Court of Appeal Files New, Unsealed Opinion in Disney Case

Tuesday, July 31, 2001

Page 7

PERSPECTIVES (Column)

Court of Appeal Files New, Unsealed Opinion in Disney Case

By ROGER M. GRACE

The Court of Appeal for this district has vacated its July 3 sealed opinion in a case pertaining to the licensing of the television sitcom “Home Improvement,” and has filed a new opinion with financial information redacted from it.

It has declined to unseal records in the case, ordering the trial court to decide if papers should be declassified.

Div. Seven did the right thing in scrapping its order that an opinion be hidden from public view simply because the trial court had entered a protective order.

It did the wrong thing, however, in twisting matters relating to the sealing in its revamped opinion. That opinion, authored by Justice Fred Woods, comes in Agency for the Performing Arts v. The Walt Disney Company, B138373.

The new opinion, filed Friday and received yesterday, discusses the sealing under the heading, “Other Issues.” That portion of the opinion reads:

On February 9, 1998 and May 29, 1998, the lower court entered protective orders precluding public disclosure of certain documents in the action and allowing the parties to designate documents exchanged in the course of the litigation as “confidential and highly confidential.” The orders also required the parties to file under seal any documents containing confidential information.

In accordance with these orders, the parties filed the entire appellate record and the appellate briefs under seal. At no time during the appeal, at oral argument or thereafter, did either party request this court “unseal” any portion of the appellate or trial court record, nor did cause appear from the face of the record for this court on its own motion to unseal the record. This court’s opinion, which disclosed facts and information contained in the record “sealed” by the lower court, was filed July 3, 2001 unpublished and under seal in accordance with California Rules of Court, rule 12.5, subdivision (f).

On July 11, 2001, the Metropolitan News Company sent this court a letter requesting we “unseal” the appellate opinion as well as the entire record in this matter.

Upon consideration of the respective arguments on this issue, this court has vacated the original sealed opinion and files this opinion publicly (i.e., not under seal) in view of the considerations set forth in NBC Subsidiary (KNBCTV), Inc. v. Superior Court (1999) 20 Cal.4th 1178 and subsequently codified in California Rules of Court, rule 243, subdivisions (c) - (e). With respect to unsealing the entire record, however, we note the lower court’s protective orders were entered prior to NBC and before the effective date of the new Rules of Court governing sealing of records. In light of the strong policy articulated in NBC favoring public access to court records, the issue of sealing documents should be re-examined in this case. Because this re-examination will require numerous factual and legal determinations affecting potentially thousands of pages of the record, and since all or part of the record will be relevant to further trial court proceedings pursuant to this court’s remand, we conclude the trial court is the proper forum in which to undertake the task.

Woods is in error in declaring that the opinion was sealed “in accordance with California Rules of Court, rule 12.5, subdivision (f).” In a footnote, he quotes that rule “in pertinent part” as follows: “A record filed publicly in the reviewing court must not disclose material contained in a record that is sealed....”

Rule 12.5 does not authorize the sealing of opinions, expressly or impliedly. Woods should know better. So should Acting Presiding Justice Earl Johnson Jr. and Acting Justice Paul Boland, who joined in the opinion.

Rule 12.5 is in the portion of the appellate rules dealing with “Record on Appeal.” It is sandwiched between the part on “Filing Appeal” and “Briefs.” That, alone, signals that the rule deals with what the parties cause to be filed, not the opinion filed by the court.

The wording of the rule bears this out. Rule 12.5(b)(1) defines “record” as anything “filed or lodged with the court.” An opinion is filed by the court; it is not filed “with” the court nor is it lodged.

Rule 12.5(f), pointed to by Woods, reads, in full: “A record filed publicly in the reviewing court must not disclose material contained in a record that is sealed, conditionally under seal, or subject to a pending motion to seal.” Taken in context, this cannot refer other than to the content of the record designated or provided by the parties. In no way does it authorize the sealing of opinions.

When the Court of Appeal filed its opinion on July 3 and ordered it sealed, it acted in derogation of the public’s right to know what’s going on in the public courts. Its act was unorthodox and bizarre. It was pursuant to no authority, whatsoever—and to pretend that it was “in accordance with” a court rule is disingenuous and petty.

I talked to Woods on July 11. He said of the sealing: “At times we do make mistakes. Maybe this is one of them.”

On July 11, Woods was a big enough man to admit he could have erred. Since then, he has shriveled. In the opinion filed Friday, he seeks to portray the sealing of the opinion not as a mistake, but as a prerogative which the court had, authorized by a rule of court, but a prerogative it has been persuaded not to invoke. Hogwash.

Woods recites that the trial court had issued protective orders, and contends: “In accordance with these orders, the parties filed the entire appellate record and the briefs under seal.”

Although the protective orders issued by Los Angeles Superior Court Judge Dzintra Janavs did not directly command the parties to file papers under seal in any higher court to which they might journey, the orders had that legal effect as to papers sealed in the trial court. Rule 12.5(c)(1) provides: “A record ordered sealed by the trial court that is a part of the record before the reviewing court must be filed under seal in the reviewing court and must remain sealed unless the reviewing court orders otherwise.” So, in a loose sense, the parties filed papers under seal in the Court of Appeal “in accordance” with Janavs’ orders.

However, in no sense did the parties file their briefs “in accordance” with the protective orders. The briefs, though “records” (under Rule 12.5(b)(1)’s broad definition of “records”) were not records “sealed by the trial court.” (To the extent the briefs contained references to sealed papers, Rule 12.5(f) would have required redactions of the publicly filed versions—but not a sealing of the briefs in toto.)

And, of course, the parties did not act “in accordance” with Janavs’ orders in filing papers under seal in the Court of Appeal which had not been sealed below—such as the complaint and minute orders.

In decreeing that all unsealing decisions are left to the trial court to make, Woods and his brethren have shirked a duty befalling them. They have blithely disregarded the dictates of Rule 12.5(e)(2), which commands:

“A record that was not previously filed in the trial court must not be filed under seal without a reviewing court order.

“(A) The court must not permit a record to be filed under seal based solely upon the agreement or stipulation of the parties.

“(B) A party requesting that a record be filed under seal must file a motion for a reviewing court order to file the record under seal.

“(C) The court may order a record filed under seal only if it makes the findings required by rule 243.1(d)-(e)....”

Those particularized findings as to an overriding need for secrecy are dictated by NBC Subsidiary, which is founded on federal constitutional precepts.

The Clerk’s Office erred in filing the briefs and the nonconfidential trial-court documents under seal in the absence of an order from the Court of Appeal to do so. The Court of Appeal, in its July 27 opinion, ratifies that error and commands its perpetuation.

The Court of Appeal is acting in contravention of the rule of court and in defiance of the California Supreme Court’s decision in NBC Subsidiary in continuing to conceal the briefs and nonconfidential documents from public view.

Perhaps there is a matter in the briefs which needs be redacted. If so, the Court of Appeal can so order after it has reviewed the briefs. What it may not do, consistent with the Rule 12.5 and NBC Subsidiary, is to deny public access to its records where those records were not sealed below and it has not reviewed them and made findings concerning an overriding need for confidentiality. Where it does deny access, it may only do so to the extent necessary to serve the interest it is protecting—meaning redaction, not hiding the entire briefs.

It is not for the trial judge (Richard Fruin, who replaced Janavs in the case) to review the appellate briefs. These are Court of Appeal documents, not trial documents. There is no reason for the trial judge to review documents that were never sealed in the Superior Court. The concealment of the briefs and nonconfidential trial-court documents is concealment by the Court of Appeal, itself, on orders of Woods, Johnson and Boland, and is in no measure attributable to actions of the trial court.

Even if Div. Seven acted properly in shifting the burden to the Superior Court to sift through the mounds of documents sealed on orders of that court, it is guilty of dereliction of its responsibilities in failing to do the work that is its to do in examining the documents which were sealed independently of the protective orders. It should have ordered these documents unsealed and stayed its order for just long enough to permit a party to seek an order pursuant to Rule 12.5(e)(2)—such an order being the sine qua non of sealing documents in the Court of Appeal which were not sealed below.

Woods says in the dispositional portion of his opinion: “In view of the remand to the trial court, the Metropolitan News Company’s request to unseal the entire record is stricken as premature.” With respect to those papers which are not subject to scrutiny of the trial court, but exclusively subject to examination by the Court of Appeal under Rule 12.5(e)(2), that striking was improper.

I would take issue with other parts of the opinion as it relates to the sealing.

•Woods says there is nothing on the “face of the record” pointing to a basis for an unsealing of records in the Court of Appeal. This is not accurate. The records that are sealed in the Court of Appeal are sealed because of the trial court’s protective orders. The latter order accorded either party carte blanche power to proclaim any document it produced to be “confidential” or “highly confidential.” (Documents in the latter category were to be viewed only by the attorneys receiving the documents, and not their clients.) This contravened Los Angeles Superior Court Rule 7.19 which proscribes such broad protective orders. It requires a “document-by-document” review to determine if “[s]ecrecy is in the public interest.” The fact that Janavs’ orders predated NBC Subsidiary is irrelevant; they are facially invalid in light of the local rule which was in effect when the orders were made.

•Woods mentions that the Metropolitan News Company’s request by way of a letter was not in the form of a motion. Stupid, stupid MNC. Nonetheless, the Court of Appeal magnanimously construed the request as a motion. However, it was Woods who, during our July 11 interview, suggested I write a letter to the court requesting an unsealing. He said that if any nonparty made a letter request for an unsealing, “it would be sufficient to put it before the court.” Neither of us at that point was familiar with Rule 12.5 which, in subd. (d)(1), authorizes nonparties to make unsealing motions. In any event, while the letter was not in proper format for a motion, it could be said to constitute a motion; Code of Civil Procedure §1003 says that “[a]n application for an order is a motion.” It was an application for an order.

•Woods alludes to the “strong policy articulated in NBC favoring public access to court records.” The words “strong policy” are inadequate. NBC was not merely decided on public policy grounds. The state Supreme Court recognized a “First Amendment right of access.” When the Court of Appeal wrongfully withholds documents from the public—which it is now doing—it is not merely breaching public policy; it is acting in willful contravention of federal constitutional dictates.

Meanwhile, the July 3 opinion remains sealed. So does the attachment to the letter-brief filed by the defendant, The Walt Disney Company, following the Court of Appeal’s invitation to comment on MNC’s unsealing request. Though the brief was not filed under seal, the Clerk’s Office won’t release a copy of the attachment, which is the July 3 opinion, with Disney’s proposed redactions.

Diana Greene Gordon, the attorney for plaintiff AFT, said yesterday that “not very much” was snipped from the original version of the opinion, “just the financial information.”

AFT, a talent agency, brought suit based on Disney, which had control over distribution of “Home Improvement,” allegedly licensing the show for airing on ABC for less than its market value. ABC is owned by Disney. AFT is contractually entitled to a share of the net profits, and it claimed the profits were minimized owing to Disney’s purported self-dealing.

Woods’ opinion did not mention the Disney-ABC link. It affirmed the judgment in favor of Disney insofar as it was based on the trial court’s rejection of a theory that the covenant of good faith and fair dealing was breached. Disney did not breach the covenant even if it got less than fair market value for the show because it was not contractually obligated to distribute it, at all, Woods reasoned.

He concluded that summary adjudication was improperly granted to Disney on a cause of action based on under-payments because there was a triable issue of fact as to whether AFT’s share was to be based on the initial license fee paid by ABC or whether increases in the fee were to be reflected.

Gordon will not only be handling the case that’s been remanded, but also a new case filed by her client against Disney. In that case, AFT contests Disney’s lowering of payments by reducing from the net profits the $4.7 it expended in attorneys’ fees and costs in the action brought by AFT and an earlier related action.