Monday, May 7, 2007

Mediation in Kentucky Fen-Phen Settlement Scandal

Article in the Cincinnati Post about plans to mediate the dispute in which hundreds of fen-phen clients accuse their former lawyers -- Shirley Cunningham, William Gallion, Melbourne Mills, and Stan Chesley -- of defrauding them in connection with the aggregate settlement of their claims against Wyeth.  If mediation fails, however, plaintiffs' attorney Angela Ford is seeking a change of venue from Boone County to Lexington.  Here's an excerpt from the April 24 article by Shelly Whitehead, Fen Phen Suit Heads to Mediation:

The attorney for hundreds of people who say lawyers representing them in a suit against the diet drug fen-phen defrauded them will try to settle their differences in mediation sessions next month.  If that doesn't work, however, an attorney representing the more than 400 plaintiffs in the case wants the trial of their suit moved from Boone County, Ky., to Lexington. ...

In 2002, fen-phen maker American Home Products and more than 400 people who took the drug in Kentucky reached a $200 million settlement.  Cunningham, Gallion and Mills, the original attorneys for plaintiffs in the case, hired Chesley to negotiate that agreement.

The victims in that case wound up splitting $74 million and the lawyers and their associates got $106 million. The plaintiffs complained that was more than had been agreed upon, and hired Ford to represent them in an effort to recover some of that money.

A year ago, [Judge William] Wehr ruled the three main lawyers in the original case had misappropriated settlement money and breached their fiduciary duties. The Kentucky Supreme Court later suspended the licenses of that trio.  ...

If mediation between the parties - set for May 16 and 17 - fails to resolve that issue, the matter will go to trial, and a jury will determine how much money the attorneys must return to the original plaintiffs.  ...

Wehr scheduled another hearing for May 31 at the Burlington courthouse to determine what, if any, progress has been made during mediation and how the case will proceed.


Ethics, Fen-Phen, Settlement | Permalink

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