STATEMENT OF HON. HARRY SAUTHOFF, A REPRESENTATIVE Mr. SAUTHOFF. Did Judge Padway testify, Mr. Chairman? Mr. SAUTHOFF. Inasmuch as the judge and I are old friends, and served on the judiciary committee in our State legislature together, and have gone over some of these things, I do not want to repeat what he said. There are two respects in which I agree with the judge, one is this rule 38 that requires affirmative action to get a trial by jury. I am opposed to it. That right to trial by jury should be held inviolate, and not require any affirmative action. It should require affirmative action if he does not want it. In that connection, may I introudce this letter, which is very short? The CHAIRMAN. Yes, sir. (The letter referred to is as follows:) Hon. HARRY SAUTHOFF, HILL, BECKWITH & HARRINGTON, House of Representatives, Washington, D. C. DEAR HARRY: I don't know whether there is anything that can be done about the rules of civil procedure for the United States district courts which has been submitted to Congress, but I wanted to call your attention to rule 38, respecting jury trials. Reference to this rule will show that it purports to retain the right to trial by jury decreed by the seventh amendment. However, the rule goes on to require a party to demand a jury trial in writing at any time after the commencement of the action, and not later than 10 days after service of the last pleading (whenever that may be). This is the same rule that was proposed to the Supreme Court of Wisconsin about a year ago, and it was generally opposed by the bar of the State. As I see this affair, the right to a jury trial is preserved "inviolate" by the Constitution, and it is neither practical nor right to require a party to take an affirmative step to save himself that right. This rule puts the situation in the reverse. The rule should be that the jury trial will be had in all cases, unless waived. This rule requires a party to demand a jury, in default of which he automatically waives. This rule simply adds another technical hazard to rights of litigants in Federal court, and is designed solely to deprive persons of their right to a trial by jury and to expedite the disposition of the calendar for convenience of the judge. Respectfully yours, HILL, BECKWITH & HARRINGTON. The other thing is that these rules specifically set forth that they shall take effect 6 months after their promulgation, and thereafter all laws in conflict therewith shall be of no further force or effect. The thing that I object to in that rule is that it does not provide for any hearing. Now, in our supreme court we, by statute, empower the court to make the rules, but they shall not become effective until 60 days after hearing has been held, which shall be an open hearing. Mr. WEAVER. A hearing before the supreme court? Mr. SAUTHOFF. Yes; a hearing before the supreme court and you, or I, or anybody else, can come in and make an argument, just as we have here today, which, it seems to me, is the only fair way to do it, and we certainly should not empower the court to make its rules and no one be permitted to know what they are or have a hearing on them. That does not seem to be in accordance with procedure. In regard to this matter of corporations and where they are organized, the judge went into that, so I do not care to go into that further at this time. Mr. CHANDLER. He went into the other point and we had quite a discussion on it, and practically agreed on some language that would conform to the law in Wisconsin with reference to hearings before the supreme court. Mr. SAUTHOFF. That is fine. If I may trespass just a moment to say this further thing: I have been highly entertained by Major Tolman's wonderful lecture on procedure and have learned a lot. Many of the things that are being advocated here we have used for years in Wisconsin, and it has resulted in simplifying the trials of lawsuits, and it has cut down the number of lawsuits, and it has made for much cheaper litigation. Litigation is cheaper as a result of adopting those rules. Today we can go into court and interplead anybody that ought to be interpleaded. We can settle it all in one action. I come from the county where the capital is located. We have three trial courts of $100,000 jurisdiction. Those judges call in the attorneys, and it is a well-established practice, they call in the lawyers in the various trials or suits 2 weeks before the calendar is called and say, "Can you gentlemen get together on your case? If you can, settle it. If you cannot what are the issues that you cannot settle?" By the time it comes to the jury holding trials half of your cases are done away with. In many jurisdictions more than half of them are done away with. Mr. MCLAUGHLIN. Is that done by rule? Mr. SAUTHOFF. No; that got to be an established practice. It was started by an old judge many years ago, and the other judges have adopted it. Mr. MCLAUGHLIN. The courts do that on their own initiative? Mr. SAUTHOFF. Yes. Mr. CHANDLER. You are making an excellent argument for these rules. Mr. SAUTHOFF. Well, I am strongly in favor of them, because, after all, what is the good of courts unless they give justice, and the justice should be cheap, and it should be quick. All of these technicalities only tangle it up and make it cost more money. Mr. ROBSION. Your friend from Wisconsin just spoke of this hearing before the judges after they have tentatively put out some rules. Mr. SAUTHOFF. They have to give them 4 weeks' notice, Mr. Robsion, when the final set is prepared. Mr. ROBSION. After you appear there and many other people appear and they argue it out, does the court have to accept your statements? Mr. SAUTHOFF. No; the court can go ahead and make rules, but, of course, the court is very reluctant to do anything that there is much objection to, and after the court makes the rules, there is nothing to prevent the State legislature from upsetting them. Mr. ROBSION. You have that right here, have you not? Mr. SAUTHOFF. I know, but you do not give any opportunity to be heard on a rule. Your court can make any rule it sees fit, and nobody knows about it. The CHAIRMAN. We have not really denied anybody an opportunity to discuss these rules here. I agree thoroughly with you that there ought to be some opportunity for the operation of something like a local forum. Mr. SAUTHOFF. Yes. The CHAIRMAN. They did not do it that way, but they did consult, as I understand it, a great many people before they drafted these rules. We are very much obliged to you. Mr. SAUTHOFF. I am the one that learned by listening to the major and his associates all this week. I am one that is indebted, thank you very much. Mr. CHANDLER. Mr. Chairman. The Association of the Bar of · the City of New York, through its committee on Federal legislation, has given some study of this entire subject, particularly H. R. 8892, and I desire to ask that its report be made part of the hearing at this point. The CHAIRMAN. That may be done. (The report is as follows:) REPORT OF THE COMMITTEE ON FEDERAL LEGISLATION, ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK The stated purpose of H. R. 8892 is to modify the rules of civil procedure for the district courts of the United States recently adopted by the Supreme Court. (It should be noted that the bill refers to "rules of procedure" and deals with criminal as well as civil procedure, whereas the rules promulgated by the Supreme Court have no application in criminal cases.) The rules of civil procedure were adopted by the Supreme Court pursuant to authority granted by Congress in the act of June 19, 1934 (Judicial Code, secs. 723b and 723c). The rules were carefully drawn with the assistance of an able and representative advisory committee appointed by the Court. Before the final form of the rules was decided upon, draft rules were made public so that there was ample opportunity for criticism. The draft rules were considered at special meetings of many bar associations held all over the country, and many suggestions recommended by them were adopted in the final draft. The rules were approved by the American Bar Association at its annual meeting in September, 1937. The rules will become effective September 1, 1938, or at the close of the present session of Congress, whichever is later. The provisions of the present bill may be conveniently classified for the purposes of this report. Reenactment of Conformity Act.-Section 724 of the Judicial Code (providing that the practice, etc., in civil cases other than equity and admiralty cases shall conform as near as may be to State practice) was not specifically repealed by the act of June 19, 1934, but that act does provide that, when rules of civil procedure become effective, any laws in conflict therewith shall be of no further force and effect. The present bill reenacts section 724, presumably solely for the purpose of adding to it the provisions limiting the power of the judge to comment on the evidence. (Those provisions are considered below.) A reenactment of section 724, however, coming after the act of June 19, 1934, might be taken as evidencing a congressional intention to repeal the Supreme Court's authority to make rules governing actions at law. At the very least, therefore, this reenactment of section 724 ought to be stricken from the bill. Power of judge to comment on the evidence.-The bill provides that in all jury cases, civil and criminal, the judge shall not comment on the evidence except as comment may be authorized by the State practice. The language of this provision is identical with that of H. R. 4721 passed by the House without debate on the consent calendar on June 21, 1937. A joint report of this committee and of the committee on criminal courts, law, and procedure of this association condemned that bill. That report pointed out that similar proposals had been disapproved many times by leading bar associations; it showed that the Supreme Court had often recognized that the role of a judge in a jury trial historically included the power to direct and supervise the trial of the issues and to assist the jury by comment on the evidence; and it concluded: "In the opinion of both committees justice in a jury trial is more likely to be arrived at if the presiding judge has discretion, not only to direct the course of the trial and rule upon questions of admissibility of the evidence, but also when necessary to comment on the evidence or upon the character, appearance, demeanor, or credibility of a witness or party. The historical conception of a jury trial is summed up by Thayer in his Treatise on Evidence as follows (188, note 2): "It is not too much to say of any period, in all English history, that it is impossible to conceive of trial by jury as existing there in a form which would withhold from the jury the assistance of the court in dealing with the facts. Trial by jury, in such a form as that, is not trial by jury in any historic sense of the words. It is not the venerated institution which attracted the praise of Blackstone and of our ancestors, but something novel, modern, and much less to be respected.' "Trial by jury will be a mockery unless it is assumed that judges presiding over jury trials will act fairly and impartially, and with such a judge it is of advantage to justice that he be permitted wide discretion. Abuses of discretion in regard to comments on evidence or on the character of witnesses are the exception and not the rule, and such abuses should be dealt with on appeal exactly as in the case of any other abuse of discretion occurring during a jury trial. "The present bill would deprive the only impartial lawyer connected with a jury trial of the right to help the jury by instructing them on the various questions which arise before them. Such a result would not aid justice, but would in many cases defeat it, since it would leave the jury without that assistance which only the experienced and impartial magistrate can supply.' Capacity and citizenship of corporations and other associations.-Section 430C of the bill is apparently intended to accomplish two entirely different purposes. With the exceptions noted below, its language is that of rule 17 (b) of the Supreme Court's Rules of Civil Practice, which deals only with capacity to sue and be sued. The variations between section 430C of the bill and rule 17 (b) of the Rules of Civil Practice are as follows: 1. Rule 17 (b) provides, among other things, that the capacity of a corporation to sue or be sued shall be determined by the law under which it is organized. Section 430C provides that "for the purpose of determining citizenship under this section, a corporation shall be deemed to be a citizen of the State in which it is sued, if the cause of action arose within said State and if such corporation is authorized to do and is doing business therein irrespective of the State of its incorporation." [Italics added.] The words quoted are the only words in the section or in the bill concerning suits by or against corporations. They apparently, therefore, are intended to affect the jurisdiction of the district courts over suits between citizens of different States, provided for in section 41 of the Judicial Code. Whether the provision would accomplish that purpose is doubtful, for it relates to the determination of citizenship "under this section." This committee sees no great objection to a proposal which would prevent a foreign_corporation authorized to do and doing business in a State from resorting to the Federal courts on a cause of action arising within the State. The proposed section 430C, however, is so inaptly drawn as to make it doubtful whether it accomplishes its purpose. In any event a change in the diversity of citizenship jurisdiction of the district courts ought to be accomplished by an amendment of section 41 of the Judicial Code, not in a section which otherwise deals entirely with capacity. 2. Rule 17 (b) provides that, where a partnership or other unincorporated association has no capacity to sue or be sued under the laws of a State in which a district court is held, it nevertheless has the capacity to sue or be sued in the district court for the purpose of enforcing for or against it a substantive right existing under the Constitution or laws of the United States. The proposed section 430C eliminates this provision, with the result that under it the capacity of partnerships and other unincorporated associations would always be determined by the laws of the State in which the district court is held, even if a Federal right were in question. Apparently it is the purpose of this amendment to reverse the decision of the Supreme Court in United Mine Workers v. Coronada Coal Company (259 U. S. 344), where it was held that an unincorporated association, legal recognition of which had been extended in various ways, could be sued for damages under the Sherman Act, though the State court held that it was without capacity to sue or be sued. In that decision the Supreme Court forcefully pointed out that unless an unincorporated organization is held to have the capacity to be sued, the result would be to deprive those injured by the acts of such an association of all remedy. "To remand persons injured to a suit against each of the 400,000 members to recover damages and to levy on his share of the strike fund, would be to leave them remediless." The Coronado decision involved a labor union, but the principle of the case and the provisions of rule 17 (b) are applicable to unincorporated associations of every character. This provision of the bill would represent a step backward in the development of the law. The modern tendency, and a highly beneficial one, has been to provide a practicable, workable remedy for any legal wrong, striving for the elimination of unnecessary procedural complexities. Miscellaneous provisions.-The bill proposes to amend section 412 of the Judicial Code to provide that all jurors, grand and petit, shall be drawn from a list of 2,000 persons "proportioned equally among the counties contained in such judicial circuit, as the population of such counties may appear from the last census." This provision would presumably repeal section 413 of the Judicial Code, under which jurors are to be returned from such parts of the district as the court shall direct, having in mind expense and burden on citizens. argument in favor of the proposal contained in the bill is not apparent and there are real reasons to doubt its desirability. At least in districts which are of considerable geographical extent the proposal obviously involves a substantial expense on the part of the Government and a real burden on the citizens drawn from remote regions. The Section 430B provides that all causes of action arising within the jurisdiction of a district court shall be heard at the nearest place of holding of the court to the residence of the defendant unless the defendant is a nonresident, in which case it shall be heard at the nearest place to the residence of the plaintiff. It further provides that no such case shall be transferred "to another place in such circuit" without the agreement of both parties. The principle of this provision seems unobjectionable. It should be noted, however, that the phrase "causes of action arising within the jurisdiction" is ambiguous as it is not clear whether it applies to all causes of action over which the district courts have jurisdiction or whether it applies only to those arising within the territorial district. The bill further contains (sec. 430D) various detailed provisions for the appointment of official stenographers, their compensation, and the use of transcripts of testimony and proceedings. While this committee sees nothing particularly undesirable in these provisions, it believes that their subject matter can more properly be dealt with in rules of court. Rule 80 of the Supreme Court Rules of Civil Procedure covers substantially the same ground with greater flexibility. The committee believe strongly that this bill ought not to pass. In the first place its particular provisions are in the main objectionable. No one would seriously advocate a repeal of the Supreme Court's power to make rules for law action at variance with State practice, but the bill's reenactment of the conformity act may have that very result. The proposal to limit the power of the judge to comment on the evidence would represent a stultification of the true trial by jury. Denial of the capacity to sue and to be sued to unincorporated associations would be to deny justice in many cases. The other provisions of the bill are either so vaguely drawn as to be the cause of nothing but litigation, or clearly undesirable, or at the best unnecessary. In the second place, any particular provisions of the bill aside, there is surely no occasion now for any tinkering with the Supreme Court's Rules of Civil Procedure. Let the rules which have been so carefully drawn and so thoroughly considered become effective in the form prescribed by the Supreme Court. If in practice particular rules prove to work unsatisfactorily, there is every reason to believe that the Court will make the necessary corrections. If it fails to do so, Congress can then act. For the reasons above stated the bill is disapproved. Cloyd Laporte, chairman, Haughton Bell, Samuel Blumberg, Porter MARCH 4, 1938. Mr. CHANDLER. Mr. Chairman, I sent a copy of the proposed unified rules of procedure to Mr. Walter P. Armstrong, a very prominent lawyer of Memphis, and chairman last year of the American Bar Association's committee on jurisprudence and law reform, and ask that his comments be placed in the record, inasmuch as he and his |