Monthly Archives: August 2006

Quattrone’s ordeal is coming to a close

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Quattrone new2.jpgAfter five years, two trials, an appeal, two regulatory investigations, thousands of hours of tedious legal work, multi-millions of dollars in legal cost and untold damage to the attorney-client privilege, the Justice Department has finally decided to cut its losses with regard to its misguided harassment of former Credit Suisse investment banker Frank Quattrone (previous posts here). This NY Times article reports that Mr. Quattrone has entered into a deferred-prosecution agreement with the Justice Department that will impose no penalty and will not require Quattrone to admit any wrongdoing. The deal is scheduled for court approval this coming Tuesday in New York City.
So, yet another chapter closes in the story of the Great Waste of the federal government’s dubious criminalization of business in this post-bubble era.

Not enough choices?

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country music.gifThis NY Times article passes along the news that the last remaining area-wide radio station in the Los Angeles market playing country music has changed its format, so the second-largest radio market in the country joins New York (the largest radio market) and San Francisco (the fourth largest) as big markets that no longer host a radio station with a country music format. Inasmuch as such a development seems unthinkable in a country-music hotbed such as Houston, the Times article provides the following explanation:

ìCountry is a tough format to do in a market that is an ethnic melting pot,î said Rick Cummings, Emmisís president of radio. ìThe appeal of the format is fairly limited when it comes to ethnicity.î In Los Angeles, he said, stations that cater mostly to white listeners are ìplaying for less than 25 percent of the marketplace on a good day.î
And while country music may draw a more diverse audience in cities like Houston, he added, it simply does not in Los Angeles, where Latino listeners have a wealth of choices for entertainment in both English and Spanish.

So, Latinos are forced to listen to country music more in Houston than in L.A. because they lack the variety of entertainment choices of the Los Angeles area?
My sense is that the Times reporter has not checked out the Houston radio market recently.

Now, let me get this straight

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POLICE OFFICER & WHISTLE.gifI am not astute politically, so I usually leave analysis of such matters to more politically savvy bloggers, such as local pundits Charles Kuffner at Off the Kuff, as well as Kevin Whited and Anne Linehan over at blogHouston.net.
And I also certainly don’t condone public officials using their clout to obtain favorable treatment for their family members and friends who mess up and find themselves embroiled in the criminal justice system.
However, after reading this article, it occurs to me that the attorney general of New Jersey was forced to resign earlier this week essentially because she forgot some some items in her boyfriend’s car and the boyfriend wasn’t wearing a seatbelt.
What am I missing?

More on the benefits of oil and gas trading

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gas pump2.jpgFollowing on this post from earlier in the week on the benfits of speculation in the oil and gas commodities markets, Chronicle business columnist Loren Steffy pens this column (related podcast here) along the same lines that includes an interview with Craig Pirrong, the director of energy markets for the Global Energy Management Institute at the University of Houston’s C.T. Bauer Business School. As Pirrong notes, the current criticism of speculators in the oil and gas markets is simply the latest salvo in a long and misguided American tradition of scapegoating speculators:

Investors [in oil and gas commodities markets] . . . make bets on what the price of oil will be. If they’re right, they make money. If they’re wrong, they lose.
That, Pirrong says, allows producers to share the risk that comes with volatile prices. Speculators, using derivatives and other financial tools, can offer producers more stable price contracts. The stability makes it easier for oil companies to invest in new production or new technology, he says.
“We’d be worse off if they hadn’t come in,” Pirrong says.
Historically, though, speculators have been blamed when markets have gone awry. When Congress attempted to regulate agriculture markets in the 1880s and 1890s, speculators were cited as a threat to price stability, Pirrong says. The same was true in the 1920s, when regulation was enacted amid slumping commodity prices that were again blamed on speculators.
“This is just the latest chapter in a very old story,” Pirrong says.

Merck’s bad day

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merck_logo8.jpgAs with the baseball season, Merck & Co.’s defense of the Vioxx litigation is a marathon and not a sprint (previous posts here). Yesterday’s sprint was not good for Merck, but my sense is that it’s still way too early to write off Merck’s defense strategy as a failure at this point.
The bad news for Merck was that a federal jury in New Orleans awarded $51 million to a former FBI agent who was taking Vioxx when he suffered a heart attack, while a New Jersey judge threw out a verdict in Merck’s favor from a trial there last fall. The NJ judge has a reputation of being plaintiffs-friendly, so that ruling was not all that much of a surprise and, despite the federal venue of the New Orleans trial, New Orleans is still a plaintiffs-friendly environment. After a year of Vioxx trials, the scorecard reflects that Merck and the plaintiffs each have four victories, and there are at least another eight or so Vioxx trials scheduled in both state and federal court through the end of this year.
Ted Frank, who has been following the Vioxx litigation closely, has the best analysis of yesterday’s developments in the overall context of the Vioxx litigation (see also here and here). Peter Lattman also has an interesting post in which he includes an email exchange with Houston plaintiff’s lawyer, Mark Lanier, who was the first lawyer to hammer Merck in a Vioxx trial.

Conn Gen fires back in the Bagwell disability claim lawsuit

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Bagwell PC3.jpg This earlier post examined the initial exchange between the parties in the Houston Astros’ lawsuit against Connecticut General Insurance Co. over the insurer’s denial of the Stros’ claim under the disability insurance contract that the Stros bought from the insurer on their injured slugger, Jeff Bagwell (previous posts here).
Now, Conn Gen has fired back with a response (download link here) to the Stros’ argument that the club’s extra-contractual claims (juicier from an evidentiary and damages standpoint) should be tried along with the club’s more pedestrian breach of contract claim under the policy. In short, the insurer argues that there is little legal precedent for the Stros’ desire to have all of the claims adjudicated in one lawsuit and that the risk of prejudice to the insurer in having the claims tried together strongly mitigates in favor of severance of the claims for seperate trials.
I will be surprised if Connecticut General does not win this initial skirmish over severance of the Stros’ claims.

Politics of academia run amok

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Machiavelli.gifMy late father treasured his career in academic medicine, but he did concede that the politics of academia were rather byzantine at times. However, even my father didn’t expect those politics to get this brutal:

The dean of medicine at the University of Texas Medical Branch at Galveston has temporarily stepped down, three weeks after her husband was mugged in the aftermath of announced layoffs at the school.
Dr. Valerie Parisi will “focus her attention on personal and family members” until Oct. 1, said a news release on UTMB’s Web site Wednesday.
Parisi had led reorganization efforts that include layoffs of about 1,000 employees and a change in professors’ salary structure ó moves that have roiled the campus.
Soon thereafter, on July 27, Parisi’s husband, Gary Strong, was attacked by three masked men while walking his dog. One of the men told Strong his wife “doesn’t know who she’s (expletive) with,” leading police to believe the attack may have been related to the layoffs.

Sheesh!

The best major?

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pgachamp.jpgThe fourth and final major professional golf tournament of the year begins today in the western suburbs of Chicago as the PGA Championship returns to Medinah Country Club. Golf World’s Tim Rosaforte provides ten reasons why the PGA is not only the most improved major golf championship, but in some ways the best. Geoff Shackelford has the scoop on Medinah.
This year’s PGA Championship has the additional intrigue of the game within the game — the competition for a spot on the US Ryder Cup team — and that pairing for the first two rounds of Master’s champ Phil Mickelson, US Open champ Geoff Ogilvy and British Open champ Tiger Woods doesn’t hurt the marquee value of the tournament, either.
Finally, don’t miss this entertaining Boston Globe story on Houstonian and Champions Golf Club owner Jack Burke‘s victory at the 1956 PGA Championship. At that very different time and during a much less lucrative stage of professional golf, Burke played 155 holes over five days to beat seven opponents (the PGA Championship was match play back in those days) and win the 38th PGA Championship. For his trouble, Burke received a check for $5,000, which turned out to be hot. By the way, the article passes along Burke’s following analysis of why Woods is the top professional golfer in the world right now:

“He’s the only one who understands how to play the game, how to make shots. The other guys? They’re all out there plumb-bobbing the world, worrying about their launch angle and their ball speed. But Woods is like the great pool player — he doesn’t see the cue, doesn’t see the ball, he just sees the whole game.”

Do as I say? Or as I do?

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Barack_Obama_portrait_2005.jpgAccording to this report, Illinois senator Barack Obama warned citizens at his 50th Town Hall meeting about gas guzzling vehicles and proclaimed that such vehicles are a big part of the blame for the world’s higher temperatures. In urging citizens to switch to higher mileage hybrids, Obama observed that “it would save more energy, do more for the environment and create better world security than all the drilling we could do in Alaska.”
After the meeting, Obama proceeded to leave in his SUV, a GMC Envoy.
But it’s not finished. When Obama’s staff saw the news report, they sent the following email to the station that published the report:

A story your station ran seems to imply that my boss Senator Obama was being hypocritical when he said Americans should drive more fuel-efficient vehicles though he was himself traveling in an SUV.
The SUV in question, though, is a Flexible Fuel Vehicle that can run on E85, which the Senator fills it with wherever its available (and in fact he’s worked very hard to provide tax credits to increase availability and access to e85). I believe in light of these facts the story is misleading and warrants a correction.

Let’s get this straight. Don’t drive an energy guzzling SUV. But it’s o.k. to do so if your SUV can guzzle primarily ethanol, for which the Senator promotes tax breaks because it is uneconomic to produce otherwise, partly because of the energy cost involved in such production.
Something tells me that Senator Obama and his staff should shut up on this particular issue. Hat tip to Steven Hayward.

Christine Hurt is working on an interesting paper

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scales of justice10A.gifChristine Hurt, Conglomerate blogger, former Houstonian and currently the Richard W. and Marie L. Corman Scholar in the University of Illinois College of Law, is working on an interesting paper that she describes here:

The prosecutorial response to white collar crime post-Enron has had some setbacks. In both the Arthur Andersen case and the Enron Nigerian Barge case, appellate courts eventually said that the fact pattern did not constitute the crime in question. However, as welcomed as these decisions are, they cannot turn back time. Arthur Andersen was destroyed by the investigation and conviction and, like a corpse after an autopsy, cannot be brought back to life. The defendants in the Nigerian barge case will never get back the years they spent defending themselves and actually living in prison, not to mention the untold defense costs. I am writing a paper on the relative burdens on the various parties in criminal and civil corporate misconduct cases, and I find it interesting that we have so many requirements and presumptions to save corporate civil defendants from vexatious litigation and exorbitant discovery costs, but we seem not to care about the corporate criminal defendant who must wait until a jury verdict or an appellate ruling to determine whether the prosecution was without merit.

Music to my ears! ;^)