Following a hearing on the Kentucky Inquiry Commission’s charge that plaintiffs’ attorney Stanley Chesley violated a number of ethical rules in connection with the settlement of mass tort claims over the diet drug Fen-Phen, a trial commissioner has recommended that he be permanently disbarred and ordered to disgorge as restitution to his clients $7.55 million in excess fees. According to the February 22, 2011, report, which was submitted to the state supreme court, Chesley took more than $7 million in fees beyond his contractual agreement with co-counsel, and these sums were taken from the clients’ settlement fund. He also allegedly took the fees with no notice to the clients and no disclosure or accounting in any court proceeding or court order.
The report claims that Chesley “willingly and actively” participated in a meeting with a judge to get his approval “upon this criminal enterprise” and Chesley “subsequently received all orders signed by Judge Bamberger containing many statements which Chesley knew to be false and inaccurate.” The report also states, “His callous subordination of the interests of his clients to his own greed is both shocking and reprehensible. His actions justify a permanent disbarment from the Kentucky Bar Association.” The trial commissioner notes that Chesley has “never been disciplined by any bar association in a long and distinguished career. But his character witnesses and his prior unblemished record are insufficient to mitigate Chesley’s egregious conduct in this case.”