Johnson & Johnson’s latest attempt to settle tens of thousands of lawsuits over its talc-based products has ignited a fresh legal dispute between two plaintiffs’ law firms. Beasley, Allen, Crow, Methvin, Portis & Miles, a firm opposing J&J’s settlement plan, has filed a lawsuit accusing The Smith Law Firm of breaching a joint venture agreement. The suit alleges that Smith accepted a deal with J&J to resolve debts owed to litigation funders.
In a lawsuit filed on Tuesday in Alabama federal court, Beasley Allen claims that The Smith Law Firm, led by attorney Ted Smith, violated an agreement to jointly represent 11,000 clients alleging that Johnson & Johnson’s Baby Powder and other talc products caused cancer. Beasley Allen argues that Smith broke ranks to secure a faster payout from J&J and address his financial obligations.
J&J, which denies that its talc products are harmful, is attempting to finalize a multibillion-dollar settlement through the bankruptcy of a subsidiary. The company had previously pledged to pay $8 billion over 25 years to resolve the litigation but recently increased its offer by approximately $1.1 billion to gain the support of Smith’s clients. The Smith Law Firm, according to J&J, had been one of the key holdouts to the settlement.
In response to the lawsuit, Smith defended the settlement offer, stating that it was a positive outcome for women suffering from ovarian cancer. He dismissed Beasley Allen’s legal action as “baseless” and criticized the firm’s tactics, saying, “Attorneys can disagree without resorting to such petty behavior. I will not be intimidated from pursuing the best result for my clients.”
Beasley Allen did not respond to requests for comment, while J&J declined to comment on either the lawsuit or the ongoing settlement negotiations.
According to Beasley Allen’s lawsuit, Smith has been actively trying to persuade the firms’ mutual clients to vote in favor of J&J’s proposed bankruptcy settlement. Initially, J&J set a July 26 deadline for voting on the deal but extended the timeline to allow Smith more time to gather support. J&J is reportedly preparing for a third attempt at bankruptcy to finalize the settlement, following two failed attempts to resolve the lawsuits through bankruptcy filings by its subsidiary.
Beasley Allen opposes the latest settlement proposal, arguing that it exploits U.S. bankruptcy laws and fails to adequately compensate cancer victims. The firm claims that Smith’s efforts to rally votes for the settlement violate their joint venture agreement, which stipulated that Beasley Allen would handle all client communications.
The lawsuit further alleges that Smith, who secured the first trial victory against J&J in 2013, initially partnered with Beasley Allen and another firm, Porter Malouf, to take on more talc cases against the pharmaceutical giant. Under their agreement, Beasley Allen was responsible for half of the workload and litigation costs, with Smith and Porter Malouf sharing the remaining obligations.
However, according to the lawsuit, Smith defaulted on his commitments, incurring significant debt to litigation funders after secretly buying out Porter Malouf’s responsibilities without informing Beasley Allen. Smith also allegedly retained some talc clients for himself instead of bringing them into the joint venture, violating the terms of their agreement.
Beasley Allen has also named Porter Malouf as a defendant in the lawsuit, accusing the firm of failing to meet its obligations under the joint venture. Porter Malouf did not respond to requests for comment.
J&J has alleged that Smith Law Firm owes up to $240 million to litigation funders, according to Beasley Allen’s complaint. Additionally, Beasley Allen claims Smith owes them $1.1 million for litigation expenses they fronted as part of the joint venture.
The case, Beasley Allen v. The Smith Law Firm et al., was filed in the U.S. District Court for the Middle District of Alabama, No. 24-cv-00582. Beasley Allen is represented by Robert Segall and David Martin of Copeland, Franco, Screws & Gill. Representation for The Smith Law Firm has not yet been announced.