The New Jersey Supreme Court won’t overturn the disqualification of a law firm that spent years and money on thousands of talcum powder lawsuits, only to find itself on the sidelines.
Beasley Allen was found to have strategized too closely with a former lawyer for Johnson & Johnson on a plan to craft a mass settlement of claims alleging products like Baby Powder contained asbestos. The state Appellate Division earlier this year booted the firm off 3,600 cases in state court, and on April 10 the Supreme Court denied Beasley Allen’s request to appeal.
It’s the latest blow to the firm, which has also been removed from its lead counsel position in a massive consolidation of cases in New Jersey federal court. Though it said in court documents it is “likely to prevail in its forthcoming appeal” to the Third Circuit, lawyers at other firms have begun filing applications to take over as lead counsel.
That federal multidistrict litigation houses more than 60,000 lawsuits alleging asbestos from cosmetic talc caused ovarian and other cancers. Beasley Allen secured a leadership position and fought J&J’s plan to settle claims for $9 billion in bankruptcy court.
The firm was successful and forced J&J back to New Jersey federal court, where Beasley Allen hoped for jackpot verdicts that would boost its clients’ position for larger settlements than the previous plan would have provided.
But along the way, it and Birchfield collaborated with a former J&J lawyer on a mass settlement plan – an arrangement J&J called “shocking and deeply troubling.”
New Jersey’s Appellate Division found Beasley Allen violated professionalism rules when it consulted with James Conlan, who had represented Johnson & Johnson in court, on a mass settlement of talc claims.
The ruling escalated the disqualification push in federal court, where a disgruntled former client of the firm, Aletha Wilson, said Beasley Allen tried to trick her into signing a retroactive power of attorney giving the firm the power to vote against the $9 billion bankruptcy plan Johnson & Johnson floated to settle talc litigation against it.
Beasley Allen voted against the bankruptcy plan on behalf of some 11,500 clients, claiming they were better off negotiating a settlement or suing in court. Wilson says she stood to gain money under the bankruptcy plan but nothing if she sued in court, since plaintiff experts back claims Baby Powder can cause ovarian cancer, but not uterine cancer.
Conlan was a partner at Faegre Drinker Biddle & Reath who defended J&J in talc litigation. He left the firm to start Legacy Liability Solutions, where he attempted to buy the company’s talc liabilities and opposed the company’s ultimately unsuccessful plan to settle all cases in bankruptcy court.
He worked with Beasley Allen’s Birchfield to craft a settlement outside of the bankruptcy process, which was J&J’s preferred avenue. Conlan and the firm wanted the talc liabilities bundled to an offshoot company that would be sold to him.
Conlan even wrote an op-ed in Bloomberg touting that strategy. Court records show 8,000 Beasley Allen clients who, through Beasley Allen, voted against J&J’s bankruptcy settlement but never actually told the firm what their position on that plan was.
Beasley Allen “ratified” Conlan’s conduct by asking to include him in settlement negotiations with J&J, U.S. magistrate judge Rukhsanah Singh wrote.
“Mr. Conlan has never been employed, retained, supervised or controlled by Beasley Allen,” the firm says.
“Mr. Conlan has his own interests – that is the interest of Legacy Liability Solutions – looking to step into the shoes of Johnson & Johnson…Yet under this Court’s expansive definition, their discussions during a court-ordered mediation rise to the level of an association…”
Affirming the ruling would chill participation in mediation efforts, the firm said, and discourage “creative approaches to dispute resolution.”
The talc MDL is one of the largest in the country and was organized in 2016. There are more than 67,000 claims, and the promise of a large payout when it is resolved led to attorneys spending on advertising and some firms taking money from litigation funders who were promised a share of the recovery.
Still pending are motions to disqualify experts who testify there is asbestos in talc, the talc made its way into plaintiffs’ bodies and it caused their cancers. J&J calls those claims “junk science,” and a ruling preventing those experts from telling it to jurors could doom the cases.
J&J has won plenty of defense verdicts in trials that hinge on expert testimony regarding whether there is asbestos in the talcum powder, but when it loses, jurors aren’t shy about delivering massive verdicts. In December, one woman won $1.5 billion in Baltimore, and two women in Los Angeles won $40 million.
