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The long-awaited court battle between Hartford, Conn.-based Pepe & Hazard and Philadelphia-based Dechert over a 1996 raid on Pepe’s finance/real estate practice group is headed for private arbitration. The abrupt shift comes after more than five years of consuming pretrial litigation on the complex litigation docket. The parties had picked five of 10 jurors for the trial in Waterbury, Conn., Superior Court. Plaintiff Pepe & Hazard contends its former founding partner Richard D. Jones illegally conspired with Dechert to lure away other Pepe lawyers and steal clients, depriving P&H of current and future business. Dechert has responded with an abuse of process counterclaim, contending the P&H case will fail and be ruled a frivolous waste of court resources. So far, the case has generated a small mountain of filings, engendering intense controversy over expert witness qualification. As trial approached, it became clear Pepe wasn’t being allowed to present the case it had planned. First, in September, Judge Michael Sheldon ruled that Ralph G. Elliot, of New Haven, Conn.-based Tyler, Cooper & Alcorn, would not be allowed to present ethics testimony about the propriety of Jones’ and Dechert’s actions, on grounds that his testimony would go to the ultimate issue in dispute. Then, on Oct. 15, Sheldon ruled that P&H must limit the testimony of Wethersfield, Conn., CPA Kenneth Pia regarding the firm’s losses. Pia had calculated the loss of Jones and two other Pepe partners as equivalent to the sale of a practice group. That was too hypothetical for Sheldon, who limited Pia’s testimony to the losses between 1996 and 1998. Also on Oct. 15, Sheldon’s successor in the case, Carl J. Schuman, ruled that Pepe’s claims under the Connecticut Unfair Trade Secrets Act had to be tried to a judge, not a jury. Interestingly, some of Connecticut’s top criminal defenders were set to face off in this civil grudge match. Pepe is represented by Hubert J. Santos and Hope C. Seeley, of Hartford’s Santos & Seeley, and Jones is represented by Hugh F. Keefe, of New Haven’s Lynch, Traub, Keefe and Errante. Dechert is represented by Frank J. Silvestri, of Zeldes, Needle & Cooper in Bridgeport. UNSETTLING CONFERENCES On Nov. 7, Robert L. Holzberg, the administrative judge overseeing Waterbury’s complex litigation docket, made a last-ditch attempt to move the parties to settle, without success. With Shuman facing a two-month trial, Holzberg encouraged a move toward arbitration. Neither law firm could be confident of winning sympathy from a blue-collar Waterbury jury, noted two lawyers well acquainted with the case. Furthermore, the charges of fraud, deception and illegal dealings could expose reputations to hard-to-calculate damage. Lawyers interviewed for this story repeatedly cited an ongoing California trial in which partners in a now-defunct firm are suing to recover lost profits of $32 million from San Francisco’s Brobeck, Phleger & Harrison, after that firm lured away two key business generators. Moving the case to arbitration eliminates the potential for a runaway jury verdict, and provides other advantages that could be attractive to both sides, noted Bourke G. Spellacy, name partner in Hartford’s Updike, Kelly & Spellacy. He is not connected with this case, but is involved in Connecticut’s most recent big-firm fee case that ended with litigation. Spellacy’s firm was awarded over $800,000 in fees and interest in a hard-fought trial. Afterward, several New Britain Superior Court jurors expressed shock at big-firm billing and economics. That case is currently on appeal to the state supreme court. Spellacy, experienced in both litigation and arbitration, noted, “The advantage of arbitration in a dispute, such as the Pepe dispute, is speed and privacy, and that a decision rendered is apt to be final. It’s difficult, if not impossible, to appeal from an arbitrator’s decision.”

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