Global Industrial Investment Limited v. 1955 Capital Fund I GP LLC

District Court, N.D. California·Decided September 20, 2023·No. 4:21-cv-08924·Unknown

Opinion

GLOBAL INDUSTRIAL INVESTMENT Case No. 21-cv-08924-HSG LIMITED, et al., ORDER GRANTING IN PART AND Plaintiffs, DENYING IN PART MOTIONS TO v. Re: Dkt. Nos. 109, 114, 118, 121, 131, 133, 1955 CAPITAL FUND I GP LLC, et al., 144, 146, 148, 151, 152 Defendants. Pending before the Court are the administrative motions to file under seal filed by Petitioners Global Industrial Investment Limited and China Fortune Land Development and Respondents 1955 Capital Fund I GP LLC and 1955 Capital China Fund GP LLC. See Dkt. Nos. 109, 114, 118, 121, 131, 133, 144, 146, 148, 151, 152. For the reasons detailed below, the Court GRANTS IN PART and DENIES IN PART the motions. Courts generally apply a “compelling reasons” standard when considering motions to seal documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (quoting Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)). “This standard derives from the common law right ‘to inspect and copy public records and documents, including judicial records and documents.’” Id. (quoting Kamakana, 447 F.3d at 1178). “[A] strong presumption in favor of access is the starting point.” Kamakana, 447 F.3d at 1178 (quotations omitted). To overcome this strong presumption, the party seeking to seal a judicial record attached to a dispositive motion must “articulate compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure, such as the public interest in omitted). “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in disclosure and justify sealing court records exist when such ‘court files might have become a vehicle for improper purposes,’ such as the use of records to gratify private spite, promote public scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). “The mere fact that the production of records may lead to a litigant’s embarrassment, incrimination, or exposure to further litigation will not, without more, compel the court to seal its records.” Id. The Court must “balance[] the competing interests of the public and the party who seeks to keep certain judicial records secret. After considering these interests, if the court decides to seal certain judicial records, it must base its decision on a compelling reason and articulate the factual basis for its ruling, without relying on hypothesis or conjecture.” Id. Civil Local Rule 79-5 supplements the compelling reasons standard set forth in Kamakana: the party seeking to file a document or portions of it under seal “must explore all reasonable alternatives to filing documents under seal, minimize the number of documents filed under seal, and avoid wherever possible sealing entire documents . . . .” Civil L.R. 79-5(a). The party must further explain the interests that warrant sealing, the injury that will result if sealing is declined, and why a less restrictive alternative to sealing is not sufficient. See Civil L.R. 79-5(c). Records attached to nondispositive motions must meet the lower “good cause” standard of Rule 26(c) of the Federal Rules of Civil Procedure, as such records “are often unrelated, or only tangentially related, to the underlying cause of action.” See Kamakana, 447 F.3d at 1179–80 (quotations omitted). This requires a “particularized showing” that “specific prejudice or harm will result” if the information is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th Cir. 2002); see also Fed. R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated by specific examples of articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992) (quotation omitted). The parties continue to heavily litigate this case and have filed several administrative underlying arbitration and to Respondents’ and the Funds’ financial information. The Court initially denied over 20 administrative motions to seal related to the Second Arbitration Award, as well as the briefs and exhibits filed in this case regarding the enforcement of that award. Dkt. No. 108. Respondents have filed a renewed motion to seal, and now seek to seal narrower excerpts of these same documents. See Dkt. No. 109. The parties also seek to file under seal materials related to the parties’ more recent filings, including the motions for attorneys’ fees, motion for sanctions, motion to stay judgment pending appeal, and motion to include judgment details. See Dkt. Nos. 114, 118, 121, 131, 133, 144, 146, 148, 151, 152. The Court previously explained that the Second Arbitration Award is integral to the public’s understanding of these proceedings, and the Court accordingly applies the compelling reasons standard to Respondents’ requests to seal information related to that award and to the enforcement of that award. The Court otherwise applies the good cause standard to those documents related to ancillary and non-dipositive motions. For some of the administrative motions to seal, Petitioners initially filed motions to consider whether another party’s material should be sealed because Respondents previously designated specific documents as confidential. See Civil L.R. 79-5(f). However, rather than file a declaration explaining the need for keeping the documents or portions of the documents under seal, Respondents simply filed entirely new administrative motions to seal as to those same materials. Respondents are seeking to seal less information than previously identified. The Court therefore TERMINATES AS MOOT Petitioners’ initial administrative motions, and only considers Respondents’ more narrow requests where appropriate. Dkt. Nos. 121, 133, and 148. Substantively, many of the excerpts that Respondents seek to seal identify the specific amount of money that Respondents reserved for management fees of the Funds and for litigation expenses, rather than for investing on behalf of the Funds. See, e.g., Dkt. No. 109-4 at 6; see also Dkt. No. 109-3 at ¶¶ 383, 420–22, 499, & n.1131. Respondents make no attempt to explain with any level of specificity why such information should remain under seal. The declaration from Andrew Chung, Respondents’ managing member, only asserts at a high level that the information information concerning [Respondents’] internal finances and operations, sensitive financial information concerning third-party portfolio companies, and third-party investors.” See Dkt. No. 109-1 at ¶ 7. The amount of money Respondents reserved for management fees and litigation expenses does not appear to relate in any way to Respondents’ proprietary investments or investment strategies. See id. at ¶ 17. Moreover, this information was a key point of the analysis in the Second Arbitration Award, in which Arbitrator Arif Hyder Ali concluded that Respondents had breached their fiduciary duties. Similarly, Respondents seek to seal information regarding their bank statements. The specific account numbers are not disclosed in these documents, but they do contain information about some transactions and remaining balances regarding the Funds at issue in this case. Other than a generic explanation that such information is confidential and “competitively sensitive,” however, Respondents do not explain how this spec

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Global Industrial Investment Limited v. 1955 Capital Fund I GP LLC, (N.D. Cal. 2023).

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