Stan Chesley stands to lose more than license

Howard Erichson in Cincinnati.com, June 19, 2011

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Written by
Jim Hannah and Dan Horn

Stan Chesley was asked a few years ago if he ever would consider walking away from the law career that has brought him more fame, wealth and influence than the former shoe salesman ever thought possible.

"I've known a lot of lawyers, and there's nothing sadder than when they retire," Chesley said in that 2006 interview. "People completely forget about them."

Chesley, still one of the nation's top lawyers at 75, spent most of his life making sure he would not be forgotten.

He became a courtroom legend, pioneering the use of class-action lawsuits, and along the way became a major player in national politics, charitable fundraising and a wide range of causes, from saving swimming pools in Cincinnati to planting trees in Israel.

But soon he may be forced to leave behind the career that made it all possible.

The job he couldn't imagine giving up could be taken from him unless he can convince the Kentucky Supreme Court later this summer that he did not violate ethics rules and should be allowed to keep his law license. The state bar association's board of governors recommended disbarment last week.

Disbarment would be both a professional death sentence and a personal disaster for a man who has defined himself for decades by his work - and by the power and influence that came with it.

He could lose not only the ability to practice law, but also the ability to effectively raise money, influence politicians and serve as a leader of charitable and educational institutions.

"Chesley has had a giant career," said Howard Erichson, a Fordham Law School professor and editor of the Mass Tort Litigation blog. "If his career ends in disbarment, it would be a really sad end."

Chesley, who declined comment, is accused of misconduct and accepting excessive fees from the $200 million settlement for people in Kentucky sickened by the diet drug fen-phen. He has denied wrongdoing and said he was unaware he received too much money.

Fallout from the scandal, which began several years ago, has intensified in recent months as Chesley's case made its way through Kentucky's disciplinary system.

Within the next three months, Chesley must make his last stand at the Kentucky Supreme Court. It won't be easy: The Supreme Court has imposed permanent disbarment every time it was recommended.

If the court does so again, Ohio is likely to follow suit.

"It is going to be falling dominos," said Lester Brickman, an author and professor at the Benjamin N. Cardozo School of Law School in New York.

Ohio, the other state where Chesley is licensed, has a reciprocal agreement that allows for the same discipline, regardless of where the misconduct occurred. Ohio has imposed another state's discipline in 24 of the 25 reciprocal cases filed since 2007.

Chesley also could lose the right to practice in federal court, where he does most of his litigation and where his wife, Susan Dlott, is the chief judge of U.S. District Court in Cincinnati.

If that happens, Chesley would have to cut ties with his law firm, and both he and the firm would potentially lose the tens of millions of dollars in fees that Chesley now brings in for his work on massive class-action cases.

He is currently a lawyer of record in at least 17 cases in federal courts across seven states, including lawsuits against Fortune 500 companies such as General Electric and Coca-Cola.

"The firm can continue, but he is obviously the lead lawyer in the firm," Brickman said. "He is the rainmaker. He brings in the business. He has the reputation and the contacts."

He said Chesley is so valuable to the firm because his groundbreaking work in class-action cases, starting with the Beverly Hills Supper Club fire in 1977, has helped him land prestigious and profitable leadership roles in national cases.

"His name is synonymous with class-action litigation," said Peter A. Chapman, editor-in-chief of the Class Action Reporter legal journal. "He is one of the big ones."

Chesley got a taste of what the scandal might cost him when Ohio Attorney General Mike DeWine suspended him last week as lead litigator of the state's lawsuit against mortgage giant Fannie Mae.

"That's a pretty good example of what can happen across the board when controversy surrounds a person," said John Green, director of the Ray C. Bliss Institute for Applied Politics at the University of Akron.

For now, at least, colleagues say Chesley still is doing the work that made him rich and famous. Ben Dusing, a Cincinnati lawyer, said Chesley was as fierce as ever when he butted heads with him at the negotiating table a few months ago.

And after they battled for a few hours, Chesley displayed the same savvy that helped him get where he is today. He called Dusing's father, with whom he'd worked years ago, and told him his son turned out to be a great lawyer.

"That is one of the classier things anyone has done for me," Dusing said.

But kind words for Chesley have been hard to come by lately. Investigators in Kentucky have called his behavior appalling and said he should pay back $7.5 million from the fen-phen settlement.

"His callous subordination of the interests of his clients to his own greed is both shocking and reprehensible," said Trial Commissioner William Graham.

Damning words such as those can do great harm to a legal career, with or without disbarment, but they also could impact Chesley's role as a top-tier fundraiser for politicians and charities.

Although he has made enemies as well as friends on his climb to the top, few would dispute his knack for bringing in cash for causes and candidates. The majority of those candidates, most notably Bill and Hillary Clinton, are Democrats.

But he's also backed some Republicans, including Hamilton County Prosecutor and GOP heavyweight Joe Deters, who works for Chesley's firm.

"There's no doubt there will be some people who will try to distance themselves from him on both sides of the aisle," said Tim Burke, chairman of Hamilton County's Democratic Party.

"But there are some people who have been Stan's friend for a long time, through thick and thin, and they will still be there."

Green said the scandal has taken such a toll on Chesley's reputation that even those politicians who consider him a friend may feel the need to back away.

"He may not be able to continue to travel in the circles where people make political contributions," Green said. "Fundraising is controversial enough without having other things attached to it."

It's less clear what impact the scandal will have on his ability to effectively serve charities and nonprofits, as he has for decades as a member of boards and in other leadership positions. So far, most are standing by him.

"Stan Chesley has been and is a great leader and great president for Jewish National Fund," said Jodi Bodner, spokeswoman for the New York-based group that Chesley has led for about two years.

Chesley's supporters and detractors agree the scandal has tarnished his image, but they also say it's too soon to write his professional obituary.

He earned a reputation as a bulldog in court and has vowed to keep up the fight to save a career that has opened doors that otherwise would have been closed to him.

Chesley has said many times over the years that he sees himself as an outsider: a liberal in a conservative town and a "new money" guy in a city filled with "old money" families.

"This is a tough town," he said in 2006. "Very conservative. And I'm not a part of that."

But his career made him part of it, made him one of the city's movers and shakers. That's why he stands to lose more than a law license when he goes before the Kentucky Supreme Court later this year.

"Stan's always found a way to work through difficult things," Burke said. "But how this is going to play out, none of us know."