Friend of John Grisham, brother-in-law of Trent Lott, kajillionaire lawyer for the sick and hurting.  Richard "Dickie" Scruggs pleaded guilty today to conspiring to bribe a state court judge.  He faces up to a five-year stretch in a federal corrections facility, a $250,000 fine, and probable disbarment.  Stories here, here, here, and here.

Very ugly stuff.  The only bright spot that Blawgletter can see for the trial bar?  That Scruggs’s lawyer son, Zachary, didn’t plead guilty, too.  We hope it’s because his dad was at least a good enough father not to have corrupted his son, too.  If not, Dickie deserves a lot more than five years.

Trial lawyer and jury consultant Anne Reed just got back from a sojourn in Japan, where she delivered a talk on jury stress and did lots of other cool stuff.  And she has started sharing her thoughts about things she learned and re-learned during the trans-Pacific trip. 

We especially like this snippet from her latest Deliberations post:

Americans widely believe that the voice of the citizen in the courtroom is important.  In the big Harris Interactive poll on juries in January, half of respondents said they would trust a jury more than a judge to render a fair verdict, while only 23% said they would trust a judge over a jury.  (The rest were unsure.)  Juror blogs and the juror questionnaires I’ve seen repeat this theme often; juror after juror says it will be inconvenient to serve, but it’s a civic duty they recognize and value.

Feedicon14x14_2 Spring has sprung.

The Federal Reserve yesterday announced a plan to lend up to $200 billion of taxpayer money to Wall Street banks.  The collateral?  Essentially, a bunch of mortgages that have a piece of twine holding them together.  The news sent the Dow Industrial Average reaching for the stars.  Not so much today though.  WSJ article here.

Blawgletter read somewhere that the Fed has authority to make loans like that but didn’t see anything about how the Fed valued the collateral for purposes of determining its adequacy as security for the $200 billion.  Did it use face value?  Something less?  How much less?

Because the whole thing looks like moving the deck chairs around on that ship that sank after hitting an iceberg and inspired an interminable movie with nudity (and more!) in a jalopy aboard the vessel prior to its voyage to the bottom of the sea.

Moving a bundle of mortgages from the balance sheet of, say, Goldman Sachs to that of Uncle Sam doesn’t, in our view, make the bundle worth more.  It just makes GS’s financial condition look better.  And, if GS has to take the bundle back, what really has changed?

Perhaps Ben Bernanke has the magic wand that, by calming an irrational market, restores true value.  But with underlying real estate values continuing to fall, we wonder if something less Disneyesque has happened. 

Can you say bailout?

Feedicon14x14 As a matter of fact, we do plan to visit the Magic Kingdom next week.

Adam Liptak penned a Sidebar column today on a study of the influence that each of the 50 or so state supreme courts exerts over its brethren and sisteren. The big winner? The Golden State’s highest court — yes, the Supreme Court of California.

How did Blawgletter’s home state judicial Olympians fare? Not so great. For the period 1940 through 2005, the Supreme Court of Texas ranks fourteenth despite sitting in the second biggest (after Alaska) and second most populous (behind California).

Now for the worse news: The court’s standing fell to twentieth if one takes only 1986 through 2005 into account. One wonders how well the court would’ve done for 1940-1985 if 1986-2005 hadn’t dragged down the ranking for the long sweep of 1940-2005.

We feel certain that Their Honors have an excellent explanation.

Reddyice

Last week, federal antitrust authorities raided the Dallas headquarters of Reddy Ice Holdings Inc., the biggest maker, packager, and distributor of ice in the United States.  The other gargantuan ice vendor in North America, Arctic Glacier Inc., with main offices in Winnipeg, Manitoba, also reported a brush with the antitrust probe.

See the Reddy Ice press release here and the Arctic Glacier one here.

Blawgletter just had a chilling thought.  Never mind.

Feedicon14x14_2 Brain freeze.

The March issue of Litigation News includes two items that will make beaucoups of hourly lawyers grimace.  The titles say it all: 

  • "Corporations Balk at Outside Counsels’ Automatic Rate Increases:  Wal-Mart, Shell, and other corporations say rising associate salaries are to blame"
  • "In-House Counsel Are Keeping Closer Tabs on Outside Lawyers:  Law departments use vendor management techniques to monitor billing"

To which Blawgletter says not "yikes!" but "hallelujah!"  We welcome in-house lawyers’ insistence on getting value for their legal dollars. 

We also have two words for them:  contingent fee.

Feedicon14x14 The plastics of tomorrow.  Sorry, Dustin.

All the world knows that use of asbestos in the United States skyrocketed during World War II but took a nosedive after the public started realizing its health hazards.  Between 1973 and 2005, total domestic consumption dropped from 803,000 metric tons to 2,400.  So says the National Cancer Institute, a part of the U.S. National Institutes of Health, a federal agency.

The WSJ editorial board apparently didn’t get the memo.  Its members seem not to realize that an enormous drop-off in asbestos use would eventually result in an equally large decline in provable asbestosis claims.

So today the editors rail against the "tort bar" — bet you didn’t see that coming — for "blanketing" dozens of "second-tier players" like W.R. Grace with weak asbestosis claims and thus pushing the companies into bankruptcy.  (Please ignore for the moment that in 2005 a federal grand jury indicted Grace and seven executives for knowingly exposing hundreds of workers to asbestos in a Montana vermiculite mine.  The case remains pending.)  The occasion this time?  The bankruptcy judge presiding over Grace’s proceeding ruled that she won’t estimate the amount of Grace’s liability to asbestosis claimants until — wait for it — the claimants submit proof that they actually have asbestosis!

Leave it to the WSJ to argue that an example of the system working as it should proves the system’s fundamental badness.

Blawgletter confesses that we don’t know a great deal about asbestosis claims or how the bankruptcy estimation process works or if the Grace judge has set up a sensible process.  But we do know that the WSJ’s editors almost daily attack the civil justice system as if it usually produces unfair outcomes.  As if the judiciary seldom gives Corporate America a break.  And as if our Founding Fathers must have forgotten how untrustworthy citizens are when the Founders enshrined, in the seventh amendment to the Constitution, the right to have a jury be the final arbiter of fact disputes in civil cases.

Feedicon14x14 "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law."

Blawgletter adores the myth-busting thunderbolt hurling that goes on across the pond at Adam Smith’s Lost Legacy. Why just today we read the estimable Gavin Kennedy electrocute those who misuse Mr. Smith’s occasional invocation of the “invisible hand” figure of speech:

Nobody has yet accounted for the invisible hand in their use of it in markets, nor how it is alleged to operate as a disembodied body part, nor even what it adds to the theory of markets.

Adam Smith knew better than to make such a claim for the metaphor, which he used to a) describe as ‘pusillanimous superstition’ by pagan savages (History of Astronomy); b) to give literary flair to the behaviour of rich landlords feeding the ‘thousands they employed’ and their families (they could do no other and survive themselves) (Moral Sentiments), and c) to refer to the risk-avoidance by domestic merchants (Wealth Of Nations).

In none of the only three cases in which he used the metaphor of the invisible hand did he include its use in his theory of markets.

Zing!

We must confess to a similarly imperfect understanding of the Smithean oeuvre. Who knew, for example, that Mr. Smith knew nothing of “capitalism” — a word that didn’t exist until almost a century after he published Wealth of Nations? Thanks to Professor Kennedy for keeping us on our metaphorical toes.