Kentucky judge resigns after public reprimand
Misconduct alleged in diet-drug case
The Louisville Courier-Journal
Tuesday, February 28, 2006
By Andrew Wolfson awolfson@courier-journal.com
courier-journal.com
A Northern Kentucky judge has resigned rather than face removal for multiple counts of alleged misconduct in a $200 million settlement involving the diet drug fen-phen.
Senior Judge Joseph F. Bamberger was publicly reprimanded yesterday by the state's Judicial Conduct Commission, which said his actions "shock the conscience." The panel said Bamberger would have been removed if the multiple counts of misconduct had been proved against him.
The commission said Bamberger approved attorney fees totaling at least $86 million and as much as $104 million in the 2001 settlement -- while plaintiffs injured by the popular diet-drug combination collected a total of about $74 million.
The fees included more than $2 million approved for a close friend of Bamberger's, trial consultant Mark Modlin, according to the commission, which held that the judge violated the Code of Judicial Conduct by allowing his relationship with Modlin and the attorneys to impair his objectivity.
Bamberger also allowed $20 million from the $200 million settlement to be put into a charitable fund, and then became a paid director of the fund, receiving $5,000 a month plus a $350 monthly expense allowance.
In a new lawsuit, about 200 of the 431 plaintiffs in the settlement have demanded that their attorneys -- Melbourne Mills Jr., William Gallion and Shirley Cunningham of Kentucky and Stan Chesley of Cincinnati -- surrender excess fees.
That suit, pending in Boone Circuit Court, notes that "astonishingly, more than one-half of the total settlement funds" ended up in the lawyers' hands.
Fen-phen became the diet craze of the 1990s when researchers found that when mixed together, two appetite suppressants, fenfluramine and phentermine, caused weight loss. But in the fall of 1997, the U.S. Food and Drug Administration removed fen-phen from the market after it was shown to cause heart defects.
Jacquelyn McMurtry of Louisville, who claimed to suffer heart damage from fen-phen and is suing her former lawyers, said yesterday that she was pleased to discover that Bamberger had been sanctioned. "I feel like break-dancing," she said.
Bamberger retired in 2003 from Boone Circuit Court after 22 years on the bench but has served since as a substitute judge. He did not return calls left at his home. Modlin also did not return calls left on his cell phone and at his office.
Chesley, a nationally known class-action lawyer who served as counsel to the other lawyers, said he was unaware that their combined fees exceeded the money paid to the plaintiffs. But he praised the work of the Kentucky lawyers, saying they won "an amazing settlement."
Chesley added that he didn't think Bamberger's friendship with the lawyers had any impact on the case.
Frankfort lawyer William Johnson, who represents the three Kentucky lawyers, said their fee was up to the discretion of the court. He said they deserved a high fee because of the risk that they would have to compensate additional plaintiffs if a separate national class-action settlement collapsed.
Yesterday's public reprimand of Bamberger was the most severe sanction the commission could take against him because he resigned.
The agency noted that Bamberger didn't require the attorneys or Modlin to prepare a written summary of how the settlement money was to be disbursed or how they were to be paid.
The panel also said the lawyers told the judge that their fees and expenses were about 49 percent of the settlement -- when they were in fact far more -- and didn't disclose they had contracts with the plaintiffs that called for them to collect no more than one-third of the settlement.
The commission said Bamberger appointed Modlin as one of the directors of the Kentucky Fund for Healthy Living, the charitable fund that received $20 million from the settlement, and in that capacity he collected a $6,500 monthly stipend and a $1,000 monthly expense allowance.
Each of the three Kentucky lawyers got $5,000 a month pay and $350 in monthly expenses.
Bamberger himself collected about $45,000 until he resigned from the board and returned the money when questions were raised last year in the plaintiffs' lawsuit against their attorneys.
The Courier-Journal disclosed last year that Bamberger and Modlin were partners in a Northern Kentucky real-estate company, Panoply Inc., that was formed in April 2002, before Bamberger appointed Modlin to the fund.
The newspaper also reported that Bamberger helped nurse Modlin back to health in the late 1980s after he was nearly decapitated in a golf cart accident while playing golf with the judge.
The commission cited that relationship in its rebuke, saying Bamberger refused to step down in a Pike County case in which Modlin was trial consultant until a review of the issue was pending before Chief Justice Joseph Lambert.
The agency also said Bamberger refused to disqualify himself in a sex-abuse case against the Roman Catholic Diocese of Covington in which Modlin was trial consultant until the church's lawyers took the matter to the chief justice.
The commission noted that Bamberger argued that judges often preside in cases in which the opposing attorneys are friends. But "the disturbing events in this case cannot be dismissed so simply," it said.
The judge's failure to disqualify himself due to his close friendship and other connections with Modlin, the blanket and unrestricted orders approving the distribution of funds, the creation of the charitable fund and the appointment of the friend and attorneys as paid directors, and Judge Bamberger's acceptance of their invitation to a position of profit, are inexcusable, the commission said.
"The actions of Judge Bamberger shock the conscience of the commission."
In 1998 five Kentucky plaintiffs filed suit in Boone Circuit Court against American Home Products Corp., which made one of the drugs in fen-phen. Eventually 431 Kentuckians, opting out of a national case, joined in the Boone County suit. In 2001, they received settlements based on their specific injuries.
The settlements were confidential, but the total amount was later revealed to be $200 million.
Reporter Andrew Wolfson can be reached at (502) 582-7189.
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