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\subsection{Observations}  To examine the observed properties of dwarf galaxies in the LG, we use the compilation from \citet{McConnachie2012}, which includes all galaxies known at that time within $3 \mpc$ of the Sun.  We select ``dwarf'' galaxies as $\mstar \lesssim 10^9 \msun$, $\mstar\lesssim10^9\msun$,  including the LMC ($\mstar = 1.5 \times 10^9 \msun$).  %but not M33 ($\mstar = 5 \times 10^{10} \msun$). ($\mstar=1.5\times10^9\msun$).  The catalog includes the distance of each dwarf galaxy  from both the MW and M31, and we define ``satellites'' as those within $300 \kpc$ $300\kpc$  of either host, motivated by the sharp transition in star formation, gas, and morphological properties within this distance. $300 \kpc$ $300\kpc$  also coincides with the median virial radius, $\rvir$, for our simulated MW/M31 halos (see below). In addition to the data in \citet{McConnachie2012}, we also include the more recent measurements or upper limits of cold atomic gas mass from \citet{Spekkens2014}.  We do not include the recently discovered ultra-faint satellites of the MW from the Dark Energy Survey \citep{Koposov2015, DES2015}, though if they are all quiescent galaxies, their inclusion would barely change our results.  The observed Observed  dwarf galaxies show a tight correlation between their morphology, star formation, and cold gas content, such that all (?) of the dwarf spheroidals have little-to-no detectable gas or ongoing star formation, and all (?) of the dwarf irregulars have a significant fraction of their baryonic mass in cold gas and ongoing star formation. Thus, we define ``quiescent'' satellites as those that have $\mgas/\mstar<0.1$ or are classified as having spheroidal morphology if they have no cold gas constraints.  Thus, by this definition, the only star-forming, gas-rich satellites in the LG are: LMC ($\mstar=1.5\times10^9\msun$, $\mgas/\mstar\approx0.3$) and SMC ($\mstar=4.6\times10^8\msun$, $\mgas/\mstar\sim1$) around the MW, and LGS 3 ($\mstar=9.6\times10^5\msun$, $\mgas/\mstar\approx0.4$) and IC 10 ($\mstar=9\times10^7$, $\mgas/\mstar\approx0.6$) around M31.  %(While Sculptor has $\mgas / \mstar \approx 0.096$, we consider it quiescent based on its morphology and lack of recent star formation \citep{Weisz2014a}).