1 UNITED STATES DISTRICT COURT
2 DISTRICT OF NEVADA
3 * * *
4 SANGHAMITRA BASU, Case No. 2:20-cv-01432-JCM-BNW
5 Plaintiff, ORDER 6 v.
7 MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, 8 Defendant. 9 10 Before the Court are two motions to seal, ECF Nos. 51 and 62. Neither motion is opposed. 11 I. Legal Standard 12 Generally, the public has the right to inspect and copy judicial records. Kamakana v. City 13 & Cnty. Of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006). Those records are presumed publicly 14 accessible. Id. Accordingly, a party seeking to seal judicial record bears the burden of overcoming 15 this strong presumption. Id; see also Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir. 1995) 16 (noting that the Ninth Circuit’s approach for the common law right of access requires courts to 17 start with a strong presumption in favor of access). For a dispositive motion, such as a motion for 18 summary judgment, the party seeking to seal the record must articulate “compelling reasons 19 supported by specific factual findings” which outweigh the history of access to related documents 20 and the public policies favoring disclosure. Kamakana, 447 F.3d at 1178, 79. (cleaned up). Courts 21 cannot rely on hypothesis or conjecture. Id. at 1179. 22 Typically, “compelling reasons” exist when records may be used to release trade secrets. 23 Nixon v. Warner Comms., Inc., 435 U.S. 589, 598 (1978) (finding that courts have refused to 24 allow public access to files if they contain business information that might harm a litigant’s 25 “competitive standing”). Even if the court discerns a compelling reason for sealing its records, 26 “the court must ‘conscientiously balance [ ] the compelling interests’ of the public and the party 27 who seeks to keep certain judicial records secret.” Kamakana, 447 F.3d at 1179. 1 II. Analysis 2 a. Plaintiff’s Motion to Seal (ECF No. 62) 3 Here, Plaintiff seeks to seal Exhibits 2 and 33 to its Opposition to Defendant’s Motion for 4 Partial Summary Judgment. ECF No. 62. Plaintiff notes that Defendant designated these 5 documents as confidential under the parties’ protective order. Id. at 1. However, Plaintiff “does 6 not believe the documents qualify as confidential documents” and suggests the Defendant may 7 “wish to demonstrate to this Court why the documents should be filed under seal.” Id. at 1-2. 8 Defendant did not file a response to this motion. 9 Designating a document as “Highly Confidential” under a protective order is insufficient 10 to meet the compelling reasons standard. Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 11 1122,1136 (finding that documents subject to a protective order are filed under seal as 12 attachments to dispositive motions are still subject to the ‘compelling reasons’ standard). The 13 party seeking to seal documents still must show that the specific interests favoring continued 14 secrecy outweigh “the public interest in understanding the judicial process.” Hagestad, 49 F.3d at 15 1434; see also Kamakana, 447 F.3d at 1181. 16 Though it does not appear that Defendant seeks to keep ECF Nos. 2 and 33 sealed, the 17 Court will give Defendant a final opportunity to demonstrate why these documents should be 18 sealed. If Defendant would like these documents sealed, it must file a motion to seal by July 18, 19 2022, explaining, specifically, what compelling reasons exist to seal the documents. If no such 20 motion is filed, the documents will be unsealed. 21 b. Defendant’s Motion to Seal (ECF No. 51) 22 Here, Defendant seeks to seal Exhibit 4, titled “DI Claims Evaluation Factors,” filed in 23 support of its motion for partial summary judgment. Defendant suggests that this exhibit is a trade 24 secret. See ECF No. 51 at 2-3. Defendant argues that Exhibit 4 provides its claim examiners with 25 an “efficient and effective way” to determine whether income claims are payable and “protects[s] 26 MassMutual against fraudulent claims.” ECF No. 51 at 2. Defendant also contends that if the 27 exhibit is released to the public, Defendant’s competitors “would be able to copy MassMutual’s 1 avoid MassMutual’s methods for detecting fraud.” ECF No. 51 at 2. Accordingly, Defendant asks 2 the Court to seal Exhibit 4 on the basis that it is a trade secret. See id. at 2-3. 3 The Ninth Circuit has adopted the Restatement’s definition of “trade secret.” Apple Inc. v. 4 Samsung Elecs. Co., 727 F.3d 1214, 1222 (Fed. Cir. 2013) (citing Clark v. Bunker, 453 F.2d 5 1006, 1009 (9th Cir. 1972)). Under this definition, a trade secret is “any formula, pattern, device 6 or compilation, of information which is used in one’s business, and which gives him an 7 opportunity to obtain an advantage over competitors who do not know or use it.” Bartech Int'l, 8 Inc. v. Mobile Simple Sols., Inc., No. 215CV02422MMDNJK, 2016 WL 2593920, at *1 (D. Nev. 9 May 5, 2016) (quoting Restatement (First) of Torts § 757, cmt. b (1939)). Although trade secrets 10 generally relate to the production of goods, they may relate to other business operations. Clark, 11 453 F.2d at 1009. 12 The Restatement provides six factors to consider when determining whether information 13 is a trade secret: 14 (1) the extent to which the information is known outside of his business; (2) the extent to 15 which it is known by employees and others involved in his business; (3) the extent of 16 measures taken by him to guard the secrecy of the information; (4) the value of the 17 information to him and to his competitors; (5) the amount of effort or money expended by 18 him in developing the information; (6) the ease or difficulty with which the information 19 could be properly acquired or duplicated by others. 20 Restatement (First) of Torts § 757 cmt. b. 21 The Court reviewed Exhibit 4 within the context of the Restatement factors, but 22 Defendant has not provided enough information for the Court to determine whether the exhibit is 23 a trade secret. As explained below, Defendant’s one-paragraph explanation is insufficient to 24 explain why Exhibit 4 should be deemed a trade secret. 25 The first factor, the extent to which the information is known outside of business, is not 26 discussed within the motion. 27 The second factor, the extent to which the information is known by employees and others, 1 information because they use it to “determine whether disability income insurance claims are 2 payable . . . .” Id. at 2:21-22. However, Defendant does not clarify the extent to which the 3 information is shared throughout MassMutual or any policies regarding its secrecy. 4 The same goes for the third factor, the extent of measures taken to guard the secrecy of the 5 information. Defendant fails to explain what measures, if any, are taken to guard the secrecy of 6 the information. 7 Regarding the fourth factor, the value of the information to the Defendant and its 8 competitors, Defendant simply claims the information is valuable. Defendant argues that if it 9 were made public, competitors “would be able to copy MassMutual’s processes, and insureds 10 who are seeking to defraud MassMutual could manufacture a way to avoid MassMutual’s 11 methods for detecting fraud.” ECF No. 51 at 2. These statements are conclusory, as Defendant 12 has not provided examples of the information’s value to the company or to its competitors. 13 The fifth factor, the amount of effort or money expended in developing the information, is 14 not addressed in the motion. 15 Finally, the sixth factor, the ease or difficulty with which the information could be 16 properly acquired or duplicated by others, is also not addressed in the motion.
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1 UNITED STATES DISTRICT COURT
2 DISTRICT OF NEVADA
3 * * *
4 SANGHAMITRA BASU, Case No. 2:20-cv-01432-JCM-BNW
5 Plaintiff, ORDER 6 v.
7 MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, 8 Defendant. 9 10 Before the Court are two motions to seal, ECF Nos. 51 and 62. Neither motion is opposed. 11 I. Legal Standard 12 Generally, the public has the right to inspect and copy judicial records. Kamakana v. City 13 & Cnty. Of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006). Those records are presumed publicly 14 accessible. Id. Accordingly, a party seeking to seal judicial record bears the burden of overcoming 15 this strong presumption. Id; see also Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir. 1995) 16 (noting that the Ninth Circuit’s approach for the common law right of access requires courts to 17 start with a strong presumption in favor of access). For a dispositive motion, such as a motion for 18 summary judgment, the party seeking to seal the record must articulate “compelling reasons 19 supported by specific factual findings” which outweigh the history of access to related documents 20 and the public policies favoring disclosure. Kamakana, 447 F.3d at 1178, 79. (cleaned up). Courts 21 cannot rely on hypothesis or conjecture. Id. at 1179. 22 Typically, “compelling reasons” exist when records may be used to release trade secrets. 23 Nixon v. Warner Comms., Inc., 435 U.S. 589, 598 (1978) (finding that courts have refused to 24 allow public access to files if they contain business information that might harm a litigant’s 25 “competitive standing”). Even if the court discerns a compelling reason for sealing its records, 26 “the court must ‘conscientiously balance [ ] the compelling interests’ of the public and the party 27 who seeks to keep certain judicial records secret.” Kamakana, 447 F.3d at 1179. 1 II. Analysis 2 a. Plaintiff’s Motion to Seal (ECF No. 62) 3 Here, Plaintiff seeks to seal Exhibits 2 and 33 to its Opposition to Defendant’s Motion for 4 Partial Summary Judgment. ECF No. 62. Plaintiff notes that Defendant designated these 5 documents as confidential under the parties’ protective order. Id. at 1. However, Plaintiff “does 6 not believe the documents qualify as confidential documents” and suggests the Defendant may 7 “wish to demonstrate to this Court why the documents should be filed under seal.” Id. at 1-2. 8 Defendant did not file a response to this motion. 9 Designating a document as “Highly Confidential” under a protective order is insufficient 10 to meet the compelling reasons standard. Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 11 1122,1136 (finding that documents subject to a protective order are filed under seal as 12 attachments to dispositive motions are still subject to the ‘compelling reasons’ standard). The 13 party seeking to seal documents still must show that the specific interests favoring continued 14 secrecy outweigh “the public interest in understanding the judicial process.” Hagestad, 49 F.3d at 15 1434; see also Kamakana, 447 F.3d at 1181. 16 Though it does not appear that Defendant seeks to keep ECF Nos. 2 and 33 sealed, the 17 Court will give Defendant a final opportunity to demonstrate why these documents should be 18 sealed. If Defendant would like these documents sealed, it must file a motion to seal by July 18, 19 2022, explaining, specifically, what compelling reasons exist to seal the documents. If no such 20 motion is filed, the documents will be unsealed. 21 b. Defendant’s Motion to Seal (ECF No. 51) 22 Here, Defendant seeks to seal Exhibit 4, titled “DI Claims Evaluation Factors,” filed in 23 support of its motion for partial summary judgment. Defendant suggests that this exhibit is a trade 24 secret. See ECF No. 51 at 2-3. Defendant argues that Exhibit 4 provides its claim examiners with 25 an “efficient and effective way” to determine whether income claims are payable and “protects[s] 26 MassMutual against fraudulent claims.” ECF No. 51 at 2. Defendant also contends that if the 27 exhibit is released to the public, Defendant’s competitors “would be able to copy MassMutual’s 1 avoid MassMutual’s methods for detecting fraud.” ECF No. 51 at 2. Accordingly, Defendant asks 2 the Court to seal Exhibit 4 on the basis that it is a trade secret. See id. at 2-3. 3 The Ninth Circuit has adopted the Restatement’s definition of “trade secret.” Apple Inc. v. 4 Samsung Elecs. Co., 727 F.3d 1214, 1222 (Fed. Cir. 2013) (citing Clark v. Bunker, 453 F.2d 5 1006, 1009 (9th Cir. 1972)). Under this definition, a trade secret is “any formula, pattern, device 6 or compilation, of information which is used in one’s business, and which gives him an 7 opportunity to obtain an advantage over competitors who do not know or use it.” Bartech Int'l, 8 Inc. v. Mobile Simple Sols., Inc., No. 215CV02422MMDNJK, 2016 WL 2593920, at *1 (D. Nev. 9 May 5, 2016) (quoting Restatement (First) of Torts § 757, cmt. b (1939)). Although trade secrets 10 generally relate to the production of goods, they may relate to other business operations. Clark, 11 453 F.2d at 1009. 12 The Restatement provides six factors to consider when determining whether information 13 is a trade secret: 14 (1) the extent to which the information is known outside of his business; (2) the extent to 15 which it is known by employees and others involved in his business; (3) the extent of 16 measures taken by him to guard the secrecy of the information; (4) the value of the 17 information to him and to his competitors; (5) the amount of effort or money expended by 18 him in developing the information; (6) the ease or difficulty with which the information 19 could be properly acquired or duplicated by others. 20 Restatement (First) of Torts § 757 cmt. b. 21 The Court reviewed Exhibit 4 within the context of the Restatement factors, but 22 Defendant has not provided enough information for the Court to determine whether the exhibit is 23 a trade secret. As explained below, Defendant’s one-paragraph explanation is insufficient to 24 explain why Exhibit 4 should be deemed a trade secret. 25 The first factor, the extent to which the information is known outside of business, is not 26 discussed within the motion. 27 The second factor, the extent to which the information is known by employees and others, 1 information because they use it to “determine whether disability income insurance claims are 2 payable . . . .” Id. at 2:21-22. However, Defendant does not clarify the extent to which the 3 information is shared throughout MassMutual or any policies regarding its secrecy. 4 The same goes for the third factor, the extent of measures taken to guard the secrecy of the 5 information. Defendant fails to explain what measures, if any, are taken to guard the secrecy of 6 the information. 7 Regarding the fourth factor, the value of the information to the Defendant and its 8 competitors, Defendant simply claims the information is valuable. Defendant argues that if it 9 were made public, competitors “would be able to copy MassMutual’s processes, and insureds 10 who are seeking to defraud MassMutual could manufacture a way to avoid MassMutual’s 11 methods for detecting fraud.” ECF No. 51 at 2. These statements are conclusory, as Defendant 12 has not provided examples of the information’s value to the company or to its competitors. 13 The fifth factor, the amount of effort or money expended in developing the information, is 14 not addressed in the motion. 15 Finally, the sixth factor, the ease or difficulty with which the information could be 16 properly acquired or duplicated by others, is also not addressed in the motion. Instead, Defendant 17 simply contends that if the exhibit is not sealed, competitors could easily acquire and duplicate 18 the materials. However, this Court interprets this factor as a directive to gauge the ease or 19 difficulty with which the information could be properly acquired or duplicated by others 20 generally in the world (independent of their access to these documents in the event the documents 21 are not sealed). 22 The Court interprets this factor in this manner for two reasons. First, if the factor were 23 interpreted as Defendant seems to interpret it, this factor would always cut in favor of sealing and 24 essentially be meaningless; any document that was unsealed could be acquired and duplicated by 25 others. Second, the Restatement supports the Court’s interpretation. It provides that trade secrets 26 derive their value from being secret. It also conveys that “a substantial element of secrecy must 27 exist [for something to be a trade secret]” such that “except by the use of improper means, there 1 Here, Defendant does not explain how easy or difficult it would be for others to acquire or 2 || duplicate its sealed exhibit generally. 3 Since Defendant provided little information for each of the factors, the Court cannot 4 || determine whether Exhibit 4 qualifies as a trade secret. If Defendant wishes for this exhibit to 5 |} remain sealed, Defendant must explain specifically — and in greater detail — why it contains trade 6 || secrets that could be used for an improper purpose if allowed into the public record. See 7 || Kamakana, 447 F.3d at 1179. 8 I. Conclusion 9 IT IS THEREFORE ORDERED that Plaintiff's motion to seal (ECF No. 62) is DENIED 10 || without prejudice. If Defendant would like Exhibits 2 and 33 to remain sealed, it must file a 11 || motion to seal by July 18, 2022. If Defendant chooses not to file such a motion, these documents 12 || will be unsealed. 13 IT IS FURTHER ORDERED that Defendant’s motion to seal (ECF No. 51) is DENIED 14 || without prejudice. If Defendant would like Exhibit 4 to remain sealed, it must file a motion to seal 15 || consistent with this order by July 18, 2022. If Defendant chooses not to file such a motion, this 16 |) document will be unsealed. 17 DATED: July 6, 2022 18 LZ Ls Lap fa 19 BRENDA WEKSLER : UNITED STATES MAGISTRATE JUDGE 20 21 22 23 24 25 26 27 28