Local News
12:10 pm
Thu March 21, 2013

Class-action lawyer Chesley disbarred in Kentucky

Cincinnati lawyer Stanley Chesley - for decades one of the leading class-action trial lawyers in the country - has been disbarred from practicing law in Kentucky over his actions in a diet drug settlement.

The Kentucky Supreme Court accepted the recommendation of the Kentucky Bar Association to disbar Chesley from practicing law, but did not order him to pay $7.5 million in restitution, as the association had recommended.

Because Ohio has a reciprocal agreement with Kentucky, Chesley, who lives in Indian Hill, could lose his license to practice law in Ohio too.

Chesley, contacted by WVXU, declined to comment but his lawyer, Sheryl G. Snyder, released a written statement on his behalf.

"Mr. Chesley has been a distinguished lawyer and continues to be a philanthropic support of his community,'' Snyder said. "He has a previously unblemished record of legal service and we are therefore disappointed in the court's decision to impose such a severe sanction, especially in light of its find that 'it is not shown that he had specific knowledge of the deception practiced on each client' by the other lawyers.

The decision stems from Chesley's actions and decisions in a $200 million settlement between the makers of fen-phen and a group of Kentuckians who sued the diet-drug maker. The justices concluded Chesley knew that his fellow lawyers in the case were taking about half of the $200 million settlement, which was reached nearly a decade ago in Boone County.

Chesley's share of the settlement was $20 million, according to court documents. Two of his colleagues in the case, William Gallion and Shirley Cunningham Jr. ended up being convicted of fraud and are serving federal prison sentences.

The high court in Kentucky also found Chesley participated in a cover-up by initially helping in his colleagues' defense.

Chesley - who was known in legal circles as "the master of disaster" - first became a well-known figure over 30 years ago when he won $50 million for victims of the Beverly Hills Supper Club fire in May 1977, which killed 165 people.

You can read the court opinion here.