Daily Archives: January 24, 2005

Only in Houston

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A decade or so ago, a soliciter from London came over to Houston for the first time in his life to appear in federal court with me on a case that we were handling for a mutual client.
My friend was quite surprised by Houston’s huge trees, numerous lakes, bayous, and wildlife, particularly near my home in The Woodlands. He candidly admitted that even most sophisticated Londoners have the misconception that Houston is in the Wild West of movie lore, located in the sagebrush and dusty desert terrain of far West Texas. This Chronicle article won’t do much to correct similar misconceptions:

A police officer who struck a runaway horse on a freeway was critically injured early today, authorities say.
Several other motorists struck the horse’s carcass on Interstate 45 before police could shut down the freeway’s northbound lanes.
The injured officer, who was off-duty and driving a personal vehicle, managed to pull over to the side of the freeway after the collision but the top of his car was sheared off by the impact, said David Gutierrez, a Houston Police Department accident investigator.
He said the horse was running southbound in the northbound lanes of I-45, just north of the I-610 loop, when the first collision occurred.
The injured officer, who had to be rescued from his vehicle using the Jaws of Life, was listed in critical condition at Ben Taub General Hospital’s trauma center.
It was unknown how the horse got on the roadway.
While investigators were waiting for Harris County animal control officers to remove the horse, several other vehicles struck the carcass.

Don’t let those facts get in the way of the agenda

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As noted in earlier posts here and here, U.S. District Judge Vanessa Gilmore of Houston is currently presiding over a rather ugly criminal case in Houston against against three people accused in the deaths of 19 illegal immigrants who were being smuggled into this country in the back of a blistering hot trailer.
As noted in the earlier posts, Judge Gilmore and the prosecution have not been getting along very well during the course of this prosecution. After Judge Gilmore’s earlier threat to hold the prosecutors in contempt of court for failing to divulge internal Justice Department deliberations regarding the decision to seek the death penalty against one of the defendants, the prosecution filed a writ of mandamus (that’s like suing the judge) with the Fifth Circuit Court of Appeals requesting the appellate court to order Judge Gilmore, in effect, to quit jacking with the prosecution over communications that are clearly privileged. The Fifth Circuit agreed with the prosecution, and issued this pointy-edged 22 page opinion that, among other things, is clearly a rather sharp rebuke of Judge Gilmore’s treatment of the prosecution in the case.
On the heels of that dust-up, the Houston Chronicle ran this editorial last week on the matter that contains so many errors and misleading statements that it is questionable whether the author had even bothered reading the Fifth Circuit’s decision before writing the editorial. Kevin Whited over at blogHouston.net dissects the Chron editorial and, in so doing, establishes that the Chron editorial page is certainly not going to allow facts to get in the way of its political agenda.

To regulate or not to regulate? That is the question

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The New York Times sometimes has trouble sorting out business news items because of its bias in favor of greater government regulation over capitalist roaders.
On one hand, this NY Times Sunday article on the struggling airline industry suggests that perhaps the solution to the industry’s problems is to return to the era of regulation in which consumers paid higher prices, but airlines served better food on the flights. The only “experts” in the article quoted in favor of returning to those bygone days of high prices and limited service areas are union representatives, who believe that the higher-paying jobs of the regulation era are the birthright of airline workers. Hardly a mention is made of the fact that such increased regulation would bring increased costs to an industry that certainly doesn’t need more of those.
From a consumer standpoint, airline deregulation has been a remarkable success that has resulted in far cheaper prices and much greater service than ever before. Thus, while the Times’ premise for the article is that increased regulation could help the struggling airlines and their workers, the better premise would have been the following — i.e., despite the great success of deregulation, why are so many airlines continuing to struggle and why is it so difficult to put the chronically unprofitable airlines out of their misery?
On the other hand, this Times article notes that an unintended consequence of the increased regulation of public corporations under the Sarbones-Oxley legislation is that an increasing number of public firms are delisting because of the high cost of compliance with the legislation. Thus, as Professor Ribstein notes in this typically insightful post on the same article, “we can add a decline in disclosure as firms delist and withdraw from mandatory disclosure requirements” as further negative consequences of Sarbox.
For most businesses, the primary benefit of going public is the access to cheaper equity capital. Sarbox’s increased cost of compliance is effectively making that public equity capital more expensive and less attractive. Business owners don’t go public just for the joy of making public disclosures and dealing with class action plaintiffs’ lawyers.