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 The suit, filed last year in California state court in Oakland by
Reuters America, a unit of Thomson Reuters Corp, argued that the
state Public Records Act requires disclosure of investment-return
information for the university system's $11.23 billion endowment
fund.
Specifically, the suit sought performance information on funds
managed by Kleiner Perkins Caufield & Byers and Sequoia Capital, the
only funds among the dozens in which the university has investments
whose returns were not disclosed. The university argued that it did
not have the return information in its possession.
In October last year, a trial court judge agreed with Reuters that
the university should obtain and disclose performance results for
those funds.
Thursday, a panel of judges reversed the earlier decision, and also
ordered Reuters to pay the court costs of the Regents of the
University of California.
Reuters had argued that the public had an interest in seeing details
on the funds' performance, and previous rulings have held that the
university's returns are public records under the California Public
Records Act. But the panel of judges said that if the university
didn't have the return information, it was not required to obtain
and disclose it.
"No words in this statute suggest that the public entity has an
obligation to obtain documents," the judges wrote. Unless a document
is "prepared, owned, used or retained by a public entity, it is not
a public record under the CPRA."
"We believe today's decision by the Court of Appeal is the correct
one," said UC General Counsel Charles Robinson in a press release.
"It will allow our investment professionals to make and monitor
private equity investments without intrusion from third parties
seeking confidential and sensitive information for their own
commercial ends."
Thomson Reuters spokeswoman Barb Burg said: "We are obviously
disappointed by the court's ruling and continue to believe the
records are not only in the public interest, but should be disclosed
under the California Public Records Act." A Sequoia spokesman
declined to comment. Kleiner didn't immediately respond to a request
for comment.
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Peter Scheer, executive director of the First Amendment Coalition, a
nonprofit group, said the ruling created a loophole for groups
wishing to avoid public disclosure requirements. Such groups could
simply make an arrangement to not take physical possession of
pertinent information, he said, leading to manipulation of public
records law.
Scheer's group sued the California Public Employees' Retirement
System over fee disclosure in 2004. Calpers eventually agreed to
disclose the fees.
The university had argued that Kleiner and Sequoia considered their
returns data confidential, and it receives data from those firms
showing how their several funds it invests in are performing only in
aggregate. Reuters had sought individual-fund level returns, as the
university provides for other venture-capital firms it invests with.
California's public-records law, which was amended after a 2003
lawsuit forced the University of California to disclose investment
returns, shields some types of investment data from disclosure, such
as details about the performance of the underlying companies that
make up venture funds.
It explicitly states that other pieces of information are not exempt
from disclosure, including the dollar amount of the commitment made,
the net internal rate of return and the dollar amount of cash
distributions received.
The Reuters lawsuit, filed in January 2012, stems from a request to
the university for individual fund performance information on the
Kleiner and Sequoia Capital funds by Mark Boslet, senior editor at
Thomson Reuters' Venture Capital Journal and at PeHub, an online
publication about private equity, buyouts and venture capital.
(Editing by Jonathan Weber and Eric Walsh)
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