Franklin County

Board recommends disbarment for Mills

FRANKFORT — The board of the Kentucky Bar Association decided Friday that two of the most colorful and controversial figures in Kentucky legal history should not practice law.

The Board of Governors of the Kentucky Bar Association voted 14-1 to permanently disbar Melbourne Mills Jr. of Lexington for his part in a controversial $200 million fen-phen settlement.

The board also unanimously voted to deny Lester Burns Jr.'s request to again practice law. Burns, a onetime gubernatorial candidate and well-known Eastern Kentucky criminal defense lawyer, voluntarily gave up his law license in 1986 after pleading guilty in federal court to defrauding an insurance company of $1.1 million and to transporting stolen goods across state lines.

The board's decision will now go to the Kentucky Supreme Court, which will have final say on whether the two men can practice law. A decision could be rendered in the next 90 days. Neither Mills nor Burns attended the Friday board meeting.

A trial commissioner had ruled in August 2009 that Mills should be disbarred after finding him guilty of 17 counts of misconduct, much of which stemmed from his role in the now infamous fen-phen settlement. Mills appealed the trial commissioner's decision.

Before the fen-phen case, Mills was one of the state's most well-known lawyers, largely because of television commercials that advised people to call "the man" if they are in legal trouble.

Mills, William Gallion and Shirley Cunningham Jr. were charged with conspiring to steal millions of dollars from 440 clients they represented in a 2001 Boone Circuit Court case over whether the diet drug fen-phen had damaged their hearts and lungs. Mills was acquitted by a federal jury of all charges in July 2008.

Gallion and Cunningham were retried and convicted. Gallion and Cunningham have settled with the Kentucky Bar Association and have been permanently disbarred. All three were temporarily suspended in 2006.

James Shuffett, an attorney for Mills, argued in a hearing on Friday before the Board of Governors that Mills should be punished for his role in the fen-phen case but should not be permanently disbarred.

During the bar proceedings, as well as the federal criminal case, there was testimony that Mills — who represented more than 300 of the 440 clients — was an alcoholic who had limited involvement in the day-to-day workings of the fen-phen litigation.

Mills also did not know that the settlement was for $200 million until well after the case was settled in 2001, Shuffett said. In fact, Gallion had originally told Mills that the settlement was for $150 million.

When Mills found out that there was more money available, he demanded that all the clients receive a second round of disbursements, Shuffett said. "He did prevent the outright theft of $60 million," Shuffett said on Friday.

But Mills never told his clients the amount of the total settlement nor did he tell his clients that the other attorneys in the case were withholding some of the settlement money, board members pointed out.

"He primarily committed sins of omission not commission," Shuffett said.

Shuffett said Mills, who will be 79 in February, does not intend to practice law but wanted to keep his law license because he has been a member of the bar for more than 50 years.

Mills was originally charged by the bar with 23 counts of misconduct, and the trial commissioner found him guilty of 17 of them. The charges included failing to communicate with his clients, failing to act with diligence and promptness in representing a client and charging unreasonable fees.

Before his legal troubles in 1986, Lester Burns was one of the most well-known lawyers in Kentucky.

A former state police officer, Burns was a criminal defense lawyer who ran for state attorney general and for governor in the 1980s. But in 1986, he pleaded guilty to receiving stolen money and attempting to defraud insurance companies of $1.1 million by filing a lawsuit over a phony traffic accident.

He was also charged with receiving $175,000 in stolen money as a fee for representing a client who was accused of stealing $1.9 million from a Letcher County doctor and murdering the doctor's daughter.

Burns served 32 months of an eight-year sentence and returned to Kentucky. He could have applied to have his law license reinstated as early as 1991 but did not do so until 2004.

The application was delayed for several years because of Burns' health problems. He will be 79 on Sunday.

Patrick O'Neill, Burns' attorney, told the board on Friday that Burns does not want to open a legal practice but instead wants to do pro-bono work, helping young lawyers and the poor.

Burns now lives on a farm in Wolfe County and is in good health, O'Neill said.

But a Kentucky Bar Association committee had recommended in October 2009 that Burns not be reinstated because he was not honest with bar investigators or the committee about his past — including whether he previously had problems with alcohol or domestic violence problems with his now ex-wife. Burns gave different answers about his alcohol use to investigators on different occasions.

"Mr. Burns did not persuade the committee that he is worthy of public trust and confidence and that he possesses the good moral character required to be readmitted to the practice of law," the committee found in its Oct. 15 report.

But O'Neill said that much of the investigation focused on Burns' past behavior. Burns received treatment for alcohol dependency in federal prison but has not needed or received treatment since, O'Neill told the board Friday.