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Class action employment firm Leeds, Morelli & Brown has spent four years in sealed litigation in New Jersey over whether it conspired with Prudential Insurance Co. to defraud workers. Everything about the case, even an opinion denying a suit by three news organizations to open the proceedings, has been kept secret at the request of Prudential and the Carle Place, N.Y., firm. Now Leeds, Morelli is asking a Colorado judge to emulate the New Jersey courts and bar the public from a related proceeding, a defamation case against a firm that has been a bitter adversary, Roper & Twardowsky of Totowa. Like the New Jersey case, the Colorado litigation has attracted media lawyers. The state’s largest-selling newspaper, The Denver Post, intervened in February to keep the trial doors open. A decision is pending. The unusual wrangling over closed-door litigation in both states raises a fundamental question: Can a law firm that represents clients in confidential arbitrations continue the secrecy when its work on the sealed cases becomes the subject of ancillary litigation? Leeds, Morelli represents batches of workers in alternative dispute resolution with companies that are contemplating mass layoffs and want to avoid expensive and public discrimination suits. The workers and the companies sign arbitration agreements with nondisclosure clauses, and the companies pay the legal bills the workers owe to Leeds, Morelli, on the theory that if the companies lost individual discrimination cases, they would be subject to fee-switching anyway. Almost 200 Colorado employees of Nextel Communications Corp. used the system to reach settlements in 2003. In New Jersey, 359 Prudential employees represented by Leeds, Morelli made similar deals in 2000. The firm also represented workers in disputes with New York publisher Penguin Group Inc. After the settlements, however, some workers of the companies sued in Colorado, New York and New Jersey to overturn the awards on fraud grounds. Roper & Twardowsky is among the firms most vigorously pursuing Leeds, Morelli on behalf of disgruntled ex-clients. Representing an ex-Prudential executive in New Jersey, the Roper firm alleged that Leeds, Morelli colluded with the giant insurer in 583 arbitrations and became Prudential’s secret partner in an effort to pressure the claimants into potentially disadvantageous settlements. According to the suit, Prudential and the firm made a deal that would limit the company’s exposure to $15 million for all claims, of which the firm would receive $5 million in fees. Leeds, Morelli has declined to comment, but Prudential said when the suit was filed that the process was fair and lucrative to the employees. In the meantime, the entire record of the New Jersey suit, Lederman v. Prudential, has been sealed on grounds the workers agreed to keep everything confidential when they signed up for the arbitration. Roper & Twardowsky argued that the confidentiality clause shouldn’t apply to a suit alleging the whole deal was a fraud in the first place, but Essex County Superior Court Judge Theodore Winard didn’t agree. What’s more, Winard denied a plea by ABC-TV, The Record of Hackensack and Bloomberg News to get the case opened on grounds that the defendants’ interest in secrecy was legally weaker than the public interest in the case. Not only did Winard seal all pleadings in the media’s case; he sealed the opinion stating his reasons for denying the motions. A Mediation Delay In Centennial, Colo., Judge Timothy Fasing of the Arapahoe County District Court has ordered mediation of the defamation case, Leeds v. Roper, 2004 cv 571, putting the question of New Jersey-style secrecy on hold. The firm and name partners Lenard Leeds, Steven Morelli and Jeffrey Brown are listed as plaintiffs. The suit alleges that Roper & Twardowsky lawyers Angela Roper and Kenneth Thyne and their client, former Nextel employee Doris Brewer of Denver, defamed the firm, violated confidentiality orders in the Nextel case, engaged in the unauthorized practice of law in Colorado and invaded Leeds, Morelli’s privacy. According to the complaint, the details of the 2003 confidential settlement between Nextel and its workers was included in public filings of Brewer’s case against the firm, even though it was supposed to be sealed. Roper & Twardowsky lawyers also made unauthorized disclosures to third parties, including The Denver Post, the suit says. In a Nov. 20, 2003, feature on Brewer’s suit against Leeds, Morelli, the Post reported on the secret settlement, citing documents that showed Nextel agreed to pay Leeds, Morelli $5.5 million for legal fees incurred by Nextel claimants and gave the firm a $2 million consulting contract for post-settlement work. The Post also quoted the complaint filed on Brewer’s behalf as saying that while the firm’s take was $7.5 million, 587 present and former Nextel workers represented by Leeds, Morelli, including 180 in Colorado, split $5.9 million. There may be irony in the accusation that Roper & Twardowsky engaged in the unauthorized practice of law in Colorado. The New Jersey suit alleges that Leeds, Morelli engaged in the unauthorized practice of law in this state when it represented the state’s Prudential workers in the arbitrations. In the Colorado case, a Denver firm that hasn’t been included in the suit against Roper & Twardowsky was the counsel of record in the suit by Brewer that included the secret Nextel settlement as an attachment. Roper & Twardowsky denied the defamation charges and moved to dismiss the suit on grounds that anything the partners may have said is covered by the litigation privilege. Judge Fasing denied the motion. The next question is whether he will agree with Leeds, Morelli that, “this Court exclude all persons not officers of the Court or connected with this case from the trial,” as the firm put it in its motion to seal the courtroom. Allowing public presentation of the evidence that Roper & Twardowsky allegedly divulged “would result in repeated re-violations of plaintiff’s privacy interests,” Leeds, Morelli’s lawyers, Jay Horowitz and Peter Forbes of Denver’s Horowitz Wake & Forbes, wrote in a proposed order. They did not respond to requests for comment last week. In response to the proposed order, defense lawyer F. Michael Ludwig of Denver’s Wood, Ris & Hames, says the sealing order is astonishing, given Leeds, Morelli’s history as a civil rights firm that routinely issues press releases about its cases. In its objection to the sealing of the trial, The Denver Post argued that Leeds, Morelli had failed to overcome the presumption that judicial proceedings are open. Besides, the confidential material that Leeds, Morelli wants to keep sealed is already in the public domain, including the Nov. 30, 2003, Post article included as an exhibit in the firm’s trial memorandum, Post attorney Steven Zansberg of Denver’s Faegre & Benson wrote in a brief. “In light of the fact that all of this information has already entered the public domain, an open trial in this case that addresses these same topics and discusses this same information cannot result in any ‘disclosure’ of confidential information,” Zansberg wrote.

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