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Court documents open despite secrecy agreement

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NEWS MEDIA UPDATE   ·   NEW JERSEY   ·   Secret Courts   ·   May 12, 2006

Court documents open despite secrecy agreement

  • Documents filed in court cannot be sealed merely because the parties previously agreed to keep them confidential, a state intermediate court ruled in a case involving allegations of discrimination, fraud and bribery.

May 12, 2006  ·   The public’s right to court documents trumps a confidentiality agreement between parties in a lawsuit, the Superior Court of New Jersey Appellate Division decided Tuesday, ruling that a trial court erroneously sealed virtually all pleadings, documents and hearings based on the pact.

“Mere deprivation of the right to enforce a contractual obligation is not, without an additional showing of serious harm, sufficient to override the public’s right of access to the courts,” Judge Michael Winkelstein wrote for the unanimous three-judge panel.

The court rejected Essex County Superior Court Judge Theodore Winard’s concern for the potential harm to the parties’ reputations should the documents become public. “If embarrassment were the yardstick, sealing court records would be the rule, not the exception,” Winkelstein wrote.

Attorney Bruce S. Rosen, who has spent three years fighting to get the documents opened for the intervening media companies, said the court’s decision reinforces the fundamental principle of openness that underlies the public court system.

Allowing Winard’s decision to stand “would’ve privatized the court system,” he said.

Last August , Winard issued a sealed decision rejecting the request of three media companies — American Broadcasting Companies Inc., Bloomberg News and North Jersey Media Group Inc. — for access to documents in the case. He reasoned that there was no public interest in whether the plaintiff could sue or had to arbitrate his claims and that publicizing the documents could injure the reputation of defendant Prudential Insurance Co.

The appeals court, however, rejected the trial court’s conclusion that there was no public interest in the case, ruling that it too narrowly viewed the case.

The case, wrote Winkelstein, has “heightened public interest: allegations of racial discrimination against Prudential and fraud and bribery claims against both Prudential and [Leeds Morelli & Brown],” the law firm that represented Prudential employees.

Plaintiff Lawrence Lederman alleges he and 358 other current and former employees were duped into agreeing to arbitrate instead of litigate their claims that Prudential discriminated against them when they sold insurance to minorities. Simultaneously, he alleges, Prudential made a secret deal with Leeds Morelli & Brown to keep them from getting fair arbitrations.

When Lederman sued in November 2002, he filed his court documents publicly. Newspapers reported his allegations and the confidentiality agreement he signed, which also appeared on the Internet and on television. The documents were only later sealed when the trial court granted Prudential’s request for a restraining order sealing the pleadings and documents and closing the court proceedings.

The level of secrecy was unprecedented, Rosen said. “It’s not unheard of where there’s a trade secret or juvenile proceeding going on, but other than that the wholesale closure of a civil case is unheard of.”

Prudential spokesman Bob DeFillippo told The Star-Ledger in Newark that the company is considering appealing to the state Supreme Court.

(Lederman v. Prudential Life Ins. Co. of America; Media counsel: Bruce S. Rosen, McCusker, Anselmi, Rosen, Carvelli & Walsh, Chatham, N.J.)SB

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