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Friday, March 10, 2006

Courts - More on: Kentucky Judge Resigns Amid Accusations He Profited From Fen-Phen Case

It was not only the judge, but the attorneys, according to this story by Andrew Wolfson today in the Louisville Courier Journal headlined "Fen-phen lawyers breached duty." Some quotes:

The three lawyers who represented plaintiffs in Kentucky's fen-phen settlement passed "out money to themselves and others like it was theirs to do with as they wished," a special judge said this week.

Judge William Wehr of Campbell County ruled that attorneys Shirley Cunningham Jr., William Gallion and Melbourne Mills Jr. breached their duty to their 431 clients when they paid themselves and others more than half of the $200 million settlement and put $20 million more into a charitable trust, the Fund for Healthy Living.

Wehr ordered the lawyers to surrender the trust's $20 million and place it in escrow so it can be distributed to their former clients if they win a pending suit against the attorneys.

The judge noted that the lawyers and other directors of the fund paid themselves more in fees during its first two years than they paid out in grants. * * *

Wehr's findings mirror those in a public reprimand issued last month to the presiding judge in the fen-phen litigation, Senior Judge Joseph F. Bamberger, who resigned rather than face removal from office for approving huge fees for the attorneys and a close friend, trial consultant Mark Modlin.

Bamberger approved transfer of the $20 million to the fund, then became one of its paid directors, along with Modlin. The Judicial Conduct Commission said in its reprimand that Bamberger's actions "shocked the conscience."

In an order issued Wednesday, Wehr said Cunningham, Gallion and Mills signed contracts with clients limiting their recovery to 33 1/3 percent -- and that they agreed to make no settlements without their clients' consent. But they eventually paid themselves more than 50 percent of the total settlement and falsely told Bamberger it was with their clients' approval, Wehr said.

He said the attorneys' defense -- that their pay was approved by "a now reprimanded judge" -- falls short because the lawyers never told Bamberger about the contingency contracts, nor the amount of money being transferred to the Fund for Healthy Living.

Earlier ILB entries are available from 3/5/06 , 3/1/06, and 2/28/06.

Posted by Marcia Oddi on March 10, 2006 07:34 AM
Posted to Courts in general