United States v. Cunningham, 679 F.3d 355

Cunningham and Gallion, Kentucky lawyers, represented hundreds of fen-phen claimants in a Kentucky state court action
They settled with American Home Products for $200 million, entitling them to about $22 million each under retainer agreements
Instead they pursued a scheme to take roughly twice that amount, including a side indemnity to Duff's clinics
AHP-funded settlement was conditioned on 95% acceptance; the Kentucky court decertified the class and dismissed 431 claimants with prejudice
The lawyers misled clients about the total settlement, redistributed funds, and created a charitable trust funded with remaining proceeds
The Kentucky Bar Association later disciplined the lawyers; Cunningham and Gallion were permanently disbarred in Kentucky; Mills’ status is unclear for disbarment

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether evidence supports intent to defraud	Cunningham/Gallion intended to defraud by deception	Gallion relied on Chesley and court orders in good faith	Evidence supports intent to defraud; convictions affirmed
Whether the indictments were timely	Indictments cover ongoing conspiracy within five years	Scheme ended earlier; time-barred	Indictments timely; act of paying fees extended timeline
Nature of settlement (aggregate vs class)	State court action was a mixed with class-like attributes	Settlement was aggregate, not a class action	District court’s aggregate settlement ruling proper; did not violate rights
Restitution amount calculation	Restitution should reflect total losses to clients, not fees	Attorney fees should reduce client loss	Restitution based on total settlement, not net to clients; Hoglund analogy applied
Right to unanimous verdict waiver	Waiver right could be relinquished under certain criteria	Sixth Circuit prohibits waiver of unanimous verdict	Waiver of unanimous verdict denied; conviction upheld

Faulkenberry v. United States, 614 F.3d 573 (6th Cir. 2010) (elements of wire fraud and intent)
Gaudin v. United States, 515 U.S. 506 (U.S. 1995) (jury must determine essential facts; mixed questions)
Hoglund v. United States, 178 F.3d 410 (6th Cir. 1999) (restitution when settlement funds misused; one-third fee rule)
Mentz v. United States, 840 F.2d 315 (6th Cir. 1988) (mixed questions of law and fact; jury role in guilt)
Schaffer v. United States, 586 F.3d 414 (6th Cir. 2009) (timeliness of indictment; last overt act within limitations)
Smedes v. United States, 760 F.2d 109 (6th Cir. 1985) ( Sixth Circuit unanimity principle)