“Johnson & Johnson Gets Beasley Allen Tossed From Talc Cases” —

• “Beasley Allen, one of the leading trial firms taking on Johnson & Johnson in the sprawling multi-district talc litigation, has been disqualified by a federal court.”
• “Thursday’s ruling from a New Jersey federal magistrate judge removes the Alabama-based firm from the litigation, in which customers claim J&J talc products are responsible for their ovarian cancer.”
• “The decision sprang from a request from J&J after Beasley Allen met with a former lawyer for the medical products company in a mediation which the company said was tantamount to a lawyer switching sides. Beasley Allen was disqualified from hundreds of New Jersey-based state court cases in February.”
• “‘Disqualification is a remedy courts are not quick to administer,’ US District Court for the District of New Jersey Magistrate Judge Rukhsanah L. Singh said in her opinion. ‘Yet, there are moments when it is necessary when balancing the equities and interests. This is such a moment.’”
• “Singh’s ruling, like the New Jersey state decision, found that Beasley Allen associated with James Conlan, a former J&J attorney that worked on the company’s efforts to resolve the talc litigation through bankrupcty.”
• “The company attempted multiple times to separate itself from these liabilities, but had those efforts rejected. Beasley Allen, one of the firms leading the plaintiffs committee steering the roughly 70,000 talc cases, opposed bankruptcy attempts and collaborated with Conlan in an effort to find an alternative route.”
• “The idea: a consulting firm Conlan ran could take on the liabilities and several billion dollars to fight the claims. J&J rejected the strategy from its former lawyer and sought to have Beasley Allen disqualified for ‘associating’ with the former J&J lawyer who was involved in high-level confidential discussions on these matters.”
• “‘Indeed, there are many lawyers representing thousands of Plaintiffs in this MDL who have not generated the concerns Beasley Allen has,’ said Singh. ‘All Plaintiffs involved in this matter deserve to be represented by counsel who take seriously their ethical obligations and who are above reproach.’”
• “The federal ruling comes as bellwether cases are set to begin this year across the country. Singh said that Beasley Allen’s clients have joint representation, so other lawyers will be able to carry their cases forward.”
• “‘All involved (both past and present) have expended substantial time and effort to manage this unwieldy and beleagured matter,’ Singh said. ‘To permit counsel—who has now been disqualified in the NJ MCL—to remain here threatens to make those endeavors a futility by tainting proceedings going forward.’”
• “J&J worldwide vice president of litigation Erik Haas criticized Beasley Allen’s role in the years-long litigation and praised the ruling. ‘The Court found that Beasley Allen improperly collaborated with Johnson & Johnson’s former lawyer—conduct that strikes at the very core of the attorney‑client relationship and violates the most basic, bright‑line ethical rules governing the legal profession,’ he said in a statement. ‘No litigant should be forced to defend itself against opponents who enlist former defense counsel, secretly confer on litigation strategy, and misuse privileged access for their own gain.’”
• “Beasley Allen is fighting to stay in the case. They’re appealing the federal ruling, ‘and we are confident in our position,’ firm managing partner Tom Methvin said in a statement.”
• “The firm has also filed an appeal of the state decision in the New Jersey Supreme Court seeking a lifeline to save the roughly 50,000 hours it’s invested in roughly 11,500 cases across the country.”

“Conflict of Interest Does Not Automatically Extinguish Attorney-Client Privilege” —

• “Summary: Even if an attorney would be disqualified from representing a client due to a conflict of interest, a court may not compel the disclosure of privileged communications because the conflict of interest does not automatically eliminate the attorney‑client privilege.”
• “Columbia University sued Gen Digital (Norton) seeking, among other claims, correction of inventorship of Norton’s U.S. Patent No. 8,549,643 to identify two Columbia professors as the true inventors or at least joint inventors. After jury trial, the district court entered judgment correcting inventorship to add the Columbia professors as joint inventors. The district court also awarded Columbia enhanced damages for infringement and attorneys’ fees.”
• “In connection with the inventorship issue, Columbia argued that Norton’s counsel, Quinn Emanuel, improperly represented both Norton and a former Norton employee, Dr. Dacier, and improperly prevented Dacier from testifying at trial in support of Columbia’s inventorship claims. Norton originally identified Dacier as a fact witness regarding the inventorship issue. But during a years-long stay in the litigation, Dacier met with one of the Columbia professors at a professional event and expressed regret for Norton’s conduct regarding the inventorship issue. Columbia then contacted Dacier, who said he was unrepresented, to have him testify in support of Columbia’s inventorship claims. Norton then reconfirmed that Quinn still represented Dacier. Before trial, Quinn represented that Dacier had moved to Saudi Arabia and would not attend the trial.”
• “During motions in limine, the district court sua sponte ruled that Quinn had a conflict of interest in representing Dacier based on his expressed regret over Norton’s conduct. The district court ruled the conflict ‘voided’ the retainer agreement and ordered Quinn to disclose information obtained from Dacier during the conflict period. Quinn refused and asserted attorney-client privilege. After trial, Columbia continued seeking Quinn’s compliance with the disclosure order to support an award for enhanced damages or attorneys’ fees. The district court held Quinn in civil contempt and imposed a negative‑inference sanction for purposes of enhanced damages and attorneys’ fees in the related infringement dispute.”
• “The Federal Circuit reversed the disclosure order and the order holding Quinn in contempt. The court held that a conflict does not automatically terminate the attorney‑client relationship or vitiate attorney-client privilege, making the disclosure order invalid. Because civil contempt requires violation of a valid decree, the invalid disclosure order could not support contempt sanctions. As a result, the court also set aside the district court’s award of enhanced damages and attorneys’ fees, which were based in part on the contempt sanctions.”

Measure HB5487 was approved by a House judiciary committee last week. Context: “Illinois lawmakers move to limit investor influence as law firms, private equity edge closer” —

• “Legislation… would sharply curb private-equity involvement with law firms, erecting new state-level guardrails just as investors and lawyers nationwide are increasingly exploring back‑office partnerships and taking advantage of loosened regulations on law firm ownership in Arizona.”
• “Investors and other non-lawyers are broadly prohibited from owning direct stakes in U.S. law firms. One partial workaround that’s recently gained attention is the management services organization, or MSO: a separate company that runs a law firm’s business functions such as technology, HR and operations, collecting service fees without receiving a share of its profits.”
• “The matching Illinois House, and Senate bills, introduced on February 6, would bar private equity groups, hedge funds and MSOs they control from interfering with ‘the professional judgment’ of lawyers; from owning or determining the content of client records; from hiring or firing attorneys or staff based on competency or proficiency; or from setting those proficiency parameters.”
• “The bills would also prohibit outside investors from charging any fee ‘directly or indirectly’ tied to a firm’s fees, revenue or profits and from imposing non-compete agreements and non-disparagement agreements on lawyers and staff.”
• “They would also limit Illinois lawyers’ ability to share fees with out-of-state ‘alternative business structures’ like those allowed in Arizona unless the Illinois attorney is licensed where the ABS is approved, and the fees are for work performed in that state.”
  Violations could carry steep consequences: attorney discipline, statutory damages of $10,000 per violation, or treble actual damages, plus fees and injunctive relief.”
• “Arizona, meanwhile, has licensed more than 125 entities to provide legal services through its alternative business structure program, making it the most permissive jurisdiction for non-lawyer ownership of legal service providers and a key testing ground for non-lawyer or investor-backed law firms. Last year, KPMG under Arizona’s program became the first of the Big Four accounting firms to launch an affiliated law firm.”
• “Some legal ethics practitioners argue the Illinois bills may test constitutional boundaries. Holland & Knight partners Trisha Rich and Joshua Porte, who have advised on MSO deals, said in a client alert that the legislation may intrude on the Illinois Supreme Court’s exclusive authority over attorney regulation.”
• “Austin Maloney, a Hunton Andrews Kurth partner who advises MSO investors, said the proposal is ‘somewhere between a nothing-burger and problematic,’ pointing particularly to the language barring ‘indirect’ ties between law firm and MSO fees. Because every vendor relationship ultimately depends on firm revenue, ‘everything is indirectly tied,’ he said.”

“Big Law Cuts Back on Investor-Funded Lawsuits as Scrutiny Grows” —

• “Big Law is backing away from investor-funded lawsuits, as the practice adds potential complications at firms and comes under attack on Capitol Hill. The firms also took fewer investor dollars that backed portfolios of cases, possibly because such groups of lawsuits could create tension between attorneys handling the various suits, said Charles Agee, Westfleet’s chief executive officer. ‘Partner A feels that his really good, strong, high-value case is being weighed down by Partner B’s weaker case,’ he said.”
• “The 200 largest US law firms accounted for just under a quarter of investors’ new case commitments as of June 30 2025, down from 37% in the same period in the previous year, according to a Westfleet Advisors report released Wednesday.”
• “The pullback reverses the trend in recent years that saw the biggest firms grow comfortable with third-party investments for the cost of lawsuits, a practice known as litigation finance. The investors in return for financing get a piece of any successful court awards or settlements.”
• “Litigation finance grew to $16.1 billion of assets under management in the year ending mid-2024, an increase from less than $10 billion five years earlier, according to Westfleet. The money flow drew the ire of businesses who were alarmed by the prospect of frivolous lawsuits. Some US lawmakers last year pushed aggressively—though ultimately unsuccessfully—for legislation to curtail the practice.”
• “‘It definitely had an impact,’ said Agee, whose firm advises funders, law firms, and clients on deals and transactions. ‘We were advising on transactions that should have closed in May or June of last year, but because of all the uncertainty wound up closing in July, August.’”