A Texas bankruptcy case is on the verge of paying out billions to cancer patients and others who have health claims relating to talc, which is used in products like makeup and baby powder.

But on the eve of final approval, there is a frantic effort by a set of trial lawyers to hold up the deal, putting the money for countless cancer patients and families in limbo.

This marks a stark reminder of a recurring consumer protection problem that demands real attention: the way that trial lawyers are wrecking the bankruptcy system and putting themselves in the driver’s seat at the expense of all the other people who rely on that system.

The case in question is often referred to as Red River and involves the mega-corporation Johnson & Johnson and legal claims relating to talc.

Johnson & Johnson, of course, denies virtually all wrongdoing. And bankruptcy experts mostly discuss the case because it features a legal maneuver called the Texas Two-Step that is controversial in the bankruptcy world. 

But from a consumer protection perspective, the case is most notable because Johnson & Johnson has agreed to put $8 billion on the table to pay out and an overwhelming majority of those who have pressed claims against Johnson & Johnson over talc have voted in favor of unlocking that money—yet there is a last-minute attempt to stop the deal, challenge the votes in favor of it, and delay the payments indefinitely.

At the center of this last-minute attempt to hold up the $8 billion payout to cancer patients and families is the Alabama law firm known as Beasley Allen, which is seeking to fight the deal by contesting the votes consumers sent in, thereby holding up the settlement and gaining an advantage for itself.  This is similar to the maneuver that played out in the massive Boy Scouts of America bankruptcy over the past few years, where trial lawyers tried to jam up that multi-billion-dollar settlement and sway the voting process in their favor in order to obtain a special payout, thereby diluting the payout to the most deserving victims of abuse.

The Boy Scouts of America bankruptcy was singled out by former head of the United States Trustee Office Lawrence Friedman and the late, great constitutional litigator David Rivkin in the pages of The Wall Street Journal as a stark example of how trial lawyers had captured the bankruptcy system and turned it into a machine for their own purposes instead of a system designed to help victims and honestly divide limited money. Now, that same dynamic is playing out again, this time in Texas and with cancer patients in the bullseye and the lawyers at Beasley Allen sitting center stage.

The lawyers at Beasley Allen have a habit of showing up when billions are on the line, whether that is the massive opioid litigation of the last few years or the Deepwater Horizon litigation from the last decade.  And their reputation isn’t as peacemakers but rather as the firm that stomps its foot, slams the table, and is seen as favoring more lawsuits over settling and getting money into consumers’ pockets. 

With this track record, and given that the firm has a key role in ongoing talc litigation that would end with the finalization of the Red River settlement’s $8 billion payout, it almost feels apt to see Beasley Allen as the ones trying to stand athwart this $8 billion talc deal and yelling “stop” in the face of victims, other lawyers (including their former co-counsel), and Johnson & Johnson itself.

But just because it is unsurprising to see Beasley Allen once again in the news trying to stop a major payout to consumers doesn’t mean that it is OK.  And it doesn’t mean that there aren’t real costs to consumers, and our legal system, from this kind of behavior. 

One of the biggest problems from our consumer protection system—and, in recent years, our bankruptcy system—is how often consumers and their interests come at the end of the stack of considerations, while officials and trial lawyers jockey to put their own interests first or grandstand for the cameras. As a consumer advocate, I speak often about the shameful behavior of trial lawyers and public officials in this regard.

What Beasley Allen is doing in the Red River bankruptcy settlement is another reminder of how consumers are being lost in the shuffle of these major bankruptcies and how it is high time that we find a way to shut this type of behavior down, rein in law firms like Beasley Allen, and make it easier to get money to victims and consumers, no matter what some trial lawyers throw into the mix.

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