William J. Gallion and two other lawyers relied heavily on the advice of famed trial lawyer Stan Chesley in the handling of a $200 million civil settlement with a diet drug manufacturer, according to an expert witness retained by Gallion.
Chesley discouraged Gallion and two lawyers from providing notice to potential plaintiffs that a lawsuit against the maker of the diet drug fen-phen had become a state class action, according to a report filed in U.S. District Court by Richard L. Robbins, a Harvard-educated lawyer retained by Gallion as an expert on class-action litigation.
Chesley said the notice in the state case would interfere with a national class action he was leading against the manufacturer, according to Robbins, who reviewed documents in the criminal case against suspended lawyers Gallion, Shirley Cunningham Jr. and Melbourne Mills.
Robbins’ report, filed Monday, offered a glimpse into Gallion’s defense strategy heading into the May criminal trial. Gallion, Cunningham and Mills, who represented 440 fen-phen users in a lawsuit against American Home Products, are accused of bilking their clients out of $65 million.
They are charged with conspiracy to commit wire fraud.
A $42 million civil judgement was entered in March 2006 against the lawyers, who are being held in the Boone County jail.
No notice was delivered to Kentucky fen-phen users that the lawsuit had been settled in 2001. Robbins argues that notice would have served only to confuse potential plaintiffs because they were never notified of the lawsuit to begin with.
Attorney Angela Ford, who is representing former clients of the three lawyers, called the argument double talk. Ford said the lawyers had an ethical obligation to notify clients of the terms of the settlement.
Robbins said Gallion was not familiar with class-action litigation, Robbins said. He relied heavily on Chesley in setting procedures and sought approval from Judge Joseph Bamburger. Chesley advised them that notice was not needed, Robbins said.
Chesley could not be reached for comment Monday night. He received $20.5 million in fees for negotiating the settlement. He has said he was representing the lawyers, not the plaintiffs, and that he was not aware that they were allegedly deceiving their clients.
No criminal charges have been filed against Chesley. A lawsuit against him is pending.