Billionaire investor Ronald Burkle has persuaded the courts to shield from public view -- at least temporarily -- dozens of documents in his divorce file, arguing that a new state law requires trial and appellate judges to seal the records.
At a hearing Tuesday in Superior Court in Long Beach, Burkle’s lawyers argued that the law, signed in June by Gov. Arnold Schwarzenegger, requires sealing records that disclose financial assets in divorce cases on request of one of the parties.
Burkle’s wife, Janet, opposed sealing the records.
The Los Angeles Times and Associated Press also opposed Burkle’s motion, arguing that the new law is unconstitutional because it denies the public the right to important court records and impinges on a judge’s ability to perform a document-by-document analysis before sealing records, as required by the 1st Amendment.
State legislators passed the law in April, gutting an unrelated bill about state employees and turning it into an amendment allowing either party in a divorce proceeding to close financial records, no questions asked.
The bill’s backers said their goal was to prevent information in divorce files from being used in crimes such as identity theft and kidnapping.
The new law passed both houses unanimously as “urgency” legislation, meaning that it went into effect immediately. Opposition from a media lobbyist, who said his organization and others had successfully killed similar bills in the past, had little effect.
Schwarzenegger signed the bill June 7.
“There had to be a collective desire from all the members to get this through as quickly as it did. Otherwise, it never would have happened,” said Jim Ewert, a 1st Amendment lawyer with the California Newspaper Publishers Assn. in Sacramento.
The bill’s passage came after a Los Angeles County Superior Court judge denied a prior request by Burkle to seal pleadings containing information about the couple’s assets and accounts. Instead, the judge ordered some details, including account numbers, to be redacted from the records.
Judges have the power to seal court documents and close hearings, but are required to balance the public’s right to know with the specific harm claimed by the individual. The new law removes judicial discretion when it comes to financial records in divorce cases. A longtime major donor to Democratic candidates and causes, Burkle, who made a fortune in the supermarket industry, gave contributions totaling $147,800 to Schwarzenegger and the state Democratic Party in February and March.
Janet Burkle’s attorney, Philip Kaufler, said that he believed Burkle had a hand in passage of the new law, but he could not cite direct evidence of Burkle’s actively pushing the legislation. Burkle denies any role in the bill.
There is no evidence that his contributions about the time the bill went through the Legislature were aimed at securing its passage.
Kaufler said the bill’s legislative analysis cites the same arguments Burkle’s lawyers made previously in trying to seal records in his case.
An attorney representing Burkle, Martin D. Singer, said in a letter to The Times that any allegation of Burkle’s involvement in the passage of the law is “outrageous in the extreme.”
“You proceed at your peril,” Singer, identifying himself as Burkle’s “litigation counsel,” said in the letter.
Janet Burkle filed for divorce in Los Angeles in June 2003 after 30 years of marriage to Ronald Burkle. According to her lawyer, it was the second time she had filed a divorce complaint.
Her first divorce filing ended in a “post-marital agreement” in 1997 that delineated and valued the couple’s community property distinct from their separate property but left open the possibility of a reconciliation.
Kaufler claims that his client was misled at the time, agreeing to less than she was due.
As part of the latest divorce proceeding, she asked to have the post-marital agreement thrown out. She also sought more than $57,260 a month in child support and $410,000 a month in alimony, laying out in detail the couple’s lifestyle, including a private jet and helicopter, $15,000 shopping trips at Barneys, a full-time security team, exotic cars and vacations and a $25-million fine art collection.
The “post-marital agreement” required that any disputes that arose between the Burkles be decided by a private judge, a retired jurist. Janet Burkle is appealing a ruling by the private judge that the “post-marital agreement” is binding, Kaufler said.
During the divorce, lawyers for Ronald Burkle have repeatedly sought to close hearings or seal documents. His wife’s lawyers have opposed those efforts.
In a brief written statement and subsequent telephone call, Burkle said he “spent a fortune” on litigation to get photos and financial details removed from the file because they “caused me as a parent to worry about my children’s security and our privacy.”
In November 2003, Los Angeles Superior Court Judge Roy L. Paul, who is presiding over the case, agreed to redact certain details from the divorce documents -- such as credit card numbers -- but ruled that the documents should remain public and that hearings should be open, according to court records.
In February and March, Burkle, who had been a financial supporter of Democrat Gray Davis, donated $121,200 to Schwarzenegger. Of that money, $21,000 went to Schwarzenegger’s reelection campaign -- the maximum allowed to a candidate; the remaining $100,000 went to Schwarzenegger’s California Recovery Team, his campaign fund for ballot measures the governor favors.
Also in March, Burkle gave $26,600 to the Democratic State Central Committee.
Before this year, the Legislature had been cold to the idea of restricting public access to divorce papers. Two bills proposed since 2000 by a member of the Republican minority, Sen. Bill Morrow of Oceanside, were rejected by the Senate Judiciary Committee.
In February, Senate President Pro Tem John Burton (D-San Francisco) took on the cause of sealing certain records in divorce cases, introducing a bill that would allow courts to seal details and location of a divorcing spouse’s financial information. Burton was initially unable to garner enough support for the measure, a legislative staff member said.
In April, he asked Assemblywoman Christine Kehoe (D-San Diego) to incorporate the measure into a bill she had written concerning trial court employees. That bill had been languishing for a year with little chance of passage.
Burton told Kehoe -- a privacy rights supporter who was then mounting her successful campaign for a state Senate seat -- that he had negotiated an agreement on the bill and did not want it to “unravel,” said the staffer, who spoke on the condition of anonymity.
Because Kehoe’s bill had already passed committee, it could move more quickly through the legislative houses than a new bill.
The measure passed both houses and was sent to Schwarzenegger on May 27. He signed it 11 days later. His chief legislative advisor would say only weeks later that rush measures were “not going to be looked upon favorably unless there is a compelling public interest” because “it can take us months to get departments, finance and agencies to do analyses.”
Schwarzenegger’s press secretary, Margita Thompson, said Wednesday that there was no record that Burkle contacted the governor’s office or tried to persuade Schwarzenegger to sign the bill. She declined to explain why he signed it.
“What I can tell you,” she said, “is the governor signs legislation on their merits and being good public policy.”
This week, Burkle’s lawyers sought to close public access to portions of the divorce file on three fronts.
They asked the private judge who presided over a trial to seal exhibits and transcripts of the trial. They scheduled an emergency hearing with the Superior Court judge presiding over the case to seal 28 documents containing financial information. And they asked the state Court of Appeal to seal documents filed in an appeal by Janet Burkle.
The Times and Associated Press argued before Paul on Tuesday that the new law is unconstitutional because it removes judicial discretion.
“It’s exactly what people were worried about: that it would help wealthy litigants hide from public scrutiny and that it seals one of the most important issues in the divorce court from oversight,” said Susan Seager, who is representing The Times and Associated Press in opposition to sealing the documents. “Two main topics are assets and custody. Wiping the asset portion from public scrutiny wipes out the heart of public oversight in divorce proceedings.”
All three courts sealed the documents temporarily, pending more complete hearings on the issue in the coming weeks.