July 21, 2008
Update on the Judge Kent investigation
It looks as if the heat is being turned up again on embattled U.S. District Judge Sam Kent. Here is the latest by Chron reporter Lise Olsen:
Justice Department broadening investigation of Kent
Sale of home and gift reporting being examinedA Justice Department investigation into the sexual conduct of U.S. District Judge Samuel Kent has expanded to include allegations that he accepted but failed to report gifts and also sold his home in a deal arranged by a lawyer with dozens of cases in his court, Kent's own attorney and other lawyers have confirmed.
The ongoing investigation was launched last year after Kent's former case manager complained that the judge sexually molested her. Since then, several prominent attorneys have been subpoenaed by federal prosecutors to appear before a Houston grand jury involving other allegations of judicial misconduct, according to documents and interviews obtained by the Chronicle.
Months ago, investigators began asking about parties, a 2001 trip to London and meals attorneys had bought for Kent at Galveston restaurants — often on days they did business in his court, lawyers and former co-workers said.
According to Kent's attorney, Dick DeGuerin, they also requested records about a real estate deal in which one of those attorneys, Kurt Arnold, helped persuade his mother to buy Kent's home in the city of Galveston.
[. . .]
The 2006 sale price was $339,500 for the 64-year-old house in the Denver Court neighborhood a few blocks inland from the seawall. The property is valued at $224,090 by the Galveston County Appraisal District. However, appraisals obtained by the buyer and seller were closer to the sale price, . . .
Arnold is a former law clerk of Judge Kent who had cases pending in Judge Kent's court, so the implication of the article is that Arnold arranged for his mother to make a favorable purchase of Judge Kent's house. Nevertheless, it appears that the sale was for fair market value, although Judge Kent was able to negotiate a reduced commission on the deal because Arnold's mother didn't use a realtor. The article suggests that the reduced commission was an effective gift to Judge Kent from Arnold, which is a stretch.
The grand jury is also investigating possible gifts that Judge Kent received from attorneys practicing in his court, including a 2001 trip to London and lunches at various Galveston restaurants. The Chron reports that "at least" 10 attorneys have been subpoenaed to testify before the grand jury, although several have given sworn statements in lieu of testifying. Judge Kent has already given a statement to the FBI and has offered to cooperate with prosecutors, but has not yet been requested to do so, according to his defense counsel, Dick DeGuerin.
It's still too early to say what all this means for Judge Kent, but the extent of the grand jury investigation is not good news for him. Stay tuned.
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July 4, 2008
Nice job, but what about that other case?
This Wall Street Journal editorial pats itself on the back justifiably for swimming against the mainstream media tide in opposing from the outset former New York Attorney General Eliot's Spitzer's popular but dubious litigation and propaganda campaign against former New York Stock Exchange chief executive officer, Richard Grasso. The Spitzer-inspired case against Grasso fell apart earlier this week under the weight of multiple negative appellate decisions.
The Journal deserves much credit for standing up to Spitzer's bullying tactics when few others in the mainstream media were willing to do so. But what does the Journal say about turning a relative blind eye toward this even worse prosecutorial abuse?
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June 25, 2008
The Future of Law Firm Advertising?
Clear Lake-area plaintiff's lawyers Ron and Scott Krist use the YouTube video below to explain why helicopter crash victims should hire their firm. Not exactly To Kill A Mockingbird, but pretty darn effective nonetheless. By the way, I wonder who the defense attorney was that Scott got fired?
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June 3, 2008
So, what's the difference?
Mel Weiss was sentenced to 2.5 years in prison yesterday for making undisclosed payments to class representatives in class action lawsuits that his firm handled. As noted here about a year ago, Weiss didn't have much of a choice given the trial penalty that he was facing.
Meanwhile, in return for being the key witness against former Enron CEO Jeff Skilling, Enron Task Force prosecutors "paid" Andy Fastow with a lighter prison sentence than the one the prosecutors disclosed to the jury and the judge during Skilling's trial. Those same prosecutors also withheld from Skilling's defense team exculpatory statements about Skilling that Fastow made before he elected to accept the prosecutors "payment" of a lighter sentence and testify against him. The lead prosecutors involved in arranging Fastow's testimony have gone on to presumably lucrative careers in private practice. Skilling is serving an effective life prison sentence.
As Larry Ribstein has long contended, paying kickbacks should not be condoned. However, the hyprocrisy reflected by the above-described state of affairs is not going to be solved by demonizing Mel Weiss.
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May 30, 2008
The Bear Stearns lesson
Yesterday brought the final installment of Kate Kelly's extraordinary three-part W$J series on the fall of Bear Stearns (Kelly also contributed to today's story on Bear's final shareholders meeting). My goodness, was Kelly a fly on the wall over at Bear's office during all of this? Dear John Thain has an interesting critical analysis of the series here, here and here, while Larry Ribstein and John Carney point out that Kelly apparently fell for what has become known as "the loophole legend" in regard to JP Morgan's buyout of Bear.
Although all the articles in the series are fun reading, Kelly's most insightful observation comes from the second installment:
It was the beginning of a frantic 72 hours that would bring the Wall Street firm to its knees and threaten the stability of the global financial system. . . . The brokerage's sudden fall was a stark reminder of the fragility and ferocity of a financial system built to a remarkable degree on trust. Billions of dollars in securities are traded each day with nothing more than an implicit agreement that trading partners will pay up when asked. When investors became concerned that Bear Stearns wouldn't be able to settle its trades with clients, that confidence evaporated in a flash. Trading partners, eager to avoid losses, began to disappear almost as quickly. That further fueled rumors of trouble. Some partners, spotting a chance to profit, made bets against Bear Stearns, helping accelerate its demise. . . .
Even after the Bear Stearns lesson, our understanding of the pesky trust-based business model is still not what it should be. Improving the investing public's understanding of how best to hedge the risk of investing in trust-based businesses is a far more productive response to Bear Stearns-type business failures than this.
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May 24, 2008
Opting out with meaning
Earlier this week, the owners of the National Football League elected to opt out of the final two years of the league's Collective Bargaining Agreement with its Players Association. The Mile High Report and Stacey Brook do good jobs of analyzing the impact of the owners' election and neither believe that a lockout or strike is likely before a new deal is struck. My sense is that they are probably right, but I did chuckle when I saw this AmLaw Daily blog post on the owners' decision in regard to hiring counsel for the upcoming labor negotiations:
. . . [The NFL owners] hired L. Robert Batterman of Proskauer Rose. Batterman is well known in labor circles for his National Hockey League work. It was Batterman who presided over the NHL labor negotiations that scuttled the league's 2004-05 season, making it the first North American pro sports league to lose a full year to labor strife. "Batterman bullied [the union] into submission," says one sports labor lawyer who requested anonymity. "If one accepts the conspiracy theory of collective bargaining, this means the NFL must be looking for trouble," says another. [. . .]
No official negotiations have been held. But the hiring of Batterman sent a clear signal to the union. Gene Upshaw, president of the NFL Players Association, told SportsBusiness Journal in April that his "concerns were heightened" when he heard Batterman had been retained, noting that NHL players crumbled before Batterman's hard line. The NFLPA's outside counsel, James Quinn of Weil, Gotshal & Manges, says that the owners "have this bizarre notion that they want to get tough, so they go get Bob Batterman." (Jeffrey Kessler of Dewey & LeBoeuf is also counsel to the NFLPA.)
Doesn't sound exactly as if the NFL owners are preparing to play nice, now does it? ;^)
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May 23, 2008
Reflecting on the raid
The Third Court of Appeals' decision yesterday ruling that the State of Texas had illegally seized over 450 children from their homes at a polygamist West Texas ranch threw a large monkey wrench into the largest custody case in (at least) recent American history (the court's decision is here). However, the decision is almost certainly the correct one. As Scott Henson has diligently reported over the past two months, the state's case for taking such pervasive action was shaky, at best, and has clearly deprived many parents and children of their due process rights.
The appellate court concluded the state had offered no evidence that all of the children were in danger other than an investigator's vague opinion that the church's "belief system" encouraged teenage pregnancies. State investigators have identified 20 females at the ranch who had become pregnant before age 18, but most of them are now adults. "Even if one views the FLDS belief system as creating a danger of sexual abuse, there is no evidence that this danger is 'immediate' or 'urgent' . . . with respect to every child in the community, " the court observed.
As Henson has noted, Texas authorities' handling of the case has been dubious from the get-go. The state raided the compound last month after a sobbing woman called a family-violence hotline and identified herself as a 16-year-old girl who had been forced into marriage at the compound. Authorities never found the girl and now believe the call may have been a hoax. Then, at a mass custody hearing in mid-April that can only be described as a gross miscarriage of justice, one of the state's chief witnesses testified that he did not really know whether the young girls and boys removed from the ranch truly had been in danger. Given that context, the appellate court's decision is not surprising.
Notwithstanding the foregoing, it is difficult not to feel a profound sense of sadness over the many women and children who are subjected to a stifling existence at the Eldorado compound by a relatively small number of sexual tyrants who hold sway over them. Anthropologist Lionel Tiger addressed the genesis of the cruelty recently in this Wall $treet Journal op-ed:
The fact is that, despite all the blather about faith and freedom of religion, the men operating the various compounds in question are behaving in virtually the same manner as countless dominant males in countless primate troops observed over the years.
The essence of the case is that the men who control the politics of the group (as well as the hapless women and children who live there) have used junk theology about heaven, hell, paradise and salvation to maintain their unquestioned access to all females of reproductive age (or younger).
That's the reproductive fantasy of any adult male primate.
In this blow to simple decency, the Texas polygamists are not pathfinders. Multiple wives are of course permitted in the Islamic religion, and co-wives are a feature of dozens of human groups in which powerful men control sufficient resources to be able to support more than one woman.
This is usually because the societies in which they live are sharply unequal. Sex and offspring flow to those with resources.
One of the triumphs of Western arrangements is the institution of monogamy, which has in principle made it possible for each male and female to enjoy a plausible shot at the reproductive outcome which all the apparatus of nature demands. Even Karl Marx did not fully appreciate the immense radicalism of this form of equity.
The Texans' faith-flaunting is morally disgraceful and crudely cynical. It also raises bewildering questions about human gullibility on one hand and the efficacy of the Big Lie on the other.
Can anyone really believe that the notorious communal bed to which senior men command 16-year-old girls is part of some holy temple apparatus? Apparently some people do, and the few escapees from the fetid zoo have testified to the power the ridiculous theory wields.
The victims are not only young women but young men too. They are reproductively and productively disenfranchised, and are in effect forced to leave the communities to become hopeless, ill-schooled misfits in the towns of normal life. No dignified lives as celibate monks with colorful costumes for them.
Again, the issue is cross-cultural. Osama bin Laden has at least five wives, which means that four young men of his tribe have no date on Saturday night and forever. They may become willing jihadists, or desperate suicides eager to soothe their god by killing infidels and Americans.
Elsewhere, preference for sons has meant a sharp shortage of women in China. It is known that raiding parties from there cross into bordering countries with more regular sex ratios to steal women.
The deranged cults have been operating in plain sight for years in Texan communities whose police forces have been earnestly writing parking tickets while ignoring what is obvious major criminality. Some 400 young children have been drastically separated from their mothers – who among other derogations of civil life are allegedly part of longstanding welfare fraud engineered by their sexual tyrants.
And now what? It will be intensely depressing but probably useful to acknowledge this is at bottom a natural matter, a product of our inner behavioral nature. Understanding the shadowy sources of this nightmare may help our community cope with its victims.
John Calvin would say that the Eldorado compound is a reflection of the depravity of man. A nation of laws that protect the individual from the overwhelming power of the state may prove inadequate to deter the men who perpetrate such cruelty. But a special place in hell awaits them.
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May 20, 2008
And you thought the Mitchell Report was ugly?
So, the controversy over the Mitchell Commission Report has pretty much died down, right? Well, it looks as if another potential public relations nightmare is brewing for Major League Baseball:
Tucked away inside the United States attorney’s office in the Northern District of California are documents that link more than 100 major league baseball players to positive tests for steroids conducted in 2003.
The test results were meant to be anonymous, and a battle over access to them has wound its way through the federal court system. The players union has tried to protect its members by arguing that the government illegally obtained the information.
But now, more than four years after federal agents seized the test results as part of the investigation into the drug-distribution activities of the Bay Area Laboratory Co-operative, the government appears close to prevailing in the legal battle, which could set off another round of federal drug investigations.
According to a lawyer who spoke on condition of anonymity because the government’s plans are supposed to remain confidential, federal authorities will seek to question each of the 104 players about where and how they obtained the substance detected in their urine samples.
The authorities then intend to distribute the information they receive to federal prosecutors around the country.
Distributors, not users, have been the focus of the government’s investigations into performance-enhancing drugs ever since the authorities began seriously looking into the issue in 2002. But the 104 players would be asked to provide testimony — to federal agents or before grand juries — to lead investigators to the distributors. The players’ identities could become public if their testimony is used in government documents to obtain search warrants or to charge individuals. The players could also be called as witnesses at trials.
Regardless of how many of the 104 names eventually become public, the notion of simultaneous drug investigations being conducted by various federal attorney’s offices around the country would be a significant setback to Major League Baseball, which has struggled to get control of the issues related to performance-enhancing drugs. [. . .]
Read the entire article. The MLB Players Association has to be kicking itself for not insisting on the destruction of the "anonymous" drug tests, which were conducted during the 2003 season. Under public pressure to agree to some regulation of performance-enhancing drugs, the Players Association had agreed to the 2003 testing as a "survey" under which all players would be tested one time and 240 players would be randomly tested a second time with neither group being under any threat of punishment. Subsequently, discovery in connection with the investigation into the Balco case in Northern California transcended the deal between Major League Baseball and the Players Association, so now it appears that there is a good chance that a master list of all players who tested positive during the 2003 testing may well become public information. The list won't be released tomorrow or even next week, so most of the mainstream media will continue to focus on such sideshows as the Mindy McCready affair. But you can bet that Major League Baseball and the Players Association can hear the clock ticking on this one.
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May 18, 2008
Nice comeback
Legendary defense lawyer Gerry Spence is defending Geoffrey Fieger on campaign finance charges in Detroit. Former Spence student Norm Pattis flew into the Motor City and took in a day of the trial last week. He passes along the following exchange that occurred while Spence was cross-examining a government witness:
Spence: "Can you tell me a case in the history of the world in which ..."
Prosecutor: "Objection."
Spence: "Okay, the United States."
Pattis' collected posts on the Fieger trial are here. Very interesting, to say the least.
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May 10, 2008
Worth a watch
For those of you interested in the vexing issues involved in application of the death penalty and child predator laws, the scene below from Boston Legal is worth ten minutes of your time (H/T David Feige). I don't agree with everything that Alan Shore says in his argument to the U.S. Supreme Court, and the scene is certainly far-fetched, but it's a thought-provoking performance nonetheless:
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May 3, 2008
The stench of injustice
Scott Henson reports on the 17th exoneration (see also here) of a citizen in Dallas who had previously been wrongly convicted. This time prosecutors withheld exculpatory evidence from the defendant's lawyers and police failed to investigate it. New Dallas District Attorney Craig Watkins continues to investigate what appears to be have been a culture of abject injustice within the Dallas County D.A.'s office. I will not be surprised if there are more exonerations.
By the way, the rest of the country is noticing this outrage.
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May 1, 2008
Neuroscience and the Law
I am always on the lookout for creative and interesting Continuing Legal Education seminars. This one clearly fits the bill:
Baylor College of Medicine’s Initiative on Neuroscience and Law is proud to announce its 2008 Conference. This conference showcases talks from experts in several aspects of neurolaw. Topics include responsibility, punishment, prediction, rehabilitation, brain death, genetics, competence, intention, and ethics – all with an eye toward understanding how cutting edge neuroscience will touch the current practice of law.
The conference, which is worth 3.5 hours of CLE credit, will take place on Friday, May 23, 2008, from 1-5 p.m. at Baylor College of Medicine (Room M321) in the Texas Medical Center. One of the speakers for the conference is Daniel Goldberg, a local attorney and former Texas Supreme Court clerk who is currently working on his PhD at the University of Texas Medical Branch while serving as a Research Professor at Baylor's Initiative on Neuroscience and Law and as a Health Policy Fellow at Baylor's Chronic Disease Prevention & Control Research Center (Daniel is also a frequent commenter on health care and health care finance issues on this blog). The preliminary agenda for the conference is here. Check it out.
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April 27, 2008
Thoughts for a Sunday
The NY Times' Adam Liptak has penned a couple of interesting articles recently (here and here) on a frequent topic of this blog (here, here, here, here, here, here, here, here, here, and here) -- the troubling incarceration rate in the United States.
With only 5% of the world's population, the U.S. now houses almost a quarter (2.3 million!) of the world's prisoners. One in 100 adults in the U.S. is now behind bars and 751 people are in U.S. prisons or jails for every 100,000 in population. The only other major industrialized nation that even comes close to that rate of incarceration is Russia with 627 prisoners for every 100,000 people. England’s rate is 151, Germany’s is 88 and Japan’s is 63. Attempting to keep all of this in perspective, Pepperdine University's James Q. Wilson provides this recent op-ed that puts the U.S. incarceration rate in a more favorable light with regard to reducing serious crime.
Among other things, these incarceration numbers certainly makes one wonder why on earth we are sending folks like Jeff Skilling, the NatWest Three, the Merrill Four and Jamie Olis to prison?
Meanwhile, in this five-part LA Times debate, Reason's Jacob Sullum takes on the Heritage Foundation’s Charles Stimson over one of the main reasons for the high U.S. incarceration rate -- drug prohibition. At least in this first installment, Sullum makes a much more compelling case than Stimson. And Peter Gordon has this sage observation about the genesis of drug prohibition.
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April 11, 2008
Remember Kelo?
Check out this recent Second Circuit decision (H/T to Robert Loblaw) as an example of how the appellate courts are applying the U.S. Supreme Court's controversial 2006 decision in Kelo v. New London. Kelo allows the state to seize private property to facilitate private re-development as a legitimate form of "public use" under the U.S. Constitution.
Kelo has been widely criticized for creating perverse incentives for politically well-connected real estate developers to exercise their political clout where negotiation with private property owners didn't generate the developers' desired result. The Second Circuit case involves the huge redevelopment plan in downtown Brooklyn that will primarily benefit Bruce Ratner, a wealthy New York real estate developer. In addition to the ubiquitous office buildings and high-rise condos involved in such deals, the redevelopment will include a new arena for the New Jersey (soon to be Brooklyn) Nets NBA basketball club. Although most of the property to be contributed to the development is public land, the redevelopment plan also requires the state to seize several tracts of private property through exercise of its eminent domain power.
The private property owners sued and argued that the state's claim of public benefit is a facade, as the Second Circuit puts it, "to benefit Bruce Ratner, the man whose company first proposed it and who serves as the Project’s primary developer. Ratner is also the principal owner of the New Jersey Nets. In short, the plaintiffs argue that all of the 'public uses' the defendants have advanced for the Project are pretexts for a private taking that violates the Fifth Amendment."
The Second Circuit upheld U.S. District Court dismissal of the property owners' claims, explaining that the massive private benefits to Ratner do not trump the state's judgment that the project will also benefit the public. Moreover, even though the costs to the property owners may far outweigh the public benefits, the Second Circuit concludes that type of cost/benefit analysis is irrelevant under Kelo:
At the end of the day, we are left with the distinct impression that the lawsuit is animated by concerns about the wisdom of the Atlantic Yards Project and its effect on the community. While we can well understand why the affected property owners would take this opportunity to air their complaints, such matters of policy are the province of the elected branches, not this Court.
Given such dubious "public" ventures as this, the implications of the foregoing interpretation of Kelo are downright frightening.
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March 30, 2008
Icahn on settling Pennzoil-Texaco with Jamail
This blog is mostly about business and law, so Carl Icahn's activities have been a frequent topic. Likewise, this blog also centers on Houston, where the Pennzoil v. Texaco case from the mid-1980's is a part of the city's storied legal lore. Consequently, the video below of Icahn doing his equivalent of a standup comedy routine describing how he settled the Pennzoil-Texaco case with famed Houston plaintiff's lawyer Joe Jamail is an absolute classic for this blog. A very big hat tip to John Carney at Dealbreaker for the link to the Icahn video.
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March 2, 2008
Landry's is worth more because of what?
Did I read right what Steve Scheinthal, general counsel of Houston-based Landry's Restaurants, Inc., said in this Chronicle article?:
Landry's is . . . facing a handful of shareholder suits seeking class-action status in the wake of CEO Tilman Fertitta's bid to take the company private.
Fertitta made an offer on Jan. 27 to buy out the company at $23.50 for each unowned share. The $1.3 billion deal, including debt, is being reviewed by a special committee of the Landry's board. [. . .]
Scheinthal dismissed the shareholder suits as standard in a going-private transaction.
"Absent Mr. Fertitta's offer, the likelihood is that the company's stock would be trading well below the current market price," he said.
Landry's stock closed Friday at $17.73 a share, down 38 cents.
Fertitta's offer for Landry's was made without a financing commitment in a tough credit market. Yet, the company's general counsel is claiming publicly that such a speculative offer is all that is propping up the company's stock price?
I wonder what the boys over at Long or Short Capital will think about that?
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March 1, 2008
Sanctionable softball parents
Robert Loblaw explains why parents of high school softball players who are upset with their daughters' coach should not vent their criticism in a federal civil rights lawsuit. At least not in the Seventh Circuit.
Meanwhile, lest you think that women's athletics is not serious business, take a moment to watch the video below (H/T Jay Christensen) University of Michigan women's basketball coach Kevin Borseth have a post-game meltdown after his team blew an 18-point lead Thursday night and lost to Wisconsin, 69-67.
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February 28, 2008
Justice for Perverted Justice?
Earlier posts here, here and here addressed NBC's To Catch a Predator series, in which a television crew cooperates with police and a vigilante justice group to create child predator crimes. Then, the television crew follows the police as they apprehend the suspects, which NBC broadcasts for all to see in a sort of modern version of a witch hunt. This dubious combination of law enforcement and "entertainment" resulted in the tragic case of Louis Conradt, Jr., the late North Texas prosecutor who committed suicide with the witch hunters were on his front doorstep.
Now, this Dan Slater/W$J Law Blog post reports that Condradt’s sister is suing NBC in New York for $100 million, claiming, among other things, intentional infliction of emotional distress. Slater reports that her case has already survived the preliminary motion to dismiss stage of the lawsuit.
I don't know about you, but I hope she rings the bell on NBC.
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February 23, 2008
Thoughts on Rusty and Pettitte
This earlier post was one of the first to express reservations regarding Rusty Hardin's handling of Roger Clemens' defense to the allegations contained in the Mitchell Commission Report (previous posts here) and aftermath, but my reservations are nothing compared to those of Minneapolis attorney Ron Rosenbaum:
No one can really explain the strategy followed here," says Ron Rosenbaum, a local attorney and former talk-radio host on KSTP-AM, a station that still features him all too occasionally. "It strikes me as insane." [. . .]
"There's a difference of opinion in this town, but from the very beginning I thought this was a textbook case of how to not handle a legal situation like this," Rosenbaum says of his fellow lawyer, adding with incredulity that Hardin would allow Clemens to submit himself to a lie detector test, which the pitcher has said he would take. "At the end of the day, all you can do is recommend advice as an attorney. You can't tell your client directly what to do."
Rosenbaum is even harder on Clemens, who he characterizes as an ego-driven "buffoon."
I know Hardin, who is a first-rate trial attorney. Thus, unlike Rosenbaum, I'm certain that Hardin has fully advised Clemens in writing of the considerable risks of the strategy that Clemens has undertaken in attempting to defend himself against alleged PED use. Nevertheless, the disastrous Clemens defense strategy to date reminds me of the best advice I used to pass along to young attorneys who I trained: "One of the most difficult, yet important, responsibilities of a good lawyer is to tell a potentially lucrative client 'No'."
Meanwhile, Clemens' former teammate and friend, Andy Pettitte, was widely praised across most of the mainstream media (the Chronicle's Jerome Solomon was a notable exception) for his "honesty" in admitting during a press-conference earlier in the week to use of human growth hormone at several times in the past. Now, I'm not much of one for simplistic morality plays being applied to complex issues such as PED use in professional sports and society. Moreover, I certainly don't approve of the way ballplayers such as Pettitte and Clemens have been filleted publicly while Major League Baseball owners have largely received a pass on their culpability for promoting an almost pathologically competitive MLB culture that promotes use of PED's and other drugs. Nevertheless, as this C.J. Mahaney post points out, Pettitte's supposed adherence to his avowed Christian faith during his "confession" leaves much to be desired. Sometimes those simple morality plays aren't quite as applicable as they first appear.
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February 21, 2008
Looking for other lines of work
So Professor Buser, what did you plan on doing as a side occupation after your expert witness career? Judge Posner wants to know:
Buser’s initial report proposed that if permitted by Allmerica to continue its market-timing trading, Emerald would have earned an annual rate of return on its investment of 34 percent for 20 years, for a discounted present value of $150 million. That was a preposterous estimate, properly excluded by the district judge under Fed. R. Evid. 702. . . .Buser’s first report was so irresponsible as to justify the judge’s decision to exclude the second report summarily. Buser had demonstrated a willingness to abandon the norms of his profession in the interest of his client. Such a person cannot be trusted to continue as an expert witness in the case in which he has demonstrated that willingness, and perhaps not in other cases either.
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February 15, 2008
A solid endorsement
I've been enjoying the new local blog Life at the Harris County Criminal Justice Center, which, along with Mark Bennett's blog, provides an interesting daily glimpse of life around the Harris County criminal courthouse. Given the twists and turns of the recent Le Affaire Rosenthal, both blogs have had interesting observations about the players.
In this recent post, the HCCJC blog makes the following common sense endorsement that I hope all Harris County voters will embrace:
In the 176th [Criminal District Court] Judical Race, there is no issue in picking who I recommend.The race is between Michele Saterelli Oncken and incumbent Brian Rains.
Judge Rains has been on the bench ever since I've been a lawyer. And ever since I've been a lawyer he has had the reputation of being one of the rudest and most unkind judges on the bench since . . . well, Pat Lykos.
He claims that Michele Oncken is running against him "because I made her husband mad."
If only it was that simple, Judge Rains. The fact is that you've upset everybody.
The rudeness from this bench has gone well beyond the boundaries of being a "tough judge", and into the range of just absurd vindictiveness. The fact that a person is a jerk to both sides of the bar doesn't make that person any less of a jerk.Throughout the years, Rains has steadfastly refused to put people on probation. When probations were agreed to, he would passive-aggressively agree to the probation, but throw in 180 days in the Harris County Jail as a condition (thus nullifying the point of giving probation). He has sworn he considers the full range of punishment on any PSI hearing, but all attorneys know that it just isn't true.
Rains' refusal to consider the full range of punishment has led to more recusal hearings than any other judge that I'm personally aware of. One hearing even had the unlikely alliance of the District Attorney's Office and Dick DeGuerin.
His questionable bond decisions have led to at least two tragic murders committed by people out on bond in his court. His impatience with the pace of a trial has led to at least one capital murder conviction being reversed.
Michele Oncken was the Chief in his court for a year or two. Normally, the Chief/Judge relationship is one of some sort of fondness (or at least mutual respect). The fact that she is running against a Judge where she was previously a chief says a lot, in and of itself. She's been a Chief prosecutor for at least five years now, including stints in Capital Writs, District Court, and now in Juvenile. She certainly has the background for the job.
Sorry, Judge Rains, but its definitely time for you to go. Nobody deserves to be treated the way that you treat people.
Review this earlier post for more information on Judge Rains' dubious sentencing policies.
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February 14, 2008
The aftermath of the Clemens hearing
Many folks have been asking me about my thoughts on the Roger Clemens saga, but I am so disappointed with the abysmal level of discourse regarding the Mitchell Commission Report and the issues involved with the use of PED's in society that I find it hard to drum up much enthusiasm for addressing it. Compare the discussion of the issues from this earlier post with this live blog analysis of the questions and answers from Clemens hearing and you will see what I mean. Sort of makes you want to whipsaw the committee in the same manner as this Colman McCarthy/Washington Post op-ed, doesn't it? Art DeVany expresses similar sentiments.
Although I expressed reservations early on about the unconventional way in which Clemens' legal team has been defending the matter, I don't think the hearing measurably increased Clemens' risk of being charged criminally. In fact, in an odd way, the hearing may have actually mitigated that risk somewhat.
McNamee came across as such a manipulator that my sense is that it's doubtful that prosecutors would base a criminal case against Clemens primarily on McNamee's testimony. Thus, unless investigators come up with a conduit of the PED's who is willing to testify that the PED's were delivered to Clemens and McNamee, Clemens may avoid criminal charges. He is certainly not out of the woods yet, but the Congressional hearing probably hurt him more in the court of public opinion than it did with regard to a potential criminal case (Update: Peter Henning agrees with me).
Nevertheless, I'm not yet ready to bet on that prediction. At least without long odds in my favor.
Posted by Tom at 12:05 AM | Comments (1) | TrackBack (0)
February 13, 2008
On the DeGeurin-DeGuerin brothers and Houston's G-man
A couple of interesting stories have popped up over the past several days regarding Houston lawyers.
First, there was Mary Flood's profile of the DeGuerin (or was that DeGeurin?) brothers, Mike and Dick, two of the best in Houston's formidable criminal defense bar. The criminal defense bar in Houston has essentially branched out from two extraordinary criminal defense lawyers, the late Percy Foreman and Richard "Racehorse" Haynes. Mike and Dick are from the Foreman tree, while such excellent Houston criminal defense lawyers as Dan Cogdell and Jack Zimmermann stem from the Haynes tree. A good follow-up story for Flood would be to track the number of first-rate criminal defense lawyers in Houston who have been influenced by Foreman, Haynes and their many acolytes.
Meanwhile, not to be outdone, this ABA Journal article profiles Houston's $1,100-per-hour lawyer, Stephen Susman. As noted earlier here, Susman has long contended that that he charges in excess of a grand per hour "to discourage anyone hiring me" on an hourly basis. As they say in legal circles, Susman prefers cases with a bit more meat on the bone.
Posted by Tom at 12:05 AM | Comments (1) | TrackBack (0)
The psychotherapist-patient privilege
Gosh, as if Paul the psychotherapist, Gabe Byrne's character in the new HBO series, In Treatment, didn't have enough to worry about.
The Fifth Circuit Court of Appeals has just issued this interesting opinion on the psychotherapist-patient privilege in the case of former Austin police officer, John Auster (H/T Robert Loblaw).
Auster suffers from paranoia, anger, and depression, so the stress of the impending termination of his worker’s comp benefits was not exactly conducive to improvement of those conditions. Auster proceeded to tell two of his therapists that he was prepared to undertake a campaign of violence if his benefits were terminated. Inasmuch as the therapists had a duty under state law to report the threats, the U.S. Attorney's office indicted Auster for extortion.
On a defense motion to suppress Auster's threatening statements, the District Court threw out Auster’s threats on the grounds that they were protected by the psychotherapist-patient privilege and not admissible at trial. The government appealed and the Fifth Circuit reversed, reasoning that Auster knew that his therapists had to report the threats and so he had no expectation that the threats would remain confidential. Accordingly, the Fifth Circuit concluded that such threats are not privileged. As Loblaw points out, there is now a split among the circuit courts over the the psychotherapist-patient privilege, with the Fifth joining the Tenth Circuit in not recognizing the privilege, while the Sixth and Ninth Circuits recognize the privilege.
Posted by Tom at 12:00 AM | Comments (1) | TrackBack (0)
February 12, 2008
Lerach's sentence
Former plaintiff's class action securities lawyer Bill Lerach was sentenced yesterday to two years in prison, fined $250,000 and ordered to complete 1,000 hours of community service (Peter Lattman's W$J interview of Lerach is here and more W$J coverage of blawgosphere reaction is here). Lerach pled guilty last September to a felony count of conspiring to obstruct justice and to submit false testimony in federal judicial proceedings after being investigated by the Department of Justice for the better part of a decade.
My posts from over the years on Lerach and the investigation into his practice are here, and my latest posts summarizing my views on his plea deal are here and here. Along similar lines to the thoughts expressed in this post from yesterday, Larry Ribstein cautions those who take satisfaction in watching Lerach's fall from the pinnacle of the plaintiff's class action securities bar:
What many call their “greed” is what moves the market’s invisible hand and what has . . . generated so much public good for our financial markets. Both financial innovations and legal innovations may be taken too far, but this doesn’t negate their positive aspects and the need to encourage them.That’s not an excuse for wrongdoing. If laws have been broken the violators should be sent away. But we should be aware that the excesses of prosecutors can cause at least as much, and possibly more, harm than the excesses of financial speculators.
Posted by Tom at 12:10 AM | Comments (0) | TrackBack (0)
February 11, 2008
The winds of prosecutorial power
When the Department of Justice decided to prosecute Arthur Andersen out of business despite a manifestly weak case, that confirmed that the creation of enormous wealth for thousands of employees and an impeccable reputation built over decades of fine work provide no insulation these days from the excesses of an rapacious prosecutor's judgment.
Then, the DOJ decided to misapply a criminal law to prosecute several former executives of the social pariah Enron, which a vacuous mainstream media applauded without nary a mention of the dreadful implications that such a misuse of the state's overwhelming prosecutorial power portends.
Given this backdrop, it was not particularly surprising that the government threatened to put large employers out of business unless they served up a few employees for the government to prosecute. Or that the government turned its prosecutorial power on the business news media as well as almost everything else. In the meantime, some of the leading purveyors of this prosecutorial campaign of abuse were being rewarded for their actions and competing for the highest offices in the land.
But now the government is turning its prosecutorial power toward pillars of the legal profession, first with regard to a Mayer Brown partner who performed work for Refco and more recently with regard to Ben Kuehne, who has long been one of the most-admired lawyers in the Miami legal community. Ellen Podgor analyzes the implications of the Kuehne indictment and Ashby Jones adds more context here.
So, after much of the legal profession has stood by for years while prosecutors trampled the rule of law in criminalizing unpopular business executives, where does the profession now "hide [with] the laws all being flat?." Will the profession be able to stand upright in the winds of prosecutorial abuse that are blowing now? Stay tuned.
Posted by Tom at 12:10 AM | Comments (0) | TrackBack (0)
February 2, 2008
Piling on Rosenthal
It's become fashionable around Houston to be critical of outgoing Harris County District Attorney Chuck Rosenthal. Frankly, much of the criticism is deserved. But given what Rosenthal has been going through in federal court over the past couple of days, one has to wonder whether the media firestorm regarding Rosenthal has reached the point that otherwise rational observers have taken leave of their senses.
Take this latest Chronicle article on the hearing over Rosenthal's destruction of emails that he had been ordered to turn over in connection with a civil lawsuit in federal court. The Chron article, which is representative of the newspaper's vitriolic coverage of Rosenthal's political demise, calls the hearing a "contempt hearing" in which the judge could "hold Rosenthal in contempt, . . .[and] put the DA behind bars for six months."
H'mm. I don't think so.
Although the plaintiffs in the civil lawsuit are having a field day excoriating Rosenthal in court and in the media, I can't see how the judge could hold Rosenthal in contempt of court, at least at this stage. The plaintiffs' motion (see here) essentially requests that the judge hold Rosenthal in criminal contempt of court because of Rosenthal's destruction of email evidence and failure to comply with the court-ordered procedure for reviewing the emails. The motion doesn't call for Rosenthal to be held in civil contempt. There is no need for the court to take coercive action and Rosenthal would not be able to take any action to purge the contempt, anyway. The destroyed emails are gone for good and Rosenthal can't do anything about that.
Thus, Rosenthal -- who isn't even a party to the civil lawsuit -- is accused of criminal contempt, but he has been provided none of the protections that due process of law requires for a criminal defendant. Inasmuch as Rosenthal's allegedly contemptuous conduct did not take place in the courtroom, the trial judge does not have the power to hold him in criminal contempt without a full-blown trial on the criminal contempt charges. Indeed, the trial judge cannot even be the judge in Rosenthal's criminal contempt trial because the judge is a potential witness in that trial.
Likewise, the plaintiffs' lawyer in the civil lawsuit cannot prosecute a criminal contempt case against Rosenthal. Rather, the contempt charge must be referred to the U.S. Attorneys' Office, which then decides whether to prosecute Rosenthal based on an evaluation of the evidence and and the charges. If the U.S. Attorney decides to do so, then Rosenthal is entitled to the due process protections that any criminal defendant is entitled to receive, including notification of the specific charges, trial by jury, and confrontation of the adverse witnesses. The circus going on right now over in federal court doesn't come close to fulfilling those Constitutional safeguards.
So, I don't think Judge Hoyt is going to hold Rosenthal in criminal contempt and throw him in jail. Even if Judge Hoyt were to do so, the Fifth Circuit would likely stay the commitment order and eventually overturn it. The Chronicle and Rosenthal's many other detractors can continue to revel in the lame duck DA being filleted in a public court hearing, but at least provide Rosenthal due process of law. We in Houston have already seen what happens to the unpopular public figures of the moment when those protections are ignored.
Posted by Tom at 12:00 AM | Comments (3) | TrackBack (0)
February 1, 2008
The never-ending City of Houston corruption probe
It's been a couple of years since I last blogged on it, and it's been over two and a half years since the new defendants were first mentioned as potential targets in the probe, but the feds finally got around last week to indicting Andrew Schatte and Michael Surface, the principals in the Keystone Group who have made a living over the past decade or so managing big construction projects financed by the City of Houston and other municipalities. The press release on the indictment is here and a copy of the indictment is here. For unknown reasons, the U.S. District Clerk's office did not post the indictment publicly until yesterday, which is about as long as it took for the Chronicle's editorial staff to comment on the indictment.
The indictment alleges that Schatte and Surface bribed former City of Houston building services director Monique McGilbra to gain favor on a couple of big City of Housotn building projects for which they were competing. The feds allege that the bribes were both direct (not so big) and indirect (much larger), the latter of which were allegedly funneled through Garland Hardeman, McGilbra's former boyfriend who Schatte and Surface hired to work with them in obtaining the contracts. McGilbra, who copped a plea back in 2005, will be singing like a canary for the prosecution in this case.
Not enough is known about Schatte and Surface's defense strategy at this point to know what will be the most important issues in the case. However, one has to wonder why the U.S. Attorneys' office -- which has been investigating corruption in the City of Houston administration of former Mayor Lee P. Brown now for six years -- waited for over two and a half years after McGilbra had fingered Schatte and Surface to bring the charges against the two? Similarly, when did the feds notify Schatte and Surface that they were targets of a criminal probe? If it was some time ago (as it would appear), then why was Surface serving on the Harris County Sports & Convention Corp board for the past two years while being the target of a federal criminal probe?
The feds need to wrap this matter up.
Posted by Tom at 12:05 AM | Comments (0) | TrackBack (0)
Protesting the absolute priority rule while wintering in Houston
This Tom Fowler/Chronicle article reports on a retired commercial painter from Ohio is engaging in a rather novel protest of the absolute priority rule, the bankruptcy principle that prevents shareholders from receiving any value under a bankruptcy plan unless creditors either are paid in full or agree that the shareholders can receive something:
Calpine Corp.'s emergence from bankruptcy protection in the coming days will end a tough chapter in the history of Texas' No. 3 power producer, but don't expect applause from shareholder Robert Strouse.The retired commercial painter from Ohio likely will continue his vigil in front of the company's downtown Houston offices where he's been protesting the bankruptcy plan for the past two weeks.
"They'd like me to go away, but I'm going to hang on as long as I can," said Strouse, 62.
Strouse claims the company misled him about the price he could expect for his stock when Calpine emerges from bankruptcy — a charge the company denies. [. . .]
Strouse said his quarrel with Calpine began last month after a phone conversation with an investor relations official. He said he was told his 5,000 shares probably would be valued at about $1.60 each under the company's reorganization plan. That's a far cry from the $5.12 each he paid for them in March 2004, but better than nothing, he figured, so he voted in favor of the plan.
The plan that came out of the bankruptcy court in December, however, wasn't what he expected. It will cancel outstanding shares of common stock like his and replace them with warrants — the right to purchase new Calpine stock — but at a price likely higher than that at which the stock will begin trading.
"They lied to me, plain and simple," Strouse said.
Calpine said it didn't mislead Strouse and has been careful to tell all shareholders the same thing about the reorganization plan: that shareholders' stake in the company might have no value. [. . .]Strouse arrived in Houston from his home in Amelia, Ohio, via Greyhound bus earlier this month and has been renting a room at the downtown YMCA for about $130 per week.
He said he wanted to meet face to face with Calpine CEO Bob May, who sometimes works out of the office at 717 Texas Ave., but had to settle for coffee with an investor relations official. She didn't give him the answers he wanted, he said, so he bought some foam board and made a sign stating his complaints with the company.
Nearly every weekday he paces back and forth with the sign in front the Texas Avenue building where Calpine has its largest office, including its energy trading staff.
Workers regularly take pictures of him with their cell phone cameras, he said, but no one has tried to hamper his protest.
When it rains or he needs a break, Strouse ducks into a sandwich shop on the building's ground floor. He usually sits by a window eating lunch or calling friends and family using Skype, an inexpensive Internet-based phone service, over his laptop.
Money has gotten tight, Strouse said, but his house in Ohio is paid for and he already has a return trip ticket, so he's not in a rush to leave Houston or halt his protest. . . .
Posted by Tom at 12:00 AM | Comments (0) | TrackBack (0)
January 30, 2008
The products of an entertaining form of corruption
Inasmuch as the corrupt sponsorship of big-time football and basketball by academic institutions is a common topic on this blog, the following articles caught my eye:
The Chronicle's Richard Justice surveys several of the ugly recent incidents in big-time college football and calls for higher ethical standards. However, he ignores the perverse incentives built into the highly-regulated system that promote the unethical behavior.Meanwhile, one of the coaches who has been accused of being ethically-challenged -- former Texas Aggie coach Dennis Franchione -- turns out to be an over-achiever with an interesting story.
And how exactly is it that Rick Neuheisel was able to persuade UCLA to hire him as its new coach in the face of this curriculum vitae?
Look, June Jones, Rich Rodriguez, Franchione, Neuheisel and the other supposedly unethical coaches of the moment are not, on balance, any more unethical than the rest of us. They are simply the products of a highly-regulated system that creates all sorts of perverse incentives to act badly. Change those incentives and the coaches' behavior will change. A good start would be to quit paying the coaches the excess rents that should be paid to the players whose talents generate them.
Posted by Tom at 12:00 AM | Comments (0) | TrackBack (0)
January 23, 2008
Advances in Islamic divorce law
Certain areas of Islamic law remain archaic. However, it appears that at least technological pr