Mr. FORT. I do not wish to take too much time of your committee, or to duplicate the testimony which will be given by witnesses who follow me, or to encroach too much on the ground they will cover. Accordingly, if it please the committee, with this short introductory statement, I will conclude and introduce to the committee Mr. Freels. Senator MOORE. Any questions, Senator Donnell? Senator DONNELL. I would like to ask Mr. Fort a very few. Mr. Fort, in the early portion of your testimony you state that the opportunity afforded plaintiffs to subject a carrier to suit wherever he does business has resulted in a Nation-wide system of solicitation on the part of a small group of lawyers. Mr. FORT. Yes. Senator DONNELL. Are you prepared, Mr. Fort, to give us definite information on that, as to whether or not solicitation has occurred and if so, by whom and where? Mr. FORT. Yes. Judge Thompson covered that ground quite fully at the House hearings. Mr. Freels covered it quite fully at the House hearings. Senator, I thing you will hear from those witnesses on that point. Senator DONNELL. May I ask about this, also: You refer later in your testimony to the effect on operations of a railroad resulting from the taking away of employees to far-distant points to be witnesses. Mr. FORT. Yes. Senator DONNELL. Is it your observance that that fact has actually resulted in hardships in the operation and in inefficiency in operation, or is there a sufficient backlog of employees and substitute employees available to fill in the places of the absentees without actual injury to the operation of the roads? Mr. FORT. I think the situation might vary to some extent with varying conditions. The hardship might be greater in times of heavy traffic than at other times. You are familiar with the fact that the Director General of the Railroads, during the First World War, found that suits in remote jurisdictions were a great burden. You are also familiar with the fact that in Davis v. Farmers Coop Equity Co. (1923) (262 U. S. 312), Mr. Justice Brandeis found that such suits impaired the efficiency of operation and placed a heavy burden on interstate commerce. Traffic is now very heavy. I see no reason to doubt that the actual hardship at present is a serious one. However, my personal knowledge on this point is limited and I would suggest that you might get a better reply to your question from Mr. Freels or Mr. Gibson, who represent individual railroads and are more familiar with operating conditions at this time. Senator DONNELL. You have also mentioned certain statistics arising from an investigation on some 50 railroads, the results showing that during a 5-year period of July 1, 1941, through June 1946, more than 2,500 suits under the Employers' Liability Act were filed in jurisdictions remote from the site of the accident, and the residence of the plaintiff. So that our record may be clear, do you know what the term "remote" is defined to be in that statistical study? Mr. FORT. Yes. That is also a feature that Mr. Freels will cover in detail, and I intend to cover it only in generalities. As I understand it, in the preparation of these statistics, cases were regarded as transported if brought outside the Federal district where the accident occurred and outside the Federal district where the injured employee lived. Senator MOORE. That is, within the same State, for instance? Mr. FORT. Or outside the State or within the State. For example, I believe that suits filed in the northern district of Illinois originating in the southern district, are included in those figures, and the same thing is true in California. Senator DONNELL. Mr. Fort, I take it Mr. Freels is prepared to testify more fully on that subject. One other question, if I may, Mr. Chairman. I would like to ask you, Mr. Fort, whether or not you have examined in the question as to whether, if this bill were to be enacted into law, it would provide a different rule than prevails in other types of litigation? For illustration, if a man is charged with having negligently caused the injury of another person in some operation other than that of common carrier, what is the rule today as to the venue in such case? Mr. FORT. Are you speaking of the general venue provision of thẻ code? Senator DONNELL. Yes, sir. Mr. FORT. Let me say, if I may, Senator, that the factual distinction between railroads and other defendants to which I adverted very briefly in my original statement should be borne in mind. Railroads, by the nature of their operations, extend through a good many States, and by nature of their operations, they are required to maintain offices in a good many other States. So railroads do business and for that reason are subject to suit under the provisions of the Employers' Liability Act by reason of the factual background in quite a different way from defendants generally. The factual situation would be one that would serve to make a distinction there. I think you have that in mind. Senator DONNELL. I have that point in mind. Mr. FORT. The general venue provision of the code is found in section 112. Senator Donnell. 28th United States Code? Mr. FORT. Twenty-eighth United States Code section 112, yes, sir. That provision reads in this way [reading]: No civil suit shall be brought in any district court against any person by any original process or proceeding in any other district court than that whereof he is an inhabitant. Senator DONNELL. That is subject, however, to the exceptions provided in section 113, and 118. Mr. FORT. I don't believe they have much bearing here. Senator DONNELL. I see. I am not familiar with those sections. Mr. FORT. I should go on: But where the jurisdiction is founded only on the fact that the action is between citizens of different States that is, where the case does not arise under a Federal law suits shall be brought only in the district of the residence of either the plaintiff or the defendant. You will hear more about this, too, but as I understand it, the "district whereof he is an inhabitant," has been construed by the courts to mean the district in which defendant is incorporated, in the case of a corporation. Also, the residence referred to in the balance of the provision refers to the State of the corporation. You know, I take it, Senator, that at one time the Employers' Liability Act carried no general venue provisions, and suits under that act were subject to the general venue statute. That was thought to work a hardship on the plaintiffs in that they were required to bring suit in the State of incorporation, which might be a long way away from the site of the accident, or the residence of the plaintiff. The amendment which resulted in the provisions was intended to avoid that hardship. We think that amendment went far beyond what was necessary to avoid hardship and in doing so created new hardships. Mr. Freels will deal with that at length. Senator DONNELL. No further questions. Senator MOORE. Senator Langer, do you have any questions? Senator MOORE. Thank you, Mr. Fort. Mr. FORT. Thank you. Senator MOORE. Let the record show that Mr. W. J. Holloway of Oklahoma City, Okla., attorney for the Santa Fe, wishes to enter his appearance at this point. The next witness is Mr. Freels. Will you kindly state your name for the record. STATEMENT OF JOHN W. FREELS, ILLINOIS CENTRAL RAILROAD CO., CHICAGO, ILL. Mr. FREELS. My name is John W. Freels. I live in Chicago. I am one of the general attorneys of the Illinois Central Railroad Co. For the last 14 years I have been charged with the trial of the serious personal injury cases of that company in Chicago, and have supervised that litigation in Illinois and Missouri. Before that, I lived at East St. Louis, another railroad center, across the river from the Senator, and represented two railroads at that time, after serving several years as state's attorney. My comments today are based both on 30 years' practice as a trial attorney and on special studies that we have made as a result of this legislation. As Mr. Fort has commented, Mr. Jennings in the Seventy-ninth Congress introduced a bill seeking to limit venue under the Federal Employers' Liability Act. While that wasn't reached in the Seventyninth Congress, it caused a great deal of comment in railroad circles, and in October 1946 a committee was appointed to study the general situation. Mr. Jennings introduced a similar bill in this Congress. When that bill was reached in the House, I was privileged, as cochairman of an AAR committee that had charge of the matter, to testify before the House Judiciary Committee. The bill was passed in the same language as is now under consideration here as S. 1567. The discussion of the principles involved necessarily concerns two or three matters: The historical background to which Mr. Fort has commented rather briefly, the abuses which have arisen under the act, and the possible cures that are available. In the hearings before the House subcommittee Judge Jennings testified about the historical background and the particular abuses at Knoxville, Tenn., his home city, which had caused the original resolution by the Knoxville Bar Association, which resulted in his original bill. Senator MOORE. That is in the record, too. Mr. FREELS. That is in the record, sir, and he will testify, I understand, later on; so I will just mention very briefly the historical background as he will cover it adequately. As Mr. Fort has said, the original Federal Employers' Liability Act of 1908 had no venue provisions and a plaintiff under that act was required to go to the place of incorporation of the defendant railroad, often hundreds of miles away. The litigation which arose after the second Federal Employers' Liability Act of 1908 demonstrated to Congress that this was an injustice and on April 5, 1910, an amendment was passed which contained the present venue provisions. They are entirely different from any venue provisions that are applicable to any other type of litigation. The present provisions permit suit to be brought where the defendant is incorporated, the residence of the defendant, where the accident arose, or where the defendant may be found at the time of the commencement of action. It is that last unusual provision that has caused the widespread abuse under the act. The privilege of suing the defendant at any point where he may be found has resulted in suits being brought in New York City, as Mr. Fort has brought out, where the cause of action trose in California and Arizona. I will cover that a little more fully later on. My remarks today will be limited chiefly to a discussion of the extent of the abuses resulting from the venue provisions, a discussion of the burdens on the courts, the congestion that has arisen in a good many places, and the very real injustices to the railroads as a result. of the additional expense, disruption of service, and so forth. Senator MOORE. You testified before the House committee? Mr. FREELS. Yes, sir. Senator MOORE. It is in the record? Mr. FREELS. That is covered in part, sir. As Mr. Fort has pointed out, the 1910 amendment, while designed to permit plaintiffs to sue in a forum convenient to their residence, permitted soliciting lawyers to take cases to very remote points, and that practice has grown steadily. After Mr. Jennings introduced his first bill, a study was made, and reports of some 51 railroads were obtained, indicating the extent of the transportation of these law suits. That study was used in my testimony and some of the other testimony given before the House subcommittee. That original study has now been supplemented by another study covering 14 months expiring last August 31. These reports indicate that this type of law business has been drained away from the entire country and concentrated in a few centers. It has been concentrated not for the benefit of the bar as a whole, but for the benefit of just a handful of lawyers. Mr. Fort's statistics covered, I believe, the last 14 months. My comments here cover the entire 6 years that are covered by the two studies. According to our reports, one Chicago lawyer handled in this period 606 suits and claims for personal injuries arising in Pennsylvania alone, 138 occurring in Michigan, and 152 in Ohio, almost a thousand cases in that one law office, the closest one being from Michigan. Another Chicago lawyer had 87 suits which arose in California and Arizona alone. One Oakland, Calif., law firm had 287 suits imported from Arizona, New Mexico, and Nevada alone. I am not commenting now on what he had from his home State, but the 287 from those three foreign States. Minneapolis-St. Paul lawyers, some with offices also in Chicago, filed 523 suits in Minnesota and Illinois, many from points as remote as California, Mississippi, and Florida. One New York City lawyer handled 153 cases arising in Pennsylvania alone. One East St. Louis lawyer had 73 cases, many from points as remote as North and South Carolina. The figures I have given do not include any cases which arose in the jurisdiction where the lawyers had their offices. They are all from remote points. On the point that you mentioned a few minutes ago, Senator, if you will turn to the last two pages of my testimony, there are some exhibits attached. You will note that the studies show a total of 1,171 suits and 994 claims imported into or transported within Illinois. You questioned Mr. Fort as to the transfer of suits within the State. You notice that Illinois shows that 112 suits and 32 claims have been transported within Illinois. That means from the southern district of Illinois to Chicago or from the eastern district of Illinois to Chicago, or perhaps from Cairo to Chicago, some 500 miles. Disregarding the 112 suits and 32 claims that came from other parts of Illinois, you will note there are over 2,000 law suits and claims which have been imported into the city of Chicago, from remote States. You notice there are 44 from Arizona, 80 from California. Senator DONNELL. Pardon me. By 2,000 suits and claims, I take it you do not mean 2,000 suits arising from claims. You mean, as I understand it, 1,059 suits and 962 claims. Mr. FREELS. That is right, sir. Senator DONNELL. Originating outside of Illinois. Mr. FREELS. Suits and claims both aggregating over 2,000. Of course, many of the claims were settled before suits were instituted. You notice from Pensylvania there were 159 suits and 532 claims, from Pennsylvania alone. From the State of Washington there were two suits, from Montana, two suits, and so on like that, Arizona, Nevada, and New Mexico. It would not be unnatural, you might think, for suits to be brought in Illinois from the neighboring States, Indiana, Kentucky, or Missouri, or some place like that, but we have a picture here of suits brought from the Pacific, Gulf, and the Atlantic seaboard. We have suits brought in Illinois from Washington, Oregon, California, in the west. From Arizona, New Mexico, Texas, Oklahoma, Louisiana, |