Posts Tagged ‘Stan Chesley’

Liability roundup

Sixth Circuit: Stan Chesley played “shell game,” court did not err in freezing his assets

Onetime “king of torts” under siege: “Stan Chesley has defrauded hundreds of former clients through a ‘high-stakes shell game’ apparently orchestrated to avoid paying them a multimillion-dollar judgment, a federal appeals court said.” Following the settlement of a class action over diet drugs for $200 million, lawyers connived with a state judge, who has since been disbarred, to steer most of the proceeds into their own pockets. Clients have been pursuing recovery against Chesley for years, but he has dodged paying the resulting $42 million judgment. Thus far, five lawyers have been disbarred and two jailed in the saga. The Sixth Circuit has now ruled that a district court acted properly in freezing his assets. [Kevin Grasha, Cincinnati Enquirer; Daniel Gill, Bloomberg Law; McGirr v. Rehme] “All told, between his personal assets and the firm’s assets (of which he was sole owner), Chesley managed to lose over $90 million in assets over the course of a single year,” the court said. Of transfers raising “red flags,” some were made to Chesley’s wife, a federal judge; Judge Richard Suhrheinrich cited these in a footnote but said the court was not relying on them as a basis for its decision.

A “pattern of misuse of the judicial process…to obstruct collection efforts.”

Update on the long-running Kentucky fen-phen fee scandal: one-time “King of Torts” Stan Chesley has maneuvered for years “to avoid paying a multimillion-dollar judgment to hundreds of former clients. The Enquirer has found that Chesley’s legal maneuverings have led to more than $162,000 in sanctions against Chesley and his attorneys….The Ohio Supreme Court in an October ruling – one of two during the prolonged legal battle – said Chesley has engaged in a ‘pattern of misuse of the judicial process…to obstruct collection efforts.'” [Kevin Grasha, Cincinnati Enquirer, more]

Liability roundup

  • “A handful of plaintiffs’ lawyers dominates MDL (multi-district) litigation. Is that a problem?” [Alison Frankel, Reuters]
  • “A. 5918: Unconstitutional, Unwise and Futile Effort to Expand N.Y. Courts’ Jurisdiction” [Marc Gottridge and Lisa Fried, New York Law Journal, earlier on would-be end-run around Daimler limits on state court jurisdiction]
  • “Hawaii counties threaten to pull lifeguards off state beaches if liability bill dies” [Nathan Eagle, Honolulu Civil Beat]
  • No good reason why New York municipalities should be required to pay interest rate as high as 9 percent a year on lawsuit outlays [Adam Morey, Auburn Citizen letter to editor]
  • “Ohio Supreme Court orders halt in liquidation of defunct Chesley law firm” [James McNair, City Beat (Cincinnati)]
  • “What Should Tort Law Do When Autonomous Vehicles Crash?” [Michael Krauss; Jones Day]

Liability roundup

Liability roundup

“Federal judge: Stan Chesley’s attorneys tricked me”

Deeper and deeper for the onetime Master of Disaster: “U.S. District Judge James G. Carr ordered Chesley and his attorneys to appear next month and explain why he shouldn’t find they committed fraud on the court. Carr says in court documents that Chesley and his attorneys designed a scheme to avoid paying former clients who successfully sued him because he took far too much compensation in attorney’s fees.” [Joe Rosemeyer, WCPO, Debra Cassens Weiss, ABA Journal; earlier]

“Stan Chesley: How a Single Case Dethroned the ‘King of Torts'”

Four-part series on rise and fall of front-rank mass tort lawyer Stan Chesley [WCPO]

Part one: How Chesley, born in modest circumstances in Cincinnati, helped pave the way for modern mass tort law by suing dozens upon dozens of defendants — in particular, makers of furnishings and furniture — over the Beverly Hills Supper Club nightclub fire (scroll for more). Advice from Robert Gettys, the only lawyer to hold out and beat Chesley in that case: “Don’t listen to his B.S.”

Part two: “in a 2004 interview, Chesley estimated his firm had recovered nearly $7 billion for clients since he began doing mass tort litigation in the 1970s.”

Part three: he dishes out generously to both Democratic and Republican parties in Ohio, as well as to philanthropies that subsequently undergo embarrassment when the Kentucky Supreme Court finds Chesley “engaged in conduct involving dishonesty, fraud, deceit, or misrepresentation following the initial distribution of client funds and concealed unethical handling of client funds by others.”

Part four: “Chesley’s friends call his professional demise a ‘personal tragedy.’ But his detractors call him a bully who manipulates the media to help his causes. Plenty of local lawyers dislike him. Most, however, declined to be quoted. That’s partly because, although he’s no longer practicing law, Chesley still is married to a federal judge.” Also: why Jacquelyn McMurtry, a fen-phen claimant who attended the civil trial over fee finagling in the Kentucky case, doesn’t share the opinion of settlement guru Kenneth Feinberg that Chesley was somehow the victim of others’ fraud.