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Yes, it's correct; it uses the past perfect tense.

Edit: you can find a better answer here (and this question is actually a duplicate of that one).

Jonik
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  • You might enjoy this absurd example: http://en.wikipedia.org/wiki/James_while_John_had_had_had_had_had_had_had_had_had_had_had_a_better_effect_on_the_teacher – Chris B. Behrens Dec 23 '10 at 15:38