Judge Wehr Leans Toward delaying Fen-Phen Civil Case
By Beth Musgrave Herald-Leader.com July 24, 2007
Three suspended lawyers accused of bilking millions from their former clients want a judge to stay a civil lawsuit until a federal criminal case against the lawyers is completed in October.
Special Judge William Wehr, in a hearing Tuesday, said he was leaning toward delaying a September civil trial over what happened to a $200 million settlement over the diet drug fen-phen until after the criminal case is tried Oct. 15.
Wehr said he should have a final decision available soon.
William Gallion, Shirley Cunningham Jr. and Melbourne Mills Jr. , formerly based in Lexington, are being sued by more than 400 former fen-phen clients who say that their former lawyers took millions more of a $200 million settlement than they should have received. In March 2006, Wehr ruled that three had breached their fiduciary duty to their clients when more of the settlement money — about $106 million — went to the lawyers and consultants on the case than to the clients, despite contracts with clients that said the lawyers should receive much less.
Gallion, Cunningham and Mills were indicted June 14 by a federal grand jury on one count each of conspiracy to commit mail fraud, saying that three conspired to take $65 million of the settlement that should have gone to their clients. If convicted, the three could receive a maximum of 20 years in prison. Lawyers for Gallion, Cunningham and Mills have vowed to fight the criminal charges and say their clients have not had the opportunity to tell their side of the story. Gallion, Cunningham and Mills were temporarily suspended from the practice of law by the Kentucky Bar Association.
How much the former clients should receive from their former lawyers has still not been decided. But Wehr said during Tuesday’s hearing that he hopes by the end of this week to enter an order that may set a base-line dollar amount for damages related to the ruling that the lawyers’ breached their fiduciary duty. But other monetary damages would be decided by a jury.