Grano v. Sodexo, Inc.

District Court, S.D. California·Decided August 16, 2022·No. 3:18-cv-01818·Unknown

Opinion

VINCENT GRANO, et al., Case No.: 3:18-cv-1818-RSH-BLM

Plaintiffs, ORDER PARTIALLY GRANTING v. AND DENYING PARTIES’ MOTIONS TO FILE DOCUMENTS SODEXO MANAGEMENT, INC., et al., UNDER SEAL Defendants. [ECF Nos. 333, 335, 354, & 366] There have been four motions for leave to file documents under seal pending in this case for nearly a year. The motions to seal all relate to summary judgment motion briefing. The Court addresses each motion to seal separately below, granting and denying the motions in part. I. Legal Standard Courts have historically recognized a “general right to inspect and copy public records and documents, including judicial records.” Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 & n.7 (1978). “Unless a particular court record is one ‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the starting point.” Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). To overcome this strong presumption and seal a judicial record related to a dispositive motion, a party 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 understanding the judicial process.” Kamakana, 447 F.3d at 1178–79 (internal quotation marks and citations omitted).1 Compelling reasons “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 (citing Nixon, 435 U.S. at 598). “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. (citing Foltz, 331 F.3d at 1136). Once a party articulates their compelling reasons, courts must then “conscientiously balance[] the competing interests of the public and the party who seeks to keep certain judicial records secret.” Id. (quoting Foltz, 331 F.3d at 1135). However, even if it may be appropriate to seal a document in its entirety, a party should still redact records whenever possible. See Kamakana, 447 F.3d at 1183 (noting a preference for redactions so long as they “have the virtue of being limited and clear”); Murphy v. Kavo Am. Corp., No. 11–cv–00410, 2012 WL 1497489 at *2–3 (N.D. Cal. Apr. 27, 2012) (denying motion to seal exhibits but directing parties to redact confidential information). See also Chambers Civ. Proc. § VIII (Protective Orders and Requests to File Under Seal). As further explained in this Order, the Parties have articulated common bases for requesting that the Court seal certain records, including trade secrets, proprietary business

1 “[A] particularized showing under the good cause standard of [Federal Rule of Civil Procedure 26(c)] will suffice to warrant preserving the secrecy of sealed discovery material attached to non-dispositive motions.” Kamakana, 447 F.3d at 1180 (internal quotation marks and citations omitted). information, and confidentiality designations under the Court’s December 6, 2019, Amended Protective Order, ECF No. 55. Accordingly, the Court addresses the legal standard for sealing court records as applied to each of these categories of material below. A. Trade Secrets Federal Rule of Civil Procedure 26(c) (“Rule 26(c)”) grants trial courts broad discretion to seal court documents to protect “a trade secret or other confidential research, development, or commercial information.” Fed. R. Civ. P. 26(c)(1)(G); see Kamakana, 447 F.3d at 1179 (“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 . . . release trade secrets.”) (quoting Nixon, 435 U.S. at 598). In the Ninth Circuit, “[a] trade secret may consist of any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.” Clark v. Bunker, 453 F.2d 1006, 1009 (9th Cir. 1972) (quoting Restatement (First) of Torts § 757 cmt. b (Am. L. Inst. 1939)). B. Proprietary Business Information Courts may also justify sealing court filings to prevent judicial documents from being used “as sources of business information that might harm a litigant’s competitive standing.” Nixon, 435 U.S. at 598; see In re Elec. Arts, Inc., 298 F. App’x 568, 569 (9th Cir. 2008) (reversing district court order not to seal “pricing terms, royalty rates, and guaranteed minimum payment terms” from licensing agreements). Nevertheless, “[a]n unsupported assertion of ‘unfair advantage’ to competitors without explaining ‘how a competitor would use th[e] information to obtain an unfair advantage’ is insufficient.” Ochoa v. McDonald’s Corp., No. 14-CV-02098, 2015 WL 3545921, at *1 (N.D. Cal. June 5, 2015) (quoting Hodges v. Apple, Inc., No. 13–cv–01128, 2013 WL 6070408, at *2 (N.D. Cal. Nov. 18, 2013)). See In re Pac. Fertility Ctr. Litig., No. 18-CV-01586, 2021 WL 1081129, at *2 (N.D. Cal. Feb. 18, 2021) (holding that “generalized statement that exposure of ‘commercially sensitive business information would allow potential competitors to gain insight into . . . operations and business relationships such that its business could be significantly and irreparable harmed’ fails to satisfy the compelling reasons standard.”). As such, courts will seal records containing detailed confidential business information where the parties articulate a concrete, non-speculative harm. Compare FTC v. Qualcomm Inc., No. 17–CV–220, 2019 WL 95922, at *2–3 (N.D. Cal. Jan. 3, 2019) (granting motion to seal under the compelling reasons standard where records “contain[ed] detailed, non-public and confidential . . . information” regarding “commercial negotiations and agreements with customers, [] competitive strategy, and [] research and development activities”), with Ochoa, 2015 WL 3545921, at *1–2 (declining to seal “franchise agreements” because supporting declaration “simply sa[id] that the documents ‘contain confidential and proprietary business information, including financial terms’ that if disclosed ‘may be exploited by competitors.’”), and Apple Inc. v. Samsung Elecs. Co., No. 11-CV01846, 2013 WL 412864, at *2 (N.D. Cal. Feb. 1, 2013) (“Although Samsung recites boilerplate terms that this information is proprietary and confidential, it does not provide a particularized showing of how this information would be detrimental if disclosed.”). Additionally, the fact that parties contract or agree to treat certain information or material as confidential is an insufficient basis in and of itself for a court to seal a judicial record and override the public’s interest in understanding the judicial process. See, e.g., Rumble, Inc. v. Daily Mail & Gen. Tr. PLC, No. CV 19-08420, 2020 WL 6154061, at *1 (C.D. Cal. Feb. 11, 2020) (“[T]he fact that the parties agreed to keep their agreement confidential is not a compelling enough reason to shield the public from its terms.”); Ambrosino v. Home Depot U.S.A., Inc., No. 11-cv-1319, 2014 WL 931780, at *2 (S.D. Cal. Mar. 10, 2014) (“The existence of a confidentiality provision, witho

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