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Lawyer of the Day: Stan Chesley, Disbarred Husband of a Federal Judge

Stanley M. Chesley

Has the “master of disaster” been mastered by disaster? Has a class-action king been stripped of his crown?

It would seem so. One of the nation’s most famous and successful plaintiffs’ lawyers, Stanley M. Chesley, just got disbarred.

Cue the schadenfreude. We heard about the news from numerous tipsters. “Time to downgrade your Maybach and jet,” gloated one.

What makes it even better, of course, is that Stan Chesley is married to a federal judge, the Honorable Susan J. Dlott (S.D. Ohio). What’s that old saying about Caesar’s wife?

So what got this high-flying class-action lawyer grounded? Hint: it’s all about the benjamins….

We noted the news in Morning Docket. Here’s a report from the Louisville Courier-Journal:

Stan Chesley, the lawyer who hosted presidents at his Cincinnati mansion, has been disbarred by the Kentucky Supreme Court for his role in Kentucky’s fen-phen diet-drug scandal — in all likelihood ending his career.

Although Chesley, 76, is also licensed in Ohio, it is virtually automatic he will be disbarred there as well; the Ohio Supreme Court’s disciplinary counsel has said no Ohio lawyer has ever been permanently disbarred in another state and not been disbarred in Ohio as well.

Here is the court’s 38-page opinion. And here is a summary, from the ABA Journal:

Mass tort lawyer Stan Chesley has been disbarred for his role in a diet-drug case in which he earned $20 million to help negotiate a $200 million settlement….

The Kentucky Supreme Court said Chesley’s $20 million fee was “was unreasonable, especially in light of his professed ignorance and lack of responsibility for any aspect of the litigation except showing up at the mediation and going through the motions of announcing the agreement.” Even more critical, the court said, was a contingent fee agreement entitling Chesley to no more than $14 million, representing 21 percent of one-third of the $200 million recovery for plaintiffs injured by the diet drug fen-phen.

As noted by the National Law Journal, the plaintiffs in the case received just $46 million of the $200 million settlement. Two other lawyers involved in the case, Shirley Cunningham Jr. and William Gallion, are serving federal prison sentences:

Gallion and Cunningham were convicted in 2009 on federal charges related to the case and are serving prison sentences of 25 years and 20 years, respectively. [Another lawyer, Melbourne Mills,] was acquitted of all charges after he claimed he was too drunk during settlement negotiations to know what was going on.

Welcome to Kentucky. They’re very proud of their bourbon.

Chesley was never charged criminally in connection with the case. So even though being disbarred and having to return more than $7 million in excessive fees are bad, things could have been worse.

Stan Chesley, you’ve had a good run. As your lawyer, Sheryl Snyder of Frost Brown Todd, put it, you’ve been “a distinguished lawyer” and “philanthropic supporter” of your community over the years. But disbarment and defecting colleagues are sending you a message: it’s time to hang up the armor, put your horse in the stable, and return home to your 27,000-square-foot castle.

(That would be quite a nice place to spend house arrest. You can read about and view photos of that Lawyerly Lair, reportedly the largest and most expensive single-family home in the greater Cincinnati area, over at Underneath Their Robes.)

Famed lawyer Stan Chesley disbarred for fen-phen case misconduct [Louisville Courier-Journal via Morning Docket]
Storied Plaintiffs Lawyer Chesley Disbarred in Kentucky Over Excessive Fees [National Law Journal]
Famed tort lawyer Stan Chesley is disbarred for ‘unreasonable’ $20M fee in diet-drug case [ABA Journal]
Lawyers leaving Chesley law firm []
UTR Cribs: Judge Dlott’s Federal Judicial Mega-Mansion! [Underneath Their Robes]
Kentucky Bar Association v. Stanley M. Chesley [Supreme Court of Kentucky]

Earlier: A Solution to the Federal Judicial Pay Crisis: Marry Into Money

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