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State Bar Assn. v. United Mine Workers





APPEAL from the Circuit Court of Sangamon County; the Hon. CREEL DOUGLASS, Judge, presiding.


Rehearing denied September 21, 1966.

The Illinois State Bar Association and others, individually and as members of the Committee on Unauthorized Practice of Law, filed a complaint in the circuit court of Sangamon County seeking to restrain defendant, United Mine Workers of America, District 12, from engaging in activities alleged to constitute the unauthorized practice of law. The trial court entered a summary decree granting the relief requested. From that determination the Mine Workers appeal, contending that the decree violates the first and fourteenth amendments to the United States constitution.

The facts are substantially undisputed. For many years, the Mine Workers, a voluntary association, has employed a licensed attorney on a salary basis to represent members and their dependents in connection with claims for personal injury and death under the Workmen's Compensation Act. It is understood and provided that members may employ other counsel if they so desire. Selection of the attorney was made by the Executive Board of District 12, and the terms of his employment agreed upon by the acting president and the attorney pursuant to board authorization. The letter from the former to the latter outlining the terms of employment contains the following sentence: "You will receive no further instructions or directions and have no interference from the District, nor from any officer, and your obligations and relations will be to and with only the several persons you represent."

The plan, as described by the current salaried attorney, operates as follows: Injured members are furnished forms by the union entitled "Report to Attorney on Accidents" which advise such injured members to fill out and send the forms to the Legal Department, District 12, United Mine Workers of America. When one of such forms is received by the legal department the salaried attorney presumes that it constitutes a request that he file with the Industrial Commission an application for adjustment of claim on behalf of the injured union member although there is no language appearing on the form which specifically requests that the salaried attorney file such claim. The application for adjustment of claim is prepared by secretaries in the union offices and when completed is sent by the secretaries directly to the Industrial Commission. In most instances the salaried attorney has not seen or conferred with the injured member at the time the claim is filed with the commission, although it is understood by the union membership that the attorney is available for conferences on certain days at particular locations. Between the time the claim is filed and the hearing before the commission, the salaried attorney prepares his case from his file and from examination of the application, usually without having a conference with the union member with regard to the latter's claim. Ordinarily, the only thing an injured member receives concerning his claim is a notice to appear before the Industrial Commission, and usually this is the first time the attorney and the injured member come into contact with each other.

The attorney determines what he believes the claim is worth, presents his views to the attorney for the respondent coal company during prehearing negotiation, and attempts to reach a settlement. If the coal company agrees with the Mine Workers' attorney, the latter recommends to the injured member that he accept such resolution of his claim. If a settlement is not reached, a hearing on the merits of the claim is held before the Industrial Commission.

The full amount of the settlement or award is paid directly to the injured member. No deductions are taken therefrom, and the attorney receives no part thereof, his entire compensation being his annual salary paid by the union.

The question for decision is whether the above related activities amount to the unauthorized practice of law by the Mine Workers under prior determinations of this court, and, if so, whether such activity is nevertheless protected by the first and fourteenth amendments to the United States constitution.

It may be noted here that the services rendered the union members in the handling of their compensation claims were legal services and that one who performs them is engaged in the practice of law. People ex rel. Chicago Bar Association v. Goodman, 366 Ill. 346.

It is argued by the Illinois State Federation of Labor and Congress of Industrial Organizations, AFL-CIO, as amicus curiae, that since the United Mine Workers, District 12, is a voluntary, unincorporated association and not a legal entity separate and apart from its constituency, there is no problem concerning the existence of a lay intermediary between the individual member and the attorney. Under this view, the attorney is merely employed collectively by the members of the association to present claims before the Industrial Commission. While it is correct that it has been held that a voluntary association such as the Mine Workers is not a legal entity amenable to process and suit at law (Cahill v. Plumbers, Gas and Steam Fitters' and Helpers' Local 93, 238 Ill. App. 123, 127; Chicago Grain Trimmers Association v. Murphy, 389 Ill. 102, 109; 4 Am. Jur., Associations & Clubs, par. 41), this is not to say that such voluntary, unincorporated associations may not sufficiently partake of the nature of separate entities so as to pose serious problems regarding substantial interference with the attorney-client relationship. (As to whether unincorporated labor unions should be treated as "entities", see The Legal Status and Suability of Labor Organizations, 28 Temple Law Quarterly 1.) In any event we are concerned here not with legal forms, but activities of the association. It is the latter which must determine whether the association is engaging in the unauthorized practice of law. See Rhode Island Bar Association v. Automobile Service Association, 55 R.I. 122, 179 A. 139.

It is clear that under the prior decisions of this court, organizations, including not-for-profit organizations, which hire or retain lawyers to represent their individual members in legal matters are ordinarily engaging in the unauthorized practice of law. (People ex rel. Courtney v. Association of Real Estate Tax-payers of Illinois, 354 Ill. 102; People ex rel. Chicago Bar Association v. The Motorists Association of Illinois, 354 Ill. 595; People ex rel. Chicago Bar Association v. Chicago Motor Club, 362 Ill. 50.) The underlying reasons for such conclusion are that the "relation of trust and confidence essential to the relation of attorney and client did not exist between the members of the respondent association and its attorneys, and whatever relation of trust and confidence existed was between the membership and the association." (People ex rel. Courtney v. Association of Real Estate Tax-payers, p. 109.) And, as was said in Chicago Motor Club, p. 57: "Legal services cannot be capitalized for the profit of laymen, corporate or otherwise, directly or indirectly, in this State. In practically every jurisdiction where the issue has been raised it has been held that the public welfare demands that legal services should not be commercialized, and that no corporation, association 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."

See, also, People ex rel. Chicago Bar Association v. Goodman, 366 Ill. 346, a case involving a lay respondent's employment of lawyers to represent injured persons whose workmen's compensation claims respondent was attempting to settle, where the court said at page 356: "The faithful observance of the fiduciary and confidential relationship between attorney and client is one of the greatest traditions of the legal profession. In Goodman's business that relationship is absent as to the litigant whom the attorney employed by Goodman purportedly represents. The respondent is the attorney's real client and paymaster, and the one to whom the attorney owes allegiance."

Thought to be of paramount importance to the public is the preservation of the integrity of the lawyer-client relationship involving the highest degree of trust and confidence, and an unswerving dedication of the lawyer's abilities to the interests of his client. Intervention in this relationship of third-party organizations by whom lawyers are directly employed and compensated to handle personal claims of organization members has generally been prohibited. See cases in 7 Am.Jur.2d, p. 100; 157 A.L.R. 292.

In In Re Brotherhood of Railroad Trainmen, 13 Ill.2d 391, this court applied the foregoing considerations to an organization similar in structure to the United Mine Workers association. There, the brotherhood, through its Legal Aid Department, had established a nationwide scheme whereby "regional counsel" were selected by the Brotherhood. These attorneys paid the departmental operating costs and were, in turn, recommended to individual brotherhood members as competent to represent them on personal injury and death claims. In that case this court held impermissible any "financial connection of any kind between the Brotherhood and any lawyer" in connection with personal injury claims of brotherhood members. However, the court specifically set forth an alternate plan which would be permissible. Reference thereto is appropriate here. It was there stated: "The Brotherhood has a legitimate interest in investigating the circumstances under which one of its members has been injured. That interest antedates the occurrence of any particular injury. We are of the opinion that the Brotherhood may properly maintain a staff to investigate injuries to its members. It may so conduct those investigations that their results are of maximum value to its members in prosecuting their individual claims, and it may make the reports of those investigations available to the injured man or his survivors. Such investigations can be financed directly and without undue burden by the 218,000 members of the Brotherhood. The Brotherhood may also make known to its members generally, and to injured members and their survivors in particular, first, the advisability of obtaining legal advice before making a settlement and second, the names of attorneys who, in its opinion, have the capacity to handle such claims successfully." (13 Ill.2d at pages 397-98.) We also ...

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