One of America’s most corporate-crime-friendly bankruptcy judges forced to recuse himself
Today (Oct 16) I'm in Minneapolis, keynoting the 26th ACM Conference On Computer-Supported Cooperative Work and Social Computing. Thursday (Oct 19), I'm in Charleston, WV to give the 41st annual McCreight Lecture in the Humanities. Friday (Oct 20), I'm at Charleston's Taylor Books from 12h-14h.
"I’ll believe corporations are people when Texas executes one." The now-famous quip from Robert Reich cuts to the bone of corporate personhood. Corporations are people with speech rights. They are heat-shields that absorb liability on behalf of their owners and managers.
But the membrane separating corporations from people is selectively permeable. A corporation is separate from its owners, who are not liable for its deeds – but it can also be "closely held," and so inseparable from those owners that their religious beliefs can excuse their companies from obeying laws they don't like:
https://clsbluesky.law.columbia.edu/2014/10/13/hobby-lobby-and-closely-held-corporations/
Corporations – not their owners – are liable for their misdeeds (that's the "limited liability" in "limited liablity corporation"). But owners of a murderous company can hold their victims' families hostage and secure bankruptcies for their companies that wipe out their owners' culpability – without any requirement for the owners to surrender their billions to the people they killed and maimed:
https://pluralistic.net/2023/08/11/justice-delayed/#justice-redeemed
Corporations are, in other words, a kind of Schroedinger's Cat for impunity: when it helps the ruling class, corporations are inseparable from their owners; when that would hinder the rich and powerful, corporations are wholly distinct entities. They exist in a state of convenient superposition that collapses only when a plutocrat opens the box and decides what is inside it. Heads they win, tails we lose.
Key to corporate impunity is the rigged bankruptcy system. "Debts that can't be paid, won't be paid," so every successful civilization has some system for discharging debt, or it risks collapse:
https://pluralistic.net/2022/10/09/bankruptcy-protects-fake-people-brutalizes-real-ones/
When you or I declare bankruptcy, we have to give up virtually everything and endure years (or a lifetime) of punitive retaliation based on our stained credit records, and even then, our student debts continue to haunt us, as do lawless scumbag debt-collectors:
https://pluralistic.net/2023/08/12/do-not-pay/#fair-debt-collection-practices-act
When a giant corporation declares bankruptcy, by contrast, it emerges shorn of its union pension obligations and liabilities owed to workers and customers it abused or killed, and continues merrily on its way, re-offending at will. Big companies have mastered the Texas Two-Step, whereby a company creates a subsidiary that inherits all its liabilities, but not its assets. The liability-burdened company is declared bankrupt, and the company's sins are shriven at the bang of a judge's gavel:
https://pluralistic.net/2023/02/01/j-and-j-jk/#risible-gambit
Three US judges oversee the majority of large corporate bankruptcies, and they are so reliable in their deference to this scheme that an entire industry of high-priced lawyers exists solely to game the system to ensure that their clients end up before one of these judges. When the Sacklers were seeking to abscond with their billions in opioid blood-money and stiff their victims' families, they set their sights on Judge Robert Drain in the Southern District of New York:
https://pluralistic.net/2021/05/23/a-bankrupt-process/#sacklers
To get in front of Drain, the Sacklers opened an office in White Plains, NY, then waited 192 days to file bankruptcy papers there (it takes six months to establish jurisdiction). Their papers including invisible metadata that identified the case as destined for Judge Drain's court, in a bid to trick the court's Case Management/Electronic Case Files system to assign the case to him.
The case was even pre-captioned "RDD" ("Robert D Drain"), to nudge clerks into getting their case into a friendly forum.
If the Sacklers hadn't opted for Judge Drain, they might have set their sights on the Houston courthouse presided over by Judge David Jones, the second of of the three most corporate-friendly large bankruptcy judges. Judge Jones is a Texas judge – as in "Texas Two-Step" – and he has a long history of allowing corporate murderers and thieves to escape with their fortunes intact and their victims penniless:
https://pluralistic.net/2021/08/07/hr-4193/#shoppers-choice
But David Jones's reign of error is now in limbo. It turns out that he was secretly romantically involved with Elizabeth Freeman, a leading Texas corporate bankruptcy lawyer who argues Texas Two-Step cases in front of her boyfriend, Judge David Jones.
Judge Jones doesn't deny that he and Freeman are romantically involved, but said that he didn't think this fact warranted disclosure – let alone recusal – because they aren't married and "he didn't benefit economically from her legal work." He said that he'd only have to disclose if the two owned communal property, but the deed for their house lists them as co-owners:
https://www.documentcloud.org/documents/24032507-general-warranty-deed
(Jones claims they don't live together – rather, he owns the house and pays the utility bills but lets Freeman live there.)
Even if they didn't own communal property, judges should not hear cases where one of the parties is represented by their long term romantic partner. I mean, that is a weird sentence to have to type, but I stand by it.
The case that led to the revelation and Jones's stepping away from his cases while the Fifth Circuit investigates is a ghastly – but typical – corporate murder trial. Corizon is a prison healthcare provider that killed prisoners with neglect, in the most cruel and awful ways imaginable. Their families sued, so Corizon budded off two new companies: YesCare got all the contracts and other assets, while Tehum Care Services got all the liabilities:
https://ca.finance.yahoo.com/news/prominent-bankruptcy-judge-david-jones-033801325.html
Then, Tehum paid Freeman to tell her boyfriend, Judge Jones, to let it declare bankruptcy, leaving $173m for YesCare and allocating $37m for the victims suing Tehum. Corizon owes more than $1.2b, "including tens of millions of dollars in unpaid invoices and hundreds of malpractice suits filed by prisoners and their families who have alleged negligent care":
https://www.kccllc.net/tehum/document/2390086230522000000000041
Under the deal, if Corizon murdered your family member, you would get $5,000 in compensation. Corizon gets to continue operating, using that $173m to prolong its yearslong murder spree.
The revelation that Jones and Freeman are lovers has derailed this deal. Jones is under investigation and has recused himself from his cases. The US Trustee – who represents creditors in bankruptcy cases – has intervened to block the deal, calling Tehum "a barren estate, one that was stripped of all of its valuable assets as a result of the combination and divisional mergers that occurred prior to the bankruptcy filing."
This is the third high-profile sleazy corporate bankruptcy that had victory snatched from the jaws of defeat this year: there was Johnson and Johnson's attempt to escape from liability from tricking women into powder their vulvas with asbestos (no, really), the Sacklers' attempt to abscond with billions after kicking off the opioid epidemic that's killed 800,000+ Americans and counting, and now this one.
This one might be the most consequential, though – it has the potential to eliminate one third of the major crime-enabling bankruptcy judges serving today.
One down.
Two to go.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2023/10/16/texas-two-step/#david-jones
My next novel is The Lost Cause, a hopeful novel of the climate emergency. Amazon won't sell the audiobook, so I made my own and I'm pre-selling it on Kickstarter!
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AVA Hollow Heads designs! I'm going to be drawing the colour crew designs next : )
yes the png texture on Victim is intentional
Design notes + Headcanons down below
All of them have some sort of neck wear as you can see. Chosen one has a cape (because he is the chosen one) Dark has this two tailed shawl type thing, Second has a two tailed scarf (get it? because second? two? yeah) and Victim has a turtle neck.
All of their scarves glow when they activate their powers, not because the scarfs are the source of power or anything its just because it looks fancy i think. All of them have had those scarfs since they were first created, its kind of a hollow head thing.
Victim's turtle neck used to be a regular scarf but during his fight with Alan his scarfs tail was cut off by the man himself, resulting in it glitching out and not having any sort of texture or anything (like the transparent png background thing) When his alleged "powers" aren't activated, his scarf is pitch black along side with some other parts of his body, lower legs and arms. Because of his scarf he can't really activate any sorts of powers anymore (or never really got the chance to anyway) so he uses his coat instead. How? well thats... for later...
I wanted to give Victim a more classy look, but i do know that he lives in a very corrupt town and that look is maybe a bit too fancy for him. So he dosen't wear his coat most of the time. Meanwhile, Dark loves walking around like a drag queen as he goes on and terrorizing random people. Chosen? Well he has main character syndrome so his apperance is explainable i suppose- And Second is the actual main character who prefers comfort over looks so he has very comfortable shorts and socks. Second's gloves are also meant to resemble artist gloves cause yk the man draws for a living ((fkin literally)
Victim is the tallest and oldest (29+ yo), Chosen and Dark are twins (24-27 yo) although Chosen is taller than Dark and the only reason why Dark is at the same height as him is because he wears heels, and Second is the youngest and shortest (19-21 yo)
Anyways thats all im gonna drop here for now, hope you like them!
And also i almost forgot to mention, the flower in Victim's little vest pocket is a black rose and black roses mean rebirth, so thats a bit of symbolizm i suppose
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[From Robert B. Hubbell’s Newsletter]
Fifth Circuit holds a biased and embarrassing hearing on the mifepristone ruling of Judge Kacsmaryk
Federal district Judge Matthew Kacsmaryk issued an order withdrawing the FDA’s approval of mifepristone. A panel of the 5th Circuit Court of Appeals upheld Judge Kacsmaryk’s ruling and ordered that the ruling go into effect immediately. The US Supreme Court reversed the 5th Circuit and issued an unusual order that effectively told the 5th Circuit it could not ban the distribution of mifepristone until the Supreme Court ruled on the matter. In other words, the Supreme Court put the 5th Circuit on a “time out” for bad behavior.
A panel of the 5th Circuit Court of Appeals held oral arguments on the merits of the appeal today. The hearing was an embarrassment. The judges acted like petulant children who were upset that they had been reprimanded. Worse, they made no pretense of maintaining impartiality or objectivity—or adherence to the rule of law. The obscene display of judges following personal religious convictions rather than the Constitution is explained by Mark Joseph Stern in Slate, The 5th Circuit is furious that the Supreme Court put it in mifepristone timeout.
I highly recommend reading Stern’s article in full to get the full flavor of the hearing. Stern is at his best in this article. He writes, in part:
And here’s the punchline: Nothing these intellectual Lilliputians do will even matter. The Supreme Court has already decided that the 5th Circuit cannot be trusted with this case: In April, it froze the court’s previous decision stringently limiting access to mifepristone, expressly maintaining the freeze until the justices themselves take further action. Elrod, Ho, and Wilson are howling into the wind; they have no power to change a thing about federal regulation of medication abortion. The adults in the room have already put them in time-out. And rather than demonstrate that they can judge responsibly, they seized on Wednesday’s hearing to throw a combination temper tantrum/gaslight party. No lessons have been learned, no maturity acquired. This time-out probably isn’t ending anytime soon.
Ho read aloud random people’s criticisms of the FDA and made Ellsworth respond to them, then declared that federal courts should override the FDA’s scientific determinations because the agency isn’t trustworthy.
These are not serious people. This is not how real judges conduct themselves. This was barely a judicial proceeding. It was a struggle session in which three anti-abortion zealots yelled at attorneys who have already prevailed in this case once at the Supreme Court. Their rage should have been aimed at SCOTUS, but it’s not a good look for lower courts to trash-talk their superiors, so they redirected it to Harrington and Ellsworth instead. (Erin Hawley, wife of Sen. Josh Hawley, argued against mifepristone; the less said about her unceasing stream of shameless falsehoods, the better.)
I also recommend Talking Points Memo, Right-Wing Judges Mulling Restricting Abortion Drug: Isn’t The Real Problem Here How Mean You All Were To Kacsmaryk?
If we had a functioning Supreme Court that cared about the rule of law, it would castigate the 5th Circuit panel for its shameful display of bias, animus, and religious zeal.
But, as Stern notes, the 5th Circuit cannot restrict the distribution of mifepristone. And the failure of the 5th Circuit to address serious legal questions—like the absence of standing by the plaintiff doctors—may doom the 5th Circuit’s opinion to a chilly reception in the Supreme Court. We can only hope.
[Robert B. Hubbell Newsletter]
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