Justice in Kentucky

6/21/2011

It isn't often that a professional legal organization disciplines one of its own, but that's what happened last week to plaintiffs' bar legend Stanley Chesley. Now let's see whether Mr. Chesley's business partner, Ohio Attorney General Mike DeWine, keeps him employed.

The Kentucky Bar Association voted to disbar Mr. Chesley, a Cincinnati-based attorney who was one of several lawyers involved in a $200 million 2001 settlement with a company that made the diet drug fen-phen.

The attorneys were later accused of taking a significant portion of the settlement that should have gone to their clients. Three attorneys have been stripped of their law licenses, and two of those were convicted of defrauding clients.

Mr. Chesley was brought to the bar on charges of violating nine ethics rules, including taking unreasonable fees, sanctioning misconduct by other lawyers, and failing to inform clients fully. The trial commissioner who investigated, Judge William Graham, called Mr. Chesley's actions "shocking and reprehensible" and recommended that he lose his license and be forced to return $7.6 million of the $20 million he took in the case. The bar association accepted both recommendations, although the Kentucky Supreme Court will review the case.

All of this puts the spotlight on Mr. DeWine, a former Republican U.S. senator who made a political comeback as AG in 2010. Ohio's government has become an engine of dubious shareholder lawsuits on behalf of its public pension funds, in hopes of landing legal jackpots to fill the state's budget hole.

The state retained Mr. Chesley for its suit against Fannie Mae. Mr. DeWine has kept Mr. Chesley on the job, despite the Kentucky ethics case and evidence that the lawsuit king was less than honest with the federal judge overseeing the Fannie litigation ("Republicans for lawsuits," guest editorial, Wall Street Journal, June 2.)

Kentucky and Ohio have a reciprocal legal disciplinary agreement, so Mr. Chesley may lose his license to practice in Ohio as well. Meantime, his representation is an embarrassment to the Buckeye State and speaks loudly about Mr. DeWine's legal standards.