The talcum powder litigation is getting mighty expensive for Ridgeland attorney Allen Smith, Jr. after a federal judge ordered him to pay $75,000 to the Porter Malouf law firm last month.
Smith's law firm partnered with Porter Malouf and Alabama powerhouse law firm Beasley Allen in talcum powder litigation against Johnston & Johnston in 2014. Beasley Allen is attempting to settle the litigation for over $10 billion after rejecting an offer of $8 billion.
Smith bought out Porter Malouf's share of the litigation in 2021, assuming all responsibilities. One of those obligations was to reimburse Beasley Allen for Porter Malouf's share of the litigation expenses. The agreement stated Smith would defend Porter Malouf against any lawsuits filed against Porter Malouf while giving the right to obtain specific performance of the purchase agreement, including damages and attorney's fees.
Beasley Allen was responsible for 50% of the work and expenses while the two Ridgeland law firms handled the other 50%. Beasley Allen sued Smith and Porter Malouf in U.S. District Court (Middle District of Alabama) in 2024, claiming the two Ridgeland law firms failed to pay their share of litigation expenses. Porter Malouf in turn cross-claimed Smith, citing the purchase agreement. The Alabama complaint claims Beasley Allen fronted the vast majority of expenses in the talcum powder litigation. Beasley Allen states the two Ridgeland firms paid more than $15 million for litigation expenses since 2014 but have not paid any expenses since the third quarter of 2023. The Alabama law firm alleges the Ridgeland lawyers owe $735,584 in unpaid expenses.
Smith’s assertion that the specific performance claim is somehow subsumed, unnecessary, or moot because of the pending arbitration proceeding is equally without merit. First, Smith and Porter Malouf expressly agreed to carve-out from the scope of the arbitration agreement any claims between them for specific performance. And second, other than Smith’s hollow statement that it has agreed to indemnify and defend Porter Malouf, Smith presents nothing that substantiates that position or evidences its compliance with that obligation. In Porter Malouf’s cross-claims, Porter Malouf alleges that Smith has failed to indemnify and defend them, and they have provided evidence on that point in the form of $75,382.50 in legal fees incurred by Porter Malouf that Smith has yet to pay or reimburse. Simply put, Smith has not shown that specific performance is unnecessary or otherwise moot.
The Court held even under Mississippi law Porter Malouf would be entitled to specific performance of the purchase agreement:
(2) Defendant The Smith Law Firm, PLLC SHALL indemnify, hold harmless, and defend Porter Malouf, P.A. from and against the claims pleaded by Beasley, Allen, Crow, Methvin, Portis & Miles, P.C. in the Complaint, First Amended Complaint, and Second Amended Complaint including reimbursement of Porter Malouf, P.A. for all fees and expenses already incurred by Porter Malouf, P.A. in defense of Beasley, Allen, Crow, Methvin, Portis & Miles, P.C.’s Complaint, First Amended Complaint, and Second Amended Complaint and those incurred in the future on account of those claimsJudge Huffaker ordered Smith to pay up within thirty days or else Porter Malouf could apply to the Court for a judgement against Smith's law firm.
2 comments:
A Grifter
Oh no!
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