Legal Ethics

The Annals of Legal Ethics - When

Solicitation was Tolerated and

Widespread

One of the pleasures of researching Minnesota legal ethics are the surprises. Who knew that, from approximately 1900 to 1933, Minnesota was a national center of railway injury litigation, fueled by the absence of restraints on Minnesota lawyers’ solicitations of cases? The following notes are from a section of a draft chapter on Rule 7.3 (Solicitation) for the forthcoming fourth edition of this treatise. The draft chapter follows the section below with an account of three Minnesota Supreme Court cases from the 1930s, disciplining lawyers for solicitation.

A. 1915 - Solicitation is Not Against Public Policy. The confluence of several factors lead to Minnesota becoming, from the early twentieth century until developments in 1929 and 1933, a sort of Wild West of lawyer solicitation. In 1915, the Minnesota Supreme Court asked and answered pivotal questions as follows: “But is it champerty or maintenance or against public policy for an attorney to solicit business, to pay money to a poor client for his living expenses during the litigation, or to advise him against a settlement of his case? We may have our individual opinions on these propositions of good taste or legal ethics. But in the absence of some statute we are unable to hold that is illegal or against public policy for an attorney to solicit a case.” Johnson v. Great Northern Ry., 128 Minn. 365, 369, 151 N.W. 125, 127 (1915). Note that “taste” and “legal ethics” are not categories that warrant enforcement, as distinguished from “illegal” and “against public policy.” The Court later said that Johnson did not approve of solicitation or decide whether solicitation was ethical, but the public policy declaration in Johnson would have been interpreted by an aggressive plaintiffs’ injury lawyer as a green light for solicitation and funding clients’ living expenses. In re Greathouse, 248 N.W. 735, 737 (Minn. 1933).

B. The Court and the Legislature. As explained in the first chapter of this treatise, before approximately 1933, the Minnesota Supreme Court greatly deferred to the legislature, both as to certain discipline procedures (including a statute of limitations applicable to discipline prosecutions) and as to identifying the subjects of discipline. Thus, the Court wondered aloud whether it could discipline a lawyer for conduct not statutorily proscribed. The Court formally declined to adopt the ABA Canons of Professional Conduct. Because Minnesota statutory proscriptions on solicitation were not enacted until 1929, and then did not apply to solicitations by lawyers themselves, the Court lacked a clear basis for disciplining lawyers for solicitation.

C. Minnesota – The Question of Greek Solicitation. A colorful vignette shows how lawyers battled for cases. Two lawyers – McDonald of Minneapolis and Kamuchey of Duluth – went to war over which of them was authorized to represent an injured railway worker, Chunes. They filed three separate state court suits regarding the same accident. Their battle ended in federal court and included the following colorful name-calling, “Mr. McDonald charged Mr. Kamuchey with being an ‘ambulance chaser,‘ and the latter indignantly repelled the charge saying, ‘Kamuchey does not have to do any ambulance chasing where the injured party is a Greek, ‘ leaving in doubt just what his position with reference to ambulance chasing is in the event that the nationality of the injured party was other than Greek.” Chunes v. Duluth, W. & P. Ry. Co., 298 F. 964, 977 (D. Minn. 1924). The court dismissed all three actions and referred the conduct of McDonald and Kamuchey to state discipline authorities.

D. Minnesota – the National Center of Railway Injury Litigation. On February 2, 1923, the Governor reported to the Legislature that there were pending in Minnesota at least 1,028 railway injury claims against railways that were not operating any railway line in Minnesota. Weinard v. Chicago, M. & St. P. Ry. Co. 298 F. 977, 980 (D. Minn. 1924). Many additional claims were pending against railways operating in Minnesota. The jurisdictional reasons for Minnesota’s attractiveness as a litigation forum are beyond the scope of this treatise. However, Minnesota lawyers used agents to solicit injury cases nation-wide with apparent impunity from discipline in Minnesota. In 1929, a justice of the Minnesota Supreme Court acknowledged and condemned the prevailing practices. Winders v. Illinois Central R. Co., 177 Minn. 1, 5-8, 223 N.W. 291, 292-3 (1929).

E. 1924 - The Federal Court Twice Refers Solicitation for Discipline. In another jurisdictional dispute involving both a law firm including McDonald and a non-Minnesota railway accident, a Minnesota federal court referred McDonald’s solicitation activities to Minnesota authorities for possible discipline. Weinard v. Chicago, M. & St. P. Ry. Co. 298 F. 977 (D. Minn. 1924). Another federal court referred another matter, arising in Minnesota, for consideration by Minnesota discipline authorities of the propriety of McDonald’s admitted ambulance chasing. Chunes v. Duluth, W. & P. Ry. Co., 298 F. 964 (D. Minn., 1924).

F. 1929 – A Minnesota Supreme Court Justice “Absolves” Himself of Responsibility for Permitting Solicitation

1. A railway injury suit, brought in state court in Minnesota, by a Kentucky resident, was apparently procured by solicitation, and sustained with litigation funding, by Minnesota lawyers. The railroad’s motion to dismiss was denied. Unlike Wisconsin, Minnesota law did not provide for dismissal of litigation which was infected by champerty or barratry in its inception. Minnesota would not enforce champertous contracts, but that principle was not extended to dismiss personal injury lawsuits. Winders v. Illinois Central R. Co., 177 Minn. 1, 223 N.W. 291 (1929).

2. Justice Stone, concurring in the result, addressed Minnesota’s lawyer solicitation practices at length and with disdain, “Personally, I see so much evil already resulting from the highly organized and persistent solicitation by attorneys of personal injury business (and I am not now confining myself to that which is imported; a vast amount of local litigation is being solicited away from counsel to whom it rightly belongs), and so much more of discredit to bench and bar yet to come, if the practice is not stopped, that I take this opportunity of absolving myself, so far as I may, from responsibility for the continued refusal of the courts of this state to take effective notice of the situation.” Id. At 8, 293.

G. 1929 - The Wisconsin Supreme Court (Conditionally) Indicts and Instructs the McDonald Law Firm and the Minnesota Supreme Court

1. The McDonald Law Firms. Several Minneapolis law firms of which Robert McDonald was a member were, in the 1920’s and 1930’s, personal injury leviathans. They solicited and financed railroad and other injury cases far and wide, and strove to litigate the cases in Minnesota. McDonald openly admitted to being an ambulance-chaser. Chunes v. Duluth, W. & P. Ry. Co., 298 F. 964, 976 (D. Minn., 1924). McDonald was eventually disbarred, but not until 1938.

2. “Utterly Brazen.” The McDonald firm’s agent signed up two railroad injury plaintiffs in Milwaukee, where they were injured. The firm sued out the cases in Winona, Minnesota. The railroad sought to enjoin the Minnesota action. When the injunction action reached the Wisconsin Supreme Court, that Court delivered a blistering summary and attack on McDonald’s ethics, calling for his disbarment. The Court called McDonald “utterly brazen,” noting how he told a federal judge that if a certain case was solicited, “it was none of his business.” Id. At 299.

3. “A Menace.” Although the McDonald firm’s ethics were not, strictly speaking, central to the jurisdictional issue at hand, the Court condemned the firm strongly and repeatedly. “That an organization such as Tautges, Wilder & McDonald maintaining a corps of expert witnesses, employing high–powered solicitors, using slush and entertainment funds to secure business, and no doubt for other purposes, are a menace to the proper administration of justice cannot be doubted.” Chicago, Milwaukee, St. Paul & Pacific Ry. Co. v. Wolf, 199 Wis. 278, 226 N.W. 297, 300 (Wis. 1929).

4. Indictment of the Minnesota Supreme Court. The Wisconsin Court also pointedly addressed the Minnesota Supreme Court. “That these attorneys, being as they are officers of a court charged with important duties in the administration of justice, can openly prostitute their high calling and go unpunished––not only unpunished but unrestrained––seems incredible and if such is the case, the facts constitute a strong indictment of the courts.” Chicago, Milwaukee, St. Paul & Pacific Ry. Co. v. Wolf, 199 Wis. 278, 226 N.W. 297, 300 (Wis. 1929). This indictment came five months after Justice Stone’s critique, in Winders, above.

5. Lesson on Inherent Judicial Powers The Wisconsin Court also told the Minnesota Court that a court’s inherent powers to discipline lawyers were sufficient to overcome any statutory silence on the subject of solicitation. “The power of courts to maintain the integrity of the law and keep the channels of justice open and pure is very great. For that purpose they have broad inherent powers not dependent upon acts of the Legislature and a responsibility to society which is as great as their powers.” Id. At 300-301. As discussed in the introductory chapter to this treatise, it was not until the 1930s that the Minnesota Supreme Court asserted its inherent power against the legislature in discipline matters.

6. Decision. The Wisconsin Court did not purport to enjoin the railroad injury action, leaving its disposition, at least initially, to the good judgment of the Winona County District Court.

H. 1929 – Legislation Prohibits Non-Lawyer Solicitation. As noted above, in 1929, the Legislature prohibited solicitation by non-lawyers. However, no express prohibition on solicitation by lawyers was adopted by the Legislature or the Court.

I. 1930 – 1932 Study and Battle-Planning. In 1933, the Court wrote, “In recent years much has been said about lawyers' solicitation of business. In a report of Dean Fraser of the law school of the University of Minnesota for the biennium 1930-1932, it was stated: ‘The practice of ‘ambulance chasing’ grows increasingly common. There is necessity of making business, or of anticipating others in securing it. Lawyers with scruples against the practice are forced to engage in it in self-preservation. The unseemly scramble lowers the tone of the profession. Lawyers who indulge in these practices lose their own self respect, undermine public confidence in their profession, and bring disrepute upon the administration of the law.'” In re Greathouse, 248 N.W. 735 (Minn. 1933).