Cisco Systems, Inc. v. Chung

District Court, N.D. California·Decided March 16, 2021·No. 4:19-cv-07562·Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA

7 CISCO SYSTEMS, INC., et al., Case No. 19-cv-07562-PJH 8 Plaintiffs,

9 v. ORDER DENYING MOTION FOR RECONSIDERATION OF SEALING 10 WILSON CHUNG, et al., ORDERS AND GRANTING MOTION TO MAINTAIN SEAL ON NON-PARTY 11 Defendants. FOXCONN’S INFORMATION 12 Re: Dkt. Nos. 169-1, 176, 177

13 Before the court is plaintiff Cisco Systems, Inc., (“plaintiff”) motion for partial 14 reconsideration of the court’s December 21, 2020 order (Dkt. 168) granting in part and 15 denying in part plaintiff’s motions to seal. Dkt. 169-1. Also before the court is non-party 16 Hon Hai Precision’s (“Foxconn”) unopposed administrative motion to keep certain of its 17 information (the “E2E cost model information”) under seal. Dkt. 177. Having read the 18 parties’ papers and carefully considered their arguments and the relevant legal authority, 19 and good cause appearing, the court hereby DENIES plaintiff’s motion for 20 reconsideration and GRANTS Foxconn’s motion to keep its information under seal. 21 BACKGROUND 22 Plaintiff sued defendants for purportedly misappropriating its trade secrets. 23 Following multiple motions to dismiss, defendant Plantronics Inc. (“Plantronics”) filed a 24 motion to strike and challenge the sufficiency of plaintiff’s California Code of Civil 25 Procedure § 2019.210 trade secret designation (the “disclosure”). Dkt. 136. Plaintiff 26 made various requests to seal certain documents and information filed in connection with 27 the motion to strike. Dkts. 141, 149, 156, 160. 1 motion to strike. Dkt. 168 (the “December 21, 2020 order”) at 1-18. The court also 2 granted in part and denied in part plaintiff’s requests to seal. Id. at 19-31. The court 3 ordered plaintiff to prepare and provide Plantronics a copy of the disclosure applying 4 redactions consistent with the court’s sealing orders for filing on the public docket. Id. at 5 32. The court ordered plaintiff to provide that copy by December 31, 2020. Id. 6 Nine days later, on December 30, 2020, plaintiff filed a motion for leave to file the 7 instant motion for partial reconsideration of the December 21, 2020 order’s denying 8 plaintiff’s sealing requests. Dkt. 169. On New Years’ Eve, plaintiff filed a motion to stay 9 the court’s sealing order pending its ruling on the motion for reconsideration. Dkt. 171. 10 On New Years’ Day, the court permitted plaintiff leave to file the instant motion for 11 reconsideration and stayed its sealing order pending its ruling on that motion. Dkt. 172. 12 In its motion for reconsideration, plaintiff challenges only the court’s decision to 13 unseal five portions of its disclosure (Dkt. 136-5) and one slide in a supporting document 14 (collectively, the “challenged portions”). Dkt. 169-1 at 3-4. Plaintiff does not otherwise 15 contest the court’s December 21, 2020 order. The challenged portions include the 16 following: 17 • Disclosure at 21:15-22:13 (Internal Revenue Targets for Project Sunkist). 18 • Disclosure at 33:26-34:12 (Project Polaris Internal Strategy). 19 • Disclosure at 37:14-27 (Project Pricing Strategy). 20 • Disclosure at 39:15-40:1 (Cisco’s End-to End Cost Model). 21 • Disclosure at 66:12-26 (Project Vecchio Pricing Strategy). 22 • Docket 156-1 at 8 (the “Sunkist Presentation”). 23 At the outset, the court notes that docket 156-1 at 8 is identical to the information 24 reflected in the disclosure at 21:15-22-13. Additionally, for purpose of this order (and 25 contrary to the court’s ordinary practice), all cites to the disclosure refer to that 26 document’s original page and lines (as opposed to those generated by this electronic 27 case filing (“ECF”) system). All other citations will refer to the relevant docket number 1 On January 19, 2021, Foxconn filed an administrative motion to stay the court’s 2 sealing order with respect to disclosure 39:15-40:1. Dkt. 176. On February 5, 2021, 3 before the court ruled on its motion to stay, Foxconn filed another administrative motion 4 to permanently maintain that disclosure portion under seal. Dkt. 177.1 In it, Foxconn 5 asks the court to permanently seal some of its confidential cost information that plaintiff 6 apparently included in one of the challenged portions at issue. Id. 7 The court has already summarized the disclosure in its December 21, 2020 order. 8 Given that, the court will detail the challenged portions only as necessary in its analysis. 9 Following its analysis of the motion for reconsideration, the court will consider Foxconn’s 10 motion to permanently seal any of its information that is contained in the disclosure. 11 DISCUSSION 12 Under Civil Local Rule 7-9(b), a party may request that a court reconsider a prior 13 order under one of the following conditions: 14 • When filing the motion for leave, a material difference in fact or law exists from 15 that presented to the court prior to entry of the subject order. The party must 16 also show that it did not know such fact or law at the time of the subject order. 17 • The emergence of new material facts or a change of law occurring after the 18 subject order. 19 • A manifest failure by the court to consider material facts or dispositive legal 20 arguments presented prior the subject order. Civ. L.R. 7-9(b)(1)-(3). 21 In its motion, plaintiff contends that the court “failed to consider critical legal 22 arguments and facts that support sealing the [the challenged portions].” Dkt. 169-1 at 3. 23 To support that contention, plaintiff proffers four reasons. The court analyzes—and 24 rejects—each reason in turn below. 25 / / / 26

27 1 Because the court had already stayed its sealing orders pending resolution of the 1 I. California Civil Code § 3426.5 Does Not Require the Court to Seal the 2 Challenged Portions 3 First, plaintiff argues that the court “misapplied” California Civil Code § 3426.5’s 4 rule that “[i]n an action under this title, a court shall preserve the secrecy of an alleged 5 trade secret by reasonable means.” Dkt. 169-1 at 5 (emphasis added). Plaintiff takes the 6 position that, because its second amended complaint (“SAC”) alleges that the information 7 reflected in the challenged portions of its disclosure constitute trade secrets, the court is 8 required to seal such information. Id. at 5-7. According to plaintiff, § 3426.5 applies to 9 any information detailed in its disclosure, including that pertaining to purported trade 10 secrets that the court previously determined may not serve as a basis for its claims. 11 The court rejects plaintiff’s first ground for reconsideration for four reasons. First, if 12 adopted, plaintiff’s construction of § 3426.5 would require courts to seal any information 13 that a litigant characterizes in its pleadings as a trade secret. As plaintiff’s own cited 14 authority shows, Dkt. 169-1 at 6-7,2 California courts reject such a categorical contention. 15 Cypress Semiconductor Corp. v. Maxim Integrated Prod., Inc., 236 Cal. App. 4th 243, 16 255 (2015) (“[The sealing] motion rested on the premise that merely by filing a pleading 17 characterizing certain information as a trade secret, a party can compel the courts to 18 withhold that information from the public record until such time as it finally adjudged not to 19 be a trade secret. . . . Here there was no arguably secret information before the court. 20 Nearly all of the information Cypress sought to place under seal had been compiled by its 21 opponent from public sources . . . This was not a colorable trade secret, and Cypress's 22 calling it so did not obligate the court to place it under seal or take any other action 23 to prevent its further disclosure.”) (italics in the original) (bold italics added). 24 Plaintiff’s vague citation to In re Providian Credit Card Cases, 96 Cal. App. 4th 25

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