Ackerman-Chillingworth, Division of Marsh & McLennan, Inc. v. Pacific Electrical Contractors Ass'n

ELY, Circuit Judge:

This is a private antitrust action challenging a workmen’s compensation plan, which was implemented by an employers’ association pursuant to a collective bargaining agreement. The appellants alleged that the plan was both illegal per se and unlawful as contrary to the rule of reason under section 1 of the Sherman Act, 15 U.S.C. § 1 (1970). The opposing parties moved for summary judgment, and the District Court granted the motion of the appellees, writing an excellent opinion, reported at 405 F.Supp. 99 (D.Hawaii 1975). Here, the appellants vigorously challenge the propriety of the order.1

*486FACTS 2

Appellants, who are general insurance agents and insurance solicitors in Hawaii, filed a complaint against the Pacific Electrical Contractors Association (PECA), a trade association, its executive secretary, one Oda, the International Brotherhood of Electrical Workers, Local 1186 (IBEW), its business manager, named Fujikawa, the Insurance Company of North America (INA), and the latter’s wholly-owned subsidiary, Pacific Employers Insurance Company (PEIC). Of the approximately 120 electrical contractors in Hawaii, 63 are dues-paying members of PECA. PECA negotiates with IBEW on behalf of all the contractors, who, accordingly, have signed a collective bargaining contract with IBEW.

Prior to 1974 the electrical contractors purchased their insurance individually from a number of carriers through different agents. Hawaii’s law permits employers in an occupational field to form “safety groups” for the purpose of purchasing their insurance from a single carrier. Haw.Rev. Stat. § 431-693(3) (1968). Safety groups have been extensively utilized in other states but were uncommon in Hawaii until the concept was introduced by the appel-lees.

Several characteristics of safety groups make their use attractive. First, the insurance carrier encourages cooperative efforts among employers, workers, and insurers aimed at reducing occupational hazards and improving employee rehabilitation programs. The increased effectiveness of such safety and rehabilitation programs promotes diminution of the amounts of premiums. Second, insurance purchased by members of a safety group is of the participating type; thus, dividends are payable at the end of the policy term. In the safety group context, insurance carriers are more likely to declare large dividends rather than risk losing business to a competitor. Third, and most significantly, all employers in a safety group are eligible to receive dividends, even though carriers generally do not pay dividends to small employers. This feature was particularly attractive to the electrical contracting industry, which consists largely of small employers.

In May, 1973, IBEW proposed to PECA that all Hawaii electrical contractors place their workmen’s compensation insurance either with one carrier or through a Taft-Hartley trust fund. Union officials believed that either plan would benefit the employees by providing for better claims service through a centralized administration. In addition, a single insurer would likely have more incentive and a greater opportunity to upgrade safety and rehabilitation programs.

IBEW offered to PECA the option to manage such a workmen’s compensation insurance plan at a meeting of PECA’s Board of Directors held on May 23, 1973. Fujika-wa, of IBEW, expressed concern about the financial condition of PECA. He suggested that electrical contractors would receive reduced rates under a group insurance plan and that PECA could supplement its income by charging electrical contractors a fee for administering such a plan. To secure the anticipated benefits for the union and PECA, Fujikawa and the PECA Board agreed that contractors who were not members of PECA should also be required to participate in the plan.

In September, 1973, Martin E. Segal Company (Segal), a consulting firm that had assisted PECA and IBEW in insurance matters, evaluated the IBEW proposal. In lieu of a Taft-Hartley trust fund, Segal recommended a dividend safety group plan called the “Association Dividend Group Plan.” Under this plan the contractors would continue to pay premiums calculated according to the individual risks of their businesses, based upon considerations such as their type of work, volume of payroll, and safety record. Dividends would be computed, however, according to the record *487of the entire group of contractors. Segal estimated that total dividends under the proposed plan would exceed those that the contractors were currently earning.

Oda reported Segal’s proposal to the PECA Board of Directors. He suggested earmarking a percentage of the dividends for an employee rehabilitation program. He also recommended that, in order to supplement the income of PECA, dividends be applied to PECA dues, “with the inference that non-members would be forfeiting their dividends.”

PECA’s Board of Directors and IBEW officials held a joint meeting on September 27, 1973, to discuss the Segal plan. The PECA directors agreed to recommend that its members adopt the “Association Dividend Group Plan,” with the mandatory participation of all employers covered by the collective bargaining agreement.

On October 26, 1973, PECA convened a meeting of the general membership to discuss the proposed group plan and nonmember contractors were invited to attend the meeting. Berton Jacobson, representing Segal, explained the features of the proposed plan, including its mandatory character and the distribution of dividends. He projected an overall fifteen percent savings in premiums under the group plan. The membership approved an amendment to the collective bargaining contract that required participation of all signatory contractors, with the plan administered by PECA. The amendment read:

ARTICLE XIX — WORKMEN’S COMPENSATION
Section 1. The parties agree that present practices and procedures for compensation of employees for occupational illness and injuries are unsatisfactory, and require substantial improvement.
Section 2. The parties agree that all Employers will participate in an “Association Dividend Group Plan” providing for workmen’s compensation insurance coverage for their employees, as recommended by the actuary designated by the parties. The Plan will be administered by PECA. The Union shall be consulted by PECA prior to making any important policy decisions which may affect the employees.
Section 3. The Plan shall be initiated February 1, 1974.

During the following weeks a number of insurance carriers and agents expressed to Oda their disapproval of the mandatory nature of the plan. In a letter to Jacobson, Oda wrote, “I’m still getting calls from sub-agents who feel we will be putting them out of the workmen’s compensation business.”

On November 19,1973, Segal sent a specification letter to nine insurance carriers to solicit bids for the PECA plan. The letter requested written proposals concerning promptness of claims payments, safety and rehabilitation programs, and dividend payments. It did not specify a general agent or whether the plan would be “open” or “closed” in the sense that only one or a limited number of agents could represent the carrier. In a letter written on the same day, Jacobson warned Oda to furnish the specification letter only to direct representatives of carriers — not to agents or brokers, who might claim an entitlement to compensation for their services.

Only three insurance companies submitted bids: First Insurance Company of Hawaii, Argonaut Insurance Company, and INA. The First Insurance Company bid, which one White of Segal rejected, “require[d] the free choice of an insurance agent by the insured,” and offered a dividend plan “applicable to individual risk, with the amount of the dividend being determined on the basis of that risk’s premium size and experience.” White testified that the bid was rejected because it did not contain a group dividend plan, as requested in the specification letter.3

*488Segal recommended the INA plan, and the PECA Board of Directors accepted that plan on January 24, 1974.4 INA proposed to write the policies through PEIC, its subsidiary. INA quoted a minimum retention rate of 31.9 percent, which was more favorable than the 40.8 percent retention quoted by Argonaut Insurance Company. INA stated in its proposal that it would acquiesce to the appointment of a broker to coordinate the plan if PECA so desired.

Oda had been licensed as an insurance solicitor since 1957 but was inactive for a number of years before the implementation of the group plan. In order to supplement PECA’s income, PECA intended that Oda should serve as agent of record5 for the group plan and contribute his net commissions to PECA to defray some of the costs of administering the plan. The Yamada Insurance Agency, Ltd., for whom Oda solicited, entered into a nonexclusive general agency agreement with INA. The agreement authorized Yamada to solicit, accept, and bind risks for INA and PEIC. Consequently, all policies sold by Oda under the group plan were written by Yamada.

Oda wrote to all the signatory contractors on January 31, 1974, reminding them that the amended collective bargaining agreement required participation in the group plan and soliciting their applications for INA policies. Oda asked that each contractor notify him as to the expiration date of its current workmen’s compensation policy. The contractors were permitted to retain their current coverage until its expiration, at which time their procurement of an INA policy would be required.

During the next eleven months, Oda sent numerous follow-up letters to the contractors who had not yet acquired a group plan policy. The appellants alleged that Oda, with his aggressive solicitation tactics, coerced contractors to purchase PEIC policies through him. The record does not support that claim. It is true that Oda firmly told contractors that they could not renew their coverage with their present carriers and that it was necessary that they purchase a PEIC group policy. This was his responsibility as business manager of PECA. While he encouraged the contractors to obtain their policies through him, it was evident that he never told any contractor that the contractor must deal through him rather than through another insurance solicitor.

From the inception of the group plan, INA insisted that the plan should remain “open,” insofar as to permit any agent representing INA/PEIC to issue policies to signatory contractors. Yamada’s president advised one of the appellants, Bayly, Martin and Fay (BMF), a general agent, that BMF could issue policies. PEIC appointed BMF a general agent in August, 1974, but by that time one of the firm’s clients had already switched to the PECA plan through Oda.6

Oda objected to the stance of INA because he feared a loss in his net commissions, which PECA would receive for application to its expenses of administering the group plan. In written communications to the PECA Workmen’s Compensation Committee, the PECA Board of Directors, and Jacobson, Oda characterized the use of other agents as discriminatory in nature. Oda’s views, however, did not have any apparent influence upon the terms of the collective bargaining agreement, which did not require that Oda handle the policies, or upon the practices of Yamada, PEIC, or INA.

*489Shortly thereafter, Atlas Insurance Agency, Ltd., requested that it serve as agent of record under the group plan, with contractors having the right to a free choice of agents. Oda and PECA summarily rejected the proposal because it would have eliminated PECA’s supplemental income.

Two insurance agents other than oda, one of them the parent company of an appellant, sold PEIC insurance to signatory contractors in 1974 and 1975. Between February 1, 1974, and June 20, 1975, 114 of the 128 signatory contractors bound by the collective bargaining contract placed their PEIC insurance policies through Oda and Yamada.

JURISDICTION

IBEW and Fujikawa contend that we lack jurisdiction under 28 U.S.C. § 1292(a)(1) (1970) because the District Court’s order was not interlocutory. They urge that the order was final because it disposed of the entire claim of appellants and, moreover, that no jurisdiction attached under 28 U.S.C. § 1291 (1970) because appellants failed to secure the certificate of final judgment prescribed by Fed.R.Civ.P. 54(b).

Appellants support their argument with isolated language from In re Merles, Inc., 481 F.2d 1016, 1018 (9th Cir. 1973):

An interlocutory order or decree is one which does not finally determine a cause of action but only decides some intervening matter pertaining to the cause, and which requires further steps to be taken to adjudicate the cause on the merits.

The Merles decision, however, is not germane to this case. In Merles we held that an order of the bankruptcy court, disapproving a compromise of a claim of the bankrupt’s estate against a secured creditor, was not a final judgment for purposes of appellate review under 11 U.S.C. § 47(a) (1970).

We hold that we do have jurisdiction under section 1292(a)(1). Appellants requested injunctive relief in their complaint, which the District Court denied. Moreover, the District Court order is interlocutory for purposes of appellate review since Oda and PECA’s counterclaim under the Sherman Act remains pending. Whenever a court fully adjudicates a claim for an injunction and does not execute a Rule 54(b) certificate, the adjudication is interlocutory if other claims remain pending. Hartford Fire Insurance Co. v. Herrald, 434 F.2d 638, 639 (9th Cir. 1970); Rains v. Cascade Indus., Inc., 402 F.2d 241, 243 (3d Cir. 1969); Ronel Corp. v. Anchor Look, Inc., 312 F.2d 207, 208 (9th Cir. 1963).

THE PER SE RULE — SHERMAN ACT § 1

The appellants alleged that the requirement of the collective bargaining contract that all signatory contractors provide workmen’s compensation insurance through the “Association Dividend Group Plan” constitutes a group boycott that is illegal per se. See United States v. General Motors Corp., 384 U.S. 127, 86 S.Ct. 1321, 16 L.Ed.2d 415 (1966); Radiant Burners, Inc. v. Peoples Gas Light & Coke Co., 364 U.S. 656, 81 S.Ct. 365, 5 L.Ed.2d 358 (1961); Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959). Thus, their position is that the arrangement violated section 1 of the Sherman Act regardless of the arrangement’s economic effects or the motivations of the appellees.

The District Court rejected appellants’ argument, reasoning that IBEW and PECA did not refuse to deal with insurance carriers, that insurance agents were not precluded from writing PEIC group policies, and that, even assuming arguendo that “an implicit agreement existed to use Oda exclusively, there would still not be a per se violation of § 1.” 405 F.Supp. at 109 (emphasis in original).

In reviewing the propriety of the District Court’s summary judgment in a complex antitrust case, we look at the record in the light most favorable to the appellants, here, the parties opposing the motion for summary judgment that was granted. Poller v. CBS, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 7 *490L.Ed.2d 458 (1962). We nevertheless conclude that the record could not support a finding that appellees committed a per se violation of section 1.

First, appellants criticize the requirement that all contractors use one insurance carrier, but this feature cannot stigmatize the group plan as a boycott. Appellees solicited competitive bids from nine insurance companies, and it is not alleged that they refused to deal with other insurers. Furthermore, appellants, who are insurance agents and solicitors, have not demonstrated how the sole carrier requirement may have done harm to them.

The second theory presented by appellants is that Oda’s underwriting of policies constituted a boycott of insurance agents such as themselves. Appellants stress particularly the mandatory nature of the group plan and Oda’s backing and success in soliciting policies, suggesting that appellants were thereby precluded from also soliciting the workmen’s compensation policies. It was the legitimate desire of PECA and IBEW that Oda should write as many of the INA/PEIC policies as possible. Oda had made a very attractive offer to PECA and the contractors, i. e., he would use his net commission income to offset PECA’s cost of administering the group plan. It was in the self-interest of the individual PECA-member contractors to purchase their insurance through Oda in order to reduce the expenses of PECA. Moreover, Oda aggressively solicited the business of all the signatory contractors, both members and nonmembers of PECA. He persistently reminded recalcitrant contractors that their labor agreement required that they purchase PEIC workmen’s compensation insurance, sending them applications for insurance to be processed through him.

There is, however, no support whatsoever in the record for appellants’ contention that the appellees coerced contractors to deal only with Oda.7 The labor agree*491ment did not specify that only Oda could solicit the contractors’ business, and the appellants presented no evidence that any contractor believed that he could not purchase a PEIC policy through the agent of his choice. At numerous times, INA made it clear that any INA agent could write policies for the contractors, and INA even appointed one of the appellants as an agent. It is true that Oda, for obvious good reasons, sold the vast majority of the contractors’ policies, but it is also true that other agents did, in fact, sell some of the policies.

THE RULE OF REASON — SHERMAN ACT § 1

Appellants’ next line of attack under the Sherman Act is that, under the “rule of reason,” section 1 condemns the group insurance plan. The rule of reason prohibits every contract, combination, or conspiracy that significantly restrains competition. Standard Oil Co. v. United States, 221 U.S. 1, 59-60, 31 S.Ct. 502, 55 L.Ed. 619 (1911); see United States v. Topco Assocs., Inc., 504 U.S. 596, 606-07, 92 S.Ct. 1126, 31 L.Ed.2d 515 (1972). Whether a particular restraint unduly suppresses competition depends upon the facts peculiar to the business in which the restraint is applied, the nature and history of the restraint, its probable effect, and the reasons for which it was adopted. Board of Trade v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 62 L.Ed. 683 (1918).

The complaint of appellants is that Oda’s role in the group plan, coupled with the mandatory requirement that all signatory contractors to the collective bargaining agreement participate in the group plan, prevented the appellants from competing with Oda for the contractors’ insurance business. In particular, they stress Oda’s return of commissions to PECA and his efforts to ensure the compliance of the contractors with the collective bargaining agreement as features of the arrangement leading to Oda’s success at their alleged expense.8

The District Court ably explained the considerations that motivated IBEW and PECA to implement the group plan:

The IBEW initiated its proposal for a change in the method of purchasing insurance in order to create opportunities for better claims service for its members, more effective safety plans, and better rehabilitation programs. The PECA eventually agreed to the group-plan approach because it saw several direct benefits for electrical contractors in addition to the direct benefits to its employees. Better safety and rehabilitation programs could reduce premiums. Group purchasing could lead to lower retentions by the carriers. Group evaluation of dividends could make all contractors eligible to receive dividends regardless of the size of their individual premiums, increasing total dividends. Commissions earned by Oda and credited to the PECA could cover expenses incurred in administration of the plan, as well as eventually lead to reduced premiums through a negotiated .lower commission.

405 F.Supp. at 110. In essence, PECA sought to obtain a better product, insurance, at a lower cost, a goal that would appear to enhance, rather than diminish, competition among suppliers of that product. Oda’s underwriting of the policies furthered a salutary objective.

*492Appellants attack the professed purpose of appellees as a purpose designed to disguise sinister, monopolistic intentions. They have, however, presented no evidence of any such anticompetitive motivation on the part of IBEW, PECA, Oda, PEIC, or INA. In this respect, this case resembles Joseph E. Seagram & Sons v. Hawaiian Oke & Liquors, Ltd., 416 F.2d 71, 78 (9th Cir. 1969), cert. denied, 396 U.S. 1062, 90 S.Ct. 752, 24 L.Ed.2d 755 (1970), wherein our Brother Duniway wrote:

Nothing in the record suggests, much less would support an inference, that [defendant’s] purpose was to eliminate or damage plaintiff, or to force it to comply with unlawful demands, rather than to get better distribution of Seagram and Barton products. . . . Surely, this is the essence of competition. Surely, liability for treble damages should not be based on such second guessing of business judgment by a jury.

In applying the rule of reason, our analysis does not end with an examination of purpose. Even though the purpose of a trade practice is innocent or benign, it may be unreasonable if it is substantially harmful to competition. E. g., Helix Milling Co. v. Terminal Flour Mills Co., 523 F.2d 1317, 1322 (9th Cir. 1975), cert. denied, 423 U.S. 1053, 96 S.Ct. 782, 46 L.Ed.2d 642 (1976); Rex Chainbelt Inc. v. Harco Prods., Inc., 512 F.2d 993, 1006 (9th Cir.), cert. denied, 423 U.S. 831, 96 S.Ct. 52, 46 L.Ed.2d 49 (1975). Here, the decision that Oda should underwrite policies surely may have deprived the appellants of some business. Yet it cannot be said that this fact alone corrupted the plan to the extent that it constituted an unreasonable restraint of trade. The Sherman Act protects competition, not competitors who may suffer some pecuniary harm because of the competitive process. A contrary decision would stand the Act on its head. Overall, the group' insurance plan, with its competitive bidding, dividend plan, and employee safety and rehabilitation programs, increased competition in Hawaii’s insurance market. See 405 F.Supp. at 111. Appellants’ losses resulted from the initiative taken by appellees in developing a better plan for workmen’s compensation insurance, not from any artificial impediments to appellants’ ability to do likewise or to otherwise compete in a reasonable way.

Furthermore, the appellants are not presently precluded from competing with Ya-mada and Oda. As we have already noted, INA has indicated that other insurance agents may write group policies for contractors, and it has already licensed one of the appellants for that purpose.

CONCLUSION

The appellants have raised a variety of other issues, but we do not reach them on this appeal. For the first time, they claim on appeal that the appellees have violated section 2 of the Sherman Act, 15 U.S.C. § 2 (1970), by monopolizing and attempting to monopolize the sale of workmen’s compensation insurance to Hawaiian electrical contractors. There were no allegations of section 2 violations in the complaint, but the District Court explored the possibility that appellants’ motion for summary judgment could be construed to present a section 2 claim. See 405 F.Supp. at 112. We decline to address the issue because of its insufficient development in the trial court.

The District Court also determined that neither IBEW nor PECA were immune from antitrust liability because of the non-statutory labor exemption, but that INA and PEIC were immune under the McCar-ran-Ferguson Act, 15 U.S.C.A. §§ 1011— 1015 (1970). 405 F.Supp. at 113, 114. In view of our decision that the District Court properly granted summary judgment for appellees on the antitrust issues, we do not review these rulings.

The order of the District Court is

AFFIRMED.

. In a second count, the appellants alleged that the collective bargaining agreement violated § 8(e) of the National Labor Relations Act, 29 U.S.C. § 158(e) (1970). The District Court rejected this claim, 405 F.Supp. at 114-18, and *486the appellants do not renew the contention on appeal.

. In summarizing the facts, we have borrowed extensively from the District Court’s thorough exposition. Id. at 102-07.

. Oda testified that the requirement included by the First Insurance Company that contractors have a free choice of agents did not meet the bid specifications. Appellants argue that the First Insurance Company bid was rejected for this reason. The bid proposal did not, however, preclude free choice of agents. In addition, White, not Oda, was responsible for the *488rejection of bids, and Oda testified that he did not know why the bid was rejected.

. At this meeting Jacobson stated that he knew of no other instance in the United States in which a labor agreement required that employers participate in a particular group workmen’s compensation program.

. An agent of record is a solicitor who sells a particular policy to a particular insured.

. One member of BMF stated in an affidavit that in June, 1974 a PECA representative told him that he “would not be allowed to sell or service workmen’s compensation insurance business with any of the signatory electrical contractors . . . regardless of whether such insurance was placed with [PEIC].” Nevertheless, two months later BMF received an appointment from PEIC.

. Assuming arguendo, as did the District Court, 405 F.Supp. at 109, that the appellees implicitly agreed to utilize Oda exclusively, such an arrangement would still lack the distinguishing characteristics of boycotts that have been labeled illegal per se. Appellees are not a horizontal combination of competitors organized to exclude direct competition, which the Supreme Court condemned in Eastern States Retail Dealers’ Ass’n v. United States, 234 U.S. 600, 34 S.Ct. 951, 58 L.Ed. 1490 (1914) (lumber retailers blacklisted wholesalers who sold to retailers’ customers). Nor are IBEW/PECA and INA/PEIC vertically aligned with the intent to exclude competitors from one of their markets, as in Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959) (single retailer induced manufacturers to exclude competing retailer). Unlike Broadway-Hale Stores in Klor’s, PECA, Oda, and the contractors agreed to deal with Oda alone, not to improve Oda’s competitive position as an insurance solicitor but to aid PECA and to improve the quality of the contractors’ insurance plan. Nor were the appellants able to show any concerted refusal to deal, designed so as to influence the trade practices of the appellants. See Kiefer-Stewart Co. v. Joseph E. Seagrams & Sons, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951) (liquor manufacturers collectively refused to sell to price-cutting wholesalers); Fashion Originators’ Guild of America v. FTC, 312 U.S. 457, 61 S.Ct. 703, 85 L.Ed. 949 (1941) (original designers refused to sell to retailers who sold copies of the original designs). See generally E. A. McQuade Tours, Inc. v. Consolidated Air Tours Manual Comm., 467 F.2d 178, 186-87 (9th Cir. 1972), cert. denied, 409 U.S. 1109, 93 S.Ct. 912, 34 L.Ed.2d 690 (1973).

Under the assumption that there was a boycott, the requirement that all the contractors participate in the group plan and purchase PEIC insurance does not affect our application of the per se doctrine. The contractors who may have preferred not to join the plan are not boycott victims, and the impact of the arrangement on insurance agents is no different qualitatively because of the mandatory nature of the plan. See 405 F.Supp. at 108 n. 43.

Thus, in the absence of any of the competitive injuries wrought by the classic-type boycotts traditionally considered as unlawful per se, the District Court properly rejected application of the per se rule. Joseph E. Seagrams & Sons v. Hawaiian Oke & Liquors, Ltd., 416 F.2d 71 (9th Cir. 1969), cert. denied, 396 U.S. 1062, 90 S.Ct. 752, 24 L.Ed.2d 755 (1970), is instructive. Two distillers, who were dissatisfied with the performance of their joint distributor, agreed to transfer their business to a new distributor. Our court refused to apply the per se rule because of the lack of evidence that the distillers were motivated by a purpose other than the desire to improve the distribution of their products. Id. at 78, 80. Similarly, there is no indication here that the appellees established their group plan of insurance, with its alleged boycott of appellants, in order to pro*491tect Oda from competing insurance solicitors. Rather, their motive was clearly shown to be the improvement of the quality of their insurance coverage and the decrease of its cost. See also Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977), aff'g, 537 F.2d 980 (9th Cir. 1976) (considerations militating against use of per se rule).

. In this summary proceeding the District Court, despite the dearth of evidence, assumed that a majority of the PECA-member contractors and Oda agreed that henceforth the contractors would purchase insurance only through Oda, compelling all signatory contractors to the collective bargaining agreement to do likewise. 405 F.Supp. at 111. In light of the factors discussed below, this assumption would not lead to a different -result in our application of the standard of reasonableness.