Or The War of the Allens
"And there was war in heaven: Michael and his angels fought against the dragon; and the dragon fought and his angels", Revelation 12:7
What is it about $8 billion that brings out the worst in lawyers? A holy war has broken out between Ridgeland lawyer Allen Smith, Jr. and the Alabama behemoth law firm of Beasley Allen in federal court over Johnson & Johnson talcum powder litigation. The lawyers were partners in the fight against J&J but things went south after Beasley Allen accused the Ridgeland attorney of cutting a side deal because of financial distress.
Ridgeland attorney Allen Smith, Jr. has been pursuing claims against Johnson & Johnson for clients allegedly injured by talc-based baby powder and won the first settlement in 2013. The complaint alleges Smith contacted Beasley Allen to see if the two firms could join forces in pursuing talcum powder litigation.
Meetings were held and agreements were made. Smith, Beasley Allen, and Ridgeland law firm Porter Malouf agreed to jointly pursue the talcum powder litigation against Johnson & Johnson in January 2014. The complaint claims the parties agreed "orally" Beasley Allen would handle all negotiations with Johnson & Johnson (Pay attention to that allegation as it will be important later.). The agreement also stated only Beasley Allen could contact the clients.
Beasley Allen was responsible for 50% of the work and expenses while the two Ridgeland law firms handled the other 50%. Beasley Allen claims it fronted the vast majority of the expenses in the talcum powder litigation. The complaint states the two Ridgeland firms paid more than $15 million to Beasley Allen 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.
Alabama law firm Beasley, Allen, Crow, Methvin, Portis, & Miles sued Allen Smith, his law firm, and the Porter Malouf law firm on September 10, 2024 in U.S. District Court in Alabama. Beasley Allen filed an amended complaint on March 12, 2025.
The complaint starts dishing the dirt on the sixth page:
24. As the years passed and expenses mounted, Defendants Smith and Smith Law appear to have encountered financial difficulties in complying with their obligation to share expenses. After learning that Defendants Smith and Smith Law had borrowed litigation expense money from a litigation funding lender and then after learning more about the extent of Defendants Smith and Smith Law’s financial distress, Beasley Allen, at Defendant Smith’s request for assistance, agreed to meet with the lenders for Defendants Smith and Smith Law in an effort to work constructively towards a way to resolve their financial problems.
25. It was in connection with those discussions with the lenders for Defendants Smith and Smith Law that, in the Fall of 2023, Beasley Allen learned for the first time that Defendants Smith and Smith Law had bought out Porter & Malouf’s interest in the JV Agreement two years earlier, materially changing the nature of the agreement. 26. In January of 2024, Beasley Allen learned for the first time that Defendants Smith and Smith Law had not in fact transferred all talcum powder clients to Beasley Allen as required by the JV Agreement but had instead kept a substantial number of such clients a secret and did not disclose them to Beasley Allen.27. The financial problems of Defendants Smith and Smith Law have now grown to the point that they are actively undercutting Beasley Allen in settlement negotiations with Johnson & Johnson in what appears to be an effort to get a settlement that would alleviate their financial problems, but which would not in Beasley Allen’s opinion be in the best interest of the jointly represented clients. In a recent filing by Johnson & Johnson, it alleges that Defendant Smith Law has litigation funding loans perhaps as high as $240 million.
Smith called the complaint "baseless" and said he was just trying to get the best deal for his clients.
While the squabbling continued among the lawyers, the fight against Johnson & Johnson continued. J&J tried to file bankruptcy in May 2024 after two previous failed attempts. However, 75% of the talc powder claimants would have to approve the bankruptcy plan. 11,434 voted against bankruptcy. J&J offered to settle the litigation for $8 billion (paid over 25 years) but Beasley Allen rejected the offer, claiming its clients deserved more as they suffered from cancer. Negotiations continued but things got squirrelly. The complaint alleges a little bit of backstabbing took place:
Beasley Allen has since learned that Defendants Allen Smith and Smith Law had in fact been engaged in secret “parallel” negotiations with Johnson & Johnson since at least 2022.
37. Sometime in late August, a Memorandum of Understanding was executed between Johnson & Johnson and the Smith Law Firm (the “Smith MOU”). The effective date of the Smith MOU was August 30, 2024.
The plot thickened as Smith allegedly told J&J he could get at least "95%" of his clients to switch their votes in favor of bankruptcy. In exchange for the Smith's help, J&J would (allegedly) stop trying to dig up the dirt on Smith's litigation financing. J&J also offered an additional $1 billion to settle the case to Smith.
There was just one problem - Smith did not have the contact information for all clients. The complaint claims Smith "demanded" his partner give him the contact information so they could advise them to change their votes. Beasley Allen pointed out the agreement said it is "responsible for all client contact."
Smith sent letters to the jointly represented clients promoting his "side deal" and urging them to vote for the bankruptcy plan. If a client abstained from voting, Smith allegedly said he would exercise his power of attorney to cast their vote for bankruptcy. However, Beasley Allen claims Smith did not disclose to the clients "that Smith and Smith Law was currently in default on significant litigation," thus preventing clients from knowing whether Smith recommended changing their votes because of his alleged financial problems. In other words, Beasley Allen accused Smith of pressuring his clients to take what it thought was a low offer without telling them he was in (alleged) financial difficulty.
Smith submitted a master ballot on behalf of the clients that changed their votes in favor of the J&J bankruptcy plan.
The complaint charges the defendants with breach of contract, fraudulent suppression, and misrepresentation. Beasley Allen seeks a jury trial and damages over $75,000.
Smith promptly filed a motion to dismiss on March 26, 2025, claiming the complaint failed to state a claim against him. The attorney argued the agreement did not "impose on him the duties alleged."
The Ridgeland attorney also tried to get a protective order but his efforts went for naught. Beasley Allen subpoenaed records from Smith's lenders. U.S. District Judge Jerusha Adams summarized the controversy:
Defendants seek a protective order precluding non-parties Ellington Management Group; Intermediate Capital Group, Inc.; Fortress Investment Group, LLC; and Deer Finance, LLC from responding to a subpoena served by Plaintiff. The subpoenas issued to each non-party request the same documents concerning litigation financing provided by the non-parties to Defendants.
Judge Adams said the subpoenaed information are "directly relevant" to the case as Beasley Allen claims fraudulent misrepresentation and breach of fiduciary duty. The law firm posits Allen tried to negotiate a settlement that short-changed the clients as well as Beasley Allen due to his alleged financial distress. Judge Jones ruled against Smith and held Beasley Allen was entitled to the records subpoenaed.
Porter Malouf filed a cross-claim against Smith on May 16, 2025. Smith bought the law firm's rights to the litigation in May 2021 and assumed all Porter Malouf obligations. Porter Malouf accused Smith of breach of contract by failing its share of the expenses as well as fraudulent misrepresentation. The cross-claim charges Smith signed up talcum powder clients outside of their agreement. Thus, Porter Malouf has an interest in those clients. Smith denied it all in his answer .
Smith also filed a defamation lawsuit in U.S. District Court in Mississippi against Beasley Allen on September 19, 2024. U.S. District Judge Carlton Reeves transferred the case to Alabama federal court.
Beasley Allen's second amended complaint is due today.
Posted below: First Amended Complaint, motion to dismiss, protective order motion, cross-claim, answer to cross-claim, defamation lawsuit.
30 comments:
And never forget Allen Smith and his "secretary" Phyllis' involvement in the UM recruitment scandal. Phyllis worked for Dennis Sweet for years. I put secretary in quotation marks because Phyllis' secretarial skills were pretty much nonexistent. Secretaries kinda need to be literate.
I disagree. A good secretary need only be good at finding certain loose things under her boss’s desks. An administrative assistant needs to be literate and have good organizational skills.
"what appears to be an effort to get a settlement that would alleviate their financial problems, but which would not in Beasley Allen’s opinion be in the best interest of the jointly represented clients."
And that's the problem with borrowing money against case inventories.
It's also the problem with loaning clients money against their cases, which is strictly limited in Mississippi, but it's rampant in Louisiana and Texas.
On many occasions I've had to explain that to clients, who expected their lawyer to pay all of their personal bills and medical expenses. I once lost a pretty big case to an attorney from Houston who bought off the client with an envelope of cash, as an "advance" against his eventual settlement.
That's why I chose to practice in Mississippi. For those who bitch about the MS Bar being too lenient, you've just never practiced in southeast Louisiana or Houston.
Plantiff lawyers are all this way, backstabbing each other (Dickey Scruggs?). Can we not have an honest legal climate instead of a dishonest judge and attorneys that are their buddies and find in their favor? How would you like to be rear ended at a stop sign and the other party be buddies with the judge and find against you?
To follow up on what 11:39 said, over 25 years ago a very well respected plaintiff attorney in a county bordering Louisiana told me they couldn’t compete with the Louisiana lawyers for cases because the Louisiana lawyers advanced clients money.
11:56, If you were rear-ended while stopped at a stop sign, and if there was insurance coverage, the case would likely never have to go to trial.
And if it did go to trial, it would almost certainly be decided by a jury, not a judge.
what was the UM recruitment scandal
Smith was giving money and gifts to athletes being recruited by Ole Miss in violation of NCAA rules. Phyllis was the bag man. Both have been banned from setting foot on campus.
A billion here, a billion there, and pretty soon we are talking real money.
I find it very difficult to find sympathy for any of the parties involved as they vie for the distinction of being labeled The Greediest Attorney. Hey! Maybe that could be a new reality series. Attorneys compete to see which one can successfully #$%& the others out of the most money.
A slap fight between three plaintiff firms, what could possibly go wrong. All of the discovery needs to be made public - it will probably make us forget ole Dicky Scruggs & Joey Langston.
Allen Smith might not be in financial distress if he had not "allegedly" attempted to buy Ole Miss a few good recruiting classes. I am sure that Leo Lewis burned thru those bags of cash long ago.
His reputation was hardly spotless even before all this occurred.
He lives large.
Leo Lewis says hello!
Dick Scruggs never stabbed anyone in the back. In fact, he was overly generous with other attorneys who merely invested in litigation that Scruggs initiated.
@12:02
A “well respected plaintiff (sic) attorney.” Outside of his fellow ambulance-chasing vermin and the class of low-end perpetual victims who enrich his ilk, I doubt many productive citizens would have an ounce of “respect” for him.
This spat, like the Scruggs debacle two decades ago, shows that there isn’t even honor among thieves when it comes to these types of greedy bottom-feeders. They can’t even be content to divide their stolen millions equitably without backstabbing each other.
No group lives up to their reputation like the “respected” barristers of the plaintiffs bar.
Scruggs’ bribery case was in litigation wherein his partner in the asbestos cases sued him because Dickie refused to pay William Roberts “The Wife Of Bath” Wilson as per the partnership agreement.
Can some summarize this for the non-legal minds…
Dickie Scrubbs never stabbed anyone in the back???? Surely you jext, or you are Zach! Dickie refused to pay several of his associated attorneys or partners over the years (Wm Roberts being the final winner, but there were others). AND, he stabbed the entire judicial system in the back along with those of us that believe in this part of our society with his attempts (and probably some unreported successes) to buy a Judge all in an effort to continue lining his pockets.
He got kicked out of law school his first year for cheating. They let him back in the next year.
to 5:00 am ....telll us , what insurance company do you work for?
@4:49 you are correct.
Greed.
Can some one summarize.
The smartest move in the whole movie was this:
"U.S. District Judge Carlton Reeves transferred the case to Alabama federal court."
How many of us would love to be able to shift our problems to some else's ownership?
<a href="https://www.youtube.com/watch?v=WFob6TBIj8k>Ho hum</a>
I thought this was that same guy from my law school class, but glad someone confirmed…. None of this is shocking in the least.
How to you pass character and fitness if you've been expelled for cheating? That would seem to be a no-brainer.
6:05 yes, same guy. Dad was a surgeon and Carol West (RIP) nailed him for completely plagarizing a a paper from the Yale Law School online database in its early infancy. Bought his way back in after a 1 year sit down.
So Patrick and Tim are suing him? I thought they were best friends.
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