Before CAMPBELL, INCH, MOSCOWITZ, GALSTON, and BYERS, District Judges.
This proceeding had its origin in the motion for substitution of the respondent as attorney of record in the place of one Rowe, referred to in the matter reported in Re Rowe (D.C.) 4 F.Supp. 35.
The substitution was the result of the efforts of one James H. Murman, representing the Brotherhood of Railroad Trainmen, to induce the plaintiff in an accident suit to retain this respondent in place of Rowe as his attorney. The practice prevailing in such matters, where a member of the Brotherhood had suffered injuries, was necessarily brought to light, and the facts are substantially undisputed as to the methods involved. That is to say, the organization sought to serve its members so injured, and the families of those who were killed, by placing at their disposal the professional services of lawyers known to be skilled in that branch of their calling, to the end that settlements might be made and thus litigation avoided wherever the seniority of railway employees might be preserved without sacrifice of fair compensation for established cause.
If that should prove to be inexpedient, it was the concern of the Brotherhood to see to it that lawsuits should be conducted by experienced attorneys, whose charges would be restricted to somewhat less than the usual percentage of contingent fees in such cases. That result was attained by dividing the territory represented by the union membership into zones or regions, and, as to each, one lawyer was selected or designated by the organization, known as the regional counsel, and his employment was urged or strongly recommended to each injured member, or bereaved family.
This respondent was the regional counsel for the New York Harbor area, and he was so selected by action of the accredited officers or committee of the Brotherhood.
As to so much of the union's activity, this court is prepared to believe that the organization was performing a valuable service to its members.
The status thus acquired by the respondent provided a certain volume of regular employment, and, as a consequence, he could afford to take these cases at a smaller percentage of contingent fee than the prevailing rate among other lawyers skilled in negligence litigation, or than would be the case if his employment were of a desultory character.
The plan was carried into effect by the use of a written contract of retainer, which provided for a contingent fee of 20 per cent., one-quarter of which the respondent agreed to pay to the Brotherhood (i.e., its general counsel in Cleveland, Ohio) to be applied to the maintenance of the Legal Aid Bureau of the organization. The latter was the department of the union under which the "investigators" functioned. This man, James H. Murman, was the investigator for the region in which the respondent was regional counsel.
One example of his activity is shown, as has been stated, in the matter which is responsible for this proceeding.
The question is thus presented of whether this contract of retainer offends the rules of this court.
The respondent became a member of this bar on September 9, 1931, and, as our rules require, he expressly undertook to abide by the Canons of Ethics of the New York State Bar Association. Rule 3 clearly states that unprofessional conduct requiring discipline shall include a failure to abide by those Canons. Canon 28, so far as applicable, reads as follows:
"28. Stirring up Litigation, Directly or Through Agents. --
"* * * It is disreputable * * * to breed litigation by seeking out those * * * having any other grounds of action in order to secure them as clients, or to employ agents or runners for like purposes, or to pay or reward, directly or indirectly, those who bring or influence the bringing of such cases to his office, or to remunerate policemen, * * * or others who may succeed, under the guise of giving disinterested friendly advice, in influencing the * * * sick and the injured, the ignorant or others, to seek his professional services."
We entertain no doubt that the foregoing applies to the contract whereby this respondent turned over one-quarter of his fees to the Brotherhood. The helpful nature of the efforts of the latter to secure the maximum of results for or on behalf of its injured members, through the medium herein described, may be freely conceded, without in the least obscuring the issue. This respondent undertook to govern his professional relations according to the requirement quoted, and it would be but a poor tribute to his intelligence to suggest that his contribution of a quarter of his fees, to ...