HOUSTON - Law firms that want Johnson & Johnson's massive talc bankruptcy plan approved object to the nature of a probe by lawyers who want it rejected, as the fight for votes continues ahead of a key hearing.
J&J is trying to use a spinoff company, Red River Talc, to absorb the company's liabilities in cases alleging its Baby Powder caused ovarian cancer in tens of thousands of individuals. Rather than fight each case individually in various courts nationwide, J&J hopes to streamline the process through bankruptcy.
If approved, ovarian cancer claims will be resolved through a bankruptcy trust in Houston federal court. Supporters say this will pay claimants quicker and easier, but law firms opposed say their clients won't get their day in court and lose the potential for a blockbuster, multimillion-dollar verdict from a jury.
Key to the process is the approval of the actual claimants. Court records show 83% approve it, clearing a threshold by eight percentage points, but the firms opposing the settlement say that figure is false.
The Coalition of Counsel for Justice for Talc Claimants is a group of three firms including Beasley Allen hoping to gain enough votes to block the plan. Many firms notified the court that their clients changed their minds after J&J vowed to pump an extra $1 billion into the settlement, which would now be worth more than $9 billion.
The coalition plans to depose lawyers at firms whose clients are on board with the settlement. Those firms fear the depositions are fishing expeditions with the goal of proving some nefarious methods led to their claimants deciding to accept the settlement.
On Jan. 30, the Ad Hoc Committee - 18 firms supporting the settlement - filed a motion to limit the scope and duration of depositions of 11 lawyers at some of those firms. At a hearing later this month, those lawyers will testify as to their clients' wishes, with short declarations forming the basis of their testimony.
"Despite being advised of the limited scope of these declarations, opposing counsel has refused to agree to reasonable limitations on deposition length and scope," the Ad Hoc Committee says.
The coalition and Traveler's Insurance want depositions to run up to three-and-a-half hours, with the AHC seeking a 90-minute time limit. The AHC seeks a protective order from Judge Christopher Lopez imposing its proposed time limit and limiting questions to what is in the declarations submitted by the AHC firms.
"Allowing half-day depositions, as proposed by opposing counsel, of direct testimony declarations that are less than five pages is unnecessary, disproportionate to the issues at stake, would impose an undue burden on the witnesses, and simply makes no common sense, especially with depositions and cross examination volunteered to opposing counsel to protect their clients' rights to due process," the AHC wrote.
The coalition and insurers are aligned in their goal of getting the settlement rejected. Like J&J, Allstate says there is no evidence Baby Powder is causing these cancers. On that, plaintiffs lawyers disagree.
The coalition filed 89 pages of gripes on Jan. 24, finding fault with nearly every aspect of the plan. It says the bankruptcy system can't be used like this, nonconsensual releases are not permissible and all claimants are treated equally no matter what type of cancer they allege.
A 75% approval rate is needed. Data shows that has been met, but the coalition says 11,000 votes were switched to yes unfairly. Beasley Allen, Golomb Legal of Philadelphia and Levin, Sedran & Berman of Philadelphia make up the coalition and believe they can do better for their clients in court.
Baby Powder litigation exploded when Mark Lanier scored a $4 billion-plus verdict in St. Louis, later reduced to $2.1 billion and affirmed by the U.S. Supreme Court. It created a frenzy for clients that led to massive attorney advertising spending.
J&J has contended there was no asbestos in its talc, though plaintiffs have found highly paid experts willing to say otherwise. Trials become battles-of-the-experts, leading to split verdicts. One jury in Pittsburgh was so confused by the process it tried to hit J&J with $22 million in punitive damages despite finding it wasn't liable for the plaintiff's illness.