United States District Court, N.D. Illinois, Eastern Division
November 2, 2004.
JUAN ARMSTRONG, et al., Plaintiffs,
AMSTED INDUSTRIES, INC., et al., Defendants.
The opinion of the court was delivered by: JAMES MORAN, Senior District Judge
MEMORANDUM OPINION AND ORDER
The Amsted Industries, Inc. defendants (Amsted defendants)
seeks to recover $40,467.06 in costs and defendant LaSalle Bank,
N.A. seeks to recover $19,390.31 in costs. They seek that
recovery from the fifteen class representatives in the
non-retiree complaint and the plaintiffs in the retiree case. The
class representatives and the retiree plaintiffs oppose the
awarding of costs, but for different reasons.
The class representatives argue that costs in this ERISA action
are governed by the ERISA statute, 29 U.S.C. § 1132(g)(1): "In
any action under this subchapter . . . by a participant,
beneficiary, or fiduciary, the court in its discretion may allow
a reasonable attorney's fee and costs to either party." They
contend that costs should not be awarded because their position
was substantially justified and taken in good faith, Stark v.
PPM America, Inc., 354 F.3d 666, 673 (7th Cir. 2004). But
Stark, as well as other cases cited by class plaintiffs, do not
involve costs, they involve fees. Defendants do not seek fees,
and we would not award them if they had. Are, then, costs
excepted from the normal operation of Federal Rule of Civil
Procedure 54, when fees are not sought, because they are within
the "express provision" of a federal statute, namely
29 U.S.C. § 1132(g)(1)? We think not. The cases cited by the parties provide little support for the
notion that ERISA trumps Rule 54 in those circumstances. In
White v. Sundstrand Corp., 256 F.3d 580 (7th Cir. 2001),
costs were awarded in an ERISA action under Rule 54, without any
reference to § 1132. In Quinn v. Blue Cross and Blue Shield
Association, 161 F.3d 472 (7th Cir. 1998), the court
affirmed the award of costs without discussion, with the analysis
focusing on the appropriateness of fees under § 1132. Costs were
governed by Rule 54 and fees by § 1132 in Spellman v. Aetna
Plywood, Inc., 1991 WL 86066 (N.D.Ill). Costs were not contested
on that ground in Herman v. Central States, Southeast and
Southwest Areas Pension Fund, 2003 WL 22955996 (N.D.Ill.). Only
in Teumer v. General Motors Corp., 1994 WL 48581 (N.D.Ill.),
did a court review costs under a § 1132 standard, and then
virtually without discussion.
We do not find that surprising. Rule 54 costs are the norm, and
we are not referred to any legislative history that suggests that
Congress intended to single out costs for special treatment under
ERISA. Further, § 1132 looks both ways, and it seems unlikely
that Congress intended to deny costs to a prevailing plaintiff
solely because the defendants' position was substantially
justified and in good faith. Finally, we note that costs are
generally a very small tail on a far larger fees dog.
But the awarding of costs in a class action can have a chilling
effect, as was noted in White v. Sundstrand Corp., supra, at
586, and the suggestion there that plaintiffs' contract with
their attorneys for the attorneys to pay the costs if they lose
is not much solace to plaintiffs who were never informed of that
option. That chilling effect is, however, equally present in a
civil rights action, and § 1132 is equally applicable to a single
plaintiff case. We do not understand § 1132 to be intended to
address the effect noted in White. We cannot deny costs on that
ground. Neither can we deny costs on the ground that any class
representative cannot pay his or her pro rata share, as none claims an inability to
pay a share, even if paying the whole amount is not feasible.
That we cannot deny costs, however, does not compel the
defendants to pursue them. We ultimately ruled against the
non-retiree plaintiffs, but we recognize that they, through no
fault of their own, have endured a precipitous decline in the
value of their ESOP shares. They are, or until recently were,
employees of the company. But whether or not costs are further
pursued is not a decision for the court.
This case, as we have noted, involved the class action of
non-retirees, the Armstrong class, and claims of nine retirees,
the Bradley plaintiffs, against Amsted defendants. Seven of the
Bradley plaintiffs settled and, although they failed to file a
stipulation of dismissal, their claims ended in early 2004, and
Amsted defendants do not seek to recover costs from them. The
other two Bradley plaintiffs were Blankenship and Sparks. It
was ultimately determined that they were members of the
Armstrong class. That has two consequences. One is that some of
the costs incurred by the Amsted defendants are attributable to
the claims of the Bradley plaintiffs' claims. The Armstrong
class plaintiffs represent those to be $4,296.89, and the Amsted
defendants have not disputed that amount. The great majority of
the costs are attributable to the Armstrong class claims.
Blankenship and Sparks were not class representatives in pursuing
those claims. They were, it was ultimately determined, merely
members of a large mandatory class. They are not responsible for
costs attributable to the class claims, their claims were never
against the LaSalle Bank, and most of the costs from the claims
by the retiree plaintiffs have been waived.
We conclude that the class representatives are jointly and
severally liable to the Amsted defendants for costs in the amount
of $36,170.17, and to LaSalle Bank for costs in the amount of $19,390.31, and that Blankenship and Sparks are jointly and
severally liable to the Amsted defendants in the amount of
$954.86 their share of the Bradley costs. The judgment is,
however, stayed pending appeal.
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