Justice Breyer takes on the Originalists

Active Liberty.jpgThis Wall Street Journal ($) book review previews U.S. Supreme Court Justice Stephen Breyer‘s soon-to-be-published book, Active Liberty: Interpreting Our Democratic Constitution (Knopf Sept. 2005) in which Justice Breyer offers a rejoinder to his longtime intellectual opponent on the Supreme Court, Justice Antonin Scalia, who advocates “originalism” – i.e., a more literal interpretation of the Constitution’s meaning at the time of its writing. Justice Scalia’s views were set forth in his book, A Matter of Interpretation: Federal Courts and the Law (Princeton Univ. Press 1997).
In the book, Justice Breyer advances the longstanding criticism that originalism is simply a self-righteous political cover for the fact that all Supreme Court justices, regardless of their judicial philosophy, rely on common elements such as “language, history, tradition, precedent, purpose and consequence” when interpreting laws. It’s the way in which they afford different weight to each factor, contends Justice Breyer, that often has a monumental impact on the American republic.
Justice Breyer’s view does have merit, as the entire originalist rationale has a questionable historical basis (the Founding Fathers had widely divergent views on the Constitution and the role of the judiciary) and certainly does not always lead to a coherent uniform approach to resolving cases. However, even though some of the originalist-based decisions have had the consequence of enlarging the governmental bureaucracies and divesting local communities of control, my sense is that Justice Breyer’s approach is still more likely to result in debacles such as this.
Update: Jim Lindgren over at the Volokh Conspiracy speculates as to the source of Justice Breyer’s theory.

Judge Roberts opinion archive

John_roberts6.jpgGenie Tyburski via Tom Mighell passes along this AskSam website that provides a well-categorized database of the opinions of U.S. Supreme Court nominee, D.C. Circuit Judge John G. Roberts (prior posts here).
By the way, Tom is the grand-daddy of Texas blawgers and his legal research and technology blog — InterAlia — reached its three year milestone this past week. Tom’s blog is a phenomenal resource for anyone involved or interested in legal research, and Tom is one of the pioneers in redefining the way in which high-quality, specialized information is delivered to large numbers of people through the blawgosphere. Congratulations to Tom for a job well done and keep up the good work!
By the way II, in case you missed it on television, go over to the Comedy Central website, scroll down and watch the “Judge Report” video clip from the Daily Show, in which Jon Stewart cleverly excoriates the NARAL over its now infamous ad against Judge Roberts. It’s absolutely hilarious.

Merck gets hammered

merck_logo.jpgAs anticipated by this prior post, a Brazoria County jury found that Merck & Co. was liable for $253 million in damages ($24 million in actual damages, plus $229 million in punitive damages) as a result of its negligence in the death of a 59-year-old Robert Ernst, who at the time of death was taking Merck’s prescription painkiller Vioxx that over 20 million Americans took regularly before it was pulled from the market last year over concern that it might cause increased risk of strokes and heart attacks. The prior posts on the Merck/Vioxx trial are here, here, and here.

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To file or not to file? That is the question.

confused.gifThe Wired GC — which is an excellent blog resource for any attorney who is, or advises, a general counsel of a company — has this interesting post today about the tough decisions that some currently troubled companies currently have regarding whether they should risk a delay in filing a reorganization case under chapter 11 until after the new Bankruptcy Code Amendments of 2005 go into effect on October 17. The Wired GC also points to this handy summary by Lorraine S. McGowen of the Orrick firm regarding the changes in chapter 11 practice that will result from the amendments.
My sense is that the October 17 effective date will generate a few more reorganizations than normal over the next couple of months, but not that many. Certainly, if a company knows that a chapter 11 filing is inevitable in the near future, then filing a case sooner rather than later makes sense in light of the impending changes to the Bankruptcy Code. However, management of even the most financially-challenged companies rarely believe that bankruptcy is inevitable, so most companies will take their chances with filing under the amended Bankruptcy Code, if necessary. Finally, the Wired GC speculates that the effect of the new amendments may be to increase the number of reorganizations that end up in liquidation, which — as we have seen in regard to the legacy airlines — may not be all that bad a thing.

Coudert Brothers kaput

Coudert_Brothers_small_logo_80x64.jpgCoudert Brothers LLP, one of the oldest big U.S. law firms, elected to disband yesterday in a vote of its partners. The firm will remain in business as its lawyers move on to new jobs.
The firm was established in New York in 1853 and has long had international offices and clients. It was one of the first U.S. law firms to open offices in Paris, London, Hong Kong and other foreign locales, and it still has 17 offices in Europe and Asia. Nevertheless, in recent years, Coudert had seen many of its top partners cherry-picked by competitors, and merger negotiations with several firms over the past two years had been difficult because of Coudert’s inferior profitability compared with the prospective merger partners. Thus, the partners apparently concluded that a liquidation held more value for owners than a bad merger.
Now, if only this process could occur with regard to a few legacy airlines . . .

Important substantive consolidation decision

Owens Corning.jpgThe Third Circuit Court of Appeals issued this decision yesterday in connection with the Owen Cornings chapter 11 case in which it reversed a bankruptcy court decision that substantively consolidated Owens Corning and its numerous units as one entity for purposes of confirming the company’s reorganization plan.
Substantive consolidation in large reorganization cases is a favored tactic of tort claimants (it was favored by asbestos claimants in the Owens Corning case) and creditors of a company’s unprofitable units that allows those creditors to share in distributions generated from the company’s more profitable units. Lenders to those profitable units generally balk at substantive consolidation because it dilutes the dividend that they would otherwise receive on their claims against the profitable unit by allowing the claims against the unprofitable units to share in distributions from the profitable unit. In the Owens Corning case, the Third Circuit’s decision is a victory for a group of banks led by Credit Suisse Group’s Credit Suisse First Boston that has hundreds of millions of dollars riding on the separation of Owens Corning from its more profitable units.

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Disney Board wins the corporate case of the decade

disney4.JPGThe Delaware Chancellory Court issued its ruling yesterday in favor of the Walt Disney Company Board of Directors in the corporate case of the decade — i.e., the civil lawsuit over The Walt Disney Co. board’s decision to pay Michael Ovitz a rather generous severance package for essentially doing nothing during his short stay at Disney (earlier posts on the case are here, here and here). You can download a copy of the 175 page decision here and, based on a preliminary review, it appears that Larry Ribstein nailed it with his earlier prediction, which also provides excellent background on the fact and legal issues involved in the case. H’mm, I wonder if Professor Ribstein got any odds on his bet on the outcome of the decision?
As noted in this earlier post, check in at the Conglomerate blog for a discussion of the Disney decision by an outstanding group of corporate law scholars. Should be highly entertaining.

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The politics of charity in the world of health care

O'Quinn.gifWealthy Houston plaintiff’s lawyer John O’Quinn (earlier posts here and here) recently proposed to donate $25 million to St. Luke’s Episcopal Hospital — the largest gift in the hospital’s 50 year history — in return for renaming the hospital’s highly-recognizable medical tower the “O’Quinn Medical Tower at St. Luke’s.”
Well, the Chronicle’s Todd Ackerman, who does a fine job of staying on top of Medical Center stories, reports in this article that the St. Luke’s board’s decision to accept the donation from Mr. O’Quinn is not going over well with a number of St. Luke’s doctors:
St. Luke's tower.jpg

The plan to rename the edifice after John O’Quinn in recognition of a $25 million donation by his foundation has infuriated many St. Luke’s doctors, who last week began circulating a petition against it and Monday night convened an emergency meeting of the medical executive committee.

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Eric Andell gets probation

andell2.jpgFormer Houston district and appeallte judge Eric Andell — who formerly served as deputy undersecretary under fellow Houstonian Rod Paige at the U.S. Education Department — was sentenced to one year of probation and fined $5,000 Friday after pleading guilty to charges that he intentionally had the federal government pay about $9,000 for travel in which he conducted personal business and worked as a visiting judge while still employed at the Department of Education. Here is a previous post on the matter and here is the Chronicle story on the sentencing.
One of the most popular local Democratic politicians, Mr. Andell is a genuinely good man who made a mistake and owned up to it in a responsible manner. That he avoided any prison time is a just result.

Conglomerate forum on the corporate case of the decade

disney2.JPGGordon Wood over at the Conglomerate blog has put together an impressive list of expert contributors for an upcoming forum on the widely-anticipated decision of the Delaware Chancellory Court in the corporate case of the decade — i.e., the civil lawsuit over The Walt Disney Co. board’s decision to pay Michael Ovitz a rather generous severance package for essentially doing nothing during his short stay at Disney (earlier posts on the case are here, here, and here).
As Professor Wood notes, now all we need is a decision, which was expected before the end of July, but has now apparently been pushed back. My speculation is that the decision was close to completion when Professor Ribstein posted his recent prediction on the decision, which sent Chancellor Chandler and his clerks scampering back to the drawing board. ;^)
Seriously, though, the Conglomerate forum is yet another example of the way in which the blogosphere is redefining the way in which information is delivered to the public. Prior to the blogosphere, the only way that one could obtain the type of expert analysis that such a forum delivers would be to luck upon an op-ed in a newspaper or dig through stodgy law review articles. Now, that analysis is delivered in an efficient and effective manner for the world to peruse. That’s a remarkable development, and one that all of us should be careful not to take for granted.