Opposition Brief — Pennsylvania Railroad v. Krenger

SEP 3- \949

CHARLES ELMS CRO

IN THE

Supreme Court of the United States

OCTOBER TERM, 1949.

No. 177.

<>

—*

THE PENNSYLVANIA RAILROAD COMPANY,

Petitioner,

—against—

CLypE W. KRENGER,

Respondent.

ANSWER TO PETITION FOR WRIT OF

CERTIORARI AND BRIEF IN OPPOSITION.

WirtttamM A. BLANK,

Attorney for Respondent,

66 Court Street,

srooklyn 2, New York.

WittramM SAMUELS,

Of Counsel,

66 Court Street,

Brooklyn 2, New York.

Tue Court Press, N. Y. C.

Ee Ce EP Ne

INDEX.

PAG]

Answer to Petition for Writ of Certiorari .......... 1

ET I ee et eee vee got ]

ER CLs Vad ene cset\caebuuasskabeias 6

Ee tie coe a ee 6

Guesteeme Presented ...........ccccccascsccess 6

I ek nee ed 8 ay ri

ERIS AEG aS ay Gy nee oe ri

Specification of Errors To Be Urged .......... 9

Reasons for Granting the Writ ................ 9

I re 1)

Brief in Opposition to Petition for Writ of Certiorari, 17

EDS i i ee ea a ee ly

When a railroad employee is injured while en-

gaged in interstate commerce his employer may

not enforce a contract by the terms of which

the employee agrees to file his action for dam-

ages only in the state where his injuries were

sustained, or where he resided at the time he

sustained such injuries ............0...00.05.. lz

I GOES Cae bee la sok bs kd aoldks 6 ¥ae kaw 40)

EA Se Gch ins <6 uk as 4004 48 oX0's ve EN cc's 41

TABLE or Cases Crrep:

Akerly v. New York Cent. R. Co., 168 F. (2d) 812,

i Ee en pe 10n, 20, 25, 26

Benson v. Eastern Building and Loan Association,

EEE, Wadd Can we Cue eae Was dd Cuceoclak 39

B. € O. R. R. Co. v. Kepner, 314 U.S. 44, 86 L. Ed. 28) 23

Boyd v. Grand Trunk Western Railroad Company, 69

I ee ey .5, Sn, 6, 13, 29

ii

PAGE

Callen v. Pennsylvania Railroad ( ‘o,, 332 UL S. 25 2. on

DeGorter, et al. v. Banque DeFrance, 176 Mise. 1062,

29 N.Y. S. 2d S42 (1941), affirmed 287 X.Y, 483,

41 N. BE. 2d 65 MEE MERGE chee cnc ark: 40

Duncan vy. Thompson, 315 U. S. 1, 86 L. Ea. 575

cca: Ja EE 11n, 29, 30,3]

Employers’ Liability Cases (Howard v. Mlinois Central

RR. Co.), 2007 U.S. 4638, 52 L. Kal. 297, Jan. 6, 1908 20n

Fleming, ct al. vo Husted, 68 F. Supp. 900 ......382,33.3

Fountain v, Filson, 336 U.S. 681 ...00..000....., 13, 14

Gough, ct al. v. Hamburg Amerikanische Packetfahrt

Aktiengesellschaft, 158 F, 174 (D.C.S. DN.Y). 4

Grand Trunk Western Railroad Company v. Boyd, 321

MOE Swe phos tulivh oop sawcokcwcs. cca... 5)

Insurance Company v. Morse, 0 Ve 7, 38

Meacham vy, Jamestown, Fo & C. R. R. Co., 211 N, Y.

WES Wadgetiys VAnSUN4S ce0d shu a Rede cakicc) co. oY

Mutual Reserve Fund Life Ass'n. vy. Cleveland Woolen

Mills, 82 FB. 508 (CLC. A, MU WEG abs se hekeiua, 3o

Nunn v. Chicago, M., St. P. & Pac. R. Co., 71 F. Supp.

WWE SA NU INO NIWA USGA Aa clddy hcg tie 32

Nute v. Hamilton Mut. Ins. Co.. 6 Gray 174 .......38,39

Parker v. Krauss Co., Limited, 157 Mise. 667, 284

wpe These Gognig CTT OR ee 39

Peterson v. Ogden Union Ry. Co., 175 Pae. (2d) 744. .24, 32

Prince Steam-Shipping Co. v. Lehman, et al., 39 PF.

3) 3 ef een gene My)

Second Employers’ Liability Cases, 32 8. Ct. 169, 228

J oe 1% 5 see 11n, 21n, 34,35

Sherman v. Pere Marquette Ry. Co., 62 F. Supp. 590,

31, 32, 34

Slocum, et al. vo Westery Assurance Co., 42 F. 235

Fee Re i We oer. ae ee von 39

4 7 ax ey

PRR EET RE RY GET SEPT BIE NTE EEN gy ee -

~ 4 Ses

iii

Oruen AvutTuorrrizs Critrp:

PAGE

First Employers’ Liability Act, Chapter 3073. ..... 20, 20n

Messages and Papers of the Presidents, Vol. 15, p.

ie SE ace nckS aA bn aeseeessweens 21, 21n

Restatement of the Law of Contracts, Seetion 558. . .36, 37

Rules of the Supreme Court, Rule 38 (5) (5b) ....6, 10,11

Safety Appliance Act, March 2, 1893, e. 196, 27 Stat.

at L. 581, U. S. Comp, Stat. 1901, p. 3174, as

amended April 1, 1896, 29 Stat. at L. 85, ¢ 87,

and Mareh 2, 1903, 32 Stat. at L. 943, e. 976, U.S.

Comp. Stat. Supp. 1907, p. 88) ...........88. 20, 20n

Second Employers’ Liability Act, 35 Stat. at L. 65,

e. 149, U.S. Comp, Stat. Supp. 1909, p. 1171, and

amendment of April 5, 1910, 86 Stat. at L. 291,

¢. 143; Mar. 3, 1911, ¢. 231, See, 291, 36 Stat. 1167;

Aug. 11, 1939, ¢. 685, See. 2, 52 Stat. 1404. .21, 21n, 22n

98 U.S. C. A. 112 (Judicial Code, See. 51) .......... 21n

45 Cong. Ree. 61st Cong., 2nd Sess., Part 3, p. 2253,

22, 22n, 23, 24, 24n

45 UL S.C. A. (Federal Employers’ Liability Act):

NE ova cekas sha dk he CA. cNeee es 7, 12, 21, 30, 31, 36

ee cana ea bhhbe be ketee se ken 41

Se BPE Te ee TCeTETETTT ITE Tee 1

Section 55 ........ 4,5, 7, 10n, 11n, 15, 17, 18, 20, 21, 42

eae ee ee ee 2n, 5, 7, 11n, 18, 22, 23, 42

45 U. S. C. AL (Federal Safety Appliance Act),

Section V1... ccccccccccccccccacevcessecsessecs 1

GD A. La. BR. 1445, et meq. ..ccccccncvevcceccccnccnes 36

BOT A. La, BR. DOGO, Of. aq. on cc ccc cccncscenencncece 36

Be ze

IN THE

Supreme Court of the United States

CCTOBER TERM, 1949.

No. 177.

THE PENNSYLVANIA RarLroap CoMPANY,

Petitioner,

—against—

CLYDE W. KRENGER.

Respondent.

»s

>

ANSWER TO PETITION FOR WRIT OF

CERTIORARI.

Statement of Facts.

On April 14th, 1949, the United States Court of

Appeals, Second Circuit, by a divided bench affirmed

a judgment recovered by Clyde W. Krenger, plaintiff

employee, hereinafter referred to as respondent,

against The Pennsylvania Railroad Company, defend-

ant, respondent’s employer, hereinafter referred to as

petitioner, in an action to recover damages for per-

sonal injuries sustained by respondent, after a trial

before Inch, D. J., and a jury in the United States

District Court for the Eastern District of New York.

The action was instituted under the Federal Employ-

ers’ Liability Act (45 U. S. C. A., Sections 51-59) and

the Federal Safety Appliance Act (45 U.S. C. A., See-

tion 11), by respondent against petitioner to recover

damages for injuries suffered by respondent on March

PRR ay

—

2

10th, 1946, beeause of the negligence of petitioner and

its employees while the parties to this action were con-

cededly engaged in interstate ecommerce (R. 23),

Respondent, age 40 at the time of this accident, was

married, and the father of three minor children, and

a resident of the State of Ohio. He sustained severe

and permanent personal injuries,! at Akron, Ohio, on

March 10th, 1946, while employed as a yard conductor

by the petitioner, a corporation of the Commonwealth

of Pennsylvania.

While in this injured condition and during the time

that he was impoverished, disabled and under medical

care resulting therefrom, and not having received any

Wages in the interim, petitioner on or about May 10,

1946, loaned or advanced to respondent the sum of

$290 under an agreement (Petitioner’s Exhibit A,

R. 25, 413), by which respondent covenanted and

agreed that he would not institute or prosecute any

suit against the petitioner for damages for his injuries

except in one of the courts, State or Federal, sitting

in the State where his injuries were sustained or 2in

the State within which he (the employee) resided at

the time of the accident provided that service could

1 See Medical testimony of Dr. Milgram, respondent's physician

(R. 169, 172, 173, 174, 176-187). Medical testimony of peti-

tioner’s physicians, Drs. Kropf, Holston and Spaulding (R. 133,

136, 138, 142, 144, 145, 285, 289, 291, 292, 334, 336).

2 Unless otherwise indicated, italics throughout this brief are

the writer’s.

3 This privilege bestowed upon respondent by petitioner is sufi.

ciently startling to cause raised eyebrows, for, Title 45 1.6. CA.

Sec. 56, entitled actions: limitations; concurrent Jurisdictions of

courts; dealing with the rights of railroad employees to in-

Stitute litigation under circumstances as prevail here do not give

unto the employee the right to sue in the State of his residence

at the time of the occurrence of accident. The appropriate por-

tion relating thereto reads ‘‘* # *, in the district of the residence

of the defendant or in which the cause of action arose, or in which

the defendant shall be doing business at the time of commencing

such action.’’

a

be had upon the petitioner in either of those States.

The said sum and such additional sums as might be

advanced were to be retained by the respondent, but

if an action should be brought they were to be deducted

from or credited on any amount finally allowed in

settlement or by judgment.

Thereafter from time to time additional loans or

advances under identical agreements were made until

they aggregated $1,750 (R. 20, 21, 109).

Subsequently, respondent caused a summons and

complaint to be served upon petitioner in New York

and instituted this action in the United States Dis-

trict Court for the Eastern District of New York

under the provisions of the Federal Employers’ Lia-

bility Act (R. 4, 5).

In its answer, among other things, petitioner in

Paragraphs IV to VIII, inclusive, alleged the fore-

going agreement and the here questioned considera-

tion therefor. It further alleged that the respondent

resided and continued to reside in the State of Ohio.

that the accident occurred at the South Akron yard

operated by petitioner railroad in Akron, Ohio, and

that petitioner could be served with process in that

State (R. 6, 7).

When the ease was called for trial on December

16th, 1947, before Hon. Leo F. Raytiel, respondent

moved:

“* ** to strike Paragraphs IV to VIII, inclu-

sive, from this defendant's answer upon the

ground that that separate defense does not state

facts sufficient to constitute a defense at law, and

upon the further ground that the defenses sought

to be alleged in those pa ‘agraphs of the answer

are void for the reason that the agreement

_ —_—

——

4

(Respondent’s Exhibit A, R. 413) referred to in

the answer as having been entered into between

the plaintiff and the defendant pursuant to which

the plaintiff agreed to waive his judicial rights

with respect to venue contravenes the provisions

of the Federal Employers’ Liability Act, Sections

59 and 56”’ (R. 24).

The District Court below, in granting respondent’s

motion (R. 27, 415, 416) and commenting upon See-

tion 55, appropriately stated:

“The defendant bases its position on the

hypothesis that the question of venue is not such

a liability as was contem plated or intended in the

enactment of the said section.

* * * *

‘It is my belief that the decision and the opin-

ion of Judge Barnes in the case of Sherman vy.

Pere Marquette Railway Company, supra (62 F.

Supp. 590), is consonant with the intent of Con-

gress to provide by Section 55 of the Federal

Employers’ Liability Act adequate and com plete

safeguards for the railroad em ployee against such

an impairment of his rights as the aforementioned

agreement might effect. The right to prosecute

this action in this district is an important and

valuable right, the denial of which would contra-

vene both the letter and the spirit of Section 55.

It appears to me that recourse may be had to

legislation alone for the correction of such ineon-

veniences and hardships as the statute may en-

tail.”’

Each of the three judges of the United States Court

of Appeals bench filed separate opinions in this ease.

”»

Clark, C. J., wrote the majority opinion (R. 421-427) ;

L. Hand, C. J., wrote a concurring opinion (R. 427-

430) ; and Swan, C. J., wrote a one-half page dissent-

ing opinion (R. 4380).

Had the United States Court of Appeals withheld

its decision and its opinions until after June 6th, 1949,

there is very little doubt but that the affirmance would

have been unanimous, for on that day this Court in

Boyd v. Grand Trunk Western Railroad Company,

69 Sup. Ct. 1166, granted a petition for a writ of cer-

tiorari in favor of Boyd, the petitioner, where this

Court was then presented with the identical proposi-

tion involved in the instant case, namely:

Was the contract (Petitioner’s Exhibit A, R.

413) entered into between petitioner and respond-

ent in the circumstances of this case, void under

Section 55 of the Federal Employers’ Liability

Act (45 U.S. C. A.), for the reason that its effect

was to enable petitioner to exempt itself from a

liability created by Section 56 of the Act?

Prior thereto the Supreme Court of Michigan ruled

such contract to be a valid one in Grand Trunk West-

ern Railroad Company v. Boyd, 321 Mich. 693.

Significant, therefore, become the first five lines of

Judge Swan’s brief dissenting opinion wherein he

stated :

“T should prefer to withhold decision to await

action by the Supreme Court in Grand Trunk

Western R. Co. v. Boyd, 321 Mich. 693,4 petition

4Should have read, Boyd y. Grand Trunk Western R. Co., for

Boyd was the petitioner seeking the writ in that proceeding.

: oo

for certiorari pending. But as my brothers wish

to decide the case without delay I will state briefly

my decision” (R. 430).

The writer is, therefore, inclined to the inescapable

conclusion that Judge Swan would have concurred

with Judges Clark and L. Hand in affirming the Dis-

trict Court judgment below had he but the foresight to

anticipate that this Court was about to grant a writ

in the Boyd case.

Opinions Below.

Respondent accepts as correct the statement con-

tained in the petition under this heading reflected at

pages 1 and 2.

Jurisdiction.

Respondent further agrees with the statement con-

tained at page 2 labeled “J urisdiction’’, but does not

believe that this Court should exercise its judicial dis-

cretion to review in this case because in the writer’s

humble opinion this case does not come within the

purview of the language of Rule 38 (5) (5b) of the

Rules of the Supreme Court. More concerning this

PALS SP Wt CS ta Ne EE ILE AAPOR NEY SEES E se UE i a iis a alt Nii aa:

j point is reflected at pages 9-12 hereof.

; Questions Presented.

; Under this heading, petitioner poses questions 1,

j 2, and 3 at pages 2 and 3. Respondent agrees that

questions 1 and 2 are proper, to the extent however,

that should this Court decide that the ‘‘ Advancement

of Funds’’ agreement (R. 413) is rendered void under

Sections 55 and 56 of the Federal Employers’ Liability

Act (45 U.S. C. A.), then questions 2 and 3 become

academic and the writ sought should be denied.

Respondent does not agree that ‘‘two of the three

judges of the United States Court of Appeals held

that the contract was not so rendered void by the Act’’.

Statute Involved.

Respondent accepts as correct petitioner’s statement

concerning the ‘Statute Involved’? appearing at page

3 of its petition.

Statement.

Under this heading at pages 3 to 6 of the petition,

the facts are properly outlined except that respondent

does not agree that Judge Learned Hand ruled that

Section 5 of the Act did not bar such contracts, as

reiterated at page 6 of the petition. In fact it would

appear that among the many reasons advanced by

Judge Hand for an affirmance of the judgment below

he actually concurred with Judge Clark in the view

that Section 5 of the Federal Employers’ Liability

Act does apply to contracts of this nature. That

Judge Clark recognized this accord is most evident

from that part of his majority opinion wherein he

stated (R. 427):

‘‘As my brother’s opinion shows, the fact of the

prohibition embodied in §5 looms large in his re-

sult, * * *. It does seem that I am placing some-

Legh ee ee

es

SNe TOE NEN DEN AY sme eo

| 2 Pee Res Se NS Bg) ae

8

what more weight upon that prohibition than he,

though how much I am not wane; > * 4,"

This fact is further corroborated when reference is

made to the following statements appearing in Judge

Hand’s opinion, reading (R. 428):

“* * * the contract did ‘exempt,’ and wholly

‘exempt,’ the road from ‘liability’; for, as matters

stood, it had relieved the road from any compul-

sion to pay damages. It is true that the employee

had it within his power to revive the ‘liability’ by

repaying the advance, but that is irrelevant ; sec-

tion 5 does not permit such a release whether

absolute or conditional.”

Further corroboration is evident from an examina-

tion of that part of Judge Hand's opinion, reading

(R. 429, 430):

“The Federal Employers’ Liability Act bears evi-

dence that in the eyes of Congress employees do

not bargain in all respects as equals with the

roads. It relieves them of the defense of assump-

tion of risk; §6 gives them a larger choice of

forums than at that time was open to other plain-

tiffs; and §% impairs some of their contracts,

* * * *

* * * three considerations conspire to take them

(such contracts) outside What was decided in

Callen v. Pennsylvania R. R. Co., supra (332 U.S.

625): (1) they are contracts of a kind at which

courts have always looked askance; (2) they con-

cern a matter as to which—in some respects at

any rate—Congress has shown that it considered

the employee to bargain at a disadvantage; (3)

9

that disadvantage is in this instance especially

marked and is without any corresponding benefit.”

Significant moreover, is the theory advanced by

Judge Hand that such contracts are in fact against

public policy, on whieh subject he cogently com-

mented (R. 428):

“On the other hand, be the original reasons

good or bad, courts have for long looked with

strong disfavor upon contracts by whieh a party

surrenders resort to any forum which was law-

fully open to him.”

Specification of Errors To Be Urged.

The “Specification of Errors To Be Urged” are

properly outlined at pages 6 and 7 of the petitioner's

brief but respondent humbly believes that the Court

of Appeals for the Second Circuit did not err as to

any of the four points there set forth. Moreover, re-

spondent respectfully contends that if this Court

should decide that no error was commited as to the

first and third specification of errors urged, then

specification two and four become academic and the

writ should therefore be denied.

Reasons for Granting the Writ.

Under this heading appearing at pages 7, 9 and 10,

petitioner contends that:

“TI. The Court of Appeals has decided im-

portant questions of federal law whieh have not

—_ Te

J AEDES LL NEP N LDN. SCD AED BLAM tse thei itsat Mhepiehtinds

bade

RAP tinh eb ta! RE,

10

been but should be settled by this Court; IL.

There is a sharp conflict in judicial opinion with

respect to the validity of such contraets which

ought to be resolved by this Court; III. The

Court of Appeals has decided federal questions

in a way probably in conflict with applicable de-

cisions of this Court.”

Reference, however, to Rules 38 (5) (5b) of the

Supreme Court reveal that:

“A review on writ of certiorari is not a matter

of right, but of sownd judicial discretion, and

will be granted only where there are special and

important reasons therefor. The following, while

neither controlling nor fully measuring the court's

discretion, indicate the character of reasons which

will be considered :

Where a circuit court of appeals has rendered a

decision in conflict with the decision of another

circuit court of appeals on the same matter? or

3 Presumably petitioner is of the opinion that this portion of

the Rules of the Supreme Court covers Point II of its petition

elaborated on at pages 9 and 10. Respondent, however, contends

that petitioner's Point II is at substantial variance with this por-

tion of the Rules because exhaustive legal research on the subject

of the validity or non-validity of the specific contract involved

herein reveals that this question has been passed upon by but

two federal courts of appeals and that both such courts have

held such contracts to be void under the provisions of the

Federal Employers’ Liability Act, 45 U. S. @. A. 5);

Akerly v. New York Cent. R. Co., 168 F. (2d) 812, 6th Circuit.

Ohio, and the 2nd Cireuit, New York, in the instant case. not

yet reported (R. 421-430, 455-457). Why then should petitioner

call upon this court to review on a writ of certiorari this ques-

tion not in conflict with any decision of any other federal court

of appeals?

——

ll

has decided an important question of federal law

which has not been, but should be, settled by this

court; or has decided a federal question in a way

probably in conflict with applicable decisions of

this court; * * *.’*

On pages 11, 12 and 14 which also dwell on the

“Reasons for Granting the Writ*’, and page 19 of its

brief, it is contended by petitioner that the decision

of the Court of Appeals for the Second Cireuit, in the

instant case, is probably in conflict with an applicable

decision of this Court, namely, Callen v. Pennsylvania

Railroad Co., 332 U.S. 625. On that score therefore

the language distinguishing that case from the instant

one as contained in the opinions of Judges Clark and

L. hand Lecome significant, reading:

‘““We are met at the outset with the claim that

the agreement in question is a valid compromise

of plaintiff's claim for damages, and is therefore

a complete bar to his action. Callen v. Pennsyl-

vrania R. Co, 382 UC. 8. 625. But in Duncan

Thompson, 315 U.S. 1, 7, that contention was

rejected as to an advance made after the accident

in consideration of an agreement not to sue until

the advance was repaid’ (R. 423).

* * * *

®It is again assumed that petitioner believes its Points I and

III delved into at pages 7-9 and 10-12 of its petition and pages

18-21 of its brief, come within the purview of this portion of the

Rules. Respondent, however, contends that these points do not

warrant this Court's exercise of its right to review on a writ of

certiorari because this Court has not only previously passed upon

the question here presented, but has in addition supported re-

spondent’s contention that contracts of this nature prepared by

railroads may not be enforced and do violate Sections 55 and 56

of the Federal Employers’ Liability Act, 45 U. S. C. A.; Duncan

Vv. Thompson, 315 U. S. 1, 86 L. Ed. 575 (1942); Second Em-

ployers’ Liability Cases, 32 S. Ct. 169, 223 U.S. 1, 56 L. Ed. 327.

(bin p P telipe M CM Oe Nata LEY oe Sa

SARI Sis a

ne

“*T do not forget in Callen v. Pen nsylvania R. R.

Co., 3382 U. 8. 625, the court held that an employee

was not in so unequal a bargaining position that

—in the absence of some positive provision of

law—he could not settle his claim in full; and if

he may do that, it would seem at first blush that

he may surrender one of the privileges by whieh

the claim is protected. Yet the differences seem

to me critical. Although the employee is ordi-

narily not qualified to estimate his chances of

suceess in a suit against the road, it is desirable

that he shall be able to collect his claims without

suit. On the other hand in contracts like that at

har the payment not only does not settle the

claim, but it has no relation to any value at which

the employee may appraise it, not even after he

has discounted it by the hazzards of a suit. It

is no more than.a tempor ry relief of his im-

mediate necessities, which must be credited upon

any recovery or settlement. Moreover, he is at

a much greater disadvantage in estimating the

effect of the contract upon his rights, than when

he settles the claim. He is likely to suppose that

one court is like another; and certainly he cannot

he deemed to be acquainted with those differences

between them which may in fact vitally affect his

recovery’? (R. 429),

12

Respondent, at the risk of repetition, does not sub-

scribe to petitioner’s contention IV appearing at pages

12 and 13 as part of its ‘‘Reasons for Granting the

Writ’’, wherein it is claimed that a majority of the

judges of the Court of Appeals disagreed with the

decision of the District Court as to the interpretation

of Section 5 of the Act as applied to the ** Advance-

_—

13

ment of Funds”’ agreement here involved. As pointed

out previously herein, Judge Swan might very well

have coneurred with Judges Clark and L. Hand had

the decision of the Court of Appeals been held in

abeyance until this Court had passed upon the ap-

plication for the writ of certiorari in the Boyd case

on June 6th, 1949. Petitioner’s contention that Judge

Hand’s opinion is also probably in conflict with the

decision of this Court in Fountain v. Filson, 336 U.S.

681, is fallacious. In that case an order was made

on an appeal to a federal court of appeals on a new

issue as to which the opposite party had no oppor-

tunity to present a defense before the trial court

and therefore this Court reversed. In the instant

case, however, it clearly appears, both from the record

and Judge Hand’s opinion of May 25th, 1949, on peti-

tioner’s application for rehearing to the Court of

Appeals below, that the facts are entirely different.

When this case was actually called for trial, respond-

ent moved to strike Paragraphs IV to VIIT from

the defendant’s answer dealing with the contract or

agreement (R. 413) in question (R. 24), at which

time, petitioner merely offered in evidence the said

contract without submitting any proof regarding the

circumstances of the signing thereof, more particu-

larly with respect to whether or not respondent had

any knowledge or understanding of the legal meaning

of the contents thereof, whereupon the District Court

below granted respondent’s motion (R. 25-27).

That Judge Hand considered this failure of proof

on petitioner’s part in aiding the Court to arrive at

I RIE LEONI EBC Ni AIG AED A TOE A Beth ji

Been, BRI ABBE Cakes. eo09

——

14

its concurring opinion is evident when he aptly re-

marked (R. 455, 456) :

“Upon petition for rehearing the defendant

asserts that it has been deprived of any oppor-

tunity to present the evidence which I held to be

necessary to make the contract valid. * * *, The

defendant moved to have the validity of its de-

fence that the contract was a bar decided in

advance of the trial, and this was granted. When

the issue came on before a judge, the plaintiff

moved to strike out the defence and the defend-

ant put in evidence the contract, but noth ing more.

The judge thereupon struck out the defence.

As I said in my concurring opinion, I think

that the contract was invalid unless the defendant

affirmatively proved that it was executed after

the employee was fully advised of its ‘effect upon

his rights’. It was part of the defendant's case

therefore, when the plaintiff moved to strike out

its defence, to prove these facts, and it did not

even attempt to do so, * * *, Moreover, the defend-

ant does not even now allege what alone would

satisfy me: i. e., that the plaintiff had had the

advice of someone who adequately informed him

of the effect of the contract upon his rights. Cer-

tainly that person must be someone not in the

defendant’s employ ; and, indeed, I am inclined to

say that he must be a lawyer, though I should not

wish to make that an inflexible condition.’

In the instant case therefore petitioner had ample

opportunity to submit proof whereas in the Fountain

case the appealing party never had such opportunity.

—

CONCLUSION.

The Court of Appeals for the Second Circuit, cor-

rectly affirmed the decision of the District Court which

held that the contract in question violated Section 55

of the Act, and the petition for a writ of certiorari

should, therefore, be denied.

Witiiam A. BLANK,

Attorney for Respondent,

66 Court Street,

Brooklyn 2, New York.

WItuiaM SAMUELS,

Of Counsel.

—

17

IN THE

Supreme Court of the United States

OCTOBER TERM, 1949.

No. 177.

a

>

THE PENNSYLVANIA RAILROAD COMPANY,

Petitioner,

—against—

CLYDE W. Krencer,

Respondent.

~

—

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI.

ARGUMENT.

When a railroad employee is injured while engaged

in interstate commerce his employer may not enforce

a contract by the terms of which the employee agrees

to file his action for damages only in the state where

his injuries were sustained, or where he resided at the

time he sustained such injuries.

Respondent contends that this agreement was void

under Section 55 of the Federal Employers’ Liability

Act. This section is so broad and sweeping in its

terms that it prohibits any contracts by the terms of

Which railroads may seek to limit or reduce their lia-

bility or impair in any way the rights of their em-

ployees, when it states:

*Any contract, rule, regulation, or device what-

—

18

soever, the purpose or intent of which shall be

to enable any common carrier to exempt itself

from any liability created by this chapter, shall

to that extent be void * * *"° (45 ULS. CLA. D)).

PhS ee ea ee

The words ‘tany liability created by this chapter”

is not the same as saying ‘tany liability created by

Section 1 of the Act”’. Congress, in the enactment of

the law created a new liability and substituted it for

the existing liability at the common law. That new

liability is the composite of all of the separate pro-

Visions of the Act. If one element of that liability

can be destroyed by a contract such as is here in-

volved, all can be destroyed. The successive destrue-

tion by means of such a contract of the elements of

that liability, would, like the successive pulling down

of the pillars of a temple, destroy the entire structure

erected by Congress and strengthened and perfected

by amendments over the period of approximately

forty years that have elapsed since the law was passed.

SOR REE TE rs ARB eR sah etn he tic

ful employer in the matter of claims for injuries or

death arising out of his employment, as a result of

Fi One of the vital elements of that liability is the

3 right of the railroad employee to select the forum in

i which to bring his suit, as provided in Section 56.

e The comprehensive language of Section 55 outlaws

‘ any contract, the effect of which is to destroy the

A right to freely choose such a forum, and it is therefore

4 void under that provision.

g It is respondent's contention that *fany lability

: created by this chapter’? means just what it says and

F that the comprehensive language of Section 53 was

; deliberately chosen by Congress to preserve the status

8 of the employee at the level fixed by the aggregate of

4 the Act’s provisions. The status given to him by the

3 Act in its entirety, was designed to place him as

nearly as possible on an equal footing with his power-

19

the employer’s negligence, both in bargaining for

settlement and in securing a judgment in court, where

suit becomes necessary. It was intended by Congress

that that position of equality should not be bartered

away, either altogether or in piecemeal fashion, by the

employee in a moment of dire necessity, as respondent

was induced to do in this ease. The powerful em-

ployer must be made to understand that when it at-

tempts to induce the necessitous employee to forego

any of the privileges or immunities given to him in

the Act, for some tentative advantage such as $250

or in fact any sum of money, with which to purchase

the necessities of life, while recovering from his seri-

ous injuries, it bargains with the employee, armored

with every protecting provision of the Act.

The privilege of selecting a forum at any place

where his employer is carrying on its business is one

of those protecting provisions and comes within the

meaning of the words ‘‘any liability created by this

chapter’’.

It would be extremely difficult to imagine or select

any phraseology more inclusive in its scope. By the

word contract with which we are here dealing it was

sought by petitioner to deprive respondent of his right

to file his action in the courts of New York, Illinois,

ete.; and to limit him to the courts of Ohio only.

This issue has come before a number of District

Judges and State Courts and the results and opinions

have been divergent. Some of the courts have held

that such contracts are valid. Others, however, with

whose reasoning the writer is naturally in accord, have

held such an agreement to be void. The latter deci-

sions viewed realistically take the position that con-

tracts the type of which we are presently dealing with

limit to a very great extent the liability of the rail-

roads and therefore such contracts are void. Not

BE ALA BL EAS ALE SCG MLE LESSER Gp BO Ya eR Sn CAM Oia Ie Lab Ai alae al

msl abeedss

eRe

| ere BMC ABRs IR RL Me

20

until June 14, 1948 did a question involving this pre-

cise type of contract come before any Circuit Court

of Appeals. On that date the case of Akerly v. New

York Cent. R. Co., 168 F. (2d) 812, was decided by

the Cireuit Court of Appeals, 6th Circuit, in the State

of Ohio, which held that such contracts are absolutely

void. Subsequent thereto and on April 14, 1949 the

Court of Appeals for the Second Cireuit made a simi-

lar finding in the instant case (R. 431). More con-

cerning the Akerly ease and the other decisions relat-

ing to this question will be discussed later.

Before dealing with the eases and other authorities,

the writer desires to foeus this Court's attention on

the history of the Federal Employers’ Liability Act

in the belief that sueh history will help make clear

the meaning and significance of Section 55 with which

we are here concerned,

The Safety Appliance Act was signed by President

Harrison and beeame law on or about March 2, 1893.7

The dreadful toll of deaths and injuries of railroad

employees, however, continued and created such a

public scandal that President Theodore Roosevelt

paid particular note to the imperative need of further

legislation for the protection of such employees. So

came about the enactment by Congress in 1906 of the

first Employers’ Liability Act.8 This Act was there-

after held to be unconstitutional®

*The Safety Appliance Act. March 2, 1893, e. 196, 27 Stat.

at L. 531, U. S. Comp. Stat. 1901, p. 3174, as amended April 1,

1896, 29 Stat. at L. 85, ¢. 87, and March 2, 1903, 32 Stat. at L.

943, ¢. 976, U. S. Comp. Stat. Supp. 1907, p. 885.

8 Chapter 3073. Act Relating to Liability of Common Carriers

in the District of Columbia and Territories and Common Carriers

Engaged in Commerce between the States and between the States

and Foreign Nations and Their Employees.

® Employers’ Liability Cases (Howard vy. Illinois Central RR.

Co.), 207 U. S. 463, 52 L. Ed. 297, Jan. 6, 1908.

‘aaa

Immediately following this decision, President Theo-

dore Roosevelt sent a special message to Congress

requesting immediate enactment of a new Employers’

Liability Act which would be Constitutional under

the rules laid down by the Supreme Court. Among

other things, he said :!°

21

It is to he observed that an employers liability

law does not really mean mulcting employers in

damages. It merely throws upon the employer

the burden of accident insurance against injuries

which are sure to oceur. It requires him either

to bear or distribute through insurance the loss

which ean readily be borne when distributed, but

which, if undistributed, bears with frightful

hardships upon the unfortunate victim of acei-

dent.”’

Under the immense pressure thus created, Congress

responded, and the Second Employers’ Liability Act

was enacted and approved on April 22, 1908, held to

be Constitutional by this Court, January 15, 1912."

Section 5 contained therein the identical verbiage

as appears in 45 U. 8S. C. A. 55. Venue at that time

was controlled by the general federal venue provi-

sions’* which merely gave the injured employee the

right to institute his action in, and only in, the district

of which his employer was a resident.

This limitation was considered a great handicap to

10 Messages and Papers of the Presidents, Vol. 15, p. 7127,

Jan. 31, 1908.

1135 Stat. at L. 65, e. 149, U. S. Comp. Stat. Supp. 1909, p.

1171, and the amendment of April 5, 1910, 36 Stat. at L. 291,

— Second Employers’ Liability Cases, 223 U.S. 1, 56 L. Ed.

vel.

1228 U. S.C. A. 112 (Judicial Code, See. 51).

ee

Dik ERAS DRC eae vagina:

i

PNB SPIE LGM ep iinigs

22

the usefulness of the law in compelling railroads to

take effective action for the safety of their employees

and in 1910 Congress recognized that injured em-

ployees should be granted much wider latitude in the

selection of the courts in which to institute their

litigation and so Section 6 (45 U.S. C. A. 56) was

amended to give to the injured railroad employee ;

three-fold choice of venue whieh has remained in the

Act ever since.

Obviously this was done by Congress in the belief

that the hazards of railroading could be substantially

lessened if the railroads could thus be made to realize

the expensiveness of their indifference to their em-

ployees’ safety.

It should moreover be noted that the final three-fold

choice of a forum, as enacted in Section 6 (45 U.S.

C. A. 56), was not determined until after considerable

debate. The Congressional Record shows that the

original 1910 proposed amendment provided a four-

fold choice of venue reading as follows:

“The district of the residence of either the

plaintiff or the defendant, or in which the cause

of action arose, or in which the defendant shall be

found at the time of commencing the action.’

This was a four-fold choice and was finally deter-

mined to be too broad. The permission to sue in the

district of the residence of the plaintiff was therefore

eliminated and the section was finally legislated and

approved to provide a three-fold choice in which form

it has ever since remained,

13 Apr. 5, 1910, ¢. 143, Sec. 1, 36 Stat. 291; Mar. 3, 1911, e.

231, Sec. 291, 36 Stat. 1167; Aug. 11, 1939, ©. 685, Sec. 2. 52

Stat. 1404.

1445 Cone. Ree. 61st Cong., 2nd Sess., Part 3, p. 2253.

—

23

Much of this historical background is set forth in

B. & O. R. R. Co. v. Kepner, 314 U. S. 44, 86 L. Ed.

28, in which this Court held that the venue provisions

of Section 6 (45 U. S. C. A. 56) are mandatory in

nature and it is therefore impossible for a State Court,

regardless of its equity powers, to enjoin filing and

prosecution of a case in a district far remote from the

scene of the accident.

In that case Mr. Justice Reed appropriately stated

at page 54:

“* * * When the section was enacted it filled

the entire field of venue in federal courts. A

privilege of venue granted by the legislative body

which created this right of action cannot be frus-

trated for reasons of convenience or expense. If

it is deemed unjust, the remedy is legislative, a

course followed in securing the amendment of

April 5, 1910, for the benefit of employees. This

Court held in Hoffman v. State of Missouri ex rel.

Foraker, 274 U. S. 21, 47 S. Ct. 485, 71 L. Ed.

905, that the burden on interstate ecommerce

would be disregarded where the carrier had lines

in the distant state. The importance of unham-

pered commerce is at least as great as that of a

earrier’s freedom from harassing incidents of

litigation. Whatever burden there is here upon

the railroad because of inconvenience or cost does

not outweigh the plain grant of privilege for suit

in New York.’

As Senator Borah said in explaining the salutary

and desirable features of the bill which embody the

amendments, it:

“enabled the plaintiff to find the corporation at

SOAS Stn FN ie a ee tai SR he iitias,

eel Ds

ten

Peas

His Re EAR A

Se ee ee Pe

——

24

any point or place or state where it is actually

carrying on business and there lodge his action if

he chooses to do so."

This 1910 amendment was not, as is obvious from

the foregoing, enacted thoughtlessly nor without a

clear determination to give to a plaintiff a liberal

choice of forums in which to bring his suit. To put

it very simply and directly, it is quite apparent that

Congress concluded that such a wide choice on the

question of forums was desirable in order to equalize

to some degree the immense differences in financial

resources between the impoverished and injured em-

ployee or his next of kin and the financially powerful

employer.

As was said on December 23, 1946, by the Supreme

Court of Utah in the case of Peterson v. Ogden Union

Ry. Co, 175 Pac. (2d) 744, on page 747:

“Section 6 (45 U.S. C. A. see. 56) makes avail-

able to the plaintiff several courts in which he

may bring the action. Clearly that section gives

the employee substantial benefits. It was not ouly

for his convenience and to enable him to choose a

court where the expense of litigation would not

he prohibitive, but it was to give him the right to

select the court in which he considers it would be

most advantageous for him to bring his action.”

That case dealt with the same type of contract in-

volved in the instant ease.

This in brief is the historical background of the law

which the petitioner here seeks to defeat by the pres-

15945 Cong. Rec. 61st Cong., 2nd Sess., Part 3, p. 2253.

ent contract with a permanently injured and impov-

erished employee.

As heretofore indicated, although this question has

been passed upon with divergent views by many dis-

trict Judges in different jurisdictions, no Cireuit Court

of Appeals had this precise question before it until

June 14th, 1948 when the case of Akerly v. New York

Cent. R. Co., 108 F. 2d 812, reached the Cireuit Court

of Appeals, 6th Cireuit (Ohio) which reversed its

lower Court, where Allen, Cireuit Judge, aptly re-

marked at pages 814, 815:

“* * * Section 6 ereates new and important

rights in the employee and it created correspond-

ing liabilities against the employer. Appellee

argues that liability, within the meaning of the

Act, is the determination of the obligation of the

appellee to pay damages, and that it is in no

way affected by the place or forum of trial.

But liability is an ordinary word, to be construed

according to its ordinary meaning. The second,

and more limited definition of the words, as found

in Webster’s Unabridged Dictionary (2d ed.),

1935, is in substance that urged by the appellee;

hut the first, and more inclusive definition is ‘The

state or quality of being liable.’ Liable, in turn,

is defined as being ‘hound or obliged in law or

equity; responsible; * * * answerable or exposed

to a certain contingency or casualty of an un-

desired character.” Within these definitions, the

appellee was liable under 66 of the Act to be sued

in any one of three jurisdictions: that of its resi-

dence, that where the accident occurred, that

where it does business. In fact this new venue

statute creates, within the ordinary meaning of

eI a eT ea a

co ip eae ee

PERIL ELLE S PA le tA OAM LID OSEAM el AAAB iS) sy asta

APTI OF. Sy Oh CNL

ep Et RRS LS 51 APD yee

—

26

the word, liability against the employer in states

and districts, where he could not have been sued

prior to the amendment, The paragraph is broad

and sweeping, and as pointed out in Duncan y.

Thompson, 315 U. S. 1, 62 S. Ct. 422, 424, 86 L.

Ed. 575, the adoption of the section in its present

form ‘argues persuasively that Congress wanted

Section 5 to have the full effect that its compre-

hensive phraseology implies.’ * * *,

We think that the inclusion of this section in

the Employers’ Liability Act, with its creation

of new obligations against the employer, makes

the venue provisions an inherent part of the em-

ployer’s liability. An attempt to limit it by con-

tract is an attempt fo erempt the railroad from

liability, and is void.”

That the petitioner also interpreted this section as

creating a liability on its part of being sued in New

York and elsewhere, is clearly apparent else why

did it apply such meticulous care in preparing a con-

tract of this nature for its injured employee to sign,

knowing full well that at the time of its execution re-

spondent was not only seriously injured and under

medical care but not receiving wages during the time

of his disability.

oa

As was further stated by the Cireuit Court in the

Akerly case, the facts of which are identical to the

instant one (p. 814):

‘**Under the conceded facts, it is a fair inference

that the appellee (railroad) regarded this contract

as important for the sake of exempting itself

from the liability of being sued in New York,

the state of its residence, or in any of the states,

other than Pennsylvania, where it does business.”

2

The Court of Appeals for the Second Cireuit in the

instant case supported these interpretations when, in

the majority opinion of Judge Clark, it appropriately

held:

“ee * Duncan v. Thompson, supra, (315 U. 8.

1) has established that contracts made after the

injury are within the scope of §5; and it specifi-

cally voided the condition precedent to suit of re-

turning the money advanced. We agree with the

majority view in Akerly v. New York Cent. BR.

Co., supra (168 F. 2d 812) that the sweeping lan-

guage of the Act, its legislative history, and the

interpretation of the provision thus made—all

support the plaintiff’s contention.

Significance should be attached to the inclusive

nature of the statutory phrase—any liability

under this chapter’ Had a restricted meaning

been intended, it would surely have been simple,

indeed, to limit the Statutory provision to the

duty to pay damages. That could have been done

by this precise, though natural, phrase, or indeed

by deseriptions used in other parts of the Act,

such as the ‘right of action’ of §59 or even the

‘eause of action’ of §56. On the other hand, it

is difficult to think what liability under this chap-

ter, and beyond the main grant of § 1, could have

been intended if this was not, or what more apt

expression to cover it, together with all other

duties, liabilities, and disabilities created by the

Act, could have been chosen, The importance of

this extensive choice of venue to injured railroad

workers is no secret; it was fully set forth by

Senator Borah in sponsoring the amendment of

1910 which granted the choice—a hit of legislative

history recently recounted at length in decisions

sats

28

re-enforcing the option against suggested judicial

! limitation. Baltimore & O. R. Co. v. K epner, 314

j U.S. 44, 136 A. L. R. 1222; Miles v. Minois Cent.

R. Co., 315 U. S. 698, 146 A. L. R. 1104. of

course if we cut through dialectic to reality—a la

Mr. Justice Jackson in the latter ease, 315 U. S.

at pp. 705-708—we know that its greatest import-

ance is because of its hoped-for consequence upon

the amount of recovery through suit in a district

where juries are generous. But we need not re-

sort to an operation so drastic. For the views of

cases and scholars—not to speak of the preferred

dictionary definition relied on by Judge Allen in

the Akerly case, supra—are quite ample to sus-

tain this meaning of ‘liability’ even apart from

the special setting of the statutory phrase in its

immediate context. Under the analysis of Pro-

fessor Hohfeld, adopted by the Ameriean Law

Institute, liability is quite differentiated from a

mere duty to pay damages and serves as the cor-

relative of power and the opposite of immunity

or exemption. Thus the railroad was contracting

against its liability to be sued, i. e., to have its

legal relations changed—adversely—in any one

dig iy pie,

OS Mae Pe 6th eae Ma i ital a aN a? ten a Megane

nic Pati s Loft

" of several jurisdictions, in order to obtain im-

F munity from such change except under the favor-

5 ing conditions of a single chosen jurisdiction.

7 Hohfeld, Fundamental Legal Conceptions 8, 50,

{ 58-60, 1923, citing and quoting judicial usage;

j Corbin, Legal Analysis and Terminology, 29 Yale

L. J. 163, 169, 170; 1 Restatement, Property (3,

comment a and Special Note, 1936, * * *,

** *, And, indeed, any possibility that the

statutory phrase could be limited to the duty to

Lae

i

j

29

pay damages only would seem already foreclosed

by Duncan v. Thompson, supra. That case, it

will be recalled, held invalid an agreement. re-

quiring the repayment of sums advanced as a

condition precedent to the bringing of action. If

the statutory phrase applies to a condition re-

quiring fulfillment before an action may be

brought, it would seem just as applicable to a

condition as to the place where action must be

brought. * * *.

** *. Thus I accept the view that these are

contracts of a kind generally to be viewed eritiec-

ally unless they are to be taken as parts of a fair

compromise between the parties. 6 Williston on

Contracts § 1725, Rev. Ed. 1938; 2 Restatement,

Contracts § 558, 1932”? (R. 424-426, italies the

Court’s).

The writer believes that only one case excepting the

recent Boyd case, involving a somewhat similar agree-

ment has reached this Court. That is the ease of Duncan

V. Thompson, 315 U. S. 1, 86 L. Ed. 575 (1942), where

a railroad advanced to one of its injured employees

the sum of $600 for living and other expenses just as

in our case at bar. In that case the agreement, how-

ever, contained the provision that plaintiff would re-

pay the advance before filing any lawsuit.

In the instant case the agreement was that the re-

spondent employee would only file his lawsuit in the

courts of one particular state, namely, Pennsylvania.

In violation of that agreement the plaintiff in the

Duncan case filed his action in Missouri without re-

paying the advance. The Trial Court, however, re-

fused to dismiss the case and there was judgment en-

tered in plaintiff's favor. The higher State courts in

:

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~

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DM GR

Peete in ctrrraciimnrnie.

30

Missouri held however, that the agreement was valid,

and therefore entered judgment in favor of the rail-

road.

This Court unanimously reversed that judgment

holding that the covenant not to file suit until the

advance payment was repaid was void under the pro-

visions of Section 5 of the Act. The Court reviewed

the legislative and judicial history of this section and

through Mr. Justice Black appropriately held, page 6:

“* * *. Under the state acts there had been

widespread attempts by employers to contract

themselves out of the liabilities the acts were

intended to impose. State legislatures had re-

sponded to this practice by adopting provisions

which proscribed employer-employee agreements

intended to deprive employees of the statutory

benefits. These provisions varied in scope and

language. Some declared agreements attempting

to exempt employers from liability void only

when they were part of contracts of employment.

One state, although not limiting the statutory

invalidation to contracts of employment, specifi-

‘ally restricted it to agreements ‘entered into

prior to the injury.’ Other states, presumably

after experience had shown that narrower limita-

tions were inadequate to stamp out ingenious

evasions of the statutory responsibilities, adopted

measures invalidating agreements of any type,

regardless of when made, which attempted to ex-

empt employers from liability. House Report

No. 1386, 60th Cong., 1st Sess., pp. 30-75.

** *, And the adoption of Section 5 of the

present act without adding any of the other limi-

tations which some of the state statutes had em-

31

bodied argues persuasively that Congress wanted

Section 5 to have the full effect that its compre-

hensive phraseology implies.”’

By that decision it is reasonable to assume that this

Court was of the opinion that an agreement which

compelled a plaintiff to repay monies loaned or ad-

vanced as a pre-requisite to filing an action constituted

a substantial impairment of his rights, and that same

was wholly void under Section 5.

The writer therefore inquires, if it is a substantia]

impairment of an injured and impoverished federal

employee’s rights to loan or advance him $600 and

merely require repayment as a condition precedent

to the filing of a lawsuit, by equally applied logie

is it not a substantial impairment of his rights to

loan or advance to him $250, $1,750 or even $17,500

on condition that he will renounce his right to file

suit in all but one of the various states where Con-

gress legislated prior thereto that he had a right to

file in? In that connection is it not important to

also consider that respondent’s judgment by jury

verdict in this case, was $28,750, a sum more than

sixteen times greater than the amount loaned oer ad-

vanced by petitioner to respondent ?

To the same effect see the holding in Sherman vy.

Pere Marquette Ry. Co., 62 F. Supp. 590, where

Barnes, District Judge, who included in his discussion

rights of federal employees with respect to Congres-

sional legislated privileges bestowed on them, ably

stated on page 593:

“Generally speaking, venue is a privilege which

may be waived, but it may not be contracted away

in the face of a specific statute which prohibits

eT

32

such contracting, as does Section 5 of the Em-

ployers’ Liability Act under consideration.

The court is of the opinion that the contracts

in question in this suit are void because they are

d prohibited by Section 5 of the Federal Employers’

3 Liability Act.”

{

i In that connection see also Peterson v. Ogden Union

: Ry. Co., 175 Pace. (2d) 744, 747, su pra; Nunn vy.

i Chicago, M., St. P. & Pac. R. Co., 71 F. Supp. 541.

y

P Another case in which each and every section of the

: Federal Employers’ Liability Act was examined into

: and discussed at great length, is Fleming, ct al. y.

g Husted, 68 F. Supp. 900. In that case the railroad

: again set up as a defense an agreement similar in all

€ respects to the one here involved. The injured em-

; ployee in that action moved to dismiss on the ground

: that the contract in question was void, and in sustain-

BS ing this contention Dewey, District Judge, appro-

priately held, on page 901:

“Then next comes this fifth proposition which

has to do with the statement that any contract,

the purpose or intent of which would be to en-

able any common carrier to exempt itself from

any liability created by this Chapter, shall be

to that extent void. Any liability created by this

Chapter! That, it seems to me, is the question—

whether or not this is a contract attempting to

exempt the carrier from any liability ercated by

the Chapter.

The sixth has to do with venue, which it seems

to me is important in this case; because if there

was only the ordinary venue which obtains in all

actions between residents of different states, we

Bas 8 y

Bersin in: eas et” eee

33

might have a different situation here. But the

Act creates an additional venue to that in ordinary

actions; and, as I remember it, one which is

limited in cases of diversity of citizenship to the

place of residence of the plaintiff or the defendant.

* * * *

What I am getting at is: If you limit this lia-

bility as contended for it could be only as to See-

tion One of the Act. J cannot believe that

Congress intended in Section Five of the Act to

limit the contract, making it void, to only Section

One of the Act. It is way down, in Section Five,

in the Act itself. And where you limit liability

of the venue only, still it is a very important right

given by the Act to the plaintiff, which is sought

to be limited in this case. And I cannot see why

venue, an additional venue given to employees by

the provisions of the Act, and which certainly

creates an additional legal right to the em ployees,

and—which necessarily follows—creates a corre-

sponding legal responsibility and obligation on an

employer, why the word ‘liability’ under Section

Five of the Act does not include an attempt to

limit that obligation or burden on the part of the

employer just the same as any other liability

under the Act or the entire Chapter.

It seems plain to me that Congress did not

intend to limit the right to voiding a contract

limiting liability under the Act to the liability

under paragraph One of the Act, but that it is

on all the obligations created by the Act as against

the employer; and I can not conscientiously de-

termine and find that these contracts were valid

contracts. Venue is easy to be waived, we all

know that is true; but it has nothing to do with

———

34

this case. Here we have a statutory right created

and broadened by the Act itself, and that statu-

tory right creates an additional obligation on the

tS

%

} part of the employer, and also brings with it the

; prohibition against entering into a contract. to

limit that right as being void under section Five

iN of the Act, 45 U.S. C. A. §55.”

|

‘ See also

;

; Tague v. Delaware L. & W. PR. Co., 5 F. R. D,

323,

:

; Further, on this subject see Sherman v. Pere Mar-

: quette Ry. Co., 62 F. Supp. 590, where Judge Barnes

F held on page 593:

“* * *. It has been said that the word ‘lia-

f bility’ in Section 5 is limited to the liability of

the carrier fo respond in damages, but when we

say that we beg the real question, which is as to

the meaning of the word ‘liability’ in Section 5.”

Congress by the adoption of the Federal Employers’

Liability Act, unqualifiedly intended that the railroad

employee should have the benefit of each and every

provision of the entire act. It was not intended that

an employee might contract away or have the power

to so contract any portion of his rights thereunder,

This intention is clearly evident from an examination

of the Second Employers’ Liability Cases, 32 8. Ct.

169, 223 U. S. 1, 56 L. Ed. 327, where Mr. Justice

Van Devanter, very ably remarked, at page 176:

one

Next in order is the objection that the pro-

vision in §5, declaring void any contract, rule,

regulation, or device, the purpose or intent of

which is to enable a carrier to exempt itself from

A EA Pe

Bexs- es a

35

the liability which the act creates, is repugnant

to the 5th Amendment to the Constitution as an

unwarranted interference with the liberty of con-

tract. But of this it suffices to say, * * * that if

Congress possesses the power to impose that lia-

bility, which we here hold that it does, it also

possesses the power to insure its efficacy by pro-

hibiting any contract, rule, regulation, or device

in evasion of it.”

It is apparent therefore that the right of venue -

bestowed upon the railroad employee under the Fed-

eral Employers’ Liability Act is different from that

given by the general venue statute. The liability act

must be considered as a whole. If a railroad were

to be permitted, by contract with its employee, to

vary one provision of the Act it might well by con-

tract vary all of the provisions of the Act and thereby

nullify it. A railroad employee may therefore not

lightly be deprived of the venue rights acquired by

him as a result of the promulgation of the Federal

Employers’ Liability Act.

The agreement in the instant ease, as all other

similar agreements interposed by railroads after their

employees suffered injuries in furtherance of Inter-

state Commerce, lacks consideration. The advances

made to respondent were not in the nature of a pay-

ment but only a loan. The money which the peti-

tioner turned over to respondent was an advancement

rightfully due him for his injuries at the time since

he was not receiving any wages or compensation dur-

ing the time of his disability following his injuries.

The parties did not deal at arms length. Respondent

was an impoverished working man, uneducated in

matters of law, suffering from a severe injury and

36

was not fully cognizant of his rights. Petitioner was

represented by its claim agent, a man well coached

and versed in matters of this nature.

It is therefore apparent that respondent beeause of

straitened circumstances and dire need, accepted these

monies as a loan in consideration of which he is sup-

posed (according to petitioner’s contention) to have

forfeited his rights to prosecute this action in the

manner accorded him under Section 6.

Even in the absence of the vigorous prohibitions

contained in Section 5 of the Federal Employers’ Lia-

bility Act there is more than enough authority based

on grounds of publie policy which deny the rights of

parties by private agreement to deny access to ) u-

ticular courts. Thus for example we find in 107

A. L. R. 1060, et seg. and 59 A. L. R. 1445, et seq., the

general rule stated as follows:

“The recent cases, like those set out in the

original annotation, have quite uniformly refused

to give effect to a stipulation in a contract limit-

ing the jurisdiction of any action or proceeding

with reference to the contract to the courts, or a

particular court, of another state or country, or

of another district in the same state either as

defeating the jurisdiction altogether, or as a sufti-

cient reason for declining jurisdiction * * *,”

See also the Restatement of the Law of Contracts

Which contains this provision (Section 558) :

“A bargain to forego a privilege, that other-

Wise would exist, to litigate in a Federal Court

rather than in a State Court, or in a State Court

rather than in a Federal Court, or otherwise to

37

limit unreasonably the tribunal to which resort

may be had for the enforcement of a possible

future right of action, or the time within which a

possible future claim may be asserted, is illegal.”’

Certainly Petitioner’s Exhibit A was a contract

which attempted to extract from respondent the priv-

ilege bestowed upon him by Congress to litigate his

contemplated future law suit in a Federal Court in

the State of New York and therefore such contract

is legal under all existing authorities.

On this subject reference is made to the ease of

Insurance Company v. Morse, 20 Wall. 445, decided

hy this Court, where Mr. Justice Hunt ably com-

mented at page 451:

‘We see no difference in principle between the

the cases supposed and the case before us. Every

citizen is entitled to resort to al] the courts of

the country, and to invoke the protection which

all the laws or all those courts may afford him.

A man may not barter away his life or his free-

dom, or his substantial rights. * * *. Ina civil

‘ase he may submit his particular suit by his own

consent to an arbitration, or to the decision of a

single judge. So he may omit to exercise his

right to remove his suit to a Federal tribunal, as

often as he thinks fit, in each recurring case. Jn

these aspects any citizen may no doubt waive the

rights to which he may be entitled. He cannot,

however, bind himself in advance by an agree-

ment, which may be specifically enforced, thus to

forfeit his rights at all times and on all OCCASIONS,

whenever the case may be presented.

That the agreement of the insurance company

a

« +

38 a

is invalid upon the principles mentioned, numer

ous cases may be cited to prove. Nate v. Hamil.

ton Insurance Co., 6 Gray 174; Cobb v. New Eng-

land Marine Insurance Co., ld. 192+ Hobbs v.

Manhattan Insurance Co., 56 Maine 421: St phen-

son Vv. P. F. and M. Insurances Co., D4 Id. 70;

Scott v. Avery, 5 House of Lords Cases 811. They

show that agreements in advance to oust the

courts of the jurisdiction conferred by law are

Wegal and void.’

z

H

}

3

;

'

Another interesting ease on this subject is Nute y,

; Hamilton Mut. Ins. Co., 6 Gray 174, where Chief

4 Justice Shaw ina very enlightening opinion remarked

‘ (pp. 181, 184):

“Suppose it were stipulated in an ordinary

; contract, that in case of breach no action shall

| he brought; or that the party in default shall be

liable in equity only and not at law. or the re-

verse; that * * * in any suit te be brought on

such coutract, the party sued will confess judg-

ment, or will waive a trial by jury; * * * is it

not obvious, that, although in a certain sense these

are rights or privileges which the party, in the

proper time and place, may give or waive. vet a

compliance with them cannot be annexed to the

contract, cannot be taken notice of and enforced

; by the court or tribunal before which the remedy

i is sought, * * *?

** *. The rules to determine in what courts

and counties actions may be brought are fixed,

upon considerations of general convenience and

expediency, by general law; to allow them to be

changed by the agreement of parties would dis-

Bence «- Riese WS

39

turb the symmetry of the law, and interfere with

such convenience,”

In Meacham v. Jamestown, F. & C. R. R. Co., 211

N. Y. 346, Cardozo, J., writing on this subject, cogently

commented, page 354:

“If jurisdiction is to be ousted by contract,

we must submit to the failure of justice that may

result from these and like causes. It is true

that some judges have expressed the belief that

parties ought to be free to contract about such

matters as they please. Jn this state the law has

long been settled to the contrary. (Sanford v.

Commercial Travelers’ Mut. Ace. Assn., 86 Hun.

380; 147 N.Y. 326; Nat. Contracting Co. v. Hud-

son R. W. P. Co., 192 N. Y. 209. See also; Miles

Vv. Schmidt, 168 Mass. 339; Fisher v. Merchants’

Ins. Co., 95 Me. 486.) The jurisdiction of our

courts is established bu law, and it is not to be

diminished, any more than it is to be increased

by the convention of the parties.”

,

Holding to the same effect are the following cases:

Benson v. Eastern Building and Loan Associa-

tion, 174 N. Y. 83;

Parker v. Krauss Co., Limited, 157 Mise. 667,

284 N. Y. S. 478;

Mutual Reserve Fund Life Ass'n. v. Cleveland

Woolen Mills, 82 F. 508 (C. C. A. 6th);

Prince Steam-Shipping Co. v. Lehman, et al.,

39 F. 704 (D. C. S. D. N. Y.);

Slocum, et al. v. Western Assurance Co., 42

F, 235 (D.C. 8S. D. N. Y.);

Pee nL Se were Toe oe

40

Gough, et al. ve Hamburg Amerikanische

Packet fahrt Aktiengesellschaft, 158 F. 174

i Bae Se ae ay

DeGorter, et al. v. Banque DeFrance, 176 Mise.

1062, 29 N.Y. S. 2d 842 (1941), affirmed 287

N.Y. 483, 41 N. EF. 2d 65 (1942),

CONCLUSION.

For the reasons stated, it is respectfully submitted

that the petition for a writ of certiorari should be

denied.

Witittam A. Buank,

Attorney for Respondent,

66 Court Street,

Brooklyn 2, New York.

WILLtaM SAaMUELs,

Of Counsel.

——

41

APPENDIX.

Applicable Sections to Federal Employers’ Liability Act.

Section 51.) Liasmiry or CoMMON Carriers py Ratroap,

IN Interstate orn Forex COMMERCE, FoR

Insunies to Emprioyres From Nerenigexce;

Derixition of Empioyrrs

Every common carrier by railroad while engaging in

commerce between any of the several States or Terri-

tories, or between any of the States and Territories, or

between the District of Columbia and any of the States or

Territories, or between the District of Columbia or any

of the States or Territories and any foreign nation or

nations, shall be liable in damages to any person suffering

injury while he is employed by such earrier in such com-

merece, or, in case of the death of such employee, to his or

her personal representative, for the benefit of the surviv-

ing widow or husband and children of such employee ;

and, if none, then of such employee's parents; and, if

none, then of the next of kin dependent upon such em-

ployee, for such injury or death resulting in whole or in

part from the negligence of any of the officers, agents, or

employees of such carrier, or by reason of any defect or

insuflicieney, due to its negligence, in its ears, engines,

appliances, machinery, track, roadbed, works, boats,

wharves, or other equipment.

Any employee of a carrier, any part of whose duties as

such employee shall be the furtherance of interstate or

foreign commerce; or shall, in any way directly or closely

and substantially, affect such commerce as above set

forth shall, for the purposes of this chapter, be con.

sidered as being employed by such carrier in such com-

merce and shall be considered as entitled to the benefits

of this chapter. Apr. 22, 1908, ¢, 149, §1, 35 Stat. 63:

Aug. 11, 1939, ¢. 685, $1, 58 Stat. 1404,

—

Section 55. Cowrract, Rure, Recvatiox, or Device Ex-

EMPTING FROM LiaBiLity; Set-Orr

Any contract, rule, regulation, or device whatsoever,

the purpose or intent of which shall be to enable any

common carrier to exempt itself from any liability created

by this chapter, shall to that extent be void: Provided,

That in any action brought against any such common

carrier under or by virtue of any of the provisions of this

chapter, such common carrier may set off therein any

sum it has contributed or paid to any insurance, relief

benefit, or indemnity that may have been paid to the

injured employee or the person entitled thereto on ae-

count of the injury or death for which said action was

brought. Apr. 22, 1908, e. 149, § 5, 35 Stat. 66.

Section 56. Actions; Limitation; Concurrent J uRIs-

picTIoN OF Courts; REMovaL or Case IN

State Court

No action shall be maintained under this chapter unless

commenced within three years from the day the cause of

action accrued.

Under this chapter an action may be brought in a dis-

trict court of the United States, in the district of the

residence of the defendant, or in which the cause of

action arose, or in which the defendant shall be doing

business at the time of commencing such action. The

jurisdiction of the courts of the United States under this

chapter shall be concurrent with that of the courts of the

several States and no case arising under this chapter

and brought in any State court of competent jurisdiction

shall be removed to any court of the United States. Apr.

22, 1908, e. 149, § 6, 35 Stat. 66; Apr. 5, 1910, e. 143, 41,

36 Stat. 291; Mar. 3, 1911, ¢. 231, § 291, 36 Stat. 1167;

Aug. 11, 1939, ¢. 685, § 2, 52 Stat. 1404.

AE i REG OSL, BO ie Se Cathet ee SELENA Soi wel SN te thy bp cba On A

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