DFND Security, Inc. v. CrowdStrike, Inc.

N.D. California

DFND Security, Inc. v. CrowdStrike, Inc.

District Court, N.D. California·Decided March 29, 2024·No. 3:22-cv-04542·Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 DFND SECURITY, INC., Case No. 22-cv-04542-AMO

8 Plaintiff, ORDER GRANTING IN PART AND 9 v. DENYING IN PART ADMINISTRATIVE MOTIONS TO 10 CROWDSTRIKE, INC., et al., SEAL 11 Defendants. Re: Dkt. Nos. 46, 51

12 13 Before the Court are two administrative motions to seal documents and exhibits: DFND 14 Security, Inc.’s Administrative Motion to Consider Whether Another Party’s Material Should be 15 Sealed (ECF 46) and CrowdStrike, Inc.’s Unopposed Administrative Motion to File Under Seal 16 (ECF 51). The Court, having carefully considered the submissions, the record, the applicable law, 17 and any arguments related thereto, hereby orders that the motions are GRANTED in part and 18 DENIED in part. 19 A. Legal Standard 20 “Historically, courts have recognized a ‘general right to inspect and copy public records 21 and documents, including judicial records and documents.’ ” Kamakana v. City and Cnty. of 22 Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc’ns, Inc., 435 23 U.S. 589, 597 & n.7 (1978)). Consequently, access to motions and their attachments that are 24 “more than tangentially related to the merits of a case” may be sealed only upon a showing of 25 “compelling reasons” for sealing. Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 26 1102-03 (9th Cir. 2016). 27 To overcome the strong presumption in favor of access, the party seeking to seal judicial 1 outweigh the general history of access and the public policies favoring disclosure, such as the 2 public interest in understanding the judicial process.” Kamakana, 447 F.3d at 1178-79 (internal 3 quotations and citations omitted). The party must make a “particularized showing” that “specific 4 prejudice or harm will result” if the information is disclosed. Phillips ex rel. Estates of Byrd v. 5 Gen. Motors Corp., 307 F.3d 1206, 1210-11 (9th Cir. 2002). 6 Although a lower “good cause” standard applies to filings that are only “tangentially 7 related” to the merits, Ctr. for Auto Safety, 809 F.3d at 1097, the default compelling reasons 8 standard applies to motions to dismiss because such motions are inherently central to the merits of 9 a case. See FibroGen, Inc. v. Hangzhou Andao Pharm. Ltd., No. 3:22-CV-07148-AMO, 2023 WL 10 6237986, at *1 (N.D. Cal. Sept. 22, 2023) (applying compelling reasons standard for motion to 11 dismiss); Santelices v. Apttus Corp., No. 19-cv-07414-HSG, 2020 WL 5870509, at *4 (N.D. Cal. 12 Oct. 2, 2020) (same). 13 In addition, pursuant to Civil Local Rule 79-5, the party seeking to file a document or 14 portions of it under seal must explain “(i) the legitimate private or public interests that warrant 15 sealing; (ii) the injury that will result if sealing is denied; and (iii) why a less restrictive alternative 16 to sealing is not sufficient.” Civil L.R. 79-5(c)(1). The proposed order must be “narrowly tailored 17 to seal only the sealable material.” Id. at 79-5(c)(3). 18 B. Discussion 19 DFND Security, Inc. (“DFND”) filed an administrative sealing motion in conjunction with 20 exhibits attached to its supplemental jurisdiction briefing, seeking to seal information designated 21 as confidential or highly confidential by CrowdStrike, Inc. (“CrowdStrike”). ECF 46. 22 CrowdStrike filed a statement in support of sealing, arguing that three exhibits should be sealed 23 entirely and two in part because they reference “sensitive non-public information about 24 CrowdStrike’s corporate structure and the nature of [] private board discussions[.]” ECF 49 at 2- 25 3. CrowdStrike moves the Court to strike DFND’s publicly filed supplemental brief regarding 26 jurisdiction and file a version redacting the confidential information from the sealed exhibits. Id. 27 at 3. 1 support of CrowdStrike’s supplemental brief in support of the motion to dismiss. ECF 51. These 2 exhibits contain excerpts of deposition testimony, which CrowdStrike argues reference sensitive 3 non-public information about “the nature of private board discussions[.]” ECF 51 at 2-3. DFND 4 does not object to either motion. ECF 50; Plunkett Decl. (ECF 51-1) ¶ 7. 5 “Compelling reasons exist to seal confidential business information, including non-public 6 information about a company’s business strategy, business transactions, corporate structure, and 7 finances.” Bold Lmtd. v. Rocket Resume, Inc., No. 22-CV-01045-BLF, 2024 WL 1329921, at *2 8 (N.D. Cal. Mar. 27, 2024) (citing cases); see, e.g., Unlockd Media, Inc. Liquidation Tr. v. Google 9 LLC, No. 21-CV-07250-HSG, 2022 WL 4624985, at *2 (N.D. Cal. Sept. 30, 2022) (finding 10 compelling reasons to seal non-public information related to a company’s business model); 11 Newmark Realty Cap., Inc. v. BGC Partners, Inc., No. 16-CV-01702-BLF, 2018 WL 10701600, at 12 *2 (N.D. Cal. Aug. 31, 2018) (sealing confidential information related to Defendants’ “business 13 and internal discussions about business strategy” as disclosure would cause “competitive harm”). 14 Further, “[i]f publicly disclosing that information would harm a designating party’s competitive 15 standing and divulge terms of confidential contracts or contract negotiations, compelling reasons 16 may exist to seal that information.” DeMartini v. Microsoft Corp., No. 22-CV-08991-JSC, 2023 17 WL 4205770, at *2 (N.D. Cal. June 26, 2023) (citing FTC v. Qualcomm Inc., No. 17-cv-00220- 18 LHK, 2019 WL 95922, at *3 (N.D. Cal. Jan. 3, 2019)). 19 The Court finds that CrowdStrike has articulated compelling reasons to seal the proposed 20 redactions. The Court’s rulings on the sealing requests are set forth in the table below. 21 Document or Portion of Ruling Reason 22 Document Sought to be 23 Sealed Ex. C-1 to Thomas Declaration GRANTED. Confidential business information 24 about CrowdStrike’s corporate structure from private board 25 meeting of parent company CrowdStrike Holdings’s Inc. 26 (“CHI”), which is not a party to this 27 action. Disclosure would give competitors insight into matters Plunkett Decl. (ECF 49-1) ¶¶ 2, 5-6. 1

2 Ex. C-2 to Thomas Decl. GRANTED. Confidential business information from CHI board meeting. 3 Disclosure would give competitors insight into confidential matters. 4 See Plunkett Decl. ¶¶ 2, 5-6.

5 Ex. C-3 to Thomas Decl. GRANTED. Confidential business information. 6 Disclosure of CrowdStrike’s organizational charts and reporting 7 structure would give competitors insight into CrowdStrike operations. 8 See Plunkett Decl. ¶ 8.

9 Ex. F-1 to Thomas Decl. GRANTED. Confidential business information 10 at 43:15-44:14 discussing nonpublic documents, specifically Board Minutes and 11 organizational charts. See Plunkett Decl. ¶ 9. 12

13 Ex. F-2 to Thomas Decl. GRANTED Confidential business information at 122-125, 130-33 discussing nonpublic documents, 14 specifically Board Minutes and organizational charts. See Plunkett 15 Decl. ¶ 9.

16 Ex. G to Thomas Decl. at GRANTED. Confidential business information 17 Pages 30-33 discussing nonpublic documents, specifically Board Minutes and 18 organizational charts. See Plunkett Decl. ¶ 9. 19 Strike Supplemental Brief and GRANTED. Confidential business information 20 Order DFND to file redacted redacted in Exs. C-1, C-2, C-3, F-1, 21 version (see Ex. E (ECF 49-6)) F-2, and G. See Plunkett Decl. ¶ 10.

22 Ex. A to Plunkett Decl. at GRANTED. Confidential business information. Page 130 lines 7-25 Disclosing testimony discussing 23 Page 131 lines 1-25 internal matters voted on by the CHI 24 Page 144 lines 1-25 Board would cause competitive Page 156 lines 1-25 harm. See Plunkett Decl. (ECF 51- 25 Page 157 lines 1-25 1) ¶¶ 4-6. Page 159 lines 1-25 26 Ex. B to Plunkett Decl. at GRANTED. Confidential business information.

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