Lawyers Seek to Remove Judge in Prudential Class Action

Lawyers for victims in the Prudential Insurance Co. fraud scandal sought Tuesday to disqualify the federal judge presiding over a class-action lawsuit on grounds that the jurist has taken sides in a controversial settlement proposal pending before him in U.S. District Court in Newark, N.J.

A 20-page motion seeking the ouster of Judge Alfred M. Wolin also accuses him of conducting secret hearings, including a previously undisclosed private session with Prudential Chairman Arthur F. Ryan.

The motion filed by Pittsburgh attorney Michael P. Malakoff also cites allegations that the judge attempted to intercede behind the scenes in a Pennsylvania state court case outside his jurisdiction.

Such “apparent impropriety,” said Malakoff’s motion, was part of a pattern of “increasingly injudicious behavior” that has compromised the judge.

Wolin “has become an advocate for the settlement in a manner that makes fair judgment impossible . . . “ according to the motion.

Malakoff’s brief also seeks to unravel the pending settlement of a class action that received conditional approval from Wolin in October. That approval came after a private court session that was first disclosed by The Times, which reported that the hearing excluded state regulators and the media and was held without notification going to most of the interested parties in the case.

The proposed settlement affects 10.7 million Prudential customers nationwide, including 750,000 in California. The suit stemmed from allegations that Prudential defrauded clients who bought life insurance policies, including through an illegal practice called churning, which involves misleading customers into turning over the cash value of existing life insurance policies to buy bigger ones, often with the false promise that they won’t have to pay any premiums. Wolin’s handling of the case could have a big impact on customers, since he is to rule on any objections to the fairness of the settlement.

Wolin, through his law clerk, declined to be interviewed about the disqualification motion. However, in a previous telephone exchange with The Times, Wolin defended his private meeting with Ryan and said the lead class-action lawyers gave their consent.

The Malakoff motion and a related affidavit in which a Kentucky attorney says Wolin tried to intimidate him in a recent off-the-record telephone call raise new questions about the conduct of the judge whose efforts to help fashion the class-action settlement have been called “railroading” by some plaintiff’s attorneys.

Opposition to the settlement has been growing among state regulators and plaintiff’s attorneys who question whether it provides adequate compensation and contend that it places an unfair burden on victims to prove they were misled or defrauded many years ago.

Malakoff, who declined to be interviewed, referred media inquiries to Wilner.

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Tuesday’s motion was precipitated, according to Wilner, by Wolin’s apparent attempt to intercede in a Pennsylvania case scheduled to go on trial next week.

Malakoff’s motion cites an exchange between lawyers for Prudential and Lancaster County Court Judge Paul K. Allison in which company attorneys said that Wolin “was open” to a telephone call from Allison to discuss matters related to the Pennsylvania case.

A plaintiff’s attorney asked, “Why does Judge Wolin send Prudential as his emissary to Judge Allison?”

Allison responded: “I was wondering that myself. . . . I, frankly, feel that it would be highly improper for me to talk to Judge Wolin in this matter, and I will not do it.”

In a hearing Monday in Newark, Wolin denied sending Prudential lawyers with a message to Allison. “I in no way sought to speak to the judge from Pennsylvania,” he said.

Kentucky lawyer J. Bruce Miller said in an affidavit, however, that Wolin had two weeks earlier threatened to contact the Pennsylvania judge after raising questions about the truthfulness of one of Miller’s clients, a former Prudential agent, who was scheduled to be a witness in Allison’s court.

Paltrow reported from New York and Rempel from Los Angeles.