Stan Chesley Part IV: The case that would end it all
Lucy May, WCPO Digital
5:00 AM, May 31, 2013
5:42 PM, Aug 29, 2013
Editor’s Note: Cincinnati native Stan Chesley, considered the father of the modern-day class action lawsuit, won billions of dollars on behalf of thousands of clients. At his peak he was among the most successful plaintiff’s lawyers in the nation, if not the world. A single case brought it tumbling down. This is the fourth in a four-part series that examines the man who is loathed by his detractors just as fiercely as he’s defended by his friends. There is occasional profanity.
CINCINNATI -- After more than a half century fighting for the little guy as one of the nation’s best-known mass injury lawyers, Stan Chesley has spent the past two years fighting for his professional life.
The 77-year-old son of Jewish Ukrainian immigrants ended that fight in April when he permanently retired from the practice of law in Ohio rather than face a disciplinary proceeding. The surprise move came a month after the Kentucky Supreme Court permanently disbarred him and ended a 53-year career encompassing the biggest mass tort lawsuits of the past generation.
Chesley’s friends call his professional demise a “personal tragedy.” But his detractors call him a bully who manipulates the media to help his causes. Plenty of local lawyers dislike him. Most, however, declined to be quoted.
That’s partly because, although he’s no longer practicing law, Chesley still is married to a federal judge. He and U.S. District Judge Susan Dlott have been married since 1991. His ex-wife, Suellen Chesley Feck, died last July.
But the other reason Chesley’s local critics won’t talk is because even lawyers who despise Chesley told WCPO Digital that they didn’t want to kick him publicly when he’s down.
Style ‘A Bit Ruthless’
Lawyers in other parts of the country have been less reticent.
In a 2004 interview, Seattle attorney Leonard Schroeter called Chesley “an opportunist and just a nasty son of a bitch.” The criticism came as the result of Chesley’s firm’s handling of a class-action case in Washington state on behalf of people injured at a government nuclear weapons plant.
Schroeter has since become ill and couldn’t be interviewed for this story.
Mississippi lawyer Dickie Scruggs, who worked with Chesley on the national tobacco settlement, told the Louisville Courier-Journal in 2007:
“Stan will take every advantage you will allow him to take. Some will say his style is a bit ruthless.”
Scruggs couldn’t be reached for this story, though. He pleaded guilty to attempting to bribe a judge and to corruption of a public official in a separate case and was sentenced in 2008 to federal prison.
Chesley Not Alone
James Helmer is among the few local lawyers who would talk to WCPO Digital on the record for this story. Helmer has worked on the same side as Chesley in cases but also has worked as counsel opposing him and has represented people who’ve had disputes with him.
“If you think about some of the people who have really achieved great success in Cincinnati, names that come to mind are Charlie Keating, Morley Thompson, Marvin Warner, Pete Rose and Bob Taft,” said Helmer, president of Helmer, Martins, Rice & Popham Co., LPA.
“They’re all Cincinnati guys, and they all got to the very top of their particular professions. All are self-made. All are innovative and fearless. And every one of them fell off the ladder for not following the rules. To me, as I look at Stan’s situation, I think it’s very similar.”
Helmer views Chesley’s fall from grace as the classic rags to riches to rags story.
“In this country, you can start with nothing and gain quite a bit,” Helmer said. “And if you’re not careful, you can lose that.”
Diet Drug Case Is Undoing
His whole life, Chesley has been driven to succeed.
But in past interviews, he’s said it’s his ability to see things differently that’s made him successful combined with his passion for helping the little guy. Chesley’s a man who will speak truth to power, he said in 2004, and he’s not afraid of criticism along the way.
So how did Chesley, considered by many a prince among men in legal circles, fall so hard?
It all stems from his involvement in a lawsuit against the maker of the controversial diet drug fenfluramine/phentermine, more commonly known as fen-phen. The drug was touted as a miracle treatment for obesity in the 1990s but was pulled off the market in 1997 after it was shown to cause potentially fatal heart problems for people who took it.
Lawyers across the country scrambled to sue. In Kentucky, three lawyers – Shirley Cunningham, Jr., William Gallion and Melbourne Mills Jr. – assembled a group of several hundred clients.
Chesley teamed up with them later and ultimately helped negotiate a $200 million settlement.
Next page: The reason it all went wrong
%page_break%But Kentucky courts have found that the lawyers collected far more in fees than they were entitled to, effectively taking money from the people they represented. Cunningham, Gallion, Mills and Kentucky attorney David Helmers were disbarred before Chesley. Cunningham and Gallion were convicted of taking about $94 million from the settlement that should have gone to their clients.
Gallion is serving a 25-year sentence at a federal prison in Oakdale, La., and couldn’t be reached for this story. Cunningham is serving 20 years at a federal prison in Yazoo City, Miss., and spoke by phone only long enough to decline an interview request. Helmers didn’t return calls to his Lexington office.
Shirley Cunningham Jr. and William Gallion
Chesley received immunity during the criminal proceedings and was never charged with a crime.
But he was disbarred.
A trial commissioner for the Kentucky Bar Association concluded that Chesley collected $7.5 million more in fees than his contract allowed. And while Chesley argued he didn’t realize he had been overpaid, the Kentucky Supreme Court didn’t believe him.
“I think when the book is written on this entire Kentucky thing, Stan got ensnarled with some very sleazy people down there, and he couldn’t extricate himself,” said Hamilton County Prosecutor Joe Deters, a long-time friend of Chesley’s who works part-time at Chesley’s firm as an attorney “of counsel.” “To my dying day, I would never believe that Stan would do something unethical.”
Still, the Kentucky Supreme Court disbarred Chesley on March 21.
“While the good reputation he has enjoyed and his generosity serves to exacerbate the tragedy of his fall, they cannot atone for the serious misconduct he has committed in connection with this matter,” Chief Justice John Minton wrote for the court. “Therefore, we find that permanently disbarring Respondent is an appropriate penalty for his ethical violations.”
He was also disbarred in Michigan and faced disbarment in Indiana because of the action in Kentucky. He decided to permanently retire from the practice of law in Ohio rather than fight a possible disciplinary action in his home state.
“I think Stan was negligent in not supervising more carefully what these other lawyers were doing,” said Kenneth Feinberg, a Washington, D.C., lawyer and Chesley friend who is best known for his work as special master of the federal government’s September 11th Victim Compensation Fund. “I think Stan had a trust and faith that was misdirected and ultimately proved his undoing, and I think he’s a victim of this fraud committed by others.”
Narcissist Or Nice Guy?
Jacquelyn McMurtry doesn’t see it that way.
The Louisville woman was a client of Cunningham’s who had never heard of Chesley until the lawyers came under fire for how they handled the case.
A civil case against Chesley and the other lawyers is pending before the Kentucky Supreme Court. Plaintiffs involved in the original fen-phen case are suing to recover fees their disbarred attorneys collected.
“I went to the trial, and I heard him testify, and I never came to such a low opinion of a human being in my life,” McMurtry said of Chesley.
McMurtry was especially disgusted by Chesley’s condescending attitude toward Lexington lawyer Angela Ford during the proceedings, she said. Ford is the attorney who filed a civil suit against Chesley and the other lawyers involved in the case to try to recover money for people who took the drug.
“He was narcissistic, controlling,” said McMurtry, who said she’s been paid a little over $95,000 in her settlement so far. That’s far more than the roughly $500 a friend was paid in a national fen-phen settlement, she said, but far less than the $1 million another lawyer told her she might get. “He liked to put people down.”
McMurtry believes Chesley was very much a part of the deception that kept money away from people like her and the cover up to hide that deception.
“The bottom line for him is money,” she said. “It’s greed.”
Next page: Chesley, the hero?
%page_break% 'He's My Hero'
Lisa Crawford knows a very different Stan Chesley.
Crawford was one of the plaintiffs in a case brought against the government by residents near the Fernald, Ohio, plant that processed uranium for nuclear weapons.
She was upset and frightened when she found out the well at her rental home in Crosby Township was contaminated back in 1985. She and her husband asked several lawyers for help, and they all scoffed at the idea of suing the government.
Then a friend told her she should meet with Chesley.
“He was one of the nicest guys I have ever met – cordial, kind, understanding,” she said. “And he was the only one who would even talk to us.”
Chesley took the case and negotiated a $100 million settlement with the U.S. Department of Energy and its private contractor. And, even more important to Crawford, he got a medical monitoring program established so that anyone within a five-mile radius would get regular physicals to try to detect health problems early.
“He’s my hero,” Crawford said.
Crawford, who estimates her family received “a couple hundred thousand dollars” as a settlement, said she doesn’t pretend to understand all the details of the fen-phen case. But it’s hard for her to believe the Chesley she knows did anything to try to hurt anyone.
“I love him, and he’s never been anything but kind or good to me,” she said. “Back then, I could call him any time of day, and the man would call me right back.”
Friends: May Be Down But Not Out
Chesley still has lots of friends in high places locally.
Basketball legend Oscar Robertson, Xavier University President Michael Graham, Cincinnati State President O’dell Owens and Cincinnati Mayor Mark Mallory remain loyal supporters.
They all told WCPO Digital they expect Chesley to continue to contribute to the community in his retirement, and all said he’s far more than the practice of law.
“Stan Chesley has an incredibly generous side to him,” Graham said. “He’s relentless, and I think because of that he’s easily caricatured. In this sound-bite era, we’re all of us caricatured. And that’s never fair.”
As relentless a fighter as Chesley is, though, Dlott said she encouraged her husband to retire.
“He was ready to retire,” she said, “particularly because of the way he had been treated the last couple of years.”
Just a few weeks ago, Dlott and Chesley were at a party, and a young man approached them. He explained that he was going to be a law clerk for U.S. Supreme Court Justice Elena Kagan.
“He said, ‘I heard you were going to be here, and I always wanted to meet you. We studied your cases at Harvard Law School,’” Dlott recounted.
But now those will be the cases of a lawyer disbarred after reaching the pinnacle of his profession.
“It just goes to show you how much is riding on everything you do,” said Howard Erichson, a law professor at Fordham University who was an expert for the government in the federal prosecution of Gallion and Cunningham and in the ethics case against Chesley.
“Stan Chesley had a great career as a mass tort lawyer,” Erichson said. “And there’s something really sad about such a great lawyer falling so hard.”