Blockchain Innovation, LLC v. Franklin Resources, Inc.

District Court, N.D. California·Decided October 8, 2024·No. 3:21-cv-08787·Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 BLOCKCHAIN INNOVATION, LLC, Case No. 21-cv-08787-TSH

8 Plaintiff, ORDER RE: MOTIONS TO FILE 9 v. UNDER SEAL

10 FRANKLIN RESOURCES, INC., et al., Re: Dkt. Nos. 298, 300-03, 331-32, 338-40, 11 Defendants. 349-51

12 13 I. INTRODUCTION 14 This order addresses the parties’ motions to seal pursuant to Civil Local Rule 79-5 that are 15 pending in connection with their motions to exclude expert testimony (ECF Nos. 295, 299). For 16 the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART the motions. 17 II. LEGAL STANDARD 18 The Ninth Circuit has recognized “good cause” as “the proper standard” to evaluate sealing 19 involving “previously sealed discovery attached to a nondispositive motion.” Pintos v. Pac. 20 Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (citing Phillips ex rel. Estates of Byrd v. Gen. 21 Motors Corp., 307 F.3d 1206, 1213 (9th Cir. 2002)); see also Edwards Lifesciences Corp. v. Meril 22 Life Scis. Pvt. Ltd., 2021 WL 5407316, at *4 (N.D. Cal. Nov. 18, 2021) (“The documents at issue 23 in the pending motions to seal relate to Plaintiffs’ non-dispositive motion to preclude expert 24 testimony so the Court will apply the lower good cause standard.”). Under this standard, “a strong 25 presumption in favor of access is the starting point.” Kamakana v. City and Cnty. of Honolulu, 26 447 F.3d 1172, 1178 (9th Cir. 2006) (quotations omitted). The “good cause” standard requires a 27 “particularized showing” that “specific prejudice or harm will result” if the information is 1 R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated by specific examples of articulated 2 reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 3 1992) (quotation omitted). 4 Civil Local Rule 79-5 supplements this standard. Where, as here, a filing party (the 5 “Filing Party”) seeks to seal a filed document because that document has been designated as 6 confidential by another party (the “Designating Party”) the Filing Party must file an 7 Administrative Motion to Consider Whether Another Party’s Material Should Be Sealed. Civ. L. 8 R. 79-5(f). This motion must identify each document or portions thereof for which sealing is 9 sought. Id. “Within 7 days of the motion's filing, the Designating Party must file a statement 10 and/or declaration” including “a specific statement of the applicable legal standard and the reasons 11 for keeping a document under seal.” Civ. L. R. 79-5(c)(1), (f). That statement must include (i) the 12 legitimate private or public interests that warrant sealing; (ii) the injury that will result if sealing is 13 denied; and (iii) why a less restrictive alternative to sealing is not sufficient. Civil L. R. 79- 14 5(c)(1). A failure to file a statement or declaration may result in the unsealing of the provisionally 15 sealed document without notice to the Designating Party. Id. 16 III. DISCUSSION 17 A. ECF Nos. 298, 301 and 303 18 On September 3, 2024, Plaintiff Blockchain Innovation, LLC filed a motion to consider 19 whether certain of Defendant Roger Bayston’s materials included or referenced in Plaintiff’s 20 motion to exclude expert testimony and materials submitted as exhibits to the Declaration of 21 Christopher G. Granaghan in support of the motion should be filed under seal. ECF No. 298. 22 Bayston designated as “Highly Confidential – Attorney’s Eyes Only” the following documents: 23 Rebuttal Expert Report of Philip Green (Granaghan Decl., Ex. 3, ECF No. 303-4); and Transcript 24 of the August 2, 2024 deposition of Philip Green (id., Ex. 5, ECF No. 303-5). 25 Plaintiff also filed a motion to consider whether certain of Defendants Franklin Resources, 26 Inc. d/b/a Franklin Templeton, FT FinTech Holdings, LLC, Franklin Templeton Companies, LLC, 27 and Jennifer Johnson’s (“FT Defendants”) materials included or referenced in Plaintiff’s motion 1 The FT Defendants designated as “Highly Confidential – Attorney’s Eyes Only” the following 2 documents: Expert Report of Dr. Seoyoung Kim (Granaghan Decl., Ex. 1, ECF No. 303-2); 3 Rebuttal Expert Report of Philip Green (id., Ex. 3, ECF No. 303-4); Transcript of the July 30, 4 2024 deposition of Stephen Melvin (id., Ex. 4, ECF No. 303-5); and Transcript of the August 2, 5 2024 deposition of Philip Green (id., Ex. 5, ECF No. 303-6). FT Defendants also designated as 6 “Highly Confidential – Attorney’s Eyes Only” and “Highly Confidential – Source Code” the 7 following document: Expert Report of Dr. Stephen Melvin (id., Ex. 2, ECF No. 303-3). 8 Plaintiff also seeks to seal the motion to exclude itself (ECF No. 295), as it quotes from 9 and discusses several of these documents. Granaghan Decl., Ex. A, ECF No. 303-7. 10 Plaintiff also filed a motion to seal certain portions of Dr. Kim’s report (Granaghan Decl., 11 Ex. 1, ECF No. 301-2), Dr. Melvin’s report (id., Ex. 2, ECF No. 301-3), and Mr. Green’s report 12 (id., Ex. 3, ECF No. 301-4). ECF No. 301. 13 On September 10, 2024, The FT Defendants and Bayston (collectively, ‘Defendants”) filed 14 a combined response in support of Plaintiff’s motions. ECF No. 320. Defendants request the 15 Court seal the portions of Dr. Melvin’s Report and Mr. Green’s Report because they reveal, 16 among other things, commercially sensitive, proprietary, and technical information of Defendants. 17 ECF No. 320. Defendants state each report discusses and relies on materials that reveal highly- 18 sensitive, confidential business and technical information belonging to Franklin. 19 Defendants don’t seek to seal the motion to exclude itself or Dr. Kim’s Report, excerpts 20 from Dr. Melvin’s deposition transcript, or excerpts from Mr. Green’s deposition transcript. 21 1. Confidential Business Information 22 Defendants state portions of the listed paragraphs in each of these reports disclose 23 Franklin’s sensitive internal business strategy and corporate decision-making about FinTech, 24 tokenized assets, investment strategies: 25 • Dr. Melvin Report ¶¶ 87, 89, 91, 93, 95, 102, 104, 106, 109, 111, 113, 115, 117, 119, 26 171, 182, 188, 194, 220, 226, 232, 238, 247, 254, 270, 276, 287. See also Simmons Decl. ¶¶ 4-5, 27 ECF No. 320-1. 1 Defendants state the following portions of both reports also disclose information about 2 Franklin’s highly-confidential internal budgeting and finances: Melvin Report ¶ 61; Green Report 3 ¶¶ 202-204, 215, 229, 259-261, 267-269. See also Simmons Decl. ¶¶ 4, 6. 4 Courts regularly hold that good cause supports sealing information related to a company’s 5 business strategy and finances where it can impose harm by allowing competitors to capitalize on 6 a business’s internal business decisions. See Big Run Studios Inc. v. AviaGames Inc., 2024 WL 7 1364734, at *2 (N.D. Cal. Mar. 28, 2024) (good cause to seal “[c]onfidential business 8 information”); Bos. Ret. Sys. v. Uber Techs., Inc., 2023 WL 6132961, at *1 n.2 (N.D. Cal. Sept. 9 19, 2023) (good cause supports sealing portions of exhibits that reveal “business strategy and 10 corporate decision making”). Defendants state Franklin is a global leader in asset management, 11 and public disclosure of information revealing its internal business strategies and finances would 12 likely result in significant competitive injury to Franklin, because it could allow Franklin’s 13 competitors to gain an unfair business advantage over Franklin based on confidential and non- 14 public information.” See Simmons Decl. ¶¶ 4-6.

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Blockchain Innovation, LLC v. Franklin Resources, Inc., (N.D. Cal. 2024).

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