1 2 3 6 7 DANTE DEMARTINI, et al., Case No. 22-cv-08991-JSC
8 Plaintiffs, ORDER RE MOTIONS TO SEAL AND 9 v. DISCOVERY DISPUTE
10 MICROSOFT CORPORATION, Re: Dkt. Nos. 88, 89, 119, 133, 134, 161, 11 Defendant. 162, 167, 173, 185, 186
12 Before the Court are several party and non-party (“designating parties”) requests to seal 13 from public disclosure information designated as varying degrees of confidential, including 14 portions of Plaintiffs’ first amended complaint, portions of and exhibits to Plaintiffs’ motion for 15 preliminary injunction and related papers, portions of and exhibits to Microsoft’s motion to 16 dismiss, and portions of and an exhibit to parties’ joint letter brief. The Court rules on these 17 motions below. (Dkt. Nos. 88, 89, 119, 133, 134, 161, 162, 167, 173, 185.)1 Designating parties 18 are given notice they have 14 days from the date of this Order to respond to this Court’s denial 19 without prejudice of any portion of a document or exhibit that those parties believe should be 20 partially or wholly sealed due to compelling reasons in compliance with this Court’s local rules. 21 (See Dkt. Nos. 88, 133, 134.) This Court also addresses Plaintiffs’ request to undesignate “Exhibit 22 K” below. (Dkt. No. 186.) 24 There is a right of public access to judicial records and documents. Nixon v. Warner 25 Commc'ns, Inc., 435 U.S. 589, 597 (1978). In considering motions to seal, courts recognize that 26 “a strong presumption in favor of access is the starting point.” Kamakana v. City & County of 27 1 Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (cleaned up). Designating parties seeking to seal 2 judicial records relating to motions that are “more than tangentially related to the underlying cause 3 of action,” Ctr. for Auto Safety v. Chrysler Grp., 809 F.3d 1092, 1099 (9th Cir. 2016), bear the 4 burden of overcoming the presumption with “compelling reasons supported by specific factual 5 findings that outweigh the general history of access and the public policies favoring disclosure, 6 such as the public interest in understanding the judicial process,” Kamakana, 447 F.3d at 1178–79 7 (cleaned up). A court must identify “a compelling reason [to impose the restriction] and articulate 8 the factual basis for its ruling, without relying on hypothesis or conjecture.” Id. at 1179; see also 9 Ctr. for Auto Safety, 809 F.3d at 1097 (finding the court must “conscientiously balance the 10 competing interest of the public and the party who seeks to keep certain judicial records secret”) 11 (quoting Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). 12 In addition, designating parties moving to seal their own or another party’s materials must 13 comply with Civil Local Rule 79-5. The rule supplements the “compelling reasons” standard. 14 Scramoge Tech. Ltd. v. Apple, Inc., No. 22-cv-03041-JSC, 2023 WL 3168322, at *5 (N.D. Cal. 15 Apr. 17, 2023). Parties’ requests must be “narrowly tailored to seek sealing only of sealable 16 material.” Civil L.R. 79-5. Parties “must explore all reasonable alternatives to filing documents 17 under seal . . . and avoid wherever possible sealing entire documents.” Id. at 79-5(a). A request to 18 seal needs to include “a specific statement” with the reasons for keeping a document under seal 19 explaining the interests warranting sealing, the injury that will result without sealing, and why a 20 less restrictive alternative is not sufficient. Id. at 79-5(c)(1). Under Civil Local Rule 79-5(f), 21 parties seeking to seal documents designated confidential by another party or non-party must file a 22 statement or response in accordance with Civil Local Rule 79-5(c)(1). 23 A request to seal may be supported by compelling reasons if the documents or portions of 24 documents at issue are “sources of business information that might harm a litigant’s competitive 25 standing.” Ctr. for Auto Safety, 809 F.3d at 1097; see also Nixon, 435 U.S. at 598. “The mere fact 26 that the production of records may lead to a litigant’s embarrassment, incrimination, or exposure 27 to further litigation will not, without more, compel the court to seal its records.” Kamakana, 1 terms, details of confidential licensing negotiations, and business strategies” can be “compelling 2 reasons” to prevent competitors from leveraging this information to harm the designating parties 3 in future negotiations. See Exeltis USA Inc. v. First Databank, Inc., No. 17-cv-04810-HSG, 4 2020 WL 2838812, at *1 (N.D. Cal. 2020) (citation omitted); In re Qualcomm Litig., No. 3:17-cv- 5 0108-GPC-MDD, 2017 WL 5176922, at *2 (S.D. Cal. 2017). If publicly disclosing that 6 information would harm a designating party’s competitive standing and divulge terms of 7 confidential contracts or contract negotiations, compelling reasons may exist to seal that 8 information. See FTC v. Qualcomm Inc., No. 17-cv-00220-LHK, 2019 WL 95922, at *3 (N.D. 9 Cal. Jan. 3, 2019). 10 The Court balances the public’s understanding of the judicial process against such 11 confidential information within the context of the gravamen of this case, the alleged anti- 12 competitive effects of the Microsoft-Activision merger on Plaintiff recreational video gamers. See 13 Epic Games, Inc. v. Apple Inc., No. 4:20-cv-05640-YGR, 2021 WL 1925460, at *1 (N.D. Cal. 14 Apr. 30, 2021) (balancing confidentiality of third-party information “with the [c]ourt’s ultimate 15 resolution of the instant dispute which should be transparent in its analysis”); Ctr. for Auto Safety, 16 809 F.3d at 1097 (stating a court must balance the interests of the public against the party seeking 17 to seal judicial records). The Court also considers a more lenient approach when sealing non-party 18 information, but this distinction is not dispositive. See Epic Games, Inc., 2021 WL 1925460, at 19 *1. 20 Accordingly, the Court makes the following findings based upon the current state of the 21 record:2 23 A. Plaintiffs’ First Amended Complaint 24 A complaint is more than tangentially related to the underlying cause of action because it 25 forms the foundation of the lawsuit. See In re Yahoo! Inc. Customer Data Security Breach Litig., 26
27 2 Designating parties are advised that if the Court decides that certain now-sealed information is 1 No. 16-MD-02752-LHK, 2018 WL 9651897, at *2 (N.D. Cal. Jan. 3, 2018) (citing cases); Ctr. for 2 Auto Safety, 809 F.3d at 1099. Accordingly, this Court applies the “compelling reasons” standard 3 to Plaintiffs’ first amended complaint (“FAC”). Plaintiffs move to consider sealing material in 4 their FAC that Microsoft and Sony have designated as highly confidential and highly confidential 5 – outside counsel only, respectively. (Dkt. Nos. 88, 89.) 6 1. Microsoft’s Materials 7 Microsoft filed a statement and declaration modifying Plaintiffs’ motion which this Court 8 considers, but it is overbroad. (See Dkt. No. 114.) Microsoft requests to seal “sensitive business 9 information” from three categories: confidential contracts, business strategy, and competitive 10 analysis. (Id at 2.) For example, Microsoft requests redactions regarding Microsoft and 11 Activision’s competitive relationship or the value of Activision games to Microsoft given the 12 public merger, but this is important to understanding how the merger would affect competition and 13 it does not appear to reveal information that would damage Microsoft’s competitive position. 14 (See, e.g., Dkt. No.
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1 2 3 6 7 DANTE DEMARTINI, et al., Case No. 22-cv-08991-JSC
8 Plaintiffs, ORDER RE MOTIONS TO SEAL AND 9 v. DISCOVERY DISPUTE
10 MICROSOFT CORPORATION, Re: Dkt. Nos. 88, 89, 119, 133, 134, 161, 11 Defendant. 162, 167, 173, 185, 186
12 Before the Court are several party and non-party (“designating parties”) requests to seal 13 from public disclosure information designated as varying degrees of confidential, including 14 portions of Plaintiffs’ first amended complaint, portions of and exhibits to Plaintiffs’ motion for 15 preliminary injunction and related papers, portions of and exhibits to Microsoft’s motion to 16 dismiss, and portions of and an exhibit to parties’ joint letter brief. The Court rules on these 17 motions below. (Dkt. Nos. 88, 89, 119, 133, 134, 161, 162, 167, 173, 185.)1 Designating parties 18 are given notice they have 14 days from the date of this Order to respond to this Court’s denial 19 without prejudice of any portion of a document or exhibit that those parties believe should be 20 partially or wholly sealed due to compelling reasons in compliance with this Court’s local rules. 21 (See Dkt. Nos. 88, 133, 134.) This Court also addresses Plaintiffs’ request to undesignate “Exhibit 22 K” below. (Dkt. No. 186.) 24 There is a right of public access to judicial records and documents. Nixon v. Warner 25 Commc'ns, Inc., 435 U.S. 589, 597 (1978). In considering motions to seal, courts recognize that 26 “a strong presumption in favor of access is the starting point.” Kamakana v. City & County of 27 1 Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (cleaned up). Designating parties seeking to seal 2 judicial records relating to motions that are “more than tangentially related to the underlying cause 3 of action,” Ctr. for Auto Safety v. Chrysler Grp., 809 F.3d 1092, 1099 (9th Cir. 2016), bear the 4 burden of overcoming the presumption with “compelling reasons supported by specific factual 5 findings that outweigh the general history of access and the public policies favoring disclosure, 6 such as the public interest in understanding the judicial process,” Kamakana, 447 F.3d at 1178–79 7 (cleaned up). A court must identify “a compelling reason [to impose the restriction] and articulate 8 the factual basis for its ruling, without relying on hypothesis or conjecture.” Id. at 1179; see also 9 Ctr. for Auto Safety, 809 F.3d at 1097 (finding the court must “conscientiously balance the 10 competing interest of the public and the party who seeks to keep certain judicial records secret”) 11 (quoting Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). 12 In addition, designating parties moving to seal their own or another party’s materials must 13 comply with Civil Local Rule 79-5. The rule supplements the “compelling reasons” standard. 14 Scramoge Tech. Ltd. v. Apple, Inc., No. 22-cv-03041-JSC, 2023 WL 3168322, at *5 (N.D. Cal. 15 Apr. 17, 2023). Parties’ requests must be “narrowly tailored to seek sealing only of sealable 16 material.” Civil L.R. 79-5. Parties “must explore all reasonable alternatives to filing documents 17 under seal . . . and avoid wherever possible sealing entire documents.” Id. at 79-5(a). A request to 18 seal needs to include “a specific statement” with the reasons for keeping a document under seal 19 explaining the interests warranting sealing, the injury that will result without sealing, and why a 20 less restrictive alternative is not sufficient. Id. at 79-5(c)(1). Under Civil Local Rule 79-5(f), 21 parties seeking to seal documents designated confidential by another party or non-party must file a 22 statement or response in accordance with Civil Local Rule 79-5(c)(1). 23 A request to seal may be supported by compelling reasons if the documents or portions of 24 documents at issue are “sources of business information that might harm a litigant’s competitive 25 standing.” Ctr. for Auto Safety, 809 F.3d at 1097; see also Nixon, 435 U.S. at 598. “The mere fact 26 that the production of records may lead to a litigant’s embarrassment, incrimination, or exposure 27 to further litigation will not, without more, compel the court to seal its records.” Kamakana, 1 terms, details of confidential licensing negotiations, and business strategies” can be “compelling 2 reasons” to prevent competitors from leveraging this information to harm the designating parties 3 in future negotiations. See Exeltis USA Inc. v. First Databank, Inc., No. 17-cv-04810-HSG, 4 2020 WL 2838812, at *1 (N.D. Cal. 2020) (citation omitted); In re Qualcomm Litig., No. 3:17-cv- 5 0108-GPC-MDD, 2017 WL 5176922, at *2 (S.D. Cal. 2017). If publicly disclosing that 6 information would harm a designating party’s competitive standing and divulge terms of 7 confidential contracts or contract negotiations, compelling reasons may exist to seal that 8 information. See FTC v. Qualcomm Inc., No. 17-cv-00220-LHK, 2019 WL 95922, at *3 (N.D. 9 Cal. Jan. 3, 2019). 10 The Court balances the public’s understanding of the judicial process against such 11 confidential information within the context of the gravamen of this case, the alleged anti- 12 competitive effects of the Microsoft-Activision merger on Plaintiff recreational video gamers. See 13 Epic Games, Inc. v. Apple Inc., No. 4:20-cv-05640-YGR, 2021 WL 1925460, at *1 (N.D. Cal. 14 Apr. 30, 2021) (balancing confidentiality of third-party information “with the [c]ourt’s ultimate 15 resolution of the instant dispute which should be transparent in its analysis”); Ctr. for Auto Safety, 16 809 F.3d at 1097 (stating a court must balance the interests of the public against the party seeking 17 to seal judicial records). The Court also considers a more lenient approach when sealing non-party 18 information, but this distinction is not dispositive. See Epic Games, Inc., 2021 WL 1925460, at 19 *1. 20 Accordingly, the Court makes the following findings based upon the current state of the 21 record:2 23 A. Plaintiffs’ First Amended Complaint 24 A complaint is more than tangentially related to the underlying cause of action because it 25 forms the foundation of the lawsuit. See In re Yahoo! Inc. Customer Data Security Breach Litig., 26
27 2 Designating parties are advised that if the Court decides that certain now-sealed information is 1 No. 16-MD-02752-LHK, 2018 WL 9651897, at *2 (N.D. Cal. Jan. 3, 2018) (citing cases); Ctr. for 2 Auto Safety, 809 F.3d at 1099. Accordingly, this Court applies the “compelling reasons” standard 3 to Plaintiffs’ first amended complaint (“FAC”). Plaintiffs move to consider sealing material in 4 their FAC that Microsoft and Sony have designated as highly confidential and highly confidential 5 – outside counsel only, respectively. (Dkt. Nos. 88, 89.) 6 1. Microsoft’s Materials 7 Microsoft filed a statement and declaration modifying Plaintiffs’ motion which this Court 8 considers, but it is overbroad. (See Dkt. No. 114.) Microsoft requests to seal “sensitive business 9 information” from three categories: confidential contracts, business strategy, and competitive 10 analysis. (Id at 2.) For example, Microsoft requests redactions regarding Microsoft and 11 Activision’s competitive relationship or the value of Activision games to Microsoft given the 12 public merger, but this is important to understanding how the merger would affect competition and 13 it does not appear to reveal information that would damage Microsoft’s competitive position. 14 (See, e.g., Dkt. No. 88-3 ¶¶ 11, 159, 182, 252.) For other information designated as confidential, 15 Microsoft has not provided compelling reasons that would outweigh the public’s presumption of 16 access to understanding the merits. (See, e.g., id. ¶¶ 22, 92.) 17 2. Sony’s Materials 18 Sony, a non-party, has provided sufficient compelling reasons for sealing each part of the 19 FAC containing non-public confidential information about Sony’s cloud and gaming services and 20 subscription services, internal business data, console competition research, observations about 21 consumer behavior and engagement, and other strategy decisions that would cause injury to Sony. 22 (See Dkt. No. 113.) Further, Sony’s proposed redactions are narrow enough as to not significantly 23 reduce the public’s understanding of the FAC or the Court’s analysis of it as other allegations 24 provide enough information and context. 25 Accordingly, Plaintiffs’ motions are GRANTED in part, DENIED in part as detailed 26 below. (Dkt. Nos. 88, 89.) 27 Portions of Materials Requested to 1 Designating Party Ruling be Sealed 2 FAC ¶¶ 40, 310 Microsoft DENIED with prejudice. Microsoft did not address sealing portions of 3 these paragraphs and as such they are unsealed. 4 FAC ¶¶ 80-83, 108-109, 205, 228, Microsoft GRANTED. Microsoft provides 257, 285-286, 288 (lines 52:1-7), compelling reasons to protect its 5 303, 327 confidential business strategy and 6 prevent competitive harm. FAC ¶¶ 66, 78-79 Microsoft GRANTED. Microsoft provides 7 compelling reasons to protect its business information and prevent 8 competitive harm. 9 FAC ¶¶ 333, 335-338 Microsoft GRANTED. Microsoft provides compelling reasons to protect 10 confidential contracts. FAC ¶¶ 41, 73, 192, 301, 313 Microsoft GRANTED. Microsoft provides 11 compelling reasons to protect its competitive analysis and prevent 12 competitive harm. 13 FAC ¶¶ 11, 22, 54-55, 57, 71-72, Microsoft DENIED without prejudice. 76, 92, 159, 182, 199, 205, 252, Microsoft failed to meet its burden 14 271, 275, 280, 288 (lines 52:8-9), to provide compelling reasons why 304-305, 323, 332, 353, 362, 375- these paragraphs should be sealed 15 376 that outweigh a public’s right to access judicial materials related to 16 the merits and the Court’s analysis. 17 FAC ¶¶ 66, 300, 303, 308-312, Sony GRANTED. Sony provides 316, 326 compelling reasons to protect its 18 confidential business information and prevent competitive harm. 19
20 B. Microsoft’s Motion to Dismiss Materials 21 Microsoft has moved to seal the exhibits attached to its motion to dismiss in their entirety. 22 (Dkt. No. 119.) Upon review of Microsoft’s exhibits, this Court finds that these documents are 23 contracts with confidential terms or discussions of those terms that would harm the party’s 24 negotiating position moving forward. Accordingly, sealing is warranted under both the “good 25 cause” and “compelling reasons” standards. Finisar Corp. v. Nistica, Inc., No. 13-cv-03345-BLF 26 (JSC), 2015 WL 3988132, at *4-5 (N.D. Cal. June 30, 2015); see Qualcomm Inc., 2019 WL 27 95922, at *3. 1 Microsoft’s motion is GRANTED as detailed below. (Dkt. No. 119.) Portions of Materials Requested to 2 Designating Party Ruling be Sealed 3 Kilaru Decl., Exs. A-E Microsoft GRANTED. Microsoft provides compelling reasons to protect 4 confidential contracts and discussions thereof in deposition 5 testimony. 6 7 C. Plaintiffs’ Motion for Preliminary Injunction and Related Documents 8 Plaintiffs seek to consider sealing materials in and exhibits to Plaintiffs’ motion for 9 preliminary injunction. Denying a preliminary injunction does not change the presumption of 10 public access regarding judicial records related to that motion for preliminary injunction. See Ctr. 11 for Auto Safety, 809 F.3d at 1102. In their FAC, Plaintiffs request primarily injunctive relief. (See 12 Dkt. No. 83-3 ¶¶ 386-92.) Here, the motion for preliminary injunction is more than tangentially 13 related to the merits of the case where this preliminary injunctive relief would have resolved that 14 portion of their claims in Plaintiffs’ FAC. See Ctr. for Auto Safety, 809 F.3d at 1102. 15 Accordingly, this Court applies the “compelling reasons” standard to judicial records related to 16 Plaintiffs’ motion. 17 1. Plaintiffs’ Motion for Preliminary Injunction 18 Plaintiffs seek to consider sealing materials and exhibits that Microsoft and Sony have 19 designated highly confidential and highly confidential – outside counsel only, respectively. (Dkt. 20 Nos. 133, 134.) 21 a. Microsoft’s Materials 22 Microsoft filed a statement contending that all materials referenced in and attached to 23 Plaintiffs’ motion should be sealed. (Dkt. No. 158.) Microsoft’s request is overbroad. Microsoft 24 states the material contains “internal, confidential business strategies and analyses” such as 25 “internal strategy presentations, discussions, and analysis used in Microsoft’s decision-making” 26 that competitors could use to obtain a competitive advantage. (Id. at 2.) Microsoft has provided 27 compelling reasons to seal some portions of Plaintiffs’ material and exhibits, but for others, the 1 explained how the 12/17/19 email from Matt Booty in Exhibit K would harm rather than just 2 embarrass Microsoft should the information become public.3 See Kamakana, 447 F.3d at 1179 3 (stating compelling reasons based on specific factual findings must outweigh presumption in favor 4 of public access to judicial records); Nixon, 435 U.S. at 598 (stating documents may be sealed to 5 prevent harm but not embarrassment). It also has not provided compelling reasons as to why the 6 expert’s qualifications and conclusions should be sealed in the expert’s report, Exhibit A to the 7 Seidel Decl. 8 b. Sony's Materials 9 Sony filed a statement and declaration narrowing Plaintiffs’ request to seal certain 10 information. (Dkt. No. 179; see Dkt. No. 177 (granting Sony’s request to file out of time).) 11 For the most part, Sony has provided in detail compelling reasons for this Court to seal its 12 information. (See Dkt. No. 179.) Sony explains that the confidential and internal data, including 13 platform user and franchise data, and economic and commercial analysis that are not publicly 14 accessible outside the company could “unfairly enable [Sony]’s competitors to gain insight into 15 [Sony]’s strategic thinking and business strategy” because it would be “immensely valuable to 16 competitors in developing their own strategy against [Sony], and to prospective and current 17 business partners in negotiating with [Sony].” (Dkt. No. 179-1.) These are “sources of business 18 information that might harm a litigant’s competitive standing.” Ctr. for Auto Safety, 809 F.3d at 19 1097. This Court also considers that Sony did not voluntarily put at issue its information. See 20 United States v. Bazaarvoice, Inc., No. 13-cv-00133-WHO, 2014 WL 11297188, at *1 (N.D. Cal. 21 Jan. 21, 2014). 22 However, Sony’s requests to seal Plaintiffs’ expert report in its entirety, Exhibit A to the 23 Seidel Decl., because it relies on its data and analysis is overbroad. (See Dkt. No. 179 at 1, 6; Dkt. 24 No. 133 at 4; Dkt. No. 158 at 2.) The expert’s qualifications and conclusions speak to the merits 25 of the case and pose limited competitive harm. Weighing the competitive harm the report could 26 inflict with the public’s right of access to judicial records, this Court declines to seal portions of 27 1 the report. Namely, the cover page, the table of contents, the Section 1 Qualifications, the Section 2 2 Report’s Instructions, the Section 3 Summary and Conclusion, and the Section 6.6 Summary. 3 Accordingly, Plaintiffs’ motions are GRANTED in part, DENIED in part as detailed 4 below. (Dkt. Nos. 133, 134.) Portions of Materials Requested to 5 Designating Party Ruling be Sealed 6 Plaintiffs’ Motion for Preliminary Microsoft GRANTED. Microsoft provides Injunction 2:8-10, 12:16-17 (after compelling reasons to protect its 7 “industry”), 16:12-21, 17:20-26, business information, business 18:5-7, 18:24-28, 19:21-23, 19:27- strategy, confidential contracts, 8 20:1, 20:4-7, 21:7-9, 24:12-14 and competitive analysis and prevent competitive harm. 9 Plaintiffs’ Motion for Preliminary Microsoft DENIED without prejudice. 10 Injunction 2:26-3:8, 12:11-14, Microsoft failed to meet its burden 12:15-16 (through “industry”), to provide compelling reasons why 11 12:26-28, 16:6-7, 16:10, 20:21-22, these paragraphs should be sealed 20:24, 21:14, 21:21-23, 22:16-25, that outweigh a public’s right to 12 22:27-28, 23:13-14, 23:24, 23:25- access judicial materials related to 24:5, 24:9, 27:25-26 the merits and the Court’s 13 analysis. 14 Seidel Decl., Exs. I, J, M, Q, R, S, Microsoft GRANTED. Microsoft provides T, W, X, Y, CC compelling reasons to protect its 15 business strategy and competitive analysis and prevent competitive 16 harm. 17 Seidel Decl., Ex. K Microsoft DENIED as moot as to the 12/17/19 Booty email, GRANTED 18 as to remainder. Microsoft failed to show how that email would 19 competitively harm it and that email has since been disclosed in 20 another proceeding. 21 Seidel Decl., Ex. U Microsoft DENIED without prejudice. Microsoft failed to meet its burden 22 to provide compelling reasons why these paragraphs should be sealed 23 that outweigh a public’s right to access judicial materials related to 24 the merits and the Court’s 25 analysis. Plaintiffs’ Motion for Preliminary Sony DENIED with prejudice. Sony did 26 Injunction 4:20-21, 15:5, 17:9, not address sealing portions of 23:10-11 these paragraphs and as such they 27 are unsealed. Plaintiffs’ Motion for Preliminary Sony GRANTED. Sony provides 1 Injunction 15:10-12, 16:23-26, compelling reasons to protect its 2 18:1-3, 19:23-25, 20:1-4, 20:12- business information and prevent 15, 20:25-21:6, 21:9-13, 21:17-19, competitive harm. 3 22:6-8, 23:14, 27:27-28:3 Seidel Decl., Ex. A Sony, Microsoft DENIED without prejudice as to 4 cover page, the table of contents, Sections 1-3, Section 6.6, 5 GRANTED as to remainder. Sony 6 and Microsoft provide compelling reasons to protect their respective 7 confidential business information and strategy and prevent 8 competitive harm. Seidel Decl., Exs. B-F, G, L Sony GRANTED. Sony provides 9 compelling reasons to protect its 10 business information and prevent competitive harm. 11
12 2. Microsoft’s Opposition to Plaintiffs’ Motion for Preliminary Injunction 13 Microsoft requests this Court seal some of its and Activision’s materials and exhibits filed 14 in support of its opposition to Plaintiffs’ motion for preliminary injunction and designated as 15 confidential and highly confidential – outside counsel only, respectively. (Dkt. Nos. 161, 162.) 16 a. Microsoft’s Materials 17 Microsoft provides a limited but compelling factual basis to redact the valuation of the 18 merger and confidential agreements arising out of the same because it could harm Microsoft’s 19 competitive standing and future negotiations with competitors. Santelices v. Apttus Corp., No. 19- 20 cv-07414-HSG, 2020 WL 5870509, at *4 (N.D. Cal. Oct. 2, 2020) (finding compelling reasons to 21 seal company’s internal valuation analysis of merger where court did not rely on documents in its 22 analysis). The public’s interest in disclosure of this information is minimal given that the bond did 23 not factor into the Court’s analysis when it denied Plaintiffs’ motion for preliminary injunction. 24 Plaintiffs oppose Microsoft’s request as deficient. (Dkt. No. 176.) However, Microsoft has 25 provided a narrowly tailored request supported by a factual basis that allows this Court to grant 26 sealing portions of its opposition and related exhibits. (See Dkt. No. 161.) 27 b. Activision’s Materials 1 Activision filed a statement and declaration in support, narrowing Microsoft’s request to 2 certain page and line redactions which this Court now considers. (Dkt. No. 183.) Activision 3 provides compelling reasons for sealing portions of Microsoft’s opposition to Plaintiffs’ motion 4 for preliminary injunction related to confidential contract terms and negotiating strategy, the terms 5 of a proposed agreement, and a decision about whether Activision would participate in newly- 6 developed services. (Id.) As a non-party, the compelling reasons test is more lenient. See Epic 7 Games, Inc., 2021 WL 1925460, at *1. Sealing this information prevents competitive harm by 8 keeping confidential the specific terms and business decisions made by Activision. See Ctr. for 9 Auto Safety, 809 F.3d at 1097; In re Qualcomm Litig., 2017 WL 5176922, at *2 (finding 10 compelling reasons to seal information subject to confidentiality agreements that could harm a 11 party’s future negotiating position); Finisar Corp., 2015 WL 3988132, at *5 (same). 12 Microsoft’s motions are GRANTED as detailed below. (Dkt. Nos. 161, 162.) 13 Portions of Materials Requested to Designating Party Ruling be Sealed 14 Microsoft’s Opposition 15:3, 15:9- Microsoft GRANTED. Microsoft provides 15 15, 15:19, 15:20, 15 n.12, 16:17- compelling reasons to protect 18 business strategy and prevent 16 competitive harm. Kilaru Decl., Exs. C, D, E Microsoft GRANTED. Microsoft provides 17 compelling reasons to protect 18 confidential contracts and discussions thereof in deposition 19 testimony. Stuart Decl., ¶¶ 8, 15-21 Microsoft GRANTED. Microsoft provides 20 compelling reasons to protect confidential contracts and business 21 strategy and prevent competitive 22 harm. Stuart Decl., Exs. B, C Microsoft GRANTED. Microsoft provides 23 compelling reasons to protect confidential contracts and business 24 strategy and prevent competitive harm. 25
26 Microsoft’s Opposition 8:25-26 Activision GRANTED. Activision provides compelling reasons to protect 27 confidential contracts and prevent Kilaru Decl., Ex. B 187:1-190:25 Activision GRANTED as redacted, DENIED 1 with prejudice as to remainder. 2 Activision provides compelling reasons to protect confidential 3 contracts and prevent competitive harm. 4 Kilaru Decl., Ex. F 49:1-53:25, Activision GRANTED as redacted, DENIED 64:1-65:25, 77:1-78:23 with prejudice as to remainder. 5 Activision provides compelling 6 reasons to protect confidential contracts and prevent competitive 7 harm. Kilaru Decl., Ex. G 112:2-113:24 Activision GRANTED as redacted, DENIED 8 with prejudice as to remainder. Activision provides compelling 9 reasons to protect confidential 10 contracts and prevent competitive harm. 11
12 3. Plaintiffs’ Reply and Corrected Reply 13 Plaintiffs filed two motions to consider sealing Microsoft’s materials designated as highly 14 confidential in Plaintiffs’ reply and corrected reply. (Dkt. Nos. 167, 173.) Microsoft filed a 15 statement in support of sealing the same materials in each document. (Dkt. No. 180.) Plaintiffs 16 oppose Microsoft’s statement in support of sealing, arguing that the materials regarding the issue 17 of the bond go toward the public’s understanding of the judicial process and Microsoft failed to 18 provide compelling reasons for keeping information related to the valuation of the merger sealed. 19 (Dkt. No. 184.) 20 Microsoft provides a compelling factual basis to redact the valuation of the merger because 21 it could harm Microsoft’s competitive standing and future negotiations with competitors. See 22 Santelices, 2020 WL 5870509, at *4 (finding compelling reasons to seal company’s internal 23 valuation analysis of merger where Court did not rely on documents in its analysis). The public’s 24 interest in disclosure of this information is minimal given that the bond did not factor into the 25 Court’s analysis when it denied Plaintiffs’ motion for preliminary injunction, and it is not central 26 to the ongoing merits of the case. 27 Plaintiffs’ motions are GRANTED as detailed below. (Dkt. Nos. 167, 173.) 1 Portions of Materials Requested to 2 Designating Party Ruling be Sealed 3 Plaintiffs’ Reply 11:16, 11:23, Microsoft GRANTED. Microsoft provides 12:25 compelling reasons to protect its 4 business strategy and analysis and prevent competitive harm. 5 Plaintiffs’ Corrected Reply 11:16, Microsoft GRANTED. Microsoft provides 11:23, 12:25 compelling reasons to protect its 6 business strategy and analysis and 7 prevent competitive harm. 8 9 D. Joint Letter Brief Regarding Exhibit K 10 The parties filed a joint letter brief regarding the sealability of Exhibit K to the Seidel 11 Decl., attached as Exhibit 1 to the Williams declaration in support of the parties’ joint letter brief, 12 hereinafter “Exhibit K”. The sealability of Exhibit K is also addressed in connection with the 13 preliminary injunction motion. Microsoft asks to seal both Exhibit K and an excerpt thereof in the 14 joint letter brief. (Dkt. No. 199.) 15 The Court DENIES sealing of Exhibit K for the entire 12/17/2019 email from Matt Booty; 16 the rest of Exhibit K may be sealed. (Dkt. No. 185.) The unsealed portion has been made public 17 in another proceeding. See FTC v. Microsoft Corp., No. 23-cv-02880-JSC. Given that Exhibit K 18 was at issue in an administrative motion to seal, the discovery dispute joint letter was unnecessary 19 and the Court declines to find that Microsoft waived its right to a confidentiality designation of 20 any of Exhibit K. (Dkt. No. 186.) Portions of Materials Requested to 21 be Sealed Designating Party Ruling Parties’ Joint Letter Brief: Microsoft DENIED as moot. 22 quotation following “three years 23 old. It states that . . .” Ex. 1 to the Declaration of Steven Microsoft DENIED as moot as to the 24 N. Williams (Ex. K) 12/17/19 Booty email, GRANTED as to remainder. 25
27 2 The Court rules on these requests to seal based on the current state of the record. If any 3 party or non-party believes that any portion of these documents or exhibits not ordered sealing do 4 || warrant sealing under the compelling reasons standard, then within 14 days of this Order, it shall 5 submit narrowly tailored motions to seal in compliance with Civil Local Rule 79-5. If no such 6 || motions are filed, then the parties shall file versions of these documents pursuant to this Order as 7 needed within 21 days of this Order. 8 This Order disposes of Dkt. Nos. 88, 89, 119, 133, 134, 161, 162, 167, 173, 185, 186. 10 Dated: June 26, 2023 11
JAQQUELINE SCOTT CORL 13 United States District Judge © 15 16
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