On Tuesday, January 17, 2012, the Sixth Circuit heard oral argument of an appeal by two Kentucky attorneys who were convicted of defrauding their clients of millions of dollars in settlement funds.  In their briefing, appellants alleged a host evidentiary improprieties and deficiencies as well as constitutional violations.

Attorneys William Gallion and Shirley Cunningham represented over 400 plaintiffs in a class action lawsuit against diet drug fen-phen.  The attorneys negotiated a settlement of $200 million, approximately two-thirds of which should have gone directly to their clients.  Instead, the clients received less than $100 million.  Both Gallion and Cunningham were convicted of wire fraud and conspiracy in 2009 and were permanently disbarred from practicing law in Kentucky and Ohio.  Fen-phen has since been taken off the market due to heart-health concerns.

Reports are that the Sixth Circuit panel, comprised of Judges Batchelder, Clay, and Gilman, were not persuaded by appellants’ arguments.  Indeed, Judge Clay told Gallion’s attorney that “You go on and on, but we’re not hearing any legal authorities.”

We will follow this case and provide an update when the Sixth Circuit issues its decision.