Posted on Sat, May. 10, 2008

FEN-PHEN TRIAL

Diet drug brought on two nightmares

By Jim Warren

JWARREN@HERALD-LEADER.COM

Pablo Alcala

W.L. Carter is a likely witness for the prosecution in Monday's trial. Photo by Pablo Alcala | Staff

FEN-PHEN CASE TIMELINE

W.L. Carter first heard of fen-phen in the late 1990s, when clinics offering the popular diet-drug cocktail were popping up all around Kentucky, thanks to friendly state prescription rules.

Carter, who lives in Lawrenceburg, never expected to need weight loss help himself -- he'd been trim and active all his life -- but he found himself taking what he now calls "the fantasy drug."

"My wife became seriously ill in 1994 and everything changed; we became more like homebodies," he recalled. "My weight shot up to about 270 almost overnight." Carter went on fen-phen, rapidly dropped 65 pounds, and "felt like a whole new person."

But, he says now, it was the beginning of a nightmare.

Shortly thereafter, Carter learned he had heart-valve damage and joined more than 400 others in a class-action lawsuit against drug-maker American Home Products. Representing Carter and the other plaintiffs were attorneys Melbourne Mills Jr., William Gallion and Shirley Allen Cunningham Jr.

Now Carter figures to be among prosecution witnesses called when Mills, Gallion and Cunningham go on trial in Covington, beginning Monday, on charges they conspired to commit wire fraud in pocketing $65 million of a $200 million fen-phen suit settlement that should have gone to Carter and other plaintiffs.

Because the case involves extreme charges against high-profile attorneys -- and because of the large amounts of money involved -- lawyers and legal ethicists in Kentucky and around the country will be following developments in court. It promises to be the most-watched Kentucky trial in recent memory.

Federal prosecutors will allege in the trial that while reasonable attorney fees in the suit would have totaled $40 million to $60 million, Gallion, Cunningham and Mills actually kept about $65 million more, plus about $20 million they placed in a charitable trust they controlled.

The defense is expected to counter that the plaintiffs received all the money they were entitled to and that the three lawyers acted in good faith and never intended to defraud anyone. Defense lawyers also are expected to argue that actions and fees of the three lawyers were approved by Boone Circuit Judge Joseph "Jay" Bamberger, who presided over the original fen-phen case.

The trial could take up to a month. Lawyers say more than 200,000 pages of documents are involved, and the prosecution alone could call up to 40 witnesses.

W.L. Carter, now 54, says he took fen-phen only briefly and at half the recommended dose, trying to save money because his health insurance didn't cover the drug. In retrospect, he thinks the small doses might have limited his heart damage and saved his life. Carter, who continues to work as a tool-and-model maker, works out regularly and watches his diet in hopes of staving off more damage to his heart.

Carter said he noticed "no side effects" when he took fen-phen. "It was almost too easy," he recalled. "I think that's why so many people took it."

But then studies began appearing, suggesting that fen-phen caused heart-valve damage in some people. Prompted by such reports, the U.S. Food and Drug Administration had fen-phen pulled from the market in September 1997. Carter still felt fine, but was worried. He called his doctor, who suggested that he take a heart test called an echocardiogram.

It quickly was confirmed that, even though Carter had no physical symptoms, the valves of his heart had sustained the kind of damage found in fen-phen users. "I was scared to death," Carter said. He said he feared for the welfare of his wife, who had not returned to work after her illness, and their two children, who still lived at home.

Soon afterward, Carter signed on to the growing list of plaintiffs in a class-action lawsuit that Mills was preparing on behalf of fen-phen users against American Home Products, the company that marketed the drug. Carter said he didn't learn until long afterward that Mills had combined his fen-phen suit with others being mounted by Cunningham and Gallion. Eventually, there would be more than 440 plaintiffs.

Carter's disillusionment with the case began in the summer of 2001, when a Mills associate handed him a check for his share in the settlement, which had just been approved in Boone Circuit Court. Carter said the amount, which he can't reveal, was so little that he was "shocked." More worrisome, he said, was the associate's warning that, under settlement terms specified by American Home Products, Carter could be fined or even jailed if he told anyone about the settlement or how much he had received. Carter said he was so fearful and bitter afterward that he stopped and vomited beside the road on his way home.

"I looked at the check and asked myself, 'What have I done?' I felt like I'd sold my soul to the devil, and I didn't have Daniel Webster to bail me out. I was so mad at American Home Products, because here I'd gotten a check for a few thousand dollars, and if anybody found out, I was going to be fined or sued."

Carter told his wife about the settlement but kept it secret from his children, other family members, and everybody else he knew. He said he was so afraid that someone might find out -- and that he would get into trouble -- that he worried constantly and developed sleep apnea. "They had absolutely scared me to death," he said.

Carter said that when Mills' office called him again in 2002 he was terrified that word of the settlement had leaked out and that he was in trouble. Instead, a Mills representative handed Carter another check, saying the court had made extra money available from the settlement. Again, Carter was warned to tell no one.

(The federal government alleges that Mills, Gallion and Cunningham released the extra money to Carter and other plaintiffs only after the Kentucky Bar Association started questioning the lawyers' handling of the settlement. Prosecutors also say that secrecy warnings given to Carter and other plaintiffs were improper.)

Carter said Mills' representative told him at the 2002 meeting that some settlement money would be left over after the final distribution and asked if Carter would mind if the money went to charity. Carter said he didn't object, because the associate told him the amount involved would be "minuscule." Other plaintiffs also have said they also were told the amount would be small.

In reality, prosecutors say, Mills, Gallion and Cunningham put about $20 million into a charitable foundation called the Kentucky Fund For Healthy Living, which they created and controlled. Judge Jay Bamberger, who approved the original fen-phen settlement, also would become a paid trustee of the foundation.

Carter said that while he wasn't happy with the way things had gone, he didn't become suspicious about the settlement until late 2004, when he received a questionnaire in the mail from Lexington attorney Angela Ford, who was preparing a civil suit against Mills, Gallion and Cunningham. Carter ultimately joined the suit, which sought a full accounting of the fen-phen settlement money.

A special judge last summer ruled in that suit that Gallion, Mills and Cunningham had breached their fiduciary duty, and approved a $42 million judgment against the three. That came roughly a month after a federal grand jury indicted the attorneys.

Nowadays, Carter says he still has no obvious symptoms from his heart damage. But he says he gets regular checkups, and walks miles each day, hoping that staying active will postpone the onset of symptoms, which he says could appear at any time.

Carter says he wants to see justice done in the upcoming trial. But he says that, whatever the outcome, he plans to campaign for changes to strengthen Kentucky laws and regulations concerning the handling of class-action lawsuits.

"I want to do whatever I can to make sure no one ever has to go through this kind of thing again."

COMING SUNDAY