What went wrong with one of the biggest names in the plaintiff’s bar. [Corporate Counsel]
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Posts tagged as:
Stan Chesley
- Bizarrely overbroad: “Tennessee law bans posting images that ’cause emotional distress’” [Tim Lee, Ars Technica]
- “Superlawyer Stanley Chesley Faces Reckoning Tuesday” [Dan Fisher, Forbes, Cincinnati Enquirer, reporter Jim Hannah, earlier]
- More on record run-up in used car prices [Perry; my Cato take]
- Winkler County, Texas nurses case illuminates evils of prosecution-as-weapon [Texas Observer via PoL; earlier here, here, and here]
- Not a parody: claim that litigious celebs should be doing more to support Litigation Lobby [CJD]
- “Feminism by Treaty: Why CEDAW is Still a Bad Idea” [Christina Sommers, Policy Review]
- Why do agents of so many miscellaneous government agencies pack guns? [Quin Hillyer last year]
- New idea for who to sue over sex scandals [Conan show lawyer ad parody, adult content]
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- “Cleveland Browns lawyer letter is apparently real” [Lowering the Bar, earlier]
- “Headlines of the Apocalypse: ‘Lady Gaga eyes legal action over breast milk ice cream.’” [@vsalus re: Breitbart via @EdDriscoll]
- Chesley discipline prospects in Kentucky fen-phen scandal: “King of Torts Dethroned” [Laura Simons, Abnormal Use]
- Busy construction-defect lawyers vex Fresno builders [Bee, Business Journal]
- “NHTSA Postpones Back-Up Camera Requirement Rule” [The Truth About Cars, earlier]
- Lawyers in Italy call strike to protest law requiring mediation of commercial disputes [WSJ Law Blog]
- NYT’s Mark Bittman has a magical touch with food (alas) [Patrick at Popehat]
- Beasley Allen lawyers sluiced $850K to Alabama GOP judicial contender [Birmingham News via PoL]
- “Lawyer held in contempt for advising clients to retake foreclosed home” [Ventura County Star, earlier]
- Some perspective on Wisconsin Gov. Walker’s plans: about half the states curtail some or all public-sector unionism [Barro]
- Guy who sued over Jimmy Carter book offers his side of story [Turley, earlier]
- “Disbarment recommended for litigator Chesley over fen-phen fees” [NLJ, PoL, previously on scandal] Kenneth Feinberg affidavit in case draws scrutiny [Steele/LEF, Frank/PoL]
- Mississippi: “Minor, 2 ex-judges disbarred by state Supreme Court” [Sun-Herald, related on scheduled resentencing, earlier]
- “AIG Ended Up Having To Pay Millions For the Duke Lacrosse Stripper Lawsuit” [Business Insider, earlier]
- Labor Department hotline to put workers in touch with private lawyers [Fox Biz, Wood/PoL]
- Underage man on hook for child support to older woman [seven years ago on Overlawyered]
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You may recall the earlier trial of the Kentucky fen-phen attorneys who had stolen tens of millions of dollars from their clients ended in a mistrial for two and an acquittal for their third compatriot. This time around, a federal court jury, after ten hours of deliberation, found William Gallion and Shirley Cunningham Jr. guilty of eight counts of fraud and one count of conspiracy. A streamlined prosecution case no doubt helped make a difference; defense attorneys sought to blame the matter on Stan Chesley, who negotiated the underlying settlement and received millions more than he was contracted to receive, and it remains mysterious why he was not charged. [Courier-Journal]
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After 52 hours of deliberation over eight days, a federal jury yesterday declared it was hopelessly deadlocked in deciding whether attorneys William Gallion and Shirley Cunningham Jr. defrauded clients of $65 million in Kentucky’s 2001 fen-phen settlement.
After the judge declared a mistrial, the jury foreman, Donald Rainone of Erlanger, said jurors were stuck at 10-2 to acquit the defendants, and had been at that vote for much of their deliberations.
“We felt the prosecution just didn’t have a strong enough case,” Rainone said in a phone interview in which he strongly criticized the prosecution for being unprepared and focusing its case on only Gallion, Cunningham and a third lawyer, Melbourne Mills Jr.
“There’s a lot of people that had their hand in this,” he said. “There’s a lot of people that should have been on trial that weren’t.”
Rainone declined to say who else should have been on trial, saying he didn’t want to “get sued.”
Of course, that the prosecution failed to indict participants in the fen-phen scam who also stole from tens of thousands to tens of millions doesn’t explain why one votes to acquit the criminal defendant attorneys who stole millions–except for the fact that the defendants were able to blame the empty chair for their actions. If the defendants’ allegations about Stan Chesley’s role are half true, the question remains why Ohio disciplinary authorities have not so much as opened an investigation, much less failed to disbar him. But we will perhaps learn more as the civil trial progresses. Meanwhile, as Peter Bronson writes, “giving immunity to someone so powerful, wealthy and politically wired was everything that destroys public trust in the justice system.”
Judge William O. Bertelsman, who has taken senior status, has recused himself from the retrial; the new judge, Danny Reeves, will likely be requested to lower the eight-digit bond for Gallion and Cunningham, who remain in jail. Melbourne Mills, who was acquitted, says he has already spent the $20 million he was paid for his role in the case–a case his lawyer told a jury that he was too drunk to work on and didn’t understand the underlying law. Nice work if you can get it.
Off-the-record reports I am receiving about the trial blame prosecutors’ performance (such as failing to object to defendant expert opinion that contradicted the facts) and Judge Bertelsman’s instructions to the jury; it also seems to me that the defendants were given far too much leeway to argue the law before the jurors when the judge should have given a straightforward instruction that the underlying case was or was not a class action covering all future Kentucky claimants rather than allow argument over that simple legal question. (Answer: it wasn’t. The settlement with AHP explicitly says it’s a lump-sum settlement for existing plaintiffs requiring the attorneys to comply with Rule 1.8, and there is no indemnification provision contrary to defense testimony arguing otherwise.)
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Melbourne Mills’s defense that he was too drunk to know what was going on when he and two other attorneys stole tens of millions of dollars appears to have created reasonable doubt in the mind of a Kentucky jury. Mills may have been helped by the revelation that his two co-counsel tried to hide $50 million from him, too, permitting his attorney to more plausibly blame the scheme on others. Or the jury may have believed the argument of Mills’s attorney that the three attorneys were too stupid to understand the settlement agreement and didn’t intend to steal any money (though they transferred a lot of money from their personal account to their clients when they learned the bar was investigating, and lied to the bar about how much money their clients received). (Jim Hannah, “One cleared in diet drug case”, Cincinnati Enquirer, Jul. 2; Beth Musgrave, “Fen-phen lawyer Mills is found not guilty”, Lexington Herald-Leader, Jul. 2; Beth Musgrave, “Jury hears closing arguments in fen-phen trial”, Lexington Herald-Leader, Jun. 24; AP/Kentucky Post, Jun. 23). The jury, today in its seventh day of deliberations, claims a deadlock on the other two attorneys, no doubt confused by why Judge Jay Bamberger and co-counsel and Democratic bigwig Stanley Chesley have not also been indicted. Defendants Cunningham and Gallion have sought to blame the tens of millions they stole on the fact that Bamberger (who was indirectly paid millions) judicially approved the settlement and Chesley (who was directly paid tens of millions) was allegedly the architect of the settlement that ensured lawyers would get far more than their contracts with their clients provided. Since there is no dispute that those two were indeed intimately involved in the scheme, the jury isn’t the only one confused why the Kentucky fen-phen three are being treated differently than the judge, the judge’s former law partner, and Stan Chesley, who all profited mightily.
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From the Cincinnati Enquirer columnist, a refreshingly acerbic account of the erstwhile Master of Disaster’s time on the stand in the Kentucky fen-phen trial, during which he compared himself to Tiger Woods in explaining why he should not be asked to stoop to taking an hourly fee:
Jurors have been anesthetized by six weeks of watching witnesses avoid the truth the way cats avoid a bath. …
…when [defense attorney O. Hale] Almand tried to make Chesley admit – yes or no – that he knew his own lawyer told prosecutors he would take the Fifth unless he got immunity, Chesley’s serial evasions made the courtroom squirm.
I counted at least nine tries. After the seventh, the judge twice ordered Chesley to answer yes or no.
He would not. He wheedled, ducked, swerved and danced. He blustered about attorney-client privilege, corrected the grammar of the question, and griped about how he has been mistreated by the press. …
If you’re hoping to hit a slip-and-fall lotto jackpot by suing Amalgamated Banana Peel Inc., Chesley is just the guy to take on herds of high-paid lawyers. But if you’re looking for a straight answer under oath, look somewhere else.
(”Tiger Woods of Torts”, Cincinnati Enquirer, Jun. 19).
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Perfectly jaw-dropping testimony at the ongoing Covington, Ky. trial:
Attorney William Gallion testified yesterday that he and his co-defendants would have been “legally justified” in taking as much as $170 million from Kentucky’s $200 million fen-phen settlement — because, he said, their clients’ cases were worth only $30 million.“We were like an insurance company where the hurricane didn’t strike, so we got to keep the premium,” the suspended Lexington lawyer testified in his diet-drug fraud trial in U.S. District Court.
The lawyers, it seemed, had structured the settlement so as to reserve the gigantic helping of gravy in question for the supposed disposition of certain contingencies which then conveniently failed to materialize. Judge William Bertelsman immediately told the jury that Gallion’s interpretation of the law was wrong. (Andrew Wolfson, “Judge, lawyer clash at fen-phen trial”, Louisville Courier Journal, Jun. 14).
And on Monday, famed Cincinnati attorney Stan Chesley — who has been given immunity — testified, assailing the conduct of the three defendants and conveying his complete shock that they would structure the settlement so unfavorably to clients. (Jason Riley, “Chesley rakes diet-drug trio”, Courier-Journal, Jun. 17; Jim Hannah, “Chesley: Fen-phen role slim”, Cincinnati Enquirer, Jun. 17). For a different viewpoint, see Peter Bronson, “Where’s Chesley?”, Cincinnati Enquirer, Jun. 12. More: Herald-Leader.
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William Gallion takes the stand in the Kentucky fen-phen settlement criminal trial:
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The press is starting to catch on to the scandal of Judge Bamberger not being charged in the Kentucky fen-phen settlement scandal, and we have criminal trial updates after the jump.
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The name does have a clean, daisy-fresh smell to it, like a good laundry. In this case the laundering being done was of settlement money in the Kentucky fen-phen scandal. (WSJ law blog, Louisville Courier-Journal, Lexington Herald-Leader, Krauss @ PoL).
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- Canada free speech: Islamic group files complaint against Halifax newspaper over cartoon of burka-wearing terror fan; two more libel suits aimed at online conservative voices; growing furor over complaint against Steyn/Macleans [National Post]
- More than 5,000 students committed crimes last year in Philadelphia schools, but none were expelled — consent decrees tying system’s hands are one reason [Inquirer]
- U.K.: Man threatened with legal action for flying pirate flag as part of daughter’s birthday party [Guardian]
- Bankruptcy judge doesn’t plan to accept at face value Countrywide’s claim that it generated false escrow documents by mistake in foreclosure [WSJ, WSJ law blog]
- Amid bipartisan calls to step down, Ohio AG Marc Dann [Apr. 19, May 6] hires an opposition researcher [Adler @ Volokh] on top of Washington lobbyist [Legal NewsLine], after being rebuked by judge for political suit [Dispatch]. And where’s that ethics form on the Chesley flight? [Dayton Daily News]
- Missouri med-mal claims fall sharply after legislated damages curb [Springfield News-Leader]
- More on Dartmouth prof Priya Venkatesan, the one who wants to sue her students — as suspected, she’s a devotee of deconstructionist Science Studies [Allen/MtC; earlier]
- Covert plan to sabotage Chinese economy? [Wilson Center event]
- What, never? Well, hardly ever: Docs continue to assail notion that various complications such as patient delirium, clostridium difficile infection, iatrogenic pneumothorax, etc. — not to mention falls — are “never events” [KevinMD various posts; earlier]
- Mich. high court agrees anti-gay-marriage amendment bars municipal health benefits for domestic partners, just what key proponents had claimed it wouldn’t do [Rauch @ IGF, Carpenter @ Volokh, earlier]
- Private service rates the safety of charter air providers — but can it afford the cost of being sued after giving a bad rating? [Three years ago on Overlawyered]
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- Ninth Circuit, Kozinski, J., rules 8-3 that Roommates.com can be found to have violated fair housing law by asking users to sort themselves according to their wish to room with males or other protected groups; the court distinguished the Craigslist cases [L.A. Times, Volokh, Drum]
- Class-action claim: Apple says its 20-inch iMac displays millions of colors but the true number is a mere 262,144, the others being simulated [WaPo]
- U.K.: compulsive gambler loses $2 million suit against his bookmakers, who are awarded hefty costs under loser-pays rule [BBC first, second, third, fourth stories]
- Pittsburgh couple sue Google saying its Street Views invades their privacy by including pics of their house [The Smoking Gun via WSJ law blog]
- U.S. labor unions keep going to International Labour Organization trying to get current federal ground rules on union organizing declared in violation of international law [PoL]
- Illinois Supreme Court reverses $2 million jury award to woman who sued her fiance’s parents for not warning her he had AIDS [Chicago Tribune]
- Italian family “preparing to sue the previous owners of their house for not telling them it was haunted”; perhaps most famous such case was in Nyack, N.Y. [Ananova, Cleverly]
- Per their hired expert, Kentucky lawyers charged with fen-phen settlement fraud “relied heavily on the advice of famed trial lawyer Stan Chesley in the handling of” the $200 million deal [Lexington Herald-Leader]
- Actor Hal Holbrook of Mark Twain fame doesn’t think much of those local anti-tobacco ordinances that ban smoking on stage even when needed for dramatic effect [Bruce Ramsey, Seattle Times]
- Six U.S. cities so far have been caught “shortening the amber cycles below what is allowed by law on intersections equipped with cameras meant to catch red-light runners.” [Left Lane via Virtuous Republic and Asymmetrical Information]
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As a number of commentators have noted (e.g. Brett Kittredge @ Majority in Mississippi, Alan Lange @ YallPolitics), Booneville attorney Joey Langston, who just entered a guilty plea on charges of judicial corruption, is someone accustomed to throwing the weight of his pocketbook around in Mississippi politics. In particular, he has been among the biggest donors to incumbent Mississippi attorney general Jim Hood, even as Hood employed Langston and partner Tim Balducci on contract to handle the controversial MCI tax bill negotiations, with their resulting $14 million legal fees payable to Langston et al, and the potentially very lucrative Zyprexa litigation.
Equally interesting in some ways, however, are Langston’s activities on the national political scene. To take just one example: this CampaignMoney.com listing tabulates the top “527″ contributions to a group called the Democratic Attorneys General Association, whose political and electoral mission is implied by its name. In the listing, two donors are tied for first place, with contributions of $100,000 apiece. One is the large Cincinnati law firm of Waite Schneider Bayless Chesley, associated with one of the country’s best-known plaintiff’s lawyers, Stanley Chesley. The other $100,000 contribution is from Joey Langston.
In presidential politics, Langston has recently been a repeat donor to the quixotic (and, since Iowa, defunct) campaign of Sen. Joseph Biden (D-Del.), a lawmaker whose high degree of seniority on the Senate Judiciary Committee makes him important to ambitious lawyers whether or not he ever attains the White House. When the Scruggs scandal was still in its early stages, the WSJ law blog (Dec. 10) noted that two key figures in the affair, Tim Balducci and Steve Patterson, were strong backers of the Biden campaign: “Their bet on Biden was that he wouldn’t win the presidency but would become Secretary of State under a Hillary Clinton administration, according to two people familiar with their thinking.” The Journal reprinted (PDF) an invitation to an Aug. 10, 2007 fundraising reception for Biden at the Oxford (Miss.) University Club, sent out above the names of six hosts, three of whom (Scruggs, Balducci and Patterson) were soon indicted. Scruggs, of course, is better known for his support of Mrs. Clinton, a fundraiser for whom he had to cancel after the scandal broke.
Campaign-contributions databases such as OpenSecrets.org and NewsMeat indicate that Langston has been a prolific and generous donor to incumbent and aspiring Senators across the country, mostly Democrats (Murray, Cantwell, Daschle, Nelson, etc.) but also including a number of Republicans who might be perceived as swing votes or reachable, such as Sen. Lindsey Graham (S.C.), Susan Collins (Me.), and Arlen Specter (Penn.)
Incidentally, some critics have intimated that Langston’s generous support to DAGA, the Democratic Attorneys General Association, should actually be interpreted as a roundabout gift to Hood, who was the beneficiary of interestingly timed largesse from DAGA. It does not appear, however, that any of the parties involved — Langston, Hood or DAGA — have acknowledged any connection between the timing of the donations (& welcome Michelle Malkin, David Rossmiller, YallPolitics readers).
[Second of a two-part post. The first part is here.]
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Most recently: May 15; at American.com.
- Curlin, the horse owned by fen-phen fraudsters Gallion and Cunningham, won the Preakness by a head. Curlin’s trainer is apparently ensconced in his own scandal, having served a six-month suspension for illegally drugging horses. (Andrew Beyer, “Making a Run for It”, Washington Post, May 20; Jennie Rees, “Curlin camp a crowded place”, Louisville Courier-Journal, May 20).
- Stan Chesley did not even show up to the court-ordered May 16 mediation session, allegedly forcing a rescheduling until May 23. (Chesley’s attorney says he was in contact with his client at the hearing.) Plaintiffs have asked for sanctions. (Paul Long, “Mediation over lawyer fees fails”, Cincinnati Post, May 18).
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.
