Risk Update

Disqualification Hearing Conflicts — Talc Testimony Gets Heated

‘I Was Kind of Dumbfounded’: J&J Lawyers Testify in Talc Disqualification Hearing” —

  • “A senior in-house attorney for Johnson & Johnson told a pair of judges on Monday that an alliance between a former member of his legal team and talc plaintiffs’ attorney Andy Birchfield was the ‘most egregious breach of ethical obligations I have ever heard of, ever seen.'”
  • “At an evidentiary hearing, Erik Haas, Johnson & Johnson’s worldwide vice president of litigation, told Steve Brody, a partner at O’Melveny & Myers in Washington, D.C., that he was shocked when his former outside counsel, John Conlan, teamed up with Birchfield, of Montgomery, Alabama’s Beasley Allen, to propose settling the talc litigation for $19 billion.”
  • “‘We were utterly shocked and appalled that our former counsel was conferring with our adversary,’ Haas said, ‘by proposing an alternative transaction based upon the same matter and same issues he had represented us extensively for 21 months.'”
  • “But he and an outside lawyer for Johnson & Johnson, Jim Murdica, of Barnes & Thornburg in Los Angeles, had more recent revelations: they had no idea Conlan began working with Birchfield as early as April 2023, about six months before they originally learned about the alliance, until plaintiffs’ lawyers submitted a privilege log a few weeks ago in the multidistrict litigation describing confidential communications between them.”
  • “‘I was kind of dumbfounded—and I was in close contact with the mediators’” Murdica testified on Monday. ‘I was extremely concerned. In my career, I’ve never seen anything like that.'”
  • “Jeffrey Pollock, a partner at Fox Rothschild in Princeton, New Jersey, who represents Birchfield, objected to testimony about the communications in the privilege logs, calling it ‘rank speculation.'”
  • “The hearing, before Atlantic County Superior Court Judge John Porto and U.S. Magistrate Judge Rukhsanah Singh, both in New Jersey, comes after Johnson & Johnson filed motions to disqualify Birchfield and his firm from leadership of the talc litigation. Beasley Allen principal Leigh O’Dell is co-lead plaintiffs’ counsel in the talc MDL.”
  • “The disqualification motions allege Birchfield partnered with Conlan, who was a partner at Faegre Drinker Biddle & Reath until 2022, to push a talc settlement that was more than double the amount Johnson & Johnson offered as part of the second bankruptcy of its subsidiary, LTL Management.”
  • “Birchfield’s lawyer, Pollock, has called the allegations ‘smear tactics’ and an unprofessional ‘locker-room brawl.'”
  • “Monday’s hearing continued to be contentious, with objections back and forth. ‘Listen to my question for once,’ Pollock told Haas on cross-examination. ‘The process is not the Erik Haas show.'”
  • “Both Porto, the judge in the talc multicounty litigation in New Jersey state courts, and Singh, who is overseeing the talc multidistrict litigation in the U.S. District Court of New Jersey, found that more evidence was needed.”
  • “Haas, on direct examination, said he was ‘intimately familiar’ with Conlan’s work on the Johnson & Johnson talc litigation, calling him a ‘central figure in strategic decision making in connection with this team.'”
  • “‘We would have weekly calls where we were collectively litigating and adjudicating the talc litigation,’ he said. ‘From the very first conversation I had and throughout the entire time Mr. Conlan was representing Johnson & Johnson, we had repeated discussions—many, many discussions—over whether and to what extent the cases should be resolved in bankruptcy or completely outside bankruptcy.'”
  • “He said Conlan, who now runs Legacy Liability Solutions, approached him about a proposal to resolve the talc litigation, but he didn’t know at the time Birchfield was working with him. The idea was for Legacy to administer funds to settle talc claims, absorbing LTL and other entities with talc liabilities. Johnson & Johnson turned him down, citing its auditor’s concerns.”
  • “Conlan’s Oct. 18 letter was the first time he revealed working with Birchfield—that is, until the privilege logs came up a few weeks ago showing a longer relationship between the two of them.”
  • “‘We now know it’s even more egregious, because it wasn’t the first time,’ Haas said.”
  • “Pollock attempted to downplay the accusations that his client was pushing for a settlement with a dollar figure that would provide more legal fees for him. He brought up two experts for Johnson & Johnson in its bankruptcy that estimated the cost to resolve the talc litigation would be $11 billion to $21 billion. He also questioned whether Conlan had breached any ethics.”
  • “‘You accused him of being a side-switching lawyer,’ Pollock told Haas. ‘How can he be a side-switching lawyer if he’s not representing a client in the matter other than himself?’ Haas explained that Conlan is working with Johnson & Johnson’s adversary on the same matters ‘That is a side-switching lawyer,’ he said. Porto previously ordered that both Conlan and Birchfield must testify at the hearing. On Monday afternoon, he said he would schedule another day of the hearing at a later date.”