author: CAHILL, District Judge.

text:
    Barbara G. HOLLENBECK, Administratrix of the Estate of Virginia M. Gutting, Deceased, Plaintiff, v. FALSTAFF BREWING CORPORATION, Defendant.
    No. 81-0791 C (4).
    United States District Court, E.D. Missouri, E.D.
    Sept. 6, 1984.
    On Application For Attorney’s Fees Feb. 20, 1985.
    As Amended Feb. 28, 1985.

      David G. Dempsey, Shifrin, Treiman, Barken, Dempsey, & Ulrich, St. Louis, Mo., for plaintiff.
    Theodore F. Schwartz, St. Louis, Mo., Joseph L. Alioto, Alioto & Alioto, San Francisco, Cal., for defendant.
   MEMORANDUM, FINDINGS OF FACT, and CONCLUSIONS OF LAW

CAHILL, District Judge.

This case has a long judicial history and pedigree. It essentially involves the rights of the litigants to proceeds from a death benefit plan that Falstaff had adopted for several of its executives. The plan is known as the “CBS Plan.” Under the CBS Plan, Falstaff purchased life insurance policies on the individual lives of the executives that were covered by the Plan. At the death of a covered executive, the Plan provided that the executive’s beneficiaries would receive the proceeds of the life insurance policy minus the amount of premiums paid by Falstaff and three percent interest on those premiums. Ferdinand Gutting was one of the Falstaff executives who was covered by the CBS Plan. In early 1975 Paul Kalmanovitz purchased a controlling interest in Falstaff. Shortly after Kalmanovitz’s takeover, Gutting and several other Falstaff executives left Falstaff’s employ.

Gutting died in 1980 and his widow made a claim for the benefits under the CBS Plan shortly thereafter. Falstaff, however, did not pay the CBS Plan benefits to Gutting’s widow. Defendant argues that Gutting’s beneficiaries have no right to any benefits under the terms of the CBS Plan. Paragraph 6 of the plan provides:

All payee’s benefits payable under the terms of this agreement shall be forfeited if ... he ... is discharged for proper cause.
As used in this agreement, the term “proper cause” shall include, but not be limited to (1) failure to perform assigned duties with reasonable skill and diligence, (2) gross misconduct, or (3) conviction of a felony.

Defendant asserts that it fired Gutting for proper cause and therefore under paragraph 6 of the CBS Plan, Gutting forfeited the benefits of the Plan. Among the reasons defendant gave as constituting proper cause for Gutting’s dismissal are Gutting’s alleged: (a) involvement in paying a large sum of money to a Louisiana state legislator under suspicious circumstances, (b) failure to stop payments of improper rebates to retailers (known in the industry as “black-bagging”), (c) acquiesence in Falstaff’s violation of federal alcohol laws, and (d) fraudulent failure to disclose in a financial statement that Falstaff had mortgaged nearly all of its assets. Plaintiff disagrees that Gutting was fired for proper cause. Plaintiff contends that Falstaff fabricated these “reasons” as a convenient way to avoid paying benefits to Gutting’s beneficiaries under the CBS Plan.

Plaintiff has sued defendant in two counts. Count I purports to state a cause of action under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 (1976) (ERISA), for the recovery of benefits under the CBS Plan. Count I specifically alleges that Gutting was not fired for cause, and even if he was fired for cause, the forfeiture provision of the CBS Plan is unenforceable under ERI-SA. See 29 U.S.C. §§ 1103 & 1106. Count I seeks $375,000 in compensatory damages (the estimated amount of the death benefits payable under the CBS Plan) and $4,000,000 in punitive damages. Count II purports to state a cause of action for breach of fiduciary duties under Missouri common law. Count II also seeks $375,000 in compensatory damages (the estimated amount of the death benefits under the CBS Plan) and $4,000,000 in punitive damages.

In 1982, summary judgment was entered against plaintiff in this case. 541 F.Supp. 345. Plaintiff’s former counsel had failed to answer defendant’s requests for admissions on time. One of the defendant’s requests asked plaintiff to admit that Gutting was fired for cause. Because of plaintiff’s counsel’s failure to file timely responses, the district court ruled that defendant's requests for admissions could be deemed as admitted. Shortly thereafter, the district court entered summary judgment finding that plaintiff had admitted that Gutting had been fired for cause and that the forfeiture clause was not rendered unenforceable by ERISA, 29 U.S.C. §§ 1053, 1103, or 1106. Plaintiff appealed. The Eighth Circuit reversed and remanded. The Eighth Circuit specifically vacated the original district court’s summary judgment regarding the effect of ERISA on the CBS Plan and requested that the district court hold further rulings on ERISA issues in abeyance “until such time as it becomes necessary to decide that question.” See Gutting v. Falstaff Brewing Corp., 710 F.2d 1309, 1312 n. 4 (8th Cir.1983). On remand, the case was transferred to this Court.

After remand, the parties asked the Court to decide several issues of law concerning the effect of ERISA on the CBS Plan. The Court has heeded the Eighth Circuit’s request and abstained from ruling on these issues. See Gutting v. Falstaff, No. 81-791-C(4), mem. op. at 2-3 (E.D.Mo. Dec. 2, 1983). Now that the case has been tried, the Court finds that it is necessary to resolve several key legal issues concerning ERISA. The Court also wishes to address several other important legal issues that were raised during trial. The foremost issue, however, is whether the CBS Plan is governed by ERISA, and if so, to what extent does ERISA provide the applicable rules of decision for this case.

I. Applicable Rules of Decision.

The scope of ERISA’s coverage is defined in 29 U.S.C. § 1003. ERISA applies to any “employee benefit plan if it is established or maintained (1) by any employer engaged in commerce or in any industry or activity affecting commerce....” It is beyond peradventure that Falstaff was and is engaged in activities “affecting commerce.” Thus, the key question is whether the CBS Plan is an “employee benefit plan.” Section 1002(3) defines “an employee benefit plan” as “an employee welfare benefit plan or an employee pension benefit plan or a plan which is both....” In pertinent part, the term “employee welfare benefit plan” is defined as

Any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer ... to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance ..., benefits in the event of ... death....

This definition describes with perfect acuity the CBS Plan which Falstaff established and maintained through the purchase of insurance to provide death benefits for the beneficiaries of several of its employees. Therefore, it is apparent to this Court that the CBS Plan is an employee welfare benefit plan within the coverage of ERISA.

In contending that the CBS Plan is not covered by ERISA at all, the defendant at various times has asserted that the substantive ERISA provisions that plaintiff relies on to render the forfeiture clause unenforceable did not become effective until at least 1976. Defendant argues that Gutting was fired and forfeited his benefits in 1975, before these substantive ERISA provisions became effective. Therefore, defendant contends that ERISA cannot be applied retroactively to govern this case. Defendant also maintains that this is how the original district court had ruled in its 1982 order granting summary judgment.

For several reasons, defendant’s argument lacks merit. First, whatever the import of the original district court’s order granting summary judgment, the Eighth Circuit specifically vacated the district court’s ERISA rulings in that order. See Gutting v. Falstaff Brewing Corp., 710 F.2d at 1312 n. 4. Second, plaintiff has abandoned her reliance on 29 U.S.C. § 1053 which did not become effective for the CBS Plan until January 1,1976. Section 1053 of Title 29 outlaws “bad boy” clauses; that is, clauses which require accrued benefits to be forfeited if the employee is fired for cause or obtains employment with a competitor. Instead, plaintiff only relies on 29 U.S.C. § 1103(c)(1) and § 1106(a) & (b), both of which became effective on January 1, 1975. See 29 U.S.C. § 1114(a). Neither party contends that plaintiffs cause of action accrued before January 1, 1975. Third, ERISA’s coverage, jurisdiction, and preemption provisions became effective on or before January 1, 1975. See 29 U.S.C. §§ 1003, 1052, & 1144. Taken together, these three provisions vest jurisdiction in federal courts over causes of action relating to ERISA plans that accrue on or after January 1, 1975. They also mandate that those causes of action must be resolved exclusively under a uniform body of federal law. Congress clearly expressed that this mandate included the authority and responsibility to create federal common law where there are interstices in the substantive provisions of ERISA. See Dependahl v. Falstaff Brewing Corp., 653 F.2d 1208, 1216 (8th Cir.1981); Landro v. Glendenning Motorways, 625 F.2d 1344, 1351 (8th Cir.1980). Accord Thornton v. Evans, 692 F.2d 1064, 1079 (7th Cir.1982); Murphy v. Heppenstall Co., 635 F.2d 233, 237 (3d Cir.1980). Thus, for causes of action accruing in the gap period between January 1, 1975, and the effective date of an otherwise applicable substantive ERISA provision, the general federal law of ERISA still governs the action, as long as the action “relates to” “an employee benefit plan” within the meaning of §§ 1003 and 1144. See Amory v. Boyden Assoc., 434 F.Supp. 671, 672-73 (S.D.N.Y.1976). See also Flynn v. Aetna Casualty & Surety Co., 698 F.2d 758, 759 (5th Cir.1983), affirming 558 F.Supp. 861, 864-65 (N.D.Tex.1982); Woodfork v. Marine Cooks & Stewards Union, 642 F.2d 966, 972-73 (5th Cir.1981); Lee, ERISA’s “Bad Boy:’’ Forfeiture for Cause in Retirement Plans 9 Loy.Unv.L.J. 137, 168-173 (1977). Again, neither party contends that plaintiff’s cause of action accrued before January 1, 1975. Accordingly, this Court holds that ERISA, and its supporting federal common law, provide the applicable rules of decision to resolve all disputes between these litigants that relate to the CBS Plan. Dependahl, 653 F.2d at 1216, cf. Cowan v. Keystone Employee Profit Sharing Plan, 586 F.2d 888, 892-94 (1st Cir.1978).

Defendant’s major defense in this case is that Gutting’s beneficiaries are not entitled to the death benefits of the CBS Plan because Gutting was fired for “proper cause” and thereby forfeited his death benefits. In enacting ERISA, Congress was deeply concerned over the use of such “bad boy” clauses to forfeit an employee’s vested ERISA benefits. See Winer v. Edison Brothers Stores Pension Plan, 593 F.2d 307, 310-11 (8th Cir.1979). In accordance with Congress’ strong policy against the use of bad boy clauses, federal courts have subjected bad boy clauses to a rigorous reasonableness test as a matter of federal common law whenever the substantive non-forfeiture provisions of ERISA are not applicable. See e.g., Flynn, 558 F.Supp. at 864-65, aff’d 698 F.2d 758 (5th Cir.1983). As part of this federal common law rule of reasonableness, a presumption is raised that use of bad boy clauses to forfeit ERI-SA benefits is unreasonable. Of course, this presumption is rebuttable, but defendant bears the burden of proving that the factual prerequisites of the bad boy clause have been met and that use of the bad boy clause to forfeit plaintiff’s ERISA benefits based on those facts is reasonable. See, e.g., Amory, 434 F.Supp. at 673. Because plaintiff’s cause of action arose after January 1, 1975, and 29 U.S.C. § 1053 is not otherwise applicable, the Court will follow the federal common law rule of reasonableness in reviewing Falstaff’s affirmative defenses.

II. Pre-emption.

Count II of plaintiff’s amended complaint purports to state a cause of action for breach of fiduciary duties under Missouri common law. However, under 29 U.S.C. § 1144, ERISA preempts “any and all state laws insofar as they ... relate to any employment benefit plan....” Save for a few limited exceptions not applicable here, ERISA broadly preempts any state and local regulation of employee benefit plans. Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 525, 101 S.Ct. 1895, 1907, 68 L.Ed.2d 402 (1981); Landro, 624 F.2d at 1351. The state law at issue need not specifically concern subjects covered by ERISA to be preempted. Alessi, 451 U.S. at 525, 101 S.Ct. at 1907; Pervel Industries, Inc. v. Connecticut Commission on Human Rights, 468 F.Supp. 490, 492 (D.Conn.1978), aff’d 603 F.2d 214, cert. denied, 444 U.S. 1031, 100 S.Ct. 701, 62 L.Ed.2d 667 (1980). Rather, even a state’s general common law will be preempted by ERISA if, in its present application, the common law “relates to” an employee benefit plan. Dependahl, 653 F.2d at 1215-16; Woodfork, 642 F.2d at 970; Ogden v. Michigan Bell Telephone Co., 571 F.Supp. 520, 523-24 (E.D.Mich.1983) (state common law fraud cause of action is preempted by ERI-SA); Missouri ex rel. Montgomery Ward & Co. v. Peters, 636 S.W.2d 99, 101-02 (Mo.App.1982) (Peters) (cause of action for breach of fiduciary duties under Missouri common law is preempted by ERISA). See also Dairy Industry and Allied Foods of St. Louis, Missouri Employees’ Union Pension Fund v. The Manufacturers Life Insurance Co., No. 82-1873-C(4) mem. op. at 2-4 (E.D.Mo. Sept. 14, 1983) (Missouri common law breach of fiduciary duty cause of action is preempted by ERISA). As the Supreme Court has said: “A law ‘relates to’ an employee plan, in a normal sense of the phrase, if it has a connection with or reference to such a plan.” Shaw v. Delta Airlines, Inc., 463 U.S. 85, 103 S.Ct. 2890, 2900-91, 77 L.Ed.2d 490 (1983). In other words, if state common law is being relied upon to resolve a dispute over the litigants’ rights and obligations that have their genesis in an employee benefit plan, then that common law is preempted by ERISA.

The Missouri common law principle that plaintiff invokes in Count II is that Falstaff tortiously breached its fiduciary duty by failing to pay the CBS Plan benefits to Gutting’s beneficiaries when Falstaff was obligated to pay the benefits under the terms of the CBS Plan. Thus, the specific obligation that plaintiff seeks to enforce via Missouri’s common law torts was created and is determined by the CBS Plan. Accordingly, no other conclusion can be drawn but that the Missouri common law which plaintiff relies on in Count II “relates to” an employee benefit plan covered by ERISA.

Plaintiff has argued strenuously that Count II cannot be preempted because Congress certainly did not intend to leave a victim of fraud or outright theft from an ERISA plan without some remedy to redress these serious wrongs. This argument misperceives the effect and purpose of federal preemption of state law. At the same time that ERISA preempts the field of state and local regulation of ERISA plans, ERISA also provides new uniform federal rules of decision which replace the 50 different regulatory systems that existed prior to ERISA. In fact, Congress considered federal preemption and replacement of conflicting and inconsistent state regulations as the "crowning achievement” of ERISA. 120 Cong.Rec. at 29,197 (statement of Congressman Dent). See also Hutchinson & If shin, Federal Preemption of State Law Under the Employee Retirement Income Security Act of 197f 46 U.Chi.L.Rev. 23, 35-43 (1978). Thus, preemption does not eradicate a fraud or theft victim’s remedies; rather, it only directs the victim to federal law for the source of his remedies. In this case, any number of ERISA’s substantive provisions, or the federal common law of ERISA, could have been invoked by plaintiff to redress the wrongs of which she complained in Count II. Ready examples are provided by the provisions plaintiff relied upon in Count I, as well as 29 U.S.C. § 1109. Although the Court might be able to recouch Count II as an ERISA cause of action, the Court will not do so for two reasons. First, plaintiff was adamant that Count II must be heard under Missouri law, even when faced with defendant’s argument, and this Court’s concern, that Count II would be preempted by ERISA. Second, as an ERISA claim, Count II would be redundant of Count I. Both counts allege the same essential acts and pray for the exact same damages. Therefore, the Court will simply grant defendant’s oral motion to strike Count II as preempted by ERISA and permit plaintiff to proceed under Count I. See Zittrouer v. Uarco, Inc. Group Benefit Plan, 582 F.Supp. 1471, 1477-78 (N.D.Ga.1984) (per Hall, J.) (following same procedure).

III. Jury Trial.

Defendant had originally demanded a jury trial in its initial answer. Defendant’s answer, however, denied that this case is governed by ERISA. No challenge to the jury demand was made prior to the day of trial, even though Eighth Circuit precedent indicated that ERISA actions are not triable by a jury. See In re Vorpahl, 695 F.2d 318, 319-22 (8th Cir.1982). Under Fed.R. Civ.P. 39(a), when a jury trial has been demanded, “the trial of all issues so demanding shall be by jury unless ... (2) the court ... of its own initiative finds that a right of trial by jury of some or all of those issues does not exist under the Constitution or statutes of the United States.” (Emphasis added.) On the day of trial, the Court took that initiative in this case by asking the parties to explain their positions as to whether the case could be tried to a jury.

The defendant explained that its position throughout this case was that this was not an ERISA case, but merely a state law action for breach of contract. Thus, believing that this was a state law contract case, defendant demanded a jury trial on plaintiff’s state law breach of contract cause of action. Defendant went on to clarify its position by stating that if the Court decided this case was governed by ERISA, then defendant objected to a jury trial because (1) defendant had not demanded k jury trial for an ERISA claim, and (2) there is no right to a trial by jury for ERISA claims.

Plaintiff’s position was equally equivocal. Plaintiff did not strongly contest that she had no right to a jury trial on her Count I ERISA claim. But plaintiff did argue strenuously that she had a right to a jury trial under Count II because Count II was a state law cause of action for breach of fiduciary duties which is triable by jury. Defendant’s response was that if the CBS Plan was governed by ERISA, then ERISA preempted plaintiff’s state law cause of action in Count II and Count II must be stricken. Plaintiff disagreed.

The key to resolving these conflicting positions was to decide whether this case was governed by ERISA. The Court, cognizant of the Eighth Circuit’s admonition not to decide any ERISA issues until it became absolutely necessary, accepted the suggestion that the case be tried to an “advisory jury.” See Fed.R.Civ.P. 39(b). This procedure left the Court several options. For example, if the Court ruled that the whole case was governed by ERISA and also found that there is no right to a jury under ERISA, the Court could treat the jury’s verdict as advisory and issue its own findings of fact and conclusions of law. On the other hand, if the Court ruled that only Count I was governed by ERISA and found that there was no right to a jury trial under ERISA, the jury verdict could stand as to Count II and would be advisory as to Count I. This procedure was a reasonable accommodation between the parties’ equivocal arguments and the Eighth Circuit’s concern that ERISA issues be decided as a last resort. Now that the trial has been completed and the Court has decided that the entire case is governed by ERISA, the Court will rule on the two issues it presented to the parties prior to trial. First, is there a right to a jury trial under ERISA? Second, if not, have the parties agreed by mutual consent to a trial by jury under Fed.R.Civ.P. 39(c)?

As a general matter, the clear weight of authority holds that there is no right to a jury trial in actions brought pursuant to 29 U.S.C. § 1132(a) of ERISA. See, e.g., In re: Vorpahl, 695 F.2d at 319-22; Hechenberger v. Western Electric Co., 570 F.Supp. 820, 822 (E.D.Mo.1983) (per Hungate, J.); Meyer v. Phillip Morris, 569 F.Supp. 1510, 1511 (E.D.Mo.1983) (per Nangle, J.). Accord Calamia v. Spivey, 632 F.2d 1235, 1236-37 (5th Cir.1980); Wardle v. Central States, 627 F.2d 820, 828-30 (7th Cir.1980). Differences of opinion arise in the caselaw, however, depending under which subsection of 29 U.S.C. § 1132(a) the case is brought. In her amended complaint, plaintiff generically invokes jurisdiction under § 1132, without specifying upon which particular subsection she specifically relies. From the nature of the allegations, it appears that Count I was brought under 29 U.S.C. § 1132(a)(1)(B) (suits brought by a beneficiary to recover ERISA benefits owed to him by the trustees of the ERISA plan).

The caselaw cited above supports the proposition that there is no right to a jury trial under § 1132(a)(1)(B). See also Brown v. Retirement Committee, 575 F.Supp. 1073, 1077 (E.D.Wisc.1983); Foulke v. Bethlehem 1980 Salaried Pension Plan, 565 F.Supp. 882, 883 (E.D.Pa.1983). Cf. Peckham v. Board of Trustees, 653 F.2d 424, 426 n. 3 (10th Cir.1981) (dicta). Two cases have taken the opposite position, but they have been uniformly rejected by more recent decisions. See Pollock v. Castrovinci, 476 F.Supp. 606, 609 (S.D.N.Y.1979); Stamps v. Michigan Teamsters, 431 F.Supp. 745, 747 (E.D.Mich.1977).

This Court concludes that neither party has a right to a jury trial under Count I. The cases cited above adequately articulate the Court’s rationale for reaching this conclusion. Count I alleges that Falstaff, as trustee of the CBS Plan, forfeited the benefits owed to Gutting’s beneficiaries under the CBS Plan. As will be more fully developed below, the issues raised by this complaint are essentially equitable. The fact that the alleged damages are a sum certain and are alleged to be unconditionally and immediately due, does not by itself convert the equitable nature of the issues into legal ones. Whether the monetary relief sought is actually owed in this case is inextricably bound to the equitable questions whether plaintiff is entitled to the benefits and whether the forfeiture clause of the CBS Plan is enforceable. These determinations have traditionally been left to the judge for resolution. See Vorpahl, 695 F.2d at 322; Kahnke v. Herter, 579 F.Supp. 1523, 1527-28 (D.Minn.1984); Foulke, 565 F.Supp. at 883 (prayer for lump sum benefit did not convert essentially equitable claim into a legal one). Even if it is assumed that the nature of the damages sought in this case could convert the case into a legal action, the parties have stipulated to the amount of compensatory damages, thereby making submission of this “legal” issue to a jury anserine.

It might be argued that Count I is also brought under 29 U.S.C. § 1132(a)(2) for breach of Falstaff’s fiduciary duties under § 1109. This would not change the Court’s decision that there is no right to a jury trial, however. First, a brethren district judge within the Eighth Circuit has already ruled in a well reasoned and persuasive opinion that there is no right to a jury trial under § 1132(a)(2). See Kahnke v. Herter, 579 F.Supp. 1523, 1526-28 (D.Minn.1984). This Court adopts the Kahnke court’s rationale, and rejects the rationale underlying Ovitz v. Jeffries & Co., 553 F.Supp. 300, 301 (N.D.Ill.1982). Second, the equitable nature of Count I’s allegations are not altered by framing Count I as a breach of fiduciary duty cause of action under 29 U.S.C. § 1109. If Count I is read as alleging a violation of Falstaff’s fiduciary duties under § 1109, Falstaff would be liable for such a breach of fiduciary duty only if the forfeiture clause of the CBS Plan is either inapplicable or unenforceable. Thus, the issue whether Falstaff breached its fiduciary duty is integrally dependent upon the question whether plaintiff is entitled to the benefits of the CBS Plan—an essentially equitable question. See Vorpahl, 695 F.2d at 322; Kahne, 579 F.Supp. at 1527-28. See also Zittrouer, 582 F.Supp. at 1477-78 (N.D.Ga.1984). Thus, even if it could be argued successfully that Count I was brought un der 28 .U.S.C. § 1132(a)(2), the Court still is of the opinion that there is no right to try Count I to a jury under ERISA or the Seventh Amendment.

The next issue is whether the parties have agreed to a trial by jury under Fed.R.Civ.P. 39(c). As noted above, defendant’s position is that it did not demand a jury trial if this case is found to be governed by ERISA. Whatever the technical merits of this argument, it is clear that defendant did not, and would not, consent to a jury trial of plaintiff’s ERISA cause of action. Therefore, the Court will view the jury’s verdict as advisory under Fed.R. Civ.P. 39(b) and will issue its own independent findings of fact and conclusions of law.

IV. Collateral Estoppel.

In her reply to defendant’s answer, plaintiff pleaded collateral estoppel as to two key factual issues. First, plaintiff notes that in SEC v. Falstaff Brewing Corp., No. 77-894, mem. op. (D.D.C. Oct. 26, 1978), aff’d 629 F.2d 62 (D.C.Cir.1980), the district court found that Kalmanovitz was personally liable for misleading statements and omissions in a 1975 proxy statement and for several other post-1975 violations of the federal securities laws. One specific finding made by the court was that Kalmanovitz personally knew that most of Falstaff’s assets had been mortgaged, but that Kalmanovitz had permitted a 1975 proxy statement to be issued without disclosure of this fact. Plaintiff points out that defendant in this case is using Gutting's failure to disclose these mortgages to Kalmanovitz in a 1974 financial statement as one of the reasons for discharging Gutting for proper cause. In effect, plaintiff argues that defendant should be es-topped from relitigating that Gutting’s putative failure to disclose the mortgages to Kalmanovitz is a valid and true reason for invoking the forfeiture clause of the CBS Plan because that fact has been resolved against Falstaff in SEC v. Falstaff Brewing Corp., supra.

Second, plaintiff notes that defendant is also using Gutting’s alleged responsibility for the putative gross misconduct of former Falstaff executives Charles Dependahl, William Healy, and John Calhoun as a separate reason for discharging Gutting for proper cause. In response, plaintiff cites to the findings of fact in Dependahl v. Falstaff Brewing Corp., 491 F.Supp. 1188 (E.D.Mo.1980), aff’d in part, rev’d in part, 653 F.2d 1208 (8th Cir.1981). Plaintiff asserts that the district court in Dependahl found that Dependahl, Healy, and Calhoun were not guilty of any gross misconduct or incompetence, but had been fired simply because of a change in management. Therefore, plaintiff contends, Gutting cannot be held accountable for misconduct that did not take place. Hence plaintiff argues that defendant should be es-topped from relitigating that Gutting’s putative responsibility for the alleged misconduct and incompetence of Dependahl, Healy, and Calhoun is a valid and true reason for invoking the forfeiture clause because that fact has been resolved adversely to the defendant in Dependahl v. Falstaff Brewing Corp.

Both of plaintiff’s arguments fail when one inspects the law of offensive collateral estoppel. To successfully rely on offensive collateral estoppel, the plaintiff must establish that

(1) the issue at stake is identical to the one involved in the prior litigation;

(2) the issue was actually litigated in the prior litigation;

(3) the determination of the issue in the prior litigation was a critical and necessary part of the judgment in that earlier action; and

(4) the offensive use of collateral estoppel in the subsequent case would not be unfair to the defendant. The first three elements of these four are those that must be established in the traditional defensive use of collateral estoppel. See Hicks v. Quaker Oats, 662 F.2d 1158, 1166 (5th Cir.1981). The fourth element was added by the Supreme Court in Park Lane Hosiery Co. v. Shore, 439 U.S. 322, 329-37, 99 S.Ct. 645, 650-54, 58 L.Ed.2d 552 (1979), as a precondition to offensive use of collateral estoppel, as plaintiff is seeking to do in this case. The trial court has broad discretion in permitting the offensive use of collateral estoppel. Id. at 331, 99 S.Ct. at 651. In exercising this discretion, the trial court must judge the concept of fairness based on the totality of the circumstances surrounding the prior and subsequent lawsuits. For example, if during the prior lawsuit the defendant could foresee the subsequent suit, it would not be unfair to allow offensive use of collateral estoppel in the subsequent suit because defendant would have had the incentive to vigorously litigate the issue in the prior lawsuit. Id. at 330, 99 S.Ct. at 651. On the other hand, if the defendant did not have the same procedural or evidentiary opportunities available to him in the prior lawsuit that he now has available to him in the subsequent suit, it would be unfair to allow the offensive use of collateral estoppel if the difference between the procedural or evidentiary opportunities is likely to cause a different result in the subsequent case. Id. at 330-31, 99 S.Ct. at 651-652.

It is clear from the recitation of these elements that plaintiff cannot rely on offensive use of collateral estoppel based on SEC v. Falstaff Brewing Corp. The factual issue plaintiff seeks to bar defendant from relitigating in this case is that Gutting’s putative failure to disclose the mortgages on Falstaff’s assets to Kalmanovitz in a 1974 financial statement can be a valid and true reason for invoking the forfeiture clause of the CBS Plan. This factual issue was never actually litigated in the SEC case. All the SEC case did determine was that Kalmanovitz knew that Falstaff’s assets were mortgaged in early 1975 prior to the issuance of a 1975 proxy statement and that Kalmanovitz’s failure to disclose this information violated federal securities laws. The parties’ knowledge concerning the 1974 financial statements at issue here, was never even discussed in the SEC case. Plaintiff might be able to rely on offensive collateral estoppel to bar relitigation of the subsidiary factual issue that Kalmanovitz did not disclose the mortgages in 1975. Plaintiff may even extrapolate factual arguments based on this one subsidiary fact. But plaintiff cannot collaterally estop defendant from contesting plaintiff’s extrapolated factual argument that Kalmanovitz cannot complain about Gutting’s 1974 failure to disclose when Kalmanovitz himself committed the same sin in 1975.

Similarly, plaintiff cannot rely on the findings of fact in Dependahl v. Falstaff Brewing Corp. First of all, the district court in Dependahl never found as fact that Dependahl, Healy, or Calhoun did not engage in gross misconduct. In Dependahl, Falstaff relied on the affirmative defense that Dependahl, Healy, and Calhoun had been fired for cause because they had engaged in serious improprieties. But, Falstaff had failed to comply with discovery requests and the district court struck its affirmative defenses as a sanction. Thus the district court, although harboring doubts about the “bona fides” of the affirmative defenses, did not decide the issue because the affirmative defenses had been stricken. See Dependahl, 491 F.Supp. at 1193 (Finding of Fact 3l). Secondly, even if the district court had found as fact that Dependahl, Healy, and Calhoun were not guilty of improprieties, it would be unfair to allow offensive use of collateral estoppel against the defendant in this case. It would be unfair primarily because defendant did not have the same procedural or evidentiary opportunities to litigate these factual issues in the Dependahl case that it has in this case. In Dependahl, defendant’s affirmative defenses had been stricken and plaintiff’s request for admissions had been deemed admitted due to defendant’s untimely responses. This significant difference in procedural and evidentiary opportunities could readily cause a different result in this case. In addition, it would be fundamentally unfair to punish defendant twice by barring it from relitigating factual issues based upon discovery abuses in an earlier case. Hence, plaintiff may not collaterally estop defendant from litigating the alleged improprieties of Dependahl, Healy, and Calhoun or Gutting’s putative responsibility for their alleged improprieties.

V. Discovery Sanctions.

In its order of March 23, 1984, this Court left open the question of discovery sanctions. After the March 23rd order, both parties comported with the Federal Rules of Civil Procedure and the Local Rules of this Court. Therefore, the Court hereby denies plaintiff’s motion for discovery sanctions and will not impose discovery sanctions against either party. It is hoped and expected that in the future both parties will behave as they did after the March 23rd order, and not as they had prior to the March 23rd order.

VI. Findings of Fact.

1. The Court expressly adopts the parties’ stipulations of fact as the Court’s Findings of Fact.

2. With the concurrence of the Executive Committee of Falstaff Brewing Corporation, and later the Board of Directors of Falstaff, Paul Kalmanovitz terminated Ferdinand Gutting as an active employee of Falstaff prior to Gutting’s putative retirement on November 1, 1975.

3. Gutting’s services were terminated because Paul Kalmanovitz wanted to replace the then-current management with executives more attuned to his style of business. As soon as Kalmanovitz found that Gutting did not fit into Kalmanovitz’s style, Gutting’s services were terminated.

4. Although Gutting may have been ultimately responsible for various alleged improprieties occurring during his tenure as chief executive officer of Falstaff, Kalmanovitz did not fire Gutting because of these improprieties. Kalmanovitz fired Gutting because of a difference in managerial style. Hence, the actual reasons that lead Kalmanovitz to fire Gutting did not constitute “proper cause” within the meaning of clause 6 of the CBS Plan.

5. Kalmanovitz did not fire Gutting in order to deny Gutting’s beneficiaries the benefits of the CBS Plan.

VII. Conclusions of Law.

1. The Court expressly adopts the points addressed in parts I through IV, supra, as the Court’s Conclusions of Law.

2. Virginia Gutting was a “beneficiary” of the CBS Plan within the meaning of 29 U.S.C. §§ 1002(8) & 1132(a)(1)(B).

3. Falstaff Brewing Corporation is the Plan’s sponsor and trustee of the CBS Plan.

4. Even if a difference in managerial styles is construed to be “proper cause” for termination under clause 6 of the CBS Plan, this type of “proper cause” is too subjective to sanction the forfeiture of ERISA benefits. As noted above in Part I, the federal common law of ERISA requires some objective criteria by which the Court can judge whether defendant’s invocation of a forfeiture clause is reasonable. See supra at 427-428. A major part of Congress’s antipathy for “bad boy” clauses was that broad and subjectively based bad boy clauses could be used as a convenient subterfuge to deprive an employee of his pension benefits merely to save the employer the expense of paying those Benefits. No employee is perfect, and so every employee could possibly be terminated for “proper cause.” In order to prevent abuse of bad boy clauses, employers must prove that plaintiff was actually fired because of some impropriety that would breach the business sensibilities of a hypothetical “reasonable” businessman. Obvious examples are cases in which plaintiff is fired because he committed some crime or gross misconduct that harmed his employer. Cf. Fremont v. McGraw-Edison Co., 606 F.2d 752, 755-56 (7th Cir.1979); Flynn v. Savings & Profit Sharing Plan, 558 F.Supp. 861, 865 (N.D.Tex.1982). But simple disagreement over business judgments, or even acts of incompetence, generally will be insufficient to meet the rigorous standard of reasonableness under federal common law. Certainly in this case it is not objectively reasonable to forfeit Gutting’s beneficiaries’ death benefits based upon the actual reasons that led defendant to fire Gutting. Even though Gutting may have been responsible for some gross misconduct, Gutting was actually fired over a difference in managerial style, or at most, a failure to perform his assigned duties in the way Kalmanovitz desired that they be performed. These actual reasons for Gutting’s discharge are insufficient as a matter of federal common law to merit the forfeiture of his beneficiaries’ death benefits that Gutting had a reasonable expectation his beneficiaries would receive. See cases cited supra at 428.

5. Virginia Gutting’s estate, as Ferdinand Gutting’s beneficiary, is entitled to the death benefits under the CBS Plan in the amount of $201,477.43.

6. Under federal common law, a trial court has the discretion to award prejudgment interest if the damages sought were previously liquidated, or an award of prejudgment interest is necessary to make the plaintiff whole. See Bricklayers’ Pension Trust Fund v. Taiariol, 671 F.2d 988, 989-90 (6th Cir.1982) (holding as a matter of federal common law that prejudgment interest can be awarded in the Court’s discretion under an ERISA cause of action); Washington v. Kroger Co., 671 F.2d 1072, 1078 (8th Cir.1982). The amount of prejudgment interest will be set at the rate which most equitably compensates plaintiff for the lost time-use of the money damages she recovers. Id. The Court concludes that plaintiff is entitled to prejudgment interest on her award of compensatory damages in this case. The amount of her damages was liquidated, or at least readily ascertainable, as of December 11, 1980, the earliest date that the death benefits were due. In order to compensate plaintiff for the lost use of the death benefits from that date until the date of judgment, the Court awards plaintiff prejudgment interest at the rate of nine (9) percent simple interest.

7. Count I of plaintiff’s complaint prays for punitive damages. It is highly doubtful that the Eighth Circuit Court of Appeals would affirm an award of punitive damages in an ERISA case. See Dependahl v. Falstaff Brewing Corp., 653 F.2d 1208, 1217 (8th Cir.1981). Plaintiff, however, has cited Monson v. Century Manufacturing Co., 739 F.2d 1293 (8th Cir.1984), for the proposition that punitive damages are now recoverable in an ERISA case within the Eighth Circuit. But Monson does not hold, state, infer, or support the proposition that punitive damages are recoverable on an ERISA cause of action. The Monson case involved an employer’s misrepresentations concerning an employee profit program (referred to by the district court as the “Program”) and an independent employee pension plan (referred to by the district court as the “Plan”). As the district court opinion in Monson makes clear, only the employee pension plan was governed by ERISA, while the profit sharing program was not related to ERISA in any way. The district court awarded, and the Court of Appeals affirmed, punitive damages only as to the non-ERISA profit sharing program under the Minnesota common law of fraudulent misrepresentation. This state common law cause of action was not preempted by ERISA because it related to the parties’ rights and obligations under the non-ERISA profit sharing program, and not the ERISA pension plan. No punitive damages were awarded for any cause of action relating to the ERISA pension plan. See Monson v. Century Manufacturing Co., No. 4-80-Civil-614, mem. op. (D.Minn. May 17, 1983). Nonetheless, were this Court writing on a clean slate, it might well consider awarding punitive damages in an ERISA case appropriately based on a fiduciary’s wanton or malicious breach of his fiduciary duties. See, e.g., Winterrowd, v. David Freedman & Co., 724 F.2d 823, 826-27 (9th Cir.1984).

But even if this Court could award punitive damages under ERISA the Court would not do so in this case. First, plaintiff failed to produce any proof during its case-in-chief that defendant acted maliciously or in wanton disregard of plaintiff’s rights to the benefits of the CBS Plan. Even the evidence brought forward during defendant’s case in chief and plaintiff’s rebuttal case was insufficient to warrant the award of punitive damages. The Court has previously found as fact that Gutting was fired of a difference in managerial style and that Falstaff did not fire ^Gutting or invoke the forfeiture clause maliciously or with wanton disregard of Gutting’s beneficiaries’ rights to receive the benefits of the CBS Plan. Thus, under the standard announced in Winterrowd, the Court in its discretion does not award punitive damages to the plaintiff in this case.

JUDGMENT AND ORDER

In accordance with the memorandum filed this day and incorporated herein,

IT IS HEREBY ADJUDGED, DECLARED, AND DECREED that the Court finds in favor of plaintiff Barbara G. Hollenbeck, as Administratrix of the Estate of Virginia M. Gutting, deceased, and against defendant Falstaff Brewing Corporation in the amount of $201,477.43 in compensatory damages plus prejudgment interest from December 11, 1980 to the date of this judgment at a rate of nine (9) percent simple interest.

IT IS FURTHER ORDERED that plaintiff’s motion for discovery sanctions is DENIED.

On Application For Attorney’s Fees

This matter is before the Court on the issue of plaintiff’s application for attorney’s fees and costs.

Plaintiff brought this suit alleging violations of the Employee Retirement Security Act (ERISA), 29 U.S.C. § 1132. After jury trial before this Court, verdict was rendered in favor of plaintiff, and plaintiff was awarded substantial monetary relief.

In the present motions, plaintiff seeks attorney’s fees in the sum of $182,250.75. That sum represents a lodestar fee of $121,500.50 plus an enhancement of 50%. The statutory authority upon which plaintiff bases the claim for attorney’s fees is 29 U.S.C. § 1132(g), which authorizes a court in its discretion to award reasonable attorney’s fees and costs to either party in any action brought pursuant to section 502. Defendant argues that with the exception of one factor (defendant’s ability to satisfy an award) plaintiff fails to meet the criteria enunciated by the Ninth Circuit in Hummel v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir.1980), and is thus precluded from recovering attorney’s fees in this matter. The Court disagrees with defendant, and finds that an award of attorney’s fees is appropriate in this case.

In the first instance, this Court is of the opinion that the standards enunciated in Hummel, supra, were not intended to be an insurmountable barrier to a successful plaintiff’s recovery of attorney’s fees. Rather, the guidelines are to be used as an aid to the Court in exercising its discretion under Sec. 1132(g). Defendant’s contention that plaintiff is precluded from a recovery of attorney’s fees is therefore without merit.

In considering an award of attorney’s fees the factors to be considered include:

1) the degree of the offending party’s culpability and bad faith;

2) the ability of the offending party to satisfy an award;

3) whether an award of attorney’s fees would deter other persons from acting similarly under like circumstances;

4) the relative merits of the parties’ positions; and

5) whether the action benefited a general class of beneficiaries of the fund.

Culpability and Bad Faith.

Under ERISA, a plaintiff need not show bad faith in order to recover attorney’s fees. Ford v. New York Central Teamsters Pension Fund, 506 F.Supp. 180, 182 n. 3 (W.D.N.Y.1980); aff’d 642 F.2d 664 (2d Cir.1981); Landro v. Glendenning Motorways, Inc., 625 F.2d 1344 (8th Cir.1980); Baeten v. Van Ess, 474 F.Supp. 1324 (E.D.Wis.1979). Section 1132(g), like the rest of ERISA, is remedial legislation. The section should therefore be read broadly to mean that a plan participant or beneficiary if he prevails in his suit under § 1132 “should ordinarily recover an attorney’s fee unless special circumstances would render such an award unjust.” The mere absence of bad faith on the part of a losing defendant is not such a special circumstance. Landro v. Glendenning Motorways, Inc., 625 F.2d 1344 (8th Cir.1980). Thus, defendant’s argument that plaintiff failed to show culpability or bad faith is without merit.

Ability of Parties to Satisfy An Award.

Defendant does not dispute its ability to satisfy an award, thus, the Court need not address this factor.

Relative Merits.

Defendant neither articulated nor possessed a legitimate reason for denying plaintiff vested benefits. The jury so found and awarded plaintiff substantial monetary relief. Thus, the relative merits of this case are tipped in plaintiff’s favor.

Deterrence.

Contrary to defendant’s position, an award of attorney’s fees will promote deterrence against any future unwarranted denial of benefits. Defendants will have added incentive to comply with ERISA, rather than face suits for compliance, if they know that they may have to pay attorney’s fees, in addition to the cost of compliance and their own legal fees.

Common Benefit.

Failure of an action to confer a common benefit on a group of pension plan participants is not a bar to recovery of reasonable attorney’s fees and costs by plaintiff in an action to recover pension retirement benefits. The absence of such a common benefit is one factor to be considered in determining the propriety of a particular award of attorney’s fees. Ford v. New York Central Teamsters Pension Fund, supra; Eaves v. Penn, 587 F.2d 453, 465 (10th Cir.1978); Korn v. Levine Bros. Iron Works Corp., 574 F.Supp. 836 (S.D.N.Y.1983); Baeten v. Van Ess, 474 F.Supp. 1324 (E.D.Wis.1979). Defendant’s contention that plaintiff’s action must benefit a general class of petitioners in advance of recovering attorney’s fees is therefore erroneous.

Accordingly, this Court finds and concludes that plaintiff is entitled to recover reasonable attorney’s fees in this matter.

The starting point in determining attorney’s fees is to calculate a base or lodestar figure by multiplying a reasonable hourly rate by the number of hours reasonably expended. The Fifth Circuit Court of Appeals enumerated various factors which are relevant to an award of attorney’s fees in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974). These factors have been adopted by the Eighth Circuit in ERISA cases, Dependahl v. Falstaff Brewing Co., 496 F.Supp. 215 (E.D.Mo.1980); Carter v. Montgomery Ward & Co., 76 F.R.D. 565 (E.D.Tenn.1977). Under the Johnson analysis, the award should generally not be less than the reasonable number of hours worked times a reasonable hourly fee. Jorstad v. I.D.S. Realty Trust, 643 F.2d 1305 (8th Cir.1981); Depen dahl, supra; Zoll v. Eastern Allamakee Comm. School District, 588 F.2d 246 (8th Cir.1978); Cleverly v. Western Electric Co., 594 F.2d 638 (8th Cir.1979). The hours reported for each task that are properly billable should be evaluated in order to determine whether the time spent is reasonable.

This litigation has consumed well over three years, and plaintiff’s attorneys have spent an enormous amount of time on it. Given the protractive nature of this ease, this Court cannot conclude that the time for which compensation is sought was not reasonably spent. Likewise, this Court need not make an artificial distribution of the attorneys’ time between successful and unsuccessful claims. All of the issues involved in this case necessarily benefit the resolution of others. Dependahl, supra.

Inasmuch as defendants do not oppose the hourly fees plaintiff’s counsel have requested, and in the absence of any facts suggesting that the hourly fees are exorbitant, the Court will allow as reasonable the hourly fees submitted by plaintiff’s counsel.

Multiplying the hourly rates by the number of hours reasonably expended in this litigation, the Court finds the lodestar fee for plaintiff’s counsel to be $121,500.50.

The Court does not feel that an enhancement is warranted in this case. The party moving for enhancement bears a heavy burden in proving entitlement to an increase for risk or quality. Jorstad, supra. An increase is designed to take account of an unusual degree of risk or skill; it is a bonus that “reflects exceptional services only.” Id. quoting Lindy Bros. Builders, Inc. v. American Radiator & Standard Sanitary Corp., 540 F.2d 102 (3d Cir.1976). In addition, this circuit has frequently cautioned against over “generosity” caused by the use of high multiples of the lodestar figure. See, e.g., Paschall v. Kansas City Star Co., 695 F.2d 322 (8th Cir.1982); Jorstad, supra.

Plaintiff’s counsel fail to show their entitlement to enhancement. Additionally, the lodestar figure already provides compensation for the length and complexity of the litigation because it includes more than one thousand hours in firm time that extends as far back as 1982. Moreover, the hourly rates used to calculate the fee are among the highest in the St. Louis area. These rates already reflect the experience, reputation, and quality of plaintiff’s attorneys. In sum, the Court recognizes that the work done by plaintiff’s attorneys was of high quality, but because this Court feels the lodestar figure amply compensates plaintiff’s attorneys for the work done, the 50% enhancement is denied.

Plaintiff's attorneys have also filed a motion to recover as costs $7,872.79. In response, defendant has filed its motion attacking certain items on plaintiff’s bill of costs. Defendant objects to plaintiff’s bill of costs for copies on the ground that plaintiff has submitted no itemization by which it can be determined whether the costs requested for photocopying are incident to this litigation. Defendants contend that before an award be made, further itemization should be required of plaintiff. Defendant’s objection on this ground is overruled, for plaintiff has demonstrated, to the satisfaction of this Court, that its costs for copies were “necessarily obtained for use in the ease” within the meaning of Sec. 1920(4).

Title 28 U.S.C. § 1920 provides for the taxing of costs. 28 U.S.C. § 1924 requires that before costs are taxed, they must be verified by an affidavit that states the items are correct and were necessarily incurred in the case. To be recoverable as a part of costs, a disbursement must be shown to have been made in connection with the case in which the costs are allowed. Such a showing is normally made by an affidavit under 28 U.S.C. § 1924. The affidavit may be based on the affiant’s knowledge or on business records available to him. Wahl v. Carrier Manufacturing Co., Inc., 511 F.2d 209 (7th Cir.1975). In the instant matter, plaintiffs counsel have fully complied with the requirements of 28 U.S.C. § 1924, and given the lengthy nature of this case and the number of documents obviously compiled and copied for use in the case, this Court cannot conclude that plaintiffs bill of cost for copies is not reasonable.

Next, defendant objects to plaintiffs bill of cost for depositions on the ground that plaintiff is only entitled to recover the costs for depositions they noticed, not the depositions noticed and paid for by defendant. The Court disagrees and will tax the deposition costs against defendant.

This Court has discretionary power pursuant to 28 U.S.C. § 1920(2) to assess the cost of taking depositions in favor of the prevailing party. Murphy v. Amoco Production Co., 558 F.Supp. 591 (D.N.D.1983); Chemical Bank v. Kimmel, 68 F.R.D. 679 (D.Del.1975). A deposition not used at trial can still be taxed so long as it was taken for use at trial and not merely for discovery purposes. The taxability depends on whether the deposition, when taken, was reasonably necessary for use in trial. Chemical Bank v. Kimmel, supra; Koppinger v. Cullen-Schiltz & Assoc., 513 F.2d 901, 911 (8th Cir.1975). Unless the opposing party interposes a specific objection that a deposition was improperly taken or unduly prolonged, deposition costs will be taxed as having been necessarily obtained for use in the case within the meaning of 28 U.S.C. § 1920. Meder v. Everest & Jennings, Inc., 553 F.Supp. 149 (E.D.Mo.1982); Federal Savings & Loan Insurance Corp. v. Szarabajka, 330 F.Supp. 1202, 1210 (1971). In the absence of such an objection on defendant’s part, the deposition costs sought by plaintiff will be allowed.

Defendant also objects to plaintiff’s bill of costs for travel expenses, telephone expenses, Federal Express and local delivery costs, postage expenses, office expenses, and miscellaneous expenses on the ground that such items are not ordinarily taxable as costs. The Court agrees with defendant and will deny plaintiff’s bill of costs for these items.

Taxable costs do not automatically include all expenses. Absent extraordinary or compelling circumstances, travel of attorneys is not a taxable cost of taking depositions. Kiefel v. Las Vegas Hacienda, Inc., 404 F.2d 1163 (7th Cir.1968); cert. den., 395 U.S. 908, 89 S.Ct. 1750, 23 L.Ed.2d 221; George R. Hall, Inc. v. Superior Trucking, 532 F.Supp. 985 (N.D.Ga.1982); Frigiquip Corp. v. Parker-Hannifin Corp., 75 F.R.D. 605 (D.C.Okla.1976); 6 Moore’s Fed. Practice 11 54.77[4], Likewise, plaintiff’s request for costs to cover long distance telephone calls, Federal Express and local delivery service, office expenses, miscellaneous and postage expenses must also be denied. The costs requested for these items are not “costs” as that term is used in 28 U.S.C. § 1920, but are in fact out-of-pocket expenses. Finding no statutory authority for reimbursement of these expenses, the' Court will deny plaintiff’s requests with respect to these items. Accordingly, the amount of costs plaintiff will be awarded totals $4,036.63.

Accordingly,

IT IS HEREBY ORDERED that plaintiff recover of defendant the sum of $121,-500.50 as attorney’s fees and $4,036.63 as costs.

      . 29 U.S.C. § 1003(b) lists five types of employee benefit plans that are exempted from ERISA. There is no indication from the parties that any of these exemptions apply to the CBS Plan at issue here.

      . In any event, it is extremely doubtful that 29 U.S.C. § 1053 would apply to the relevant acts of this case. Section 1053 only applies to pension benefit plans and the CBS Plan is not a pension benefit plan. See 29 U.S.C. § 1002(2). In addition, § 1053 only prohibits the forfeiture of "accrued benefits.” The legislative history of § 1053 makes it clear that Congress did not intend the nonforfeiture provisions of ERISA to apply to lump sum life insurance proceeds because they are not to be considered as "accrued benefits.” See Joint Explanatory Statement of the Committee of Conference, H.R.Conf.Rep. No. 1280, 93d Cong., 2d Ses. (1974) reprinted in 1974 U.S.Code Cong. & Ad.News 4639, 5038, 5054.

      . The Seventh Circuit has more recently reaffirmed Wardle, as it relates to jury trials in cases arising under ERISA alone. See Bugher v. Feightner, 722 F.2d 1356, 1358 (7th Cir.1983). But the Bugher decision went on to hold that if the ERISA case is also brought under the Labor Management Relations Act, 29 U.S.C. § 185(a), the parties do have a right to a jury trial. Plaintiffs complaint in the present case, however, was not brought under 29 U.S.C. § 185(a). Therefore, the Bugher decision has no application to this case.

      . At several points during the trial, plaintiff referred to the unpublished decision in Donovan v. Schmoutey, No. CV-LV77-47, Judgment (D.Nev. Dec. 1, 1983), for the proposition that a jury trial is allowable in an ERISA case. For two reasons, the Schmoutey decision is inapposite to this case. First, the jury in Schmoutey only considered the plaintiffs state law cause of action, not the plaintiffs ERISA causes of action. Second, the state law claims which the jury considered were not preempted by ERISA because those claims related to a loan agreement between an ERISA plan fiduciary and a private corporation. In the state law claim, the plaintiff was attempting to enforce the loan agreement. Thus, the litigants’ rights and obligations arose from the loan agreement, and were wholly independent of the ERISA plan. See supra at 428-430.


source: Caselaw Access Project

author: JOSEPH H. YOUNG, District Judge.

license: Public Domain

text:
    In re MID-ATLANTIC TOYOTA ANTITRUST LITIGATION. STATE OF MARYLAND ex rel. SACHS v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. STATE OF DELAWARE ex rel. GEBELEIN v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. STATE OF WEST VIRGINIA ex rel. BROWNING v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. DISTRICT OF COLUMBIA ex rel. ROGERS v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. COMMONWEALTH OF PENNSYLVANIA on its own behalf and as Parens Patriae v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. COMMONWEALTH OF VIRGINIA v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. Daniel E. GOLUB, et al. v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. Wallace H. JOHNSTON, Jr., et al. v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al.
    No. MDL-456.
    Civ. A. Nos. Y-80-3238, Y-81-650, Y-81-726, Y-81-805, Y-81-1880, Y-82-479, Y-81-806 and Y-81-2954.
    United States District Court, D. Maryland.
    Sept. 24, 1984.
    See also, D.C., 92 F.R.D. 358.

      Michael F. Brockmeyer, Asst. Atty. Gen., Baltimore, Md., liaison counsel for plaintiffs.
    Joseph L. Bianeulli, Washington, D.C., liaison counsel for defendants.
   MEMORANDUM

JOSEPH H. YOUNG, District Judge.

This multidistrict antitrust litigation involves six parens patriae actions, 15 U.S.C. § 15c, and two private treble damages actions, 15 U.S.C. § 15, which have been consolidated. All parties have reached compromised settlements of the claims, and have submitted their proposals to the Court for determination, required by Fed.R.Civ.P. 23(e) and 15 U.S.C. § 15c(c), as to whether the settlement is fair, reasonable, and adequate. The parties have also filed a joint application for award of counsel fees and costs. At a hearing on July 13, 1984, this court granted final approval of the proposed settlements for the reasons stated herein.

HISTORY OF THE LITIGATION

The states of Maryland, Delaware, West Virginia, and the District of Columbia initiated this action in December, 1980. By September, 1981, the Commonwealths of Pennsylvania and Virginia, as well as the private plaintiffs, had filed suit. All the plaintiffs sued two classes of defendants: Toyota dealers in Delaware, Maryland, Pennsylvania, Virginia, West Virginia, and the District of Columbia (“Dealer defendants”); and several entities essentially comprising the single Toyota distributor for the six jurisdictions (“Distributor defendants”). The plaintiffs alleged that all defendants conspired together in violation of § 1 of the Sherman Act, 15 U.S.C. § 1, to force purchasers of certain new 1980 Toyotas to pay more for their cars than they would have paid in the absence of a conspiracy.

Over defendants’ opposition all the actions were transferred to the District of Maryland for pretrial purposes by the Judicial Panel on Multidistrict Litigation. After the transfer, Distributor defendants moved to dismiss many of the actions on the ground that they were brought by, or on behalf of, indirect purchasers barred from financial recovery under Illinois Brick v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977). On June 30, 1981, this Court ruled that Illinois Brick did not bar plaintiffs’ claims. In re Mid-Atlantic Toyota Antitrust Litigation, 516 F.Supp. 1287 (D.Md.1981).

Defendants also raised other grounds for dismissal including lack of personal jurisdiction over certain defendants, improper venue, failure to state a claim upon which relief can be granted, failure to comply with Rule 11, and the unconstitutionality of the Hart-Scott-Rodino Antitrust Improvements Act. On October 14, 1981, this Court upheld the constitutional authority of the governmental plaintiffs to pursue these actions but dismissed several defendants on the basis of jurisdiction and venue. The Court also denied the motions to dismiss based on Rule 11, while granting the motions to dismiss the Pennsylvania complaint for failure to state a claim for relief to the extent that it was based on a claim for damages under 15 U.S.C. § 14. In re Mid-Atlantic Toyota Antitrust Litigation, 525 F.Supp. 1265 (D.Md.1981). On December 22, 1981, this Court amended its opinion. In re Mid-Atlantic Toyota Antitrust Litigation, 541 F.Supp. 62 (D.Md.1981). At defendants’ request, the issue of parens patriae authority was certified to the Fourth Circuit. That court affirmed the holding that the governmental plaintiffs had authority to pursue these actions. Pennsylvania v. Mid-Atlantic Toyota Distributors, Inc., 704 F.2d 125 (4th Cir.1983).

In the interim, private plaintiffs sought class certification under Fed.R.Civ.P. 23(b)(3). In January, 1982, this Court denied these motions on the grounds that the fee arrangements between the named plaintiffs in the class action and their attorneys violated the ABA Code of Professional Responsibility, while noting that it did not intimate “that there has been or that there will be improprieties on the part of counsel in the instant case.” In re Mid-Atlantic Toyota Antitrust Litigation, 93 F.R.D. 485, 487, 491 n. 9 (D.Md.1982).

Substantial discovery occurred during the winter and spring of 1981-82. Eventually approximately 500,000 documents, selected from transactional records, were organized in a document depository in Baltimore.

On October 29, 1982, this Court heard argument on summary judgment motions filed by defendants raising three principal issues: (1) whether defendants’ conduct would be scrutinized on a per se or rule of reason basis, (2) whether sufficient evidence had been developed to infer that a § 1 “contract, combination or conspiracy” existed among the defendants, and (3) whether plaintiffs had alleged an antitrust injury to the Toyota purchasers. On April 4, 1983, the Court ruled that plaintiffs’ claims would be considered under the per se standard, that sufficient facts regarding conspiratorial activities had been developed, and that purchasers of Toyotas under the Double Value Days Program did not suffer antitrust injury. In re Mid-Atlantic Toyota Antitrust Litigation, 560 F.Supp. 760 (D.Md.1983).

Settlement discussions continued throughout the litigation. On May 27, 1983, this Court preliminarily approved a proposed settlement (“Original Settlement Agreement”) between all plaintiffs and the Distributor defendants. In re Mid-Atlantic Toyota Antitrust Litigation, 564 F.Supp. 1379 (D.Md.1983). Designed to achieve a “global” resolution of this litigation, the Original Settlement Agreement gave each Dealer defendant the option of joining in the settlement. When an insufficient number of Dealer defendants chose to “opt-in,” plaintiffs continued the litigation against the remaining defendants, while engaging in negotiations in a renewed attempt to achieve a global settlement. Plaintiffs eventually concluded settlements with all remaining defendants, and the Court preliminarily approved these settlements on May 9, 1984. In re Mid-Atlantic Toyota Antitrust Litigation, 585 F.Supp. 553 (D.Md.1984). Notice of the proposed settlements was mailed to purchasers on May 11, 1984, and notice by publication was made on May 20-21, 1984. A hearing on final approval of the proposed settlements and the joint fee petition was held on July 13, 1984.

The Court has already provided detailed summaries of the proposed settlements in the litigation, see In re Mid-Atlantic Toyota Antitrust Litigation, 564 F.Supp. 1379, 1382 (D.Md.1983); In re Mid-Atlantic Toyota Antitrust Litigation, 585 F.Supp. 1553 (D.Md.1984), and will presume familiarity with the terms of the proposed settlements.

STANDARDS FOR APPROVAL

The standard for determining whether a proposed settlement should be approved, is whether the settlement is “fair, reasonable and adequate.” Manual on Complex Litigation § 1.46 at 56-57 (5th ed. 1982). In In re Mid-Atlantic Toyota Antitrust Litigation, 564 F.Supp. 1379 (D.Md.1983), and In re Mid-Atlantic Toyota Antitrust Litigation, 585 F.Supp. 1553 (D.Md.1984), the Court followed the bifurcated analysis of late Judge Blair of this District. That analysis includes separate inquiries on the “fairness” and the “adequacy” of the proposed settlement. On the element of “fairness,” Judge Blair stated:

The factors tending to reveal the fairness of a settlement are those which indicate the presence or absence of collusion among the parties. Because of the danger of counsel’s compromising a suit for an inadequate amount for the sake of insuring a fee, the court is obligated to ascertain that the settlement was reached as a result of good-faith bargaining at arm’s length. The good faith of the parties is reflected in such factors as the posture of the case at the time settlement is proposed, the extent of discovery that has been conducted, the circumstances surrounding the negotiations and the experience of counsel.

In re Montgomery County Real Estate Antitrust Litigation, 83 F.R.D. 305, 315 (D.Md.1979). In addressing the second element of “adequacy” Judge Blair stated:

In evaluating the ‘adequacy’ of a proposed settlement, the court must weigh the likelihood of the plaintiff’s recovery on the merits against the amount offered in settlement. This necessarily requires the court to make a careful assessment of all the facts and a thorough analysis of the applicable law. It is not, of course, necessary or desirable to ‘try’ the case to determine whether a settlement is adequate since the very purpose of settlement is ‘to avoid the trial of sharply disputed issues and to dispense with wasteful litigation.’
In assessing the adequacy of the proposed settlement, courts should weigh the amount tendered to the plaintiffs against such factors as (1) the relative strength of the plaintiffs’ case on the merits; (2) the existence of any difficulties of proof or strong defenses the plaintiffs are likely to encounter if the case goes to trial; (3) the anticipated duration and expense of additional litigation; (4) the solvency of the defendants and the likelihood of recovery on a litigated judgment; and (5) the degree of opposition to the settlement.

Id. at 315-16 (citations omitted).

FAIRNESS

This Court concludes that the settlements were reached as a result of good faith bargaining at arms length. The negotiations resulting in these settlements were conducted by members of the Attorneys General offices of the states involved, a partner in a prominent litigation firm, and a former Attorney General of the United States. The settlements emerged after three and a half years of complex, hard-fought, litigation which resulted in one appellate opinion and numerous rulings by this Court. Indeed, the comprehensiveness and intricacy óf the settlements suggests the professionalism behind them. In short, there is nothing to suggest that the settlements were reached prematurely, that the parties colluded, or that the negotiations were conducted in anything but good faith. This Court has no difficulty in concluding that the settlements were reached in an entirely appropriate manner.

ADEQUACY

Relying on the factors articulated by Judge Blair, this Court initially notes that in this case plaintiffs estimate that seventy-five percent of the approximately 50,000 purchasers of 1980 Toyotas are qualified to receive the benefits of the settlements. Approximately eighty-five to ninety percent of these purchasers will be, or have been, located and, therefore, will actually receive these benefits. The purchasers will recover anywhere from $125.00 in cash to $250.00 in a service and goods option for each car purchased. The plaintiffs have introduced economic evidence which suggests that Dealer defendants averaged $136 more in gross profit per Toyota as a result of the alleged conspiracy and that consumers paid between $172 and $249 (cost plus gross profit) more for their Toyotas as a result of the conspiracy. See In re Mid-Atlantic Toyota Antitrust Litigation, 585 F.Supp. 1553 (D.Md.1984). The total settlement amount is approximately $5.1 million. In light of this evidence, the Court concludes that the amount purchasers will receive will adequately and fairly compensate them for their actual loss as a result of the alleged conspiracy.

This recovery weighed against the relative strength of the plaintiffs’ case on the merits indicates that the proposed settlements are adequate. In its summary judgment ruling, this Court implied that the case would probably go to the jury on a per se theory of antitrust liability. If the case did go to the jury, a plaintiffs’ verdict would be a significant possibility. However, the summary judgment ruling only resolved the issue of antitrust injury on the level of facial allegations; it did not foreclose the possibility of a directed verdict for defendants on that basis should it appear appropriate. In re Mid-Atlantic Toyota Antitrust Litigation, 560 F.Supp. at 784-86. Under such circumstances, the proposed settlements reflect an adequate balance between the possibility of a finding of no damages on the one hand, and the potential trebling of damages on the other. Indeed, the Court finds the balance particularly appropriate when continuation of this litigation would certainly entail significant costs for all involved.

The almost complete absence of opposition to the settlements also supports a finding of adequacy in this case. Notice was sent to the 50,000 purchasers of 1980 Toyotas. The notice invited consumers to submit comments on the proposed settlements either in writing or in person at the July 13 hearing. No consumers appeared at the hearing and only eight mailed objections to the Court. Of these eight none responded when the Attorneys General offices sent letters detailing the reasons behind the settlements’ terms. Moreover, after reviewing the specific objections, which primarily concern the amount of the recovery and the requirements that the consumers have paid $425 or more for a protective package to qualify for the benefits, this Court does not find that the dissatisfaction expressed by these individuals renders the settlements inadequate.

In summary, the weight of these factors leads this Court to the conclusion that the proposed settlements are fair, reasonable and adequate. The Court, therefore, grants final approval to the settlements. In reaching this conclusion, the Court notes that many of the concerns which it expressed in earlier opinions regarding the terms of the proposed settlements have been allayed by plaintiffs’ counsel’s vigorous efforts to locate all eligible consumers. See In re Mid-Atlantic Toyota Antitrust Litigation, 564 F.Supp. 1379, 1386, 1387 (D.Md.1983). Moreover, the fact that the settlements paint with a broad brush as to individual recovery does not persuade the Court that the settlements are indeed inadequate. The Court suspects that the administrative difficulties in individualizing recovery would prove to be exceedingly complex and costly.

Plaintiffs have also submitted motions to dismiss defendants College Toyota, Inc., Import City, Inc., Mountain View Toyota, Inc., Valley Toyota, Inc., and Henry Kehl Enterprises, Inc. As noted in this Court’s May 9, 1984 Memorandum and Order, these defendants are insolvent, in bankruptcy proceedings, or going out of business. In re Mid-Atlantic Toyota Antitrust Litigation, 585 F.Supp. 1553 (D.Md.1984). No objections to the motions to dismiss were received by the Court. Qualified purchasers from these Dealer defendants will receive settlement benefits consistent with other qualified purchasers. Under these circumstances, the Court grants the motions to dismiss.

JOINT FEE PETITION

Pursuant to 15 U.S.C. § 15c(d)(l) and 15 U.S.C. § 15, plaintiffs’ counsel, including two law firms representing the private plaintiffs, five state Attorneys General, and the Corporation Counsel for the District of Columbia have filed a joint petition for fees and costs seeking the award of a $100,000 fund established by the Original Settlement Agreement with Distributor defendants, for the purpose of reimbursing out-of-pocket expenses incurred in litigation. Counsel intend to use the fund to reimburse each state’s contribution to a $89,749 cost sharing fund established in 1981. The balance remaining after such reimbursement will be allocated to the private plaintiffs in the amount of $5,000 in partial reimbursement of litigation expenses, and to the state of Maryland in partial reimbursement of expenses associated with economic experts. Plaintiffs also seek an award of interest accruing on the settlement funds (an estimated $321,998 attributable to Distributor defendants and an estimated $135,896 attributable to Dealer defendants as of September 1, 1984), as reimbursement for expenses not covered by the $100,000 fund, and as an award of attorneys’ fees. The various settlement agreements, see In re Mid-Atlantic Toyota Antitrust Litigation, 564 F.Supp. 1379 (D.Md.1983); 585 F.Supp. 1553 (D.Md.1984), provide that interest which is generated on amounts previously deposited or deposited in the future can be utilized for the payment of attorneys’ fees and costs. Plaintiffs estimate that interest will continue to accumulate on the funds during the time necessary for individual consumers to make claims for damages and to negotiate checks, and for various Dealers to present their claims for payment. Plaintiffs request that the interest accruing on the principal contributed by Distributor defendants through September 1, 1984 be awarded on the following percentage basis:

Maryland 48.42%
Pennsylvania 19.84%
Virginia 12.63%
Private Plaintiffs 13.98%
Delaware 2.37%
District of Columbia 1.99%
West Virginia 0.77%
TOTAL: 100.00%

Plaintiffs state that this allocation reflects factors agreed upon by plaintiffs, which include number of purchasers represented, amount of attorney and paralegal time expended, expense of retaining and supervising economic experts, and the overall contribution of various counsel to the prosecution. The five governmental plaintiffs seek an award of interest accruing on the principal contributed by Dealer defendants in the following amounts:

Pennsylvania $53,911
Maryland $36,697
Virginia $35,563
Delaware $ 5,110
District of Columbia $ 4,615
TOTAL: $135,896

Plaintiffs state that these figures reflect agreement among plaintiffs’ counsel that these government attorneys are entitled to interest generated by settlements with Dealer defendants within their respective jurisdiction with the exception of the District of Columbia Corporation Counsel which is allocated a fixed sum since the District of Columbia has no dealerships physically located within its boundaries. Plaintiffs’ counsel will submit supplemental applications for awards of additional counsel fees and expenses to the Court from the interest accruing on the settlement funds after September 1, 1984.

The Fourth Circuit has expressly adopted the criteria established in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974), for determining appropriate attorneys’ fees. Barber v. Kimbrell’s, Inc., 577 F.2d 216 (4th Cir.1978). The twelve Johnson factors are as follows:

(1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney’s opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney’s expectations at the outset of litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneys’ fees awards in similar cases.

Allen v. Burke, 690 F.2d 376, 379 (4th Cir.1982).

In Anderson v. Morris, 658 F.2d 246, 249 (4th Cir.1981), the Fourth Circuit articulated a method for applying these factors because it recognized that “merely providing a checklist of factors to consider does not lead to consistent results, or, in many cases, reasonable fees.” The Anderson decision stated:

The Court of Appeals of the Fifth Circuit, progenitor of the Johnson factors, has recognized these problems. It therefore has instructed district courts to first ascertain the nature and extent of the services supplied by the attorney from a statement showing the number of hours worked and an explanation of how these hours were spent. The court should next determine the customary hourly rate of compensation. These are essentially Johnson factors 1 and 5. The court should then multiply the number of hours reasonably expended by the customary hourly rate to determine an initial amount for the fee award. Finally, the court should adjust the fee on the basis of the other factors, briefly explaining how they affected the award. In re First Colonial Corp. of America, 544 F.2d 1291, 1298-1300 (5th Cir.1977). See also Copper Liquor, Inc. v. Adolph Coors Co., 624 F.2d 575, 581-84 (5th Cir.1980). We endorse this manner of applying the Johnson factors.

658 F.2d at 249. More recently, the Fourth Circuit has noted that “the district court is not required to engage in a lengthy discussion concerning what portion of the award is attributable to which [Johnson] factor ... [for], as the United States Supreme Court noted in Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), many of the Johnson factors ‘are subsumed within the initial calculation of hours reasonably expended at reasonable hourly rate and need not be further considered at all.’ ” Arnold v. Burger King Corp., 719 F.2d 63, 67 n. 4 (4th Cir.1983).

Under these principles the first inquiry to be made is the nature and extent of the services supplied by the attorneys. In support of their petition, plaintiffs have submitted affidavits containing summaries of attorney time, and in one instance, paralegal and attorney time. See fn. infra. These summaries separately account for the numbers of hours spent on such matters as pre-complaint investigation, legal research and preparation of the complaint, coordination with plaintiffs’ counsel, discovery, post-complaint investigation, preparation of matters for the Judicial Panel for Multidistrict Litigation, attendance at pretrial status conferences, preparation of responses to motions to dismiss, requests for investigative materials from the United States Department of Justice, preparation of materials for the Fourth Circuit, preparation of initial notice to consumers, preparation of response to motion to summary judgment, preparation of damage theory and analysis, preparation of motions to transfer, trial preparation, settlement negotiations and administration, and miscellaneous. The total numbers of hours spent by each Attorneys General office, Corporation Counsel for the District of Columbia, and the two private law firms are as follows:

Delaware 833.0
Maryland 10,042.2
Pennsylvania 5,909.3
Virginia 3,679.8
West Virginia 585.2
District of Columbia 942.7
Titus, Marcus and Shapira 937.5
Ladenheim and Campbell 437,9
TOTAL: 23,367.6

Besides these figures, the state of Delaware and the District of Columbia estimate that an additional 1400 hours and 2125 hours, respectively, were spent by their offices although time records are now unavailable. Plaintiffs do not seek reimbursement for these undocumented hours at this time.

In calculating the “lodestar” amount, the number of hours reasonably worked times the customary hourly rate, the Court relies on plaintiffs’ figures as an accurate representation of the hours spent by the attorneys involved. Such hours are reasonable in light of the enormity of this litigation. Although some duplication of effort may have occurred, see Hensley v. Eckerhart, 461 U.S. at 434-37, 103 S.Ct. at 1940-41, 76 L.Ed.2d at 51-52, such duplication was not excessive or unnecessary.

The plaintiffs have not provided figures as to the customary hourly rate of compensation for the type of work performed in this case. However, they have suggested a hypothetical figure of $50.00 per hour. This is a reasonable, but low, approximation of the customary hourly fee. Using this figure to determine the “lodestar” amount, the Court is presented with the following figures:

Delaware $ 41,650.00
Maryland $502,110.00
Pennsylvania $295,465.00
Virginia $183,990.00
West Virginia $ 29,260.00
District of Columbia $ 47,135.00
Titus, Marcus and Shapira $ 46,875.00
Ladenheim and Campbell $ 21,895.00
TOTAL: $1,168,380.00

As plaintiffs note, these lodestar figures exceed the approximately $550,000 and $600,000 which the settlement fund can be expected to generate.

Application of the Johnson factors indicates that this lodestar figure is subject to both downward and upward adjustment. The factor suggesting downward adjustment is the result obtained with regard to the class certification issue. In In re Mid-Atlantic Toyota Antitrust Litigation, 93 F.R.D. 485 (D.Md.1982), this Court denied plaintiffs' motion for class certification because the fee arrangement was in violation of the Code of Professional Responsibility. In the joint fee petition, the plaintiffs indicate that attorneys spent the following amounts of time on the class certification issues: Delaware 6 hours, Maryland 32.8 hours, Pennsylvania 10.6 hours, the Ladenheim firm 104.6 hours, and the Titus firm 235 hours. The Court finds it inappropriate to award attorneys’ fees on this issue in light of its previous ruling. Cf. Hensley v. Eckerhart, supra, 461 U.S. at 434-37, 103 S.Ct. at 1940-41, 76 L.Ed.2d at 51-52 (district court may identify certain hours to be eliminated from fee award where plaintiff met with limited success). Even if the lodestar figure is adjusted downward plaintiffs’ counsel are still receiving less than the adjusted lodestar figure of $1,149,430.

The factor suggesting upward adjustment is the novelty and difficulty of the questions raised. Plaintiffs were required to overcome significant obstacles such as the Illinois Brick doctrine, jurisdiction and venue, and issues regarding the theory of liability. Indeed, at an early stage in the litigation this Court noted that plaintiffs “have a long and tortuous road ahead in seeking to prove the existence of the voluntary conspiracy which they allege.” In re Mid-Atlantic Toyota Antitrust Litigation, 516 F.Supp. at 1296-97. Moreover, throughout these arduous proceedings, counsel’s performance has been of the highest caliber. The Court, therefore, concludes that an upward adjustment of the lodestar figure is appropriate. However, it will not put an exact figure on that adjustment at this time, since there is no indication that plaintiffs’ counsel will recover even the downwardly adjusted lodestar figure. If at a later time it appears that the funds available exceed the adjusted lodestar figure of $1,149,430 this Court will entertain a motion to readjust the lodestar figure.

Plaintiffs have also submitted summaries of out-of-pocket expenses. These summaries separately itemize the costs by the following categories: court costs, contribution to governmental entities cost sharing fund, transcripts, travel, contractual personnel, document duplication, expert witness fees, photocopying, long distance telephone charges, postal, and miscellaneous. The total cost incurred by each Attorneys General office, Corporation Counsel for. the District of Columbia, and the two private law firms are as follows:

Delaware $ 6,434.44
Maryland $85,626.66
Pennsylvania $95,034.60
Virginia $59,131.38
West Virginia $ 7,511.97
District of Columbia $10,617.51
Titus, Marcus and Shapira $12,947.42
Landenheim and Campbell $ 6,702.97
TOTAL: $284,006.85

In holding that most litigation expenses are recoverable as attorneys’ fees, the Fourth Circuit stated:

[T]he question is whether the statutory authorization of reasonable attorneys’ fees are intended to include litigation expenses. We hold that it was.
Litigation expenses such as supplemental secretarial costs, copying, telephone costs and necessary travel, are integrally related to the work of an attorney. ...

Wheeler v. Durham City Board of Education, 585 F.2d 618, 623 (footnotes omitted).

The Court finds that plaintiffs’ costs in this case are reasonable litigation expenses. The only item which causes the Court to pause is the expert witness fee. In Wheeler, the Fourth Circuit noted that the fees and expenses of outside, non-legal consultants and experts “are traditionally not regarded as attorneys’ fees, however essential their services may be to the successful preparation and trial of a complex case.” 585 F.2d at 624. However, the Eighth Circuit recently observed that “[w]ith increasing frequency ... federal courts have suggested that the prevailing party may recover expert witness fees when the expert’s testimony was crucial to the resolution of the case.” Paschall v. Kansas City Star Co., 695 F.2d 322 (8th Cir.1982). In Paschall, the Court held that for expert witness fees to be recoverable, the district court must find that the testimony of the expert was “indispensable” or “crucial” to the issues decided below. Id. at 339. In this case, the affidavits of the economic experts were crucial in determining the fairness and adequacy of the proposed settlements. As the Manual for Complex Litigation § 1.46 emphasizes, the need of the court for reliable economic data concerning the damage suffered by the class as a result of the alleged illegal conduct is great in complex civil antitrust class actions; without such data “a rational determination of what is fair, reasonable, and adequate cannot be made.” In this case, plaintiffs’ economic evidence was essential to this Court’s grant of final approval to the settlements. Therefore, these costs will be allowed.

Plaintiffs have filed the fee petition as a joint petition. They state that the proposed allocation of fees and costs amongst the various counsel presents a fair division, and that the allocation reflects a number of factors which have been discussed thoroughly and agreed upon by all. Under such circumstances, the Court declines to interfere for in complex litigation of this nature “it is virtually impossible for the Court to determine as accurately as can the attorneys themselves the internal distribution of work, responsibility and risk.” In re Ampicillin Antitrust Litigation, 81 F.R.D. 395 (D.D.C.1978). The Court will not alter the allocations as set forth in the joint petition. However, should plaintiffs find the allocations inappropriate in light of its rulings on attorneys’ fees issues, they should notify this Court as to any proposed changes in the allocations.

As a final note, the Court turns to the only issue that was contested at the July 13 hearing, whether a consumer who purchased a 1980 Toyota which did not have two or more of the five elements of the package actually on the car, but which did have a sticker listing the elements as available options for the car is entitled to participate in the settlement. This is a question of fact which the Settlement Committee should resolve as provided by the settlement agreements.

ORDER

In accordance with the statements in the Memorandum attached hereto, it is this 24th day of September, 1984, by the United States District Court for the District of Maryland, ORDERED:

1. That the proposed settlements BE, and the same ARE, hereby APPROVED;

2. That the motions to dismiss BE, and the same ARE, hereby GRANTED; and

3. That the Joint Application for Award of Counsel fees and costs BE, and the same IS, hereby GRANTED in part and DENIED in part.

       The affidavit submitted by the Titus firm did not specify the number of hours spent on the class certification issue. The Court has therefore assumed that it spent approximately the same percentage (24%) of time on that issue as did the other firm representing the private plaintiffs. The Court, however, suspects that the figure of 225 hours may be somewhat inflated since the Titus summary of hours included both paralegal and attorney time. But since the total award apparently will not come close to the lodestar figure even if the Titus figures were totally omitted, the Court will not require greater specificity at this time.