U.S. Bankruptcy Judge Christopher Lopez told all sides in the Johnson & Johnson talc powder bankruptcy litigation Tuesday that he will “get a big pot of coffee” and spend the weekend in his office going through more than 11,500 disputed votes in order to get an accurate number of claimants supporting and opposing J&J’s $8.2 billion settlement plan.
New Jersey-based J&J, one of the largest pharmaceutical companies in the world, created a new Texas-headquartered subsidiary in September called Red River Talc and used a Texas law to transfer all its potential liabilities from tens of thousands of lawsuits filed against J&J by women who claim they have ovarian cancer because they used J&J’s talc powder.
J&J then filed for bankruptcy protection with a so-called prepackaged plan that included an $8.2 billion settlement for the women with causes of action against J&J. The company claimed that it had received approval from more than 83 percent of the women claimants in support of the settlement plan.
But lawyers at one firm, Alabama-based Beasley Allen, claim that J&J wrongly switched more than 11,000 votes from being against the plan to being in favor of it in a secret agreement with another plaintiff’s law firm acting as co-counsel for those 11,000 women.
“I just want to know if someone voted, how they voted and if their vote was switched,” Judge Lopez said. “There are going to be some very specific numbers, and you are going to tell me how they got there.”
Lawyers for all parties involved agree that those 11,000 votes will determine if J&J has the prerequisite number of votes favoring their settlement proposal, which would allow the Red River Talc bankruptcy to move forward and effectively end tens of thousands of ovarian cancer-related talc lawsuits and claims pending across the U.S. against J&J.
In a packed Houston courtroom Tuesday afternoon, lawyers on both sides presented arguments claiming that the other side should be forced to disclose their paperwork related to the voting and calculation, and each side argued that client-attorney privilege prevented them from being more transparent with their clients’ voting processes.
The two-and-a-half hour hearing focused on the Beasley Allen firm, which originally submitted about 12,000 votes from its clients in the litigation with more than 11,500 voting against it. But weeks later, the Smith Law Firm in Mississippi went behind Beasley Allen to rescind their earlier vote submission and claimed that they had the true legal authority to submit the votes for those same 12,000 women and that more than 11,000 had switched from being against the settlement plan to being in favor.
Lawyers for Beasley Allen accused J&J off paying off the Smith Law Firm and told Judge Lopez that the votes are invalid.
Judge Lopez said the decision comes down to two factors: Which law firm had the authority to submit the votes of the 12,000 women, and were their vote counts accurate?
Allison Brown, a lawyer for Skadden Arps, which represents J&J, demanded that Judge Lopez order Beasley Allen to turn over all documentation it has showing that they had the authority to collect and submit the votes for the 11,000 claimants.
“Beasley Allen either needs to provide the evidence or tell us that they don’t have it,” Brown argued.
Brown said that their firm surveyed some of the women who told them that “they have no recollection of Beasley Allen contacting them about the vote.”
Lawyers for the Coalition of Counsel for Justice, which opposes the forced bankruptcy settlement plan, say they have the documentation but that it includes client-attorney privileged information they cannot disclose.
“This is a shakedown,” Michael Winograd, a partner at Brown Rudnick and co-lead lawyer for a coalition of trial lawyers opposing the forced bankruptcy settlement plan. “J&J is targeting Beasley Allen because it is the most vocal opponent.”
Winograd and Beasley Allen partner Leigh O’Dell told Judge Lopez that they would be happy show him the evidence to prove their arguments.
“If there are any questions your honor has, we are happy to provide the documents for you to review in camera,” Winograd said.
Judge Lopez scolded both sides for attacking their opponents.
“Somebody is going to have to review these votes, and it might as well be me,” the judge said. “I will get a big pot of coffee and go through them all in my office.”
Judge Lopez ordered the parties to turn over documentation by Friday showing “which party had the authority to solicit the votes and how they solicited the votes.”
Regarding the ovarian cancer claimants, Judge Lopez said, “Their voice must be heard, and their votes must be accurate. I want to make sure we get this right.”
The case is In re Red River Talc, Southern District of Texas, No. 24-90505.