Chesley Faces Scrutiny Over Fees
A Cincinnati attorney who gained national prominence as the master of disaster for his expertise representing victims in class action lawsuits could face legal sanctions over his role in a $200 million settlement in a Kentucky case involving fen-phen.
Attorney Stan Chesleys conduct in the 2001 settlement is being reviewed by a Lexington judge handling a lawsuit filed by more than 400 of the former plaintiffs in the fen-phen case. They allege Chesley is among attorneys in the case who took fees that exceeded their contracts.
Special Judge William Weir already has ruled that three Lexington attorneys Shirley Cunningham, William Gallion and Melbourne Mills violated the contract and accepted excessive fees. The action breached the trios fiduciary duties to the plaintiffs, Weir said.
Plaintiffs in the lawsuit allege Chesley knew that the other attorneys in the fen-phen case accepted fees that violated their contract. Thats because Chesley received $20.5 million for his role in negotiating the settlement. As Chesleys deal called for him to get 21 percent of the three attorneys fees, that showed the trio received nearly $100 million half of the settlement and exceeded what was allowed.
Chesley has argued that he had no direct contact with plaintiffs in the fen-phen case and that his fiduciary duties were to the three attorneys who hired him, not the plaintiffs.
If the judge decides Chesley violated his fiduciary duties, he could make Chesley give away more of the settlement funds or make him pay punitive damages.
Chesley, 70, lives on an Amberley Village estate with his wife, U.S. District Judge Susan Dlott. He is a frequent contributor to the campaigns of Democratic and Republican political candidates.
Fen-phen was a popular prescription weight loss drug in the 1990s until it was shown to cause heart disease in some people.