Stan Chesley speaks: Willing to settle fen-phen case

Stan Chesley, the former lawyer at the heart of the legal standoff between Ohio and Kentucky over the still ongoing fen-phen diet drug case, acknowledged for the first time that he owes money to his former clients in an interview with the Enquirer last week.

These are his first public comments about the case since being disbarred in Kentucky more than two years ago.

In extensive interviews this week, Chesley and his lawyers say they are willing to settle with those former clients seeking fees that were inappropriately charged or stolen from the original $200 million they were awarded in 2001. But they say that while Chesley "owes more than zero," it certainly isn't the $76 million that the lawyer representing those former clients is seeking.

"I've always felt the most I owed was $6 million to $7 million but nobody ever came to me with that," Chesley told The Enquirer. "When someone wants to get it done, I will talk. I always thought resolution was the way to go."

The Lexington-based lawyer who represents nearly 400 of those former clients said that there have been plenty of opportunities for settling the case, but that Chesley has instead chosen to fight every step of the way.

"This court proceeding has been going on for more than 11 years," Angela Ford said, "and created hundreds of thousands pieces of paper in litigation ... and this is just more statements thrown out there to burnish Mr. Chesley's PR image. We''re nearing the end of those 11 years of litigation and how long it will take to get to the very end is unknown. It's totally in his control to settle this ... it always has been."

The case has escalated to the point that a Boone County judge issued a bench warrant for Chesley's arrest late last month after he failed to appear in a hearing. Chesley is still in Ohio and has not decided whether to turn himself in or to agree to the judge's order, which he and his lawyers contend would force him to violate Ohio state law.

Boone County Circuit Judge James R. Schrand, the same judge who issued the warrant, ruled in 2013 that Chesley should be included in a previous decided $42 million judgment against three other lawyers accused of stealing money from the original settlement. That ruling came after nearly 10 years of legal fighting and litigation, visits to the supreme courts of both states, and even Chesley suing his own former clients in Ohio court.

Now Chesley, who scored billions of dollars worth of settlements against major corporations as a plaintiff's attorney and made millions for himself, appears to be looking for a solution out of the ongoing legal mess, according to his lawyers.

"Stan did a lot of good in his life and helped a lot of people and who knows how much longer he'll be around," said Chesley's lawyer Vince Mauer, who was also cleared to talk about the case for the first time in years. "It would be sad to have his legacy finish up with this still outstanding on his record."

Ford said Chesley's "actions speak louder than words."

"Redemption begins with acceptance of responsibility, and based on his actions, there certainly has been no acceptance here," she said.

How we got here

The bench warrant and Chesley's statements are the latest chapter in the bizarre and convoluted fen-phen case that began in the late 1990s. That's when it was discovered that the obesity weight loss drug caused major heart and lung problems, thus creating a bevy of lawsuits.

Chesley joined one of those suits with three other Kentucky lawyers and was key in securing a $200 million settlement; he received $20.5 million for himself as part of a previously signed contract. But then reports of discrepancies with the settlement payments started to emerge involving the original three lawyers William Gallion, Shirley Cunningham Jr. and Melbourne Mills Jr.

Those three eventually were found to have "skimmed" from their clients to the tune of $42 million. Gallion and Cunningham went to federal prison for the crime; Mills was acquitted. All three were disbarred, along with the Kentucky judge who oversaw the original settlement.

Then in 2013, Chesley was also disbarred for his involvement with the case. Schrand ruled the following year that Chesley should be part of that original $42 million judgment against the three other lawyers.

Now the case stands in Ohio courts, where Ford started to collect the assets but was stopped by a lawsuit by Chesley against her and her clients.

Judge's rulings questioned in ongoing Chesley fen-phen lawsuit

"Stan is today a debtor because of the judgment, but that doesn't not mean he does not have rights," Mauer said, defending the most recent lawsuit. "Given the situation, we felt like we had no choice. We felt that we needed more information to get to the judge to allow him to make a proper decision."

Ford filed a petition in August with the Ohio Supreme Court to have the case kicked out or at least have the Ohio judge overseeing the case removed.

Chesley cries foul over Kentucky treatment

In the interviews Chesley and his lawyers renewed previously made arguments about the case and how it was handled in Kentucky.

"This was trial by ambush," said Chesley's Kentucky-based lawyer Frank "Bucky" Benton. "I've never seen anything quite like it."

Chesley said that he was originally cleared of any involvement in the skimming scheme by a trial judge, a Kentucky appeals court and even the Kentucky Supreme Court between 2007-08. The current case was only allowed to proceed after his disbarment in 2013, which he also questioned.

"I've never said this before and never talked about this with the media before," Chesley said. "But she's been allowed to come after me again. I even cooperated with the Justice Department and testified against the other lawyers and they didn't see that I did anything wrong."

As for the current case, court records indicate that Schrand allowed Chesley and his lawyers ample arguments over his inclusion in the original judgment. Previous courts and the Kentucky Bar Association also heard his concerns and ruled against Chesley.

"They started these arguments in 2007, and made the same arguments in my case as well as during the disbarment proceedings," Ford said. "Any argument that he has not had the opportunity to defend himself is preposterous and not based on reality."

Can this be settled?

As for the possibility of settling the case, it appears unlikely, given the hardened stances of both sides as well as the complexity of the case.

Both Ford and Chesley camps acknowledge three previous mediation sessions that apparently went nowhere. And Ford says that with a judgment in hand, she has the legal leverage in the end.

"If they want to better control the amount Mr. Chesley is to pay, the time to do that began after the complaint was filed," she said.

As for Chesley, he is still active in Ohio and not just staying put in his Indian Hill home, despite the outstanding warrant against him. He said he remains proud of his work on the fen-phen case, talking glowingly about "smoking gun" emails he discovered that were so incriminating that the company never went to trial on any of the cases and instead settled them all.

Chesley undecided on arrest warrant

Chesley declined to discuss his next legal steps or what it would take to get him to either turn himself in to Boone County law enforcement or settle the case.

"At this point, I am leaving that all to my lawyers," Chesley said. "All anyone wants to talk about is my attempted arrest ... but look, it's not over. I'm not the kind of guy who just fades or covers his head in the blankets.

"That's just not my style, still isn't."