Legal news of local interest: 

Enron may be gone, but its legal legacy lives on.  

Former CEO Jeff Skilling has his oral hearing before the Fifth Circuit today, and the Chronicle reports some experts give him a real shot at overturning his conviction based on a previous Fifth Circuit ruling in a separate Enron case:

A 5th U.S. Circuit Court of Appeals panel issued that [other] ruling, which rejected a key prosecution legal theory that the government also used in the Skilling case.

While a different set of 5th Circuit judges will hear arguments in Skilling’s appeal today in New Orleans, the precedent is there, and it’s not in the government’s favor.

“It’s like dropping a rock in a pond and what the ripple effect will be,” said Peter Henning, a professor specializing in corporate law and white-collar crime at Wayne State University Law School in Detroit.

“He’s got the error. Now it’s just how far he runs with it.”

That error, as cited in Skilling’s appeal, was prosecutors’ contention that his behavior robbed Enron of his “honest services.”

The government used that argument in obtaining a conspiracy conviction that was linked to most of Skilling’s 18 other convictions.

Soon after Skilling’s trial, an appeals panel rejected the “honest services” theory prosecutors used in gaining convictions against participants in Enron’s sale of three barge-mounted power plants, which the government alleged was a disguised loan.

The 2-1 ruling said that the “honest services” issue didn’t apply because the defendants didn’t steal, embezzle or otherwise take money or property, and their actions were aligned with corporate goals.

Skilling’s attorney Daniel Petrocelli (the “Hollywood lawyer” who represented, among others, the Goldman family in the wrongful death suit against OJ Simpson) will also raise other arguments, including that the trial should have been moved from Houston and that the prosecution withheld information which could have helped the defense.

The article noted that prosecutors almost always fare well in the Fifth Circuit, but Enron cases have bucked the trend, quoting Houston attorney Brian Wice:

“For the first time in a long time, the playing field’s level . . ..  Traditionally in that court, the government wins 95 percent of the time by spelling its name right on the cover of the brief. But this is not your ordinary case.”

Ken Lay escaped his sentence through death.  Skilling is looking for a less permanent way out.

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Just in case we needed reminding that healthcare is big, big business:

The antitrust division of Texas Attorney General Greg Abbott’s office is looking into the conduct of Memorial Hermann Healthcare, including allegations that it drove a local doctor-owned hospital out of business with unfair tactics.

The Texas attorney general has asked numerous insurance companies, hospitals and individuals about the business practices of Memorial Hermann Healthcare System and possibly others in the health care industry, the Houston Chronicle has learned through an open records request.

The request for documents and interviews — in the form of 30 “demand letters” going back to June 2006 through this January — comes after a complaint from doctor-owned startup Houston Town & Country Hospital of antitrust behavior by Memorial Hermann.  [That hospital is now defunct.]

A later lawsuit filed by doctors from Town & Country contends that Memorial Hermann coerced insurance companies to boycott the smaller hospital.

The AG is investigating whether Memorial Hermann violated state antitrust laws which prohibit conduct that restrains trade.  The Town & Country group claimed that Memorial Hermann’s conduct, including the pressure on insurance companies, forced T&C out of business.  Memoriall Hermann claims the smaller hospital was undercapitalized and mismanaged.

Well-known Houston lawyer Rusty Hardin represents the Town & Country plaintiffs.  Another legal heavy hitter, David Beck, respected litigator and former president of the State Bar, represents Memorial Hermann.

It will be interesting to see if the medical behemoth really stifled its competition, or if doctors once again proven to be awful businessmen.