Kentucky Supreme Court Restores fen-phen Judgment

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On Thursday, the Kentucky Supreme Court reinstated a $42 million fen-phen judgment in which 440 plaintiffs, who had won the matter, had been defrauded by three Lexington attorneys.

The judgment had been tossed out by the Court of Appeals two years ago, when the appeals court held that the lower court had erred in not holding a trial before ruling that the attorneys had breached their duties.

  

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Since then, the attorneys, Shirley Cunningham Jr. William Gallion and Melbourne Mills Jr. have been disbarred.

The appeals court held that a trial should have been there since an affidavit by an expert in mass torts litigation, Kenneth Feinberg, submitted on behalf of the errant attorneys created sufficient factual dispute to call for a trial.

Since then Feinberg had disavowed the affidavit, commenting that he was unaware of the drug case, and in 2010, he testified that his entire knowledge of the case came from the exclusive instruction of one of the errant attorneys.

Without mentioning that Fienberg has already disavowed his affidavit, the 6-0 pane of the Kentucky Supreme Court held that the affidavit submitted by the expert on mass tort litigation raised issues of law and not issues of fact. Hence a trial, as considered necessary by the appeals court, was in fact unnecessary.

The high court upheld the decision of the lower court and restored the original verdict.

In the instant case, the lawyers, who were entitled to $60 million of the settlement money, helped themselves to $94 million in fees, and an extra $20 million in the name of a foundation controlled by them.

According to the plaintiffs’ counsel, the chief architect of the scheme was Cincinnati lawyer Stan Chesley, who collected about $14 million, and has since then been disbarred.

In fact, the matter has led to the disbarment of six attorneys.

Gallion and Cunningham received 25 and 20 years in prison respectively. Mills claimed at his trial that he was too drunk to have had a part in the conspiracy, and was acquitted.

Charges in the matter were never brought against the alleged mastermind, Stan Chesley, as he turned government witness before the others had a chance.