Based on this decision from earlier this week, it’s pretty clear that U.S. Bankruptcy Judge Frank Monroe of Austin — a former Houstonian — is not pleased with Congress and President Bush over the Bankruptcy Reform Act of 2005 passed by Congress last year (earlier post here, here, here, and here). The following excerpt will give you a flavor for Judge Monroe’s entire opinion:

The Congress of the United States of America passed and the President of the United States of America signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the “Act”). It became fully effective on October 17, 2005. Those responsible for the passing of the Act did all in their power to avoid the proffered input from sitting United States Bankruptcy Judges, various professors of bankruptcy law at distinguished universities, and many professional associations filled with the best of the bankruptcy lawyers in the country as to the perceived flaws in the Act. This is because the parties pushing the passage of the Act had their own agenda. It was apparently an agenda to make more money off the backs of the consumers in this country. It is not surprising, therefore, that the Act has been highly criticized acrosse the country. In this writer’s opinion, to call the Act a “consumer protection” Act is the grossest of misnomers.

Moreover, he’s just getting warmed up in the foregoing passage. Read the whole thing. Steve Jakubowski comments and provides more context here.

Clear Thinkers favorite and longtime Houstonian Edith H. Jones has been appointed the Chief Judge of the Fifth Circuit Court of Appeals in New Orleans.
Here is a series of blog posts over the past couple of years on some of Judge Jones’ opinions and the frequent speculation that she will eventually be nominated for the U.S. Supreme Court. Judge Jones is one of the best appellate judges in the U.S. on business-related issues and would make a valuable contribution in that area if nominated and confirmed as a Supreme Court Justice. Persuading a majority of the Supreme Court Justices to adopt questionable business-related decisions such as this one would be much more difficult in a Supreme Court that includes Edith Jones.

With the confirmation hearing for U.S. Supreme Court nominee Samuel A. Alito, Jr. coming to a close this week, it’s time to dust off a good Supreme Court trivia question that you can use to stump your colleagues: How many U.S. Supreme Court Justices have hailed from Texas?
The answer is one — Tom Clark, who President Truman appointed in 1949. Justice Clark served until 1967 when fellow Texan Lyndon Johnson engineered Clark’s resignation so that Johnson could appoint the first black Justice — Thurgood Marshall — to the Supreme Court. How did President Johnson induce Justice Clark to resign? By appointing Clark’s son Ramsey as Attorney General of the United States. Johnson really could get things done, eh?
With the Supreme Court in the news, the University of Texas’ fine Utopia site has made Justice Clark’s personal papers available on the Web. The materials “contain a comprehensive record of Justice Clark’s activities as a U.S. Supreme Court Justice, public servant, and advocate for improved judicial administration. . . [f]rom . . . 1949 until his death in 1977.” The site focuses on court documents relating to Judge Clark’s work in the areas of desegregation, school prayer, voting rights, civil rights, and much more.
Hat tip to the Librarians Internet Index via ZiefBrief for the link to Justice Clark’s papers.

Muriel Dobbin’s Washington Times review of Nate Blakeslee’s new book on the Tulia scandal — Tulia: Race, Cocaine, and Corruption in a Small Texas Town (PublicAffairs 2005) — says it all about the enduring legacy of racism in American society:

It was only six years ago that it happened, but it could have been 60. Decades after the gains of the civil rights movement in the battle against discrimination, this book warns that it isn’t over. This is the disturbing chronicle of what happened in the bleak little west Texas town of Tulia when a rogue cop ran amok and organized a drug sweep that put a substantial number of the black population in jail for allegedly dealing powdered cocaine. . .
This book is dark evidence of the kind of racism that still lingers in America, from corrupt cops and judges to an indifference to justice most commonly associated with the deep south of the 1930s. . . .
Almost as difficult to believe as the Tulia sting operation are the dimensions of the legal battle it took to reverse the conviction of the Tulia defendants and disclose that [rogue police officer Tom] Coleman had a record of leaving jobs with unpaid debts and had a reputation as a racist and pathological liar obsessed with guns. Mr. Blakeslee’s meticulous account of court proceedings and legal actions underscores the racist roots as well as the inadequacies of justice on the Texas panhandle.

Read the entire review. Tulia reminds us that the stubborn prejudice noted earlier here remains woven tightly within the fabric of American life. When the dark passions of racism are combined with the power of the state, the damage to lives, justice and the rule of law is truly foreboding.

Most of us don’t have time to watch much of the Senate Judiciary Committee hearing on President Bush’s nomination of Samuel A. Alito, Jr. to the U.S. Supreme Court, so here are a few items to help you catch up on the festitivities.
A Washington Post video of the tasty and testy exchange between Senators Kennedy and Spector over Kennedy’s request to subpoena some documents.
Peggy Noonan’s analysis of the hearing to date, including this recitation (fictional, I hope) of the typical quality of Senator Joe Biden’s questioning (?) of Judge Alito:

What if a fella–I’m just hypothesizing here, Judge Alito–what if a fella said, “Well I don’t want to hire you because I don’t like the kind of eyeglasses you wear,” or something like that. Follow my thinking here. Or what if he says “I won’t hire you because I don’t like it that you wear black silk stockings and a garter belt. And your name is Fred.” Strike that–just joking, trying to lighten this thing up, we can all be too serious. Every 10 years when you see me at one of these hearings I am different from every other member of Judiciary in that I have more hair than the last time. You know why? It’s all the activity in my brain! It breaks through my skull and nourishes my follicles with exciting nutrients! Try to follow me.

Noonan wonders: “How does Judge Alito put up with this?”
Meanwhile, a measured criticism of Judge Alito’s nomination is contained in this Jonathon Turley/USA Today op-ed in which Turley observes as follows:

Despite my agreement with Alito on many issues, I believe that he would be a dangerous addition to the court in already dangerous times for our constitutional system. Alito’s cases reveal an almost reflexive vote in favor of government, a preference based not on some overriding principle but an overriding party.
In my years as an academic and a litigator, I have rarely seen the equal of Alito’s bias in favor of the government. To put it bluntly, when it comes to reviewing government abuse, Samuel Alito is an empty robe.
Alito’s writings and opinions show a jurist who is willing to yield tremendous authority to the government and offer little in terms of judicial review — views repeatedly rejected not only by his appellate colleagues but also by the U.S. Supreme Court.
An independent judiciary means little if our judges are not independently minded. In criminal, immigration and other cases, Alito is one of the government’s most predictable votes on the federal bench. Though his supporters have attempted to portray this as merely a principle of judicial deference, it is a raw form of judicial bias.

Read the entire piece.
Finally, don’t miss the Comedy Central video “Sam’s Club,” particularly the final 1.5 minutes where the current hearing is compared to another senate committee hearing that is familiar to all movie buffs.

After only a week, Peter Lattman’s new WSJ Law Blog is proving well worth reading, as reflected by his posts here and here on the politics involved in the initial meetings to select the creditors’ committee and its counsel in the Calpine Corp. chapter 11 case, which include the following observations:

Youíd think that a get-together of people owed money by Calpine would be a solemn affair, but it felt more Kiwanis Club than Creditors Club. Thatís because most of the people in the room werenít creditors; they were the lawyers, bankers, and consultants who make their livings off the carcasses of bankrupt companies like Calpine.
And this is one tight-knit group. After . . . 10 minutes of bland introductory remarks, they adjourned the meeting for two hours to select a committee. At that point a party broke out. The various advisors lingered, glad-handing and networking their way through the room. We even ran into a few hedge fund managers working the crowd, trying to handicap their investments.

This San Diego Union-Tribune story reminded me that, in asking questions about the credentials of an expert witness, it’s usually a good idea to ask a few follow-up questions before moving on to other areas:

The Medical Board of California is investigating whether a surgeon it used as an expert witness lied about his qualifications when testifying against other doctors in disciplinary hearings.
According to a transcript of the hearing, [Dr. Don J.] Schiller implied he currently was certified by the American Board of Surgery when questioned by Deputy Attorney General Mary Agnes Matyszewski. But Schiller . . . has not been a board certified surgeon for 18 years, though his resume indicates he is certified and he has sworn under oath to being certified.
In an interview, Schiller said that when he testifies as an expert witness, he says he was certified by the American Board of Surgery in 1977. But he doesn’t volunteer that he has not renewed the certification.

“If I am ever asked if I was re-certified I say ‘no,'” Schiller said.

And that’s how he testified Sept. 23 in the San Diego case:

“Are you board certified, sir?” deputy attorney general Matyszewski asked, according to a transcript of the hearing.
“I was certified by the American Board of Surgery in 1977,” Schiller responded before Matyszewski moved on to other questions about his professional background.

I have a savvy-investor friend who jokes that he shorts stocks of the company whose CEO is featured on the cover of Forbes magazine each month.
Along those lines, this Wall Street Journal ($) article from February 2004 highlighted the comeback of lavish lifestyles and spending on Wall Street after a period of relative poverty after the bursting of the late 1990’s stock market bubble. The article included this excerpt:

A year ago, Bret Grebow, a 28-year-old who runs hedge fund HMC International, was taking cheap flights on JetBlue Airways and keeping a lid on his spending. But his fund’s investment portfolio surged nearly 40% last year, and Mr. Grebow says he’s confident that the market has regained its footing. So two months ago he bought a new $160,000 Lamborghini Gallardo. He says it was his first “treat” in months.
These days when Mr. Grebow and his girlfriend travel between his Highland Beach, Fla., home and his New York office, he charters a catered plane with a bar, paying as much as $10,000 for the three-hour flight. Last weekend he spent more than $12,000 to fly himself and some friends on a Learjet 55 to the Super Bowl.
“It’s fantastic. They’ve got my favorite cereal, Cookie Crisp, waiting for me, and Jack Daniel’s on ice,” says Mr. Grebow.

Fast forwarding to today, this NY Times article reports the Securities and Exchange Commission filed a lawsuit yesterday in New York accusing Grebow and his HMC cohort Robert Massimi of operating a Ponzi scheme that bilked investors out of more than $5 million without actually trading on their behalf. The SEC press release on the complaint is here.
Is it just me, or is anyone else surprised that investors give large sums of money to a 28 year-old who drives a Lamborghini Gallardo and publicizes that he eats Cookie Crisp cereal while drinking Jack Daniel’s?

NY Times reporter Kurt Eichenwald — best known for his coverage of the Enron scandal for the paper and his book on the scandal, Conspiracy of Fools — pens this remarkable Times article, which tells the incredibly sad story of Justin Berry, a teen-ager who was seduced by online pedophiles.
At the ripe age of 13, Justin began attracting online pedophiles by performing on his webcam and he subsequently made hundreds of thousands of dollars over the next several years by performing online. In researching the story, Eichenwald met Justin and persuaded him to get off of drugs, to shut down the online business, and provide to the government names and credit card information on about 1,500 people who paid him to perform on his webcam.
This is one of those stories that stays with you for a long time.

It looks as if a number of wealthy Aggies have had an Aggie joke played on them.
This Southern District of Texas U.S. Attorney’s office press release (newspaper report here) reports that a Bryan woman has been indicted on mail and wire fraud charges after the woman allegedly portrayed herself to investors as a postgraduate A&M student studying cattle reproduction at the university. Based on her supposed position as an A&M grad student, the woman promoted a number of Aggie investors to purchase bogus cattle as a part of an alleged grant-funded genetics research program at the university. The woman would raise $600 per head of cattle from the investors on the promise that she would use the invested funds to buy cattle from one of four Texas ranches, including the venerable King Ranch. Then, after nine months of “research” at A&M, the cattle would be sold back to the ranches for $1,000 per head, with $400 of that sales price coming from a research “grant” funded by A&M and the four participating ranches. After she pocketed a $100 fee for “tax purposes,” the woman would tell the investors that they would make a $300 per-head profit on each resale of the cattle. Remarkably, the woman was able to promote the dubious deal for almost three years.
As with all investments that violate the tried and true “too good to be true rule,” the research program was nonexistent, the cattle were bogus, the woman was not an A&M student and she is currently a defendant in civil lawsuits by investors seeking over $5 million. She faces 26 criminal counts, each of which carries a possible punishment of up to 20 years in prison and a $250,000 fine.
Meanwhile, there is no truth to the rumor that the A&M administration — as an accomodation to the defrauded investors — is attempting to schedule a special screening of the new movie, The Producers. Hat tip to Peter Henning for the link to the U.S. Attorney’s press release.