Ford hammered after girlfriend of plaintiff’s lawyer is excused from the jury

It’s never easy to defend a personal injury case in certain parts of Texas, and Crystal City in Zavala County is one of them.
This San Antonio Express-News article reports on a case in Crystal City (between San Antonio and Eagle Pass) in which a jury last week awarded $28 million to a plaintiff against Ford Motor Co. in a rollover case. In an almost unbelievable development except that this is Zavala County, the trial was interrupted earlier when Ford lawyers discovered that one of the jurors was the girlfriend of one of the plaintiffs’ lawyers. Moreover, in a hearing over a defense motion for a mistrial, Ford presented evidence that the girlfriend — who happens to be the Crystal City city manager (it’s a very small world in Zavala County) — had also solicited two of the plaintiffs for her boyfriend to represent in the case!
Incredibly, the trial judge denied Ford’s motion for a mistrial. So it goes in small town South Texas.
Will the plaintiff’s lawyer’s failure to disclose that the juror was his girlfriend receive a more appropriate response from the State Bar of Texas? Stay tuned.

More WorldCom settlements

On the heels of BofA’s settlement earlier in the week, more “courthouse steps” settlements in the WorldCom shareholder class action lawsuit took place on on Friday as four investment banks settled claims arising from their involvement in underwriting bond sales that were based in part on WorldCom’s false financial statements.
Under the latest settlements, Lehman Brothers Inc. settled for $62.7 million and Credit Suisse First Boston, Goldman, Sachs & Co. and UBS Warburg LLC each settled for $12.54 million. All four participated as underwriters in WorldCom’s May 2000 bond offering. Among the 10 institutions that remain in the litigation are JPMorgan Chase & Co. and divisions of Deutsche Bank AG and ABN AMRO Bank.

Ebbers case goes to the jury

The “honest idiot” case goes to the jury today.
As an aside, it is always remarkable to me the amount of time that both the prosecution and the defense take in presenting closing arguments in these high profile criminal cases. Although the article on the closing arguments does not disclose the exact amounts of time expended, my sense is that both sides spent hours in front of the jury on closing argument. That is a dubious strategy, and one which tired jurors will often hold against a lawyer and his client. If a lawyer has not persuaded the jurors of the validity of the lawyer’s theory of the case by the time of closing argument, then spending hours on end attempting to drum it into them will more likely alienate the jury than anything else.

B of A settles in WorldCom class action

In two weeks, the trial cranks up of claims by investors and creditors who lost billions in the WorldCom accounting scandal against WorldCom’s former underwriters, outside directors, and Arthur Andersen. Consequently, over the next several weeks, there will probably be a series of “courthouse steps” settlements announced as the defendants in that litigation hedge their risk of a huge judgment for damages if they elect to go to trial. Yesterday, the first of such settlements was announced as Bank of America Corp. agreed to pay $460.5 million to settle the claims against it in the litigation.
The plaintiffs in the class action essentially allege that Bank of America and the other underwriters failed to conduct adequate due diligence in regard to about $17 billion of WorldCom bonds that were issued in the early part of this decade. Citigroup Inc. agreed to pay $2.65 billion to settle its portion of the lawsuit in May 2004. The Bank of America and Citigroup settlements increases the price of poker for the 14 other underwriters in the lawsuit, who now face the prospect of having to pay a larger share of damages if they risk taking the case to trial.
The Bank of America settlement increases the settlement pot in the WorldCom class action $3.04 billion. In comparison, the similar class action litigation involved in the Enron case has generated a settlement pot of only about $500 million to date. The Enron case remains mired in the discovery phase with a trial date currently scheduled for some time in mid-2006.
In its public statement announcing the deal, BofA denied violating any laws and added that it settled solely to hedge the risk of litigation. For their part, the plaintiffs’ representative in the lawsuit stated that Bank of America settled under the same formula used in the Citigroup settlement, which other underwriters protest because of their more limited role in WorldCom offerings. Under that settlement formula, J.P. Morgan — another underwriter defendant in the litigation — would have to pay about $1.3 billion in a settlement. Last year, J.P. Morgan set aside $2.3 billion of a $4.7 billion litigation reserve to cover the potential costs of litigation stemming from its role in arranging financing for Enron and for WorldCom.
Bank of America has been aggressive than most big underwriters in settling big class action claims over the past year. During that time, BofA has agreed to pay about more than $1 billion in settlements of various investment banking and trading claims. For example, in July 2004, BofA agreed to pay $70 million to settle claims against it in the Enron class action for its relatively limited role as an underwriter of various Enron deals. Similarly, earlier this year, the bank paid just south of $700 million in restitution, penalties, and reduction of fees consideration to settle various civil claims that it favored certain investors in engaging in “market timing”-trading and late trading of mutual funds.

Bad Bankruptcy bill gets worse

One of the only good provisions of the bad Bankruptcy Reform legislationthe anti-forum shopping provision for business bankruptcies — was pulled out of the Senate bill yesterday in what appears to be a political deal between Texas Senator John Cornyn and Delaware Senator Joseph Biden to protect Texas’ liberal homestead exemption law and Delaware’s favored nation status for business bankruptcies.
This proposed legislation is the quintessential example of poorly-concieved special interest legislation. Outside of the credit card industry, there is no meaningful public support for these proposed reforms of the U.S. Bankruptcy Code, which is the preferred model for emerging countries to use in establishing their own insolvency and business reorganization systems. A radical overhaul of such a successful system is not only unnecessary, but unwise.
However, the credit card industry has contributed large amounts of cash to the campaign war chests of many Republican legislators, and the industry is now expecting a return on that investment in the form of this bad legislation. Remember that next time you are considering a vote for either Mr. Cornyn or Kay Bailey Hutchison, both of whom are supporting this abomination despite an extraordinary number of appeals to them from experts and professionals in the insolvency and reorganization field to do the right thing and reject this legislation.

An inevitable lawsuit

Eight former Afghan and Iraqi prisoners represented by the American Civil Liberties Union and Human Rights First have filed a federal lawsuit (bugmenot login: “colinsearle” pword: “bristol”) in Illinois seeking unspecified damages against Defense Secretary Donald Rumsfeld for authorizing abuse of prisoners in violation of the U.S. Constitution and international law. The plaintiffs contend that they were never combatants against the U.S. and eventually were released without any charges being filed against them.

Justice tees up another investigation of Halliburton

In what seems like a weekly event, the Justice Department is investigating whether former employees of Houston-based Halliburton Co. conspired with other companies to rig bids for large overseas construction projects. Halliburton disclosed the bid-rigging investigation in its annual 10K filing with the Securities and Exchange Commission. This new antitrust investigation has grown out of an earlier investigation into whether a consortium of companies bribed Nigerian officials to win a lucrative contract to build a liquefied natural-gas plant there.
Although Halliburton is a major provider of oilfield services, it also owns the giant construction and government-contracting unit called Kellogg Brown & Root. KBR is one of the world’s largest overseas construction firms and specializes in building large and complex projects in foreign countries. Halliburton announced in late 2004 that it would likely sell its KBR unit, but that such a sale would take considerable time to finalize and consummate.
The antitrust and Nigeria investigations are focused on Albert J. “Jack” Stanley, who was the former chairman of the Halliburton unit Kellogg Brown & Root. Halliburton canned Mr. Stanley this past June for allegedly receiving improper payments from an agent of the Nigeria construction consortium. The Justice Department is looking into Mr. Stanley’s activities dating back to the mid-1980s when he worked for construction firm M.W. Kellogg. Dresser Industries acquired Kellogg in 1988 and then Halliburton bought Dresser in 1998 while U.S. Vice-President Dick Cheney was CEO of Halliburton.
This current probe is just one of many investigations that are confronting Halliburton, which appears to be defense lawyer’s dream client. Another federal grand jury is investigating whether the company violated U.S. sanctions against doing business in Iran, while another investigation is attemptting to determine whether Halliburton overcharged the U.S. military for running dining halls in Iraq.

Robert Dawson, RIP

Robert “Mad Dog” Dawson, who taught criminal and juvenile law to a generation of law students at the University of Texas Law School, died Saturday at his farm in Fentress at the age of 65. Although illness forced him to into a motorized scooter in the last few months of his life, Professor Dawson continued to teach his criminal law class at UT until a week and a half ago.
Professor Dawson taught at UT for 30 years and founded the school’s Criminal Defense Clinic in 1974. The clinic gives third-year law the opportunity to represent criminal defendants in court under the supervision of UT law professors. Dawson authored the state’s juvenile justice laws in 1973 and advised lawmakers on the revision of the Texas Juvenile Justice Code in 1995.
According to his obituary, Professor Dawson’s ashes will be mixed with old horse stall bedding and scattered by manure spreader on pastures at the farm. “They will make good fertilizer for the hay crop,” he wrote before his death.
Arrangements were pending with Weed-Corley-Fish Funeral Home in Austin. A memorial service is scheduled for 2 p.m. April 2 at UT’s LBJ Auditorium.

Nebraska v. OU Spirit Squad

The University of Nebraska football team has not been fairing well lately in its football rivalry with the University of Oklahoma. So, last year, a Nebraska lineman got confused and thought that NU was going to play the OU Spirit Squad instead. Oklahoma criminal authorities are not pleased (bugmenot login: “privatecitizen@msn.com”; password: “password”).

A different question

The question being batted around the sports world the past couple of days is whether the suspension of Temple University basketball coach John Chaney is sufficient punishment for Chaney directing a goon on his team to hammer an opposing team’s player, resulting in the player suffering a broken arm.
My question is different: How much will Chaney and Temple have to pay in money damages to the player? Looks to me that the liability phase of that civil case is a dead cinch winner for the injured player.
Update: Although I wouldn’t want him sitting on the jury if I am representing the plaintiff, Greg Skidmore over at the Sports Law Blog has a nice analysis of the potential civil liability arising from Coach Chaney’s actions. Also, Professor Palmer over at the Sports Economist is already thinking about potential damage calculations. Sounds like a budding expert witness on damages to me! ;^)