Kentucky Appeals Court Reverses Judge's 42 Million Dollar Judgment Against Fen-Phen Lawyers, Melbourne Mills, Shirley Cunningham & William Gallion.

Appeals court reverses $42 million verdict in fen-phen case
By Jim Warren

The Kentucky Court of Appeals has reversed a $42 million judgment against three disbarred lawyers accused of stealing millions of dollars from their clients in a $200-million fen-phen diet drug settlement.

In a ruling released Friday, the appeals court said that Special Judge William Wehr acted improperly in March 2006 when he ruled, without a trial, that lawyers Melbourne Mills, Shirley Allen Cunningham and William Gallion had breached their fiduciary duty to their clients, who allegedly had suffered health damage from using the hugely popular phe-phen diet drug combination.

Wehr then ruled in August 2007 that Gallion, Cunningham and Mills had to repay $42 million to their former clients. It is this judgment that the appeals court has ordered vacated.

The case now goes back to Boone Circuit Court, where Wehr issued his rulings, for further consideration. That apparently could include a trial.

Cunningham, Mills and Gallion had more than 400 clients in a class-action suit against the makers of fen-phen. The case was settled for $200 million. But former clients later alleged that the lawyers secretly took millions of dollars from the settlement that they were not entitled to receive.

Cunningham and Gallion were convicted in 2009 on federal conspiracy and wire-fraud charges stemming from their handling of the fen-phen case. Mills was acquitted of all criminal charges.

Read more: http://www.kentucky.com/2011/02/04/1623328/appeals-court-reverses-42-million.html#more#ixzz1D2Xk8ATv


Editor's note: You can read the opinion here.