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It sounds like the event was pretty traumatizing.
If they were blocking the entire road then you could have called the police. If they were no more than two abreast riding as far to the right as was safe then they were fine.
It's quite common for a group ride to act as a single rider at a stop sign safety permitting. This is not only faster for everyone but reduces the chance of confusion. It may technically not be legal but I've never once heard of an instance where it was an issue.
Posted from my iPhone/Mobile device
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