Lino A Graglia is the A. Dalton Cross Professor of Law at the University of Texas Law School and Texas’ foremost Constitutional law scholar. From time to time, he has also been one of the more outspoken and controversial commentators on application of Constitutional law to social issues in American society.
In this Opinion Journal op-ed, Professor Graglia notes that modern Constitutional law is narrowly based:

The essential irrelevance of the Constitution to contemporary constitutional law should be clear enough from the fact that the great majority of Supreme Court rulings of unconstitutionality involve state, not federal, law; and nearly all of them purport to be based on a single constitutional provision, the 14th Amendment–in fact, on only four words in one sentence of the Amendment, “due process” and “equal protection.” The 14th Amendment has to a large extent become a second constitution, replacing the original. . .
The problem is that the Supreme Court justices have made the due process and equal protection clauses empty vessels into which they can pour any meaning. This converts the clauses into simple transferences of policy-making power from elected legislators to the justices, authorizing a court majority to remove any policy issue from the ordinary political process and assign it to themselves for decision. This fundamentally changes the system of government created by the Constitution
The basic principles of the Constitution are representative democracy, federalism and the separation of powers, which places all lawmaking power in an elected legislature with the judiciary merely applying the law to individual cases. Undemocratic and centralized lawmaking by the judiciary is the antithesis of the constitutional system. . .
Plato argued for government by philosopher-kings, but who could argue for a system of government by lawyer-kings? No one can argue openly that leaving the final decision on issues of basic social policy to majority vote of nine lawyers–unelected and life-tenured, making policy decisions for the nation as a whole from Washington, D.C.–is an improvement on the democratic federalist system created by the Constitution. Yet that is the form of government we now have.
The claim that the court’s rulings of unconstitutionality are mandates of the Constitution, or anything more than policy preferences of a majority of the justices, is false. Rule by judges is in violation, not enforcement, of the Constitution. Ending it requires nothing more complex than insistence that the court’s rulings of unconstitutionality should be based on the Constitution–which assigns “All legislative Power” to Congress–in fact as well as name.

Read the entire piece.

This Washington Post article provides a fine report on the various memorial services for Lloyd Cutler, the longtime Washington attorney and insider who died this past Sunday. Mr. Cutler served as an official and unoffical adviser to most of the Presidents over the past generation.
Mr. Cutler was a Democrat, but he was widely respected by both sides of the political aisle for his conscience, which is not always considered an asset in the hard-knuckled backrooms of Washington. For example, Mr. Cutler opposed the Democratic Party’s successful effort to thwart conservative Judge Robert Bork’s nomination to the Supreme Court in 1987 and often defended the automobile industry in legal proceedings that consumer activist Ralph Nadar pursued over safety issues. Over the past year, Mr. Cutler served on President Bush’s commission that investigated intelligence failures during the run-up to the war in Iraq.
As with Texan Robert Strauss, Mr. Cutler served our country selflessly while working quietly in the background to resolve many important issues of our time. He exemplified what a lawyer should aspire to be.

It’s a pretty good sign that a trial has just not gone well for the defendant when the defendant takes solace in the fact that the punitive damage award is “only” $850 million.
The same Florida state court jury that awarded Ronald Perelman $604.3 million in actual damages against Morgan Stanley earlier in the week awarded the Revlon, Inc. chairman $850 million against Morgan in punitive damages for defrauding the financier in connection with the 1998 sale of a large interest in Coleman, Inc. to Morgan’s client, Sunbeam Corp. Mr. Perelman had been seeking $1.8 in punies.
Thus, Morgan Stanley is facing a $1.454 billion jury verdict. If the trial court upholds the jury verdict, then Morgan is facing a difficult appeal, which will almost certainly revolve around the trial court judge’s pre-trial sanction order against Morgan Stanley that effectively prevented Morgan from defending itself during trial on the merits of Mr. Perelman’s fraud claims. Although that sanction order was harsh, most jurisdictions review such orders on an abuse of discretion standard. That is not an easy standard to overcome on appeal, even when the result is a $1.454 billion jury verdict.

In an interesting public relations and legal strategy, BP PLC admitted liability for its negligence in connection with the March 23rd explosion at its Texas City facility that killed 15 contract workers and injured more than 170 others. Here is the Houston Chronicle’s exhaustive coverage of the explosion, and here is the BP report and notes from its press briefing that were published on BP’s website.
In a detailed preliminary report on the blast, BP concluded that its employees committed “surprising and deeply disturbing” mistakes that led to the blast. The accident was only the latest in a series of serious safety and compliance lapses in BP’s North American operations. Not only do the report’s findings suggest that BP expects regulators to assess fines once their own investigations are complete, but they essentially turn the wrongful death and personal injury lawsuits resulting from the blast into a trial on the amount of damages that BP will have to pay. This Wall Street Journal ($) article quoted John Eddie Williams Jr., one of Houston’s best personal injury trial lawyers, as saying the following:

“My client’s husband trusted BP with his life, and now she’s supposed to trust that BP will fully compensate her for his death?”

BP’s report blames its supervisors and employees for making a series of operational errors and oversight lapses that caused the blast at the isomerization unit of the refinery. The explosion occurred during a start-up procedure after the unit had been taken off-line for routine maintenance when operators overfilled and overheated a processing tower at the unit that housed hydrocarbon liquid and vapor. The liquid and vapor mix was overpressurized and flooded into an adjacent stack before escaping into the atmosphere around the unit. The vapor cloud was then ignited by a still-unknown source.
“The failure of [the isomerization unit’s] managers to provide appropriate leadership and the failure of hourly workers to follow written procedures are among the root causes of this incident,” BP admitted in it’s press statement. BP is taking disciplinary action against an unspecified number of employees responsible for running the isomerization unit on the day before and the day of the blast, and has already replaced the plant’s manager. BP has also began a wide-ranging review of plant procedures.
Although its effectiveness is still uncertain at this point, BP’s strategy in quickly investigating the explosion and in admitting liability may be the best way to put the negative publicity from the blast behind it. BP realizes that the regulatory fines and damages it will have to pay on wrongful death and personal injury claims arising from the blast will be substantial, but even those amounts will be only a small fraction of BP’s net worth. The greater risk for the company is that prolonged publicity and uncertainty from the investigations would negatively affect the company’s stock price. Yesterday’s admission may be BP’s way of trying to minimize that risk.

Checking again on Ford Motor Company’s troubles in Crystal City, this Chronicle article reports on the hearing in regard to Ford’s motion to set aside the $28 million jury verdict that a jury rendered against Ford in a wrongful death lawsuit earlier this year. Ford’s motion is based on a variety of grounds, including the following information that was confirmed during the hearing about the original jury foreman in the trial:

[The original jury foreman] acknowledged on the stand she and [the plaintiff’s lawyer] were romantically involved, that she had helped him sign up clients for this case and had worked for him as a jury consultant in other cases.
But, she said, those factors did not affect her ability to be fair as a juror in the case.

Yeah, right. And if you believe that, I’ve got some swamp property near Beaumont that will be a nice weekend getaway spot for you and your family.
Incredibly, the girlfriend’s relationship with the plaintiff’s lawyer was not her only connection with the case:

In addition to her relationship with [the plaintiff’s lawyer], [the girlfriend’s] sons from a previous marriage were first cousins to one of the deceased victims.

What has not been reported is how the girlfriend was able to hide her relationship with the plaintiff’s lawyer from Ford’s attorneys during the voir dire (i.e., questioning) of the jurors before trial. Likewise, there has been no report yet on the rationalization of the plaintiff’s attorney as to why he did not disclose his relationship with the girlfriend before she was placed on the jury. Depending on the answers to those questions, both the girlfriend and the plaintiff’s lawyer may have much bigger legal problems than having a $28 million verdict set aside.
Crystal City is about 90 miles southwest of San Antonio near the Texas-Mexico border. Here is a KSAT.com story on the proceedings.

Based on the developments related in this previous post, it’s not particularly surprising that a Florida jury awarded billionaire financier and Revlon, Inc. chairman Ronald Perelman $604.3 million against Morgan Stanley on his claims that Morgan defrauded him when he sold about an 80% stake in camping-gear maker Coleman Inc. to Sunbeam Corp. in 1998. Shortly thereafter, Sunbeam went into chapter 11, undercutting the value of much of the $1.5 billion consideration that Mr. Perelman received under the deal.
To make matters worse, the $604 million award is for compensatory damages only. Inasmuch as Mr. Perelman is also claiming entitlement to punitive damages, Morgan’s damages in the case could rise to almost $2.5 billion. Finally, all of this carnage comes after Morgan Stanley had rejected a $20 million settlement offer from Mr. Perelman during early stages of the case.
As noted in the earlier post, Mr. Perelman’s case was helped by the earlier default judgment that the state court judge approved as a sanction for Morgan Stanley’s discovery abuse in failing to turn over documents (mostly emails) to Mr. Perelman’s legal team. Accordingly, the judge instructed the jury during the trial that it must accept as fact that Morgan Stanley helped Sunbeam defraud investors. As a result, Mr. Perelman only had to persuade the jury that he relied on representations made by Morgan Stanley or Sunbeam and that he lost money.
The judgment comes during a troubled time for Morgan Stanley, which is currently undergoing a management revolt in which former executives are attempting to persuade the Morgan board to replace Morgan CEO Philip Purcell over how he is running the company. Morgan is in the “trust” business and, at some point, troubles such as those Morgan is experiencing can undermine customers’ trust in Morgan’s financial integrity. That lack of trust is what brought Enron down, and Morgan’s board needs to be concerned with that same dynamic.

Federal Reserve chairman Alan Greenspan gave the commencement address at Wharton yesterday and was quoted as saying the following: “I am surprised that the Sarbanes-Oxley Act, so rapidly developed and enacted, has functioned as well as it has.”
H’mm. This earlier post notes Mr. Greenspan’s rather dubious views on criminalizing negligence of business executives. But if you want a detailed analysis of the error in Mr. Greenspan’s opinion on the Sarbox legislation, Professor Ribstein’s archive of Sarbox posts is an excellent resource.