Fen-Phen Lawyers Run Off With $126 Million of $200 Million Settlement

When people tell us why they like the Consumerist, they often mention the distinct lack of lawyers. (Sorry Sam, nothing personal.) We imagine stories like this one have something to do with it. From the New York Times:

W. L. Carter knew there was something fishy going on when he went to his lawyers’ office a few years ago to pick up his settlement check for the heart damage he had sustained from taking the diet drug combination fen-phen.

W. L. Carter, a fen-phen plaintiff, said he was angry about how he had been treated. “The greed got the best of them,” he said of his lawyers.

The check was, for starters, much smaller than he had expected. And his own lawyers threatened to retaliate against him if he ever told anyone, including his family, how much he had been paid. “You will be fined $100,000, you will go to jail and you will be sued,” Mr. Carter recalled them saying.

Mr. Carter was right to have been suspicious. The lawyers defrauded their clients, a state judge has ruled in a civil case, when they settled fen-phen lawsuits on behalf of 440 of them for $200 million but kept the bulk of the money for themselves.

Yes, you will go to jail if you tell anyone that your lawyer is stealing your money. That’s the best they could think of? They should see if that RIAA law firm is hiring. We hear there are still a few more college students left to threaten, and they’re no doubt looking for a few good men.—MEGHANN MARCO

Fraud Inquiry Looks At Diet-Drug Case [New York Times]

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  1. Sam Glover says:

    None taken.

    These clowns deserve everything they get.

  2. A_B says:

    Why is that when a lawyer does something bad, all lawyers are implicated, but when somebody of a different profession does something bad, their entire profession isn’t tarred?

    For example, if a CEO takes his company’s money, I don’t immediately hate all CEOs. I went to a coffee shop today and the person behind the register was an idiot. Are all coffee shop employees idiots? (No)

    This fen-phen lawyer is a scumbag, but what does it have to do with Sam Glover? They’re both attorneys? So?

  3. Sam Glover says:

    I dunno, I took it as friendly teasing. As a temporary member of the Consumerist aristocracy (lack of royal we notwithstanding), I am clearly above reproach.

  4. FishingCrue says:

    Doesn’t commingling of trust funds almost always result in disbarment? Then again, if I absconded with 120 million the Kentucky Bar’s Ethics division probably doesn’t have jurisdiction over my beach house in Brasil.

    Focus: Didn’t anyone notice when the check was deposited in a Swiss bank account?

    And yes, I am scum

  5. segfault, registered cat offender says:

    Three lawyers were suspended from practice… If you’re suspended, you have to prove to the ethics people that you’ve righted whatever wrongs that caused the suspension before they will allow you to resume practice.

    I’ve known an attorney who was disbarred for forging checks and stealing from estates. The three lawyers above could still be disbarred–I’m guessing the suspension was because, at the very least, they overcharged their clients, but they are reserving judgment on whether they consider it outright theft or not.

  6. AcilletaM says:

    @A_B: Because of one CEO, I now hate all CEOs. And hats but I’m digressing…

  7. segfault, registered cat offender says:

    Here’s a more cynical way of looking at it: The lawyers who brought the suit alleging that the Phen-fen clients were overcharged, will now get a contingent fee on any fees they recover–while this will result in a net gain for the Phen-fen victims, their total legal fees paid will still be higher than what they ideally should have been (around 33% is the normal tort standard, but in medical malpractice cases it can be higher). And, the law firm(s) alleging that the original firms overcharged will now get a piece of the $200M action without the burden of having to handle the original case.

  8. Aston14 says:

    These guys make Dewey Cheatem and Howe look like saints by comparison. Unfortunately, this will almost certainly be used against all plaintiffs attorneys. So some real cases, filed by honest people, could be affected. While some crooks like these suck, I think it would be a bad idea to use it as a means of stopping lawsuits that could have some merit in the future.

  9. KevinQ says:

    @segfault: I believe, in most states, that fraud will get you punitive damages, so they could wind up paying much more than they were over-paid, meaning that the clients could still wind up with what they deserved, the new attorneys get paid for their work, and the old attorneys get punished for being right evil gits.

    K

  10. ironchef says:

    i’m surprised plantiffs even got a penny. The lawyers left money on the table.


    If this isn’t a great example for tort reform….

  11. royal72 says:

    “Why is that when a lawyer does something bad, all lawyers are implicated, but when somebody of a different profession does something bad, their entire profession isn’t tarred?”

    because the simple fact is, our legal system is completely fucked. first of all, you are not innocent till proven guilty, you are guilty till you convince a jury/judge to acquit your charges. you’re guilty till you pay enough to get very good lawyers, who create enough doubt or find the right loopholes. no one in an actual court of law cares about truth, it’s a soap opera.

    at the end of the day, you have pay a crap load of money to prove your innocence. after you’ve been vanquished and your case has been proven, you’re still out the money, time, and energy just to go through the motions.

  12. mac-phisto says:

    @ironchef: i don’t see how this is relevant for tort reform. this is a clear breach of standard code & ethics. oh, oh…i got it! they’re acting like a bunch of insurance agents when they’re actually lawyers. is that the connection you were trying to make?

  13. Crim Law Geek says:

    I forgot exactly which model rule applies, but it is against the ABA’s rules for attorney conduct to threaten an opposing with criminal charges when there is no basis for such a threat. I’m not sure if a client who comes to you accusing you of cheating them is considered an opposing party, but I doubt these assholes had any basis for such a claim. Sadly, the Model Rules have not been adopted by all the states, so it may not have been illegal in that particular state.

    But WTF do I know, I’m just a 1L

  14. ironchef says:

    @mac-phisto:
    these trial lawyers grabbed every penny they could and left a token sum for they plantiffs to divvy up.

    Tort reform should cap excessive fees and raiding of judgements.

  15. OnceWasCool says:

    Part of the problem is class action lawsuits! Remember all the cigarette lawsuits? The lawyers walked away with MILLIONS and most just got coupons for food products.

  16. chimmike says:

    If this was a class action lawsuit, the people were foolish to think they would get any sort of large sum. Lawyers LOVE class action lawsuits because they can rake in the bucks like it sits unclaimed on a beach.

  17. zentec says:

    This is the most concerning part of the article:

    “But the judge who made that statement and who approved the settlement, Joseph F. Bamberger, received a financial benefit from the windfall. After retiring from the bench in 2004, Judge Bamberger became a director of the $20 million charity for a $5,000 monthly fee. He has since repaid what he received.”

    This is just a staggering breach of confidence in the legal system and quite simply, an undeniable arrogance.

    When they lock up the three lawyers, they need to find a fourth bunk for the retired judge because the mere appearance of impropriety within the legal system is simply unacceptable.

  18. IC18 says:

    I agree with @A_B, I have a friend who is a lawer and I in no way compare him to these doushbags.

  19. NeoteriX says:

    “When people tell us why they like the Consumerist, they often mention the distinct lack of lawyers.”

    Actually Consumerist seems to have more lawyers (and law students) than any other site I frequent. It could have to do with the fact that despite its problems, the law is a powerful tool to help enforce the rights of the consumer :)

  20. souhaite says:

    @NeoteriX: You’re totally right. This site is great for getting a feel for how consumers respond to company actions, and for issues to keep an eye out for in my own company. I can’t be the only lawyer who reads religiously and can do it on company time without feeling guilty.

    And, c’mon Consumerist . . . just a few entries ago you put out a plea for free legal advice, and then you take this jab at us? You can’t have it both ways (or you can, but you look like a total hypocrite).

  21. silverlining says:

    @ironchef, @oncewascool: See, now this was exactly what I thought would happen… someone would use this start to start yelling about tort “reform” and ending class action lawsuits.

    If a company screws up and costs someone damages, those who experienced damages should be able to sue. And if the company causes a whole class of people damages, they should have to pay the class of people.

    Companies understand one thing–the bottom line. Lawsuits are the way that average folks have any kind of leverage with large corporations that mess up–deliver a poor product, ignore the safety of their customers or employees, etc. etc. There are countless examples of when regulation is simply not enough, or not enforced enough. Even then, the threat of a lawsuit is not a slam-dunk.

    Punish individual lawyers who abuse class-action lawsuits, but don’t throw the baby out with the bath water.

  22. starflyer59 says:

    You want to see bad lawyering in action, check out the disciplinary rulings in your state’s bar association newspaper. I’ve seen everything from your basic misuse of funds to one who made up docket numbers to cover up for his failure to do any work at all. And they almost universally blame it all on depression and/or alcoholism.

    As for me, all the consumer protection work I’ve done has been pro bono.

  23. ironchef says:

    @silverlining:
    my point was companies should be sued for wrong doing. But then again lawyers need to cap their “fair share” of the settlements. This gouging of the settlement is insane. $112 million of $200 just smacks of pure greed. I was surprised the attorneys even left a penny for the victims.

  24. spincycle0 says:

    I actually worked on the fen-phen litigation quite extensively, although it was for a different firm with many many many more plaintiffs. The clients were pissed because their settlements were smaller than expected, but that was due to some serious trial losses in New Jersey. Further, The settlement agreement specifically states that the client can’t discuss their settlement and that they would be liable for liquidated damages if they did. This is on the insistance of the defendant, not the plaintiffs counsel. Basically, some fat chain smoking guy is mad because he’s not getting a million dollars and wants to sue his lawyer. If people had any idea of the astronomical costs and risks that go into pursuing a large fen-phen docket, they’d understand why the lawyer gets 40% plus expenses. If the lawyer didnt get this amount, why would he risk millions of his own money on a speculative claim? he wouldn’t and the result is these people would have gotten nothing because they couldn’t pay the 250/hour rate that most lawyers charge.

  25. spincycle0 says:

    Also, when the plaintiffs sign the contracts, it explicitly states that in the event of recovery, the lawyer gets 40% plus expenses. This is explained to them and signed at the beginning, so i have no sympathy when they cry at check cutting time. Also worth noting, if the lawyer doesn’t win, he doesnt get anything, despite having spent a couple of million bucks out of his pocket. All of you tort reform people need to understand how this actually works before you go on your witch hunt.