Attorney's Fees

Judge says ex-attorney must help pay $42M judgment to plaintiffs in fen-phen litigation

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Add another ex-lawyer to the group of disbarred personal injury attorneys responsible for paying a $42 million judgment over fees plundered from a $200 million settlement to plaintiffs in fen-phen diet drug litigation.

After nearly a decade of court battle, a Kentucky judge ruled earlier this week that former Cincinnati practitioner Stan Chesley, 78, is responsible for the unpaid portion of the $42 million judgment, the Courier-Journal reports.

That amounts to around $25 million, plaintiffs attorney Angela Ford tells the newspaper. “Despite tremendous wealth and considerable political influence, he was not able to insulate himself from accountability,” she said of Chesley.

Attorney Sheryl Snyder of Louisville, Kentucky, represents Chesley. She did not immediately respond to a request for comment from the Courier-Journal.

However, Chesley has repeatedly denied wrongdoing and argued at trial that he represented the three Kentucky lawyers rather than their clients in settlement negotiations, the Associated Press reports. Boone County Circuit Judge James P. Schrand disagreed, ruling that Chesley had contracted with the plaintiffs’ Kentucky law firm to represent some 400 clients.

Two of the three Kentucky lawyers originally responsible for paying the $42 million judgment to the fen-phen plaintiffs are serving hefty federal prison terms for wire fraud. They are William J. Gallion, who got 25 years, and Shirley Cunningham Jr., who got 20 years. A third former Lexington practitioner, Melbourne Mills Jr., was acquitted in the criminal case. Chesley has never been criminally charged.

However, Mills was found civilly liable, along with Galleon and Cunningham, for paying out $94.6 million to themselves and others when a contract in the contingency-fee case provided for $60 million in attorney fees, the Courier-Journal reports. Some $20 million went to a foundation that paid management fees to Gallion and Cunningham, as well as others, the newspaper notes.

Chesley, who was entitled to $14 million under a contingent contract but was paid more than $20 million for settling the case, faced a separate civil case for breach of contract and breach of fiduciary duty. That resulted in the ruling this week in Boone County Circuit Court.

He was disbarred in Kentucky but allowed to retire in Ohio.

David Helmers, a former associate attorney for Gallion, was disbarred in 2011, the AP article reports, and former Kentucky judge Joseph “Jay” Bamberger, who OK’d the 2001 settlement in the fen-phen case, lost his law license, too.

See also: “Recent Law Grad Got $3M Bonus, Plus Porsche, in Fen-Phen Case” “Former Judge Disbarred for Approving Fen-Phen Settlement Without Checking the Details” “Top court reinstates $42M award against 3 lawyers who plundered $200M fen-phen settlement”

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