State University v. Superior Court

• Decision Date: 16 July 2001
• Docket Number: No. F037418.,No. F037383.,F037383.,F037418.
• Citation: 90 Cal.App.4th 810,108 Cal.Rptr.2d 870
• Court: California Court of Appeals Court of Appeals
• Parties: CALIFORNIA STATE UNIVERSITY, Fresno Association, Inc., Petitioner, v. The SUPERIOR COURT of Fresno County, Respondent, McClatchy Company, Real Party in Interest. The Board of Trustees of the California State University et al., Petitioners, v. The Superior Court of Fresno County, Respondent, McClatchy Company, Real Party in Interest.

108 Cal.Rptr.2d 870

90 Cal.App.4th 810

CALIFORNIA STATE UNIVERSITY, Fresno Association, Inc., Petitioner, v. The SUPERIOR COURT of Fresno County, Respondent, McClatchy Company, Real Party in Interest.

The Board of Trustees of the California State University et al., Petitioners, v. The Superior Court of Fresno County, Respondent, McClatchy Company, Real Party in Interest.

No. F037383.

No. F037418.

Court of Appeal, Fifth District.

July 16, 2001.

Rehearing Denied August 9, 2001.

McCormick, Barstow, Sheppard, Wayte & Carruth, Lowell T. Carruth, Fresno, and Christopher S. Hall, for Petitioner California State University, Fresno Association, Inc.

Susan Westover, Costa Mesa, for Petitioners Board of Trustees of the California State University et al.

No appearance for Respondent.

Dietrich, Glasrud, Mallek & Aune, Donald H. Glasrud and Bruce A. Owdom, Fresno, for Real Party in Interest.

Levy, Ram, Olson & Rossie, Karl Olson, and Joni S. Jacobs, San Francisco, for California Newspaper Publishers Association as Amicus Curiae on behalf of Real Party in Interest.

OPINION

WISEMAN, J.

California State University, Fresno proposed a $103 million multi-purpose arena on its campus, the Save Mart Center, to be funded primarily by private donations and operated by a University-affiliated, nonprofit auxiliary corporation, California State University, Fresno Association, Inc. (Association). In exchange for a generous gift to the California State University, Fresno Foundation (Foundation), also a University-affiliated auxiliary corporation, donors may obtain luxury suites in the arena for five, seven or ten-year terms. The donors enter into license agreements with the Association for use of the luxury suites. Some of the donors who obtained luxury suites requested to remain anonymous.

The McClatchy Company, doing business as the Fresno Bee (McClatchy), requested documents from the University, pursuant to the California Public Records Act (CPRA), concerning the identity of the individuals and/or companies that purchased luxury suites in the arena. The University denied the request, and McClatchy filed a petition for writ of mandate. Respondent court ordered the University and the Association to disclose the identities of the undisclosed licensees and to produce the license agreements.

The Board of Trustees of the University and John Welty, the University's President (collectively referred to as the University), and the Association filed petitions for writ of mandate challenging the respondent court's order, which has been stayed pending resolution by this court. Having reviewed the matter, we deny the University's writ petition, but grant the Association's writ petition and direct respondent court to vacate that portion of its order commanding the Association to disclose the identities of the undisclosed licensees and to produce the license agreements. Respondent court's order remains unchanged with respect to the University. The time has come to disclose the requested documents.

PROCEDURAL AND FACTUAL HISTORIES

The Save Mart Center will house the University's sports teams, including basketball, volleyball and wrestling, and will be a venue for community concerts, cultural events, educational conferences and graduation ceremonies. It will seat 16,000 for sporting events and 18,000 for concerts and stage events. The plans call for state-of-the-art classrooms, computer rooms and conference rooms, with an anticipated date of completion in the fall of 2002.

The estimated cost of the Save Mart Center is approximately $103 million. The State of California contributed approximately $8 million for pre-planning and design costs and offsite improvements to the roads and freeways providing access to the site. The remainder of the funding is from private donations. Save Mart Supermarkets and Pepsi Bottling Group together pledged a $40 million sponsorship gift, payable over 20 years.

The Save Mart Center will feature 32 luxury suites available for use by purchasing a license. Each suite will have 18 seats, a private restroom, refrigerator, wet bar, television monitors and Internet access. Prices for the suite licenses range from $45,000 to $63,000 per year, and license terms are five, seven and ten years. The suite licenses are expected to generate approximately $1.5 million annually for the construction and operation of the Save Mart Center. The University considers the license fees to be charitable donations, the majority of which are tax deductible.

The license agreements are entered into between the donors, "licensees," and the Association, "licensor." The agreements state, in relevant part:

"I. TERM

"Licensor does hereby grant the privilege of use to Licensee, and Licensee accepts that certain space shown on Exhibit `A' and ... known as Preferred Seating Area (PSA) No. _____ (the 'Premises') located in the structure commonly known as the Save Mart Center ... for _____ consecutive terms commencing on 2002 and expiring on _____, (the `Term') unless terminated sooner as provided herein....

"II. CONSIDERATION

"Licensee hereby acknowledges that the privilege of use granted by Licensor in the Agreement is based upon annual execution of the terms of Licensee's Pledge Agreement between Licensee and [the Foundation] ...."

The Association is a California nonprofit corporation operating under Education Code section 89900 et seq., which addresses auxiliary organizations of state universities and colleges. The Association operates all the University's commercial enterprises, including the University's bookstore, food services, housing and student union. The Foundation is also a California nonprofit corporation operating under Education Code section 89900 et seq. The purpose of the Foundation is to provide assistance to faculty and staff with the administration of grants, contracts and trust accounts. The Foundation manages all aspects of the financial activities for grants, contracts, trust accounts, investments, endowments, scholarships, loans, gifts and donations.

The Save Mart Center will be constructed and owned by the auxiliary corporations, not the University. The University will lease the land for the Save Mart Center to the Association, which will operate the facility. The Association was designated the official recipient of the funds obtained from suite licenses. However, payments for suite licenses are made to the Foundation and mailed to the University. The Association maintains the original license agreements. The University conceded at the hearing on McClatchy's petition that it has the names of the licensees, a concession supported by the record. The record also reveals that the University possesses, or did possess, copies of the license agreements.¹

The University publicized the names of donors when it had their permission to do so. However, some donations to the Save Mart Center were made on the condition of anonymity. The University identifies several reasons donors may wish to remain anonymous, including pressures from competing charitable groups and potential family heirs. The University maintains that if certain donors cannot remain anonymous, they will withdraw their pledges. The University also speculates that the forced revelation of donor identities will have a chilling effect on future fundraising efforts.

According to the University's assessment of the economic and fiscal benefits of the Save Mart Center, construction will generate approximately 2,000 new full-time jobs, $188 million in construction expenditures, and $442,000 in local tax revenues. The University also claims the Save Mart Center's annual operations will support approximately 460 to 510 new full-time jobs, $20 to $24 million in new annual expenditures, and $281,000 to $340,000 in annual local sales and transient occupancy tax revenues. The University further maintains that the Save Mart Center will stimulate job creation and retention, enhance the workforce, diversify the economy, and provide additional educational opportunities for students.

On October 14, 1999, a news reporter with the Fresno Bee wrote to the president of the University, and requested "all documents in [his] or [his] office's possession relating to the identity of the people and/or companies who have purchased luxury suites in the Save Mart Center project at [the University].... [and] the terms of their purchase contracts, including the length of the lease and the purchase price." On October 22, 1999, the University responded to the request, acknowledging it was made under the CPRA. The University concluded "the information ... requested, to the extent, if any, that it is contained in state records, is `official information,' and . . . the benefit to the public from non-disclosure outweighs the benefit to the public in disclosing it." The University further reasoned: "Donors expect that the University will keep their donations private. If the University were to be required to disclose this information, there is a very real possibility that it would lose the benefit of many donations. Loss of donations would work a great harm to the University and to the State, which supports it, and is therefore against the public interest."

On December 10, 1999, the attorneys for McClatchy wrote to the University requesting it reconsider its refusal to provide the requested documents. On December 20, 1999, counsel for the University reiterated the University's position that the records, to the extent they exist in state files, are protected from disclosure because the public interest in nondisclosure outweighs the public interest in disclosure.

On March 24, 2000, McClatchy filed a petition for writ of mandate pursuant to the CPRA. against the University, the Association, and the Foundation to compel disclosure of the requested documents. As of August 2000, the University had received approximately $80 million in pledges. However, actual gifts received totaled only $12.6 million....