Appendix — United Transportation Union v. State Bar of Michigan

Supreme Court brief1971

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INDEX

PaGE

CE SE aac cc concen wkdecwnscnees 1

Bill of Complaint, Filed Jan. 28, 1959 .............. 5

Answer to Bill of Complaint, Filed June 9, 1959 .... 12

Plaintiff's Reply to Defendants’ Answer, Filed June

SE chien wake buhdSsubel@eCisbaicaxackék cass 20

Plaintiff’s Statement of Claim, Filed April 11, 1961 .. 29

Pretrial Summary by the Court, Filed April 11, 1961 30

Concise Statement of Defense, Filed April 12, 1961 .. 31

Transcript of Testimony, had on June 27, 1961 ...... 34

Testimony of David J. Walsh, witness on behalf

of plaintiff:

ee Le ae ks et wer 62

OEE TLE TCO TEC CTT TT 89

I I nck cn ansasesasenas tence 105

Decision, Filed September 12, 1962 ................ 109

Decree, Filed September 14, 1962 .................. 113

Claim of Appeal by Defendants and Proof of Service,

ee ns ches aabe tans 118

Plaintiffs Exhibit 1—Illinois Motion for Leave to

File Petition for Declaratory Judgment .......... 120

Plaintiff’s Exhibit 2—Illinois Petition for Court’s In-

structions as to Representation of Brotherhood

OE TP ID nn kan accncnnccacdceacaccas 137

Plaintiff's Exhibit 4—FELA Settlements by Michigan

Residents reported 1953-1955 .................00. 155

Plaintiff's Exhibit 6—-FELA Settlements by Michigan

Residents reported 1955 ........... cece e ees 157

PPPS AR IY TENG FRE BG ted Pile SBE pt Ns iM BN Sibel ae

RIGS Salen NO DEAD MY OPAL S AE 2 oi Nish k oe

;

q ’

Plaintiff's Exhibit S—FELA Settlements by Michigan

Residents reported 1956 ................0000.... 159

Plaintiff's Exhibit 10—FELA Settlements by Michi-

gan Residents reported 1957 .................... 161

Plaiitiff’s Exhibit 12—FELA Settlements by Michi-

gan Residents reported 1958 .................... 163

Plaintiff's Exhibit 14—FELA Settlements by Michi-

gan Residents reported 1959 .................... 165

Plaintiffs Exhibit 16—FELA Settlements by Mich-

igan Residents reported 1960 .................... 167

Plaintif’s Exhibit 17—FELA Settlements by Michi-

gan Residents reported 1960 .................... 168

Plaintiff’s Exhibit 19—Directory of the Grand Lodge

and Subordinate Lodges of the Brotherhood of

Railroad Trainmen POT, POND oan icccncanass 169

Remittitur from Michigan Supreme Court, Filed Jan.

MN Seewinniawanaudekeyserinsin ce 170

Motion for Further Proceedings, Filed Jan. 20, 1965 172

Opinion and Order of Circuit Court for the County of

Jackson, Filed May 24, 1968 .................... 173

Judgment, Filed May 27, 1968 .................... 176

Claim of Appeal, Filed June We SE uuetcecavcexes 177

Transcript of Proceedings had on Feb. d, 1965, Filed

NN OM neces vereriee cute ee 178

Transcript of Proceedings had on May 3, 1968 ...... 186

Majority Opinion with Appendix; and Minority Opin-

ion by State of Michigan Supreme Court, March

a Mii Le TEE TT te Tot ee Han 205

Judgment by State of Michigan Supreme Court,

ccconsimadie Messanctt Cer ON OLCOTT OTe Feats ea ena ae 220

APPENDIX

IN THE

Supreme Court of the United States

OCTOBER TERM, 1970

No. 434

UNITED TRANSPORTATION UNION,

Petitioner,

US.

THE STATE BAR OF MICHIGAN,

Respondent.

ON WRIT OF CERTIORARI TO

THE SUPREME COURT OF MICHIGAN

CHRONOLOGICAL LIST OF RELEVANT

DOCKET ENTRIES

[18]*

CIRCUIT COURT CALENDAR ENTRLES

1959

Jan. 28. Bill of complaint filed.

June 9. Answer to bill of complaint filed.

June 16. Plaintiff’s reply to defendant’s answer, filed.

Nov. 17. Interrogatories filed.

Nov. 25. Proof of service filed.

*Numbers in brackets at the outer edges refer to the

pages of the certified record.

June 27.

1962

Apr. 30.

Answers of William Kennedy, president,

Brotherhood of Railroad Trainmen, to plain-

tiff’s interrogatories.

Order and notice of pre-trial conference filed.

Stipulation filed.

Plaintiffs statement of claim filed.

Pre-trial summary by the court filed.

Concise statement of defense filed.

Order filed.

Clerk’s notice filed.

Exhibits filed (listed on summary sheet).

Motion to strike proceedings made in plain-

tiff’s reply brief filed.

Answer to motion to strike filed.

Brief for plaintiff filed.

Brief for defendants filed.

Reply brief for plaintiff.

Decision filed.

Decree filed and entered.

Clerk’s notice filed.

Appealed to Supreme Court, docket 2, page

138.

Decree enrolled.

SUPREME COURT CALENDAR ENTRIES

1962

Oct. 2. Claim of appeal by defendants and proof of

service filed.

Oct. 4. Notice of filing appeal and payment of appeal

fee filed.

Dec. 28. Stipulation and Order extending time filed.

1963

Oct. 3. Certified to Supreme Court.

[20]

1965

Jan. 22. Remittitur from Supreme Court reversing

Judgment and remanding to the Court be-

low, filed.

CIRCUIT COURT CALENDAR ENTRIES

1965

Jan. 20. Motion for further proceedings in Circuit

Court on remand from Supreme Court, no-

tice of hearing and proof of service filed

and entered, and order.

June 9. Motion to Dismiss certain defendants and aff-

davit filed.

1968

April 22. Motion for judgment and notice of hearing

filed.

May 24. Motion for dismiss a certain defendant and

affidavit filed.

May 24. Notice of calling up motion for decision with

exhibits filed.

ianihiedes ieaeaeadeeinnter a. |

STE AT ita te

paiticiaterssisiessnn Ree

May 24. Notice of calling up motion for decision filed.

May 24. Qpinion and order filed.

May 27. Judgment (Amending decree) filed and en-

tered.

May 27. Clerk’s notice filed.

June 17. Claim of appeal filed, A1-75.

COURT OF APPEALS DOCKET ENTRIES

1968

June 17. Claim of appeal, notice, proof of service filed.

June 17. Certificate of court reporter filed.

Sept. 16. Remittitur from Supreme Court granting ap-

plication by defendants for leave to appeal

prior to decision by the Court of Appeals is

considered filed.

Oct. Notice of filing transcript of record filed.

Oct. Transcript of testimony filed.

Oct. 4. Affidavit filed.

> >»

(1)

SUPREME COURT CALENDAR ENTRIES

1968

July 11. Application filed (by pass).

Sept. 12. Application granted.

1969

Oct. 29. Circuit Court records filed.

Oct. 29. Notice for December filed.

Dee. 9. Argued and submitted.

1970

Mar. 9. Affirmed. No cost.

Mar. 27. Application for rehearing filed.

May 4. Ordered rehearing denied.

June 10. Record certified to Supreme Court of U.S.

IN THE CIRCUIT COURT

FOR THE COUNTY OF JACKSON

THE STATE BAR OF MICHIGAN, )

vs.

r No. T—640

THE BROTHERHOOD OF

RAILROAD TRAINMEN, p

BILL OF COMPLAINT

(Filed January 28, 1959)

The State Bar of Michigan respectfully represents unto

this Honorable Court:

1. That it is a public body corporate, charged with

the duty to aid in promoting improvements in the ad-

ministration of justice and advancements in jurisprud-

ence, in improving relations between the legal profession

and the public, and in promoting the interests of the

legal profession in the State of Michigan.

2. That the Brotherhood of Railroad Trainmen is a

national railway labor organization, with principal office

in Cleveland, Ohio, but having branches, members, of-

ficers and agents throughout the United States, including

the State of Michigan.

3. That Frank J. Carr and L. M. Hasbrouck, of Jack-

son, Raymond Fieberkorn and Thomas W. Fletcher, of

Detroit, W. C. Coryell, of Okemos, L. E. Singer of

Plymouth, E. V. Surdam of Grand Rapids, H. F. MeCall

of Birmingham, R. J. Johnson, and L. A. Russell, of

Durand, A. V. Grandstaff, of Dearborn, W. T. Ellsworth,

Be i Sin IL ahs Sane

2) tySB DP Sears

OA te BO > whens

of Allen Park, R. J. Snow, of Melvindale, and William

E. B. Chase, of Livonia, are members, officers and agents

of defendant Brotherhood of Railroad Trainmen resid-

ing within the State of Michigan, and that there are

other members, officers and agents of said defendant

Brotherhood of Railroad Trainmen, within the State of

Michigan, constituting a class so numerous as to make

it impracticable to bring them all before the court, as

[22]

to all of whom there are common questions of law and

fact affecting their several rights and against all of

whom a common relief is sought, as hereinafter shown.

4. That, in or about the year 1930, the Brotherhood

of Railroad Trainmen organized and established a so-

called “Legal Aid Department” as a division of said

Brotherhood of Railroad Trainmen, representing, as rea-

sons for organizing said Legal Aid Department, the fol-

lowing:

Many lawyers frequently abuse the confidence of

their clients by effecting low settlements in the case

in order to obtain a higher settlement in some other

case against the same railroad; incompetently pre-

paring and processing such cases upon the law or

the facts; not fully and fairly explaining to the client

the terms of the employment, so that the client, after

having assented to settlement, finds the proceeds

thereof surcharged with items for expenses of liti-

gation, medical expenses, expenses of one sort and

another or the like, which are not legitimate, or if

legitimate, were not explained to him before the set-

tlement was concluded, as well as in other ways.

Adequate compensation cannot in general be ex-

acted if members of the Brotherhood are persuaded

[23]

by claim agents either to settle their own claims or

to place them in the hands of incompetent, inexperi-

enced or otherwise inadequate counsel.

In 1930, A. F. Whitney, then President of the

Brotherhood, in a public utterance to the Brother-

hood’s membership, declared that in his several

years experience as an officer of the Brotherhood

it had come to his attention that members who had

been killed while engaged in railroad service had

fared rather badly at the hands of railroad claim

agents in some instances, as well as at the hands of

so-called ambulance-chasing lawyers, and that settle-

ments wholly inadequate in the light of the serious-

ness of the injuries and the responsibility of the

employers had been made with members of the

Brotherhood who were either entirely devoid of their

rights in such matters or who had been induced to

make cheap settlements by misrepresentations in-

dulged in by those who sought to effectuate these

settlements.

5. Plaintiff is informed and believes, and therefore

alleges as true, that the Constitution and By-laws of the

defendant Brotherhood of Railroad Trainmen require,

and the so-called Legal Aid Department of said Brother-

hood of Railroad Trainmen has, ever since its formation,

by and through its members, officers and agents, pursued

and continues to pursue and engage in a well-organized

and systematized solicitation, for so-called Regional Coun-

sel, of claims and/or causes of action for personal injuries

and/or death of railroad employees arising under the

Federal Employers Liability Act, using the methods and

practices, as follows:

—

DD OPER ENG RAVE PRG Ba Cm

aoe en AY

Tied, ae PEGA,

| ee ee ale O a Mle het od

A member representative of the Brotherhood, usu-

ually the Chairman of the Grievance Committee in

the locale of the accident, calls upon the injured em-

ployee or his bereaved family, and not only explains

to them that they can, but recommends and urges

[24]

that they do consult with the Regional Counsel, and

such representative urges said employees or sur.

vivors of the deceased employees not only to consult,

but to retain Regional Counsel. Such employees or

survivors of deceased employees are told that Reg-

ional Counsel will not charge in excess of 25 per cent

(25°) of the amount of any recovery, whether re-

covery be affected by suit or settlement, and that

this percentage will include expenses incidental to

the investigation and any litigation of the claim.

6. Plaintiff is furtner informed and believes, and

therefore alleges as true, that representatives of the

Brotherhood of Railroad Trainmen are reimbursed for

their time in bringing injured employees or the survivors

of the deceased employees to the offices of the Regional

Counsel. Reimbursement is at the member representative's

hourly rate of pay on the railread. Member representa-

tives are also reimbursed for any out-of-pocket expenses

incurred in bringing injured employees or the survivors

of deceased employees to Regional Counsel.

7. Regional Counsel referred to above are the atvorneys

selected by the defendant Brotherhood of Railroad Train-

men, in some fifteen “regions” designated by said de-

fendant to receive, through the methods and practices

aforesaid, all Federal Employers Liability Act cases aris-

ing in their designated regions.

8. The Lower Peninsula of the State of Michigan,

is the “region” of one Edward B. Henslee, an attorney,

of Chicago, Illinois, and his associates, for whom de-

(25)

fendants, or some of them, actively solicit, by the methods

herein outlined, all cases of personal injury or death of

railroad employees occurring in the State of Michigan,

as plaintiff is informed and believes and thereupon alleges

as true.

9. Plaintiff further shows unto the Court, on informa-

tion and belief, that, by and through the operations of

the Legal Aid Department of the Brotherhood of Rail-

road Trainmen in the State of Michigan, large numbers

of cases and claims of members of the Brotherhood of

Railroad Trainmen residing in Michigan and whose

claims have arisen within the State of Michigan, have

been unlawfuly and improperly solicited by said Brother-

hood of Railroad Trainmen Legal Aid Department,

through its members, agents and officers, and have been

directed into and handled by the office of Regional Coun-

sel Henslee and associates in Chicago, Illinois and else-

where, to the extent that a majority of such cases are so

solicited and so handled.

10. That such solicitation, on an organized and sys-

tematized basis, interferes with and impedes the orderly

administration of justice, adversely affects the relation-

ship between the legal profession in the State of Michi-

gan and the public, and causes, and threatens to cause,

irreparable damages to property rights of the public

and the legal profession in the State of Michigan.

11. Plaintiff further alleges that the methods of op-

eration of the Legal Aid Department of the Brother-

Vie

hood of Railroad Trainmen, as set forth above, violaie

the Penal Code of the State of Michigan, particularly

Section 410 theivof, being Section 28.642 of Michigan

Statutes Annotated, which provides in part as follows:

PASS GET cath Meech

[26]

Leach, Zs

“Any person, firm, co-partnership, association or

organization of any kind, either incorporated or

unincorporated, or any of the officers, agents, serv-

ants, employees, or members of any such person, firm,

: co-partnership association or organization of any

: kind, either incorporated or unincorporated, or of

; any division, bureau or committee of such associa-

tion or organization, either incorporated or uncor-

: porated, who shall directly or indirectly, individually,

or by agent, servant, employee or member, solicit

any person injured as the result of an accident, his

administrator, executor, heirs or assigns, his guard-

ian, or members of the family of the injured person,

for the purpose of representing such person in mak-

ing claim for damages or prosecuting any action or

causes of action arising out of any personal injury

claim against any other person, firm or corporation,

or to employ counsel for the purpose of such solici-

tation, shall be guilty of a misdemeanor * * *”,

aOR

12. The matter in dispute in this case exceeds the

sum of One Hundred and No/100 ($100.00) Dollars.

: Wherefore, the premises being considered and plaintiff

being without adequate remedy at law, the plaintiff

; prays:

§ (a) That the named defendants be required to an-

’ swer this bill of complaint, paragraph by paragraph, on

their oaths.

(b) That, on the hearing of this cause, all named de-

fendants, and all other defendants of this class, members,

[27]

agents and officers of the Brotherhood of Railroad Train-

men, be permanently enjoined from, directly or indirectly,

engaging in the solicitation, in the State of Michigan, of

claims and/or causes of action under the Federal Employ-

ers Liability Act, for the purpose of causing persons hav-

ing such claims and/or representatives, to retain said Ed-

ward B. Henslee, and associates, or any other of the Reg-

ional Counsel of defendant Brotherhood of Railroad Train-

men, or any other attorney or attorneys, or firm of attor-

neys, in the prosecution and/or negotiation for settle-

ment of such claims and/or causes of action.

further relief as equity and good conscience shall require,

and as to this Honorable Court seems just.

/s/ State Bar of Michigan,

By Philip C. Kelly,

/s/ J. Cameron Hall,

General Counsel, State Bar of

Michigan,

/s/ Philip C. Kelly,

301-4 Reynolds Building,

Jackson, Michigan,

/s/ J. Cameron Hall,

1323 Dime Building,

Detroit, Michigan,

Attorneys for Plaintiff.

[28]

(Jurats omitted in printing)

8 iid bt 10 Sy Rew a ae

nate

Dear stcsscisssticn: Se Sch guticer

ANSWER TO BILL OF COMPLAINT

(Filed June 9, 1959)

Now comes the defendants by Edward B. Henslee, Jr.,

Martin K. Henslee, John J. Naughton and Arthur Lum-

ley, their attorneys, and for answer to the bill of com-

plaint say:

1. Defendants admit the allegations of paragraph one

and two of the bill of complaint.

2. Defendants admit that they are members, officers

and agents of defendant Brotherhood of Railroad Train-

men (hereinafter called Trainmen) residing within the

State of Michigan and further admit that there are others

in like capacity within the State. Defendants deny all

other allegations in paragraph 3.

3. Defendants admit that in the year 1930 the Train-

men organized and established a department of the Train-

men designated as the “Legal Aid Department.” Defend-

ants admit that the representations alleged were stated,

along with other representations, as factors to be consid-

ered in deciding whether a legal aid department should

be established. Defendants deny all other allegations of

paragraph four of the bill of complaint.

Defendants aver that on a referendum questionnaire and

ballot in 1930, the members of the lodges of the Trainmen

in the United States voted by a majority vote of eleven

to one that a legal aid department should be organized.

Defendants further aver that the said Legal Aid De-

partment was thereupon organized as a part of or de-

SRR YVR Ona ete Be,

[30]

partment of the defendant Trainmen and, as constituted,

was directly subject to the provisions of the Constitution

of the Trainmen and to the authority of the president of

the Trainmen.

Defendants further aver that the title of the said Legal

Aid Department was changed by order of the president

of the Trainmen on or about January 1, 1959 and «>:

redesignated as the “Department of Legal Counsel”. §

fendants aver that the title of the attorneys designaw«

for the several regions was at the same time changed

from “Regional Counsel” to their present designation as

“Legal Counsel.”

4. Defendants deny each and every allegation con-

tained in paragraph five of the bill of complaint.

Defendants aver that in many cases, but not in all, a

member of the defendant Trainmen calls upon, contacts,

or in some other manner explains to an injured member

employee, or his bereaved family, the advisability of ob-

taining a lawyer, or the opinion of a lawyer, and recom-

mends that they consult with the Legal Counsel desig-

nated, and further recommends that the Legal Counsel

be retained if a lawyer is to be retained. Defendants

further aver that some of the said members have repre-

sented, as was the fact in most cases arising in the Lower

Peninsula of the State of Michigan, that the legal coun-

sel will not charge in excess of twenty-five percent (25%)

of the amount of any recovery whether the recovery be

affected by suit or settlement, and that this percentage

would include expenses incidental to the investigation

and any litigation of the claim.

Defendants further aver that this representation of the

fee charged has been eliminated by order of the president

of the Trainmen contained in his letter to all lodges dat-

eo : . - > PRN UAC ReneS ENED AT RR ah BURRS ERS 2a ere een

“4

Sih 2 Biber wea

De YS

AES NE BEB My AE FES gia DURE PISS:

[31]

ed March 16, 1959, effective April 1, 1959, hereinafter set

out in the First Affirmative Defense to this answer.

5. Defendants admit the allegations of paragraph six

of the bill of complaint as being in existence up to and

including the 3lst day of March, A. D. 1959.

Defendants further aver that the said compensation

and reimbursement has been terminated under the prev-

iously mentioned order of the president of the Trainmen

dated March 16, 1959.

6. Defendants deny each and every allegafion of para-

graph seven of the bill of complaint. r

Legal Counsel referred to above are attofneys desig-

nated by the defendant Trainmen in some #venteen re-

gions designated by the said defendant as a orneys rec-

ommended for their qualifications and their hintegrity to

be competent to prosecute claims arising under the Fed-

eral Employer’s Liability Act for members of the Train-

men in their designated regions.

7. Defendants deny all of the allegations of para-

graph eight of the bill of complaint except that they ad-

mit the Kdward B. Henslee referred to at one time was

the Regional Counsel for a region ineluding the Lower

Peninsula of the State of Michigan and that he had as-

sociates. Defendants further aver that the said Edward

B. Henslee died on November 22, 1958.

8. Defendants deny each and every allegation of para-

graphs, nine, ten and eleven of the bill of complaint.

9. Answering paragraph twelve of the bill of com-

plaint, defendants deny each and every allegation con-

tained therein and specifically and particularly deny that

[32]

the plaintiff is entitled to any of the relief for which it

prays.

First AFFIRMATIVE DrFENSE

For their First Affirmative Defense, defendants aver

that defendant trainmen petitioned the Supreme Court of

the State of Illinois for a declaratory judgment request-

ing that the Court rule that the conduct of trainmen and

the operation of its Legal Aid Department, and the con-

duct of the attorneys who serve as its Regional Coun-

sel was neither illegal nor unprofessional.

Hearings were held before the Honorable Charles H.

Thompson, a former judge of the Supreme Court of IIli-

nois as a special commissioner. Trainmen, the Illinois

State and Chicago Bar Association, and a group of twen-

ty-seven railroads appeared in the hearings by their

counsel. Plaintiff herein, the State Bar of Michigan, filed

charges with the Illinois State Bar Association and at-

tempted to intervene in the declaratory judgment hear-

ings. Evidence prepared by the plaintiff herein was pre-

sented at those hearings.

At the conelusion of the hearings, all parties filed briefs,

and a brief was filed on behalf of the American Bar

Association.

The opinion of the Supreme Court of Illinois as modi-

fied on denial of trainmen’s petition for rehearing is re-

ported at 13 Ill. 2d 391, 150 NE 2d 163. That Court

decided that certain practices of the trainmen in its op-

eration of the Legal Aid Department were objectionable

and should be discontinued and the Court further indi-

Stes Es a

Pievex: MEH, Sao ek VTE

cated what trainmen could do with respect to the injury

and death claims of its members.

[33]

In compliance with the opinion of the Supreme Court

of Illinois, the president of Trainmen in a letter to all

lodges and members ordered the following:

“Cleveland, Ohio, March 16, 1959

To AJl Lodges and Members:

The following for your information and instruction:

LEGAL COUNSEL

The following letter addressed by me to All Legal

Counsel of the Brotherhood is self-explanatory:

March 16, 1959,

To All Legal Counsel,

Brotherhood of Railroad Trainmen.

Dear Sirs and Brothers:

Some time ago, I sent you a copy of the opinion

of the Supreme Court of Illinois in a ease in which

the Brotherhood of Railroad Trainmen asked the

Court of Illinois for a ruling as to what the Legal

Aid Department of the Brotherhood can do for its

injured members and the conduct that should be fol-

lowed by Legal Counsel of the Brotherhood.

Under date of March 20, 1958, the Supreme Court

of Illinois handed down its opinion which is found

in volume 13, 2nd Edition of the Illinois Supreme

Court reports on page 391.

In compliance with said opinion, any Legal Coun-

sel who represents the Brotherhood is hereby in-

structed, and required, to live up to said opinion

[34]

in its entirety, and any violation shall be cause to

remove said attorney, and the same shall be reported

to the Bar Association of the particular state in which

such violation may occur.

The Brotherhood will finance its Legal Aid De-

partment, and will investigate accidents so that it

will be acquainted with the cause of said accidents,

and by so doing will be able to remedy any violation

of the Federal Employers’ Liability Act and The

Safety Appliance Act. The result of such investiga-

tion shall be made available only to the injured per-

son.

Please arrange to comply with these instructions

on and after April 1, 1959, and acknowledge receipt

of this letter by return mail.

Fraternally yours,

/signed/ W.P. Kennedy, President.”

Wherefore these defendants pray that the bill of com-

plaint be dismissed for the reason that the issues raised

by the bill of complaint are moot and the said bill is de-

ficient for want of equity.

Seconp AFFIRMATIVE DEFENSE

For their Second Affirmative Defense, defendants aver

that plaintiff herein in attempting to base its bill of com-

plaint on an alleged violation of the statutes of the State

of Michigan is attempting to enjoin the alleged commis-

sion of a crime and is patently attempting to deprive these

defendants of their constitutional right to a trial by jury.

| ee ERIC Ss int nes Hed

[35]

Wherefore, these defendants pray that paragraph eleven

of the bill of complaint be stricken and that any prayer

for relief based thereon be dismissed for the reason that

the said bill in that regard is deficient for want of equity.

THIRD AFFIRMATIVE DEFENSE

For their Third Affirmative Defense, defendants aver

that their activities, past or present, do not infringe any

statute, rule or law of the State of Michigan, do not

interfere or impede the orderly administration of justice

in the State of Michigan, and do not infringe the legal

or property rights of any individual or group. Defendants

further aver that if any of their actions could be consid-

ered an offense against any of the said laws or interest,

the right of the Trainmen, and the consequent right of

the remaining defendants as members, officers and agents

of defendant Trainmen to advise injured trainmen or their

bereaved families in claims arising under the Federal

Employers’ Liability Act derives directly from the Rail-

way Labor Act (U.S.C.A., Title 45, Sections 151-164) and,

to the extent that any statute or rule of Michigan Law

might be deemed to interdict or prohibit the conduct and

actions of the defendants, such statute or rule of Michi-

gan law is, or would be, in conflict with the Railway

Labor Act, the Interstate Commerce Clause of the Con-

stitution of the United States (Article 1, Section 8) and

the Supremacy Clause of the Constitution (Article VI,

Clause 2).

Wherefore, these defendants, having answered the bill

of complaint, pray that in this respect and, in the fore-

going respects, the bill of complaint should be dismissed

[36]

for want of equity and that these defendants should be

awarded their costs.

Brotherhood of Railroad Trainmen,

By W. E. B. Chase, Vice President

Frank J. Carr

L. M. Hasbrouck

Raymond Fieberkorn

Thomas W. Fletcher

W. C. Coryell

L. E. Singer

EK. V. Surdam

H. F. MeCall

R. J. Johnson

L. A. Russel

William EF. B. Chase, Individually

A. V. Grandstaff

W. T. Ellsworth

R. J. Snow

Defendants

Edward B. Henslee, Jr.,

Martin K. Henslee, and

John J. Naughton

139 N. Clark Street,

Chicago 2, Illinois

and

Arthur Lumley

1512 Dime Building,

Detroit, Michigan,

Attorneys for Defendants.

[37-39] (Jurats omitted in printing)

Peiiccerteiniiini cnsnat ant ited a

[40]

PLAINTIFF'S REPLY TO DEFENDANTS’

ANSWER

(Filed June 16, 1959)

Now comes the State Bar of Michigan, plaintiff here-

in, by way of reply to the answer of the defendants here-

in and shows unto the Court as follows:

1. Replying to the affirmative allegations contained in

the second, third and fourth paragraphs of paragraph 3

of the answer herein, this plaintiff is without information

sufficient to form a belief with respect thereto and hence,

neither admits nor denies the same but leaves the defend-

ants to their proofs thereof.

2. Replying to paragraph 4 thereof, the plaintiff shows

that the defendants and each of them are precluded from

denying the contents of the sub-paragraph under para-

graph 5 of the bill of complaint, by reason of the admis-

sions on behalf of the defendant Brotherhood and the find-

ings of fact in a proceeding in the Supreme Court of the

State of Ilinois, to which proceeding and opinion refer-

ence is made at the top of page 6 in the defendant's an-

swer, with reference to the matter of an investigation

as to the practices of the Brotherhood of Railroad Train-

men, ete, 18 Hlinois 2nd, 391. 150 Northeastern 2nd, 163.

Replying to the second paragraph under paragraph 4

of the defendants’ answer, the plaintiff shows that the ad-

missions by the defendants therein set forth constitute

solicitation of claims within the Sate of Michigan by the

defendants or by part or all of the defendants and by the

defendant Brotherhood, on behalf of the Regional Counsel

or Legal Counsel of the defendant Brotherhood.

(41)

Replying to the third paragraph under paragraph 4 of

the defendants’ answer, the plaintiff shows that:

(a) The alleged order by the President of the

defendant Brotherhood dated March 16, 1959 is al-

leged by the defendants in this paragraph to apply

to the representation as to the fee to be charged by

the Brotherhood’s Regional Counsel or Legal Coun-

sel and does not cover the many other courses of con-

duct which are the subject of this cause.

(b) There is no assurance that each and all of the

members of the defendant Brotherhood will comply

with the terms of such orders as may be issued by

the President of the defendant Brotherhood.

order by the President of the defendant Brother-

hood as alleged, the same might not be reversed by

either this or a future officer of the defendant Broth-

erhood,

3. Replying to the affirmative matters set forth in par-

agraph 5 of the answer, wherein the defendants admit the

allegations of paragraph 6 of the Bill of Complaint up to

March 31, 1959, the plaintiff shows that even if the Presi-

dent of the defendant Brotherhood disseminated a com-

munication dated March 16, 1959, the same does not con-

stitute a defense in this cause for the reasons that:

(a) Said purported communication by the Presi-

dent of the defendant Brotherhood does not cover

all of the matters concerned in this cause, nor is it al-

leged to cover all the matters of conduct concerned

in this cause.

AP Cn celia ice tea ae ie hid Sdtgeds at ald IK ie ite Fhe in ‘AV abel Rese aula de

(os sirens steer

the members of the defendant Brotherhood will com-

ply with the terms of such orders as may be issued by

the President of the defendant Brotherhood.

(ec) There is no assurance that if there were an

order by the President of the defendant Brotherhood

as alleged, the same might not be reversed by either

this or a future officer of the defendant Brotherhood.

[42]

(b) There is no assurance that each and all of

;

4. Replying to the purported denials and affirmative

allegations in paragraph 6 of the defendants’ answer, the

plaintiff shows that the second paragraph under para-

graph 6 in effect admits the type of conduct alleged in

paragraph 7 of the plaintiff’s bill of complaint. The plain-

tiff further shows that the defendants are precluded from

denying the conduct described in paragraph 7 of the

plaintiffs’ bill of complaint by reason of the admissions of

the defendant Brotherhood and opinion of the Court in

said Illinois case to which reference is made at the top

of page 6 of the defendants’ answer.

5. Replying to paragraph 7 thereof, with reference

to the denial therein contained, the defendants are pre-

cluded from denying the allegations of paragraph 8 of

the plaintiff's bill of complaint by reason of the admis-

sions on the part of the defendant Brotherhood and the

findings of the Court in said Illinois case as described at

the top of page 6 of the defendants’ answer. Further

answering said paragraph, the plaintiff lacks information

sufficient to form a belief with respect to the allegation

that Edward B. Henslee died either on November 22, 1958

or any other date and accordingly, neither admits nor

denies the same but leaves the defendants to their proofs

thereof. The plaintiff further shows that the conduct with

[43]

reference to solicitation and other matters described in

the bill of complaint are applicable to whatever Regional

Counsel or Legal Counsel may have been in office or as-

sociated with the defendant Brotherhood as described in

the bill of complaint and that the allegations of the bill

of complaint with reference to said Edward B. Henslee

refer to whoever acted as Regional Counsel or Legal

Counsel for the defendant Brotherhood with reference to

said matters described in the bill of complaint.

6. Replying to paragraph 8 of the defendants’s an-

swer, the plaintiff shows that the defendants are preclud-

ed from the denials as to paragraph 9, 10 and 11 of the

bill of complaint by reason of admissions made by the

defendant Brotherhood in said case in the Illinois Su-

preme Court as cited at the top of page 6 of the defend-

ants’ answer and also for the Court findings in that case.

The plaintiff further shows that the defendants have

failed to set forth any reason or reasons as to the denial

of the existence of the statute as quoted in paragraph 11

of the bill of complaint.

7. Replying to any further affirmative allegations con-

tained in said answer to which reference has not speci-

fically been made, the plaintiff denies the same.

Repry to First AFrirMaATIVE DEFeNsE

Replying to the first affirmative defense, the plaintiff

admits that the general subject matter here concerned

was before the Supreme Court of the State of Illinois,

along with various other matters relative to other areas,

in the matter of an investigation as to the practices of the

Brotherhood of Railroad Trainmen, ete.

0 ht LDL CALLEN OBS MME BE at. is Belay M RON SO MN aS ERR pilot ES Sal

Pesterciinimcc En Ae eee

The plaintiff denies the first paragraph under “first af-

firmative defense” and shows that said paragraph is not

[44]

a correct representation to this Court with reference to

the contents of the opinion in said Illinois case. The plain-

tiff further shows that in the opinion of of the Supreme

Court of Illinois, with reference to the Brotherhood and

its Regional Counsel, the Illinois Court recited that: “* * *

its present practices and those of its regional counsel can-

not be continued * * *”; the plaintiff further shows that

the Illinois Court thereupon prescribed certain conditions

and limitations on the conduct of the defendant Brother-

hood.

The plaintiff further shows that the conduct of the de-

fendant Brotherhood and its agents has been before the

Courts of several states with reference to the same or

similar practices as those at issue in this cause and that

the conduct described has been held to be reprehensible.

The only other or further affirmative matters set forth

in said purported first affirmative defense is reference to

an alleged communication by the President of the defend-

ant Brotherhood under date of March 16, 1959, appear-

ing to instruct the membership to comply with the decree

of the Supreme Court of the State of Illinois. However,

the same is not a defense in this cause for the following

reasons:

(a) Said communication does not direct compli-

ance with all the matters at issue in this cause.

(b) There is no assurance that the membership

of the defendant Brotherhood or the other defend-

ants or any of them will in all respects comply with

the terms of said alleged complication by the Presi-

ie Sere

—

dent of the defendant Brotherhood, either concurrent-

ly or at all times in the future.

tion by the President of the defendant Brotherhood,

[45]

as alleged, would not be reversed by this or a future

officer of the defendant Brotherhood.

Further replying, the plaintiff shows that the conduct

at issue in this cause, and even that conduct admitted in

the defendants’ answer, violates the statute in force in

the State of Michigan as described in the bill of com-

plaint and violates those principles effective within the

State of Michigan with reference to the freedom of a

claimant to select an attorney of his own choosing, with-

out influence by organizations or persons in the capacity

of the defendants in this cause, either by way of recom-

mendation, urging the employment of particular counsel,

conduct designed to secure cases for particular counsel,

and otherwise.

The plaintiff shows therefore that the matters in this

cause are not moot and that said purported first affirma-

tive defense is not applicable.

Rep.iy to Seconp AFFIRMATIVE DEFENSE

Replying to the purported second affirmative defense,

the plaintiff denies that in the State of Michigan an in-

junction against a course of conduct which constitutes

the commission of a crime is unlawful or constitutes a

reason fer non-issuance of such injunction.

The plaintiff further shows that this cause will assist

in preventing multiplicity of proceedings within the State

of Michigan as to each of the various occurrences of the

ES i ir DOORS Es aOR 2A

OR Ee Lt,

ids Net ERS Or i

ee en

LOSE

conduct concerning which complaint is made in this cause.

The plaintiff further shows that the conduct concerned

herein violates both the statute to which reference is

[46]

made in the plaintiff’s bill of complaint and also those

principles in force in the State of Michigan to which ref-

erence is made under the reply to the first affirmative de-

fense as above set forth.

The plaintiff therefore shows that paragraph 11 of the

bill of complaint should not be stricken, as prayed by

the defendants, and further, that said purported second

affirmative defense does not constitute a defense herein.

Repty to THrrp AFFIRMATIVE DEFENSE

Replying to the first sentence of the purported third

affirmative defense, the plaintiff denies the averments

therein contained and shows that the conduct concerned

herein does violate the statute to which reference is made

in the bill of complaint, violates those principles de-

scribed in the reply to the first affirmative defense above,

violates the laws of the State of Michigan, interferes and

impedes with the orderly administration of justice in the

State of Michigan and does infringe upon the rights both

of the claimants concerned in the cases to which refer-

ence is made in these proceedings and also the rights of

the plaintiff and the Courts of the State of Michigan.

Replying to the second sentence of the third affirmative

defense, the plaintiff denies the conclusions therein con-

tained.

Further answering said second sentence of the pur-

ported third affirmative defense, the plaintiff shows that

the reference therein made to the Federal Employers’

-_-

Liability Act as derived from the Railway Labor Act,

cited by the defendants as United States Code Annotated,

Title 45, Sections 151 through 164, is an erroneous citation

to this Court. The plaintiff shows that said Sections 151

| [47]

through 164 as cited by the defendants, deal with “rates

of pay, rules and working conditions” as repeatedly de-

scribed in those sections of said Federal Statute.

The plaintiff further shows that the defendants were

and are well aware that the citation of those sections to

this Court are not a defense of the conduct at issue in this

cause for in said opinion of the Illinois Supreme Court as

cited in the defendants’ answer, the Illinois Court set

forth that:

“The Brotherhood defends its practices on legal

grounds, and also argues that they are justified by

policy considerations. As a matter of law it argues

that its method of handling the personal injury and

death claims of its members is permissible because

under the Railway Labor Act the Brotherhood is au-

thorized to represent its members, before the Na-

tional Railroad Adjustment Board or other appropri-

ate tribunals, in the processing of ‘disputes grow-

ing out of grievances.’ (45 U.S.C. 152). But these

injury and death claims are not the kind of labor dis-

putes that the statute contemplates. We find nothing

to suggest that Congress intended by the Railway

Labor Act, any more than by the Labor Manage-

ment Relations Act, (29 U.S.C. 141) to overthrow

State regulation of the legal profession and the un-

authorized practice of the law.”

Further replying, the plaintiff denies that the statute

and principles and rules of law within the State of Michi-

gan applicable to the conduct concerned herein, in any

way conflicts with the Railway Labor Act or Federal

Statute, with the Interstate Commerce Clause of the Con-

[48]

stitution of the United States with Article I, Section 8

thereof, the Supremacy Clause of the Constitution, with

Article VI, Clause 2, or otherwise conflict with Federal

Statutes or the Con#itution of the United States.

The plaintiff shows that said purported third affirmative

defense is not available as a defense in this cause.

Wherefore, the plaintiff denying any other or further

affirmative matters contained in said answer and affirma-

tive defenses, the plaintiff prays that the plaintiff be

granted that relief described in the plaintiff’s bill of com-

plaint.

State Bar of Michigan

By Phillip C. Kelley and

By J. Cameron Hall

General Counsel

State Bar of Michigan

Phillip C. Kelly,

301-4 Reynolds Building,

Jackson, Michigan;

J. Cameron Hall,

1323 Dime Building,

Detroit 26, Michigan,

Attorneys for Plaintiff.

[48, 49] (Jurats omitted in printing)

SONG, Wee as

[62]

PLAINTIFF’S STATEMENT OF CLAIM

(Filed April 11, 1961)

Plaintiff claims that defendant, the Brotherhood of

Railroad Trainmen, and its members, officers and agents

named herein, and as a class within the State of Michi-

gan ever since 1930, have been engaged in a course of

conduct which consists of organized solicitation of claims

for injuries and/or death of railroad employees occur-

ring in the course of their employment within the State

of Michigan, such solicitation being for the benefit of

out-of-state lawyers, particularly defendants Henslee and

Naughton, named herein.

Plaintiff further claims that, as part of such organized

solicitation, the solicitors are paid for their time and

services, the Brotherhood of Railroad Trainmen is paid

on an agreed basis, in consideration of designating said

[63]

attorneys as the recipients of such solicited claims, and

the injured employees and/or their survivors are pro-

vided with financial support while their cases are pend-

ing.

Plaintiff claims that the conduct of defendants as set

forth in the bill of complaint is in violation of the crim-

inal statutes of the State of Michigan, and the canons of

ethics, as adopted by the Supreme Court of Michigan,

that such conduct further interferes with, and impedes

the orderly administration of justice, adversely affects

the relationship between the legal profession and the

public in the State of Michigan, and causes irreparable

damage to property rights of the public, and the legal

Dao Ri.

55a ee Ree

Ce ens a Se ne

Se res lagna eat RB aed Fe

Petttiteiatisiise nce Se eed

profession, in the State of Michigan, and should be en-

joined.

Phillip C. Kelly,

J. Cameron Hall,

Attorneys for Plaintiff.

Dated: May 27, 1960.

PRE-TRIAL SUMMARY BY THE COURT

(Filed April 11, 1961)

The parties hereto, by their respective counsel, ap-

peared for pre-trial conference before this Court on May

27, 1960.

The pre-trial statement of claim of plaintiff was filed

at that time, and subsequent thereto defendants’ pre-trial

statement of claim was also filed.

It appears that there is a possibility that a consent de-

cree may enter in this cause against the defendant. The

[64]

Brotherhood of Railroad Trainmen and all named de-

fendants. (In this connection it is pointed out that At-

torneys Edward B. Henslee, Jr., Martin K. Henslee, and

John J. Naughton have declined to submit voluntarily

to the jurisdiction of this court, they being nonresidents. )

In the event there is not a consent decree, defendants

have been requested to advise what issue in Michigan

is different than in the other states where consent de-

crees have entered.

It was also agreed that depositions of Mr. Whitney,

with his files, and Mr. Maher and the three above-named

attorneys may be taken; Mr. Whitney and Mr. Maher in

Cleveland and the three attorneys either in Chicago or

Detroit.

—

It was further agreed that the answer heretofore filed

may stand as the answer to the plaintiff's amended dec-

laration. (In this connection it is also pointed out that

this Court is this date entering an order striking from

the files and records of this case the appearances of the

three above-named defendants and also striking the

amended bill of complaint filed herein and reinstating the

original bill of complaint of plaintiffs filed herein, so that

the original answer may now stand as the answer to the

original bill of complaint.)

It was further agreed that the Constitution of The

Brotherhood of Railroad Trainmen as amended at the

convention in 1954 may be admitted in evidence, includ-

ing any amendments thereto, copies of which will be fur-

nished by the defendants.

At the time of pre-trial it was also agreed that this

cause should remain on the pre-trial docket and stand

continued from day to day until June 10, 1959, prior to

which time this Court was to be advised as to whether

[65]

or not there would be a consent decree. This Court not

having been advised that there would be a consent de-

cree, this matter is hereby ordered transferred from the

pre-trial to the trial docket.

(Signed) John C. Dalton

John C. Dalton, Cireuit Judge.

Dated: April 11, 1961.

CONCISE STATEMENT OF DEFENSE

(Filed April 12, 1961)

Trainmen contend that the State Bar is attempting to

enjoin BRT in Michigan on the basis of a bill of com-

» fa te

ie Ra. Eko RES

BR Ses

plaint which alleges selected statements from the opinion

of the Supreme Court of Illinois, Re. Brotherhood of

Railroad Trainmen, 13 Ill. 2d 391, 150 NE 2d 163, as

facts, though based solely on information and _ belief,

Such a complaint is not proper. Hartingh v. Bay Cir-

cuit Judge, 176 Mich. 289, 142 N.W. 585, Ann. Cases 1915

B, 520. The matter is moot sinee the Trainmen are, and

have been, in full compliance with the decision of the Su-

preme Court of Illinois. The State Bar of Michigan

attempted to intervene in the said proceeding and evi-

dence prepared by the State Bar was introduced in the

said proceeding. The complaint is also deficient for want

of equity in that neither the State Bar, nor the publie of

the State of Michigan have any property right in Fed-

eral Employers’ Liability Act claims or cases arising out

of railroad accidents occurring in Michigan. The right to

practice law is not a property right. Ayres v. Hadaway,

303 Mich. 589, 6 N.W. 2d 905. Even if the publie had

property rights in these cases, the State Bar of Michigan

[66]

is not the proper party to enforce those rights.

Plaintiff may not base its complaint on an alleged vio-

— lation of the Michigan statutes because it is hereby at-

tempting to enjoin the alleged commission of a crime

and is patently attempting to deprive the defendants of

their Constitutional right to a trial by jury. Even if a

: complaint could be validly based on the said statute, the

_ allegations herein do not state a cause of action founded

on that statute. The meaning and effect of that statute

was considered and stated in Hightower v. Detroit Edi-

son Co., 282 Mich. 1, 247 N.W. 97. There, the Supreme

Court of Michigan states:

“The rule of strict construction confines an of-

fense to the words of the statute, but it permits the

CANARD HAM VANS STR. Hd

words not only to be read naturally, but to be given

a meaning in harmony with the purpose and intent

of the law as far as may be done without distortion

of language. Deloria vy. Atkins, 158 Mich. 232, 241,

122 N.W. 559; People vy. Gould, 237 Mich. 156, 163,

211 N.W. 346; Sutherland on Statutory Construe-

tion, Vol. 2 s 528 et seq.; 59 C. J. 1113 §660,

The purpose of the act is to discourage the prae-

tice commonly known as ‘ambulance chasing’. The

practice has developed recognized evils, the major

of which are (1) fomenting litigation with resultant

burdens on the courts and publie purpose; (2)

subornation of perjury; (3) muleting of innocent

persons by judgments, upon manufactured causes of

action and perjured testimony, and by settlements

to buy peace; and (4) defrauding of injured persons

having proper causes of action, but ignorant of legal

rights and court procedure, by means of contracts

[67]

which retain exorbitant percentages of recovery and

illegal charges for court costs and expenses and by

settlements made for quick return of fees and

against the just rights of the injured persons.”

Finally, Trainmen contend that their rights in the

premises are governed by Federal Statutes, the Federal

Constitution, and considerations of public policy. Be-

cause of the said rights, Trainmen are entitled to have

this action dismissed.

Respectfully submitted,

| Arthur C. Lumley,

Attorney for Certain

Defendants,

1512 Dime Building,

Detroit, Michigan.

Prcice« Sa eg de

tall Cag 5 lemmas |

TRANSCRIPT OF TESTIMONY

Jackson, Michigan, June 27, 1961

10:13 o’clock a. m.

Before Honorable John C. Dalton, Circuit Judge.

*(2) Appearances: Phillip C. Kelly, Esq., 301-4 Reyn-

olds Building, Jackson, Michigan, and J. Cameron Hall,

Esq., General Counsel, State Bar of Michigan, 1323 Dime

Building, Detroit 26, Michigan, for the plaintiff; Arthur

C. Lumley, Esq., 1512 Dime Building, Detroit 26, Michi-

gan, and Henslee & Henslee, Esqs., of counsel by Ed-

ward Henslee, Jr, Esq., and John J. Naughton, Esq., 139

North Clark Street, Chicago 2, Illinois, for the defend-

ants.

[68]

(8) The Court: Gentlemen, are you ready for this

matter to be presented to the Court?

Mr. Kelly: The plaintiff is ready, your Honor.

The Court: Defense?

Mr. Lumley: Defense is ready,

The Court: Mr, Kelly?

Mr. Kelly: May T inquire if John J. Naughton is one

of the partners of Henslee, Henslee & Naughton, who ap-

pears as counsel for the defendants here?

Mr. Naughton: Mr. Naughton is not a partner but

he appears for the defendants. He is associated with the

firm of Henslee & Henslee.

Mr. Kelly: In Chicago.

Mr. Naughton: In Chicago.

Mr. Kelly: May I inquire if anyone else from that firm

or associated with that firm is here?

*(2) refers to page of Transcript of Testimony.

Mr. Henslee, Jr.; I am Edward Henslee, Jr. | am

here.

The Court: Are they of counsel in this matter?

Mr. Lumley: The order hasn't been entered, your

Honor.

Your Honor has the opinion. I do not have a copy

(4) of that order.

Mr. Kelly: May I refer to the answer to the bill of

complaint filed by the defendants, in which Edward B.

Henslee, Jr., Martin K. Henslee, and John J. Naughton,

139 North Clark Street, Chicago 2, Illinois, State 2-5925,

and Arthur C. Lumley, 1512 Dime Building, Detroit 26,

Michigan, Attorney for Defendants, Woodward 2-1490,

appears as part of the record and files in this case?

Mr. Lumley: There is no contest about that, your

Honor.

At one time I believe there was an order entered strik-

ing these parties.

The Court: That is right.

[69]

Mr. Lumley: And then your Honor rendered an opin-

ion in which you said that for comity they could be al-

lowed to proceed as defendants, but we didn’t enter an

order on that.

So that I took the position, in view of the fact we didn't

enter an order, that I could have them here to assist me

in the trial of the matter, just like you would have an-

other agent to assist you.

It doesn’t make any difference to me. If the Court

wishes to admit them right now as attorneys in this case,

I would not have any objection.

AD LAER ADEE se Pa IDG, a

“ot ine

SIE RN Poth, SS stl Le"

eee

Teo-

o © “wr oe?

ee ae

[PT Seen ee a me

Mr. Kelly: IL think the—

Mr. Lumley: That was the reason I made that state-

(5) ment,

Mr. Kelly: 1 think at no time were they refused the

privilege as appearing as counsel here, and as T wnder-

stand the record they are here as counsel for the de-

fendant,

The Court: We are splitting hairs here.

Is there any objection to the record showing that they

are here as of counsel?

Mr. Lumley: No,

The Court: Let the record so show.

Mr. Kelly: May it please your Honor, this cause is

here this morning on the original bill of complaint and

the answer of the defendants to the bill of complaint

and the reply of the plaintiff to the defendants’ answer.

In these pleadings the issues are to a considerable ex-

tent admitted. The allegations of the bill of complaint

are admitted, to be more accurate.

And it is proposed on behalf of the plaintiff at the

outset of this case to make an opening statement on the

record delineating what issues are admitted in the plead-

ings. And in the course of this statement, to present

documentary exhibits on the record so that the Court

[70]

may have before it, insofar as it ean be done, the faets

which we ask the Court to find on the pleadings, follow-

ing which we will present evidence as to the facts which

are in dispute.

And for the benefit of the Court, this being a (6) chan-

cery case, on behalf of the State Bar of Michigan, I

think it is proper to summarize briefly the background

and history of this litigation and of this matter of the

State Bar to this date, including the pleadings and issues

here before the Court this morning.

Now, the matter which we are pursuing is, namely,

the alleged unlawful solicitation through The Brother-

hood of Railroad Trainmen, Legal Aid Department, of

cases of Michigan residents, railroad employees and

their survivors in the event of the death of those em-

ployees, which cases come under the terms and provi-

sions of the Federal Employers’ Liability Act; the solici-

tation of those cases through the operations of the Legal

Aid Department of The Brotherhood of Railroad Train-

men who have certain attorneys—more specifically, have

regional counsel of The Brotherhood of Railroad Train-

men, Legal Aid) Department—whose territory includes

the railroads in the lower peninsula of Michigan.

Now, this matter first came to light, at least to the

knowledge of the State Bar of Michigan and myself as

a member of that bar, in the form of a newspaper story

which appeared in the local Jackson Citizen Patriot late

in 1952, which contained—

Mr. Lumley: Just a moment. I object to any reference

to something that would categorically he hearsay.

He could so mention the newspaper story.

(7) The Court: There is no objection to noticing it.

This Court will not take judicial notice of any news-

paper story. It will not receive it in evidence, because

it is hearsay.

[71]

You have no objection to the record showing that is

how it first came to your attention?

Mr. Kelly: All right.

wiikinn i Ht

It came to the attention of the City of Jackson and the

attorneys practicing in Jackson, members of the Jackson

County Bar Association, late in 1952, that the case of a

local citizen employed by the New York Central Railroad

had been handled by—

Mr. Lumley: Just a moment. I object to that again

because now he is telling what is in the article, and that,

I believe, is hearsay, your Honor.

Mr. Kelly: This is prefatory, your Honor please, to

giving the Court the background of this ease. There is

no jury here. I do not ask the Court to consider it as

any evidence in the case.

The Court: Let’s keep in mind, gentlemen, we do not

have any jury to impress here.

Let’s get the facts before the Court so we ean have

this matter for disposition.

As a matter of fact, the Court is familiar with it, any-

way, but I do not think it is properly before the Court.

(8) Mr. Kelly: I am going to elaborate on it.

The Court: Lets’ go on. We have this coming to the

attention of the State Bar in 1952 through a newspaper

story which appeared in the Jackson Citizen Patroit.

Mr. Kelly: I may say to the Court that it had been the

cause of some wonder why this type of case was never

seen in this Court, and I think the records will show that

no such case as an F. E. L. A. case has ever been in this

court.

As a result of this newspaper publicity, the State Bar

of Michigan appointed a committee to investigate what

was going on in reference to the F. E. L. A. eases arising

in Michigan.

[72]

I was appointed chairman of the State Bar committee

by President David Pence.

An investigation by our committee disclosed that there

had been established by the B. of R. T. back in 1930,

approximately, what was called a Legal Aid Department.

The rational or the explanation for the creation of this

department was expounded by the president of the B. of

R. T. at that time. I will refer to that later as to the

statements which were made as to why this Legal Aid

Department was organized.

I think probably in deference and in reference to the

Court’s indicated statement that I will proceed with-

out any further background to the state of the pleadings

in this (9) case.

The Court: Very well.

Mr. Kelly: Referring only just briefly to those further

matters.

The State Bar, after the disclosures made from the in-

vestigation our committee had produced, authorized a

complaint to be made on behalf of the State Bar of

Michigan to the Chicago Bar Association against the

Henslee firm in Chicago, regional counsel of the B. of

R. T. covering Michigan. That complaint was filed with

the Chicago Bar Association in the year 1956 or 1957.

I believe 56. And it was made at that time by a proceed-

ing instituted by The Brotherhood of Railroad Trainmen

in the Supreme Court of the State of Illinois, asking for

approval of their methods of what we term solicitation

in these F. E. L. A. cases.

The Supreme Court of Illinois appointed a commis-

sioner to hold hearings and investigate the operations

“NORE A keen OMS sabe ge

Pe ee

Sarthe,

Beinn WEIS CR AP as

and, following the report of the commissioner, the Su-

preme Court entered a decree disapproving their meth-

ods and operations and entering a decree to that effect,

[73]

but at the same time stating that, inasmuch as the law

had just been settled in Illinois, the complaints whieh

were pending by the State Bar of Michigan and, I think,

the Philadelphia Bar Association at that time against

regional counsel in Chicago should be dismissed and not

prosecuted.

(10) So that this proceeding was authorized by the

State Bar, the instant proceeding here, to ask the Court

for an injunction against the operations of The Brother-

hood of Railroad Trainmen in Michigan. And that is the

basis on which this case has come to court.

Now, in our bill of complaint, in paragraph 1, it is al-

leged that the State Bar of Michigan is a public body

corporate, charged with the duty to aid in promoting im-

provements in the administration of justice and advance-

ments in jurisprudence, in improving relations between

the legal profession and the public, and in promoting the

interests of the legal profession in the State of Michi-

gan.

The answer of the defendants admits paragraph 1.

And in paragraph 2 it is alleged that The Brotherhood

of Railroad Trainmen is a national railway labor organ-

ization, with principal office in Cleveland, Ohio, but hav-

ing branches, members, officers and agents throughout

the United States, including the State of Michigan.

And the answer admits those allegations.

Paragraph 8 alleges: “That Frank J. Carr and L. M.

Hasbrouck, of Jackson, Raymond Fieberkorn and

Thomas W. Fletcher, of Detroit, W. C. Coryell, of Oke-

mos, L. E. Singer of Plymouth, E. V. Surdam, of Grand

Rapids, H. F. McCall, of Birmingham, R. J. Johnson

and LL. A. Russell, of Durand, A. V. Grandstaff, of Dear-

born, W. T. Ellsworth, of Allen Park, (11) R. J. Snow,

of Melvindale, and William KE. B. Chase, of Livonia, are

[74]

members, officers and agents of defendant Brotherhood

of Railroad Trainmen residing within the State of

Michigan, and that there are other members, officers

and agents of said defendant Brotherhood of Railroad

Trainmen, within the State of Michigan, constituting

a class so numerous as to make it impracticable to bring

them all before the court, as to all of whom there are

common questions of law and fact affecting their several

rights and against all of whom a common relief is sought,

as hereinafter shown.”

The answer of the defendants admits that they are

members, officers and agents of defendant Brotherhood

of Railroad Trainmen (hereinafter called Trainmen)

residing within the State of Michigan and further admit

that there are others in like capacity within the state.

Defendants deny all other allegations in paragraph 3.

In other words, the denial of the defendants there is

the statement of the allegation that it constitutes a class

so numerous as to make it impracticable to bring them

all before the court. There are no questions of law and

fact as to all of them.

In paragraph 4 of the bill of complaint it is alleged

that in or about the year 1930 the Brotherhood of Rail-

road Trainmen organized and established a so-called

Legal Aid Department as a division of said Brother-

it? ia

TN pV te

hood of Railroad Trainmen, (12) representing, as rea-

sons for organizing said Legal Aid Department, the

following:

“Many lawyers frequently abuse the confidence

of their clients by effecting low settlements in the

case in order to obtain a higher settlement in some

other case against the same railroad; incompetently

preparing and processing such cases upon the law

or the facets; not fully and fairly explaining to the

client the terms of the employment, so that the

client, after having assented to settlement, finds the

proceeds thereof surcharged with items for expense

of litigation, medical expenses, expenses of one sort

and another or the like, which are not legitimate, or

if legitimate, were not explained to him before the

settlement was concluded, as well as in other ways.

“Adequate compensation cannot in general be ex-

acted if members of the Brotherhood are persuaded

by claim agents either to settle their own claims or

to place them in the hands of incompetent, inex-

perienced or otherwise inadequate counsel.

“In 1930, A. F. Whitney, then President of the

Brotherhood, in a public utterance to the Brother-

hood’s membership, declared that in his several

years’ experience as an officer of the Brotherhood,

it had come to his attention that members who had

been killed while engaged in railroad service had

fared rather badly at the hands of railroad claim

(13) agents in some instances, as well as at the

hands of so-called ambulance-chasing lawyers, and

that settlements wholly inadequate in the light of

the seriousness of the injuries and the responsibility

of the employers had been made with members of

the Brotherhood who were either entirely devoid of

their rights in such matters or who had been induced

to make cheap settlements by misrepresentations

indulged in by those who sought to effectuate these

settlements.”

The answer of the defendants admits “that in the year

1930 the Trainmen organized and established a depart-

ment of the Trainmen designated as the ‘Legal Aid De-

partment.” Defendants admit that the representations

[76]

alleged were stated, along with other representations, as

factors to be considered in deciding whether a legal aid

department should be established. Defendants deny all

other allegations of paragraph four of the bill of com-

plaint.”

[ point out to your Honor at this time that there are

no other allegations in the complaint which would be cov-

ered by that denial. In other words, paragraph 4 is in

effect admitted.

Paragraph 4, that is correct, is in effect admitted.

And then the defendants go on to say further in their

answer, which is numbered 3 in the answer:

“Defendants aver that on a referendum question-

naire and ballot in 19380, the members of the lodges

of the Trainmen (14) in the United States voted by

a majority of eleven to one that a legal aid depart-

ment should be organized.

“Defendants further aver that the said Legal Aid

Department was thereupon organized as a part of

or department of the defendant Trainmen and, as

POSE SANG RIND cd a Ni a |

oe ae

constituted, was directly subject to the provisions of

the Constitution of the Trainmen and to the auther-

ity of the president of the Trainmen.

“Defendants further aver that the title of the

said Legal Aid Department was changed by order

of the president of the Trainmen on or about Janu-

ary 1, 1959, and was redesignated as the ‘Depart-

ment of Legal Counsel.’ Defendants aver that the

title of the attorneys designated for the several re-

gions was at the same time changed from ‘Regional

Counsel’ to their present designation as ‘Legal Coun-

sel.’ ”

77]

Now, the plaintiff has filed a reply to these affirma-

tive allegations, as follows:

“Replying to the affirmative allegations contained

in the seeond, third and fourth paragraphs of para-

graph 3 of the answer herein, this plaintiff is with-

out information sufficient to form a belief with re-

spect thereto and hence, neither admits nor denies

the same but leaves the defendants to their proofs

thereof.”

In paragraph 5 of the bill of complaint it is alleged

“that plaintiff is informed and believes, and therefore

alleges as true, that the Constitution and By-Laws of the

defendant (15) Brotherhood of Railroad Trainmen re-

quire, and the so-called Legal Aid Department of said

Brotherhood of Railroad Trainmen has, ever since its

formation, by and through its members, officers and

agents, pursued and continues to pursue and engage

in a well-organized and systematized solicitation, for

so-called Regional Counsel, of claims and/or causes of

action for personal injuries and/or death of railroad

employees arising under the Federal Employer’s Liabil-

ity Act, using the methods and practices, as follows:

“A member representative of the Brotherhood,

usually the Chairman of the Grievance Commit-

tee in the locale of the accident, calls upon the in-

jured employee or his bereaved family, and not only

explains to them that they can, but recommends and

urges that they do consult with the Regional Coun-

sel, and such representative urges said employees

or survivors of the deceased employees not only to

consult, but to retain Regional Counsel. Such em-

ployees or survivors of deceased employees are told

that Regional Counsel will not charge in excess of

[78]

25 per cent (25%) of the amount of any recovery,

whether recovery be affected by suit or settlement,

and that this percentage will include expenses inci-

dental to the investigation and any litigation of the

claim.”

And in answer to that paragraph, the answer of the

defendants is as follows:

“Defendants deny each and every allegation con-

tained (16) in paragraph five of the bill of eom-

plaint.

“Defendants aver that in many eases, but not in

all, a member of the defendant Trainmen calls

upon, contacts, or in some other manner explains to

an injured member employee, or his bereaved family,

the advisability of obtaining a lawyer, or the opin-

ion of a lawyer, and recommends that they consult

with the Legal Counsel designated, and further

recommends that the Legal Counsel be retained if

a lawyer is to be retained. Defendants further aver

erent |

that some of the same members have represented, as

was the fact in most cases arising in the Lower

Peninsula of the State of Michigan, that the legal

counsel will not charge in excess of twenty-five per

cent (25%) of the amount of any recovery whether

the recovery be effected by suit or settlement, and

that this percentage would include expenses inci-

dental to the investigation and any litigation of the

elaim.

“Defendants further aver that this representation

of the fee charged has been eliminated by order of

the president of the Trainmen contained in his let-

ter to all lodges dated March 16, 1959, effective

April 1, 1959, hereinafter set out in the First Af-

firmative Defense to this answer.”

[79]

This letter was dated, of course, after this action was

started in this court. And our reply leaves them to their

proof as to those allegations.

However, I point out to your Honor that it is here

(17) admitted that the representative of the Brother-

hood of Railroad Trainmen, Legal Aid Department.

recommends that legal counsel be retained, which is the

issue in this case alleged and admitted.

In paragraph 6 of the bill of complaint it is alleged

that “Plaintiff is further informed and believes, and

therefore alleges as true, that representatives of the

Brotherhood of Railroad Trainmen are reimbursed for

their time in bringing injured employees or the survivors

of the deceased employees to the officers of the Regional

Counsel. Reimbursement is at the member representa-

tive’s hourly rate of pay on the railroad. Members rep-

—

resentatives are also reimbursed for any out-of-pocket

expenses incurred in bringing injured employees or the

survivors of deceased employees to Regional Counsel.”

The answer of the defendants, number 5 of their an-

swer, is as follows:

“Defendant’s admit the allegations of paragraph

six of the Bill of Complaint as being in existence up

to and including the 3lst day of March, A. D.,

1959.”

Which was, as I have said, after the suit was filed.

(Continuing reading) “Defendants further aver

that the said compensation and reimbursement has

been terminated under the previously mentioned

order of the (18) president of the Trainmen dated

March 16, 1959.”

[80]

Our reply to that answer is as follows:

“Replying to paragraph 4 thereof—”

No, I have just referred to paragraph 5 but I neglected

to read our reply to their paragraph 4, and I shall read

it into the record at this time. (Reading):

“The plaintiff shows that the defendants and each

of them are precluded from denying the contents of

the sub-paragraph under paragraph 5 of the Bill of

Complaint, by reason of the admissions on behalf of

the defendant Brotherhood and the findings of fact

in a proceeding in the Supreme Court of the State

of Illinois, to which proceeding and opinion refer-

ence is made at the top of page 6 in the defendants’

answer, with reference to the matter an investiga-

tion as to the practices of the Brotherhood of Rail-

wicca cee |

[81]

road Trainmen, ete. 13 Illinois, 24 391; 150 North-

eastern 2nd, 163.

“Replying to the second paragraph under para-

graph 4 of the defendants’ answer, the plaintiff

shows that the admissions by the defendants therein

set forth constitute solicitation of claims within the

State of Michigan by the defendants or by part or

all of the defendants and by the defendant Brother-

hood, on behalf of the Regional Counsel or Legal

Counsel of the defendant Brotherhood.

Replying to the third paragraph under Paragraph

4 of the defendants’ Answer, the plaintiff shows

that:

(19) “(a) The alleged order by the President of

the defendant Brotherhood dated March 16, 1959, is

alleged by the defendants in this paragraph to apply

to the representation as to the fee to be charged by

the Brotherhood’s Regional Counsel or Legal Coun-

sel and does not cover the many other courses of con-

duct which are the subject of this cause.

“(b) There is no assurance that each and all of

the members of the defendant Brotherhood will

comply with the terms of such orders as may be

issued by the President of the defendant Brother-

hood.

“(c) There is no assurance that if there were an

order by the President of the defendant Brother-

hood as alleged, the same might not be reversed by

either this or a future officer of the defendant

Brotherhood.

“Replying to the affirmative matters set forth in

Paragraph 5 of the answer, wherein the defendants

admit the allegations of paragraph 6 of the bill of

complaint up to March 31, 1959, the plaintiff shows

that even if the President of the defendant Brother-

hood disseminated a communication dated March

16, 1959, the same does not constitute a defense in

this cause for the reasons that:

“(a) Said purported communication by — the

President of the defendant Brotherhood does not

cover all of the matters concerned in this cause, nor

is it alleged to cover all of the matters of conduct

concerned in this (20) cause.

“(b) There is no assurance that each and all of

the members of the defendant Brotherhood will

(82)

comply with the terms of such orders as may be is-

sued by the President of the defendant Brotherhood.

“(c) There is no assurance that if there were an

order by the President of the defendant Brother-

hood as alleged, the same might not be reversed by

either this or a future officer of the defendant

Brotherhood.”

Now, in paragraph 7 of the bill of complaint alleges:

“Regional Counsel referred to above are attor-

neys selected by the defendant Brotherhood of Rail-

road Trainmen, in some fifteen ‘regions’ designated

by said defendant to receive, through the methods

and practices aforesaid, all Federal Employers Lia-

bility Act cases arising in their designated regions.”

The answer of the defendants, carried under number 6

of their answer, says:

Pe A NEN ss OTE NaS DS tet NER

es ee

Peecnter cen patel

“Defendants deny each and every allegation of

paragraph seven of the Bill of Complaint.

“Legal Counsel referred to above are attorneys

designated by the defendant Trainmen in some

seventeen regions designated by the said defendant

as attorneys recommended for their qualifications

and their integrity to be competent to prosecute

claims arising under the Federal Employers’ (21)

Liability Act for members of the trainmen in their

designated regions.”

Our reply to that answer is as follows:

“Replying to the purported denials and affirma-

tive allegations in Paragraph 6 of the defendants’

Answer, the plaintiff shows that the second para-

[83]

graph under paragraph 6, in effect, admits the type

of conduct alleged in paragraph 7 of the plaintiff's

Biil of Complaint. The plaintiff further shows that

the defendants are precluded from denying the con-

duet described in paragraph 7 of the plaintiff's Bill

of Complaint by reason of the admissions of the de-

fendant Brotherhood and opinion of the Court in

said Tllinois case to which reference is made at the

top of page 6 of the defendants’ Answer.

Paragraph 8 of our bill of complaint alleges:

“The Lower Peninsula of the State of Michigan,

is the ‘region’ of one Edward B. Henslee, an attor-

ney, of Chicago, Illinois, and his associates, for

whom defendants, or some of them actively solicit,

by the methods herein outlined, all cases of personal

injury or death of railroad employees occurring in

the State of Michigan, as plaintiff is informed and

believes and thereupon alleges as true.”

r Wear * +

The answer of the defendants, carried under number 7

of their answer, says:

“Defendants deny all of the allegations of para-

(22) graph eight of the Bill of Complaint except

that they admit the Edward B. Henslee referred to

at one time was the Regional Counsel for a region

including the Lower Peninsula of the State of Michi-

gan and that he had associates. Defendants further

aver that the said Edward B. Henslee died on No-

vember 22, 1958.”

Our reply to that answer is as follows:

“Replying to Paragraph 7 thereof, with reference

to the denial therein contained, the defendants are

[84]

precluded from denying the allegations of paragraph

8 of the plaintiff's Bill of Complaint by reason of

the admissions on the part of the defendant Brother-

hood and the findings of the Court in said Illinois

case as described at the top of page 6 of the defend-

ants’ answer.

“Further answering said paragraph, the plaintiff

lacks information sufficient to form a_ belief with

respect to the allegation that Kdward B. Henslee

died either on November 22, 1958, or any othe date

and accordingly, neither admits nor denies the same

but leaves the defendants to their proofs thereof.

“The plaintiff further shows that the conduet

with reference to solicitation and other matters de-

seriped in the Bill of Complaint are applicable to

whatever Regional Counsel or Legal Counsel may

have been in office or associated with the defendant

Brotherhood as described in the Bill of Complaint

Sieata, cities |

(23) and that the allegations of the Bill of Com-

plaint with reference to said Edward B. Henslee

refer to whoever acted as Regional Counsel or Legal

Counsel for the defendant Brotherhood with refer-

ence to said matters described in the Bill of Com-

plaint.”

Paragraph 9 of the bill of complaint alleges that:

“Plaintiff further shows unto the Court, on infor-

mation and belief, that, by and through the opera-

tions of the Legal Aid Department of the Brother-

hood of Railroad Trainmen in the State of Michi-

gan, large numbers of eases and claims of members

of the Srotherhood of Railroad Trainmen residing

in Michigan and whose claims have arisen within the

[85]

State of Michigan, have been unlawfully and im-

properly solicited by said Brotherhood of Railroad

Trainmen Legal Aid Department, through its mem-

bers, agents and officers, and have been directed into

and handled by the office of Regional Counsel Hens-

lee and associates in Chicago, Illinois, and else-

where, to the extent that a majority of such eases

are so solicited and so handled.”

The defendants deny each and every allegation of

paragraphs 9, 10, and 11 in their number 8 of their an-

swer and, for reply, the reply as filed by the plaintiff

sets forth as follows:

“Replying to Paragraph 8 of the defendants’ An-

swer, the plaintiff shows that the defendants are

precluded from (24) the denials as to paragraphs

9, 10 and 11 of the Bill of Complaint by reason of

admissions made by the defendant Brotherhood in

said case in the Illinois Supreme Court as cited at

the top of page 6 of the defendants’ Answer and

also for the Court findings in that case. The plain-

tiff further shows that the defendants have failed to

set forth any reason or reasons as to the denial of

the existence of the statute as quoted in paragraph

11 of the Bill of Complaint.”

We have not, of course, read that as yet, but it is a

penal statute of this state.

Paragraph 10 of the bill of complaint alleges:

“That such solicitation, on an organized and sys-

tematized basis, interferes with and impedes the

orderly administration of justice, adversely affects

the relationship between the legal profession in the

State of Michigan and the public, and causes, and

[86]

threatens to cause, irreparable damages to property

rights of the public and the legal profession in the

State of Michigan.”

That is denied by the answer, as stated.

Paragraph 11 alleges that the methods of operation of

the Legal Aid Department of the Brotherhood of Rail-

road Trainmen, as set forth above, violate the Penal

Code of the State of Michigan, particularly Section 410

thereof, being Section 28.642 of Michigan Statutes Anno-

tated, and it is quoted in its pertinent part in this para-

graph, and I will (25) not read it into the record.

The Court: I see no need to. The Court will take

judicial notice of that.

“>

Ge REE

Bios PF Reatta et Ais BAS ess.

Mr. Kelly: Paragraph 12 alleges that matter in dis.

pute in this case exceeds the sum of one hundred dol-

lars, and in their answer the defendants deny that alle-

gation.

Paragraph 12 then goes on to pray for relief by way

of answer of the defendants and injunction from the

conduct complained of, and I will not read that into the

record because it is part of the bill of complaint.

So that there are affirmative defenses set forth, but

that is a matter for the defendants to care for, I assume.

As the pleading stand, if the Court please, we believe

that substantially all of the allegations of the bill of

complaint, all of the material allegations in the bill of

complaint, are admitted except as to paragraph 9 alleg-

ing that large numbers of cases and claims of members

of the Brotherhood of Railroad Trainmen residing in

Michigan and whose claims have arisen within the State

of Michigan, have been unlawfully and improperly so-

licited by said Brotherhood of Railroad Trainmen Legal

Aid Department, through its members, agents and of-

[87]

ficers and have been directed into and handled by the

office of Regional Counsel Henslee and associates in Chi-

cago, Illinois.

As to that matter, we propose to present proofs to

(26) the Court; and, further, as to the statements made

by the Brotherhood of Railroad Trainmen in its proceed-

ing in the Illinois Supreme Court which are relied upon

by the defendants and mentioned also in our reply.

(To the reporter): Will you mark this, please?

(The booklet referred to was marked “Plaintiff's

Exhibit 1.”)

ah)

Mr. Kelly: I would like to offer in evidence plain-

tiff’s Exhibit 1 entitled “Motion for Leave to File Peti-

tion for this Court’s Declaratory Judgment or Directive

Order Concerning the Practice of Law in the Respects

Set Forth in the Petition,” filed in the Supreme Court

of Illinois, November Term, A. D. 1955. In the Matter

of the Petition of the Brotherhood of Railroad Trainmen;

and W. P. Kennedy, President and a member thereof;

on behalf of the members, thereof, Petitioners, number

33877, as certified to by Mrs. Earle Benjamin Searcy,

Clerk of the Supreme Court of the State of Illinois.

Mr. Lumley: Your Honor, I object to the proposed

plaintiff’s Exhibit 1 for the reason that my examination

of it indicates that it is a petition of the Brotherhood

of Railway Trainmen and, as such, it does not constitute

testimony.

I do not see how just the pleadings of any particular

case would be admissible in this case.

(27) The Court: Is it a part of the—

Mr. Lumley: It doesn’t involve the same parties.

The Court: Is it a part of the record in the Illinois

case?

[88]

Mr. Lumley: It is a part of the record in the Illinois

case, that’s right.

The Court: It will be admitted, then.

Mr. Lumley: I would like to conclude my objection.

The Court: Go ahead.

Mr. Lumley: I believe that, as regards plaintiff's

Exhibit 1, it is incompetent, irrelevant, and immaterial.

It merely represents pleadings in a case rather than

see WA a

Pertetiiistisesiisrins ony

testimony, and certainly it is not evidence of any testi

mony offered in that case, which would have to be used

by counsel for impeachment purposes.

Mr. Kelly: I would like to read into the record from

plaintiff’s Exhibit 1 the following pages, 6 and 7, of the

exhibit:

“Under the Brotherhood’s constitution, by-laws

and other action approved by its membership, when

a member is injured or killed in railroad operations,

it is not only the right and privilege but the duty

and obligation of member representatives of the

Brotherhood, usually the Chairman of the Grievance

Committee in the locale of the accident, to call upon

the injured member of\his bereaved family, and not

27) only explain to them that they can but recom-

mend and urge that they do consult with the Re-

gional Counsel and his associates. The representa-

tive informs them that (as is the fact) such con-

sultation does not require them to retain Regional

Counsel and will entail no financial obligation upon

them unless they do retain such Counsel. There

is no disavowal, however, of the fact that repre-

sentatives do in fact not only urge members or sur-

vivors of the deceased members not only to consult,

but to retain, Regional Counsel. Members are told

[89]

(as is the faet) Regional Counsel are not permitted

to and will not charge in excess of 25% of the amount

of any recovery, whether recovery be effected by

suit or settlement, and that this percentage will in-

clude expenses incidental to the investigation and

any litigation of the claim.”

Mr. Lumley: Will you read the date of that petition,

counsel, so we have it in the record?

Mr. Kelly: It does not appear to be dated, Mr. Lum-

ley.

It says: “Respectfully submitted,” signed “Brother-

hood of Railroad Trainmen (A national railway labor

union); W. P. Kennedy, President of the Brotherhood,

By William C. Wines, Attorney for Petitioners.”

It is filed in the November Term, A. D. 1955, of the

Supreme Court of Illinois.

(28) Otherwise, it is not dated.

The Court: Does that cover your point?

Mr. Lumley: Yes, sir.

The Court: Very well.

Mr. Kelly: Reading further from page 7 of the ex-

hibit:

“Local Chairmen, or other member representa-

tives of the Union, are reimbursed for their time

in bringing injured members or the survivors of de-

ceased members to the offices of Regional Counsel.

In many instances member representatives of the

union are employed to investigate claims, it having

been found that their acquaintance with fellow-

employee witnesses and their conversance with rail-

road operations make them, for many eases, the best

investigator. Reimbursement is at the member rep-

[90]

sentative’s hourly rate of pay on the railroad, is

made immediately, and is wholly independent of

whether any money is recovered upon the claim or

not. Member representatives are also reimbursed

ER ARE BU aap cer |

ah ih age:

Sa PS ai lin

oP eee SA, ae

for any out-of-pocket expenses incurred in bringing

injured members or the survivors of deceased mem-

bers to Regional Counsel and in investigating the

case. Such reimbursement is likewise independent

of the result of any claim.”

Reading further at the top of page 6 of the exhibit,

your Honor:

“Edward B. Henslee, a Chicago lawyer, is Gen-

eral (29) Counsel for the Brotherhood and is one

of the 15 Regional Counsel. He has offices in Chi-

cago.”

The Court: Is there going to be considerable read-

ing from this next exhibit?

Mr. Kelly: No, your Honor.

The Court: Why, if there was, we better give the

reporter a break here.

Mr. Kelly: Will you mark this, please?

(The booklet referred to was marked “Plaintiff's

Exhibit 2.”)

Mr. Kelly: Exhibit 2 is offered in evidence.

Mr. Lumley: Defendants object to the admission of

plaintiff's proposed Exhibit 2 in evidence on the ground

that it is incompetent, irrelevant, and immaterial. It

contains conclusions of the pleader. It was not. testi-

mony.

Particularly, I direct the Court’s attention to the fact

that the date of this particular pleading is the November

Term, as far as I can tell here, 1955, which, of course,

[91]

from the standpoint of laying the foundation for the

relief that the plaintiff seeks, is incompetent, irrelevant,

—

and immaterial because it is better than five years ago,

and it does have no bearing upon whether the practices

that are alleged to have been contained in the plaintiff’s

Exhibit 2 are now in operation.

Mr. Kelly: It is in the same category as Exhibit 1,

(30) your Honor, another petition, an accompanying

petition filed by defendant, The Brotherhood of Railroad

Trainmen, in the Supreme Court of Illinois.

The Court: Let me ask you this: This is a part of

the record of the Illinois case, Mr. Lumley?

Mr. Lumley: Of course, he is the one that is offering

it, but I presume it is a part of the record, yes, your

Honor.

The Court: Well, so far as you know.

Mr. Lumley: As far as I know, it is a part of the

record.

The Court: It may be admitted.

Mr. Lumley: But I—

The Court: I understand.

Mr. Lumley: I want the Court to realize I am object-

ing to the record of the Illinois ease.

The Court: I understand.

Mr. Kelly: Exhibit 2 is entitled: “Petition for This

Court’s directions with Respect to the Representation

by Attorneys, of Members of The Brotherhood of Rail-

road Trainmen and the Survivors of Deceased Members

Arising Under the Federal Employer’s Liability Act and

the Railway Labor Act.”

Filed: “In the Matter of the Petition of the Brother-

hood of Railway Trainmen; and W. P. Kennedy, Presi-

| reece a eee

[92]

dent (31) and a member thereof; on behalf of the mem-

bers, thereof, Petitioners.”

Filed: “In the Supreme Court of Illinois, November

Term, A. D. 1955,” being number 33877; and reading

specifically from page 7 of the exhibit as follows:

“Edward B. Henslee is both the General Counsel

and one of the Regional Counsel for the Brother-

hood, as Regional Counsel represents the interests

of the Brotherhood and its members with respect

to the following segments of the following railroads,

respectively.”

Now, without reading further, I will just refer to

the fact that defendant includes all or portions of the

states of Indiana, Ohio, Illinois, Pénnsylvania; and as

to Michigan, reading again: “All employees of railroads

except those which run into the upper peninsula of the

state.”

The Court: I think at this time we better take a ten-

minute recess.

(A brief recess was taken.)

Mr. Kelly: If the Court please, that concludes our

presentation under the heading of issues in dispute,

and we will refer to Mr. Lumley if he cares to make an

opening statement. If not, we are prepared to proceed

with our proof under paragraph 9 which is in dispute.

The Court: Mr. Lumley, do you wish to or do you

wish to reserve it?

(82) Mr. Lumley: TI didn’t know that was an opening

statement, your Honor.

[I thought he started on his case. He read those things

in the record as evidence, and Plaintiff’s Exhibit 1 and

Plaintiff's Exhibit 2 were admitted in evidence as ex-

hibits in the case.

[93]

Mr. Kelly: That is right; they are matters—

Mr. Lumley: That is not an opening statement. That

is embarking upon his own case.

[ am content now to continue with his own case and

I will reserve my rights to make an opening statement

at the time when we start in ours if the Court will per-

mit me.

The Court: Very well.

Mr. Kelly: I offered Exhibits 1 and 2. They are part

of the pleading in the Illinois Supreme Court on behalf

of the defendant Brotherhood, as explanatory of the mat-

ters which are, we admitted in the pleadings; but as a

different—the statements published in those records

which are also in the pleadings. We haven't offered any

proof as to disputed matters. We do not intend to. How-

ever, we are ready to go ahead with proof if counsel

does not want to make an opening statement.

Mr. Lumley: If counsel is now saying that what he

has done heretofore constitutes an opening statement of

his claim, then I move that all of it be stricken for the

reason (33) that an opening statement is a statement

made by counsel as to what he intends to show and does

not constitute evidence and is not testimony.

What he did in this particular case was to introduce

into evidence two exhibits over my objection, which cer-

tainly constitutes not an opening statement but evidence

received by the Court in substantiation of his claims in

his bill of complaint, and I ask that it be stricken.

Mr. Kelly: I don’t know whether Mr. Lumley was

listening or not.

Te RE

ee |

penn Pd

eT es

es at RES eel ats

ty hie at ag” te

+ ele F tle hci «

Mr. Lumley: I was.

Mr. Kelly: But I stated to the Court that those mat-

[94]

ters were not in dispute and were admitted in the plead-

ings, and I was going to state them in the record for the

purpose of assisting the Court in making the findings

of facts.

We are ready to go ahead.

The Court: Let’s get on with the proofs.

Mr. Kelly: With our proofs, if counsel doesn’t want—

Mr. Lumley: May I have a ruling on my motion to

strike?

The Court: Your motion to strike is denied.

(34) WALSH, DAVID J., called as a witness on behalf

of the plaintiff, being first duly sworn, testi-

fied as follows:

Mr. Kelly: For the purposes of the record, if your

Honor please, and in opposition to the motion as made

by the defendants, I would like to re-offer at this time

in evidence plaintiff's Exhibits 1 and 2 and ask that

they be received in the record at this time.

Mr. Lumley: Same objections.

The Court: Same ruling.

Mr. Lumley: Everything is the same.

The Court: We are saving time.

Mr. Kelly: Are the exhibits received at this time,

your Honor please?

The Court: Yes.

Mr. Kelly: Thank you.

[95]

Direct Examination

By Mr. Kelly:

What is your name, please?

My name is David J. Walsh.

W.-a-l-s-h?

Yes, sir.

Where do you live, Mr. Walsh?

I live in Chicago, Illinois.

What is your occupation?

bPOo>OoOPOoDO

I am supervisor of the clearing house for the

Claims Research (35) Bureau, General Claims Division,

of the Association of American Railroads.

Q. And is the Association of American Railroads a

national organization?

A. Yes, sir.

Q. Who comprises that association?

A. Railroads operating in the United States.

Q. And how long have you occupied your position

with that organization?

A. Since July 1, 1953.

Q. Will you state whether or not the business of that

organization includes the keeping of records of claims

filed against railroad members of the organization?

A. It does.

Q. And whether or not the keeping of those records

is under your supervision?

A. It is, yes.

Q. And has been since July 1, 1953?

MO one odie BES oe

a, a

ot hip aap willie Be etn toicds

nee ee

A. Yes.

Q. Is it the regular course of your business to keep

those records?

A. It is, yes.

[96]

Q. I will ask you whether or not you have with you

records of claims of Michigan residents under the Fed-

eral Employers’ Liability Act against railroad members

of the Association of (86) American Railroads.

A. Yes, I do.

Q. Will you produce them?

A. Yes. I have them right here.

Q. Now will you refer to these records and tell the

Court what period of time they cover?

A. Yes. I have a group of cards here which covers

eases reported during the period July 1, 1953, to March

31, 1955.

Mr. Lumley: May I ask that that testimony be

stricken relating to any cards he may have between the

years 1953 and 1955 on the grounds that as far as the

issues in this case are concerned they are incompetent,

irrelevant, and immaterial?

This case is being tried in 1961 for alleged things

that happened in 1961, if they predicate that testimony

upon what they want to seek an injunction in the future.

Mr. Kelly: The only issue in this case as we see

it. Mr. Hall and myself for the plaintiff, is whether or

not a large volume of these cases arising in Michigan

reached the office of Regional Counsel Henslee and as-

sociates in Chicago over a period of several years dur-

ing the operation of this legal aid department. That is

placed in issue in our bill and denied by the answer,

and this is evidence offered in support of the bill.

The Court: It may admitted.

(87) Q. (By Mr. Kelly): You have identified records

covering the period of July 1, 1953, to March 31, 1955,

is that so?

A. Yes, that’s correct.

[97]

Q. I am holding in my hand a number of cards on

which are typed this legend: “F. E. L. A. cases involving

Michigan residents reported to Claims Research Bureau

4 a

during period July 1, 1953, to March 31, 1955.

Is that so?

A. Yes, that’s correct.

Mr. Lumley: May I ask a question if he seeks to

admit that in evidence, your Honor?

The Court: IT do not think he has offered them yet.

I assume it is going to be marked as an exhibit but

it has not been offered yet.

Mr. Kelly: Will you mark these, please?

(The group of cards referred to was marked “Plain-

tiff’s Exhibit 3.”)

Q. (By Mr. Kelly): Are these records kept under

your supervision, Mr. Walsh?

A. Yes, they are.

Q. Are they made and kept in the regular order of

your business and in the regular course of your business?

A. Yes, they are.

Q. Is it the regular course of your business to keep

such records?

Dh LONE APS ois MES i eS atest: AN hah IR i

te at Dr Nem Sap at A its

Pei nteier. ied abit

A. Yes, it is.

(38) Mr. Kelly: Will you mark this, please?

(The group of papers referred to were marked “Plain-

tiff’s Exhibit 4.”)

Q. (By Mr. Kelly): I will show you plaintiff's Ex-

hibit 4, Mr. Walsh, and ask you what that is.

Mr. Lumley: Well, I think that will have to be identi-

fied so that you can offer it in evidence before you take

testimony. It may be inadmissible.

Mr. Kelly: Thank you, Mr. Lumley. That is what I

am asking him.

[98]

The Court: He is going to identify them. That was

the question.

A. This is a listing of each of the cards which are

in this exhibit.

Q. (By Mr. Kelly): This is a compilation of the

pertinent information which is contained in the cards

constituting plaintiff’s Exhibit 3?

That’s correct.

Made for the convenience of the Court?

Yes, it is.

Who made that schedule?

I made that personally.

You made it personally?

rere rer

Yes.

Q. It refers to these cards, Exhibit 3, is that right?

(39) A. Yes.

Mr. Kelly: Now, for the purpose of convenience, we

offer plaintiff's Exhibit 4 in evidence, which the witness

has testified was made personally by him from his orig-

inal records.

We will tender those records, Exhibit 3 for the use

of counsel for the defendants if he cares to see them,

and we will offer Exhibit 3 also. For whatever purpose.

But we thought it would be less cumbersome in the file

to offer the compilation.

The Court: I think it is apparent, the reason for

it; so if you will let counsel examine them perhaps we

can agree on something here.

Mr. Kelly: We offer plaintiff’s Exhibits 3 and 4.

Mr. Lumley: May I ask a question now on Exhibit 3?

Mr. Kelly: Yes.

The Court: Go ahead.

[99]

Q. (By Mr. Lumley): Mr. Walsh, where did you

get the information that is listed on the cards which con-

stitute plaintiff’s Exhibit 3?

A. It is supplied by the railroads.

Q. In other words, these cards merely reflect informa-

tion that was given to you from the record of the inde-

pendent railroad?

a. oe

(40) Q. So that the original records which represent

the information that is listed on plaintiff’s proposed

Exhibit 3 are with the original railroads that settled the

claims?

A. Yes.

Mr. Lumley: I object to it, your Honor, on the ground

that it is not the best evidence, Exhibit 3.

Mr. Kelly: Your Honor please, this is offered under

Section 27.902, Michigan Statutes Annotated, the busi-

ness-records-evidence statute, which insofar as material

here reads as follows:

“Any writing or record whether in the form of an

entry in a book or otherwise, made as a memorandum

of any act, transaction, occurrence or event shall be

admissible in evidence in all trials, hearings and

proceedings in any cause or suit in any court in

: proof of said act, transaction, occurence or event

if it was made in the regular course of any business

and it was the regular course of such business to

make such memorandum or record at the time of

such act, transaction, occurrence or event or within

a reasonable time thereafter. All other circumstances

of the making of such writing or record including

: lack of personal knowledge by the entrant or maker,

may be shown to affect its weight but not its ad-

missibility.”

[100]

It is the business of the—and has been so testified

—the regular course of business of the Association of

(41) American Railroads to keep such records. They

are made under the supervision of this witness in the

regular course of their business, and it is the regular

course of business to make them and keep them as ree-

ords. And it is clearly admissible under the statute.

Ble il Pt

Mr. Lumley: The court has ruled numerously that

the so-called shop-book rule, which T believe is what

counsel refers to, was not designed to render admissible

that which has been heretofore inadmissible.

All of these railroads have original records of claims

that they have settled or of the suits that have been

Preacircstiesniaicts in seasitios i iettatedarnis

}

MESON SS.

started, and those original records are kept by them;

so that the so-called plaintiff's Exhibit 3 is merely a

compilation of records that are in the original railroads

in the first instance. and those records would be the

best evidence of what they contain. It would appear

to me.

That is why I make my objection.

Mr. Kelly: Here is an association of all the rail-

roads, your Honor, whose very business is the keeping

of these records, and it has been testified that they are

so kept; and the objection which counsel has made of the

lack of personal knowledge doesn’t affect their admissi-

bility.

It would not be possible to bring in every person who

knows about the facts of this instance.

Mr. Lumley: I would like to supplement, if I may,

(42) my objection, your Honor, which is on an entirely

different ground and concerns both Exhibit 3, appar-

ently, and Exhibit 4, since Exhibit 4 is supposed to be,

for convenience, a compilation of the ecards in Exhibit 3.

The Court: Go ahead.

[101]

Mr. Lumley: Looking at Exhibit 4, I find that there

has been a certain number of cases allegedly instituted

or handled in Michigan and handled in the State of

Illinois.

Now, the so-called Michigan cases have been handled

by many law offices. As is shown here, Cary & BeGole;

Carl Gussin, and so forth.

As to that portion of the claim, I make my objection

on the grounds that it is not in any way binding upon

us. It would not be material in these particular pro-

ceedings which are directed to the parties involved.

May I show your Honor what I mean?

Le eae

ASS F

SEAN AALS EEL NOSE CERN ac ES: 95 ciate,

Wise

Bisnis Selita Lag Sabi Ste SiN, oii

PAT,

Mr. Kelly: I might say to your Honor that that ix

only one of our exhibits and it will be extended right

down to the present time; and, of course, we do not claim

anything for any of the other names on there excepting

the ones we are referring to in this case, and we are

prepared to demonstrate their participation from the

entire exhibits.

The Court: I think the exhibit speaks for itself.

Naturally, the defendants cannot be bound by the

litigation which on the face of this exhibit was not

handled by (43) their firm.

That is your point, is it not?

Mr. Lumley: Yes, your Honor.

The Court: I do not think there is any question about

that.

Mr. Kelly: We claim nothing for that.

The Court: Very well, we will receive the evidence

under the rule, Section 27.902.

Well, go ahead, Mr. Kelly.

Mr. Kelly: Plaintiff's Exhibit 4 is entitled: “Settle-

ments in F. KE. L. A. Cases Involving Michigan Resi-

dents Reported to Claims Research Bureau During

Period April 1, 1955, to December 31, 1955.”

[102]

I think I have picked the wrong exhibit.

I would like to straighten it out.

We inadvertently picked a compilation covering a period

April 1, 1955, to December 31, 1955, and had it marked

“Plaintiff's Exhibit 4” as being taken from plaintiff's

Exhibit 3 which covers a different period of time.

~ ae

I would like to withdraw plaintiff’s Exhibit 4 and have

it stricken from the record for the time being and sub-

stitute for it and offer in evidence a similar compilation

covering the same period as Exhibit 3.

The Court: I see no objection to that.

Mr. Kelly: Will you mark this, please?

(44) (The substituted group of papers referred to was

re-marked “Plaintiff’s Exhibit 4”.)

Q. (By Mr. Kelly): Now showing you corrected

plaintiff’s exhibit 4, Mr. Walsh, I will ask you whether

that is a compilation of settlements in F. E. L. A. cases

involving Michigan residents reported to the Claims

Research Bureau during the period July 1, 1953, to

March 31, 1955.

A. Yes it is.

Q. Was that compilation or schedule prepared by

you personally?

A. Yes.

Q. From the records constituting plaintiffs Exhibit 3

in your office?

A. Yes.

Mr. Kelly: May it be received in evidence?

The Court: I think you better submit it to counsel.

Mr. Kelly: Covering a different period of time.

Mr. Lumley: May I ask one question in regard to this,

your Honor?

Q. (By Mr. Lumley): Mr. Walsh—

A. Yes.

[103]

Q. (Continuing):—when did you start this particu-

lar organization of which you are a member?

eae.

SSeS oe AS REL A AN aI Sn NAR ee oat ohn

Bais: ee ane

A. It was begun on July 1, 1953.

Q. So that I notice in this exhibit here, the proposed

Exhibit 4 that you have, refers to years long prior to the

time when you (45) were organized as an association.

A. Yes.

Q. 1947, 1948, 1949, 1950, 1951, 1952?

A. That’s right.

Mr. Kelly: What are you referring to, Mr. Lumley?

Q. (By Mr. Lumley): Pages 4 to 5. As representing

the years before you were even organized at all?

A. That's correct.

Q. You did’t even keep records yourself of these

years, did you?

A. Those were reports came to our attention.

Q. But you didn’t keep records at all of these years,

did you, in the ordinary course of your business, because

you were not in business?

A. We were not in business at the time.

Mr. Lumley: 1 object to that exhibit, your Honor; at

least to the extent that T brought ont.

Mr. Kelly: Let me ask the witness this further ques-

tion: Was the Association of American Railroad organ-

ized before 1953?

A. Yes, it was.

Q. (By Mr. Kelly): When was that organized?

A. I believe it was approximately 1921 or 1922.

Q. And the keeping of records in your office under

the research claims division that you are supervisor of

commenced on July (46) 1, 1953?

A. Yes.

Q. Is that correct?

A. That’s right.

[104]

Q. You have assembled these records since that time

as records—

Mr. Lumley: I think the questions are very leading,

your Honor.

Mr. Kelly: All right.

The Court: Yes.

Rephrase it, Mr. Kelly.

Q. (By Mr. Kelly): You have kept records as part

of the business of the Association of American Railroads?

bureau of which you are an employee as furnished to

you by members of the—by railroads constituting the

membership of the Association of American Railroads.

Is that correct?

A. Yes.

Q. Ilas it been part of the job to analyze these claims

matters in your department?

Mr. Lumley: Objected to as leading.

Q. (By Mr. Kelly): What I am getting at is: Why

did you keep this record for the prior years before the

office that you are connected with started? Why did you

keep these records?

A. They are more or less of historical significance,

Mr. Kelly: I think it all goes to the point that we are

interested in here, that we are trying to direct the (47)

Court’s attention to: that these cases have been going into

these offices even before the time when this particular

office made the compilations, and they have made this

ee eetuiece es

compilation from records which have been furnished to

them and are equally admissible under the statute.

Mr. Lumley: I would like to have the record show that

I renew my objection that I originally made to the mis-

taken plaintiff’s Exhibit 4 in reference to this Exhibit 4.

The Court: Your objection is denied. The exhibit

may be admitted and, of course, the weight of it is for

the Court.

[105]

Mr. Kelly: Will you mark this, please?

(The group of papers referred to was marked “Plain-

tiff’s Exhibit 5.’)

Q. (By Mr. Kelly): I will show you plaintiff's Ex-

hibit 5, Mr. Walsh, and ask you whether those are the rec-

ords of claims F. E. L. A. eases, involving Michigan resi-

dents reported to the claims research bureau during the

period April 1, 1955, to December 31, 1955.

A. Yes, they are.

Q. To shorten the record, are all of those records

which you have in front of you, including plaintiff’s Ex-

hibits 3 and 5 and the others, of a similar nature kept in

the regular course of your business?

A. Yes, they are.

(48) Q. Is it the regular course of your business to

keep these records?

A. Yes, it is.

Mr. Lumley: What years do they cover, Mr. Kelly?

Mr. Kelly: April 1, 1955, to December 31, 1955.

(To the reporter): Will you mark this, please?

(The papers referred to were marked “Plaintiff’s Ex-

hibit 6”.)

Q. (By Mr. Kelly): Did you also make a schedule of

the contents of the cards constituting Exhibit 5, Mr.

Walsh?

A. Yes, I have.

Q. Showing you plaintiff's exhibit 6, is that the

schedule?

A. Yes, it is.

Q. Was that made by you from the records of exhibit

A. Yes, it was.

Mr. Kelly: Plaintiff’s exhibits 5 and 6 are offered in

evidence.

[106]

Mr. Lumley: I wish to make the same objection to

exhibit 5, that it is—I assume it is not the best evidence

because you secured it the same way, did you not, Mr.

Walsh?

A. Yes, that’s true.

Mr. Lumley: So I object to exhibit 5 on the ground,

first, that it is not the best evidence; secondly, that it is

incompetent, irrelevant, and immaterial because it covers

a period of time long prior to the issues that are in-

volved in (49) this ease.

As to Exhibit 6, I might ask one other question of the

witness if I may, your Honor.

The Court: Go ahead.

Q. (By Mr. Lumley): Does this cover or do your

records show where the accidents happened in these

cases?

A. Yes, the records show that.

naftintte. ——"

ODAC IME A A It tele Als cl DE Mion 5 tet est i iscn dei

tind

Q. I mean do the cards—

A. (Interrupting): Yes, the cards also.

Q. And Exhibit 4 and Exhibit 5 reflect where the ac-

cidents happened?

A. Yes.

Q. I note, for instance,—I am just taking a card out

of the proposed Exhibit 5, and I see the accident hap-

pened January 10, 1954, at Chicago, Illinois.

A. May I see the card? Yes, that’s correct; it hap-

pened in Chicago.

Mr. Kelly: Go ahead, answer the rest of the question.

The Witness: But the address of this claimant. is

shown as Holland, Michigan, which would make it come

within that summary I gave you.

Mr. Lumley: I object to plaintiffs Exhibit 6 on the

grounds that it does not represent the best evidence of

the contents or of the information it purports to contain,

{107}

(50) and, because it covers certain years far prior to the

issues involved in this case, [ contend it is incompetent,

irrelevant, and immaterial.

The Court: For the same reason as stated with refer-

ence to Exhibits 3 and 4, the objection is denied and the

exhibits may be admitted.

Q. (By Mr. Kelly): We have taken the record down

to December 31, 1955.

Do you have records with you covering the same mat-

ters during the year 1956?

A. Yes, I do.

Mr. Kelly: Will you mark these, please?

(The group of cards referred to was marked “Plain-

tiffs Exhibit 7”.)

Q. (By Mr. Kelly): Showing vou Plaintiff’s Exhibit

7, T will ask you, Mr. Walsh, whether those are records

of F. E. L. A. eases involving Michigan residents re-

ported to the claims research bureau during the year

1956.

A. Yes, they are.

Q. From those records have vou made a schedule

containing the information in those records for use here

in court?

A. Yes, I have.

Mr. Kelly: Will you mark this, please?

The papers referred to were marked “Plaintiff's Ex-

hibit 8”.)

(51) Q. (By Mr. Kelly): Showing you Plaintiff's Ex-

hibit 8, I will ask you whether that is the schedule of

information you have made from the records in Exhibit

A. Yes, it is.

Q. Covering the calendar year January 1, 1956, to

December 31, 1956?

A. Yes.

[108]

Mr. Kelly: Plaintiff's Exhibits 7 and 8 are offered in

evidence.

Mr. Lumley: I would like to renew my same objection

to Plaintiff's Exhibit 7 and Plaintiff's Exhibit 8, and I

assume the Court will render the same ruling.

The Court: The Court will make the same ruling, and

the exhibits may be admitted.

Gentlemen, I think we better stop for lunch.

At this time this court will stand recessed until one-

thirty.

(A recess was taken until one-thirty o’clock p. m.)

Afternoon Session

The Court: Mr. Kelly.

You have already been sworn, so just take the stand,

; Mr. Walsh.

WALSH, DAVID J., called as a witness on behalf of the

plaintiff, resumed the stand and testified further as

; follows:

elena ce eee en te

-_—

Direct Examination (continued)

; By Mr. Kelly:

_ Q. Mr. Walsh, do you also have with you records of

_ F. E. L. A. eases involving Michigan residents reported to

‘ your claims research bureau during the year 1957?

A. Yes, I do.

Mr. Kelly: Will you mark these, please?

(The group of cards referred to were marked “Plain-

tiff’s Exhibit 9.”)

Q. (By Mr. Kelly): I will show you Plaintiff’s Ex-

hibit 9 and ask you if these are the records we just re-

ferred to.

[109]

A. Yes, sir.

Q. Have you made a schedule of the contents of Ex-

hibit 9 for the use of the Court in this case?

A. Yes, T have.

Mr. Kelly: Will you mark this, please?

(The group of papers referred to were marked “Plain-

tiff’s Exhibit 10.”)

Q. (By Mr. Kelly): Showing you Plaintiffs Exhibit

10, I will ask you whether that is a schedule of settle-

ments in F, E. L. A. cases involving Michigan residents

reported to the claims research bureau during the period

January 1, 1957, to December 31, 1957.

Yes, it is.

Is that prepared by you?

Yes, it was.

From Exhibit 9?

. we

Mr. Kelly: Plaintiff's Exhibits 9 and 10 are offered

in evidence.

Mr. Lumley: Same objections, your Honor.

The Court: Very well, the Court will make the same

rulings as on Exhibits 3 to 8 inclusive, and the exhibits

will be admitted.

Q. (By Mr. Kelly): You have with you the records

of F. E. L. A. eases involving Michigan residents re-

ported to the claims research bureau during the year

1958?

A. Yes, I do.

Mr. Kelly: Will you mark these please.

(The group of cards referred to were marked “Plain-

tiff’s Exhibit 11.”)

Q. (By Mr. Kelly): Showing you Plaintiff's Exhibit

11, I will ask (54) you whether those are the records

from your office as just referred to for 1958.

A. Yes, they are.

>Oo>o>

tL asta be Nica Sic

€ Ween 7b,

Q. Have you made a schedule of the contents of Ex-

hibit 11 for the use in this court?

A. Yes, I have.

Mr. Kelly: Will you mark these, please?

(The papers referred to were marked “Plaintiff’s Ex-

hibit 12.”)

Q. (By Mr. Kelly): Showing you Plaintiffs Exhibit

; 12, I will ask you if that is a schedule of the information

contained in Plaintiff's Exhibit 11.

A. Yes, it is.

Mr. Kelly: Exhibits 11 and 12 are offered.

Mr. Lumley: For the record, your Honor, the same

objections.

The Court: Same objections, and the same ruling by

the Court.

Let’s understand each other. When we say “same ob-

jections” and “same rulings,” it is with reference to these

eards and the schedule prepared pursuant thereto.

Mr. Lumley: Yes, your Honor.

Q. (By Mr. Kelly): Do you have with you the rec-

ords of F. E. L. A. eases involving Michigan residents

reported to the claims research bureau during the year

1959?

(55) A. Yes, I do.

Mr. Kelly: Will you mark these, please?

(The group of cards referred to was marked “Plain-

tiff’s Exhibit 13.’’)

Q. (By Mr. Kelly): Showing you Plaintiff's Exhibit

13, I will ask you whether those are the records refer-

red to.

A. Yes, they are.

Q. And whether or not you made a schedule of the

information contained in those records for the use of the

Court.

[111]

A. Yes, I have.

Mr. Kelly: Will you mark these, please?

(The papers referred to were marked “Plaintiff's Ex-

hibit 14.”)

Q. (By Mr. Kelly): Showing you Plaintiff's Ex-

hibit 14, I will ask you whether that is a schedule of

settlements in F. E. L. A. cases involving Michigan resi-

dents reported to the claims research bureau during the

period of January 1, 1959, to December 31, 1959.

A. Yes, it is.

Q. Made by you from the records contained in Plain-

tiffs Exhibit 13?

A. Yes.

Mr. Kelly: Exhibits 13 and 14 are offered in evidence.

Mr. Lumley: Same objections in this case that I (56)

made in all the other cases, your Honor, and I want to

supplement my objection by including the fact that Ex-

hibits 13 and 14 refer to cases handled during the period

of January 1, 1959, to December 31, 1959, and T eall

your Honor’s attention to the fact that that period of

time, I believe, is after the petition in this case, or the

bill of complaint, was filed.

Mr. Kelly: They are all offered—

Mr. Lumley (interrupting): Therefore, I claim that

that is incompetent, irrelevant, and immaterial. It is not

covered by the pleadings in this case nor the issues that

have been developed in this case.

Mr. Kelly: They are all offered as showing a course

of conduct on the part of the defendants, persisting in

the face of this pending injunction suit against them.

The Court: The exhibits will be admitted. The objec-

tion is denied.

Q. (By Mr. Kelly): Do you have with you records of

your office of F. E. L. A. cases involving Michigan

residents reported to the claims research bureau during

the year 1960?

12 A. Yes, I have.

Mr. Kelly: Will you mark these, please?

(The group of cards referred to was marked “Plain-

tiff’s Exhibit 15.”)

Q. (By Mr. Kelly): Showing you Plaintiff’s Exhibit

15, [I will ask you if those are the records just referred

to.

(57) A. Yes, they are.

Q. Have you made a schedule of the information con-

tained in Plaintiff’s Exhibit 15?

A. Yes, I have.

Mr. Kelly: Will you mark these, please?

eA Nee EY Wadniel ALIS on A aR, 5 RN RnB

-—

(The papers referred to were marked “Plaintiff’s Ex-

hibit 16.”)

Q. (By Mr. Kelly): Now, showing you Plaintiff’s

Exhibit 16, I will ask you whether that is the schedule of

settlements in F. E. L. A. cases involving Michigan resi-

dents reported to the claims research bureau during the

period January 1, 1960, to December 31, 1960, taken from

the records constituting Plaintiffs Exhibit 15.

———

A. Yes, it is.

Mr. Kelly: Exhibits 15 and 16 are offered in evidence.

Mr. Lumley: Same objection, your Honor, including

the further objection that it covers a period of January

1, 1960, to December 31, 1960, which is definitely much

later than the issues that were created here in the suit.

The Court: In other words, the same objections as to

Exhibits 13 and 14.

The objection will be denied and the exhibits admitted.

Q. (By Mr. Kelly): So that the record will be com-

plete, as T (58) understand it, Mr. Walsh, is it your tes-

timony that these card records, Plaintiff's Exhibits 3, 5,

7, 9, 11, 13 and 15, are records in the office of the Asso-

ciation of American Railroads kept in the regular course

of business?

[113]

A. Yes, they are.

Mr. Lumley: That is repetitious. That has all been

asked and answered.

Mr. Kelly: If it has, I just wanted to make sure it is.

The Court: I don’t recall.

Go ahead and answer the question. I don’t recall if it

was.

Q. (By Mr. Kelly): The answer is yes?

A. The answer is yes.

Q. Whether it is the regular course of business of the

Association of American Railroads to keep such records.

A. Yes, it is.

Q. So kept under your immediate supervision?

A. Yes,

foanenciatsh’ de a

Q. The corresponding exhibits of the schedules taken

from those records were made by you personally?

A. Yes, they were.

Q. From those records?

A. That’s correct.

Q. Now, I will ask you, Mr. Walsh, whether or not

you have made (59) a summary of the cases and settle-

ments from those records in your office during the pe-

riod July 1, 1953, to December 31, 1960?

Yes, I have.

Was that made by you personally?

Yes, it was.

From your records in your office?

POobO>

, *

Mr. Kelly: Will you mark this, please?

(The paper referred to was marked “Plaintiff’s Ex-

hibit 17.”)

Q. (By Mr. Kelly): That is, the records, Plaintiff’s

Exhibit 3 through 15 inclusive?

A. That’s correct.

[114]

Q. Is that correct?

A. Yes. Yes, it is.

The Court: 3 through 16 you mean, don’t you?

Mr. Kelly: Well, these original records.

The Court: All right.

Mr. Kelly: I offer Plaintiff’s Exhibit 17 in evidence.

Mr. Lumley: Same objection.

_—

The Court: The same ruling by the Court. The ob-

jection is denied, and the exhibit may be admitted for

what it is, a summary, here.

(60) Mr. Kelly: I would like to read into the record

from Exhibit 17, if the Court please, the following:

“Total number of cases covering the period July

1, 1953, through the year 1960: 482. Tota’ number

of these cases, of the 482 cases, handled by the Hens-

lee firm: 218.”

Mr. Lumley: I submit, if the Court please, if Mr.

Kelly is going to read that summary into the record, he

should read it all, because it shows a certain pattern that

is going down rather than up.

Mr. Kelly: Weli—

Mr. Lumley: Well, jook at it for yourself.

Mr. Kelly: I do not agree with counsel. The whole

exhibit is in evidence and I prefer to refer to things

that are pertinent to the Court.

The Court: Whatever portion of it is not read into

the record by Mr. Kelly, it may be read in by you, Mr.

Lumley.

Mr. Kelly: Of the total of 482 such cases covering the

period referred to, 218 were handled by the Henslee

firm. The total amount of settlements in those 480 cases

was $5,357,480, of which the Henslee firm handled cases

in which the payments totaled $2,352,469.

[115]

Q. (By Mr. Kelly): As I have examined the exhibits

with the periodic schedules here, Mr. Walsh, not all of

these cases have the settlement amounts paid included.

Is that correct?

Tn Gos fewrts

PEE GEM PAP REDE SS

ear. a

eat SS

" a a

A. That’s correct.

(61) Because they were not available?

A. That’s right.

Q. So that this figure of total payments appearing

on Plaintiff's Exhibit 17 is the total of the payments for

the cases in which you have that total, have you?

A. Yes, that’s right.

Q. But there are a number of cases in these exhibits

as to which you have no amounts?

A. That’s correct.

Q. Now, have you prepared from your records a list

of F. E. L. A. cases involving Michigan residents pend-

ing with the Attorneys Henslee & Henslee, Chicago, IIli-

nois, reported to the claims research bureau as of June

23, 1961?

A. Yes, I have.

Mr. Kelly: Will you mark this, please?

(The paper referred to was marked “Plaintiff’s Ex-

hibit 18.”)

Q. (By Mr. Kelly): Showing you Plaintiff’s Exhibit

18, I will ask you whether that is such a list.

A. Yes, it is.

Q. Prepared by you?

A. Yes, it was.

Mr. Kelly: Exhibit 18 is offered in evidence.

Mr. Lumley: May I ask a question on this proposed

Exhibit 18?

(62) The Court: Go ahead.

Q. (By Mr. Lumley): Mr. Walsh, where did you

get the information that you have placed upon the pro-

posed Exhibit 18?

[116]

A. From our files in Chicago.

Q. From your files?

A. Yes.

Q. Through what source did the information reach

your files?

A. From the various railroads involved.

Q. You never checked any of the court records?

A. No.

Q. There are court records in all of these pending

cases?

A. Well, [ don’t know. They are all suits.

Q. You don’t even know if they are suits?

A. No, I don’t. They may be claims, in which case

no suit has been filed.

Q. At least, you haven’t checked the records of the

court and you haven’t checked the records of the com-

panies that gave you the information?

A. No, we haven't.

Mr. Lumley: I object to it, your Honor, on the

grounds, one, that it isn’t the best evidence of what it

contains.

It is highly self-serving. We don’t even have the

benefit of their records, because that is not a record that

is kept in the ordinary course of business and it has not

been (63) established; and, secondly, I object to it be-

cause it carries on the period that follows the date of the

institution of this suit and it is therefore inadmissible

because it is not in support of the issues that are in-

volved herein.

;

WAAR a BO A AE le

er eh RED

ing

But, most important, it definitely is not the best evi-

dence, and we do not have sufficient information, nor

does Mr. Walsh have sufficient information.

Mr. Kelly: The same objection was made earlier this

morning, that we didn’t have personal information. That

[117]

is not an objection as to the admissibility. It may go

to the weight of it under the statute.

Mr. Lumley: Those aren't the records, Mr. Kelly.

Q. (By the Court): That is a summary prepared

from the ecards, is it not?

A. Yes, yes.

Mr. Lumley: Where are the cards?

Q. (By Mr. Kelly): Do you have the eards here?

A. No, the eards are in our files in Chicago.

Q. You can produce those cards if counsel wants to

see them?

A. Yes, I ean.

Mr. Lumley: The ecards or their records.

Mr. Kelly: What?

Mr. Lumley: The ecards or their original records.

Q. (By Mr. Kelly): Will you produce them for Mr.

Lumley if he wants to examine them?

(64) A. Yes, I will.

Mr. Kelly: We will make that offer, your Honor, in

good faith, to have them available for Mr. Lumley with-

in the next day or two as a condition for admitting the

exhibit if the Court wants to admit it.

Mr. Lumley: I don’t think that should be a condition.

Mr. Kelly: I think it is properly admissible on that

understanding, your Honor please.

Mr. Lumley: They are able to bring all the other cards

here, your Honor. There is no reason why those cards

should not have been brought.

Mr. Kelly: I will take the blame for it. I didn’t ask

him to bring them, but I will ask him.

Mr. Lumley: You asked him to bring the summary.

Mr. Kelly: I will ask him to bring the cards cover-

ing these twenty-six cases if you want to stand on the

objection, Mr. Lumley.

[118]

Mr. Lumley: No, you are placing me in a position that

is embarrassing. I don’t want, however, to be placed in

that position.

I object to the introduction of that exhibit because

it is not the best evidence of even the records of the

company that he represents.

Mr. Kelly: Well, I think they might be admissible

(65) even without them, your Honor please, but my as-

sociate, Mr. Hall, suggests that we waive the introdue-

tion of the exhibit; and that is all.

The Court: Do you want to withdraw Exhibit 18?

Mr. Kelly: Yes.

The Court: Very well.

Mr. Kelly: You may cross-examine.

Cross Examination

By Mr. Lumley:

Q. Mr. Walsh, what is your position with the Asso-

ciation of American Railroads?

a Pee er

—

came

pe Ai LE MAA GL bed ALI ap sth ARE

I am supervisor of the clearing house.

Who is your immediate superior?

Mr. K. A. Carney.

What is the function of your particular depart-

Orpod >

ment?

A. We accumulate statistics with respect to employee

injury claims.

Q. What is the purpose of accumulating those statis-

ties?

A. We can make analyses such as we have seen here

in these exhibits. We can also study the costs of the vari-

ous types of injuries and so forth.

Q. Do you have any other purposes?

A. Yes, there are other purposes, too.

[119]

Q. Is one of your purposes the investigation of

lawyers handling those claims?

A. I wouldn’t say lawyers actually.

(66) Q. Well then, let’s carry it a step further. Is

one of your functions to investigate the individuals who

are in any way associated with the presentation of those

claims?

A. I would say yes to that.

Q. Isn’t it a fact that you have made it your business

to cooperate with the various bar associations through-

out the country in connection with railroad claims?

A. Yes.

Q. Isn’t it a fact that you are under the employ of the

various railroads?

A. Yes, we are.

Q. Each railroad contributes so much money to your

department?

A. That’s true.

Q. And the purpose of your particular research divi-

sion is not to analyze various claims so much as it is the

studied attempt on the part of your department to in-

vestigate these claims, investigate the individuals who

make the claim, investigate the parties who represent

them in making their claims? Isn’t that true?

A. No, I can’t say as to that.

Q. When did you first cooperate with the State Bar

of Michigan in connection with the pending litigation?

A. I believe Mr. Kelly brought that up this morning.

It dates back some years.

Q. I didn’t ask you what Mr. Kelly brought up this

morning. I (67) ask you to answer my question, please.

A. I don’t have the exact date at my fingertips.

Q. Well, can you give us an approximation of that

date?

A. I believe it was in 1953 if T am not mistaken.

[120]

Q. Yes. And you have been the chief investigating

department for the State Bar of Michigan since that

time, haven’t you?

A. I believe we have, yes.

Q. Yes. And you have compiled this data specifically

for the railroad purposes, haven’t you, in handling

claims?

A. I don’t know. I don’t make the policy there.

Q. What?

FP Aa AEA tls en |

I don’t make the policy as to that.

You say your immediate superior is Mr. Carney?

Yes.

Isn’t it a fact that Mr. Carney has testified at

various hearings throughout the country?

A. Yes, he has.

Q. Now, the American Association of Railroads per-

form a good many functions in addition to the one that

is handled by your department, isn’t that true?

Oro Pp

A. Yes, that’s true.

Q. They are also lobbyists for the railroads, aren’t

they?

A. Yes, they are.

Q. And they are paid a very sizeable sum of money

each year by the railroads to carry on their functions,

aren’t they?

(68) A. Yes.

Mr. Kelly: No one objected to any of this, if the Court

please, but I think it is getting in the argumentative field

and entirely incompetent on the inquiry here.

Mr. Lumley: It goes to the question of the credibility

of this witness.

Mr. Kelly: I think if you ask the witness himself what

he has done.

Mr. Lumley: He is working for a principal.

Mr. Kelly: I think that is—

[121]

Mr. Lumley: I am laying the foundation about these

records.

Mr. Kelly: I don’t care to object. I just thought there

was a time when it should end.

The Court: All right, let’s go here.

What was the last question, Mr. Reporter?

(The last question and answer were read.)

Q. (By Mr. Lumley): Now, isn’t it a fact that those

so-called cards that you have in your possession and

which have been introduced in evidence in this case and

which are lying on the desk up there, Exhibits 3, 5, 7, 9,

11, 13, and 15, are called A-3 cards?

A. Yes, they are.

Q. Isn’t it a fact that those cards are used as the

vehicle to investigate the solicitations of cases?

(69) A. Yes, they are.

Q. So that, in fact, as far as your particular depart-

ment is concerned, you are a sort of detective body de-

signed to investigate cases after they have been settled.

Isn’t that true?

A. Yes.

Q. You don’t do any investigative work before the

eases are settled or presented to court, do you?

A. Not as a general rule, no.

Q. As a general rule, you do that after they have been

settled?

That’s true.

You investigate the lawyer, don’t you?

I couldn’t say.

How he got the case?

Yes; in that respect, yes.

OPporod Pp

You investigate the individnal to see if his in-

juries are as permanent as he ciaimed they were in

court?

[122

A. Yes.

Q. You do this not for the State Bar, do you? You

do this for the railroads?

: A. Yes.

Q. Isn’t it axiomatic with the railroads that they

haven’t been in sympathy with the F. EK. L. A. Law ever

since it has been enacted?

;

A. Iam sorry, I can’t say anything about that.

Mr. Kelly: I object to it.

(70) The Court: I think that is going a little far afield

here.

Q. (By Mr. Lumley): I am going to read to you some

testimony of a certain individual that you have indicated

as Mr. Carney and ask you if that is your conception—

I haven’t completed my question.

Mr. Kelly: I understand it.

Q. (By Mr. Lumley, continuing):—and ask you if

that is your conception of the functions of the depart-

ment you represent.

Mr. Kelly: I object to counsel presenting this witness

the testimony of someone else, not himself, and asking

him to judge it for this Court.

SY AES ie 8K REA BD EIS LEN MILLING BISA CLT hE

It is clearly incompetent, irrelevant, and immaterial.

Mr. Lumley: I am asking him not to judge the testi-

mony.

I am asking to see if this is a fair statement of the

purposes of his particular department in connection with

this work.

Cli BR lS ic a Vie 2

Mr. Kelly: That is even more incompetent and imma-

terial.

Mr. Lumley: I am not asking him to pass upon the

testimony. I am taking the testimony of his superior and

asking him if that is correct.

[123]

The Court: You are asking to pass upon the testi-

mony, coming in through the back door, and I do not

think (71) that is proper.

Mr. Kelly: Yes.

Mr. Lumley: I am asking him, if I may state it, your

Honor: Is this information correct?

The Court: Put the question to him that way. Don’t

put it to him as Mr. Carney’s question.

I do not care what Mr. Carney said.

Q. (By Mr. Lumley): Now, isn’t it the primary fune-

tion—

Mr. Kelly: Just a minute. Have we left that ques-

tion?

Mr. Lumley: No, sir. I have left the question, yes, in

deference to his Honor’s opinion.

The Court: I told you—

Mr. Kelly: (interrupting): All right.

Mr. Lumley: I accepted the hint the Court gave me.

Mr. Kelly: That is nice of you.

Q. (By Mr. Lumley): Isn’t it the primary function

of your particular department to interview the railroad

employee cases which have been disposed of through

settlement or otherwise and to determine from them a

number of things, one of which, and perhaps the most

ee ie eee Ee a |

LK EO DAL OS RRR Im ial aS pene OTERO LAG NOLS A

(a! ae ees -

important of which, is what pressures were applied upon

the individual to employ any counsel; secondly, to deter-

mine the identity of the persons providing that pres-

sure—

Mr. Kelly (interrupting): Well, number one—

(72) Q. (By Mr. Lumley, continuing) :—thirdly—

Mr. Kelly: Just a minute.

Mr. Lumley: I have to complete the question.

Mr. Kelly: No. You are asking two or three questions

at once which is objectionable; and it is also objection-

able for counsel to repeat what he has already covered

[124]

in his cross-examination. And he has already asked this

witness whether his department of the Association of

American Railroads investigates these cases after they

have been completed, and now he is asking the same ques-

tion over again in just a different way and I object to it.

[ think the record should not be so extended, and I do

not think it is competent.

The Court: How many .ubdivisions are you going to

add onto this question?

Mr. Lumley: There are only three subdivisions, your

Honor, and that covers what we claim are the functions.

The Court: Finish the question. Go ahead.

Mr. Lumley: Now will you read that question, Mr.

Reporter?

The Court: Start with the second one and I think we

will have it.

Mr. Lumley: The second one, yes.

(The reporter read as follows): “Secondly, to deter-

mine the identity of the persons (73) providing that

pressure—”

Q. (By Mr. Lumley, continuing) :—thirdly, to deter-

mine his then-physical condition to determine whether or

not he was the totally disabled person that he reported

himself to be at the time his suit was tried or his case

was disposed of?

Is that what your function is?

_ Mr. Kelly: That is the same question already been

asked and answered. I think there should be a limit.

The Court (to the witness): Answer the question.

A. I would say yes.

Q. (By Mr. Lumley): And isn’t it an additional fune-

tion that you determine from the particular claimant

anything else of importance that might be of interest to

the individual railroads as to medical treatment he got

or the disposition of his claim?

[125]

A. Yes.

Q. Now, who contacted the bar association first? Did

the State Bar Association of Michigan contact your de-

partment or did vou contact them?

A. I can’t answer. I wasn’t aware of the negotiations

and progress.

Q. Were you subpoenaed to come here today?

A. No, I wasn’t.

Q. You came of your own free will?

A. Yes, I did.

(74) Q. Where is your main place of operation where

you operate—

Leese Tigo Sk Petes Nhs OF) eS FIVE ee eer eee, |

CE BE IS

A. Chicago.

Q. (Continuing): on behalf of the company?

A. In Chicago.

Q. So you came all the way from Chicago to testify

in these proceedings without any more than a request?

A. That’s correct.

Q. Were you paid costs to come here?

A. No, I wasn’t.

Q. Were you promised any costs or fees of any kind

to come here?

A. No, I wasn’t.

Q. You came here, then, at the expense of your com-

pany, is that right?

A. Yes.

Q. Now, these ecards which have been referred to in

the record, these A-3 cards,—and I don’t want to repeat

all the exhibits for the record; I think they are all under-

stood now—I am going to let you hold these cards in

your hand temporarily and ask: What records do you

have in your department besides these particular cards?

A. Well, we have all types of records.

Q. Let us know what kind of records you have.

[126]

A. Well, we have correspondence among other things.

Q. With whom?

A. Well, we have day-to-day correspondence, of course.

(75) Q. Do you have any other records in any par-

ticular file as to each claim?

A. Not as to each claim, no.

Q. Do you have letters from the various railroads that

employ you?

A. Yes, we do.

Q. Is that where you get your information that you

put on those A-3 cards?

A. No, we don’t.

Q. You do not investigate each claim yourself, do you?

A. No, we don’t.

Q. You don’t go to the court to find out if it resulted

in a judgment or it was a settlement?

A. No, we don’t.

Q. You don’t know whether, as far as you are con-

cerned—you don’t know for sure whether the attorney

represented the party in court, do you?

A. That’s correct.

Q. As far as you know, you don’t know whether the

attorney presented the claim.

A. That’s right.

Q. That’s right. I notice that in plaintiff's Exhibit 16

the firm of Kelly, Kelly & Kelly is listed. Is that correct?

A. Yes, they are; yes.

Q. Did you investigate the firm of Kelly, Kelly & Kel-

ly to find (76) out how they happened to get that claim?

A. That I don’t know.

[127]

Q. No. Now I am going to show you plaintiff’s Exhibit

8 and ask you if you do not notice in the Michigan cases

there the name of A. C. Lumley.

A. Yes, I do.

iri eis Sits MES AREER ca alata Bele Seance a

100

Q. Did you investigate me to find out if I ever repre

sented that claim or was attorney of record in any de

scription?

A. I don’t know.

Q. No, you don’t.

A. No.

Q. What if IL were to tell you that I did not appear in

that claim at all and never had my name affiliated w ith it?

What would you say?

A. I eouldn’t say anything.

Q. Now, in all of these particular claims where you

dwell on Henslee & Henslee—let’s take the exhibit, plain-

tiff's Exhibit 4. There are quite a few cases in there of

L. M. Marko in Detroit, aren’t there?

A. Yes, there are.

Q. Do you know who L. M. Marko is?

A. | only know his name.

Q. You only know his name. Where did you get his

name?

A. From these eards.

Q. That is all you know about it?

(77) A. That's all T know.

Q. Do you know whether your department, through

Mr. Carney or yourself or any other agent, made any in-

vestigation of Mr. Marko?

A. IT ean’t answer that. I don’t know.

Q. Will you examine those various exhibits which are

compilations of the A-3 ecards and tell me how many cases

are represented by L. M. Marko in Michigan, having to do

with F.E.L.A. cases?

101

[128]

A. I would say approximately sixty-one or sixty-two

if I added correctly.

Q. And didn’t the fact there were sixty-one cases that

were being delivered to L. M. Marko in Detroit indicate

to you that maybe it would merit some investigation by

your department?

Mr. Kelly: If the Court please, | do not understand

that this witness has anything to do with investigation.

He keeps records, number one. As to that, the question

is argumentative.

The Court: I do not think the question is properly put.

Mr. Kelly: I object to it.

Q. (By Mr. Lumley): In view of the fact that L. M.

Marko had sixty-one cases extending over the period cov-

ered by these compiled exhibits, did your company make

any investigation to your knowledge of Mr. Marko?

(78) A. I don’t know. I can’t say.

Q. Isn't it also true, since you made this compilation

vourself—isn’t it also true—

A. Yes.

Q. (Continuing): that a large number of Chieago

firms also handled Michigan cases?

A. Yes, they do.

Q. Now, isn’t it further true that the Brotherhood of

Railroad Trainmen, that is, the individual claimants, trav-

el between cities and towns both in Illinois to Detroit and

back again? Isn’t that true?

A. Yes, they do.

Q. So that in many respects they are just as much at

home in Chicago, Illinois, as they are in Detroit? Isn’t

that correct?

102

[129]

Mr. Kelly: That is argumente‘ive, if the Court please.

The Court: It is not proper. The objection will be sus-

tained.

Q. (By Mr. Lumley): Now, did you have any data

as to the number of claimants who contacted the firm of

Henslee & Henslee in Chicago on the question of whether

or not those claimants operated trains in the Chicago area

or worked on trains in the Chicago area?

A. Ihave no information, no.

Q. How many times have you testified for the various

state bars?

(79) <A. This is the first occasion.

Q. To your knowledge, how many times has Mr. Car*

ney testified for the state bars?

A. I couldn’t say, I have no knowledge.

Q. You have no knowledge at all?

A. Not on my own memory, no.

Q. Have you had operatives in the State of Michigan

investigating various Michigan claimants iv connection

with this suit?

A. Yes, we have.

Q. How long have you had them here?

A. Well, I couldn’t say. I don’t control their assign-

ment.

Q. Well, you know you have got them here, so can

you tell us when they first arrived here or you first start-

ed to bring them into Michigan?

A. I believe when our department was organized in

1953. A man came over at that time.

103

Q. So the information that you have on the A-3 cards,

if I may be permitted to summarize it, and the informa-

tion that you set forth on the various compilations, sche-

dules that were taken from the A-3 cards, is information

[130]

that you received from the various railroad companies in

which you made no investigation to check the accuracy

of that information.

A. Yes.

Q. Have you got or have you made a compilation of

A-3 cards in cases where claims were settled directly with-

out a lawyer?

(80) A. I have never made a compilation, no.

Q. You do have such records, do you not?

A. Yes, we do.

Q. And those records were reported to you by the vari-

ous railroad companies much in the same manner as the

ones involved in this case.

A. Yes.

Q. Could you get those records?

A. Yes.

Q. Mr. Walsh, can you tell us whether the majority

of the claims are settled direct without lawyers or not?

Mr. Kelly: How is that competent, your Honor please?

I think it is incompetent, irrelevant, and immaterial

and I am going to object to it.

The Court: I do not think so. If he knows, he can

tell us.

A. That is the majority, whether the majority are set-

tled with or without counsel.

Bee OPER LS URES PR IRE AP, 1S SR

104

Q. (By Mr. Lumley): Yes, what is—let me ask it

this way and I will withdraw the last question.

Isn’t it a fact that the majority of the claims against

the railroad are settled directly without attorneys?

A. I don’t think that I can answer that. I don’t know.

Q. You don’t have such records?

A. We have records of direct settlements, yes.

(81) Q. But they haven’t been compiled?

{131}

A. No, they haven’t

; Q. Do they represent, however, a large portion of the

railroad claims?

4 A. I don’t know.

Q. Do you keep records of doctors who have testified

in those cases?

Yes, we do.

Is that done in behalf of the railroads?

Yes, it is.

What is the purpose of keeping those records?

As you indicated, doctors who testified in certain

ror b>

cases,

Q. Have you filed complaints to medical associations

against certain doctors

; Mr. Kelly: If the Court please, I think that all of this

. is highly immaterial.

The Court: I do not see what that has got to do with

this.

Mr. Lumley: That is all, your Honor.

Mr. Kelly: Have you got the exhibits there?

, se

i RPG ERE et MATE OME aT TO tere yng. PIE TOT IONE SDE TG : oe

ere)

105

Mr. Lumley: No.

Mr. Kelly: You brought them back with you.

Mr. Lumley: Oh.

Re-direct Examination

By Mr. Kelly:

Q. Counsel asked you numerous questions about

whether you had (82) investigated this, that, or the other

thing, Mr. Walsh.

T understand your duty is not to investigate but keep-

ing records. Is that right?

A. That’s correct.

Mr. Kelley: That is all.

[132]

(The witness was excused.)

Mr. Kelly: Will you mark this, please?

(The booklet referred to was marked “Plaintiff's Ex-

hibit 19.”)

Mr. Kelly: Defendants’ answer appears to make some

issue of whether or not this is properly a class action in

this court due to the number of individuals which would

otherwise be involved, and on discovery of certain infor-

mation by discovery procedures of this Court we were

furnished with plaintiff's Exhibit 19 by the defendants,

and it is a directory of the grand lodges and subordinate

lodges of the Brotherhood of Railroad Trainmen as of

January, 1959, and we would like to offer it in evidence as

to that vortion which reflects the number of lodges in

the State of Michigan just on the point of the propriety

of this class action.

Any objection

LAPS RESALE AAR SEGA ie ty Gi. Gath ties

MEHMET

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a STR til MO ok

106

Mr. Lumley: What exhibit would this be?

The Court: 9.

Mr. Lumley: 19?

I submit, if the Court please, that Exhibit 19 is (8) in-

competent, irrelevant, and immaterial for the reason that

this is a suit in which they are seeking an injunction; and,

certainly, I do not believe that any of the individual

lodges or the chairmen of those lodges, if they are not

named parties here, can be under the injunctive force of

this suit.

The Court: That is not my understanding of the pur-

pose of it.

Mr. Kelly: If it is a class action, it is to enjoin all

members, officers, or agents.

Mr. Lumley: That is my objection.

The Court: I think it may be admitted. It will be re-

ceived.

[133]

Mr. Kelly: For the purposes of the record, referring

to Exhibit 19, I would like to state on the record without

reading the entire list of lodges that Exhibit 19 discloses

there are some thirty-six subordinate lodges of the Broth-

erhood of Railroad Trainmen in the State of Michigan.

The plaintiff rests, your Honor.

(The plaintiff rested.)

The Court: I think at this time we can all stand a

recess.

(A brief recess was taken.)

Mr. Kelly: May Mr. Walsh be excused?

(84) Mr. Lumley: Yes, yes.

107

The Court: Yes, you may be excused, Mr. Walsh.

Mr. Lumley: I was wondering, your Honor. I did not

mean to interrupt.

The Court: Go ahead.

Mr. Lumley: I was wondering if we could have just

a little more time. I think it could shorten things consid-

erably.

The Court: All right. How much time do you need?

Mr. Lumley: Oh, ten minutes. | promise you that it

might make a big difference.

The Court: All right, you may have the cther ‘ten

minutes, We will take an additional ten-minute recess.

(A brief recess was taken.)

Mr. Lumley: Your Honor, I want to make a motion

at this time for a decree dismissing the bill of complaint

filed in this cause.

IT would like to preserve the right under the rule to

proceed with our defense in the event this motion is de-

nied.

(Mr. Lumley argued the motion in behalf of the de-

fendants.)

[134]

The Court: Do you wish to reply, Mr. Kelly?

Mr. Kelly: Not unless the Court wants to hear me.

(Mr. Kelly argued in opposition to the motion in (85)

behalf of the plaintiff.)

The Court: The Court at this time is going to deny

the motion, and you can proceed with your proofs.

Mr. Lumley: The defendants rest.

(The defendants rested.)

}

Mh sp SOP AW

108

The Court: Defense rests.

The Court feels that briefs should be filed in this mat-

ter.

Now, the usual time period of fifteen days. Mr. Kelly

would have fifteen days and Mr. Lumley fifteen days with-

in which to reply, and then Mr. Kelly ten days within

which to answer; but, if you gentlemen happen to be

pressed for time, I will grant you some additional time.

Mr. Naughton: I think we would like to order the ree-

ord, your Honor. On that particular circumstance, perhaps

there could be some extension of time.

(Colloquy off the record.)

The Court: Upon completion of the record the court

reporter, of course, will notify me, and then I will notify

counsel and at that time, why, Mr. Kelly will have fifteen

days or enough to get your brief in.

Mr. Kelly: Is that three months from now, John?

Fifteen days would be enough for my account.

(86) The Court: All right, let’s get it and we will

fix the time for filing briefs when the record is completed.

In the meantime this matter will stand continued from

day to day.

This court stands recessed.

109

[135]

THE STATE BAR OF MICHIGAN,

Vs.

THE BROTHERHOOD OF

RAILROAD TRAINMEN,

No. T—640

DECISION

(Filed September 12, 1962)

This is an action based on a bill of complaint filed in

behalf of the State Bar of Michigan on January 28, 1959.

Answer thereto was filed on behalf of the defendants on

June 9, 1959. A reply was filed by plaintiff on June 16,

1959. Suffice it to say that subsequent amended _plead-

ings were withdrawn.

It was agreed between counsel that the record in this

ease should be transcribed before the filing of briefs. This

was completed, and the matter was ready for disposition

by this Court approximately May 1, 1962, including a mo-

tion to strike a portion of plaintiff’s reply brief having to

do with decrees entered in similar situations in other

jurisdictions.

With reference to the motion to strike, the same is

hereby denied, as this Court may consider any authorities

it deems applicable.

An examination of the aforesaid pleadings discloses in

substance that the practices complained of were in exist-

ence up to May 31, 1959. It is the claim of defendants

that they have been in compliance with the decree en-

tered in the case of In re Brotherhood of Railroad Train-

men as reported in 150 Northeastern, 2d Series, at page

163, as evidenced by the letter of March 16, 1959, as set

oes |

DAE PEIRCE AA ORE

i, pe

Wn ees eiey

110

forth in the first affirmative defense, from W. P. Ken-

nedy, President, and direeted to all lodges and members

and to all legal counsel, Brotherhood of Railroad Train-

men, Because of the indefiniteness and uncertainty there-

L136}

in in relation to the practices complained of, sueh a de-

fense position is untenable,

Tn the aforesaid Hlinois case, among other rulings and

directives, it was held as follows:

“The objective of the Brotherhood in seeking to

secure competent legal representation of its members

ean be accomplished without lowering the stand-

ards of the legal profession. The Brotherhood has a

legitimate interest in investigating the cireumstanees

under whieh one of its members has been injured.

That interest antedates the occurrence of any par-

ticular injury. We are of the opinion that the Broth-

erhood may properly maintain a staff to investigate

injuries to its members. It may so conduct those in-

vestigations that their results are of maximum value

to its members in prosecuting their individual claims,

and it may make the reports of those investigations

available to the injured man or his survivors. Such

investigations ean be financed directly and without

undue burden by the 218,000 members of the Brother-

hood.

“The Brotherhood may also make known to its

members generally, and to injured members and

their survivors in particular, first, the advisability of

obtaining legal advice before making a settlement and

second, the names of attorneys who, in its opinion,

have the capacity to handle such claims successfully.”

The problem of recommendation of counsel by the

Brotherhood is the nub of the proceedings presently be-

fore this Court, the right of freedom of speech being

basically involved.

[137]

This same matter has been before the courts of the

states of Illinois, Towa, Oklahoma, Virginia, Nebraska,

and Missouri. The majority of these states, in one form or

another, have approved the decisions of the Tlinois Su-

preme Court, Missouri being the only state to prohibit it,

and the State of Virginia prohibiting recommendation of

any particular counsel,

This Court feels that the plaintiff is entitled to relief.

Plaintiff has submitted a proposed decree with which

this Court is in accord, with the following exceptions:

1. The word “all? at the end of line 4 of para-

graph 6 on page 3 will be deleted.

2. Subparagraph (d) on page 5, the last line

thereof, will be rephrased as follows: “the employ-

ment of any particular lawyer or group of lawyers

by such person.”

3. Subparagraph (e) on page 5 is approved but

hereby designated as “subparagraph (f),” and in

place and stead thereof shall be inserted subparagraph

(e), as follows: “(e) Engaging in any activities, con-

duct, or endeavor condemned by the Supreme Court

of Illinois in the opinion above referred to.”

I should not close without adding the following:

The first affirmative defense is without merit. See Sei-

fert v. Buhl Optical Company, 276 Michigan, 692, and

eases therein cited.

112

The third affirmative defense is without merit, as. is

set forth in the Llinois case aforesaid.

Upon the above corrections and additions being made,

a decree accordingly will be subscribed and enrolled in

this court.

[138]

| believe that | should make the following observation

with reference to subparagraph (e), having to do with

the decision of the Hlinois Supreme Court, and that is

that although certain specific activities and conduct as

contained in the Ulinois decision were not specifically

pleaded in the instant suit, nevertheless, by the defend.

ants’ answer, they have been indirectly injeeted into this

litigation and should be covered by the Court's order,

As requested by the office of Mr. Arthur G. Lumley,

a copy of this opinion is being forwarded to the office of

Henslee & Henslee in Chicago, Hlinois.

(Signed) John C. Dalton,

John C, Dalton,

Cireuit Judge.

i a se ha ae te

Dated: September 12, 1962.

SAT ELAR LE GE

tt ae ae ee

padres

i ee a ee yd

113

THE STATI BAR OF MICHIGAN, )

va ; No. ‘T6140

THE BROTHERHOOD OF

RATLROAD TRAIN MIEN,

DECREE

(September td, 1962)

At a session of said court, held in the Cireuit Court

room in the County Building, Jackson, Michivan, this [4th

day of September, 1962,

Present: Hon. John CL Dalton, Cirenit: dudee.

This cause having come on to be heard on the bill of

complaint filed by plaintiff, the answer of defendants

thereto, and the reply of plaintiff to said answer, and the

parties being in court by their respective counsel, and

proofs having been taken in open court, and thereafter

the parties, through their respective counsel, having filed

briefs with the court, and the court having examined the

pleadings, having duly considered the evidence and the

J 139}

briefs of counsel, and being fully advised in the prem-

ises, from which it appears to the court that the material

facts alleged in the bill of complaint are true, the court

therefore finds as follows:

1. The State Bar of Michigan is a publie body cor-

porate, charged with the duty to aid in promoting im-

provements in the administration of justice and advance-

ments in jurisprudence, in improving relations between

the legal profession and the public, and in promoting the

interests of the legal profession and the publie, and in

promoting the interests of the legal profession in the State

of Michigan.

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OR ont

SR RSs SENS toe

BBRP at

Swast

Nee as cee

114

2. The Brotherhood of Railroad Trainmen is a na-

tional railway labor organization, with principal office in

Cleveland, Ohio, but having branches, members, officers

and agents throughout the United States, including the

State of Michigan.

3. The individual defendants, Frank J. Carr and L.

M. Hasbrouck, of Jackson, Raymond Fieberkorn and

Thomas W. Fletcher, of Detroit, W. C. Coryell, of Oke-

mos, L. K. Singer of Plymouth, E. V. Surdam of Grand

Rapids, H. F. McCall of Birmingham, R. J. Jackson, and

L. A. Russell, of Durand, A. V. Grandstaff, of Dearborn,

W. T. Ellsworth, of Allen Park, R. J. Snow, of Melvin-

dale, and William EF. B. Chase, of Livonia, are members,

officers and agents of defendant Brotherhood of Railroad

Trainmen residing within the State of Michigan, and

there are other members, officers and agents of said de-

fendant Brotherhood of Railroad Trainmen, within the

State of Michigan, constitut

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.