High-Profile Attorney Facing Disbarment in Kentucky

June 14, 2011

The Kentucky Bar Association Board of Governors is preparing to decide the fate of class-action legal specialist Stan Chesley, the Cincinnati attorney known as the “Master of Disaster.”

The board is scheduled to hear arguments Tuesday at a Lexington hotel. A trial commissioner who recommended disbarment also wants Chesley to return $7.6 million of the $20 million he was paid in fees from a Boone County settlement for people sickened by the diet drug fen-phen.

The trial commissioner wrote that Chesley was fully aware that more than half of the $200 million fen-phen settlement was not going to the 431 people he helped negotiate it for.

“It is a sordid tale worthy of the pen of Charles Dickens, were he alive and well,” the commissioner wrote. “Alas, this tale is not fiction.”

Chesley could appeal any disbarment to the Kentucky Supreme Court. Kentucky has a reciprocal agreement with Ohio – meaning Chesley could also lose his law license in that state if he is disbarred in Kentucky, the Kentucky Enquirer reports.

Chesley is considered in legal circles to be the godfather of the modern class-action lawsuit. More than 30 years ago he won $50 million for victims of the Beverly Hills Supper Club fire, a May 1977 blaze that killed 165 and injured 116 in northern Kentucky.

In recent years, Chesley, 75, has had his hands in class-action lawsuits across the country, including Ohio’s case against Fannie Mae. He came under fire when it was revealed that Chesley applied to appear in the securities fraud case without disclosing that he was licensed to practice law in Kentucky, where the fen-phen litigation was already being investigated. That’s a violation of federal court rules in Washington.

The bar association has already disbarred the three lawyers Chesley worked with in the fen-phen class-action case: William Gallion and Shirley Cunningham Jr., who were sentenced to federal prison for their actions in the settlement, and Melbourne Mills Jr., who was acquitted in the criminal case.

In his battle against disbarment, Chesley decided not to call federal prosecutors and FBI agents to talk about how he cooperated in the criminal investigation against Gallion, Cunningham and Mills after the bar association’s lawyer threatened to cross examine the federal officials as to the details surrounding the decision to not criminally charge Chesley.

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