U.S. Supreme Court won't hear fen-phen lawyer's appeal

Lawyer was convicted of wire fraud

By Pat Murphy
The Daily Record Newswire
The U.S. Supreme Court will not review the conviction of a disbarred Kentucky attorney who attempted to defraud clients of their share of a $200 million settlement compensating those injured by the diet drug fen-phen.

Last week, the Court denied without comment a petition for a writ of certiorari filed by William J. Gallion. In February 2009, a federal jury convicted Gallion and another Kentucky lawyer, Shirley A. Cunningham Jr., of wire fraud. Prosecutors say the two lawyers engaged in a scheme to take from their clients almost twice what they were owed under their retainers for a $200 million diet drug settlement with drug maker American Home Products.

In May, the 6th Circuit affirmed Gallion’s 25-year sentence, Cunningham’s 20-year sentence, and a $127 million restitution order against both defendants.

In seeking review of the 6th Circuit’s decision by the Supreme Court, Gallion contended he was denied a fair trial by the introduction of evidence of the Kentucky State Bar Association’s investigation of the attorneys’ handling of the fen-phen settlement.

In 1998, Cunningham, Gallion and another Kentucky lawyer, Melbourne Mills, filed a product liability class action on behalf a group of injured fen-phen users in Kentucky. The diet drug was found to cause heart-valve dysfunctions in as many as a third of its users.

The three lawyers brought in class action maven Stanley Chesley to help negotiate a settlement with American Home Products. In 2001, the lawyers struck a $200 million deal with the drug company to compensate approximately 431 Kentucky residents.

According to court records, Gallion’s clients only received $74 million (less than 37 percent) of the total settlement amount. On the other hand, the lawyers received generous fees: Mills received $23 million, Cunningham received $26 million; Gallion received $30 million; and Chesley received $20 million.

Only Gallion, Cunningham and Mills were indicted for wire fraud. A jury found Mills not guilty.

The clients sued Gallion, Cunningham and Mills in state court. In 2007, a state judge ordered the three Kentucky attorneys to repay at least $62.1 million in settlement funds and interest.