The U.S. Court of Appeals for the Sixth Circuit has affirmed the convictions of two Kentucky lawyers who were disbarred for a scheme to bilk clients out of settlement money in the “fen-phen” diet drug litigation.
Shirley Cunningham Jr. and William Gallion were two of the three lawyers who represented about 431 clients in a Kentucky state court fen-phen case against American Home Products. The third is another former Kentucky attorney, Melbourne Mills Jr. In April, a unanimous Sixth Circuit panel declared that Continental Casualty Co. could rescind Mills’ malpractice policy because he failed to disclose a bar association investigation on a renewal application.
The case, which alleged the drug caused heart valve problems, settlement for approximately $200 million, plus an additional $450,000 to settle new claims. The retainer agreement used by the three with their individual clients called for each client’s lawyer to collect about one-third of what the client recovered.
But according to the Sixth Circuit ruling, the clients ultimately received a total of about $73.5 million-less than 37 percent of the total settlement. Meanwhile Cunningham collected $21 million, Gallion nearly $31 million and Mills over $24 million. Other lawyers that they brought into the case got $30.5 million.
The three main lawyers put another $20 million into a charitable trust, the Kentucky Fund for Healthy Living Inc., without informing the clients how much would be put in the fund. Some clients who asked were told that “it would be a very small amount,” according to the Sixth Circuit ruling.
Cunningham, Gallion and Mills each received nearly $150,000 to serve as a director of the fund from June 2003 and June 2005. The state court judge in the case, Judge Joseph Bamberger, collected more than $50,000 in fees as a paid director of the fund from July 2004 and April 2005.
The experienced and dedicated attorneys at Lord & Faris hate to hear of these stories because they give all lawyers a bad name. If you or a loved one has been injured by a pharmaceutical, contact us for a free consultation and know that our attorneys are working for you.
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