MEMORANDUM IN OPPOSITION TO S. 1567 AND H. R. 1639, AND PARTICULARLY IN OPPOSITION TO THE AMENDMENT TO S. 1567 SUGGESTED BY CONGRESSMAN DEVITT The undersigned House Members, who participated actively in the debate on H. R. 1639 when that bill passed the House, respectfully submit the following statement in opposition to H. R. 1659 and S. 1567. We wish also to urge the rejection of the amendment proposed by the gentleman from Minnesota, Mr. Devitt. Our reasons in opposition to the bill are First, it is burning down the house in order to eradicate a few rats. Everyone admits the legal racketeers should be eliminated. But, the medicine offered shouldn't be worse than the disease. There are methods of getting at unethical lawyers and we understand those are being used against the racketeers in railroad cases-Congress certainly should not adopt a policy of changing the laws relating to venue which will upset legal precedents established over a period of 40 years and, certainly, we should not adopt that procedure when it is highly discriminatory against railroad employees and passengers. This bill rewards the railroad companies and penalizes the employees and passengers in order to curb the third-party activities of ambulance chasers. Second, the bill is clearly discriminatory against railroad employees and passengers. It has been pointed out that a shipper of hogs can sue anywhere the railroad company does business for damage to his property. But, giving a hog shipper more latitude than an injured employee or passenger isn't the worst part of this bill. An employee or passenger will be limited to two jurisdictions-where he lives or where the accident occurred. If he lives in California and an eastern railroad is involved, he will not be able to get jurisdiction in the State of his residence and will then be limited to only one jurisdiction-where the accident occurred. That will probably be Podunk. And, an employer or passenger will have to transport medical witnesses, lawyers, etc., to the scene. He won't be able to finance it and the railroad company will get a cheap settlement. The railroad company on the other hand, with its squads of experts, lawyers, and ample funds, will not be similarly limited. This isn't just a particular case it could be duplicated many times. Certainly, Congress does not want to adopt this extraordinary method so highly injurious to the rights of railroad employees and passengers in order to eliminate a few racketeering lawyers. We are opposed to the Devitt amendment for the reason that it will force the railroad employee or passenger to try two lawsuits in each case. The amendment will enable the railroad company to bring injunctive action against a plaintiff in his home State to enjoin action in another State. To illustrate: An employee lives in Sparks, Nev., which is a railroad terminal close to the California line. He was injured while working and treated at the company hospital in San Francisco. In order to be close to the medical witnesses he files his suit in San Francisco. The company could, under the Devitt amendment, bring suit in Nevada (his home) to enjoin prosecution of the suit in San Francisco. That is substantially the situation involved in the Miles and Kemp ner cases. As stated by Mr. Justice Jackson in the Miles case, this gives the employer an advantage over the employee because he can "force him to try one lawsuit at home to find out whether he would be allowed to try his principal lawsuit elsewhere." In our opinion, the gentleman from Minnesota, Mr. Devitt, misinterprets the decision in both the Miles and Kempner cases. These cases do not involve the doctrine of forum non conveniens. These cases hold that a court cannot enjoin a citizen of its State from bringing an action under the Federal Employers' Liability Act in a State court of another State, or in a Federal district court in another State. The doctrine stated in those cases is the well-known equitable doctrine of restraining oppressive foreign suits. It is a doctrine entirely different from a doctrine of forum non conveniens. The doctrine of forum non conveniens is applied only by the court in which the suit involving the merits of the action under the Federal Employers' Liability Act is before the court. The Supreme Court has never held that the doctrine of forum non conveniens is not applicable to a suit under the Federal Employers' Liability Act. If Mr. Devitt's amendment would make it applicable without exposing the employees and passengers to injunctive action under the doctrine of oppressive foreign suits, we would be for it. We think the Supreme Court will in a proper case uphold the application of the doctrine of forum non conveniens and that amendment or change in this law is not necessary. We think the Miles and Kempner cases are sound and should not be nullified. It would be an undue burden on the injured railroad employee if having selected the forum most convenient to him the railroad could force him to try a lawsuit at home to determine whether or not he could try his principal suit elsewhere. If the passage of this amendment would cause these Supreme Court decisions to be nullified-and mind you we cannot know if that is so until the question is litigated in all our courts up to the Supreme Court, which will leave the administration of this amendment in uncertainty and confusion for years-if the sponsor of this amendment is right then this Congress will be putting every injured employee in this country from this day forward to the burden of litigating two lawsuits in order to try one case. That of course will tend to deter the bringing of suits and make it possible for the railroads to settle on much more agreeable terms to them. In conclusion we object to the bill as written because it will not accomplish its objective in eliminating legal racketeers but it will destroy rights which railroad employees and passengers have enjoyed for a great number of years and subject them to unreasonable discrimination and hardship in the bringing of their suits before the courts. We are equally opposed to the amendment proposed by the gentleman from Minnesota, Mr. Devitt, for the reason that it will expose passengers and employees to injunctive actions in their home States in order to prevent the trial of an action elsewhere. We respectfully urge your committee to vote down both the bill and the amendment. Respectfully submitted. CLAIR ENGLE, Second District of California, First District of Colorado. CORRECTION OF STATEMENT SUBMITTED BY FREDERICK W. BRUNE TO A SUBCOMMITTEE ON THE JUDICIARY OF THE UNITED STATES SENATE ON H. R. 1639 (S. 1567), JANUARY 19, 1948 In the prepared statement which I submitted to this subcommittee on January 13, 1948, I referred (at p. 4) to evidence presented on behalf of the railroads before a subcommittee of the House Judiciary Committee to show the extent to which claimants may suffer as a result of expenses incurred by them in effecting a recovery and the great, unnecessary expense to which the railroads may be put. I then mentioned two very conspicuous examples which had been cited, the first of which was "a settlement of $4,000 in Chicago, from which the net proceeds received by the claimant were $307"; and I referred specifically to the sources of my information in the report of hearings before the House subcommittee. At the hearing before the Senate subcommittee I learned that this was not a complete and accurate report of this settlement. I therefore wish, as stated at the hearing, to correct my statement in this respect in accordance with Mr. Gibson's statement referred to below; and I wish to make such correction as a matter of record. My best information, which is based chiefly upon the statement of Mr. J. D. Gibson, general solicitor for the Atchison, Topeka & Santa Fe Railway Co. (the defendant in the suit referred to) submitted to this subcommittee, (pp. 13-14) is that out of a settlement of $4,000, $1,333.33 went to pay counsel fees, $2,358.91 was paid to a lawyer (Mr. Sol Andrews) to cover moneys advanced for maintenance, including purchase of clothes at Los Angeles, train fare to Chicago, hotel and rooming-house bills at Chicago and other expenses, leaving only $307.76 to be paid to the plaintiff at the conclusion of the suit, which was settled after trial had begun. As I stated at the hearing, I think that the plaintiff must have received sums out of the $2,358.91, which was the amount of the advances above referred to, which brought the net amount received by him above $307. I do not, however, have a detailed statement of the items, of which I am now informed (otherwise than through Mr. Gibson's statement) there were some 75, including some direct loans, making up the sum of $2,358.91; and I do not know how much of that sum through loans or otherwise actually was received by the plaintiff to his own use. It seems a fair inference that expenses of litigating the claim at Chicago-such as train fare to Chicago and hotel and rooming-house expenses in that city—must have reduced the amount which he ultimately received for his own use below $2,666.67, which is the sum of the above-mentioned advances and of the amount of the final check ($307.76) received by the plaintiff, and which is also equal to the amount of the settlement less the counsel fee or fees of $1,333.33. One other fact, which does not affect my general views, but which I was not aware of until I read Mr. Gibson's statement, is that the plaintiff in this case was a passenger, and hence the suit was not under the Federal Employers' Liability Act and its special-venue provisions. The accident upon which the suit was based occurred near Los Angeles, Calif., and Mr. Gibson's statement indicates that the case was transported to Chicago. I believe that whether a suit arises under the Federal Employers' Liability Act or otherwise, unnecessary expense is likely to be involved, in greater or less degree, for both parties in any case tried at a place remote from the scene of the accident, chosen for reasons other than the convenience or availability of litigants or witnesses. SUPPLEMENTAL STATEMENT OF J. C. GIBSON, VICE PRESIDENT AND GENERAL COUNSEL, SANTA FE RAILWAY, CHICAGO My name is J. C. Gibson. I testified before the subcommittee on January 7, 1948, in support of S. 1567, and I appreciate the opportunity to present a brief answer to some of the objections registered here to the bill. The opponents assiduously avoided any consideration of the simple amendments suggested by Mr. Floyd E. Thompson, former justice of the Supreme Court of Illinois, by Mr. Frederick E. Brune, appearing for the American Bar Association, by the Chicago Bar Association in its resolution in support of the bill, and by me. These amendments meet every objection except the one that railroad employees should enjoy venue privileges superior to those of other litigants and unrestrained by ordinary criteria of fairness and justice. Mr. Warren H. Atherton recited a hypothetical example of the alleged hardship that would flow from the Jennings bill, involving two railway employees similarly situated, both residing at Roodhouse in Greene County, Ill. He states that the one injured at Roodhouse would have to avail himself only of courts, medical witnesses, and lawyers residing in Greene County, but that the second employee injured at Chicago would have the privilege of suing either in Greene County or in Chicago. Under the suggested amendment making the venue State-wide in the State and Federal courts, both of these injured employees could sue at Chicago, Greene County, or anywhere within the State of Illinois where the railroad might be doing business. Later on Mr. Atherton referred to another hypothetical case, involving a resident of Madison County, in Missouri, employed by a railroad operating out of St. Louis, who allegedly would be deprived of a convenient forum if he should have occasion to sue his employer. Here again the alleged hardship would disappear if the Jennings bill were amended to provide for State-wide venue. In such event, every injured employee, regardless of where he resided in the State, would have the privilege of suing in any State or Federal court having jurisdiction of the defendant within the borders of the State. Mr. Harry See says that under the proposed legislation railroad employees "would have the choice of only one State court or one Federal court because a very substantial majority of railroad employees live in the same county where they are employed." If the State-wide venue amendment was adopted railroad employees everywhere would have the opportunity to go into any State or Federal court of competent jurisdiction within the State. This would afford a wide choice of venue. Every State in the Union moreover has one or more cities of substantial size. Mr. Freehill refers to the Neirbo case (308 U. S. 165) and states that as a result of this decision there is no practical difference between actions under the general venue clause of the Judicial Code and those under the Federal Employers' Liability Act. This statement apparently was based on an er roneous assumption that all State consent statutes permit nonresidents to sue on a foreign cause of action. The consent statutes of a number of States do not permit actions of this character. In the short time available, I have examined into the statutes and decisions in the states through which the Santa Fe operates, and find that there is considerable question as to whether the reasoning in the Neirbo decision would be generally applicable. In some States the statute is silent as to whether a nonresident can sue on a foreign cause of action. In Kansas, Texas, and California, the statutes or decisions definitely exclude such actions. Moreover the doctrine of forum non conveniens can be invoked in suits under the general vanue clause but not under the Federal Employers' Liability Act since the Miles and Kepner cases forbid. Mr. Freehill's objections with respect to passenger cases would fall with the elimination of passengers from the bill, but under another amendment suggested if a passenger could not sue in the State of his residence he could then file suit wherever the railway company is doing business. All similar objections with respect to passengers voiced by other witnesses would fall in like manner by eliminating reference to passengers entirely or by the other simple amendments suggested. Mr. Freehill refers to other carriers in interstate commerce such as bus, truck, and air lines, and infers that their employees have the right to sue them for personal injuries wherever the employers are doing business. Such is not the case. Congress has not legislated with respect to personal injury actions brought by employees against nonrail carriers. The rights of both employee and employer are still governed by the various State workmen's compensation statutes since Congress has not enacted special legisation on their behalf. Employee rights of action under these statutes are normally restricted to the State in which the contract of employment is executed or where the accident occurred. Again, in suits not arising under the Federal Employers' Liability Act, the doctrine of forum non conveniens is applicable, while it is not available in suits brought under that statute. Mr. Freehill and others suggested that the bill as it passed the House is an unconstitutional attempt by Congress, to prescribe venue provisions for State courts. Certainly, if the State-wide venue amendment were adopted, no one could plausibly urge that any constitutional rights would be invaded, because venue in a State court would then be governed by State law, except for the prohibition of certain personal injury actions accruing elsewhere and imported across State lines by nonresident plaintiffs, which are clearly subject to congressional regulation under the commerce clause. Mr. Atherton, Mr. Freehill, and others emphasized that competent doctors and lawyers are not available in some small communities. This argument likewise would fall if a State-wide venue provision were adopted. Even in the sparsely settled States there are large communities comparatively close at hand with able lawyers and competent medical and surgical specialists. Under the proposed amendment the injured employee would have the choice of suing in any State or Federal court of competent jurisdiction anywhere in the State, and there is no State in the Nation lacking in experienced members of the medical and legal professions. Mr. Atherton undertakes to defend the workings of the legal aid department of the Brotherhood of Railroad Trainmen. While I have the greatest respect for Mr. Atherton and know that he means to be entirely fair with the committee, I am sure from what he says that he is not fully informed regarding the full extent of the operations of the legal aid department. Apparently his statement is confined to what his client has told him, which has not included the more questionable activities of the regional counsel and the regional investigators of the department. Mr. Atherton confirms the fact that local lodge officials actually are required to take an active part in personal injury cases. He states that following receipt of personal injury reports at Cleveland investigators are sent to request permission to gather facts, but their activities do not stop there. These investigators have another and different function. Many of them actively solicit cases for regional counsel just as the runners in the employ of Sol Andrews solicit cases for him, although they operate more successfully because the brotherhood solicitors bring union pressure to bear to force the execution of remunerative contingent fee contracts for the private enrichment of regional counsel. I say this advisedly, and what I say is based on hundreds of statements and affidavits taken in the courts of investigations by the Santa Fe and other railroads. Typical affidavits were submitted for the record in this hearing by Judge Thompson. These investigators, operating under the direction of the general counsel and the regional counsel of the brotherhood, do everything in their power to prevent an amicable adjustment of the claim between the injured man and the company. They do their utmost to foment litigation in which the regional counsel would represent the injured person in a lawsuit against the railroad. If the injured man evinces disinclination to follow this plan, the investigator, aided by local lodge officials, subjects him to a high pressure sales campaign which is featured by efforts to blacken the reputation of the employer and to extoll the abilities of the regional counsel. The prospect is shown newspaper clippings setting out stories of large verdicts secured by regional counsel in other cases, photostatic copies of checks repreenting the amount of judgments, and other similar paraphernalia of the ordinary personal injury touter or runner. The prospect is urged to employ the regional counsel and his investigators as a matter of loyalty to the brotherhood and the things for which it stands. If the injured man consents to employ a regional counsel he is required to sign a contingent fee contract calling for 25 percent of the amount of the recovery whether as a result of suit or compromise settlement. Formerly the attorney retained 19 percent and paid 6 percent over to the legal aid department ostensibly to cover the cost of investigation of the case but really to cover both solicitaion and investigation. The attorney still gets 25 percent. While the parties claim that he no longer splits this fee with the legal aid department, he nevertheless pays the investigator for services rendered, usually under a contingency arrangement under which the investigator now gets all or some part of the 6 percent which formerly went to the legal aid department. This whole arrangement not only is violative of the code of ethics of the American Bar Association but in most jurisdictions it is also violative of the law. Canon 35 of the code of ethics prohibits a lawyer from accepting employment from any organization for the rendering of legal services to the members of such organization in respect to their individual affairs. Yet this plainly is what the regional counsel of the brotherhood do in securing designation to represent the members of the organization in personal injury litigation. * * * Canon 28 prohibits "stirring up strife and litigation," or acts "to breed litigation by seeking out those with claims for personal injuries in order to secure them as clients, or to employ agents or runners for like purposes, or to pay or reward, directly or indirectly, those who bring or influence the bringing of such cases to his office, or to remunerate * * * physicians, hospital attachés or others who may succeed, under the guise of giving disinterested friendly advice, in influencing the criminal, the sick and the injured, the ignorant or others to seek his professional services." Yet this is just what the general counsel and the regional counsel of the brotherhood do in engaging regional investigators and other lodge members to stir up strife and litigation where personal injuries occur on railroads and to solicit cases for the regional counsel on contingent fee contracts for their private profit. But Mr. Atherton expresses the view that every court that has considered "these smear charges has not only cleared the legal aid department of any unethical practice but has praised its worthy objectives and conduct." My reading of the decisions draws be to a different conclusion. Quite true, some of the activities of the legal aid department of the Brotherhood of Railroad Trainmen were found within the bounds of the law in a decision of an Illinois appellate court in Ryan v. Pennsylvania R. Co. (1932, 268 Ill. App. 364). In the following year, however, the Federal District Court for the Eastern District of New York in In re O'Neill (1933, 5 Fed. Supp. 465), expressly rejected the low standards of the Ryan case and refused to follow it as a precedent. Instead it condemned as unethical and illegal the fee splitting operations of the legal aid department. Despite this condemnation the brotherhood persisted in following the same course from 1933 to 1946, when after the Jennings bill had been introduced and after the fee splitting practice had been sharply questioned by the United States District Court at St. Louis in Young v. GM&O R. Co., it claims to have abandoned the arrangement. Certainly it has changed the form of the arrangement; whether the substance has been changed is by no means clear since at least some investigators still are paid on the contingent fee basis by the regional counsel allegedly for investigating cases but in reality for soliciting them as well. Not only O'Neill but at least one or two other regional counsel for the brotherhood have drawn judicial censure for their ambulance chasing actiivties. Former Justice Thompson told you about Robert J. McDonald whose solicitation activities had been denounced by State and Federal courts over a period of 15 years, who had been disbarred by the Supreme Court of Minnesota, and who, after being disbarred was later reinstated upon his promise not to reenter the personal injury field, only to turn up shortly thereafter as a member of a firm acting as regional counsel for the brotherhood at Chicago. (See 298 Fed. 964, 976, 977; 298 Fed. 977, 987; 226 N. W. 297, 299; 282 N. W. 677; 294 N. W. 461; 141 P. (2d) 217; and Judge Thompson's testimony before this subcommittee.) |