Universal City Studios, Inc. v. Sup. Ct.

• Decision Date: 29 July 2003
• Docket Number: No. B166081.,B166081.
• Citation: Universal City Studios, Inc. v. Sup. Ct., 2 Cal.Rptr.3d 484, 110 Cal.App.4th 1273 (Cal. App. 2003)
• Court: California Court of Appeals
• Parties: UNIVERSAL CITY STUDIOS, INC., Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; Unity Pictures Corporation, Real Party in Interest.

2 Cal.Rptr.3d 484

110 Cal.App.4th 1273

UNIVERSAL CITY STUDIOS, INC., Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent Unity Pictures Corporation, Real Party in Interest.

No. B166081.

Court of Appeal, Second District, Division 5.

July 29, 2003.

Katten Muchin Zavis Rosenman, Gail Migdal Title, Steve Cochran and Joel R. Weiner, Los Angeles, for Petitioner.

No appearance for Respondent.

Michael R. Blaha for Real Party in Interest.

TURNER, P.J.

I. INTRODUCTION

Defendant, Universal City Studios, Inc., has filed a mandate petition which seeks to compel the respondent court to seal various documents pertinent to an arbitration dispute. We do not at this juncture decide the merits of defendant's mandate petition. This is because in conjunction with the mandate petition, defendant has filed a motion with the clerk of this court to seal the aforementioned documents pursuant to California Rules of Court, rule 12.5(e).¹ As required by rule 12.5(e)(3), we permitted the aforementioned documents to be conditionally lodged under seal pending resolution of the merits of defendant's sealing request. Additionally, after we issued several orders, defendant sought to narrow its sealing request to include only two documents. The two documents consist of an October 14, 1998, settlement agreement and a June 6, 2002, stipulation and sealing order in a federal case. We conclude the sealing requests pending before us should be denied. Hence, we will return the aforementioned documents to defendant as required by rule 12.5(e)(7).

Without the foregoing documents, the denial of defendant's mandate petition is now foreordained because it will not be supported by the documents it seeks to have sealed. (Rule 56(c); Sherwood v. Superior Court (1979) 24 Cal.3d 183, 186-187, 154 Cal.Rptr. 917, 593 P.2d 862.) But we are required by rule 12.5(e)(7) to return the documents to defendant. We will allow defendant 10 days to file any supporting documents it wishes, but they must not be lodged under seal. We will defer final decision on the merits of the mandate petition for 11 days.

II. PROCEDURAL HISTORY

A. Proceedings in the Respondent Court

On November 5, 2002, plaintiff, Unity Pictures Corporation, filed its complaint for: rescission of the arbitration clause in the October 14, 1998, settlement agreement; fraud; and declaratory relief. The complaint, which is not sealed, alleged that the October 14, 1998, settlement agreement provided for strict confidentiality of its terms. Hence, the complaint indicated, further more specific facts would be alleged only when a sealing order had been secured. The first cause of action for rescission of the arbitration clause in the October 14, 1998, agreement alleged: defendant made material misrepresentations concerning the arbitration clause in the October 14, 1998, agreement; plaintiff relied on those misrepresentations; and on October 29, 2002, plaintiff gave notice of rescission of the arbitration clause in the October 14, 1998, agreement. The second cause of action alleged that: defendant's misrepresentations as to the arbitration clause were fraudulent and intended to deceive plaintiff; the misrepresentations concerning the arbitration clause in the October 14, 1998, agreement were made with the intent of depriving plaintiff of its rights; plaintiff had been damaged because it had expended money for attorney fees, costs, and arbitrator expenses; and plaintiff was entitled to an award of punitive damages. The third cause of action for declaratory relief alleged: a controversy had arisen between plaintiff and defendant; plaintiff had various claims it could bring against defendant; plaintiff contended the statute of limitations on those claims had been tolled, but defendant contended the statute of limitations had not been tolled; plaintiff alleged that it was entitled to a judicial determination as to whether the rescission of the arbitration clause restored it to its "position before it entered into" the October 14, 1998, agreement; and plaintiff was entitled to a judicial determination as to whether the statute of limitations on its pre-October 14, 1998, claims had been tolled.

On November 27, 2002, plaintiff and Ram Ben Efraim filed a request pursuant to rule 243.2(d) to conditionally lodge under seal a motion to vacate certain "interlocutory arbitration orders" and for a preliminary injunction. Mr. Ben Efraim is not named as a party in the complaint. On December 23, 2002, defendant filed a motion to permit the filing of certain documents under seal pursuant to rules 243.1 and 243.2. The documents defendant sought to be sealed were: a motion to dismiss the present action; a motion to stay the present action pending the arbitrator's ruling; and a judicial notice request. Further, defendant sought permission to file under seal its opposition to all of plaintiffs motions. Also, defendant sought to permit plaintiff to file under seal its reply to the dismissal and stay requests. Defendant also sought the following sealing order: "The parties may also file under seal motions, briefs, declarations and/or other pleadings filed in this action that refer to any of the information contained in the Motion to Dismiss, Opposition and Reply, as well as other information or materials from the arbitration that the arbitrator may authorize the parties to file." Finally, defendant requested that the respondent court order the parties and their counsel not to disclose the contents of any sealed documents to other persons or during any public court proceedings. Defendant asserted the following justification for sealing the foregoing documents: "An order sealing selected materials is necessary in order to preserve and protect the rights and obligations of the parties to the Arbitration Agreement, to maintain the confidentiality of certain information and to comply with the orders of the arbitrator in an arbitration currently pending before the Honorable Eli Chernow (Ret.) pursuant to the Arbitration Agreement. Absent a sealing order, [defendant] would suffer irreparable prejudice, as [defendant] would be unable to provide the Court with information necessary to allow the Court to fully and fairly adjudicate the issues before it or would be forced to disclose protected confidential information." The evidence relied upon by defendant in the respondent court is the same as presented to us. We will delineate that evidence shortly.

On March 6, 2003, the respondent court held a hearing on the sealing motions. The respondent court denied the sealing motions. The respondent court found: the only justification for sealing the various motions and papers was the contractual agreement of the parties; this understanding, by itself, did not constitute an overriding interest; and none of the other interests set forth in NBC Subsidiary (KNBC-TV), Inc. v. Superior Court (1999) 20 Cal.4th 1178, 1222, footnote 46, 86 Cal. Rptr.2d 778, 980 P.2d 337, warranted sealing the documents. The respondent court ordered the documents lodged conditionally under seal returned to the parties submitting the documents.

B. Defendant's Mandate Petition and Current Sealing Motion

On April 3, 2003, defendant filed a mandate petition seeking to set aside the respondent court's March 6, 2003, order denying its rule 243.2(b)(1) sealing motion. Plaintiff has not challenged the respondent court's order denying the sealing motions. Accompanying defendant's mandate petition is a motion to seal various documents. In this opinion, we only resolve the issue of the current motion before us to seal the documents which have been lodged conditionally under seal by defendant. Defendant requests we seal the October 14, 1998, settlement agreement which includes an arbitration clause; a dismissal motion; a motion to stay the present civil suit pending resolution of certain issues by the arbitrator; and a judicial notice request.

The judicial notice request contains numerous documents other than the October 14, 1998, settlement agreement which includes an arbitration clause. Because the documents attached to the judicial notice request have been conditionally lodged under seal, we will refer to them generically or only by title. We will however refer to factual matters which are revealed in unsealed documents. Defendant has lodged the first amended complaint in the case of Ben Efraim v. Universal City Studios (Super.Ct.L.A.County, Feb. 23, 2001, No. BC243368) (the Ben Efraim action) and its attached exhibits. The attached exhibits to the February 23, 2001, Ben Efraim first amended complaint consist of: a movie agreement; a cross-complaint filed by defendant in the case of Kirchmedia GmbH & Co. v. Universal Studios (Super.Ct.L.A.County, Feb. 3, 2000, No. BC221645); a judgment on the pleadings motion in the Kirchmedia GmbH & Co. case filed by defendant on June 16, 2000; various accounting statements for a film; a letter dated April 18, 1990; and a revenue statement for some films. The judicial notice request, which defendant seeks to seal, also includes: a September 26, 2001, minute order and notice of ruling filed October 9, 2001 in the Ben Efraim action; a sealed Court of Appeal order dated October 10, 2001; a notice of ruling in the Ben Efraim action filed November 28, 2001; a December 28, 2001, notice of entry of an order in the Ben Efraim action; a November 27, 2001, order in the Ben Efraim action; a Court of Appeal order denying a writ petition (Ben Efraim v. Superior Court (Feb. 6, 2002, B155328) [nonpub. order]); an answer and cross-complaint filed March 15, 2002, in the case of Universal City Studios, Inc. v. Ben Efraim (Super.Ct.L.A.County, Jan. 3, 2002, No. BC265624 and minute orders issued March 29, 2002, and August 23, 2002, in this latter lawsuit which also involves Mr. Ben Efraim.

In support of the foregoing sealing request, defendant relies upon the following facts. On October 14, 1998, plaintiff entered into a settlement...