Results matching “fen-phen”

$42M verdict reinstated in Kentucky fen-phen fraud - PointOfLaw Forum

We've been following this case for years. An intermediate appellate court threw out the verdict against attorneys who stole from the settlement fund based on a later-discredited and -disclaimed affidavit from Ken Feinberg; the Kentucky Supreme Court ruled that that affidavit didn't create a factual dispute, but simply opined on legal issues that the lower court correctly disregarded. Further litigation is still pending against Stan Chesley. The opinion doesn't appear to be online yet. [Courier-Journal; earlier on Point of Law; 2007 summary]

O'Quinn silicosis clients sue - PointOfLaw Forum

I was the first to report when John O'Quinn's breast-implant clients successfully sued his firm for tens of millions of dollars of improper overbilling. [April 2007; June 2007; July 2007; Olson follow-up December 2009]

Now a group of O'Quinn's silicosis mass-tort clients allege similar overbilling and double-billing, including the pass-along to clients of referral fees paid to medical testing companies; document destruction and coverup is also alleged. A former O'Quinn partner denies everything, and claims a state probate court already rejected the allegations. [Alison Frankel @ Reuters]

Garance Franke-Ruta has a rule regarding married politicians' affairs: paraphrased, it's "It's never two. It's either one, or many." It would seem probable that the same principle is true for mass-tort lawyers: why would an attorney who skims tens of millions of dollars of recovery from breast-implant clients suddenly turn ethical and fastidious when it comes to similarly situated silicosis clients? And if the silicosis allegations are true, perhaps fen-phen and asbestos clients of O'Quinn's might want to look at their bills a bit more carefully? Another question that comes to mind is whether O'Quinn was especially aggressive when it comes to mass-tort billing, or whether other mass-tort settlements from other attorneys have similar skimming. Every once in a while there's a news story that suggests this could be a fruitful line of inquiry. Dickie Scruggs was reckless enough to attempt to bribe judges to get an upper hand in fee-splitting disputes with fellow attorneys; is it possible that he also took advantage of less-sophisticated clients in easier-to-hide ways? And the thing that has surprised me most in my work with the Center for Class Action Fairness is how the Ted Frank of five years ago wasn't cynical enough in anticipating the ways class action counsel unfairly treat their clients. Scrutinizing the recovery of mass-tort settlement plaintiffs seems like it would be a potentially profitable niche for entrepreneurial attorneys. Though, in general, the legal system protects its own.

Around the web, May 7 - PointOfLaw Forum

The Sixth Circuit has affirmed the convictions of Shirley Cunningham, Jr. and William Gallion, whose rip-off of clients in a mass tort settlement has been the subject of coverage in this blog for years. The opinion's summary of the facts facially demonstrate the ethical violations of everyone involved, and don't even include some of the more appalling conduct, such as the diversion of supposed cy pres to a Florida A&M Chair that paid one of the attorneys. The Sixth Circuit upheld a refusal to admit expert testimony that would have endorsed the propriety of the cy pres.

Kentucky fen-phen scandal update - PointOfLaw Forum

Corporate Counsel runs a thumb-sucker on the Stanley Chesley disbarring; his appeal is pending in the Kentucky Supreme Court. Meanwhile, the Kentucky Supreme Court has got around to permanently disbarring ex-Judge Joseph Bamberger and David Helmers, a junior attorney on the case, for their roles in the scandal. Earlier.

Around the web, June 16 - PointOfLaw Forum

  • Judge Bamberger, already removed from Kentucky bench for his role in the fen-phen scandal, faces disbarment. []
  • Sensenbrenner seeks reform of "impenetrable" FCPA law; DOJ opposes constraints on prosecutorial power. [NYT/Reuters; WSJ; House Judiciary hearing]

  • Mississippi high court hears Sears case on non-economic damages caps. [AP/Forbes; earlier]
  • Haggling over med-mal reform in North Carolina; product liability reform dead. [News-Observer]
  • Special-interest defendants victimized by business-method patent troll who has already collected $400 million seek targeted legislation from Chuck Schumer in patent-reform bill helping with their particular case, while leaving other business-method patents relatively unscathed. [NYT via Yglesias ("Can't they both lose?")]

  • Good news for the First Amendment from New York: message board not liable for pseudonymous comments, even when message board reposts one of the comments as a separate post. [Volokh; Shiamili v. The Real Estate Group of New York, Inc.]
  • Sixth Circuit finds another disingenuous reason to indefinitely postpone an execution; Judge Rogers persuasively dissents. [Adler @ Volokh; Carter v. Bradshaw]

  • 38 state AGs oppose class action settlement by Encore Capital Group. [WSJ]
  • Medicare recipients already face de facto rationing through queueing effects. [MR]
  • A modest proposal to increase both jobs and safety. [Murray @ CEI]

Kentucky disbars Stan Chesley - PointOfLaw Forum

There was little chance that the Kentucky Bar was going to disregard the extensively papered recommendation of the trial commissioner after a 43-witness trial over the fen-phen scandal, but it's good to see the result, if one that was several years late. Commissioner Graham found that Chesley:

  • Led a "clandestine meeting" with Judge Joseph Bamberger in February 2002 to get the court's "stamp of approval upon this criminal enterprise" and his approval of fees totaling 49 percent of the settlement.

  • Responded with "misleading," "incomplete" and in some instances "outright falsehoods" when the Bar Association began investigating him.

  • Violated several disciplinary rules, including taking an unreasonable fee, making a false statement to a tribunal and failing to provide clients with information about the total value of the settlement.

Ohio will almost certainly pursue reciprocal discipline, but the 75-year-old has indicated that he will appeal to the Kentucky Supreme Court, which will likely delay the inevitable for a year or two. [Courier-Journal;]

The order includes a requirement to disgorge $7.6 million—which means that Chesley will still have made $12.4 million from his unethical behavior. Nice work if you can get it. And once again, given the extensive record and overwhelming evidence of misconduct here, I note the odd decision of the U.S. Attorney's office not to criminally prosecute Chesley, who wasn't even much of a cooperating witness at the trials of his co-conspirators.

So asks the Wall Street Journal, who notes that Republican Ohio AG Mike DeWine's Chesley-led lawsuit against Fannie Mae has so far cost American taxpayers $132 million. We've long covered Stan Chesley's role in the Kentucky fen-phen scandal.

Last March, two attorneys from the Kabateck Brown Kellner firm published an op ed in the Los Angeles Daily Journal attacking my litigation against impermissible cy pres awards as part of a "corporate" campaign. Never mind that the Center for Class Action Fairness has never taken a dollar of for-profit corporate money. And never mind that my position on cy pres pretty much mirrors that of the American Law Institute. And never mind that Kabateck regularly breaches its fiduciary duty to its clients by regularly negotiating for class money to go to its preferred charities in the first instance rather than as a last resort. We've knocked out one crappy Kabateck cy pres settlement this year that attempted to give the slush fund for charity to the judge if he'd sign off on a settlement that ripped off the class, and we'll knock out a few more in the next twelve months when judges rule on pending cases.

What amuses me today is that same op ed proudly beat its chest: "Another great example of the laudable use of the cy pres mechanism was in the recent Armenian Genocide Insurance Settlements," a class-action shakedown for the benefit of lawyers. Now, the National Law Journal is reporting, there are allegations that settlement funds from that very same case were fraudulently funneled to sham charities. Not the first time. But, of course, the only possible reason to oppose cy pres is to carry water for corporations, right?

(The Center for Class Action Fairness is not affiliated with the Manhattan Institute.)

Update on our February 21 and February 10 coverage: Kentucky Bar Association Trial Commissioner William Graham recommended that Chesley be disbarred and disgorge $7.6 million in excessive fees. If so, he likely faces reciprocal discipline in Ohio. [Opinion and Cincinnati Enquirer via Fisher @ Forbes; other links at ABA Journal]

Astonishingly, Chesley would get to keep the other $12.4 million under this recommendation.

Chesley's lawyers complain that the findings contradict the failure of the federal authorities to target Chesley in their investigation, but that perhaps says something about a politicized decision to use Chesley as an ineffective witness in the criminal prosecution.

Ken Feinberg and the Kentucky fen-phen suit - PointOfLaw Forum

On February 10, we reported how a Kentucky appellate court threw out a summary judgment against the infamous Kentucky fen-phen attorneys, relying on a dispute of fact created by an expert report by Kenneth Feinberg that the attorneys' conduct (since resulting in some criminal convictions and disbarments) was handled "properly and ethically" and that he had seen "nothing that credibly suggests any misconduct by the attorneys."

Friday, Andrew Wolfson reported that that same expert report came up in the Kentucky disciplinary hearings against Stan Chesley, the famed Cincinnati lawyer who helped structure the settlement, and walked away with an outsize $20 million fee even as tens of millions were being stolen from the putative clients. Feinberg says that he wrote the affidavit as a favor to his friend Chesley, all of his information for his expert report came from what William Gallion chose to tell him and show him, and that he would have thrown the report in the wastebasket and never prepared the affidavit if he had known the truth. (Whether Feinberg would have stood by his expert report had Gallion paid Feinberg the $50,000 fee he had promised is a question for an alternative universe.) Feinberg admitted that he "knew nothing about the actual factual occurrences in this case" when he wrote the affidavit that was used to defeat summary judgment.

This happens all too often: ethics experts often take a set of facts favorably construed by their clients, put on blinders and do not conduct any investigation of the truth of those assumptions, and then issue an opinion that their client did no wrong, and judges accept the opinion without care for the methodology used to reach it, even though the expert essentially assumed the conclusion. In this case, the trial court does seem to have disregarded the Feinberg opinion, but apparently failed to provide sufficient reasoning to persuade the appellate court to do the same. On remand, the trial court can simply point to Feinberg's disavowal and issue the same result, but it appears that the attorneys for Gallion's victims are going to ask the Kentucky Supreme Court to do that, a questionable strategy, given that Feinberg's disavowal took place well after the underlying summary judgment.

Kentucky fen-phen fraud trial decision reversed - PointOfLaw Forum

In 2007, a Kentucky trial court judge ruled that Kentucky fen-phen lawyers William Gallion, Shirley Cunningham, and Melbourne Mills Jr. owed $42 million to their clients as a matter of law. An appeals court has held that an expert opinion (by Kenneth Feinberg!) claiming that the three (two of whom have since been convicted of criminal charges) acted "ethically" created an issue of fact requiring trial. The suit will proceed against the three and Stan Chesley, who has confidential disciplinary charges pending against him in Kentucky; "Bar Counsel officials have stated in his disciplinary proceedings that they're seeking Chesley's disbarment." (Jon Newberry, "Court paves way for new fen-phen trial", Cincinnati Business Courier, Feb. 9; Cunningham v. Abbott (Ky. App. 2011).)

What is it about fen-phen settlements and fraud? Ten former clients of Texas lawyer George Fleming allege that he assessed the $23 million cost of echocardiograms for 35,000 unsuccessful plaintiffs upon 8,100 other clients in a fen-phen settlement. "'He said he had worked too long and too hard for a lousy $41 million,' said Jim Doyle, who left the firm after objecting to Fleming's unusual decision to include non-client expenses among those billed to clients." [Houston Chronicle] It's unclear whether the clients are asking for complete disgorgement as a remedy for the alleged breach of fiduciary duty. For a similar case involving the late Texas attorney John O'Quinn, see Overlawyered.

Around the web, August 27 - PointOfLaw Forum

  • Intel CEO: US legal environment so hostile that it will cause tech decline. [CNET]
  • $2.2 million for the lawyers, $2080 for the class in California state Wells Fargo class action. [Schonbrun @ HuffPo]
  • WSJ posits that criticism of Feinberg comes from lawyers upset that they're not gettting a bigger slice of the $20B BP fund. [WSJ ($)]
  • The trial bar heads to Iraq. [WSJ ($)]
  • Lawyer recommends disbarment for Judge Joseph Bamberger in Kentucky fen-phen scandal four years after he resigned from bench over it. [Courier-Journal]
  • More on California $21M predatory pricing verdict. [Wright]
  • Eleventh Circuit amicus brief in Cappuccitti v. DirecTV cites Andrew Trask's must-read class-action blog. [WLF; earlier at POL]
  • New York Domestic Workers' Bill of Rights passes in slightly less onerous form than first proposed; includes mandatory overtime for live-in workers. [NLJ]
  • Two BigLaw firms sanctioned $2M for their role in meritless litigation filed by Ron Perelman against his in-laws. Appeals pending. [American Lawyer]
  • Renegade Republican Michigan Supreme Court Justice Elizabeth Weaver resigns shortly before election, which may give benefit to Democratic candidate who can now claim incumbency. [Free Press]
  • The hypocrisy of [IJ]
  • Was Blagojevich jury deliberately hung by career Dem as a political move? And did prosecutors decide not to strike this obviously problematic juror for fear of Batson problems? [Ace; Patterico]

Cincinnati Enquirer on Stan Chesley - PointOfLaw Forum

If you want a link from this blog, you could do worse than to call me "a brilliant lawyer and polemicist." Bad Lawyer lets us know about Cincinnati Enquirer coverage by Jim Hannah of the Kentucky disciplinary charges we discussed earlier, which apparently include an investigation into another mass-tort settlement with the local Catholic Church diocese. (For the record, I am not "anti-plaintiff"; indeed, my legal practice these days is almost exclusively with plaintiffs ill-served by their attorneys.)

I've long wondered why Stan Chesley, who walked away with over $20 million of a $200 million settlement where the vast majority of the proceeds were siphoned away from the putative clients for the benefit of the attorneys and the presiding judge, did not face the criminal and disciplinary charges of his co-counsel, even though he was counsel of record on the case for years. Dan Fisher reports that some chickens are finally coming home to roost. The case got some attention because the two Kentucky lawyers eventually convicted of fraud used some of the ill-gotten gains to purchase the future two-time Horse of the Year Curlin. Earlier on Overlawyered.

Abel v. Austin (Ky. App. 2010) - PointOfLaw Forum

The Kentucky fen-phen scandal appears to stretch to the Beasley Allen firm in Alabama, which horse-traded for several dozen plaintiffs who thought they were being represented by Kentucky attorneys William Gallion, Shirley A. Cunningham, or Melbourne Mills. The Alabama litigation settled for $47k per plaintiff with "minimal injuries," but the plaintiffs only received $29k. They sued over the other $18k, but we'll never find out what happened to it, because the defendants succeeded in having the claims barred by the statute of limitations. [Abel v. Austin]

CNBC "American Greed" - PointOfLaw Forum

The American Association for Justice is holding its winter convention in Maui at the end of January. The AAJ semi-annual gathering was in San Francisco last summer and attracted many national political figure amid the congressional debate on health care legislation, including Speaker of the House Nancy Pelosi. It's hard to imagine a similar roster of high-level political speakers for the winter confab: What elected official dares the elitist political imagery of hanging out in Maui?

We assume the Senate and House Democrats will be still working out a "compromise" version of the health care bill even as the trial lawyers meet in Hawaii. Expanding medical liability is definitely on the AAJ's agenda for the convention. (See the convention brochure and CLE listings.) The track we found interesting -- the pharmaceutical industry remains a target despite the congressional protection it negotiated? -- and amusing for its seminar-ese was the February 2nd session, "Pharmaceutical Litigation":

Allegories and Analogies of Corporate Greed (ethics credit)

* Ethically pointing out the corporation's lack of ethics

Homemade Technology: Doing It on the Cheap (ethics credit)

* The three Cs of visuals ethics (Copyright, ClipArt, and Cartoons)

Panel: Litigation Update

* Avandia * Byetta * Gardasil * Hydroxycut * Reglan and Fen-Phen * Yaz/Yasmin * Zicam

Around the web, September 16 - PointOfLaw Forum

  • Interesting: whistleblower suit by lawyer against big personal injury firm raises questions over handling of fen-phen settlement [NJLJ]
  • "Summers v. Earth Island Institute Reiterates Actual Injury Requirement for Citizen Suit Standing" [Kevin Haroff/WLF, PDF]
  • L.A. port dispute with independent truckers: is it union favoritism dressed up in green? [Carter at ShopFloor]
  • High-profile lawprof Stephen Gillers joins Legal Ethics Forum blog [Andrew Perlman there]
  • "Mandatory National Reporting of Medical Errors?" [McDermott bill; TortsProf]
  • Pursuing product liability claim against Chinese manufacturer can be, let's say, an uphill battle [FT]

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