On February 11, we blogged about the New Jersey Appellate Court’s disqualification of a lead plaintiff firm (Beasley Allen) in the Johnson & Johnson New Jersey state court talc litigation because that firm had been canoodling with a lawyer who had formerly worked for J&J. Okay, “canoodling” is not exactly a technical, legal term, but we will soon get to what that means and why it matters. Recall that the New Jersey Appellate Court reversed the trial court’s ruling of no disqualification. Since that Appellate disqualification ruling, the plaintiff firm has been feverishly trying to stay and overturn that ruling. So far, the New Jersey Appellate Court and Supreme Court have done nothing to halt the disqualification.
Now things have gotten worse for the plaintiff firm, because last week the New Jersey federal court that is overseeing the multidistrict litigation (MDL) regarding J&J talc arrived at the same result. The disqualification ruling in In re Johnson & Johnson Talcum Powder Prods. Marketing, Sales Practices, and Prods. Liab. Litigation, 2026 WL 837332 (D. N.J. March 26, 2026), means that the plaintiff firm has now been disqualified in both the New Jersey state coordinated proceedings and the MDL. That is a big deal, and is a very bad result for the plaintiff firm. But it is the right result, and the federal court does a good job of explaining why that is so.
Just as with the state court qualification, the key issue is the status of a lawyer who had formerly worked for J&J and had been intimately involved with settlement strategy. That lawyer later set up Legacy Liability Solutions LLC, which purported to offer a solution to mass tort liabilities, such as those presented in the talc MDL. That lawyer remains active and authorized to practice law, but says that he does not practice law or act in the capacity of an attorney at Legacy. Does that matter? We shall see. [Spoiler alert: it does not matter.]
Legacy made a pitch to J&J to take ownership of talc liabilities and fund current and future talc claims. It would be a form of settlement. Now if Legacy had merely made such a proposal to J&J, there might not be much of a controversy. But the problem is that Legacy was walking on both sides of the street. Legacy engaged in discussions with the plaintiff talc firm regarding settlement proposals to present to J&J. The topics focused on such things as a term sheet and claims administration. That is the “canoodling,” and that canoodling went to the heart of settlement negotiations. That canoodling is part of a zero-sum game where one side’s benefit is the other side’s detriment. What’s the best evidence of that? The MDL Plaintiff Steering Committee (PSC) asserted the mediation privilege over its discussions with Legacy. That is, the PSC did not want J&J to know what Legacy and the PSC were discussing. Why do you suppose that is? As a plaintiff lawyer once told us during settlement negotiations long ago, “I was born at night, but it wasn’t last night.”
Nevertheless, the turncoat lawyer (at this point that does not seem like an unfair or overly dramatic characterization) denied that he had shared any J&J confidences with the plaintiff lawyers. But the evidence was clear that it would be “impossible” for the turncoat lawyer to separate out what he learned from his prior representation of J&J. One thinks of the current Apple TV drama Severance, where people’s minds are wholly separated between their work and home lives, each half knowing nothing of the other. (Yes, there are days when that would seem to be a splendid relief.) That scenario, of course, is science fiction. In any event, the conflicted lawyer admitted that he would not have been able to do what he was doing if he was acting as a lawyer in his dealings with the plaintiff lawyers. That admission was inescapable in light of Rule of Professional Conduct (RPC) 1.9(a)(“A lawyer who has represented a client in a matter shall not thereafter represent another client in the same or a substantially related matter in which that client’s interests are materially adverse to the interests of the former client unless the former client gives informed consent confirmed in writing.”). As with the state court disqualification decision, the issue turns on the application of RPC 5.3(c)(1), which calls for disqualification when a lawyer employs, retains, “or associates with a nonlawyer” who engages in conduct that, if he were a lawyer, would violate the RPC, and the lawyer ordered or “ratified” the nonlawyer’s conduct.
Beasley argued that the state appellate court went astray by overinterpreting the word “associates.” But the federal court had little difficulty consulting authorities such as Black’s Law Dictionary, the Oxford English Dictionary, and good old Merriam-Webster to determine that “associates” covered the relationship between the turncoat lawyer and the plaintiff lawyers to extract a settlement from J&J. RPC 5.3 applies to “associates” such as document vendors who are doing a good deal less substantive work than the turncoat lawyer was performing in this case. The plaintiff firm leaned hard on the fact that it never formally employed the turncoat lawyer, but that means precisely nothing under RPC 5.3. As the federal court reasoned, “By stating ‘or associates with,’ the plain language and context of the Rule lead to the unremarkable conclusion that RPC 5.3 does not require the lawyer to formally employ or retain the nonlawyer.” Moreover, Beasley unquestionably “ratified” the work of the turncoat lawyer by seeking to “use the fruits” of his efforts in this MDL. Legacy communicated with the mediators as intended by Beasley. They even coordinated to the point of authoring articles on mass tort strategy the same day and jointly appearing at a conference. As the court concluded, “Notably, this collaboration was to such an extent that Beasley Allen shared confidential privileged material with Mr. Conlan, deeming him sufficiently associated so as to maintain a privilege over their communications.”
The final issue for the federal court was the balancing of interests. Predictably, Beasley argued that its disqualification would harm its clients. There are, to be sure, many thousands of clients in the MDL. But not all were represented by Beasley, and the other plaintiff law firms appear to be managing just fine without associating with J&J’s former attorneys. In any event, the court did not buy Beasley’s implicit argument that it was too big to fail. Counterbalancing the risks of delay and disruption was “the risk of maintaining the integrity of these proceedings.” Public trust in judicial proceedings is important – more important than the fortunes of an overreaching plaintiff law firm. “Serious ethical violations warrant serious consequences.” The disqualification here was appropriate.