Lawyers for Oscar S. Wyatt Jr. have filed a motion to dismiss criminal conspiracy charges against the longtime Houston oilman in connection with the United Nations’ Oil-for-Food scandal in which they contend that the federal charges are retaliation for his being “a persistent and vocal critic of U.S. policy.” A copy of the motion to dismiss is here, the table of contents of the memorandum in support of the motion to dismiss is here, and you may download a copy of the 88-page memorandum here. Previous posts on the federal investigation of Wyatt in connection with the Oil-for-Food scandal are here, here and here.
Mr. Wyatt was indicted in October, 2005 is an expansion of another federal case that was brought in April against David B. Chalmers Jr., president of Houston-based Bay Oil USA Inc. The indictment accuses Wyatt of conspiring with Chalmers and two Swiss business executives of paying millions of dollars in kickbacks to Saddam Hussein’s regime in Iraq so that Wyatt’s companies could continue to sell Iraqi oil under the Oil-for-Food program. Under the indictment, the 81 year old Mr. Wyatt faces a potential jail term of at least 60 years and the threat that the Justice Department will attempt to freeze a substantial amount of his assets. Wyatt — who was arrested early in the morning of October 21 at his home in Houston — is currently free after pleading not guilty to the charges and posting bail of $2.5 million.

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This Opinion Journal op-ed by former House Speaker Newt Gingrich and Dallas orthopedic surgeon John Gill urges Congress to view Texas’ 2003 medical malpractice litigation reform legislation as a model for such legislation:

[P]hysicians are returning to the [Texas], particularly in underserved specialties and counties. Insurance premiums to protect against frivolous lawsuits have declined dramatically, with the stateís largest carrier reporting declines up to 22% and other carriers reducing premiums by an average of 13%. The number of lawsuits filed against doctors has been cut almost in half.

But Gingrich and Gill caution to get ready for a rumble over the Congressional debate on medical malpractice reform:

In the coming days, our senators in Washington will have a chance to stand up with America’s doctors and patients against the personal injury lawyers. Expect a brawl. On one side will be the lawyers, frantically attempting to protect and pad their wallets, while driving up costs for the American people and limiting our access to health-care providers. On the other will be the positive, pro-patient, pro-health-care story from Texas, a state which has taken an important first step toward creating a 21st-century health justice system that meets the needs of doctors and patients alike.

Read the entire piece.

Texas has no shortage of ugly death penalty cases, and one of the ugliest is that of Carl Wayne Buntion.
Buntion had 11 felony convictions and had been in and out of prison multiple times at the time that he was passenger in a car stopped at the intersection of I-45 and Airline for a minor traffic violation on June 27, 1990. Buntion got out of the car and shot Houston Motorcycle Patrol Officer James Irby in the forehead with a .357-caliber Magnum, destroying Irby’s brain. Buntion contended that he was acting in self-defense.
During Buntion’s 1991 trial on capital murder charges, State District Judge William Harmon told the defendant that he was “doing God’s work” in making sure that he was executed. According to a subsequent law review article by Brent Newton: “Harmon taped a photograph of the ‘hanging saloon’ of the infamous Texas hanging judge Roy Bean on the front of his judicial bench, in full view of prospective jurors. Harmon superimposed his own name over the name ‘Judge Roy Bean’ that appeared on the saloon, undoubtedly conveying the obvious.” During the trial, Judge Harmon laughed at one of Buntion’s character witnesses and attacked an appeals court as “liberal bastards”and “idiots” after it ruled that he must allow the jury to consider mitigating evidence. Not surprisingly, Buntion was convicted and sentenced to death.
This past Friday, U.S. District Judge Kenneth Hoyt issued an opinion (downloadable here) overturning the conviction of Buntion. In the decision, Judge Hoyt found that Judge Harmon had deprived Buntion of his Constitutional right to a fair trial by bullying his lawyers, meeting privately with prosecutors and deferring to their wishes, hanging the Judge Roy Bean postcard from his bench, and by making remarks such as the “doing God’s work” one referred to above. Judge Hoyt concluded that, even before hearing the evidence, “Judge Harmon decided that Buntion was guilty and should die.”
The issues that arise from the Buntion case are not ones with easy answers. However, as noted in this earlier post, the state’s administration of the death penalty is questionable enough without questions arising in regard to the independence of the judiciary in the process. Judge Hoyt’s decision in this troubling case is a powerful reminder of that truth.

As predicted earlier here, the U.S. Supreme Court ruled unanimously Monday that Anna Nicole Smith could pursue a tort claim in federal court that Anna Nicole’s bankruptcy estate owned and asserted against her late husband’s son and executor, J. Howard Marshall III.
The Court’s syllabus is here, Justice Ginsburg’s opinion is here, and Justice Stevens concurrence is here. Bankruptcy guru Steve Jakubowski breaks down the decision here and don’t miss Peter Lattman’s post on Dahlia Lithwickís clever Slate article on the opinion.

These previous posts reported on the unusual case of Jonathan D. “Jody” Nelson, the former chief financial officer of Snyder, Texas (between Abilene and Lubbock)-based Patterson-UTI Energy, Inc., one of the largest land-based drilling contractors in the U.S.
Early last November, the 36 year-old Nelson resigned for “personal reasons” and, a day later, he made a regulatory filing of his intent to unload about $13 million of Patterson stock. That disclosure prompted the company to make a public announcement that it was investigating a “former executive” in connection with the alleged embezzlement of over $70 million from the company, which was followed a week or two later by the Securities and Exchange Commission commencing a lawsuit to freeze Nelson’s assets. A day later, Nelson was named in a federal criminal complaint accusing him of falsely certifying an SEC report.
Well, Clear Thinkers favorite Peter Henning reports that Nelson has finally admitted to the scam and entered into a plea deal with federal prosecutors. This press release from the U.S. Attorney’s Office for the Norther District of Texas confirms that Nelson pled guilty last Thursday in Lubbock federal court to one count of wire fraud and aiding and abetting, and one count of engaging in monetary transactions derived from specified unlawful activity and aiding and abetting. Nelson faces a maximum sentence of 30 years in prison and a $500,000 fine.
Nelson’s scam was accomplished through through a bogus invoice scheme that had shell companies under his control receive Patterson-UTI money, which Nelson then spent on an airplane, an airfield, a cattle ranch, a truck stop, homes and vehicles. In case you were wondering, PriceWaterhouseCoopers, LLP. were the auditors who failed to notice that a 36 year-old CFO of the company was living rather large, at least by Snyder, Texas standards.

First, he hammered the FDIC with a record sanctions award in the long-running case against Maxxam chairman Charles Hurwitz.

Then, he challenged the Enron Task Force’s bludgeoning of a plea bargain from a mid-level former Enron executive.

Now, U.S. District Judge Lynn Hughes accused federal prosecutors of “reckless and conscious indifference” for bringing a fraud charge against Oklahoma lawyer John Claro and said he would award attorney’s fees to Claro under the Hyde Act that provides sanctions for bad-faith prosecutions.

“The charges are a jumble of claims and stray facts,” U.S. District Judge Lynn Hughes said about a health-fraud indictment against John Claro and seven others.

Giving short shrift to protests by Assistant U.S. Attorney Vernon Lewis, Hughes allowed Claro to present the court a bill for $327,000, or 1,090 hours at $300 per hour, from Houston attorney Dick DeGuerin.

Grizzled courthouse veterans observed that Claro must have received DeGuerin’s discount rate.

The Chronicle article goes on to explain:

A Houston grand jury issued indictments March 25, 2004, accusing Claro and the others of fraudulently enticing employers to buy health insurance policies administered by offshore companies not licensed to do business in the United States.

In announcing the indictment, then U.S. Attorney Michael Shelby said in a news release, “Today’s indictment brings to light a fraud of unimaginable proportions that victimized thousands of working men and women across the United States and the small businesses that employ them.”

[Judge Hughes] threw out the charges against Claro and the other defendants July 20 [2005] after DeGuerin invoked the Hyde Amendment, a 1997 law that allows a court to award reasonable attorney’s fees and other expenses if a prosecution is found to be “vexatious, frivolous, or in bad faith.”

Judge Hughes has scheduled a May 9th hearing to determine the amount of fees and expenses that he will award in favor of Claro.

This previous post notes Yale Law School Constitutional Law professor Jack Balkin‘s (of the popular Balkinization blog) article in which he favors the “living Constitution” approach over originalism as a theoretical framework for interpreting the U.S. Constitution.
In this recent blog post, Professor Balkin addresses a basic structure of constitutional interpretation and the limits of interpretive theory, and breaks down the topic into four basic issues: fidelity, interpretation, construction, and constraint. He then notes:

[T]he issue of what fidelity requires is not the same thing as the question of how the system produces constraint. That is to say, it’s possible (in fact it is likely) that the requirements of fidelity permit people to arrive at a wide range of different answers to constitutional questions over time, and that the work of constraining interpretation and construction is achieved by other features of the system. It is often assumed that what constrains judges are a set of rules of interpretation and construction, that, if followed, will produce correct answers that will also constrain judges, or, less ambitiously, keep judges from making arbitrary decisions (and poor decisions) or keep them from moving too far out of the mainstream of constitutional thought.
My view, by contrast, is that theories of constitutional interpretation, even the best theories, offer only part of the constraints necessary for the practice of judicial review, particularly when constitutional issues become most strongly contested. Rather, much of the work of constraint is produced by structural and institutional features of the constitutional system.

Check out the entire post.

This earlier post (also see here) noted the wrangling that had developed in the Enron bankruptcy case in New York over former Enron chapter 11 CEO Stephen Cooper‘s $25 million “success fee” request. That success fee, mind you, was on top of over $100 million that Cooper’s firm had already made in providing debtor-in-possession management services to Enron.
Well, as the thorough Steve Jakubowski reports here, Cooper’s proposed compromise of a $12.5 million success fee was approved late last week by the Enron Bankruptcy Judge, Arthur Gonzalez.
Not bad work if you can get it. But still no word yet from Lynn LoPucki.

This earlier post noted the paradigm shift in favor of creditors that has occurred recently with the amendments to the U.S. Bankruptcy Code, but that shift is nothing in comparison to the pressure that creditors in China can apparently bring to bear upon struggling debtors.
Get a load of this First Circuit Court of Appeals decision involving an appeal of a lower court decision denying a young Chinese woman’s request to remain in the U.S.:

Petitioner grew up in a small village in southeastern China. In 1998, her father partnered with Su Fei Pan, a local Communist Party boss, to start a new business. After an employee embezzled the business’s proceeds, the venture failed and petitioner’s father was left unable to pay off his outstanding loans.
Su Fei Pan, however, brokered a deal to clear the father’s debts. A wealthy Taiwanese man would pay off the debts if petitioner’s father would permit the man to marry his daughter, petitioner’s older sister. Petitioner’s father agreed, but the sister, who was 19 years younger than the Taiwanese man, refused and ran away from home.
A month later, in September 1999, Su Fei Pan attempted to broker the same deal but with petitioner taking the place of her older sister. Su Fei Pan told petitioner that her older sister was waiting for her in a hotel in the city of Fuzhou (a two hour drive from her village). When petitioner entered the hotel room, she was grabbed by an older man, presumably the Taiwanese man, who then tried to force her down onto the bed. Petitioner resisted and was able to escape. She fled from the hotel and went into hiding.

After hiding from her father, the Communist Party official and the Taiwanese man for several years in China, the young girl eventually made her way to the U.S. in 2002 with a fake visa, where she was promptly arrested at the LA airport and placed into custody for another few years. Inasmuch as she does not belong to a particular social group (“unmarried young wom[en] from rural China . . . who have resisted being forced into marriages and sexual relationships by a person in power” apparently isn’t good enough), the First Circuit affirmed the Immigration Board’s ruling and sent the young woman packing to China, where presumably the Communist Party is still providing brokerage services for her marital future.
Sort of makes you wonder what collection strategy the Communist Party would have taken had the father not had any daughters? Hat tip to Appellate Law & Practice for the link to the First Circuit decision.

Chapter 22 cases — the nickname for successive but seperate reorganization cases under chapter 11 — are uncommon, but certainly not unheard of. However, a chapter 26 case — a reorganization under chapter 11 followed by a bankruptcy case in a foreign country and an ancillary case in the U.S. under chapter 15 of the U.S. Bankruptcy Court — well, you just don’t see that even once a decade.
Enter OAO Yukos, the embattled Russian oil and gas company that filed a chapter 11 case last year in Houston (subsequently dismissed) in a failed effort to stop a Russian government-imposed dismantling of the company to pay the government for past-due taxes. A couple of weeks ago, Russia’s Moscow Arbitration Court placed Yukos under outside supervision and appointed a supervisor, which is the rough equivalent of a bankruptcy trustee under the U.S. system. The Russian court then set a June 27 hearing in which it will consider formally declaring Yukos bankrupt under the Russian bankruptcy system.
Meanwhile, Yukos’ supervisor and institutional creditors are claiming that Yukos managers are engaging in a “fire sale” of assets in an attempt to subvert the Russian bankruptcy case. Consequently, yesterday, the supervisor initiated a chapter 15 bankruptcy case for OAO Yukos in the Southern District of New York in an effort to derail the purported impending sale by Yukos of the company’s interest in a refinery.
I wonder if Yukos will seek a change of venue of the chapter 15 case to Houston? ;^)