The Accidental AG

john.ashcroft.jpgGQ interviews former Attorney General John Ashcroft and it’s an interesting read. For example, the following is Ashcroft’s explanation on how he got into politics:

The way my life unfolded would have required the kind of vision that could make a man rich overnight. I mean, look at my career. I started out as a teacher. After five and a half years, the congressman from my district decides heís resigning, so I decide to go and sign up. I couldnít even name the counties in the district, but I said, ìWell, Iím going to make an American election out of this.î So I go out with more naÔvetÈ than you could get in two dump trucks and a coal train. And it turns out that there are two other kooksóI put myself in the categoryówho also sign up. So it becomes a four-man primary, and I lose. But little did I know that in losing, Iíd get the attention of the man who was being elected governor, Kit Bond, and his election would mean he vacated his position as state auditor, so he would appoint me to replace him. Now, if I had figured that out in advance, you would think that this is a guy whose counsel I should seek, because he can see around corners. But thatís the story of my life.

In another part of the interview, Ashcroft talks about one of his weaknesses:

You mentioned public outreach as a failure. What other failures did you have?
Oh, my gosh. How much time do you have? One thing, Iím too hasty to make decisions. Sometimes I think that Iím so right that I donít need to consider things carefully. Thatís when I have to be very careful. One good thing about the Justice Department is that there are lots of bright people. I mean, where theyíre used to flyspecking: ìNot so fast there.î ìAnd on the other hand.î ìHave you thought about this?î I staged meetings just for that purposeóto guard against my own propensity to make a snap judgment.

H’mm. Looks as if someone missed the “have you thought this through” meeting on the Justice Department’s decision to prosecute Arthur Andersen out of business.

Finally, a plaintiff’s case that tort reformers can love

scales_of_justice5.jpgTurnabout is fair play as this Third Circuit decision holds that the plaintiffs in a settled asbestos class action can pursue a class action against their lawyers for breach of fiduciary duty. The theory of the plaintiffs’ case is that their former class action attorneys did not disclose to the plaintiffs fee arrangements that the lawyers routinely made with local counsel that allegedly led to lower settlement payments for the plaintiffs. Not the greatest theory in the world, but what the heck.
At any rate, a U.S. District Court declined to certify the class and granted summary judgment for the defendant plaintiff’s lawyers, but a divided Third Circuit panel reversed and remanded on the grounds that the District Court used the wrong standard in evaluating the plaintiffs’ claims. Thus, under applicable Texas law, the appellate court ruled that the plaintiffs’ are entitled to proceed with their claims. As a result, a legal theory based on Texas law that tort reformers probably oppose is being used to pursue taking money out of the pockets of plaintiff’s lawyers, which is certainly something that the tort reformers support. This is a great state, isn’t it?
Hat tip to Robert Loblaw for the link to the Third Circuit decision.

Justice Hecht cleared in Miers flap

Hecht and Miers2.jpgTexas Supreme Court Justice Nathan L. Hecht, who was the subject of a public admonition by the State Commission on Judicial Conduct for his public support of former US Supreme Court nominee Harriet Miers, was cleared by a three-judge Special Court of Review that heard Justice Hechtís appeal of the sanction, which carries no civil or criminal penalty. The ruling, which had been expected, noted that the ethics rules under which Justice Hecht was sanctioned were impermissably vague and did not apply to his public reply to questions regarding his relationship of Ms. Miers. One of the members of the special court concluded that Justice Hecht had violated the rules, but that the rules were unconstitutional because they limited his freedom of speech. This Chronicle article on the ruling includes pdfs of the special court’s opinions, but if you want them, move quickly — the Chronicle’s links do not always last long.

Big DOJ initiative against bankruptcy fraud

us-doj-seal-lg3.jpgPeter Henning over at the White Collar Crime Prof Blog notes this Justice Department press release the other day announcing a wide-ranging crackdown on bankruptcy fraud, although none of the cases appear to have been landed in Houston:

United States Attorneys have filed criminal charges against 78 individuals in 69 separate prosecutions in 36 judicial districts on a variety of federal bankruptcy fraud and related counts, including 18 cases charged Tuesday, Deputy Attorney General Paul J. McNulty, announced today. The announcement is the culmination of ìOperation Truth or Consequences,î a nationwide sweep that demonstrates the breadth of enforcement actions taken by the Department of Justice to combat bankruptcy fraud and protect the integrity of the bankruptcy system. [. . .]
Collectively, the Operation Truth or Consequences bankruptcy fraud sweep includes charges filed against nine attorneys, two bankruptcy petition preparers, and one former law enforcement officer; alleged concealment of more than $3 million in assets; use of false Social Security numbers and false identities; submission of forged documents and use of false statements; defrauding of individuals whose homes were in foreclosure; fraudulent receipt of government loans and benefits; and various other unlawful acts.

I have no idea whether the DOJ’s initiative is justified. But bankruptcy is strong medicine with serious side effects, and the exposure to criminal liability in bankruptcy is often underestimated by debtors and their counsel. It shouldn’t be.

Two Houston docs convicted in Medicare-wheelchair scam

Wheelchair.jpgTwo Houston doctors — Charles Frank Skripka Jr., 65, and Jayshree Patel, 62, — were among four local men who were convicted by a jury this past Friday afternoon in federal court on charges related to accepting kickbacks in a scheme that allegedly defrauded Medicare of more than $21 million. The other two men convicted were James Ekiko, 43, the owner of a medical equipment supply company, and David Dennis Brown, 47, who recruited patients into the scam.The Justice Department’s press release on the convictions is here.
The jury convicted all four men of health fraud in connection with a scheme to prescribe motorized wheelchairs to people who didn’t need them. Skripka, Ekiko and Brown also were convicted of wire fraud and conspiracy to defraud Medicare, while Skripka and Ekiko were also convicted of money laundering. Prosecutors contended that recruiters such as Brown would pay prospective patients $50 each to see the doctors, who would then prescribe motorized wheelchairs. The medical supply company would bill Medicare $4,200 for the wheelchairs that cost $1,600, pay the doctors $200 per prescription, and then pocket the balance as profit. At the height of the scam, the doctors were writing as many as 80 prescriptions a day!

So, what’s the big deal about paying key witnesses?

scales of justice10B.gifIf you’re in Baltimore on Friday, you should make a point to drop in on Larry Ribstein and Bruce Kobayashi’s presentation at the University of Maryland’s 2006 Business Law Conference of their paper entitled What’s So Bad About Paying Plaintiffs?
In this related blog post, Larry highlights the issues addressed in the paper by juxaposing the treatment of a couple of plaintiff-types who are currently signing like canaries, Enron’s Andy Fastow and Howard Vogel, the main accuser of Milberg, Weiss:

We explore the basic policies at stake in the related issues of paying off plaintiffs and witnesses involved in the Milberg indictment. We ask, what’s the difference between Andy Fastow and Howard Vogel? [. . .]
Both cases involve paying somebody for the effort and other costs involved in bringing facts to a court to establish claims that society thinks are worth bringing. [. . .]

Continue reading

Project Posner

posner8.jpgNot just any judge has one of these. But it’s a darn good idea. The following is the website’s description:

The purpose of this site is to make freely and easily available to the public Richard Posner’s largest and greatest body of work ó his judicial opinions. The database contains opinions from 1981 to 2006. It will not contain the most recent opinions.
Why this site? While Posner’s books and popular writings are easily available to the public, his opinions are difficult or expensive for the public to access, let alone search. This site, for the first time, collects almost all of his opinions in a single searchable and easily readable database.
For lawyers and those interested in law, Posner’s opinions have a particular substantive value. One thing that distinguishes the opinions is the effort to try and get at why a given law actually exists, and an effort to try and make sense of the law. That can make them more useful than most case reports.
In addition, the opinions often develop the American general and state common law. Posner is among the judges who feels free to take the rule of Erie as more suggestion than injunction.
Finally, some of the opinions are funny.

I wonder whether Judge Easterbrook will get one, too?

The tax ruse of big-time college sports

ncaa-logo.jpgAs the Universities of Texas and Oklahoma prepare to reap millions this weekend during their annual shootout in Dallas, the National Collegiate Athletic Administration is preparing a response to a possible federal challenge to the tax policy that facilitates the universities’ financial windfall.
This Indy Star.com article reports that the House Ways and Means Committee has delivered an eight-page letter to NCAA President Myles Brand demanding that the NCAA justify why the multi-billion dollar business of big-time college sports deserves its education-based tax exemption (related Miami Hawk Talk post here; also see this Sports Law Blog post). The letter observes in part:

“Educational organizations comprise one of the largest segments of the tax-exempt sector, and most of the activities undertaken by educational organizations clearly further their exempt purpose. The exempt purpose of intercollegiate athletics, however, is less apparent, particularly in the context of major college football and men’s basketball programs.” [. . .]
“To be tax-exempt . . . the activity itself must contribute to the accomplishment of the university’s educational purpose (other than through the production of income). How does playing major college football or men’s basketball in a highly commercialized, profit-seeking, entertainment environment further the educational purpose of your member institutions?”

As noted here (see also here and here), NCAA member institutions sold out long ago to the owners of professional sports franchises by effectively agreeing to subsidize minor league systems in football and basketball for the owners. The education-based tax break fuels the raising of funds necessary to capitalize that system, and directly benefits the owners of professional sports franchises who do not need to allocate capital to development of minor league systems because of the NCAA members’ cooperation in doing it for them. The contrast between college baseball — a thriving but relatively small economic model that competes for players with a well-developed minor league professional system — and college football — a booming industry (at least for a relative few universities) that does not compete with a minor league for players — reflects the high stakes involved for everyone involved in the current system.
My sense is that nothing will come of this current Congressional inquiry because — as one of Larry Ribstein’s colleagues points out in the article — politicians from states that thrive on big-time college sports would probably never allow the gravy train to end. Moreover, foreign professional leagues in basketball are creating a minor-league system in that sport that is changing the nature of college basketball for the better, so arguably markets will eventually work to mitigate the hypocrisy of the current system, anyway. But given the extraordinary run-up in the value of National Football League franchises over the past couple of decades, don’t you think it’s about time that universities quit subsidizing a part of that growth?

Getting off cheap

Les Alexander.jpgThe Houston Rockets are off to Austin for pre-season training camp and, although the basketball team hasn’t achieved much lately, Rockets owner Les Alexander recently joined for the first time fellow Houston professional sports franchise owners Bob McNair (the Texans) and Drayton McLane (the Stros) on the Forbes 400 Richest Americans list. Alexander came in at no. 322 on the list with an estimated net worth of $750 mil.
Thus, some eyebrows were raised recently when this Palm Beach Post article revealed that Alexander had gotten out of his 30-year plus marriage to former wife Nanci in 2003 for a mere $150 million. That information is just now coming to light because Alexander had his attorneys obtain an improper sealing of the court records at the time of the divorce settlement.
Looks as if Alexander has done quite a bit better than the Rockets over the past few years.

Part of the problem

Jail hands2.jpgFrom time to time, most recently here, I’ve noted the abysmal condition and chronically overcrowded nature of the Harris County Jail. It is shameful that we allow the Harris County Commissioners to continue to tolerate this mess.
As Scott Henson has noted on his fine series on the problems with the Harris County Jail, one of the main reasons why the jail is overcrowded is that local judges assess jail time to low-risk persons who have been convicted of victimless or petty crimes.
With that backdrop, this Chronicle article reports that State District Judge Brian Rains of the 176th District Criminal Court was recently recused from the case of a teenager accused of possessing a small amount of cocaine and marijuana because Rains requires jail time for any defendant convicted of a drug offense, no matter how inconsequential. Rains’ stance is so far out of kilter that the district attorney’s prosecutor did not even bother to oppose the recusal. The vice president of the Harris County Criminal Lawyers Association speculates in the article that the recusal of Rains in this case will prompt many similar recusal motions.
I’m sure Rains’ “tough” stance on requiring jail time for all drug offenders plays well on the campaign trail. But it sure stinks as a matter of justice and Harris County jail administration. Here’s hoping that the local criminal defense bar continues to recuse him in drug cases and that a political opponent emerges to call him out on the short-sighted nature of his policy.