Disbarred Fen-Phen lawyers ordered to return $30 million

Chris Rizo Apr. 7, 2009, 3:00pm

Judge Danny Reeves

FRANKFORT, Ky. (Legal Newsline)-Disgraced plaintiffs' attorneys Shirley Cunningham Jr. and William Gallion must forfeit $30 million they bilked from clients in Kentucky's $200 million Fen-Phen settlement, a jury said Tuesday.

Cunningham and Gallion on Friday were convicted of eight federal counts of wire fraud and one count of conspiracy to commit fraud for defrauding 440 clients in the diet-drug litigation that settled in 2001.

On Tuesday, jurors deliberated for several hours to decide how much money the disbarred attorneys should be forced to return.

The men face sentencing July 27. U.S. District Court Judge Danny Reeves could send the men to prison for life if he decides to run their sentences consecutively since each count carries a maximum penalty of 20 years behind bars.

Jurors' decision to force the lawyers to disgorge their ill-gotten gains drew praise from a leading legal watchdog group, the U.S. Chamber Institute for Legal Reform in Washington.

The institute's president, Lisa Rickard, said the verdict and Tuesday's order should "send a message to some in the plaintiffs' bar that justice is about putting their clients' interests first, not about advancing their own self-interest."

Prosecutors alleged that the lawyers took a $127 million payment from their clients when they should have been paid just $60 million.

They attorneys contended 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, which has been linked to heart damage and pulmonary hypertension.

Legal Newsline is owned by the U.S. Chamber of Commerce.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

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