Results matching “chesley”

$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]

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.

Chesley experts in two cases drop testimony - PointOfLaw Forum

Robert Ambrogi writes of two recent cases where experts retained by or on behalf of Stan Chesley essentially disavowed their testimony after being confronted with unpleasant facts that had been kept from them in drafting their testimony. My Point of Law post on the subject is quoted.

Around the web, June 24 - PointOfLaw Forum

  • West Virginia Supreme Court upholds non-economic damages caps in med-mal cases, correctly noting that it's not the role of the judiciary to second-guess the policy decisions of the legislature. [LNL; opinion at Torts Prof blog]
  • Can Republicans make an issue of the Obama administration's overcriminalization of business? After being beaten up for over two years, business leaders seem much less friendly to Obama's fund-raising overtures than in 2008. [Henderson via Kirkendall; NY Post]
  • Senate Judiciary Committee plans to bash Supreme Court at hearing on Wednesday. [SJC]
  • Jim Hannah has more on Chesley disbarment. [Cincy Enquirer]
  • FTC opposes Midland and Encore class-action settlement. [FTC; earlier (state AGs)]

  • Chutzpah: plaintiffs who won settlement in Texas judicial hellhole now seek to recover $5.6 M in payments to their attorneys because their attorney bribed the judge. Shouldn't the defendant be intervening in that lawsuit? [Courthouse News]

Around the web, June 18 - PointOfLaw Forum

  • Fallout: Ohio bars disbarred Chesley from representing it in class action. [Cincinnati.com; Adler @ Volokh; earlier and earlier]
  • Tennessee caps non-economic damages at $750,000 [LNL]
  • Is McLean County, Illinois, ignoring the law in asbestos cases? [Rickard @ Chi Trib]
  • Obvious except to Third Circuit: SCOTUS rules that defendants can challenge Tenth Amendment constitutionality of overfederalization of crimes they've been charged with. [Shapiro @ Cato; Bond v. United States]

  • It's not quite loser pays, but recent amendments to 28 U.S.C. § 1920 may at least shift costs of excessive e-discovery in some cases. [Beck]
  • Clifford Taylor takes on Sandra Day O'Connor on judicial elections and "merit selection" at Wayne State U conference. [Pero; Severino]
  • California high school tripped up by overbroad state child porn law. [Reason]

  • Why, yes, the Center for Class Action Fairness LLC is likely to object to the Pampers Dry Max diaper settlement. But I don't blog for Above the Law. [Jackson; Miller]
  • I strongly suspect that the requirements of dramatic arc and the fact that HBO got someone blue-eyed and hunky to play "Ted Frank" in the movie instead of Jon Lovitz or Judah Friedlander means that I'm going to be portrayed relatively sympathetically. [IMDB]

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; Kentucky.com]

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.

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).)

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.

Trial Lawyers Inc. update -- Ohio - PointOfLaw Forum

The latest state-focused installment in the popular Manhattan Institute series covers the Buckeye State, scene of some intense liability battles in recent years. Among topics aired: the state's sharply divided Supreme Court, and its narrow swing in recent years toward deference to legislated legal reform; the brief, clownish reign of state Attorney General Marc Dann; and the career of the state's best-known tort lawyer, Stanley Chesley of Cincinnati. Earlier state-by-state reports have covered California, Michigan, and Illinois.

More: David Owsiany, Buckeye Blog (Buckeye Institute), Legal NewsLine.

Fen-phen, wrapping it up - PointOfLaw Forum

Concluding arguments in the Kentucky fen-phen trial are set for today in a Covington federal courtroom, the issue being whether three attorneys who won a class-action case ripped off their clients when they took $51 million out of the $200 million settlement.

The Cincinnati Enquirer has a wrap-up story, Fen-phen case nears climax," with all its strange elements: The lawyers buying a race horse, the machinations of Cincinnati class-action guru Stan Chesley - granted immunity - and the pain suffered by the clients. (The Enquirer has published a special section: "Prescription for Scandal" featuring all the coverage so far.)

Meanwhile, Florida A&M Law School defends a $1 million contribution from one of the accused, Shirley Cunningham, endowing a chair for himself. Horsehide?

The Kentucky Enquirer reports that the judge who approved a $200 million class action settlement in a fen-phen diet drug lawsuit for which plaintiffs' lawyers are accused of looting from the "victim" class has testified he is embarrassed by the way he handled the case.

Retired Circuit Court Judge Joseph "Jay" Bamberger was on the stand in U.S. District Court in Covington, Ky., on Wednesday in the fraud trial of three Lexington attorneys accused of keeping $45 million dollars that should have gone to plaintiffs they represented, and of putting $20 million more into a "charity" that all three, as well as the judge himself, were paid $5000 each month to administer.

Bamberger told the court he had never presided over a class action lawsuit before and depended on the advice of Cincinnati class action attorney Stan Chesley.

Lawyers Shirley Cunningham Jr., William Gallion and Melbourne Mills Jr. are being tried on charges of conspiracy to commit wire fraud.

Jurors at their trial watched a videotape of a May 2001 hearing in which Bamberger approved the multimillion-dollar settlement. In the video, Bamberger seeks advice from Chesley on the proper way to proceed with the case. Chesley is heard on the tape making a self-deprecating joke about his qualifications as a class-action expert. Over the laughs that follow, Bamberger said Chesley was "taking the role" of the expert in the fen-phen litigation.

Bamberger stepped down from the bench in February 2006 to avoid being removed by Kentucky's judicial conduct commission for his actions.

Kentucky fen-phen fraud trial underway - PointOfLaw Forum

We've been covering this story for some time -- April 2007 and much earlier -- and the criminal trial of three of the Kentucky fen-phen attorneys who stole tens of millions from their clients begins today. (Andrew Wolfson, "Fen-phen trial gets under way", Louisville Courier-Journal, May 13). Andrew Wolfson has an overview at the Louisville Courier-Journal. The strategy of Gallion, Cunningham and Mills appears to be to blame their co-counsel Stan Chesley. The question arises why he hasn't also been indicted, as he took millions of dollars more than he was contractually entitled to on his own. Judge Joseph "Jay" F. Bamberger, who received at least tens of thousands of dollars directly from the settlement after approving it, will testify, but has not been indicted. Also not indicted: Bamberger's former law partner, Mark Modlin, who received millions of dollars from the fen-phen lawyers, helped negotiate the judicial approval of the settlement, and then bought a house in Florida with the judge.

Andrew Wolfson reports:

"The three Lexington lawyers already found in a civil suit to have defrauded clients in Kentucky�s $200 million fen-phen settlement were indicted today on charges of conspiracy to commit wire fraud.

"A federal grand jury in Covington accused Melbourne Mills Jr., Shirley Cunningham Jr., and William Gallion each of one count of fraud and demanded that they forfeit $46 million in misappropriated funds and more than $21 million in fees that had parked in a charitable fund."

The fourth attorney involved, Ohio powerhouse Stan Chesley, was not indicted. Earlier: May 15, Apr. 5, Apr. 4, etc.

Earlier: May 11, May 8, Apr. 5, Apr. 4, etc.

  • Barbara Bonar gets supporting testimony in her claims against Stan Chesley, but loses bench trial in case she brought over questionable settlement over Catholic church sex abuse. Bonar, the next president of the Kentucky Bar, will appeal. In the meantime, she faces trumped up ethics charges for representing class member opt-out settlements. (Andrew Wolfson, "Covington lawyer loses fee dispute case", Louisville Courier-Journal, May 12).
  • Angela Ford, who is bringing the lawsuit on behalf of Kentucky fen-phen victims ripped off by their attorneys against their co-counsel, Stan Chesley, is now also facing what seems to me retaliatory political pressure; a Hamilton County, Ohio, judge, apparently unaware of deposition commissions, is complaining that she subpoenaed an Ohio witness without being licensed to practice law in that state. For some reason, a Kentucky judge, Stanley Billingsley, is testifying on behalf of Chesley. An American Home Products witness contradicted defendants' claims that they "set aside" some settlement money for future Kentucky claimants (who, under the U.S. Supreme Court Amchem precedent, could not be bound by the settlement). And the parties are in mediation tomorrow and Thursday, which, judging by Chesley's attorney's complaints about press coverage, implies a confidential settlement is near. Next court hearing is May 31. (Shelly Whitehead, "Fen-phen suit heads to mediation", Cincinnati Post, Apr. 24; Beth Musgrave and Jim Warren, "Lawyers meet Wednesday to try to reach deal on fen-phen millions", Lexington Herald-Leader, May 14).
  • Angela Ford herself has a website, which is not surprising, but it does include a remarkable resource of publicly-available court documents related to the Abbott v. Chesley case.

So wrote Boone Circuit Court Senior Judge William Wehr in a motion denying both Stan Chesley's motion to dismiss a suit against him in the Kentucky fen-phen fee scandal. But, with plaintiffs' summary judgment motion also denied, a jury will ultimately decide how much that "more" should be, and whether a fiduciary duty was broken. The same order denied a request by Melbourne Mills to reconsider the finding that a fiduciary duty was broken. Chesley's attorneys state that he will pay back $7 million of his $20 million fee. (Jim Hannah, "Chesley made too much", Cincinnati Enquirer, Apr. 5). Earlier: OL Mar. 26 and links therein. (Cross-posted at Overlawyered.)

The trouble with cy pres - PointOfLaw Forum

Class action settlements often require donations to public-interest groups. Defendants are amenable to this, because it means that the punishment is a meaningless shift of money that would have been spent on charity anyway; plaintiffs' attorneys like this, because it increases the size of the apparent "relief" that justifies high attorneys' fees; judges go along, sometimes because they like the causes their money is supporting. (And those causes are often allies of the trial bar, thus encouraging more litigation down the line.) Little wonder that trial lawyer Michael Hausfeld spoke of the importance of cy pres at yesterday's Federalist Society Panel.

Another problem that may well be more common if investigated more fully: kickbacks. In the now infamous Kentucky fen-phen settlement, millions were diverted to a new charity that then paid the judge as a board member (OL Mar. 6). And now it is revealed that another $1 million of the settlement (negotiated by plaintiffs' bar star and top Democratic Party donor Stanley Chesley, who received $20 million for his troubles) went to Florida A&M Law School—which agreed to pay one of the lawyers, Shirley Cunningham, $100,000/year for a no-show professorship. A Florida state investigation calls evidence of criminal activity "inconclusive," but suggests the school seek its money back. (Andrew Wolfson, "Ky. lawyer's Florida A&M pay 'not earned'", Louisville Courier-Journal, Feb. 8). (Similarly: Peter Lattman on Richard Epstein on a donation to Seton Hall; for a general overview relatively sympathetic to trial lawyers, see Geoffrey P. Miller & Lori S. Singer, Nonpecuniary Class Action Settlements, 60 Law & Contemp. Probs. 97 (1997).)

More on Kentucky fen-phen scandal: OL Feb. 14 and links therein.

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