Gallion alleged that Chesley forced his way in by using his influence with the fen-phen maker’s counsel to stifle proposed settlements that Gallion, Mills and Cunningham had on the table with the drug maker.

“We knew that if we were ever to get our cases settled, we’d have to come to an agreement with Stan Chesley,” Gallion said.

Chesley isn’t charged in the case but is a defendant in a civil suit filed by more than 400 of the former clients against their ex-lawyers. The other lawyers lost a $42 million judgment in that case; a jury will decide how much of Chesley’s $20.5 million fee he must return.

Chesley’s counsel has indicated he will refuse to testify in the criminal trial, citing his right not to incriminate himself.

Yesterday’s most explosive testimony came from a former lawyer for Gallion and [Shirley] Cunningham who said his clients approved a filing with the Kentucky Bar Association that grossly exaggerated the amount of money they had paid to their clients in the fen-phen case.

Lawyer Whitney Wallingford said he made a calculation error in 2002 that led him to tell the bar association that the clients had been paid more than $116 million of the $200 million settlement. In fact, they got only about $73 million.

Wallingford said in a letter to the bar association that Cunningham and Gallion had “approved” the filing.

In court, Wallingford said he had sent a copy of it to both of them and heard nothing back from either. He said Chesley eventually called him and told him to file it.

(Andrew Wolfson, “Gallion doesn’t address charges”, Louisville Courier-Journal, Jun. 7). Gallion will return to the stand Monday; defendant Melbourne Mills is expected to testify, and Cunningham has not yet decided whether to testify. (Beth Musgrave, “Fen-phen lawyer testifies”, Lexington Herald-Leader, Jun. 7). The attorneys continue to blame everything on Chesley and Judge Joseph Bamberger.

Attorney Whitney Wallingford testified there was nothing unethical about having the Kentucky Fund for Healthy Living–created by a court order by Judge Bamberger–pay Bamberger $5,000/month to sit on its board. (Andrew Wolfson, “Witness praises lawyers’ managing of nonprofit fund”, Louisville Courier-Journal, Jun. 6). Which says something either about Wallingford or about Kentucky legal ethics.

Meanwhile in the civil case, one is inclined to call shenanigans on the attorneys’ lease of a million-dollar racehorse to one’s wife and another’s girlfriend. (Andrew Wolfson, “Horse pulled from stakes race”, Cincinnati Enquirer, Jun. 6) (h/t R.U.).

The court is struggling to maintain control over the trial; the first prosecution witness was cross-examined for a full week when the judge started putting time limits on the parties. (Jim Hannah, “I had to include Chesley”, Cincinnati Enquirer, Jun. 7).

And the question remains: why hasn’t Stan Chesley been indicted?

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Prominent Cincinnati attorney Stan Chesley said he wanted to file the Diocese of Covington priest-abuse case in Boone County because “we have a real friendly judge there,” a lawyer testified this week.

“He winked at me” and said “we need to file this in Boone County,” testified Covington lawyer Barbara Bonar, who is suing Chesley in a dispute over attorneys fees in the $84.5 million case.

“He said we already have hired a trial consultant, and he is real friendly with the judge,” Bonar said, describing a conversation she claimed to have had with Chesley in January 2003. “And he winked at me again.”

Chesley denies the allegations, but the fact remains that the Boone Circuit judge, Joseph Bamberger, of Kentucky fen-phen scandal fame, made an unprecedented ruling certifying a class action over priest abuse that forced the diocese into a $84.5 million settlement given that the church could not hope to defend itself against anonymous unnamed class members.

Bonar, who was briefly co-counsel for the class in the priest-abuse case, testified that Chesley’s partner Robert Steinberg told her in August 2003 that the Chesley firm had to turn down an early $3 million settlement offer from the diocese because it already had paid $400,000 in expenses to Modlin as a fee “to get the class certified.”

The diocese had sought Bamberger’s recusal. Modlin was also hired as a $2 million “trial consultant” in the fen-phen case, and went on to buy a house in Florida with Judge Bamberger. Chesley denies paying Modlin $400,000, and Bonar has her own motivation to fib, as she’s suing for a share of the Chesley fees from the class action, and claims she left the case only because of her fear of being involved in a fraud on the court. Bonar has already earned $2 million in fees out of the $4.7 million she settled for in individual cases outside the class action. Somewhere in here, a crime has been committed, whether it be bribery or perjury, but there’s work for a grand jury to be done. (Andrew Wolfson, “Lawyers clash in dispute over fees”, Louisville Courier-Journal, May 10; see also Jeanne Houck, “Claims tangle diocese lawsuit”, Kentucky Post, Nov. 26, 2003).

Update: the Kentucky Bar Association is investigating. (Paul A. Long, “Bar: Probe attorneys’ conduct”, Cincinnati Post, May 10.)

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The commission’s reprimand (PDF) revealed a startling fact. “The attorney fees approved were at least $86 million and perhaps as much as $104 million” — well exceeding the $74 million that was split among the 431 claimants in settlement. A lawsuit continues on behalf of some allegedly victimized clients against four plaintiff’s lawyers involved in the settlement, including big-league Cincinnati operator Stanley Chesley. (Beth Musgrave, “Fen-phen lawsuit judge resigns”, Lexington Herald-Leader, Feb. 28; Jim Hannah, “Judge quits amid allegations”, Cincinnati Enquirer, Feb. 28; “Investigation of Bamberger warranted” (editorial), Cincinnati Enquirer, Mar. 1; “A blistering rebuke” (editorial), Cincinnati Post, Mar. 1; Peter Bronson, “Hold this judge in contempt”, Cincinnati Enquirer, Mar. 2)(cross-posted from Point of Law).

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