Henry Nicholas' Divorce Is More Secret Than Yours

[Moxley Confidential] That's what the billionaire's lawyers are still arguing, three years after the split became final

Henry T. Nicholas—Orange County’s most controversial billionaire—wants his scandal-loaded divorce records permanently sealed only to protect information about the daily routines of his children, he says, and not to bury alleged details of his illicit drug abuse. Never mind that the information about the kids is probably stale—the divorce was finalized in 2008, and a Los Angeles Times reporter already combed through the file to craft an article 10 months ago. But Nicholas continues to demand that a California Court of Appeal based in Santa Ana block further public inspection of the records. Last month, the appellate court heard oral arguments and is due to render a decision by October.

This legal battle has dragged on past Nicholas’ most memorable courtroom victories. In December 2009, federal Judge Cormac J. Carney cited alleged prosecutorial misconduct when he abruptly dismissed criminal charges stemming from Nicholas’ management of semiconductor giant Broadcom Corp. The following month, federal drug charges against the billionaire were also dropped. Nicholas hailed the events as proof of his innocence.

At issue in the civil matter is whether billionaires such as Nicholas can manipulate courts to gain secrecy not available to any other citizen going through a divorce, a notion the Times has fought for years. In 2006, the California Supreme Court rejected an effort by billionaire Ronald W. Burkle to seal his divorce file. Burkle, too, claimed he only wanted to protect information about his kids from the Times and other news outlets. Apparently inspired by Burkle, Nicholas has been unable to accept the high court’s ruling in that case: that the wealthy don’t enjoy a special secrecy right.

Him again?
Jeanne Rice/OC Weekly file photo
Him again?

But according to a January 2010 brief filed by Nicholas attorney Gerard M. Mooney, the Times wants “unfettered” access to information “regarding the minor children, including medical and psychological evaluations of the children; information regarding the children’s schooling and the location of their schools, caretaker and play dates; pleadings contesting child custody; and detailed information regarding the parties’ residences and whereabouts.”

Mooney wrote that the Times’ motivation to obtain such data is “difficult to fathom” and that Nicholas has sought a court order banning the paper from publishing future information from the file.

In her own briefs, Kelli Sager—one of the Times’ lawyers—figuratively shrugs her shoulders. She notes that the paper hasn’t opposed specific redactions from the public record. She says the investigative reporter on the story, E. Scott Reckard, has never even demanded or disclosed “sensitive” details about the children’s lives.

Sager also strongly hints that the protecting-the-children angle is a ruse to mask Nicholas’ desire for confidentiality concerning messy allegations between him and his ex-wife Stacey about the use of cocaine, Ecstasy, methamphetamine and nitrous oxide.

Ironically, Nicholas had Dr. David J. Sheffner file an affidavit that suggests Sager is right. Sheffner opined that the Times would employ “sensationalism” if it obtained access to the drug allegations. He argued that “the publication of any material containing details of what the parents said about each other . . . would be highly inimical to these children’s best interests.”

Though average citizens going through a divorce are afforded no such secrecy, OC family court Judge Salvador Sarmiento accepted Sheffner’s reasoning. According to Sager, Nicholas got Sarmiento to not only seal the divorce file in its entirety without a public hearing in February 2007, but also erase any mention of its existence in public records. In another move demonstrating his apparent willingness to placate the billionaire, Sarmiento sealed his order to seal the case.

But Judge James L. Waltz assumed Sarmiento’s duties after a routine judicial rotation of jobs and made no secret he didn’t approve. At a June 2009 hearing, Kevin Qualls—an attorney for the Nicholas children—demanded that Waltz “lock down the courtroom,” claiming the debate over secrecy should be conducted in secret. Waltz declined, noting the “extraordinary” secrecy Nicholas had already “improperly” won, according to a hearing transcript I obtained. Nicholas wanted everything sealed—even form-letter “proof of service” notices between lawyers, the judge noted sourly.

Nicholas attorney Steven Goon told Waltz that the judge didn’t have the power to overturn Sarmiento’s order. Waltz was not amused. Goon then told him he “has to check [his] desire to do the right thing.”

The judge turned to Alonzo Wickers, who represents the Times.

“The case has basically been a black hole for the public and the LA Times,” said Wickers. “If [Nicholas’ argument prevails, it would] write a new constitutional rule in connection with the First Amendment right of access to court proceedings and court records.”

(Disclosure: Both Wickers and Sager of the firm Davis Wright Tremaine have represented OC Weekly.)

Waltz ultimately reversed the sealing order. Reckard reviewed the file and wrote a Sept. 4, 2009, article detailing the divorce battle. He didn’t mention any details about the whereabouts of the Nicholas children.

Despite that history, Mooney claims, “this appeal is not and never has been about keeping the existence of the case hidden from the public, as the Times fallaciously argues.”

Times attorney Sager sees a bigger principle at stake: Does Nicholas have the right “to litigate under the cover of darkness”?

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