Waite Schneider's Stanley Chesley
Class action attorney Stanley Chesley, the lawyer who some say pioneered the practice of mass class action claims, may take the witness stand in Covington, Ken., to testify in the federal criminal prosecution of three lawyers charged with allegedly bilking their clients out of tens of millions of dollars. Chesley is scheduled to be the next witness for the defendants, said Kyle Edelen, a spokesman for the U.S. Attorney’s Office in the Eastern District of Kentucky. A discussion of his possible testimony cropped up in proceedings this week, according to people who have been attending the trial at the U.S. District Court for Eastern Kentucky in Covington.
Chesley, a partner at Waite, Schneider, Bayless & Chesley in Cincinnati, worked with the three attorneys, William J. Gallion, Shirley A. Cunningham, Jr., and Melbourne Mills, Jr., on a case in which they represented 440 plaintiffs in a 1998 class action against the former pharmaceutical company American Home Products.
The plaintiffs in that case claimed in Kentucky state court case that they suffered injuries from using the company's diet drug known as fen-phen.
The lawyers reached a $200 million settlement in 2001. Moore v. A. H. Robins, No. 98-795, Boone Co.
Federal prosecutors from the U.S. Attorney's Office in the Eastern District indicted Gallion, Cunningham and Mills last year for allegedly siphoning off at least $46 million more than their contractual one-third in fees from the settlement and keeping their clients in the dark about the details of the settlement. The trial in the U.S. District Court for Eastern Kentucky started last month. U.S. v. Gallion, 07-39.
Chesley, who is married to U.S. District Judge Susan J. Dlott, was not indicted. Chesley and lawyers for the three defendants couldn't be reached for comment.
Gallion has testified in his own defense this week and the other two defendants may also take the stand, according to local news reports. Each of the three lawyers is charged with one count of wire fraud and faces up to 20 years in prison.
"They kind of don't have a choice because there really isn't anyone that's going to testify for them except their experts," said Angela Ford, an attorney who has been attending the trial proceedings and who is leading a civil action against the attorneys on behalf of 418 of the Kentucky fen-phen claimants.
In the civil case against the lawyers, the Boone County Circuit Court has ordered Gallion, Mills and Cunningham to repay $65 million in compensatory damages to the fen-phen plaintiffs, though the lawyers have appealed that decision. Ford said the plaintiffs will also seek more than $100 million in punitive damages. Chesley has avoided any order to pay damages so Ford said she expects to go to trial to press for damages against him. Abbott V. Chesley, No. 05-436.
