Fen-Phen lawyers face re-trial

Chris Rizo Jul. 7, 2008, 2:00am

Judge William Bertlesman

COVINGTON, Ky. (Legal Newsline)-Two embattled plaintiffs' attorneys will face another trial for allegedly bilking clients out of millions from Kentucky's Fen-Phen settlement, after a mistrial was declared in their case last week.

Shirley Cunningham Jr. 53, and co-defendant William Gallion, 57, have been held in the Boone County Detention Center without bail since August.

Cunningham is being held on $45 million bond; Gallion on $52 million bond.

A third defendant in the case, Melbourne Mills, was acquitted by the same jury Tuesday.

A jury considered the case against Cunningham and Gallion for 52 hours, over eight days, and remained deadlocked. U.S. District Judge William Bertlesman declared a mistrial Friday.

The men are held on charges of conspiracy to commit wire fraud in a scheme to allegedly bilk more than 400 clients out of money from Kentucky's $200 million Fen-Phen diet-pill settlement.

Prosecutors allege that the lawyers took a $127 million payment when they should have been paid just $60 million.

The jailed attorneys contend that Kentucky's rules on class action lawsuits are ambiguous. They said they relied on Boone Circuit Judge James Bamberger, who presided over the original Fen-Phen class action suit, to set the legal fees they received.

The Fen-Phen settlement was reached with diet drug maker American Home Products, now known as Wyeth, in Boone Circuit Court in 2001.

The attorneys' former clients have already won a $42 million civil award against the lawyers who represented them in a case taking on the manufacturer of Fen-Phen, the diet-drug linked to heart damage and pulmonary hypertension.

In February, citing the Fen-Phen case, outgoing Kentucky Chief Justice Joseph Lambert appointed a 12-member panel to study the state's court rules to determine whether they need strengthening to prevent unethical or illegal conduct in class-action cases.

The case has been watched closely by horse racing enthusiasts since Cunningham and Gallion are part-owners of 2007's Horse of the Year, Curlin, which won the Preakness, Breeders' Cup and Stephen Foster Handicap.

Since the wins, the attorneys have sold an 80 percent share of the horse.

From Legal Newsline: Reach reporter Chris Rizo by e-mail at chrisrizo@legalnewsline.com.

More News