On appeal from the Superior Court of New Jersey, Law Division, Essex County, ESX-L-010547-02.
The opinion of the court was delivered by: Winkelstein, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Weissbard, Winkelstein and Sapp-Peterson.
Intervenors American Broadcasting Companies, Inc., North Jersey Media Group, Inc., and Bloomberg News L.P. (the media) challenge the Law Division's August 7, 2003 order that sealed virtually all pleadings and documents filed with the court and barred the public from access to the court proceedings based upon confidentiality agreements among private parties.*fn2 We conclude that the parties' contractual agreements do not outweigh the presumption of openness that applies to court proceedings and filed documents. Accordingly, we reverse and vacate the sealing orders.
Plaintiff Lawrence Lederman was employed by Prudential Life Insurance Company (Prudential) as a sales agent and manager from 1966 through 1997, when he left his employ as a result of a mental breakdown he claims was caused by actions of Prudential. He alleges Prudential pressured him not to sell insurance to minorities, and discriminated against him and other agents who did.
Subsequently, plaintiff and 358 other current and former Prudential employees who claimed they had similarly been discriminated against by Prudential attended a series of meetings at the New York law firm of Leeds, Morelli & Brown, P.C. (LMB). LMB routinely represents aggrieved parties in their employment-related claims. Lederman and the other attendees (the Covered Claimants) first entered into retainer agreements with LMB. Those agreements provided that LMB would receive a one-third contingent fee to represent each party against Prudential. The Covered Claimants then entered into a May 5, 1999 agreement (the May 1999 Agreement or the Agreement) with both Prudential and LMB. Under the terms of that agreement, the Covered Claimants agreed to engage in a confidential alternative dispute resolution (ADR) process, known as "Roads to Resolution" (R to R), to resolve their employment-related claims against Prudential. Prudential would pay the Covered Claimants' counsel fees to LMB. The Agreement did not specify the dollar amount of counsel fees LMB would receive from Prudential.
The Agreement contained arbitration and confidentiality provisions. Disputes as to the terms or application of the Agreement would be resolved by AAA arbitration and no party or arbitrator could disclose the "existence, content or results" of any arbitration without Prudential's prior written consent. Any court action to enforce the Agreement's terms was required to be filed under seal. The Agreement was to constitute "the entire agreement and final understanding" between the parties.*fn3
Lederman claims that unknown to him, on the same date he and the other Covered Claimants entered into the May 1999 Agreement, Prudential and LMB entered into a separate agreement (the Second May 1999 Agreement). According to plaintiff's complaint, Prudential would pay $15,000,000 to resolve the employees' disputes. The first $5,000,000 would be paid as counsel fees directly to LMB in advance of the resolution of any claims; the remaining $10,000,000 would be distributed among the Covered Claimants through the R to R process. Prudential would make an initial advance of $3,500,000, and a subsequent advance of $500,000, which LMB and Prudential "reasonably anticipate[d]" would be earned by LMB under the terms of the agreement. LMB was not required to return either advance. Plaintiff later participated in the R to R process, and an adjudicator awarded him $500,000 for his employment claims.
In this lawsuit, Lederman claims the $4,000,000 advance to LMB was a commercial bribe; LMB and Prudential conspired to defraud and deceive him and the other signatories to the May 1999 Agreement; and Prudential conspired with LMB to deprive plaintiff of LMB's zealous representation in his employment claims against Prudential.*fn4 Soon after Lederman filed his complaint, which was not filed under seal, news stories about the allegations in the complaint and the May 1999 Agreement, which was attached to the complaint as an exhibit, appeared on the internet and in The Record and the New Jersey Law Journal. WABC-TV aired a report on its Eyewitness News program, and displayed a copy of portions of the Agreement.
Because plaintiff did not file the complaint under seal pursuant to the confidentiality provisions of the May 1999 Agreement and its amendments, on defendants' application the trial court entered a preliminary restraining order sealing the pleadings and documents filed with the court and barring public access to the court proceedings. The order also precluded Lederman, his counsel, and other parties from violating the confidentiality provisions contained in the Agreement.
After Philip Shapiro, another Covered Claimant, moved to intervene and lift the seal, Prudential, LMB and the LMB attorneys cross-moved to maintain the seal. Following a sealed hearing on July 14, 2003, a different Law Division judge granted Shapiro's motion to intervene but imposed a protective order pursuant to Rule 4:10-3. The judge sealed the entire record, "including all documents, transcripts, motions and pleadings." He restrained all parties and their counsel or anyone acting on their behalf from filing future complaints that disclosed the terms of the agreements to any nonparty, attaching the agreements to any complaints unless filed under seal, and discussing the terms of the agreements with anyone, except experts hired by plaintiff's law firm.
The judge found that the parties' agreements to keep the complaint and related documents confidential outweighed the presumption of openness to court proceedings. He reasoned that the agreements were private, the confidentiality provisions were clear on their face, and were bargained for by the parties. The judge found that New Jersey's public policy favored ...