1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 GLOBAL INDUSTRIAL INVESTMENT Case No. 21-cv-08924-HSG LIMITED, et al., 8 ORDER DENYING ADMINISTRATIVE Plaintiffs, MOTIONS TO SEAL 9 v. Re: Dkt. Nos. 2, 16, 20, 34, 37, 41, 43, 48, 10 1955 CAPITAL FUND I GP LLC, et al., 51, 54, 56, 58, 70, 74, 76, 81, 84, 88, 89, 93, 11 Defendants. 96, 98 12 13 Pending before the Court are the parties’ administrative motions to file under seal portions 14 of documents submitted in connection with the parties’ petition to confirm arbitration award and 15 petition to vacate arbitration award. See Dkt. Nos. 2, 16, 20, 34, 37, 41, 43, 48, 51, 54, 56, 58, 70, 16 74, 76, 81, 84, 88, 89, 93, 96, 98. For the reasons detailed below, the Court DENIES the motions. 17 I. LEGAL STANDARD 18 Courts generally apply a “compelling reasons” standard when considering motions to seal 19 documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (quoting Kamakana 20 v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)). “This standard derives from the 21 common law right ‘to inspect and copy public records and documents, including judicial records 22 and documents.’” Id. (quoting Kamakana, 447 F.3d at 1178). “[A] strong presumption in favor of 23 access is the starting point.” Kamakana, 447 F.3d at 1178 (quotations omitted). To overcome this 24 strong presumption, the party seeking to seal a judicial record attached to a dispositive motion 25 must “articulate compelling reasons supported by specific factual findings that outweigh the 26 general history of access and the public policies favoring disclosure, such as the public interest in 27 understanding the judicial process” and “significant public events.” Id. at 1178–79 (quotations 1 disclosure and justify sealing court records exist when such ‘court files might have become a 2 vehicle for improper purposes,’ such as the use of records to gratify private spite, promote public 3 scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 (quoting Nixon v. 4 Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). “The mere fact that the production of records 5 may lead to a litigant’s embarrassment, incrimination, or exposure to further litigation will not, 6 without more, compel the court to seal its records.” Id. 7 Civil Local Rule 79-5 supplements the “compelling reasons” standard. The party seeking 8 to file under seal must submit “a request that establishes that the document, or portions thereof, are 9 privileged, protectable as a trade secret or otherwise entitled to protection under the law . . . . The 10 request must be narrowly tailored to seek sealing only of sealable material . . . .” Civil L.R. 79- 11 5(b). Courts have found that “confidential business information” in the form of “license 12 agreements, financial terms, details of confidential licensing negotiations, and business strategies” 13 satisfies the “compelling reasons” standard. See In re Qualcomm Litig., No. 3:17-cv-0108-GPC- 14 MDD, 2017 WL 5176922, at *2 (S.D. Cal. Nov. 8, 2017) (observing that sealing such information 15 “prevent[ed] competitors from gaining insight into the parties’ business model and strategy”); 16 Finisar Corp. v. Nistica, Inc., No. 13-cv-03345-BLF (JSC), 2015 WL 3988132, at *5 (N.D. Cal. 17 June 30, 2015). 18 Records attached to nondispositive motions must meet the lower “good cause” standard of 19 Rule 26(c) of the Federal Rules of Civil Procedure, as such records “are often unrelated, or only 20 tangentially related, to the underlying cause of action.” Id. at 1179–80 (quotations omitted). This 21 requires a “particularized showing” that “specific prejudice or harm will result” if the information 22 is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th 23 Cir. 2002); see also Fed. R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated by specific 24 examples of articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 25 F.2d 470, 476 (9th Cir. 1992) (quotation omitted). 26 II. DISCUSSION 27 In addition to the merits of their cross-petitions to confirm and vacate the Second 1 the underlying arbitration should be sealed. As part of this process, the parties have filed 22 2 administrative motions to seal. At bottom, Respondents seek to seal significant portions of the 3 Second Arbitration Award, as well as the briefs and exhibits filed in this case regarding that 4 award. Petitioners do not believe any of this information needs to be filed under seal. The Court 5 therefore considers Respondents’ proffered justifications for sealing. 6 First, Respondents ask the Court to seal much of the Second Arbitration Award and 7 references to it temporarily because the information “would tarnish the professional reputation of” 8 and “have irreparable reputational impacts on” Respondents and Andrew Chung, the managing 9 member of Respondents. See Dkt. No. 16 at 4. Respondents suggest that the Court should wait 10 until after the Court issues its decision on the parties’ cross-petitions before unsealing this 11 information. See id. at 5. The Court has since issued its ruling, granting the petition to confirm 12 the final arbitration award. The Court further finds that the Second Arbitration Award is integral 13 to the public’s understanding of these proceedings, and should not be sealed. 14 Second, Respondents’ only proffered justification for sealing some portions of the 15 documents is that Respondents or third parties designated the information as “confidential.” But a 16 designation of confidentiality is not sufficient to establish that a document is sealable. See Civ. L. 17 R. 79-5(c). “Confidential” is merely the parties’ initial designation of confidentiality to establish 18 coverage under the stipulated protective order. See Verinata Health, Inc. v. Ariosa Diagnostics, 19 Inc., No. 12-cv-05501-SI, 2015 WL 5117083, at *5 (N.D. Cal. Aug. 31, 2015) (“But good cause 20 ‘cannot be established simply by showing that the document is subject to a protective order or by 21 stating in general terms that the material is considered to be confidential’”) (quoting Bain v. 22 AstraZeneca LP, No. 09-cv-4147, 2011 WL 482767, at *1 (N.D. Cal. Feb. 7, 2011)). The Court 23 therefore finds that sealing is not warranted on that basis. 24 Third, Respondents appear to rely, at least in part, on Judge Chhabria’s order sealing 25 certain information related to an earlier arbitration award in a separate case, China Fortune Land 26 Development v. 1955 Capital Fund I GP LLC, 19-cv-07043-VC. Respondents suggest that their 27 sealing requests in this case are “materially similar to those considered—and granted—by Judge 1 submissions based on such discovery documents, expert reports based on such discovery 2 documents, exhibits introduced in the arbitration, and the arbitration hearing transcript.” See Dkt. 3 No. 34 at 2. Without scouring the record in the separate case, the Court cannot know if the 4 documents that Judge Chhabria sealed in China Fortune Land Development contain similar 5 information to those at issue here. Respondents make no attempt to compare the substance of the 6 documents. Rather, they appear to suggest that these cases both “involve[] a private, business 7 dispute between partners . . . .” Id. But this case is now in federal court, and is no longer a purely 8 private matter.
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 GLOBAL INDUSTRIAL INVESTMENT Case No. 21-cv-08924-HSG LIMITED, et al., 8 ORDER DENYING ADMINISTRATIVE Plaintiffs, MOTIONS TO SEAL 9 v. Re: Dkt. Nos. 2, 16, 20, 34, 37, 41, 43, 48, 10 1955 CAPITAL FUND I GP LLC, et al., 51, 54, 56, 58, 70, 74, 76, 81, 84, 88, 89, 93, 11 Defendants. 96, 98 12 13 Pending before the Court are the parties’ administrative motions to file under seal portions 14 of documents submitted in connection with the parties’ petition to confirm arbitration award and 15 petition to vacate arbitration award. See Dkt. Nos. 2, 16, 20, 34, 37, 41, 43, 48, 51, 54, 56, 58, 70, 16 74, 76, 81, 84, 88, 89, 93, 96, 98. For the reasons detailed below, the Court DENIES the motions. 17 I. LEGAL STANDARD 18 Courts generally apply a “compelling reasons” standard when considering motions to seal 19 documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (quoting Kamakana 20 v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)). “This standard derives from the 21 common law right ‘to inspect and copy public records and documents, including judicial records 22 and documents.’” Id. (quoting Kamakana, 447 F.3d at 1178). “[A] strong presumption in favor of 23 access is the starting point.” Kamakana, 447 F.3d at 1178 (quotations omitted). To overcome this 24 strong presumption, the party seeking to seal a judicial record attached to a dispositive motion 25 must “articulate compelling reasons supported by specific factual findings that outweigh the 26 general history of access and the public policies favoring disclosure, such as the public interest in 27 understanding the judicial process” and “significant public events.” Id. at 1178–79 (quotations 1 disclosure and justify sealing court records exist when such ‘court files might have become a 2 vehicle for improper purposes,’ such as the use of records to gratify private spite, promote public 3 scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 (quoting Nixon v. 4 Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). “The mere fact that the production of records 5 may lead to a litigant’s embarrassment, incrimination, or exposure to further litigation will not, 6 without more, compel the court to seal its records.” Id. 7 Civil Local Rule 79-5 supplements the “compelling reasons” standard. The party seeking 8 to file under seal must submit “a request that establishes that the document, or portions thereof, are 9 privileged, protectable as a trade secret or otherwise entitled to protection under the law . . . . The 10 request must be narrowly tailored to seek sealing only of sealable material . . . .” Civil L.R. 79- 11 5(b). Courts have found that “confidential business information” in the form of “license 12 agreements, financial terms, details of confidential licensing negotiations, and business strategies” 13 satisfies the “compelling reasons” standard. See In re Qualcomm Litig., No. 3:17-cv-0108-GPC- 14 MDD, 2017 WL 5176922, at *2 (S.D. Cal. Nov. 8, 2017) (observing that sealing such information 15 “prevent[ed] competitors from gaining insight into the parties’ business model and strategy”); 16 Finisar Corp. v. Nistica, Inc., No. 13-cv-03345-BLF (JSC), 2015 WL 3988132, at *5 (N.D. Cal. 17 June 30, 2015). 18 Records attached to nondispositive motions must meet the lower “good cause” standard of 19 Rule 26(c) of the Federal Rules of Civil Procedure, as such records “are often unrelated, or only 20 tangentially related, to the underlying cause of action.” Id. at 1179–80 (quotations omitted). This 21 requires a “particularized showing” that “specific prejudice or harm will result” if the information 22 is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th 23 Cir. 2002); see also Fed. R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated by specific 24 examples of articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 25 F.2d 470, 476 (9th Cir. 1992) (quotation omitted). 26 II. DISCUSSION 27 In addition to the merits of their cross-petitions to confirm and vacate the Second 1 the underlying arbitration should be sealed. As part of this process, the parties have filed 22 2 administrative motions to seal. At bottom, Respondents seek to seal significant portions of the 3 Second Arbitration Award, as well as the briefs and exhibits filed in this case regarding that 4 award. Petitioners do not believe any of this information needs to be filed under seal. The Court 5 therefore considers Respondents’ proffered justifications for sealing. 6 First, Respondents ask the Court to seal much of the Second Arbitration Award and 7 references to it temporarily because the information “would tarnish the professional reputation of” 8 and “have irreparable reputational impacts on” Respondents and Andrew Chung, the managing 9 member of Respondents. See Dkt. No. 16 at 4. Respondents suggest that the Court should wait 10 until after the Court issues its decision on the parties’ cross-petitions before unsealing this 11 information. See id. at 5. The Court has since issued its ruling, granting the petition to confirm 12 the final arbitration award. The Court further finds that the Second Arbitration Award is integral 13 to the public’s understanding of these proceedings, and should not be sealed. 14 Second, Respondents’ only proffered justification for sealing some portions of the 15 documents is that Respondents or third parties designated the information as “confidential.” But a 16 designation of confidentiality is not sufficient to establish that a document is sealable. See Civ. L. 17 R. 79-5(c). “Confidential” is merely the parties’ initial designation of confidentiality to establish 18 coverage under the stipulated protective order. See Verinata Health, Inc. v. Ariosa Diagnostics, 19 Inc., No. 12-cv-05501-SI, 2015 WL 5117083, at *5 (N.D. Cal. Aug. 31, 2015) (“But good cause 20 ‘cannot be established simply by showing that the document is subject to a protective order or by 21 stating in general terms that the material is considered to be confidential’”) (quoting Bain v. 22 AstraZeneca LP, No. 09-cv-4147, 2011 WL 482767, at *1 (N.D. Cal. Feb. 7, 2011)). The Court 23 therefore finds that sealing is not warranted on that basis. 24 Third, Respondents appear to rely, at least in part, on Judge Chhabria’s order sealing 25 certain information related to an earlier arbitration award in a separate case, China Fortune Land 26 Development v. 1955 Capital Fund I GP LLC, 19-cv-07043-VC. Respondents suggest that their 27 sealing requests in this case are “materially similar to those considered—and granted—by Judge 1 submissions based on such discovery documents, expert reports based on such discovery 2 documents, exhibits introduced in the arbitration, and the arbitration hearing transcript.” See Dkt. 3 No. 34 at 2. Without scouring the record in the separate case, the Court cannot know if the 4 documents that Judge Chhabria sealed in China Fortune Land Development contain similar 5 information to those at issue here. Respondents make no attempt to compare the substance of the 6 documents. Rather, they appear to suggest that these cases both “involve[] a private, business 7 dispute between partners . . . .” Id. But this case is now in federal court, and is no longer a purely 8 private matter. The fact that these documents were produced in discovery in the underlying 9 arbitration is simply not sufficient reason to seal them as part of this litigation. 10 Lastly, Respondents contend that some of the information should be sealed because it 11 could cause irreparable harm to third-party portfolio companies. They urge that this could, in turn, 12 harm Respondents’ ability to develop and maintain relationships with other portfolio companies. 13 But Respondents’ reasons for sealing, even if valid, are not tailored to the information they seek to 14 seal. Respondents suggest, for example, that some of the information could reveal portfolio 15 companies’ fundraising strategies, but it is not clear how the information Respondents seek to seal 16 is related in any way to such strategies. Respondents also seek to seal information about the 17 arguments raised before the arbitrator about the application of res judicata. See Dkt. No. 43-3. 18 This was a key dispute among the parties even in this Court. Yet in support of sealing, 19 Respondents simply assert that this information could cause them “irreparable financial harm.” 20 See Dkt. No. 43-8 at 3 (proposed order). Such generic allegations of harm are insufficient to 21 support the broad redactions that Respondents propose. 22 III. CONCLUSION 23 The Court DENIES the motions to seal. Dkt. Nos. 2, 16, 20, 34, 37, 41, 43, 48, 51, 54, 56, 24 58, 70, 74, 76, 81, 84, 88, 89, 93, 96, 98. Although the Court believes Respondents are seeking to 25 seal far too much, it is possible that some limited subset of information may warrant sealing. 26 Accordingly, Respondents may file a streamlined motion to seal within 10 days of this order if 27 they can do so consistent with this order. Respondents are cautioned that they must explain with 1 denied, and why a less restrictive alternative to sealing is not sufficient under the circumstances. 2 || See Civil L.R. 79-5(c)(1). 3 IT IS SO ORDERED. 4 || Dated: 9/23/2022 5 Abepured 3 Sb). HAYWOOD S. GILLIAM, JR. 6 United States District Judge 7 8 9 10 11 12
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