United Mine Workers of America, District 12 v. Illinois State Bar Association Brief of Respondents

    No. 33.

IN TH E

SUPREME COURT OF THE UNITED STATES.

OCTOBER TERM , 1967.

UNITED M INE WORKERS O F AM ERICA, DISTRICT 12, 
Petitioner,

vs.

ILLINOIS STATE BAR ASSOCIATION, an Illinois Not for Profit Corpora­
tion, CURTIS F. PR A N G LEY, BERNARD H. BERTRAND, WILLIAM FECHTIG, 
KOREAN MOVSISIAN, H EN R Y W. PH ILLIPS, W ILLIAM C. NICOL, JOHN 
W. HALLOCK, WATTS C. JOHNSON and M ARSHALL A. SU SLER, Indi­
vidually and as Members of the Committee on Unauthorized Practice 

of Law of the Illinois State Bar Association,
Respondents.

On Writ of Certiorari to the Supreme Court of the State of Illinois.

BRIEF OF RESPONDENTS
Illinois State Bar Association and Its Individual Members 

of the Committee on Unauthorized Practice of Law,

BERNARD H. BERTRAND,
234 Collinsville Avenue,

East St. Louis, Illinois 62201, 
Attorney for Respondents.

St. Louis L aw P rinting Co., I nc., 411-15 N. Eighth St., 63101. CEntral 1-4477.



INDEX.

Table of Contents.
Page

Constitutional, Statutory Provisions and Canons of 
Ethics Involved .........................................................  1

Questions Presented ................................   2

Statement of the Case ....................................................  3

Summary of Argument ..................................................  11

Argument .............................................................................  14
I. The decision below is clearly correct ............... 14

A. An attorney may charge a fee for services
rendered in handling Workmen’s Compensa­
tion Act cases .................................................. 20

B. The Labor-Management Relations Act does
not authorize or have within its purview the 
union salaried lawyer arrangement consid­
ered by the Illinois Supreme C o u rt.............  22

C. Petitioner’s arguments run contra to facts
as well as opinions of committees on profes­
sional ethics. Its analogies are wanting in 
support .............................................................  25

D. The injunctive decree was proper and com­
plete for the purposes intended .................  28

II. The Illinois Supreme Court decision does not
deny the petitioner any constitutionally pro­
tected right nor does the state decision conflict 
with any decision of this Court .........................  30

III. A discussion of group legal services is not per­
tinent to the issues in this case ......................... 36

Conclusion ......................................................................... 37



11
Appendix A—Workmen’s Compensation Act .............  39
Appendix B:

Exhibit A—Eeport to attorney on accidents .......... 42
Exhibit B—Letter to Union officers and members 

dated September 23, 1959 ....................................... 44
Exhibit B—Letter to Union officers and members 

dated September 26, 1959 ........................................  46

Appendix C—Statement of American Bar Association 
re Informal Opinion No. 469 12/26/61 .....................  47

Appendix E>—Formal Opinion 282 ............................... 49

Table of Cases.

Beckemeyer Coal Co. v. Ind. Comm., 370 111. 113 (1938) 18

Chicago, Wilmington & Franklin Coal Co. v. Ind.
Comm. (Matchek), 400 111. 60 (1948) .....................  18

Chicago, Wilmington & Franklin Coal Co. v. Ind. 
Comm. (Sarafin), 399 111. 76 (1948) ...........................  18

Federal Trade Commission v. Beech Nut Co., 257 U. S.
4 4 1 ....................................................................................  29

Franklin County Coal Co. v. Ind. Comm., 398 111. 528 
(1948) ............................................................................. 18

Illinois State Bar Association v. United Mine Work­
ers, District 12, 35 111. 20, 112, 219 N. E. 2d 503
(1966) ........................................................................... 17

In re Brotherhood of Railroad Trainmen, 13 111. 2d 
391, 150 N. E. 2d 163 .........  11,16,23

John Florczak v. Ind. Comm., 381 111. 117 (1942) ___ 18

Lasley v. Tazewell Coal Co., 223 111. App. 462 __ 20,21

NAACP V. Button, 371 U. S. 415 ............... 20, 30, 31, 33, 36
New York, New Haven and Hartford Ry. Co. v. Inter­

state Commerce Commission, 200 U. S. 3 6 1 ............. 30
NLRB V. Express Publishing Company, 312 U. S. 42 29



Ill

People ex rel. Chicago Bar Association v. Chicago
Motor Club, 362 111. 50, 199 N. E. 1 .........................  14

People ex rel. Chicago Bar Assn. v. Lally, 313 111. 21,
144 N. E. 329 (1924) .................................................... 21

People ex rel. Chicago Bar Association v. The Mo­
torists Association of Illinois, 354 111. 595, 188 N. E.
827 ..................................................................................  14

People ex rel. Courtney v. Association of Real Estate 
Taxpayers of Illinois, 354 111. 102, 187 N. E. 823 .. 14

Sperry v. State of Florida, 373 U. S. 379 .................... 36
Swift & Company v. IT. S., 196 U. S. 375 ...................  30

Virginia Brotherhood (377 U. S. 1, April 20,
1964) ........................................................................30,31,33

Constitution, Statutes and Canons of Ethics.
Canons of Ethics of the Illinois State Bar Association 1-2 
Constitution of the United States:

First Amendment .......................................................... 1
Fourteenth Amendment ..............................................  1

Hurd, 111. Rev. Stat. 1915, § 1 5 3 ....................................  26
Labor Management Relations Act, 29 U. S. C. A.,

§141 ...........................................................................2,22,23
111. Rev. Stat. 1963, Ch. 48, § 138.19 ............................. 25
111. Rev. Stat. 1963, Ch. 63, § 1 4 ....................................  24
Illinois Workmen’s Compensation Act, Illinois Revised 

Statutes (1959), Ch. 48, §138.19 (1) (2), 138.19 (c), 
§138.16 ................................................................2,17,21,22

Miscellaneous.

Carlin and Howard, Legal Representation and Class
Justice, 12 U. C. L. A. L. Rev. 381, 386 .................  19

Carlin, Ethics and the Legal Profession (1965) ...........  19



No. 33.

T H E

SUPREME COURT OF THE UNITED STATES.

OCTOBER TERM , 1967.

UNITED M INE WORKERS OF AM ERICA, DISTRICT 12, 
Petitioner,

vs.

ILLINOIS STATE BAR ASSOCIATION, an Illinois Not for Profit Corpora­
tion, CURTIS F. PR ANGLEY, BERNARD H. BERTRAND, W ILLIAM FECHTIG, 
KOREAN MOVSISIAN, HENRY W. PHILLIPS, WILLIAM C. NiCOL, JOHN 
W. HALLOCK, WATTS C. JOHNSON and M ARSHALL A. SUSLER, Indi­
vidually and as Members of the Committee on Unauthorized Practice 

of Law of the Illinois State Bar Association,
Respondents.

On Writ of Certiorari to the Supreme Court of the State of Illinois.

BRIEF OF RESPONDENTS
Illinois State Bar Association and Its Individual Members 

of the Committee on Unauthorized Practice of Law.

CONSTITUTIONAL, STATUTORY PROVISIONS AND 
CANONS OF ETHICS INVOLVED.

Pertinent constitutional provisions consisting of the 
First and Fourteenth Amendments to the Constitution 
of the United States; Canons of Ethics of the Illinois



2 —
State Bar Association; Illinois Workmen’s Compensation 
Act, Illinois Eevised Statutes (1959), Ch. 48, § 138.19 
(1) (2), 138.19 (c), § 138.16, and 29 U. S. C. A., § 141, 
Labor Management Relations Act, are involved (Appen­
dix A).

QUESTIONS PRESENTED.

The Respondents adopt Nos. 2, 3 and 4 of this section 
as stated by Petitioners, but object to portion of No. 1 
insofar as it asserts that the attorney’s salary was paid 
by the Union from membership dues. The record refutes 
that statement (R. 15). In sworn answers to interroga­
tories, the Union responded: “ No portion of dues is allo­
cated to pay attorneys’ salary” .



STATEMENT OF THE CASE.

The legal proceeding in this case began with the filing 
of a complaint in the Circuit Court of Sangamon County, 
Illinois, wherein, the Illinois State Bar Association, and 
members of its Unauthorized Practice of Law Committee, 
as plaintiffs, brought suit against the United Mine Work­
ers of America, District 12, as defendants (R. 1-4). The 
pleadings alleged that the Illinois State Bar Association 
(hereinafter referred to as “ Bar Association” ) is a not- 
for-profit corporation organized for the purpose of estab­
lishing and maintaining the honor and dignity of the 
courts and of the profession of law, the protection of the 
public, the fostering and promoting of a high standard 
of professional ethics, and the due administration of 
justice in all courts in the State. The United Mine Work­
ers of America, District 12, is a labor union, and appeared 
in court in response to the complaint in the name of 
Joseph Shannon, a member of District 12, and all members 
of said association made parties by representation. The 
complaint charges the Union has been engaged in the 
practice of law in Illinois by employing an attorney on 
a salary basis for the purpose of representing its members 
with respect to their individual claims for compensation 
under the provisions of the Workmen’s Compensation Act 
of the State of Illinois. The complaint further charged 
that the Union is not and cannot be licensed to practice 
law in the State of Illinois, and despite its lack of au­
thority has offered, furnished and rendered legal services 
and advice. These activities are charged to be, among 
other things, contrary to public policy, and “ not only 
tend to degrade the legal profession and to bring the 
same into bad repute in the administration of justice, but 
also tend to mislead and defraud the public.” The Bar 
Association in conclusion sought an injunction restraining 
and enjoining the defendant, its agents or employees from:



1. Giving legal counsel and advice.

2. Rendering legal opinions.

3. Representing its members with respect to Work­
men’s Compensation claims and any and all other 
claims which they may have under the statutes and 
laws of the State of Illinois.

4. Practicing law in any form either directly or 
indirectly.

5. Advertising, advising or holding itself out to 
members or others as practicing law or as having 
a right to practice law.

6. Charging or collecting fees, commissions or pay­
ments or apportioning dues of members in any form 
for legal services.

Defendant, acting through Joseph Shannon, a member 
of District 12, United Mine Workers of America and all 
the members of the association made parties by repre­
sentation, then moved the Court for an order directing the 
Bar Association to make the complaint more definite and 
certain as to the allegation that defendant, on occasion, 
filed claims with the Industrial Commission for and on 
behalf of a member without obtaining the member’s per­
mission, authorization or approval (R. 5). In response 
to an order entered on this motion the Bar Association 
pleaded that one Elery D. Morse, East Walnut Limits, 
Canton, Illinois, a UMW member was injured on July 18, 
1961, in the course of his employment. In March, 1962, 
Morse retained the services of Claudon and Elson, attor­
neys, 21 W. Elm Street, Canton, Illinois, to file his appli­
cation for adjustment of claim in regard to his claim 
against the Midland Electric Coal Corporation with the In­
dustrial Commission of Illinois. On June 28, 1962, Claudon 
and Elson filed an application for adjustment of claim 
for Mr. Morse, Case No. 712,133, before the Industrial



Commission. One month later, on July 23, 1962, M. J. 
Hanagan, salaried attorney for United Mine Workers Dis­
trict 12, filed a similar application for Elery Morse, Case 
No. 713,647, without Morse’s consent, approval, authori­
zation, and without knowledge of the previous application 
having been filed (B. 6).

An answer by the Union was filed admitting the general 
allegations relating to the Bar Association and its individ­
ual members, and the existence of the Union. The Union 
denied it was engaged in the practice of law, but admitted 
the employment of an attorney on a salary basis for the 
sole purpose of representing the members in their individ­
ual claims before the Industrial Commission of the State of 
Illinois. The pleading denied filing without a member’s per­
mission, and as to the pleaded facts relating to Elery 
Morse, denied same, and stated further, that, even if true, 
such matter was immaterial to this case. It was further 
admitted that as an association it is not and cannot he 
licensed to practice law in Illinois. All other matters 
pleaded were likewise denied (E. 7-8).

The Union moved to strike the portions of the pleadings 
referring to the Elery Morse incident and for judgment 
on the pleadings (R. 8-10). This motion was denied by 
the trial court. The Union, one week later, filed a motion 
for reconsideration of the order denying motion for judg­
ment on the pleadings stressing a violation of Section 19, 
of Article 2 of the Constitution of the State of Illinois and 
of the rights allegedly guaranteed the Miners by the First 
and Fourteenth Amendments of the Constitution of the 
United States. After hearing, this likewise was denied 
(E. 11).

Interrogatories were filed by the Bar Association and 
served upon the defendant’s attorney (R. 55-62). Objec­
tions were made to the interrogatories and some were 
eliminated by order of court.



— 6

In the answers to plaintiffs’ interrogatories, the officers 
of the Union were identified. I t  was disclosed that the 
Union had 8500 working members. It had offices in Spring- 
field, Taylorville, DuQuoin and West Frankfort, Illinois. 
On legal aid, information was supplied naming an inter­
national special representative from Lewistown, a district 
special representative from Thompsonville, two secre­
taries (one in Springfield and one in West Frankfort) and 
the added information that local unions designate an 
officer or member to “assist other members in preparing 
and filing reports of accidents occurring in mines over 
which they have jurisdiction”. The salaried attorney was 
identified as Stuart J. Traynor of Taylorville, Illinois, and 
it was stated that members by themselves or with assist­
ance of someone in the local union prepare, sign and file 
for the attorney, either in Springfield or West Frankfort, 
a report of accident.

Attached to the answers and made a part thereof were 
three exhibits. Exhibit “A” was a Report to Attorney on 
Accident, Exhibit “B” was a letter from the union a t­
torney to local Union officers and members, and Exhibit 
“C” was a letter from the president to the same people 
written four years later (Appendix B).

The Union admitted that the present attorney does not 
see and interview each injured member before starting a 
claim.

Stuart Traynor, up to date of answers to interroga­
tories, (January, 1964 to February 2, 1965) had filed 590 
applications for adjustment of claims, had concluded 637 
files, and had collected $737,998.27 for the injured miners 
or their families. William D. Hanagan, serving only an 
interim term, filed only 20 applications for adjustment of 
claim, settled 87, and collected $100,723.24. His father, 
M. J. Hanagan, who held the position of salaried attorney 
for many years, from January 1, 1961 until his death in



— 7-

June of 1963, filed 1318 applications, concluded 1328 
claims and collected $1,859,640.65.

The interrogatories, further disclosed, that M. J. Hana- 
gan received a salary of $12,400 plus $2,236.54 expenses 
for a total of $14,436.54 in 1961; a total of $14,954.79 in 
1962 and until his death in 1963, the sum of $7,044.16  ̂
William D. Hanagan received a salary of $3,099.96 and 
expenses of $323.05, for a total of $3,423.01. Stuart J. 
Traynor from January through November, 1964, earned 
a salary of $11,366.68 and received expenses of $1497.60 
for a total of $12,864.28.

At a meeting of the Executive Board of the Union on 
August 5, 1963, a motion was made and passed unani­
mously authorizing the acting president, Joseph Shannon, 
to make arrangements with Stuart Traynor of Taylor- 
ville, Illinois for the purpose of retaining him “to handle 
District 12 compensation cases.”

Dues of each member have been $5.25 per month since 
November 1, 1964, but no portion of the dues is allocated 
to pay attorneys salary.

In addition to interrogatories submitted to defendant, 
the deposition of Stuart J. Traynor was taken (R. 31-54). 
In answer to questions, he advised that he was employed 
by the United Mine Workers of America, District 12, 
since October 1963, with direction and authorization to 
represent members of District 12 in claims for Work­
men’s Compensation Benefits under the Illinois Workmen’s 
Compensation Act. He disclosed his salary of $12,400 a 
year, that he is responsible and obligated to represent 
miners, no matter how many may have claims during any 
particular year, and his salary neither increases or de­
creases based on number of claims handled. The union 
never requires him, as part of his employment to do 
work outside the State of Illinois. He does not consider



himself hired to render legal advice on the running of 
District 12 or any of its internal affairs. His main func­
tion is to represent individual members when that person 
is hurt in a mining accident wherein he would qualify 
under the Workmen’s Compensation Act of the State of 
Illinois. He maintains an office at Taylorville, for his 
services with the United Mine Workers, and the Union 
maintains office space at Springfield and West Frank­
fort. I t  is generally known among the members of the 
Union that they have a lawyer available to them for the 
purpose of presenting their claim before the Industrial 
Commission and this is true whether or not they know 
him personally. Because of his residence in Taylorville, 
a considerable distance from West Frankfort, he would 
not be one of the lawyers in the West Frankfort area 
with whom the members would be personally familiar. 
Most applications for adjustment of claim are signed 
outside of his presence. The miner can obtain the Report 
to Attorney form at the mine and need not go to either 
of the two offices, but sends it in. A secretary then fills 
out the application without the man being present and 
the attorney signs it. Traynor acknowledged that he 
could not find any language in the Report to Attorney 
that in any way instructs him to file a claim or hires him 
to do so as an individual. The application is sent in to 
the Industrial Commission, after a secretary signs the 
attorneys name on the form and at the time of this 
filing, in most instances, he has not seen the injured em­
ployee. The member secures all the medical reports for 
the attorney, either from the company doctor or from 
someone else, if the member is in need of further medical 
attention. In preparing for a hearing before an Arbi­
trator he does not send out advance notice for a confer­
ence with the injured miner before the hearing. Some 
drop in and see him ahead of time, but if they did not, 
the first time the attorney would see him would be the 
day of the hearing at place of the hearing. He confers



— 9 —

with the coal company lawyer and if they agreed as to 
the figure of settlement, a settlement contract is pre­
pared and presented, otherwise they have a hearing be­
fore the Arbitrator for his decision. Although he has 
represented miners for private matters in his three 
county areas, he has never represented miners from the 
West Frankfort area for their private purposes. This 
individual representation has been more in the probate 
field than anything else.

He received his first contact from the Union in August, 
1963 when he was told Mr. Shannon would like to talk 
to him. He was told it was necessary for the Union to 
hire an attorney to carry on the work of Mr. Hanagan. 
The next event was his receipt of a letter dated Sep­
tember 26, 1963, from Mr. Shannon advising him that he 
had been hired.

There was an error in the original answers to interro­
gatories which are corrected as follows:

14 (d) $737,998.27.

This change is due to fact that from October to Decem­
ber of 1963, he filed 174 applications for adjustment of 
claim in his name and closed 150 cases for a total 
recovery of $209,113.14.

Subsequently, the plaintiffs moved to strike paragraph 
7 from their pleadings and the same was allowed.

After the pleadings were settled, the intenrogatories an­
swered and the deposition of Stuart Traynor accomplished, 
the United Mine Workers filed a motion for summary de­
cree and, upon receipt thereof, the Illinois State Bar As­
sociation countered with their own motion for summary 
judgment. These motions were heard by the Honorable 
Creel Douglas, Chief Judge of the 7th Judicial Circuit, 
State of Illinois, and on September 7, 1965, he entered an



—  10 —
order denying the relief sought by the United Mine Work­
ers of America, District 12, and granted the motion of the 
Illinois State Bar Association, and thereby enjoined the 
United Mine Workers from doing any of the following 
acts

1. Giving legal counsel and advice.

2. Eepresenting its members with respect to Work­
men’s Compensation claims and any and all other 
claims which they may have under the laws and stat­
utes of the State of Illinois.

3. Eendering legal opinions.

4. Employing attorneys on salary or retainer basis 
to represent its members with respect to Workmen’s 
Compensation claims and any and all other claims 
which they may have under the statutes and laws of 
Illinois.

5. Practicing law in any form either directly or in­
directly.

The Union took an appeal to the Illinois Supreme Court, 
whose decision affirmed the holding of the Circuit Court. 
I t  is from this Illinois Supreme Court opinion that the 
United Mine Workers, District 12, have sought a writ of 
certiorari in this court which was granted February 27, 
1967.



— 11

SUMMARY OF ARGUMENT.

The Illinois Supreme Court has consistently held that 
not-for-profit organizations which hire lawyers to repre­
sent their members are engaging in the unauthorized prac­
tice of law. The question of representation of union mem­
bers by preselected attorneys was not new to Illinois when 
the Mineworkers suit was instituted. In 1958, the Illinois 
Supreme Court in In re Brotherhood of Railroad Trainmen, 
13 111. 2d 391, 150 N. E. 2d 163, condemned the financial 
payback by the attorney to the union out of fees collected, 
but recognized the right of the union to recommend to its 
members the advisability of obtaining legal advice before 
making a settlement, and giving the names of attorneys 
who, in its opinion, have the capacity to handle such claims 
successfully.

After this decision, the Committee on Unauthorized 
Practice of the State Bar, in meetings held with minework­
ers’ representatives, urged the union to desist from its 
salaried lawyer arrangement and to follow the guidelines 
of recommendation of legal counsel as spelled out in the 
Illinois Brotherhood case. They refused to change their 
programs and, after all reasonable efforts failed, the Illi­
nois State Bar Association instituted the present litigation 
to enjoin such practice. Repeated efforts, throughout the 
proceedings, were made to urge the United Mine Workers 
Union to change to the recommendation system. They 
continued their refusal.

The type of representation, with the volume of claims 
involved, was not conducive to the best interests of the 
public. The record does not support their claim that the 
plan insured competent and loyal legal counsel for the 
individual miner.

The claim of prohibition of attorneys’ fees in compen­
sation cases in Illinois is not supported by the statutory



—  12 —

law of the State, but, on the contrary, specific provisions 
of the Workmen’s Compensation Act not only permitted 
attorneys’ fees, but provide that they shall be regulated 
by the Industrial Commission.

The general language of the part of the Labor Manage­
ment Relations Act dealing with “ other mutual aid or 
protection” does not carry with it the right to usurp the 
authority of the Illinois Court to regulate and control the 
practice of law. The Congressional declaration of purpose 
and policy, as contained in Section 141 of the Act, does 
not include the individual rights of the members of the 
union, unrelated to the common purpose.

Professional Ethics opinions of the American Bar As­
sociation support the position taken by Illinois in this 
factual situation.

The injunctive decree was proper in all of its terms 
and was necessary for the protection of the public, who 
in this case is the individual miner.

Finally, the decision of the Illinois Supreme Court does 
not deny the petitioner union any constitutionally pro­
tected right, nor does the State decision conflict with any 
decision of this Court. The protection of the public and 
the assurance of the proper attorney-client relationship 
is the sole and only purpose for the existence of a State 
unauthorized practice of law committee, and its action 
here was necessary to enforce State protected rights of 
the public.

There was a compelling State interest that required the 
action of the committee and, finally, the ruling of the 
Illinois Supreme Court. This was not some vague un­
identifiable right that was being protected, but a sub­
stantial right of the State to control the practice of law 
within its border. There was no invasion of the indi-



— 13 —

vidual miner’s right of freedom of expression and associa­
tion. I t was because of its profound duty to the public 
that Illinois concerned itself with (1) the preservation of 
the integrity of the attorney-client relationship, (2) de­
termination that Federal constitutional provisions of free 
expression and association are not infringed by the court’s 
control of professional conduct and the protection of the 
public, and (3) the prevention of substantial commer­
cialization of the law profession. The Illinois Supreme 
Court is not attempting to regulate conduct involving the 
application of a Federal law, such as the Safety Appliance 
Act, the Federal Employer’s Liability Act, or the practice 
before the United States Patent Office, but the Illinois 
decision merely limited its curtailment of the union’s con­
duct to State protected rights only.

The decision of the lower court should be affirmed.



— 14 —

ARGUMENT.

The Decision Below Is Clearly Correct.

It is basic to This Court’s consideration of the Brief 
of Petitioner’s, United Mine Workers of America, District 
12, that it be advised of the long history of Illinois Su­
preme Court pronouncements as to what constitutes the 
unauthorized practice of law within the State of Illinois. 
This court has consistently held that organizations, includ­
ing not-for-profit organizations, which hire lawyers to 
represent their members are engaging in the unauthorized 
practice of law. People ex rel. Courtney v. Association 
of Real Estate Taxpayers of Illinois, 354 111. 102, 187 
N. E. 823; People ex rel. Chicago Bar Association v. The 
Motorists Association of Illinois, 354 111. 595, 188 N. E. 
827; People ex rel. Chicago Bar Association v. Chicago 
Motor Club, 362 111. 50, 199 N. E. 1.

The Chicago Motor Club case sets forth the position 
of Illinois as to the activities of a service organization 
when it said on pages 56-57:

“ By way of exception to the findings of the com­
missioner, respondent claims there is no admission 
in the record that it solicited memberships for the 
purpose of performing legal services; that the cor­
poration itself performed no legal services; but such 
as were in fact performed were by lawyers engaged 
by respondent for its members pursuant to authority 
received by it from them; that such legal services 
were paid for out of dues collected by respondent 
from its members as their representative and agent. 
It is further contended that respondent is not engaged 
in the practice of law within its ordinarily accepted 
sense, but that its legal functions are only a part



15

of its many-sided activities as a service organization 
whose members have a common interest. However 
beneficial its many other purposes and services seem 
to be to its members and to the public generally, 
we cannot condone the advertisements and solicitations 
of memberships by respondent and its admission that 
it was only acting as agent in rendering legal services 
for its members without abandoning the rules laid 
down in several recent cases governing such practices. 
While the case of People v. Peoples Stock Yards 
Bank, 344 111. 462, is distinguishable from the present 
case in many respects, yet the fundamental principle 
was there expressed ‘a corporation can neither prac­
tice law nor hire lawyers to carry on the business 
of practicing law for i t ’ (emphasis ours). When the 
Chicago Motor Club offered legal services to its mem­
bers with the statement, ‘should you be arrested for 
an alleged violation of the Motor Vehicle law, you 
may call the legal department, and one of our attor­
neys will conduct your defense in court,’ it was 
engaging in the business of hiring lawyers to prac­
tice law for its members. This we have repeatedly 
condemned in Illinois. (People v. Peoples Stock 
Yards Bank, supra; People v. Motorists Ass’n, 354 
111. 595; People v. Real Estate Taxpayers, 354 id. 
102.) Other jurisdictions have reached the same or 
similar conclusions in recent cases. (Goodman v. 
Motorists Allliance, 29 Ohio N. P. K. 31; In re Morse, 
98 Vt. 85, 126 Atl. 550; In re Opinion of the Justices, 
194 N. E. (Mass.) 313; Rhode Island Bar Ass’n, 179 
Atl. (R. I.) 139 (decided May 9, 1935.) The fact 
that respondent was a corporation organized not for 
profit docs not vary the rule. People v. Real Estate 
Taxpayers, supra.”

Legal services cannot be capitalized for the profit 
of laymen, corporate or otherwise, directly or indi­
rectly, in this State. In practically every jurisdiction



16

where the issiie has been raised it has been held that 
the public welfare demands that legal services should 
not be commercialized and that no corporation, asso­
ciation or partnership of laymen can contract with 
its members to supply them with legal services, as 
if that service were a commodity which could be 
advertised, bought, sold and delivered (emphasis 
ours).

The Illinois Mineworkers Opinion (E. 94-105) and the 
Appellee’s brief filed in the Illinois Supreme Court (R. 
63-94) fully develop the court-announced concept of un­
authorized practice of law in Illinois by unincorporated 
associations. This problem is not new nor is it prospective 
with the Illinois Court or the organized bar of the State 
of Illinois. The Committee on Unauthorized Practice of 
the State Bar for many years has considered these prob­
lems, including the salaried lawyer arrangement of United 
Mine Workers, District 12, and has taken court action 
in stopping such practices (R. 77-83).

This question of representation of union members by 
elected attorneys was not new to the Illinois Supreme 
Court when the mineworkers suit was initiated. In 1958, 
the Illinois Supreme Court handed down its opinion in 
In re Brotherhood of Railroad Trainmen, 13 111. 2d 391, 
150 N. E. 2d 163. While condemning the financial pay­
back by the attorney to the union out of fees collected, 
that court readily recognized the right of the union to 
recommend to its members generally, and, to injured 
members or their survivors in particular, first: the ad­
visability of obtaining legal advice before making a set­
tlement; and second: the names of attorneys who, in its 
opinion, have the capacity to handle such claims success­
fully (13 111. 2d 391, 398).

Immediately following this pronouncement by our court, 
the Illinois State Bar Association Unauthorized Practice



— 17

of Law Committee, in meetings held with the mineworkers’ 
representatives, urged that union to desist from its sal- 
ai’ied lawyer arrangement and follow the guidelines of 
recommendation of legal counsel approved by the Illinois 
Court in its Brotherhood case. In 1964, after all reason­
able efforts failed, the Bar Association, acting through 
its committee, initiated the present litigation. Through­
out the course of the litigation, at every appearance before 
the judges of the Circuit Court of Sangamon County, 
and, even before the Supreme Court, in our brief (R. 
72-3, 92) as well as in oral argument, this Bar Associa­
tion, through its counsel, offered to dismiss the suit if 
the salaried lawyer arrangements were abandoned and 
a proper recommendation plan substituted. This the union 
was unwilling to do.

The State Bar is interested in seeing that union mem­
bers obtain “ competent and loyal legal counsel” (R. 72-3), 
but We are not convinced that the plan now in effect 
accomplishes such purpose. On the contrary, the record 
herein belies such claim. It is axiomatic that not all 
claims or suits brought before administrative tribunals 
or courts are correctly decided at the lowest level. For 
this reason, appellate procedures are an inherent part of 
our judicial system. The rulings of the Industrial Com­
mission are subject to review in the Circuit Courts of this 
State, and, from there, to our Supreme Court (111. Rev. 
Stat. 1959, Ch. 48, Sec. 138.19 (1) (2)). The fundamental 
duty of an attorney involves undiluted loyalty to the client 
whom he serves and whose interest he protects (Illinois 
State Bar Association v. United Mine Workers, District 
12, 35 111. 20, 112, 219 N. E. 2d 503 (1966)). It follows, 
without question, that this duty extends to the maximum 
representation of his individual client’s interest. An anal­
ysis of the Workmen’s Compensation cases which reached 
the Supreme Court of the State of Illinois for a thirty-one 
year period (1936-1967) contained in volumes published



- 1 8

by the ofBcial Reporter, discloses that 351 compensation 
cases were decided. Of this total, 252 thereof were appeals 
initiated by employers, 99 were pursued by employees. 
In that number only 11 cases were appealed by the coal 
mining companies and 10 by the miner. Of this group of 
21 cases, only 5 originated involving United Mine Work­
ers, District 12. ̂  Four of those appeals were filed by the 
coal mining companies and only one by a miner affiliated 
with the Petitioners herein. I t is further significant that 
the last appeal by the mineworker was in 1942. During 
the above referred to thirty-one year period, the rates of 
recovery for specific injury were increased several times 
by statute, the last time being in 1963, before this liti­
gation commenced. Yet, the salaried lawyer, in the cal­
endar year 1964, recovered less on the average than his 
predecessor, even though he was practicing before the 
Commission when the rates were at a higher level (R. 
53-4, 58-60). In the years 1964-66, during the pendency 
of this litigation, we find there was a substantial increase 
of appeals to the Supreme Court originating from this 
Administrative Agency due to the adoption of Illinois ’ new 
Judicial Article on January 1, 1964, which made appellate 
procedures more simplified and expeditious. Ninety-nine 
(99) compensation cases were taken by appeal to that 
court, of which seventy-nine (79) were advanced by the 
employer and twenty (20) by the employee. Not a single 
case involving a United Mine Workers, District 12 mem­
ber, either as petitioner or respondent, reached our high­
est court in that period. Is this evidence of “ competent 
and loyal legal counsel” so vital to the individual interest 
of the miner! We cannot believe that this salaried law-

1 Beckemeyer Coal Co. v. Ind. Comm,, 370 111. 113 (1938); 
John Florczak v. Ind. Comm., 381 111. 117 (1942); Franklin 
County Coal Co. v. Ind. Comm., 398 111. 528 (1948); Chicago, 
Wilmington & Franklin Coal Co. v. Ind. Comm. (Sarafin), 399 
111. 76 (1948); Chicago, Wilmington & Franklin Coal Co. v. Ind. 
Comm. (Matchek), 400 111. 60 (1948).



-- 19

yer arrangement has fully advanced legitimate legal claims 
of the mineworker. On the contrary, when considered 
with the volume of cases handled by this salaried attorney 
per year (R. 54) we cannot help but feel that, in the in­
terest of expediting his work load, he most likely has dealt 
with the coal mining company’s lawyers on a volume 
basis (sometimes called “ wholesaling files” ), and it would 
seem a logical conclusion that the individual minework­
e r’s injury claim has been compromised at a figure far 
below what might have been secured if the mining com­
pany lawyer was dealing with independent attorneys. He 
becomes no better than the personal injury lawyer-broker 
who deals in volume with the insurance company and 
trades cases as a package deal, rather than by considering 
the injury aspect of each individual file.^

In Illinois, many attorneys are highly competent and 
successful practitioners before the Industrial Commission 
of the State of Illinois. There is absolutely no shortage of 
lawyers who are willing, ready and able to handle Work­
men’s Compensation cases of the union members. (The 
section on Workmen’s Compensation of the Illinois State 
Bar Association has enrolled 969 officers and members.)"- 
I t is highly significant that nowhere in this record is there

2 Carlin, Ethics and The Legal Profession (1965); Carlin and
Howard, Legal Representation and Class Justice, 12 U C L A 
L. Rev. 381, 386. . . . .

3 Records of the Illinois State Bar Association reveal that of 
these 969 members who by their membership in the Section show 
their interest in compensation matters, 400 practice in Chicago, 
85 in Cook County, exclusive of Chicago. The three counties 
surrounding Cook—62; the next eight counties away from Cook 
—68; next six counties—47; the next fifteen—83; the next six­
teen counties 77; the next 14—45; the next 30, comprising 
Southern Illinois below Route 40—46; and the popular seven 
counties adjacent to St. Louis, Missouri—56. It is not intended 
that this list number only those attorneys who can competently 
handle a workmen’s compensation claim, but it is indicative of 
the large percentage of the lawyers practicing in Illinois who 
are available.



—  20  —
a word of testimony, nor a single affidavit tiled by the 
petitioners that any member of the union, for any reason 
whatsoever, was unable to find competent, individual at­
torneys to handle their claims. If such fact were true, 
most certainly the petitioners would have filled the trial 
court record with proof thereof, by depositions, or affi­
davits to this effect, before asking for a summary decree. 
Only if such circumstances existed in Illinois, could our 
factual situation be considered to parallel the Button (371 
U. S. 415) case. Without it, their hue and cry of prece­
dence vanishes.

A. An attorney may charge a fee for services rendered 
in handling Workmen’s Compensation Act cases.

The Petitioner, in its brief, would have this court believe 
that a principal objective of the Workmen’s Compensation 
Act was to assure that no one take anything out of an 
award except the injured person or his dependents, if he 
was deceased (Pet. brief 36-7). Reliance for this statement 
is upon a section of the Statute which prohibits an award 
to be assignable or subject to any lien, attachment, or 
garnishment. The meaning attached to this section is 
extended by Petitioner to exclude an attorney charging a 
fee for services rendered in a compensation case. The 
cases relied on, however, all refer to depleting the pay­
ments of an award because of a lien or charge from an­
other source. In quoting from Lasley v. Tazewell Coal Co., 
223 111. App. 462, a 1921 decision, it is significant to note 
that the Appellate Court found against an attorney assert­
ing a lien against the coal company for his fee after ob­
taining an award from the Industrial Commission. This is 
apparent by the following language from the opinion:

‘ ‘ There is nothing in the other sections of the Act which 
in any way conflicts with the provision referred to,”  that 
the Appellate Court did not review the entire Act. The 
Workmen’s Compensation Act has and does provide for



21

the awarding of attorneys fees (111. Rev. Stat. 1965, Ch. 48, 
Sec. 138.16).

The section as to liens referred to by Petitioner was 
included in the original Act of 1912, and, it is conceded 
that the section on Rules did not contain any reference to 
attorneys fees until June 28, 1915, when the following 
was added:

“ The Board shall have the power to determine the 
reasonableness and fix the amount or any fee or com­
pensation charged by any person, for any service per­
formed in connection with this Act, or for which pay­
ment is to be made under this Act, or rendered in 
securing any right under this Act. Hurd, 111. Rev. 
Stat., Ch. 48, Sec. 141 (1915). The words ‘including 
attorneys, physicians, surgeons and hospitals’ were 
added in 1925 immediately following the phrase ‘or 
compensation charged by any person.’ ”

As both sections were part of the Workmen’s Compen­
sation Act in 1921, and, still appear in that Act, the 
Appellate Court, in Lasley were either uninformed or, by 
nature of these provisions, merely limited its decision to 
a prohibition of enforcing an attorneys lien against the 
employer. All attorneys fees are fixed by the Industrial 
Commission and are carefully and judiciously controlled.^ 
I t is common knowledge that the maximum fee allowed 
is 20%. However, rarely does the Commission approve 
fees of that size and most fees awarded are substantially

4 People ex rel. Chicago Bar Assn. v. Lally, 313 111. 21, 144
N. E. 329 (1924) :

“The administration of the Workmen’s Compensation Act 
is put in the hands of the Industrial Commission. It fixes 
the amount of compensation to be paid and the amount of 
attorneys’ fees or compensation rendered for any service 
under the Act. Beneficiaries of the Act are under the pro­
tection of the Commission, and they can waive none of the 
provisions of the Act in regard to compensation.”



■ 22 -

less. It should also be mentioned that the maximum fee 
approved in a death case is 10%.

The law recognized that attorneys fees would and could 
he charged and are subject to the review of the Commis­
sion, when it in Section 19 (c) of the Act, in part, stated: 

“The fees and payment thereof of all attorneys and 
physicians for services authorized by the Commission 
under this Act, shall, upon request of either the 
employer or the employee or the beneficiary affected, 
he subject to the review and decision of the Com­
mission.” Ch. 48, Sec. 138.19 (c).

The Petitioners claim that the mineworkers opinion in 
this instant case conflicts with public policy as expressed 
by the Legislature is an exercise in fallacious reasoning. 
I t is self evident that the section on liens, attachments 
and garnishments cannot be read to contain a prohibition 
of attorneys fees for professional services.

B. The Labor-Management Relations Act does not 
authorize or have within its purview the union salaried 
lawyer arrangement considered by the Illinois Supreme 
Court.

The mineworkers, throughout the entire course of this 
litigation, have endeavored to place unwarranted sig­
nificance upon very general language contained in Section 
157 of the Labor Management Relations Act (29 U. S. 
C. A., 141-157). The section relied upon, after stating the 
right of employees to organize and to collectively bargain 
contains what petitioner believes to be an all inclusive 
catch-all phrase:

“and to engage in other concerted activities for the 
purpose of collective bargaining or other mutual aid 
or protection . . . ”

To this language the union claims authority for it “to 
make wise provision in advance for competent and loyal



■ 23 -

legal assistance” in the event of disabling injury or death 
arising out of and in the course of member’s employment. 
This assumes that because coal mining is hazardous, its 
members need free legal service and that its appointment 
of one man to handle all its members claims insures com­
petent and loyal legal assistance.® The facts and the 
records of the Department of Mines & Minerals of the 
State of Illinois refute each claim.®

It is common practice among attorneys handling claims 
before the Industrial Commission not to accept as final

® “We find nothing to suggest that Congress intended hy the 
Railway Labor Act, any more than by the Labor Manage­
ment Relations Act (29 U. S. C. A. 141), to overthrow 
State regulation of the legal profession and the unauthor­
ized practice of law.” In re Brotherhood of Railroad Train­
men, 13 111. 2d 391, 395.

29 U. S. C. A., § 141, specifically sets forth the purposes and 
policy of the Labor-Management Relations Act. None of the 
provisions thereof encompass the right to furnish a salaried 
lawyer to handle individual claims of the members.

® The Director of Mines and Minerals of the Department of 
Mines and Minerals of the State of Illinois stated in the Illinois 
Blue Book, 1963-1964, that the mineral industry in Illinois, of 
which the chief mineral mined is coal, exceeds a gross dollar 
revenue of $600,000,000 per year. Illinois continued as fourth­
ranking coal producing state in the nation, producing more than 
11 per cent of all coal. Its value in 1962 was $186.6 million. 
In 1965, coal produced had a value of $218,977,345.00 (Illinois 
Blue Book, 1965-1966). The State of Illinois is endowed with 
the largest known coal reserves in the nation. It is estimated 
that 137 billion tons of coal remain in the ground in seams of 
minable thickness, which at the present rate would take over 
1000 years to exhaust (Illinois Blue Book, 1965-1966). The 1966 
Annual Coal, Oil and Gas Report of the Department of Mines 
and Minerals, page 16, Table 2, “General Statement with Com­
parative Figures, 1962-66”, although showing a decline in the 
number of mines operating (from 116 to 84), shows a 15 million 
ton increase in coal output, an increase in the number of miners 
working from 8774 to 8994, and an increase in average days 
worked from 182 to 200 days. Still another statistical chart, 
“Labor and Employment—Table 17”, reflects upon petitioner’s 
claims. In this chart, it compares fatal and non-fatal accidents 
for 38 years. Since 1962, the report shows an average per year 
of 430 to 485 fatal and non-fatal accidents.



— 24 —

and unimpeachable the medical reports of the company 
doctor, hiach injured employee is submitted for physical 
examination and possible treatment to a specialist who is 
called upon to give a report as to his condition, often 
bases on percentages to aid the Arbitrator on making an 
award within the purview of the Statute. By this method, 
the lawyer is assured that the employee will present to 
the Commission the opinions of others than company 
doctors, and advances the rights and, by its very nature, 
increase the amount that is to be awarded. This is not 
the customary practice of the salaried union counsel. This 
is a rarity rather than the ordinary course of procedure 
(E. 42).

Because of the volume of claims that this one attorney 
must handle (430-485 per year), it is obvious that a thor­
ough and conscientious handling would consume all of 
his time, and in all probability if studied and presented 
on an individual basis, instead of a mass production tech­
nique, would probably reduce substantially the number 
of claims concluded each year. This volume needs the 
undivided attention of the single attorney, yet, we find 
Stuart Traynor was a State Senator and had a private 
practice other than the mineworkers’ representation (R. 
31, 41). I t is well known that a Senator must spend a 
minimum of three days, usually Tuesday, Wednesday and 
Thursday, in the State Capitol representing his constitu­
ents during a legislative session. These sessions last from 
7 to 8 months beginning in January. Illinois Blue Book 
1963-64, 1964-5, 1965-6. This leaves but 5 months, includ­
ing part of the summer, to handle the volume previously 
mentioned. His salary per annum as a legislator is Nine 
Thousand ($9,000.00) Dollars, almost equal to his pay 
from the Union.'^ The Industrial Commission sends arbi­
trators to various locations throughout the State on a

T Til. Rev. Stat. 1963, Ch. 63, § 14.



— 25 —

regular basis to hear the cases.® Many of these locations 
are in the center of coal mining areas and are removed 
from Springfield, the State Capitol, by several hundred 
miles (R. 43-45). Thus, the mine workers’ attorney cannot 
do justice to his mineworker representation if he is to 
adequately represent his constituents. By the same token, 
he cannot do justice to his Senatorial position, if he spends 
more of his time representing the mineworkers. Look at 
the practicalities of the dilemma of Mr. Traynor. Because 
the Legislature meets every other year, he must subvert 
the interest of the mineworker for at least 7 months of 
that period in order to perform his public functions. This 
is not evidence of “ competent and loyal legal assistance” .

The Supreme Court of Illinois, having pride in its con­
tinuing efforts to protect the public and to regulate the 
legal profession, was forced by the factual situation pre­
sented to it in the mineworkers case to reach its an­
nounced conclusion. To have done otherwise would have 
avoided the duty it has as the highest judicial body in 
the State and its obligation to protect the public. We 
have repeatedly stated that the individual miner is the 
public in the eyes of the Illinois Supreme Court, and he 
does not lose that identity merely because he is a member 
of a union.

C. Petitioners’ arguments run contra to facts as well 
as opinions of committees on professional ethics. Its 
analogies are wanting in support.

The Union’s explanation that a legal department had 
to be started because the “ interests of the members were 
being juggled and, even when not, they were required to 
pay forty or fifty per cent of the amounts recovered in 
damage suits, for attorneys” (R. 14). This cry arose 
within one year after the creation of the Industrial Com-

8 111. Rev. Stat. 1963, Ch. 48, § 138.19.



• 26 -

mission and before it had a chance to operate. Strangely 
enough, they refer to “ damage suits’’—not injury or 
compensation cases. Did the Union have in mind the 
establishment of a legal department to handle personal 
injury matters unrelated to compensation! Was this 
proclamation in 1913 an advertising gimmick to lure 
members away from the rival Progressive Miners Union— 
a devise to build up its membership! If the Union was 
so concerned with the alleged gauging of its members by 
attorneys why did it not seek relief through the legisla­
ture or the Industrial Commission! We find that on June 
29, 1915, the Legislature amended the Statute as follows:

“ The board shall have the power to determine the 
reasonableness and fix the amount of any fee or com­
pensation charged by any person for any services per­
formed in connection with this Act, or for which pay­
ment is to be made under this Act, or rendered in 
securing any right under this Act.” Hurd, 111. Rev. 
Stat. 1915, Sec. 153.

We are unable to find any legislative notes as to the rea­
son for this amendment or what group promoted it. How­
ever, its purpose is obvious and meets the objection of the 
mineworkers as expressed to their membership, if their 
concern was, truthfully, compensation claims. Yet, they 
chose not to eliminate their salaried lawyer arrangement 
and permitted it to continue under circumstances which 
disclosed that the individual miner was not receiving ade­
quate legal representation.

Petitioner chose to claim that the Illinois decision runs 
contra to an informal opinion of the American Bar As­
sociation’s Committee on Professional Ethics, and, quotes 
the concluding paragraph of No. 469 as authority for their 
assertion that the mineworkers plan has the approval of 
that committee. Petitioner does not inform this court of 
the full opinion (Appendix C) which emphatically reas-



— 27 —

serts previous opinions that “ where a lawyer is selected 
and employed, as well as paid, by the employer or associa­
tion to represent its employees or members, the employ­
ment may well be unethical.” Petitioner, further, refers 
to a portion of a letter to the appointed counsel (E. 19-20) 
which tells him to turn over a file if the member is repre­
sented by other counsel. I t is interesting to note that the 
format used to obtain information in no way gives the 
member the opportunity to disclose he has other counsel. 
The Report to Attorney on Accident form (R. 16-17) does 
not contain any words of employment of the Union Law­
yer to consent for him to proceed. It is arbitrarily assumed 
that the salaried union lawyer will represent him. What 
is there in these forms which would lead the salaried law­
yer to believe or not to believe that the individual miner 
wants or even has secured other counsel? The circum­
stance of the Elery Morse incident eminently demonstrates 
this void (R. 9). I t  would seem, therefore, that this right 
to choose counsel is an empty one.

We also find a purported analogy between the lawyer 
hired by the insurance company to defend an insured in 
an automobile accident case with the mineworkers sal­
aried lawyer arrangement. I t is emphasized that in 
approving the relationship, a committee on Professional 
Ethics of the ABA stated that “ the company and the 
insured are virtually one in their common interest and 
that the same may be said of the Union and its injured 
employee-members.” A reading of Formal Opinion 282 
(Appendix D), shows that such equating is not correct. 
The context of the remark by the committee has reference 
to a community of interest growing out of the contract 
of insurance with respect to an action brought by a third 
party against the insured within the policy provisions of 
defense, investigation and other contractual elements of 
control agreed upon between the parties (not the least 
of which is that it is the insurance company’s money



— 28 —

that is involved). The Committee found that the lawyer 
hired by the insurance company can neither be said to 
be “ exploited” by it in violation of Canon 35, nor that 
the lawyer was “ lending his services to the unauthorized 
practice of law” under Canon 47. I t further held that 
no profit inured to the company through the lawyers’ 
employment and such employment was a necessary in­
cident to the main contract of insurance. No part of 
Formal Opinion 282 can be stated to support the mine- 
worker’s plan which is under attack here. On the con­
trary, the record shows, among other things, that the 
mineworkers salaried lawyer is and can be “ exploited” 
to the detriment of the individual miner and, as such, 
is lending his services to the “ unauthorized practice of 
law” by a lay intermediary. When considering the type 
of services rendered and the volume involved, no other 
conclusion can be reached but that the individual miner 
is exploited to benefit the union in its claim of better 
representation as between it and rival coalminers’ unions. 
We have previously shown that the members of the 
union are not impoverished or without access to com­
petent legal advice and counsel.

D. The injunctive decree was proper and complete for 
the purposes intended.

Petitioners object to the scope of the injunctive decree 
as being too broad and not supported by the record. 
Petitioner’s brief incorrectly paraphrases Items 3 and 4 
of said decree. The decree has for its purpose stopping 
the United Mine Workers Union from representing its 
members in their individual claims through an attorney, 
the hiring of such an attorney for that purpose, and the 
necessary incidence to that arrangement. I t may seem 
somewhat enlarged to enjoin the Union from the (1) 
giving of legal counsel and advice, and (2) rendering of 
legal opinions, but such facets of the decree are part of



— 29 —

the prohibition of the Union “ practicing law in any form 
either directly or indirectly.” Perhaps each of the first 
two elements should have been included as a subpara­
graph of No. 5. However, from a review of the facts and 
the evil sought to be controlled, the decree, in its present 
form, is understandable and correct. Certainly, from the 
facts of this case, items 3 and 4 must be upheld. The 
Illinois Supreme Court recognized the problem presented 
to it, and accepted its responsibility in controlling the 
legal profession and protecting the public. If it had de­
cided that the injunctive decree was too broad in scope, 
it would have stricken that part which did not fall 
within the purview of its decision. It did not choose to 
do so. Therefore, This Supreme Court should not render 
a decision on that ground only, and reverse the con­
sidered decision of the Illinois Court.

Petitioner cites the case of State of Wyoming v. State 
of Colorado, 286 U. S. 494, as authority for the proposi­
tion that an injunctive decree cannot be broader or more 
extensive than the case warrants. The cited case does not 
so hold, but the Supreme Court has held that when a party 
brings a judgment or decree to it for review, on that 
party rests the burden of showing in what respect the 
decree is erroneous. Federal Trade Commission v. Beech 
Nut Co., 257 U. S. 441. The United Mine Workers has 
failed to sustain the burden placed upon them and have 
merely indulged in categorical statements of denial. This 
very court has acknowledged that “ it is a salutary prin­
ciple that when one has been found to have committed 
acts in violation of a law, he may be restrained from 
committing other related acts” . NLRB v. Express Pub­
lishing Company, 312 U. S. 42. “ Giving legal counsel and 
advice” and “ rendering legal opinions” are sufficiently 
related to the main subject of unauthorized practice as 
being a proper element of the decree that was entered in 
this cause.



- -  30 —

If the Court, after approving, in general, the position 
taken hy the Illinois Supreme Court, is inclined to limit 
the decree, it has the power to strike from any decree re­
straints upon the commission of unlawful acts which are 
disassociated from those which a defendant has commit­
ted. Swift & Company v. U. S., 196 U. S. 375; New York, 
New Haven and Hartford Ry. Co. v. Interstate Commerce 
Commission, 200 U. S. 361. By this authority, the deci­
sion could be limited to approving only such portion as 
the Court believes is warranted by the action taken. As 
a result, the decree could be limited to enjoining the 
United Mine Workers, District 12, from:

a) Representing its members with respect to Work­
men’s Compensation claims and any and all other 
claims which they may have under the laws and stat­
utes of the State of Illinois, and

b) Employing attorneys on salary or retainer basis 
to represent its members with respect to Workmen’s 
Compensation claims and any and all other claims 
which they may have under the statutes and laws of 
Illinois.

II.

The Illinois Supreme Court Decision Does Not Deny the 
Petitioner Any Constitutionally Protected Right Nor 
Does the State Decision Conflict With Any Decision 
of This Court.

When we filed the present suit against the mineworkers 
in June of 1964, your court had already handed down the 
decision in Button (371 U. S. 417, Jan. 14, 1963), and 
Virginia Brotherhood (377 U. S. 1, April 20, 1964). As 
lawyers, and above all, as members of the Unauthorized 
Practice of Law Committee, it behooved us to give care­
ful consideration to the intent and meaning of these de­
cisions becaxise of their possible effect on matters pending



before us. A searching analysis of these cases, while com­
paring them with the factual situation involving the mine- 
workers in Illinois, and its purely intrastate character, 
convinced us, as attorneys, that our present litigation was 
in no way comparable to these decided matters. On the 
contrary, upon reviewing these two opinions with our own 
Illinois Brotherhood ease, the Bar Association’s course of 
action was considered proper and was warranted. As 
attorneys, it would be fool-hardy and presumptuous on our 
part to arbitrarily disregard the pronouncement of the 
highest court of the land for the sole and only purpose 
of harassing a union. It cannot be considered harassment, 
when you plead with them to adopt a course of conduct 
approved by the highest court in the land in Virginia 
Brotherhood (377 U. S. 1, at p. 8) (R. 92, 104).

The prime concern of the Bar Association and its Un­
authorized Practice of Law Committee is the protection 
of the public. In this instance, the public is the individual 
mineworker, and he does not lose that status merely be­
cause he is a member of a large union. The protection of 
the public and the assurance of the proper attorney-client 
relationship is the sole and only purpose for the existence 
of a state Unauthorized Practice of Law Committee.

Our Illinois Supreme Court carefully considered the 
effect and the meaning of the pronouncements in Button 
(371 U. S. 415), and Virginia Brotherhood (377 U. S. 1), 
as it might be applicable to the mineworkers. The Court 
stated:

“ In Virginia Brotherhood Trainmen the Court held 
that the First and Fourteenth Amendments protect 
the rights of the members through their Brotherhood 
to maintain and carry out their plan for advising 
workers who are injured to obtain legal advice and 
for recommending specific lawyers. Since the part of 
the decree to which the Brotherhood objects infringes 
those rights, it cannot stand; and to the extent any



82

other part of the decree forbids these activities it too 
must fall.” 377 U. S. at p. 8.

“ The Court there (377 U. S. 5, n. 9) specifically 
pointed out that the railroad trainmen were objecting 
to only those portions of the decree encomposed by 
the language of the holding, as the Brotherhood had 
denied that it was engaging in practices forbidden 
by our decree in In Ee Brotherhood of Railroad Train­
men, 13 111. 2d 391. Accordingly, that holding does 
not purport to overturn our decision precluding any 
financial connection between the Brotherhood and the 
counsel selected by it to handle individual member­
ship claims. As a consequence, we do not read Vir­
ginia Brotherhood Trainmen as constitutionally pro­
tecting the conduct we are concerned with here, i. e., 
employment on a salary basis by a labor union of 
counsel to represent individual members’ claims be­
fore the Industrial Commission. The Circuit Court 
decree in question here does not attempt to restrain 
the union from advising its members to seek legal 
advice or from recommending particular attorneys 
thought competent to handle Workmen’s Compensa­
tion claims. As related earlier, our decision in In re 
Brotherhood of Railroad Trainmen, specifically allows 
such conduct.”

“ In N. A. A. C. P. V. Button, the Supreme Court 
of the United States held that a system devised by the 
N. A. A. C. P. to furnish and recommend attorneys 
(who were apparently compensated on a p e r  d iem  
basis by the organization in connection with each case 
handled) to member litigants for the prosecution of 
civil rights cases was constitutionally protected by 
the First and Fourteenth Amendments. However, the 
litigation therein engaged was regarded as a form of 
constitutionally protected political expression and 
cannot as such be equated with the bodily injury liti­
gation with which we are concerned here. Also, it is



to be noted that an apparent dearth of Virginia law­
yers willing to handle civil rights litigation was 
deemed of some importance by the Supreme Court, 
and at least Justice Douglas was influenced by his 
conclusion that the State’s attempt to characterize 
the N. A. A. C. P. activities as ‘solicitation’ indicated 
a legislative purpose to penalize that group because of 
desegregation activities. Further, the majority opin­
ion there read the decree of the Virginia Supreme 
Court of Appeals ‘as prescribing any arrangement by 
which prospective litigants are advised to seek the 
assistance of particular attorneys’ (371 U. S. at p. 
433). Under such construction, the decree was deemed 
violative of the First and Fourteenth Amendment 
freedoms of speech and expression.”

Comparing the Button facts with the mineworkers, the 
Illinois Court rightfully held that Illinois was not at­
tempting to prohibit the union from advising its members 
to seek the assistance of particular attorneys, and pointed 
out that the Bar Association conceded that the minework­
ers “ may validly advise their members to seek legal 
advice in connection with their claims and may properly 
recommend particular attorneys deemed competent to 
handle such litigation” (E. 104).

The Illinois Court correctly concluded that the decision 
entered by the Circuit Court of Sangamon County was 
not violative of the First Amendment guarantees relating 
to freedom of association and expression. This State Court 
decision referred to the recognition in both Button (371 
U. S. 438-40) and Virginia Brotherhood (377 U. S. 8, 10) 
cases, of the right of individual states to regulate the 
practice of law and those who unauthorizingly practice it 
(R. 104-5).

We find in Button that the facts disclosed no compelling 
state interest to justify Virginia’s action. To the same



— 34-

eifect is this Court’s opinion in the Virginia Brotherhood 
Trainman case (377 U. S. 8). Each decision, then, justi­
fied its application of First Amendment protection in 
reaching results announced. Illinois is not ignoring its 
recognition of the rights so vividly protected in Button 
and Virginia Brotherhood Trainmen; specifically the right 
of political expression or the right to advise and recom­
mend particular attorneys because of their competence in 
a particular legal field. On the contrary, Illinois urges 
those rights and encourages their proper use for the bene­
fit of the Union member in his individual affairs. What 
Illinois is concerned about, and in which it has a com­
pelling state interest, is the protection of the public in 
connection with the practice of law by members of the 
profession admitted in its state acting through a laj  ̂
intermediary. The maintenance of high professional 
standards among those who practice law, the prohibitions 
of acts of champerty, barratry and maintenance, the ad­
herence to well-founded Canons of Ethics against solicita­
tions and intervention by lay intermediaries, as well as 
statutory provisions forbidding the unauthorized practice 
of law are all factors involving clear and compelling state 
interests and have continually received the attention of 
Illinois Courts. Illinois, through the efforts of its Bar 
Association has repeatedly caused its Supreme Court to 
look into arrangements which challenge this protection 
of the public, and, as an incident thereto, the profession. 
We have referred earlier to the history of this court in 
that regard. The Illinois Supreme Court is not blind to 
progress or sociological development, as evidenced by its 
ruling in the Illinois Brotherhood case. You do not find 
it striking down the basic plan fostered by the Brother­
hood. I t only restricted its evil. That evil was the 
financial connection between the Brotherhood and the 
attorneys, and the concern of interference with the indi­
vidual attorney-client relationship. I t has done no more 

its mineworker decision. I t attacks the salariedin



— 35 —

lawyer relationship for the evil it exposes, and it attempts 
to assure to the individual member of the union the un­
divided loyalty of his attorney. Neither the Court nor 
the Bar Association has put arbitrary road blocks in the 
path of the union. They merely direct that its Illinois 
Brotherhood and the Virginia Brotherhood Trainmen de­
cisions be followed by eliminating that financial connec­
tion between union and attorney, and substituting the 
practice of selecting a list of qualified and competent at­
torneys to recommend to the members for that member to 
hire, and for that member to pay for services rendered.

In considering whether Illinois has a “ compelling state 
interest” in controlling the practice of law and the pro­
tection of the public, the Court rightfully looked into the 
potential problems of the future under this plan or any 
similar device to circumvent the desired individual at­
torney-client relationship. Because the Illinois Supreme 
Court is concerned with what might happen in the future, 
the union charges it with unnecessary clairvoyance, and 
condemns such reasoning. Petitioner ignores, however, 
the responsibility of the Illinois Court over the legal pro­
fession and its duty to protect the public, incidental 
thereto. I t is no answer to say that this plan or any one 
like it should be continued because the Court has the 
right to correct individual abuses as they are brought to 
its attention. Consider if you will, what this means, and 
its effect upon the individual. The salaried lawyer han­
dles a claim for an individual mineworker member, and, 
because he has not fully prepared his case, the mineworker 
receives an award considerably less than the maximum he 
was entitled to or could have received. Consider further 
that this situation, because of the salaried lawyer rela­
tionship, does not come to the attention of the Bar until 
the appeal time has been exhausted. Certainly, the Bar 
and the Court are interested in this case and probably 
vdll hold hearings as to the lawyer’s conduct, to deter-



— 36 —

mine whether this was incompetence, or of such a character 
to deserve suspension or disbarment. What good is this 
control element to the individual whose claim has not 
been handled properly? Obviously, he is left without a 
remedy unless it is against the lawyer for mal-practice. 
The Supreme Court of every state, not only Illinois, must 
consider many matters prospectively in order to fulfill its 
rule making function. It is because of its profound duty 
that Illinois concerned itself with (1) the preservation of 
the integrity of the attorney-client relationship, (2) de­
termined that Federal Constitutional provisions of free 
expression and association are not infringed by that 
court’s control of professional conduct and its protection 
of the public, and (3) the prevention of substantial com­
mercialization of the law profession.

We do not find any constitutional infringement of the 
rights of the Illinois mineworkers in the action taken by 
the Courts of Illinois to regulate and control the practice 
of law within its border. The State of Illinois has a 
“ compelling state interest’’ in controlling the standards 
of professional conduct, NAAOP v. Button, 371 U. S. 41-5 
at 438. The Illinois Supreme Court is not attempting 
to regulate conduct involving the application of a Federal 
law, such as the Safety Appliance Act, the Federal Em­
ployer’s Liability Act, or the practice before the United 
States Patent Office, Sperry v. State of Florida, 373 U. S. 
379, but the Illinois decision merely limited its curtail­
ment of the Union’s conduct to state protected rights only.

III.

A Discussion of Group Legal Services Is Not 
Pertinent to the Issues in This Case.

The problem presented by the facts of this case were 
of such a nature that any discussion of group legal 
services as an answer to the issues raised herein would



—  2.1 —

be improper. The extent of the legal services rendered 
by the salaried lawyer employed by United Mine Workers 
of America, District 12, made it imperative that the 
Illinois Supreme Court reach the decision it rendered. It 
was a purely local problem within Illinois, involving a 
union and a lawyer, and the proper application of the 
prohibitions contained in the Canons of Ethics. It was a 
proper exercise of the Court’s power to control the prac­
tice of law.

We have treated this improper insertion of considera­
tion of group legal services in our Objections to requests 
by others to file as Amicus Curiae. The position we 
asserted therein is the position of the Illinois State Bar 
Association and, by virtue of its many decisions on the 
subject of unauthorized practice, is the position of the 
Illinois Supreme Court.

CONCLUSION.

For the foregoing reasons, the Illinois State Bar Asso­
ciation and the individual members of its Committee on 
Unauthorized Practice of Law submit that the decision of 
the Illinois Supreme Court was correct, and that this 
Court should affirm that decision.

Eespectfully submitted.

BERNARD H. BERTRAND, 
234 Collinsville Avenue,

East St. Louis, Illinois, 
Counsel for Respondents.



A P P E N D I X .



— 39 —

APPENDIX A.

Workmen’s Compensation Act.

§ 138.16 Eules and Orders—Depositions—Subpoenas—Hos­
pital Eecords—Court Reporter—Fees and Charges.

The Commission shall make and publish rules and 
orders for carrying out the duties imposed upon it by 
law, which rules and orders shall be deemed prima facie 
reasonable and valid.

The Commission shall have the power to determine the 
reasonableness and fix the amount of any fee of compen­
sation charged by any person, including attorneys, physi­
cians, surgeons and hospitals, for any service performed 
in connection with this Act, or for which payment is to be 
made under this Act or rendered in securing any right 
under this Act. 1951, July 9, Laws 1951, p. 1060, § 16, as 
amended 1957, July 11, Laws 1957, p. 2610, § 1; 1959, July 
21, Laws 1959, p. 1733, §1.

138.19 Judicial Review—Certiorari—Scire Facias—Certifi­
cation of Record by Commission—Cost of Record.

(1) Except in cases of claims against the State of Illi­
nois, in which case the decision of the Commission shall 
not be subject to judicial review, the Circuit Court of the 
county where any of the parties defendant may be found, 
or if none of the parties defendant can be found in this 
State then the Circuit Court of the county where the ac­
cident occurred, shall by writ of certiorari to the Com­
mission have power to review all questions of law and 
fact presented by such record.



— 40 —

Bond—Determination on Certiorari—Review by Supreme 
Court Supersedeas and Stay—Majority Rule.

( 2)
* * * # # # *

Judgments and orders of the Circuit Court under this 
Act shall be reviewed only by the Supreme Court upon 
the filing of a Notice of Appeal. Such Notice of Appeal 
shall be filed with the Clerk of the Circuit Court within 
30 days after the entry of the order of that Court. The 
time herein provided for the filing of the Notice of Ap­
peal shall be jurisdictional and shall not be subject to 
any extension. Except as herein provided, the appeal 
shall be subject to statute or rules of the Supreme Court.

Sec. 138.19 Appointment of examining physician—Pees 
of attorneys and physicians.

(c) The Commission may appoint, at its own expense, 
a duly qualified, impartial physician to examine the in­
jured employee and report to the Commission. The fee 
for this service shall not exceed $5 and traveling expenses, 
but the Commission may allow additional reasonable 
amounts in extraordinary cases.

The fees and payment thereof of all attorneys and phy­
sicians for services authorized by the Commission under 
this Act, shall, upon request of either the employer or 
the employee or the beneficiary atfected, be subject to the 
review and decision of the Commission.

# # # # # #

29 USCA, § 141. Short title ; Congressional declaration of 
purpose and policy.

(a) This chapter may be cited as the “ Labor Manage­
ment Relations Act, 1947.”



41 —

(b) Industrial strife which interferes with the normal 
flow of commerce and with the full production of articles 
and commodities for commerce, can be avoided or sub­
stantially minimized if employers, employees, and labor 
organizations each recognize under law one another’s 
legitimate rights in their relations with each other, and 
above all recognize under law that neither party has any 
right in its relations with any other to engage in acts or 
practices which jeopardize the public health, safety, or 
interest.

I t is the purpose and policy of this chapter, in order to 
promote the full flow of commerce, to prescribe the legiti­
mate rights of both employees and employers in their 
relations affecting commerce, to provide orderly and 
peaceful procedures for preventing the interference by 
either with the legitimate rights of the other, to protect 
the rights of individual employees in their relations with 
labor organizations whose activities affect commerce, to 
define and proscribe practices on the part of labor and 
management which affect commerce and are inimical to 
the general welfare, and to protect the rights of the public 
in connection with labor disputes affecting commerce. 
June 23, 1947, c. 120, § 1, 61 Stat. 136.



42 ■

APPENDIX B.

Exhibit A.

Eeport to Attorney on Accidents, Legal Department,
U. M. W. of A., District No. 12.

Read this carefully and when filled out mail to Legal 
Department, District 12, U. M. W. of A., 601 United Mine 
Workers Building, Springfield, Illinois.

1. See that notice of every accident and claim for com­
pensation is made upon the company within 30 days. (In 
hernia cases notice and claim must be made in 15 days.)

2. Compensation is not due in injury cases until three 
weeks after the injury. Do not make this report until 
a reasonable time has elapsed after compensation is due, 
and then only after demand on the company has been 
made, and either no compensation is paid, or not a suffi­
cient amount.

3. The purpose of making reports in injury cases is to 
bring to the attorney’s attention cases where compensa­
tion is not paid when due, or where compensation is not 
adequate in amount, or where compensation payments 
are discontinued before it is proper so to do; or where 
compensation payments have been discontinued and there 
yet remains compensation due for: 1—Temporary total, 
being time of inability to perform any work; 2—Medical, 
surgical and hospital services; 3—Partial incapacity, be­
ing the period when only partial earnings are possible;
4— Loss of a member, such as finger, toe, leg, hand, etc.;
5— Permanent disfigurement to head, hands or face; 6— 
Partial loss of the use of finger, hand, arm, foot or leg; 
and, 7—Complete permanent disability.

4. Report all death cases not later than ten days there­
after.



— 43 —

5. I t is useless to send these reports unless all ques­
tions are fully answered.

(Please Print)

Date of Report...............................

1. Full name of injured or deceased...............................

2. Address.................................Telephone No...................
Local Union No................................

3. Number of children under eighteen at time of acci­
dent ..................... .....................................................................

4. Date of injury.

5. Correct Name and Address of Company operating
mine, number and nickname of mine, if any.....................

6. Nature of work person engaged in at time of acci­
dent; describe and give in detail injury or injuries sus­
tained, whether arm, leg, or eye (right or left). Give any 
disfigurement to head, hands, or face. State if there is 
any partial incapacity for work..........................................

7. Did Company furnish all medical and hospital atten­
tion? ..........................................................................................

8. When did injured return to work, or when will he
he able to return to work.......................................................

9. Regular work of injured.

10. Has any compensation been paid? If so, how much 
and at what rate per week....................................................



— 44 —

11. Date of service on the Company of notice of acci­
dent? ..........................................................................................

12. If no notice was given, did accident come to knowl­
edge of some officer of the Company and to whom and 
when ? ........................................................................................

13. Day or night shift?......................................................

14. Describe any previous injury?.....................................
15. When? .............................................................................

16. Where ? ...........................................................................

17. What? .............................................................................

18. Any compensation collected? ....................................

Date of this report...............................................................

Reported by .........................................................................

Signed ..................................................................................

Address ................................................................................

Local Union No....................................................

Exhibit B.

Letterhead of United Mine Workers of America.

September 23, 1959

To Local Union Officers and Members 
Board Member District 4 
District 12, U. M. W. of A.

Dear Sirs and Brothers:

I t has been brought to our attention that some of our 
members are not properly apprised as to the period 
allowed for filing claims under the Workmen’s Compen-



45

sation Law. Therefore, we would like to call to your 
attention that the Industrial Commission has certain re­
quirements that must be met before a claim can be 
properly processed before it.

1. The injured employee must make a report to the 
company on all hernia cases within 15 days of the date 
of the accident. Otherwise, the claim is barred.

2. All other accidents must be reported promptly to 
the company, but not to exceed 45 days from the date 
of the accident. Otherwise, the claim is barred.

3. We must receive your Report to Attorney on Acci­
dents in time to file your claim with the Industrial Com­
mission within one year of the date of the accident, or 
one year from the date of the last compensation check. 
Otherwise, the claim is barred.

However, we insist upon Accident Reports being filed 
with us promptly when the man is released from medical 
care, or, in any event, he cannot extend his filing time 
by continuing under medical care. A good rule to follow 
is to file all claims with us promptly. We are enclosing 
some Accident Report forms, and ask that you write us 
when you need a further supply.

We hope the Local Union Officials will designate some­
one at each Local to be responsible for seeing that our 
members’ rights are protected under the Law. Let us 
do everything in our power not to allow any of our 
members to have their claims barred for failure to file 
accident reports within the proper time.

With kind personal regards.

Very truly yours,
M. J. Hanagan,

Attorney.



46

Exhibit C.

Letterhead of United Mine Workers of America.

September 26, 1963
To the Officers and Members,
Local Unions in District 12 
United Mine Workers of America

Dear Sirs and Brothers:
We are pleased to notify our membership that Mr. 

Stuart Traynor, Attorney at Law, will have charge of 
the Workmen’s Compensation cases for members of Dis­
trict 12, United Mine Workers of America, effective 
October 1, 1963. He fills the vacancy created by the death 
of our former attorney, Mr. M. J . Hanagan.

Mr. Traynor will service onr Legal Department through 
offices at the District Headquarters, Room 601, United 
Mine W orkers’ Building in Springfield, and our office in 
the Elks’ Building, West Frankfort.

Accident reports should be mailed to him at the office 
in your respective area. Compensation cases will be filed 
and handled through the Industrial Commission of Illi- 
"'ois as in the past.

Very truly yours,
Joe Shannon,

Acting President.
TS:RJ



■47 —

APPENDIX C.

American Bar Association

Standing Committee on Professional Ethics

Ee: Informal Opinion No. 469 12/26/61

Employer, Association or Union Agreeing to Pay Legal 
Expenses of Employee or Member

You have forwarded to us a letter from Mr. (name) 
in which he inquires if there is anything unethical in 
any of the following situations:

(1) An employer agrees to pay the legal expenses of 
any employee who retains an attorney (a) to perform 
any work of a civil nature (including, but not being 
limited to, writing wills, defending negligence actions, 
etc.); (b) to defend the employee on any criminal charge 
except a felony.

(2) An association agrees to do the same for any mem­
ber of the association.

(3) A Labor Union agrees to do the same for any Union 
member.

Prom an ethical standpoint, all of the above situations 
appear to be similar, and they will therefore be dealt 
with together rather than singly.

We gather from your reference to “ the legal expenses 
of any employee who retains an attorney” that in each 
case the attorney is selected and employed by the em­
ployee or member, and has no responsibility to the em­
ployer, association or union, which merely pays his fee 
and expenses.



— - 4 8 -

Canon 35 says:

“ A lawyer’s relation to his client should be per­
sonal, and the responsibility should be direct to the 
client. ’ ’

The mere fact that the client is to be reimbursed for 
his legal expenses does not destroy this relationship, so 
long as that is all that is involved. On the other hand 
where the lawyer is selected and employed as well as 
paid by the employer or association to represent its em­
ployees or members, the employment may well be un­
ethical. See Opinions 3, 31, 35, 41, 56, 98 and Informal 
Opinions 317 and 319.

We therefore hold that there is nothing unethical in 
the situations which you describe so long as the participa­
tion of the employer, association or union is confined to 
payment of or reimbursement for legal expenses only.



49-

APPENDIX D.

Formal Opinion 282 

(May 27, 1950)

An attorney may accept employment from an insurance 
company to represent the company’s insureds within the 
limits of the policy without the request or approval of 
the insured.

An attorney who is employed by an insurance company 
to prosecute the company’s subrogation claim against a 
third party may simultaneously prosecute the insured’s 
claim for the amount not recoverable under his insurance 
if the attorney is retained and compensated directly by 
the insured.

An attorney may defend for a fee a person sued in a 
“ public liability and property damage” action brought 
by a third party when at the same time he represents 
the “ collision” insurance company and the insured in a 
cross-action against such third party.
Canons Interpreted: Professional Ethics 6, 27, 34, 35, 47

A lawyer, employed and compensated by an automobile 
insurance company, which holds a standard contract of 
insurance with an insured, may with propriety;

A. Defend the insured in an action brought by a 
third party without making any charge to the in­
sured;

B. Prosecute an action for the insured against a 
third party, upon a fee basis, along with a subrogation 
action by the insurance company;

C. Defend for a fee a person sued in a “ Public 
Liability and Property Damage” action brought by 
a third party when at the same time he represents



— 50 —

the “ Collision” insurance company and the insured 
in a cross-action against such third party.

The opinion of the Committee was stated by Mr. 
Brucker, Messrs. Drinker, Jackson, Jones, F. M. Miller, 
S. Miller, Jr. and White concurring.

The Grievance Committee of The Toledo Bar Associa­
tion has presented several questions to this Committee 
with respect to representation of an insured by a lawyer 
employed and compensated by an insurance company. 
These questions are as follows:

1. May an attorney, employed by an insurance company 
exclusively, on a salary basis, prosecute subrogation claims 
for both the portion recoverable by the insurance company 
and the portion recoverable by the assured under a de­
ductible policy!

2. May said attorney charge a fee to the assured based 
upon the assured’s pro rata share of the amount of re­
covery !

3. May said attorney defend the assured in action 
brought by a third party against the assured!

4. May said attorney charge a fee for defending the 
assured in the action referred to in No. 3! The attorney 
referred to in this question is employed by the insurance 
company which carried the co llis ion  coverage on the as­
sured’s car.

5. May an attorney, employed by an insurance company 
exclusively, upon a salary basis, defend law suits against 
assureds on behalf of the insurance company, within the 
limits of the policy, without making any charge to the 
assured !

6. May an insurance company employ an attorney to 
defend law suits against assureds, within the limits of 
the policy, without the request or approval of the assured!



51 —

We shall first consider questions 5 and 6 together be­
cause of the relevancy of the answers to the other ques­
tions presented. The inquirer adds the following comment:

It is the w riter’s notion that questions 5 and 6 
are intended to raise the issue as to whether an in­
sured should be permitted to retain his own counsel, 
who would be reimbursed by the insurance company, 
and also whether or not the insurance company in 
utilizing the services of its own attorney-employee 
or in employing independent counsel is, in effect, 
practicing law.

C anon  35 of the Canons of Professional Ethics pro­
vides :

The professional services of a lawyer should not 
be controlled or exploited by any lay agency, personal 
or corporate, which intervenes between client and 
lawyer. A lawyer’s responsibilities and qualifications 
and individual. He should avoid all relations which 
direct the performance of his duties by or in the 
interest of such intermediary. A lawyer’s relation to 
his client should be personal, and the responsibility 
should be direct to the client. . . .

C anon  47, which is complementary to C anon 35, pro­
vides :

No lawyer shall permit his professional services, 
or his name, to be used in aid of, or to make possible, 
the unauthorized practice of law by any lay agency, 
personal or corporate.

Any answer to these interrogatories must of course 
consider the relationship of the parties created by the 
contract of insurance.

The standard policy of automobile insurance requires 
the following duties from the insurance company:



— 52 —

(a) That it shall defend any suit against the in­
sured alleging injury and claiming damages;

(b) That it shall pay any judgment rendered 
against the insured up to the applicable limitation 
of liability under the policy.

(c) That it shall pay all expenses incurred by it 
and all taxed costs and interest accrued after entry 
of judgment.

The standard policy of automobile insurance requires 
the following duties from the insured:

(1) To give the insurance company prompt notice 
of the accident, claim or suit.

(2) To give assistance and cooperation in opposing 
such claim or suit.

(3) To subrogate the insurance company for any 
amount paid by it to the insured.

From an analysis of their respective undertakings it 
is evident at the outset that a community of interest exists 
between the company and the insured growing out of 
the contract of insurance with respect to any action 
brought by a third person against the insured within 
the policy limitations. The company and the insured are 
virtually one in their common interest. The requirement 
that the insurance company shall defend any such action 
contemplates that the company, because of its contractual 
liability and community of interest, shall take charge of 
the incidents of such defense including the supervising 
of the litigation. Whenever the insured is served Avith 
the court process as a defendant, the contract of insurance 
expressly requires him to forward such process to the 
company so that the company may provide the means 
of defense. It is elemental that this includes retaining 
and compensating a lawyer at the company’s expense.



— 53-

Under certain circumstances a person may by contract 
clothe another with power to retain a lawyer to conduct 
a defense. Especially may this be done when, as here, 
the power is coupled with an interest resulting from 
covenants of insurance. Under these circumstances the 
lawyer selected by the company to conduct the defense 
cannot be said to be “ exploited” by the company under 
C anon 35. Nor can it be said that the lawyer is lending 
his services to the “ unauthorized practice of law” under 
C anon 47. No profit inures to the company through the 
lawyer’s employment and it is an incident of the main 
contract of insurance. The essential point of ethics in­
volved is that the lawyer so employed shall represent 
the insured as his client with undivided fidelity as required 
hy C anon 6.

“ Consent and approval” to represent the insured are 
clearly implied when the insured complies with his re­
ciprocal duty under the insiirance contract by forwarding 
the court process to the insurance company. If the insured 
does not desire to avail himself of the company’s obli­
gation to defend the suit including counsel, together with 
payment of any judgment and costs, he is at complete 
liberty to renounce his rights under the insurance contract 
and employ independent counsel at his own expense.

For the foregoing reasons our answers to the 5th and 
6th questions are in the affirmative with the qualifications 
stated.

The 1st and 2nd questions may be considered together. 
A lawyer employed by an insurance company may, of 
course, prosecute the company’s subrogation claim against 
a third party, recoverable by the insurance company. Nor 
is there any conflict of interest within the meaning of 
C anon 6 in the lawyer’s prosecuting simultaneousy the 
claim recoverable by the insured under a deductible policy 
—providing the lawyer does so on a fee basis paid by



— 54 —

the insured direct to the lawyer and not to the insurance 
company for such services. C anon  34 prohibits division 
of fees with any lay organization and the lawyer’s ar­
rangement with the client must observe this requirement. 
Furthermore, under C anon 27 the lawyer representing the 
insurance company in a subrogation claim is barred from 
soliciting or even suggesting that he might represent the 
insured upon his claim against a third party. He may 
accept such retainer only if voluntarily proffered by the 
insured. Hence the answer to the 1st and 2nd questions 
is in the affirmative with the qualifications stated.

The 3rd and 4th questions are explained by the follow­
ing comment from the inquirer:

With reference to questions 3 and 4, we have in 
mind the situation where an action is brought against 
the assured to recover damages, either to person or 
property, and the assured then files a cross petition 
for damages to his automobile in which the insurance 
company, which carried the collision coverage, joins 
as co-cross petitioner and sets up its subrogation 
claim. You can see that, under these circumstances, 
the attorney, as a salary-employee of the insurance 
company, is not only representing the insurance com­
pany and the insured in their claims for damages 
against the third party, but would also be defending 
the insured in the action of the third party against 
the insured. Although the insurance policy involved 
was only collision coverage and not public liability 
and property damage coverage.

Summarized, the questions are as follows: May a lawyer 
employed and compensated by an insurance company 
which carries only collision insurance, defend the insured 
in a “ public-liability-and-property-damage ’ ’ action brought 
by a third party against him, and at the same time act 
for the insured and the co llis ion  insurance company in a 
joint cross-petition against such third party?



55 —

There is nothing basically unethical in a lawyer, who 
is employed and compensated by a co llis ion  insurance 
company, defending a person in an action based upon 
damage to person and property brought by a third party. 
It is conceivable that there might be some conflict of 
interest between the “ collision” insurance company and 
the insured, who is the same person who is made defend­
ant in the “ person-and-property-damage ” action. Under 
C anon 6 if such a conflict should arise, the lawyer could 
not represent both without “ express consent of all con­
cerned given after a full disclosure of the facts.” How­
ever, if such consent were given there is no ethical ob­
stacle to the lawyer representing both parties. Under 
C anon 27  the lawyer for the “ collision” insurance com­
pany is forbidden to solicit or even suggest to the insured 
that he might be retained to defend the “ person-and- 
property-damage” action. However, if voluntarily prof­
fered by the defendant in such action he may accept the 
retainer and proceed with the defense of the action brought 
by the third party, and at the same time may act for 
the insured and the collision insurance company in a joint 
cross-petition against snch third party. Hence the answer 
to questions 3 and 4 is in the afSrmative with the qualifi­
cations stated.



4

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