Flextronics International USA, Inc. v. Murata Manufacturing Co., Ltd.

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 FLEXTRONICS INTERNATIONAL USA, 8 INC., Case No. 5:19-cv-00078-EJD

9 Plaintiff, ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ 10 v. ADMINISTRATIVE MOTION TO SEAL PARTS OF PLAINTIFF’S COMPLAINT 11 MURATA MANUFACTURING CO., LTD., et al., Re: Dkt. No. 76 12 Defendants. 13 This order addresses Plaintiff’s administrative motion to file portions of its second 14 amended complaint under seal. Dkt. 68. For the reasons discussed herein, the Court GRANTS 15 the motion in part DENIES it in part without prejudice. The Court provides instruction to the 16 parties on how they should prepare motions to seal going forward. Plaintiff may re-file this 17 motion to seal; however, Defendant must submit adequate documentation showing a compelling 18 reason justifying sealing. Generalized allegations of confidentiality are insufficient. 19 Courts recognize that the public has “a general right to inspect and copy public records and 20 documents, including judicial records and documents.” Whitewater W. Indus., Ltd. v. Pac. Surf 21 Designs, Inc., 2019 WL 1590470, at *1 (S.D. Cal. Apr. 12, 2019) (quoting Nixon v. Warner 22 Communications, Inc., 435 U.S. 589, 597 (1978)). “When considering a sealing request, ‘a strong 23 presumption in favor of access is the starting point.’” Space Data Corp. v. Alphabet Inc., 2019 24 WL 2305278, at *1 (N.D. Cal. May 30, 2019) (quoting Kamakana v. City & Cty. of Honolulu, 447 25 F.3d 1172, 1178 (9th Cir. 2006)). The right to access, however, is not absolute. Whitewater W. 26 Indus., 2019 WL 1590470, at *1 (quoting Nixon, 434 U.S. at 598). A court may grant a party’s 27 Case No.: 5:19-cv-00078-EJD 1 motion to seal judicial records that are “more than tangentially related to the underlying cause of 2 action,” if the moving party presents “compelling reasons” for maintaining confidentiality that 3 outweigh the presumption in favor of disclosure. Space Data, 2019 WL 2305278, at *1 (citing 4 Ctr. for Auto Safety v. Chrysler Grp., 809 F.3d 1092, 1099 (9th Cir. 2016)). To make this 5 showing, the moving party must provide “specific factual findings that outweigh the general 6 history of access and the public policies favoring disclosure.” Opperman v. Path, Inc., 2017 WL 7 1036652, at *1 (N.D. Cal. Mar. 17, 2017). Courts applying the compelling reasons standard have 8 upheld the sealing of trade secrets, marketing strategies, product development plans, detailed product-specific financial information, customer information, internal reports and other such 9 materials that could harm a party’s competitive standing. See, e.g., In re Elec. Arts, Inc., 298 F. 10 App’x 568, 569 (9th Cir. 2008); Opperman, 2017 WL 1036652; Lucas v. Breg, Inc., 2016 WL 11 5464549, at *1 (S.D. Cal. Sept. 28, 2016); Rodman v. Safeway Inc., 2015 WL 13673842 (N.D. 12 Cal. Aug. 4, 2015). 13 However, courts should exercise caution not to allow these exceptions to swallow the 14 strong presumption in favor of disclosure. “The mere fact that the production of records may lead 15 to a litigant’s embarrassment, incrimination, or exposure to further litigation will not, without 16 more, compel the court to seal its records.” Kamakana, 447 F.3d at 1179. “Broad allegations of 17 harm, unsubstantiated by specific examples of articulated reasoning” will not carry the compelling 18 standards burden. Space Data, 2019 WL 2305278, at *1 (quoting Beckman Indus., Inc. v. Int’l 19 Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992)). Mere designation of a document as confidential 20 under a protective order is not sufficient to establish that said document, or portions thereof, are 21 sealable. N.D. Cal. Civ. L.R. 79- 5(d)(1)(A). 22 Here, there is no objection to Plaintiff’s motion to seal. The designating party is 23 Defendant. While Defendant filed a declaration supporting its motion to seal, the Court finds parts 24 of the sealing motion unsupported. See Space Data, 2019 WL 2305278, at *1 (noting that broad 25 allegations of harm are insufficient to meet the compelling interest standard). 26

27 Case No.: 5:19-cv-00078-EJD 1 Paragraph Sought to be Ruling 2 Sealed 3 4] 235, 241, 264, | GRANTED. This material relates to confidential customer identities and/or 268, customers’ trade secrets. According to Defendant’s disclosure of this 4 information would violate nondisclosure agreements and would disadvantage it in future negotiations with current and potential customers. See Johnstech Int’l 5 Corp. v. JF Microtechnology SDN BHD, 2016 WL 4091388, at *4 (N.D. Cal. 6 Aug. 2, 2016). 237-38, 244— | DENIED. This material relates to the Plaintiff's general allegations against the 7 45, 248, 251, Defendants. See In re Apple Inc. Device Performance Litig., 2019 WL 254, 258, 261— 1767158, at *2 (N.D. Cal. Apr. 22, 2019). Defendants’ declaration provides no 8 63, 266-67, specific compelling reasons why this paragraph must be sealed. Indeed, 9 269, Defendants cite no case law allowing sealing of “confidential identification information for individual current and former employees.” Everett Declaration 10 (“Everett Decl.”) | 2, Dkt. 76-1. Likewise, Defendant provides no case law supporting its proposition that an employee’s “individual privacy rights” 11 presents “compelling reasons” outweighing the right of access. 12 The Court reminds Defendants that embarrassment and/or incrimination do not B present cause to seal. Kamakana, 447 F.3d at 1179. = 4] 239, 240, 242, | GRANTED IN PART/DENIED IN PART. The motion is granted as to O 14 confidential customer identity. The motion is denied as to the names of current 252, 256-57, and former employees. See supra. 15 265, 4] 243, 246, 255, | GRANTED IN PART/DENIED IN PART. The motion is granted as to 16 259-60, 270 confidential customer identity and the customers’ trade secrets regarding 5 17 product and commercial development that are the subject of nondisclosure 5 agreements. See Johnstech Int’] Corp., 2016 WL 4091388 at *4. The motion Zz 18 is denied as to the names of current and former employees and as to Defendants’ own products. See supra. For the foregoing reasons, the Court DENIES in part and GRANTS in part the sealing “0 motion at ECF 68. Plaintiff shall consult Civil Local Rule 79-5(e)(2). Alternatively, the moving party may also renew the motion so to provide sufficient reasons in supporting declarations no 22 later than 10 days from the filing of this order. 2 ° IT IS SO ORDERED. 24 Dated: December 16, 2019

26 EDWARD J. DAVILA 37 United States District Judge Case No.: 5:19-cv-00078-EJD 28 || ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ ADMINISTRATIVE MOTION TO SEAL PARTS OF PLAINTIFF’S COMPLAINT