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.
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).
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.
Judge Joseph Bamberger rubber-stamped a Kentucky fen-phen settlement agreement where plaintiffs’ attorneys cheated class members out of tens of millions of dollars. In the process, his former law partner was paid millions by the settlement, which he used to buy a Florida house with Bamberger, and Bamberger himself received a $5000/month sinecure. At trial of the three lead attorneys yesterday, jurors were shown a videotape where one of the plaintiffs questioned the judge on how low her settlement was and the validity of her release; the videotape shows Bamberger browbeating the plaintiff, but then awarding her an additional $100,000 and a $1200/month life annuity on the condition that she cease talking about the settlement and her objections to it. (Jim Hannah, “Judge dressed down victim”, Cincinnati Enquirer, May 24) (h/t R.U.). For some reason yet undisclosed by prosecutors, Bamberger is on the witness stand rather than in the dock with Gallion, Mills, and Cunningham.
We’ve extensively covered the scandal over charges that attorneys William Gallion, Shirley Allen Cunningham Jr. and Melbourne Mills Jr. siphoned off $65 million or so in settlement money due claimants in the diet drug litigation, using the proceeds to buy, among other things, the Preakness-winning race horse Curlin. Ted notes the latest developments over at Point of Law, as does Carter Wood. (Wolfson/Courier-Journal, WSJ law blog).
More from WSJ law blog: Mills’ lawyer tells jury his client “was hospitalized for an ‘alcoholic seizure’ a month after the case was settled, didn’t take part in any court hearings and was too drunk at the time to be responsible,” while prosecutor says “that Mills ‘sat back and laughed’ when the other two described a plan to overcharge the clients.”
- 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]
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- 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]