches for addressing and learning about enforcement and legal defense.Community Approach to Legal DefenseThere is some concern, that in the future there will be an increase in the risk of challenges to CE’s as land prices increase,there is an increase in the number of second generation landowners, and/or land uses in the area change to be lessconducive to conservation. These factors may contribute to a CE being challenged in court as a landowner attempts to modifyor overturn the CE. A land trust needs to be in a position to legally defend and uphold an easement. It can be difficult for a landtrust to build the resources to defend an easement, especially if the potential financial gain by the landowner is greater thanwhat the land trust is able to contribute toward defense.Research projects in the US have explored community approaches to reduce the burden of legal defense. Some of theactivities include forums for sharing knowledge and lessons learned, relying on third party assistance or development ofcommunal defense insurance. Discussion on communal approaches is less developed among Canadian land trusts likelybecause CE are a newer conservation tool, landowners who signed the CE are still on the property and cases of litigation inCanada are rare. Regardless, it is advisable that the land trust community prepare itself for the possibility of a challenge. The www.foothillslandtrust.org
  7. 7. ideas explored below are to instigate discussion within the land trust community. Communal approaches have not been fullyexplored in the Canadian legal context.Legal Defense Learning CentreThe LTA has developed a legal defense learning centre, whereby land trusts can review documents, reports and results ofcourt cases to help inform their practices and reduce the risk of challenges. A Canadian equivalent whereby land trusts canshare lessons learned from enforcement and challenges will help the community proactively reduce the risk of challenges.Third Party AssistanceThere are examples where a third party may help a land trust defend a CE, such as government support, non-profits designedto protect conservation interests (e.g. Ecojustice),or pooled legal advice from law schools or law firms.In the US, a number of states actively protect the intent of a CE because it represents a public service. For example, the stateof Massachusetts provides legal defense support to conservation easements, as all CE are approved by the state, which has avested public interest in upholding easements. A research paper by Jessica Jay (2007), noted that “Massachusetts preparedto step into its first enforcement action in 1997, when the Attorney General wrote to landowners violating their conservationeasement and indicated the Attorney General’s intent to become involved in the case. The landowners settled out of courtshortly thereafter and it is thought that the perceived threat of government involvement in the enforcement action was enoughto encourage these landowners to resolve the issue out of court.” Although this has proven to be an effective mechanism forprotecting CE, government involvement may scare some private landowners into entering an agreement or it may not be anoption in many regions.Another possibility is the exploration of pooled defense approach; this could take on many forms, but one approach couldinclude land trust pooling resources and fundraising as a community to generate a fund to be used for legal defense. This typeof approach would require the development of a set of criteria to enable the community to decide on when and the fundswould be dispersed.Additionally, groups such as Ecojustice (formally Sierra Legal Defense) could be approached to assist with legal defensecases.Their ability to help would depend on timing, how precedent setting the case is and Ecojustice’s capacity.Communal Defense InsuranceThe LTA has investigated a communal insurance program, whereby land trusts pay a fee per easement per year to ensureprotection against challenges and assistance with enforcement of CE when violations occur. The risks associated with theseactivities are often very difficult to assess and commercial insurance companies in the US were not interested in providinggroup insurance. The LTA is in the process of establishing its own captive insurance program and are currently seekingcommitment from membership to proceed with a national communal defense program.Some of the concerns expressed by land trust experts in Canada include the variability in standards between different landtrusts (tying one’s fate to another), a smaller number of land trusts and CE’s to contribute toward a communal defenseapproach and different insurance and CE legislation between provinces. Therefore, a communal approach to legal defense islikely best explored by provincial / regional alliances aimed at supporting the land trust community.Given the lessons learned from the US experience, it would seem prudent that the land trust community in Canada proactivelyexplore options to assist the community to enforce and defend conservation easements in the future. www.foothillslandtrust.org
  8. 8. ReferencesAldrich, R. and J. Wyerman. 2005. National Land Trust Census Report. Land Trust Alliance.Bates, Sylvia. 2007. Conservation Capacity and Enforcement Capability. Land Trust Alliance.Betterley Risk Consultants Inc. 2008. An Analysis of Historic Data Relating to Easement Violations, Land Protection andDefense Insurance Feasibility. Land Trust Alliance.Canadian Land Trust Alliance. 2005. Canadian Land Trust Alliance: Standards and Practices. Modified by the Canadian LandTrust Alliance from Land Trust Standards and Practices © 2004 by the Land Trust Alliance with permission from the Land TrustAlliance.Doren, J.V. 2004. 2004 Conservation Easement Violation & Amendment Study: Major Violation Follow-Up Questionnaire. LandTrust Alliance.Doscher, P., B. Lind, E. Sturgis and C. West. 2007. Determining Stewardship Costs and Raising and managing Dedicated Funds.The Land Trust Alliance.Heidenreisch, B. Draft 2009. A Stewardship, Monitoring and Costing Guide for Natural Heritage Conservation Agreements.Ontario Heritage Trust and Ontario Land Trust Alliance.Michalsky, S. 2010. Dedicated Stewardship Funding Training Module 3. Alberta Land Trust Alliance.Rately- Beach L. 2009. Managing Conservation Easements in Perpetuity: Fulfilling the Promise of Permanence through KeepingRecords, Managing Amendments and Upholding Conservation Easement Integrity. Land Trust Alliance.Watkins, M.J. 2007. The Management of Private Conservation Lands by Land Trusts in Canada. Faculty of Graduate Studies,University of Guelph.Prepared by Miistakis Institute for Foothills Land TrustWith support from Alberta Real Estate Foundation and The Calgary FoundationDisclaimerThis report was created for the Foothills Land Trust and may or may not be appropriate for all land trustorganizations. It is available for any land trust to use and to adapt for its own purposes. Foothills Land Trust is notresponsible for any results achieved or decisions made through the application of the results of this report. www.foothillslandtrust.org

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