THE KENTUCKY SUPREME COURT ISSUES ORDER PERMANENTLY DISBARRING BOONE CIRCUIT JUDGE JOSEPH BAMBERGER – IGNORES JUDICIAL IMMUNITY DOCTRINE

 The Supreme Court adopted the findings of the Trial Commissioner and found that Judge Bamberger had violated two ethics rules.   He was acquitted of a charge relating to Mark Modlin, a trial consultant.

 The court had previously rejected a tendered Amicus Curie brief  raising the issue of Judicial Immunity.   This decision, by not mentioning  the  Judicial Immunity  Doctrine sets a precedent for the KBA and Bar Counsel to question any ruling made by a judge in the future.

 Full text of the Bamberger decision  released on Thursday, Oct. 27, 2011

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 2011-SC-000378-KB

KENTUCKY BAR ASSOCIATION MOVANT

V. IN SUPREME COURT

JOSEPH F. BAMBERGER RESPONDENT

OPINION AND ORDER

 

The Board of Governors of the Kentucky Bar Association (KBA) has

recommended to this Court that Respondent, Joseph F. Bamberger, KBA

Member No. 03045, be permanently disbarred as a result of his violations of

the Rules of Professional Conduct. Respondent was admitted to the practice of

law in Kentucky in 1970. His last known roster address is 1598 Shady Cove,

Florence, Kentucky, 41042.

The Inquiry Commission charged Respondent with three counts of

misconduct. Following an evidentiary hearing, the trial commissioner issued a

report finding Respondent guilty of two of the three charges and recommending

that he be permanently disbarred. Pursuant to SCR 3.370(6), 1 the Board of

1 SCR 3.370(6) provides in pertinent part:

Governors unanimously adopted the Trial Commissioner’s findings and

recommendation. The Board now recommends that this Court find

Respondent guilty and permanently disbar him.

After reviewing the record, we adopt the Board’s recommendation.

Respondent was a circuit court judge in Boone and Gallatin counties

from 1992 through his retirement in January 2004. 2 The charges against him

stem from his actions as presiding judge in the case of Darla Guard, et al., or

Jonetta Moore, et al. v. A.H. Robins Company, et al., (hereinafter the Fen-Phen

case).

The Fen-Phen case was a class action lawsuit filed in 1998 in Boone

Circuit Court against American Home Products (AHP), the manufacturer of the

prescription diet drug Fen-Phen. The plaintiffs, who alleged that they were

injured through their use of Fen-Phen, were represented by attorneys William

J. Gallion, Shirley A. Cunningham, Jr., Melbourne Mills, Jr., Richard D.

Lawrence, Stanley Chesley, and David L. Helmers. At the outset of the

representation, the attorneys and plaintiffs entered into contingency fee

The Board shall decide, by a roll call vote, whether the decision of the

Trial Commissioner as to the finding of a violation and degree of

discipline imposed is supported by substantial evidence or is clearly

erroneous as a matter of law. The Board, in its discretion, may conduct a

review de novo of the evidence presented to the Trial Commissioner. Both

the findings and any disciplinary action must be agreed upon by eleven

(11) or three-fourths (3/4) of the members of the Board present and

voting on the proceedings, whichever is less.

2 After retiring, the Respondent served as a Senior Status Special Judge until he

resigned on February 24, 2006.

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contracts, which provided that the attorneys would receive fees equal to thirty

or thirty-three percent of any recovery.

In May 2001, the plaintiffs’ attorneys and AHP’s counsel settled the Fen-

Phen case for a total lump-sum payment of $200,000,000.00. Under the terms

of the settlement agreement, the plaintiffs’ attorneys were responsible for

dividing the settlement funds among the 440 plaintiffs and deducting their

attorneys’ fees. Despite the terms of their contingency fee contracts, the

plaintiffs’ attorneys and their agents retained $126,255,422.87, more than

sixty-three percent of the settlement funds. The plaintiffs’ attorneys also

retained an additional $20,000,000.00 in “excess funds.” They distributed only

$74,194,577.13 to the plaintiffs, who were never informed of the total amount

of the settlement or the amount of fees retained by their attorneys.

Following the settlement of the Fen-Phen case, the KBA began a

disciplinary investigation into the conduct of the plaintiffs’ attorneys. 3 In an

effort to establish that their conduct was proper, the plaintiffs’ attorneys

secretly sought court approval of their fees from Respondent. On the evening

of February 6, 2002, Respondent held an off-the-record meeting in the jury

room at the Boone County Courthouse with plaintiffs’ attorneys Mills, Gallion,

and Chesley, and their trial consultant, Mark Modlin. AHP’s counsel was not

present or advised of this meeting.

3 Several of the plaintiffs’ attorneys in the Fen-Phen case have been

permanently disbarred based on their dishonest and fraudulent actions. See

Cunningham v. Kentucky Bar Association, 266 S.W.3d 808 (Ky. 2008); Gallion v.

Kentucky Bar Association, 266 S.W.3d 802 (Ky. 2008); Kentucky Bar. Association v.

Mills, 318 S.W.3d 89 (Ky. 2010).

3

As a result of his ex parte meeting with the plaintiffs’ attorneys,

Respondent signed an order finding that the attorneys’ fees and expenses paid

in the Fen-Phen case were “reasonable and necessary.” Respondent admits

that this order, which did not set forth the actual amount of attorneys’ fees

awarded, contains numerous false statements. The order incorrectly indicates,

among other things, that Respondent was aware of the terms of the settlement

agreement, had reviewed an accounting of the funds allocated to the plaintiffs

and their attorneys, and had determined that the funds had been handled

properly and in accordance with the agreement. However, at the time he

signed the order, Respondent acknowledges that he had not read the

settlement agreement or reviewed any accounting. 4 His decision to approve the

attorneys’ fees was based solely on his ex parte discussion with the plaintiffs’

attorneys and Modlin. 5

Respondent signed the order approving the plaintiffs’ attorneys’ fees in

February 2002; however, the order was not entered into the court record for

nearly four months. Once the order was entered, Respondent instructed the

Circuit Court Clerk to provide copies of all future orders solely to the plaintiffs’

attorneys. The Clerk was further ordered to seal all future orders entered by

4 Respondent subsequently signed three additional orders approving the

attorneys’ fees as reasonable and falsely indicating that he had reviewed an

accounting of the settlement funds.

5 Modlin, who had been a close personal friend of Respondent since 1985,

received a $2,000,000.00 fee from the plaintiffs’ attorneys for his work in the Fen-Phen

case. He acknowledged that the fee was more than twice that which he had received

in any other case.

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the court in the Fen-Phen case. AHP’s counsel was not provided with copies of

any, of these orders.

After sealing the court record, Respondent entered orders authorizing the

plaintiffs’ attorneys to establish a charitable entity with the $20,000,000.00

they had retained as “excess funds.” From June 2002 through December

2003, Respondent entered a series of orders which led to the establishment of a

non-profit corporation, the Kentucky Fund for Healthy Living (KFHL). Despite

statements in the orders to the contrary, the plaintiff class never consented to

the creation of KFHL with the settlement funds.

In his orders regarding KFHL, Respondent expressly retained the court’s

authority to approve any changes in the corporation’s directors. In January

2003, Respondent appointed Modlin, Cunningham, Gallion, and Mills as the

initial directors of KFHL. As a result of this appointment, Modlin received

$7,500 per month and the plaintiffs’ attorneys received $5,350.00 per month in

director’s fees from KFHL.

Immediately prior to his retirement from the bench, Respondent entered

an order relinquishing the court’s continuing authority over KFHL. The order

implies that KFHL had fulfilled its charitable purpose and that oversight was

no longer necessary. However, in reality, KFHL had never made any

distributions for charitable purposes. Following his retirement and termination

of judicial oversight, Respondent accepted the plaintiffs’ attorneys’ invitation to

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become a paid director of KFHL. Respondent received $5,350.00 per month,

and a total of sum of $48,150.00 from KFHL. 6

Based on the acts detailed above, the Board of Governors found that

Respondent violated two of our Rules of Professional Conduct.? The charges

against Respondent are as follows:

(1) Respondent violated SCR 3.130-8.3(a), which prohibits a lawyer from

violating the Rules of Professional Conduct or knowingly assisting

another attorney in doing so. The Board of Governors found that

Respondent violated this Rule by knowingly assisting the plaintiffs’

attorneys in defrauding their clients. The Board concluded that

Respondent’s conduct – entering of numerous orders containing false

statements of fact, conducting secret proceedings, sealing the court

record, failing to review any documentation of the allocation of settlement

funds, and personally benefitting from the fraud – supported a finding of

guilt on this charge.

 

(2) Respondent violated SCR 3.130-8.3(c), which prohibits a lawyer from

engaging in conduct involving dishonesty, fraud, deceit, or

. 6 Respondent returned his director’s fees after the Judicial Conduct

Commission (JCC) initiated an investigation into his conduct.

The JCC ultimately commenced disciplinary proceedings against Respondent, resulting in a public

reprimand, which was the most severe sanction the JCC could impose because

Respondent resigned from his position as Senior Status Special Judge.

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The third charge brought against Respondent was that he violated SCR 3.130-

5.5(b) by assisting Modlin, a non-lawyer, in activity that constitutes the unauthorized

practice of law. Following the hearing before the Trial Commissioner, the KBA

admitted that there was not sufficient evidence to find that Respondent violated this

rule. The Trial Commissioner agreed and found that Respondent had not violated SCR

3.130-5.5(b). The Board of Governors adopted the Trial Commissioner’s findings.

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misrepresentation. The Board of Governors found that Respondent

violated this Rule by entering numerous orders containing false

statements of fact. The Board determined that Respondent’s admission

that he knowingly entered orders containing false statements of fact

under suspicious circumstances supported a finding of guilt on this

charge.

Upon a review of the record, we agree with the Board of Governors’

findings and adopt their recommendation to permanently disbar Respondent in

light of the highly egregious nature of his ethical violations. Respondent’s

conduct shocks the Court’s conscience.

ACCORDINGLY, IT IS HEREBY ORDERED that:

(1) Respondent, Joseph F. Bamberger, is found guilty of violating SCR

3.130-8.3(a) and SCR 3.130-8.3(c);

(2) For these violations, Bamberger is hereby permanently disbarred from

the Kentucky Bar Association. Bamberger may never apply for

reinstatement to the Bar under the current rules;

(3) Pursuant to SCR 3.390, Bamberger shall, within ten days from the entry

of this Opinion and Order, notify all clients with Kentucky cases in

writing of his inability to represent them, and notify all courts in which

he has matters pending of his disbarment from the practice of law, and

furnish copies of said letters of notice to the Director of the KBA.

Furthermore, to the extent possible and necessary, Bamberger shall

immediately cancel and cease any advertising activities in which he is

engaged; and

(4) In accordance with SCR 3.450, Bamberger is directed to pay all costs

associated with these disciplinary proceedings in the amount of

$18,700.84, for which execution may issue from this Court upon finality

of this Order.

Minton, C.J.; Abramson, Cunningham, Noble, Scott, and Venters, JJ.,

concur. Schroder, J., not sitting.

ENTERED: Octobere,17 2011.8

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