Align Technology, Inc. v. SmileDirectClub, LLC

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ALIGN TECHNOLOGY, INC., Case No. 23-cv-00023-EMC

8 Plaintiff, ORDER GRANTING DEFENDANTS' 9 v. MOTION TO STAY

10 SMILEDIRECTCLUB, LLC, et al., Docket No. 41 11 Defendants.

12 13 14 Previously, the Court issued an order granting in part and denying in part a request to seal 15 information filed by Defendants (hereinafter collectively referred to as “SDC”). See Docket No. 16 36 (order). That same day, SDC appealed the Court’s order (to the extent sealing was denied) to 17 the Ninth Circuit. See Docket No. 37 (notice of appeal). The Court granted SDC’s motion to stay 18 enforcement of the sealing order pending resolution of a motion to stay pending appeal that SDC 19 intended to file. SDC has now filed that motion to stay. Having considered the parties’ briefs,1 the 20 Court finds the matter suitable for disposition without oral argument. The motion to stay pending 21 appeal is hereby GRANTED. 22 "A stay is not a matter of right. . . . It is instead 'an exercise of 23 judicial discretion' . . . [that] 'is dependent upon the circumstances of the particular case.'" Judicial discretion in exercising a stay is to be 24 guided by the following legal principles, as distilled into a four factor analysis in Nken [v. Holder, 556 U.S. 418 (2009)]: "(1) 25 whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be 26

27 1 Align does not oppose the motion to stay pending appeal so long as “the case can proceed on the irreparably injured absent a stay; (3) whether issuance of the stay 1 will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies." "The party 2 requesting a stay bears the burden of showing that the circumstances justify an exercise of [this Court's] discretion." 3 4 Lair v. Bullock, 697 F.3d 1200, 1203 (9th Cir. 2012). “The first two Nken factors ‘are the most 5 critical.’” Id. at 1204. However, the Ninth Circuit has indicated that there is a sliding scale along 6 the lines of the standard applicable where there is a request for a preliminary injunction. In other 7 words, relief may be given where there are serious questions going to the merits and the balance of 8 hardships tips sharply in the moving party’s favor. See Flores v. Barr, 977 F.3d 742, 746 (9th Cir. 9 2020); see also Lado v. Wolf, 952 F.3d 999, 1007 (9th Cir. 2020) (“The same sliding scale 10 approach applies to the consideration of stays pending appeal. ‘If anything, a flexible approach is 11 even more appropriate in the stay context.’”); cf. Apple, Inc. v. Samsung Elecs. Co., No. 11-CV- 12 01846-LHK, 2012 U.S. Dist. LEXIS 149820, at *27 (N.D. Cal. Oct. 17, 2012) (“Deciding whether 13 to grant a stay of an order pending an appeal is an equitable inquiry. Each factor in the analysis 14 need not be given equal weight.”). 15 In the instant case, the Court concludes that the equitable inquiry favors SDC. As SDC 16 points out, if the Court were to deny SDC relief now, that would effectively gut its appeal. SDC 17 would be “deprived of any remedy if this Court does not stay its order. When the information is 18 publicly filed, what once may have been [confidential information] no longer will be.” Apple, Inc. 19 v. Samsung Elecs. Co., No. 11-CV-01846-LHK, 2012 U.S. Dist. LEXIS 115162, at *19 (N.D. Cal. 20 Aug. 15, 2012). Furthermore, the balance of hardships tips sharply in SDC’s favor, especially in 21 light of Align’s nonopposition to a stay pending appeal. 22 To be clear, however, the Court “does not believe that the partial denial of [SDC’s] sealing 23 request was erroneous.” Id. SDC suggests that the Court “barely engage[d]” in an analysis of 24 whether the portions of the complaint at issue contained confidential business information. Mot. 25 at 11. That is not correct, as borne out by the fact that the Court held that certain information 26 could be sealed from ¶¶ 97 and 98. See Docket No. 36 (Order at 3) (stating that, in ¶ 97, “[t]he 27 amount of the payment may be sealed” and that, in ¶ 98, “[t]he last sentence which provides some 1 || parties’ arbitration agreement —i.e., that the arbitration proceedings be kept entirely confidential. 2 || Butcourts have held that an agreement to keep arbitration matters confidential does not by itself 3 || establish compelling reasons to seal. See, e.g., Mission Wellness Pharmacy LLC v. Caremark LLC, 4 |} No. CV-22-00967-PHX-GMS, 2022 US. Dist. LEXIS 107771, at *2-4 (D. Ariz. June 16, 2022); 5 Ovonic Battery Co. v. Sanyo Elec. Co., No. 14-cv-01637-JD, 2014 U.S. Dist. LEXIS 82687, at *9 6 || (N.D. Cal. June 16, 2014); Pers. Staffing Grp., LLC v. XL Ins. Am., Inc., No. CV 22-6491- 7 || JEW(SKx), 2022 U.S. Dist. LEXIS 192063, at *6-7 (C.D. Cal. Oct. 19, 2022). 8 For the foregoing reasons, the Court grants SDC’s request for relief, primarily based on the 9 || wreparable mjury it would face if the Court were to deny a stay of the sealing order pending 10 || appeal. 11 This order disposes of Docket No. 41. 12 13 IT ISSO ORDERED. 14 g 15 || Dated: March 3, 2023 16 LL = fo 17 18 EDWARD M. CHEN United States District Judge 19 20 21 22 23 24 25 26 27 28