Margolin v. United States

Background

An attorney was hired by Yetta Cohen to press a claim for insurance benefits under the War Risk Insurance Act, later handled by the Veterans’ Bureau. He traveled to Washington, reviewed records, prepared papers, demanded $2,000, and received $1,500. He was indicted for unlawfully receiving that fee under a statute that allows only $3 for preparing and executing necessary papers when no court action is brought. The trial court fined him $250, the Circuit Court of Appeals affirmed, and the case reached the Court to review the statute and the conviction.

Reasoning

The Court addressed whether the statute forbids attorneys from charging more than $3 for services on a claim when no lawsuit is filed and whether that limit violates the Fifth Amendment. Relying on the statute’s plain language and the legislative history in the record, the Court concluded the law clearly permits only $3 for such assistance and criminalizes larger fees except where the statute provides otherwise. The Court rejected the constitutional challenge, finding the provision valid and not open to serious doubt, and affirmed the lower courts’ judgment.

Real world impact

The decision means lawyers who help prepare Veterans’ Bureau or similar administrative claim papers cannot lawfully take larger fees unless the statute allows it or a court proceeding is initiated. Receiving higher compensation in those circumstances is a misdemeanor punishable as the statute prescribes. The judgment affirms existing criminal enforcement of the fee limit for noncourt claims.