Results matching “kentucky 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]

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. [Cincinnati.com]
  • 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; 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).)

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 MoveOn.org. [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

Around the web, July 11 - PointOfLaw Forum

  • Our own Ted Frank on punitive damages after the Exxon Shipping decision [yesterday's WSJ]. Also check out Gordon Crovitz's take [WSJ earlier]
  • After acquittal of Mills, Kentucky fen-phen trial results in hung jury for Gallion and Cunningham; prosecutorial fumbles blamed [Ted at OL]
  • Adventures in class action choice of law: New Mexico high court sees no problem applying its law to transactions in other states [Albuquerque Journal courtesy US Chamber]
  • Alabama drug-pricing trial: Jere Beasley gets jury to award $114 million against Glaxo and Novartis, demand letters sent to 69 other drugmakers charged with the same supposed fraud [CNBC, FiercePharma]
  • Abbe Lowell files Fifth Circuit appeal of client Paul Minor's conviction [White Collar Crime Prof Blog, appeal in PDF]
  • WSJ on hurricane insurance models is stronger on hand-wringing than on analytical rigor [Salmon, Portfolio]
  • Defense bar lagging plaintiffs' in new media involvement? [Genova]

Around the web, July 2 - PointOfLaw Forum

  • Kentucky jury acquits Melbourne Mills, the "too drunk to pay attention" fen-phen defendant, can't reach agreement on others [Ted @ OL]
  • Related: Florida A&M says no one's proved $1 million law school donation from Ky. scandal's Shirley Cunningham came from tainted funds, so why give it back? [ABA Journal]
  • Law of the land: Chicago's Daley isn't so hostile toward the Second Amendment that he'd defy the Supreme Court, or is he? [Chapman]
  • "I don't hate lawyers. I hate the unfair legal SYSTEM." [docblog Fertility File]
  • Southern Illinois forum-shopping: "None of the claimants reside in St. Clair County" but all seven have gone there to file contact-lens suits against Bausch & Lomb [St. Clair Record]
  • Next up in cellphone early termination class actions: trial against Verizon in Alameda County, Calif. [The Recorder; earlier]

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?

Around the web, June 3 - PointOfLaw Forum

  • Don't miss Roger Parloff's article on William Simon, whistleblower extraordinaire of the academic ethics-opinion-for-hire industry [Fortune; earlier]
  • Here come the bisphenol-in-baby-bottles class actions [WaPo; Poked and Prodded]
  • Legal assistant in Kentucky fen-phen trial says her boss told her to destroy documents, and other dramatic testimony [Ted at OL, ABA Journal]
  • George Mason lawprof (and friend of this site) David Bernstein calls for extending Daubert principles further into realm of criminal forensics, while making them slightly less stringent on the civil toxic-tort side [Volokh Conspiracy]
  • Asbestos action in Japan on behalf of 178 construction workers and others demands $6.6 billion yen ($64 million) from government and building materials firms [Mainichi Daily News]
  • Clean energy innovators like others in tech sector are cowed by IPO suits [Nick d'Arbeloff, Boston Globe]

New at Overlawyered - PointOfLaw Forum

If you're not reading Ted's and my other blog, you're missing commentary on a terrific new Stuart Taylor Jr. column on the South Africa corporate reparations suit, global warming, lead paint, etc; my own roundup on the Kivalina Eskimo climate-change suit, also discussed by Taylor, and spearheaded by class-actioneers Steve Berman and Steve Susman; the piquantly named Kentucky Fund for Healthy Living, funded from the fen-phen settlement (and more); Congress votes to authorize antitrust suits against OPEC; metal baseball bat maker sued; D.C. Circuit panel rules paper money discriminates against blind; new round in Seidel subpoena controversy; why California's Prop 99 isn't effective eminent domain reform; and much more. And that's aside from a complete new design and navigation.

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