ImprimisRx, LLC v. OSRX, Inc.

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 IMPRIMISRX, LLC, Case No. 21-cv-01305-BAS-DDL 11 Plaintiff,

ORDER: 12 v.

(1) GRANTING THE PARTIES’ 13 JOINT MOTION TO FILE DOCUMENTS UNDER SEAL (ECF 14 OSRX, INC.; OCULAR SCIENCE, INC., No. 245);

15 Defendants. (2) GRANTING DEFENDANTS’ MOTION TO FILE DOCUMENTS 16 UNDER SEAL ATTACHED TO PLAINTIFF’S MOTION TO 17 EXCLUDE DEFENDANTS’ EXPERT (ECF No. 248); 18

AND 19

(3) GRANTING IN PART AND 20 DENYING IN PART DEFENDANTS’ MOTION TO FILE 21 DOCUMENTS UNDER SEAL ATTACHED TO PLAINTIFF’S 22 MOTION FOR PARTIAL SUMMARY JUDGMENT 23 (ECF No. 251) 24

25 Before the Court are three motions by the parties to file documents under seal. (ECF 26 Nos. 245, 248, 251.) Plaintiff ImprimisRx, LLC and Defendants OSRX, Inc. and Ocular 27 Science, Inc. submit a renewed motion to file documents under seal in support of 28 Defendants’ Daubert motion to exclude Plaintiff’s experts. (ECF No. 245.) Defendants 1 also file a renewed motion to file documents under seal in support of Plaintiff’s Daubert 2 motion to exclude Defendants’ expert. (ECF No. 248.) Plaintiff does not oppose this 3 motion. Finally, Defendants file a renewed motion to seal documents in support of 4 Plaintiff’s motion for summary judgment and Plaintiff’s opposition to Defendants’ motion 5 for summary judgment. (ECF No. 251.) Plaintiff opposes portions of this motion. (ECF 6 No. 256.) These motions come after the Court denied the parties’ previous attempts to file 7 documents under seal. (ECF Nos. 234, 236.) 8 For the reasons stated below, the Court GRANTS the parties’ joint motion to file 9 documents under seal in support of Defendants’ Daubert motion to exclude Plaintiff’s 10 experts (ECF No. 245), GRANTS Defendants’ motion to file documents under seal in 11 support of Plaintiff’s Daubert motion to exclude Defendants’ expert (ECF No. 248), and 12 GRANTS IN PART and DENIES IN PART Defendants’ motion to file documents under 13 seal related to Plaintiff’s motion for partial summary judgment and Plaintiff’s opposition 14 to Defendants’ motion for partial summary judgment (ECF No. 251). 15 16 I. LEGAL STANDARD 17 “[T]he courts of this country recognize a general right to inspect and copy public 18 records and documents, including judicial records and documents.” Nixon v. Warner 19 Commc’ns, Inc., 435 U.S. 589, 597 (1978). “Unless a particular court record is one 20 ‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the starting point.” 21 Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (citing Foltz v. 22 State Farm Mut. Auto Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). “The presumption 23 of access is ‘based on the need for federal courts, although independent—indeed, 24 particularly because they are independent—to have a measure of accountability and for the 25 public to have confidence in the administration of justice.’” Ctr. for Auto Safety v. Chrysler 26 Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 2016) (quoting United States v. Amodeo, 71 F.3d 27 1044, 1048 (2d Cir. 1995)). 28 1 A party seeking to seal a judicial record bears the burden of overcoming the strong 2 presumption of access. Foltz, 331 F.3d at 1135. The showing required to meet this burden 3 depends upon whether the documents to be sealed relate to a motion that is “more than 4 tangentially related to the merits of the case.” Ctr. for Auto Safety, 809 F.3d at 1102. When 5 the underlying motion is more than tangentially related to the merits, the “compelling 6 reasons” standard applies. Id. at 1096–98. When the underlying motion does not surpass 7 the tangential relevance threshold, the “good cause” standard applies. Id. Evidentiary 8 motions, including Daubert motions, are often “strongly correlative to the merits of the 9 case” and warrant the application of the “compelling reasons” standard. Ctr. for Auto 10 Safety, 809 F.3d at 1099. 11 “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in 12 disclosure and justify sealing court records exist when such ‘court files might have become 13 a vehicle for improper purposes,’ such as the use of records to gratify private spite, promote 14 public scandal, circulate libelous statements, or release trade secrets.” Kamakana, 447 15 F.3d at 1179 (quoting Nixon, 435 U.S. at 598). As to this last category, courts have been 16 willing to seal court filings containing confidential business material, “such as marketing 17 strategies, product development plans, licensing agreements, and profit, cost, and margin 18 data,” where the parties have been able to point to concrete factual information to justify 19 sealing. See, e.g., Cohen v. Trump, No. 13-cv-2519-GPC-WVG, 2016 WL 3036302, at *5 20 (S.D. Cal. May 27, 2016). However, “[t]he mere fact that the production of records may 21 lead to a litigant’s embarrassment, incrimination, or exposure to further litigation will not, 22 without more, compel the court to seal its records.” Kamakana, 447 at 1179. A blanket 23 protective order is not itself sufficient to show “good cause,” let alone compelling reasons, 24 for sealing particular documents. See Foltz, 331 F.3d at 1133; San Jose Mercury News, 25 Inc. v. U.S. District Court, N. Dist., 187 F.3d 1096, 1103 (9th Cir. 1999). The decision to 26 seal documents is “one best left to the sound discretion of the trial court” upon 27 consideration of “the relevant facts and circumstances of the particular case.” Nixon, 435 28 U.S. at 599. 1 In addition, parties moving to seal documents must comply with the procedures set 2 forth in this Court’s standing order for filing documents under seal. See Standing Order of 3 the Hon. Cynthia Bashant for Civil Cases ¶5. The rule permits sealing to “only those 4 documents, or portions thereof, necessary to protect such sensitive information.” Id. Thus, 5 although sometimes it may be appropriate to seal a document in its entirety, whenever 6 possible a party must redact. See Kamakana, 447 F.3d at 1183 (noting a preference for 7 redactions so long as they “have the virtue of being limited and clear”); Murphy v. Kavo 8 Am. Corp., No. 11–cv–00410–YGR, 2012 WL 1497489, at *2–3 (N.D. Cal. Apr. 27, 2012) 9 (denying motion to seal exhibits but directing parties to redact confidential information). 10 II. ANALYSIS 11 A. The Parties’ Joint Motion to Seal 12 In their joint motion to seal, Plaintiff and Defendants seek leave to file under seal 13 portions of the Expert Report of Robert Wunderlich (“Wunderlich Report”) in support of 14 Defendants’ Daubert motion to exclude Plaintiff’s experts. (ECF No. 245.) Specifically, 15 the parties seek leave to file schedules A1–C1 of the Wunderlich Report under seal. (Id.) 16 Defendants’ Daubert motion is more than tangentially related to the merits of the 17 underlying dispute. Ctr. for Auto Safety, 809 F.3d at 1099. Therefore, the parties’ motion 18 to seal is subject to the “compelling reasons” standard. In support of the motion to seal, 19 the parties aver that because Defendants are privately held and the schedules of the 20 Wunderlich Report contain internal financial information that is not otherwise publicly 21 available, the schedules should remain confidential. (ECF No. 245 at 2.) A privately held 22 business’s need for confidentiality with respect to sensitive business information is a 23 compelling reason justifying sealing. See, e.g., Cohen, 2016 WL 3036302, at *5. 24 The Court previously denied Defendants’ request to seal the entirety of the 25 Wunderlich Report because portions of the report contained non-sensitive information such 26 as the expert’s methodology or citations. (ECF No. 234.) In their renewed motion to seal, 27 the parties have tailored their request to seal to only the portions of the Wunderlich Report 28 1 that contain sensitive and private financial information. Accordingly, the parties’ joint 2 motion to seal is granted. 3 B. Defendants’ Motion to Seal Documents in Support of Plaintiff’s Daubert 4 Motion 5 Attached to Plaintiff’s Daubert Motion to exclude Defendants’ expert, Defendants 6 move to seal portions of the expert report of Dr. Alyson Wooten (“Wooten Report”) that 7 contain personal patient health information and references to Defendants’ confidential 8 business information. (ECF No. 248 at 1–2.) Daubert motions in connection with a motion 9 for summary judgment are more than tangentially related to the merits of the underlying 10 case. Ctr. for Auto Safety, 809 F.3d at 1099. Accordingly, Defendants’ motion to seal is 11 subject to the “compelling reasons” standard. 12 Defendants identify two bases for sealing the redacted portions of the Wooten 13 Report: the presence of personal patient health information and the presence of confidential 14 business information. Courts have repeatedly held the need to keep personal health 15 information confidential outweighs the presumption in favor of public access. See, e.g., 16 San Ramon Reg’l Med. Ctr., Inc. v. Principal Life Ins. Co., No. C 10-02258 SBA, 2011 17 WL 89931, at *1 n.1 (N.D. Cal. Jan. 10, 2011); Stafford v. Rite Aid Corp., No. 17-CV- 18 1340-AJB-JLB, 2019 WL 3818015, at *1 (S.D. Cal. Aug. 14, 2019). Courts have also 19 previously held the need to protect competitively sensitive business information meets the 20 compelling reasons standard. See, e.g., Cohen, 2016 WL 3036302, at *5. 21 The Court previously denied Plaintiff’s motion to seal the entirety of the Wooten 22 Report as insufficiently tailored. (ECF No. 234.) Here, however, Defendants propose 23 redacting only portions of the Report that contain patient information or sensitive business 24 information. Accordingly, Defendants’ renewed motion to seal is granted. 25 26 27 28 1 C. Defendants’ Motion to Seal Documents in Support of Plaintiff’s Motion 2 for Summary Judgment and Plaintiff’s Opposition to Defendants’ Motion for 3 Summary Judgment 4 Defendants move to seal portions of exhibits and deposition excerpts attached to 5 Plaintiff’s motion for partial summary judgment and Plaintiff’s opposition to Defendants’ 6 motion for partial summary judgment. (ECF No. 251.) For some of these portions, namely 7 Exhibits 52 and 53 attached to Plaintiff’s motion for partial summary judgment and 8 deposition excerpts identified in the table included in Defendants’ motion (ECF No. 251 at 9 3–4), Defendants renew Plaintiff’s prior motion to file these documents under seal. The 10 Court had previously rejected Plaintiff’s motion to seal these documents for being 11 inadequately tailored or for failing to present a compelling reason for being filed under 12 seal. (ECF No. 236.) Plaintiff does not oppose Defendants’ motion for these excerpts. 13 (ECF No. 256.) 14 Additionally, Defendants seek to file under seal deposition excerpts attached to 15 Plaintiff’s motion for summary judgment and Plaintiff’s opposition to Defendants’ motion 16 for summary judgment the Court has not previously considered. (ECF No. 251 at 5.) These 17 excerpts are identified in the tables included in Defendants’ renewed motion to file 18 documents under seal. (Id. at 6–9.) Plaintiff opposes Defendants’ motion with respect to 19 these excerpts for failing to present a compelling reason to justify filing the documents 20 under seal. (ECF No. 256 at 2.) 21 Motions for summary judgment are dispositive motions and are more than 22 tangentially related to the merits of the underlying case. Ctr. for Auto Safety, 809 F.3d at 23 1099. Accordingly, Defendants’ motion to seal is subject to the “compelling reasons” 24 standard. 25 1. Previously Considered Documents 26 With respect to Exhibits 52 and 53 attached to Plaintiff’s motion for partial summary 27 judgment, Defendants seek to redact the names and contact information of Defendants’ 28 customers. Sales leads and contract negotiations present compelling reasons for a 1 document to be filed under seal. See e.g., Rydman v. Champion Petfoods, USA Inc., No. 2 2:18-CV-01578-TL, 2023 WL 2711837, at *2 (W.D. Wash. Mar. 30, 2023) and Opperman 3 v. Path, Inc., No. 13-CV-00453-JST, 2017 WL 1036652, at *5 (N.D. Cal. Mar. 17, 2017). 4 While the Court previously denied sealing these Exhibits in their entireties, Defendants 5 seek only to redact the contact information of their customers. Customer contact 6 information, if provided to the public, may give competitors an advantage by being able to 7 target and market to Defendants’ customers. Because Defendants have tailored their 8 request to seal to only those portions of Exhibits 52 and 53 that contain customer contact 9 information, there is a compelling reason to seal these documents. 10 2. Previously Considered Deposition Excerpts 11 Defendants also renew Plaintiff’s motion to file deposition excerpts attached to 12 Plaintiff’s motion for partial summary judgment and Plaintiff’s opposition to Defendants’ 13 motion for partial summary judgment under seal. (ECF No. 251 at 3–4.) Specifically, 14 Defendants seek to file under seal portions of the deposition of Traci Inman (“Inman 15 Deposition”), the deposition of Francine Vaccari (“Vaccari Deposition”), the deposition of 16 Matt Gee (“Gee Deposition”), and the deposition of Anthony Sampietro (“Sampietro 17 Deposition”). These excerpts are attached to Plaintiff’s motion for summary judgment as 18 part of Exhibits 2, 3, and 7 and to Plaintiff’s Opposition to Defendants’ motion for 19 summary judgment as part of Exhibits 6 and 10. (ECF No. 251 at 3.) The Court previously 20 rejected sealing these excerpts because the parties failed to present a compelling interest 21 justifying being filed under seal. (ECF No. 236.) 22 Defendants seek to seal portions of these depositions because they identify 23 Defendants’ customers or customers’ contact information. (ECF No. 251 at 3.) As 24 discussed earlier, sales leads are confidential business information that may provide a 25 competitive advantage to Defendants’ competitors. Defendants have narrowly tailored 26 their requests to seal deposition excerpts to only those portions of the depositions that 27 contain customer names. Accordingly, the Court grants Defendants’ motion to seal these 28 1 portions of Plaintiff’s exhibits attached to Plaintiff’s motion for partial summary judgment 2 and Plaintiff’s opposition to Defendants’ motion for partial summary judgment. 3 3. New Deposition Excerpts 4 Defendants additionally seek to file under seal additional deposition excerpts 5 included in exhibits attached to Plaintiff’s motion for partial summary judgment and 6 Plaintiff’s opposition to Defendants’ motion for partial summary judgment. The Court has 7 not previously considered these excerpts. Specifically, Defendants seek to file under seal 8 portions of the deposition of the Inman Deposition, the Vaccari Deposition, the deposition 9 of Eric Garner (“Garner Deposition”), the deposition of Amy Frost (“Frost Deposition”), 10 the Gee Deposition, and the Sampietro Deposition. These excerpts are attached to 11 Plaintiff’s motion for summary judgment as part of Exhibits 2, 3, 4, 5, and 7 and to 12 Plaintiff’s Opposition to Defendants’ motion for summary judgment as part of Exhibits 4, 13 6 and 10. (ECF No. 251 at 9.) Plaintiff opposes Defendants’ motion for failing to present 14 a compelling reason for these excerpts to be filed under seal. (ECF No. 256.) 15 The excerpts Defendants move to seal fall into four categories. First, Defendants 16 seek to seal deposition excerpts that identify the names of Defendants’ customers. For 17 example, Defendants seek to seal the names of customers identified in the Sampietro 18 Deposition included as part of Exhibit 6 to Plaintiff’s opposition to Defendants’ motion for 19 summary judgment. (See, e.g., Dep. of Anthony Sampietro 39:11.) As discussed, sales 20 leads and contract negotiations present compelling reasons for a document to be filed under 21 seal. See e.g., Rydman, 2023 WL 2711837, at *2 and Opperman, 2017 WL 1036652, at 22 *5. Because Defendants tailor their redactions to only the deposition questions and 23 answers that identify the names of Defendants’ customers, there is a compelling reason to 24 seal these excerpts. 25 Second, Defendants move to file under seal deposition excerpts that discuss 26 Defendants’ business strategy and future business planning. For example, Defendants seek 27 to seal information about their prospective investments and plans to compete. (See, e.g., 28 Dep. of Traci Inman 59:1–20.) Future business planning and competitive strategy are 1 quintessential business information that may harm a firm’s competitive standing if 2 disclosed to the public. See, e.g., Microsoft Corp. v. Motorola, Inc., No. C10-1823JLR, 3 2012 WL 5476846, at *4 (W.D. Wash. Nov. 12, 2012); BBK Tobacco & Foods LLP v. 4 Cent. Coast Agric. Inc., No. CV-19-05216-PHX-MTL, 2021 WL 5578864, at *4 (D. Ariz. 5 Nov. 29, 2021). As follows, there is a compelling reason to seal these excerpts. 6 Third, Defendants move to file under seal deposition excerpts that discuss 7 Defendants’ contract negotiations and procurement procedures. These excerpts give 8 insight into how Defendants compete and how they manage their logistics and ordering 9 process. (See, e.g., Dep. of Francine Vaccari 80:2–22.) Other courts have previously held 10 that “confidential business information” in the form of “license agreements, financial 11 terms, details of confidential licensing negotiations, and business strategies” satisfies the 12 compelling reasons standard. See In re Qualcomm Litig., No. 3:17-cv-0108-GPC-MDD, 13 2017 WL 5176922, at *2 (S.D. Cal. Nov. 8, 2017); Jam Cellars, Inc. v. Wine Grp., LLC, 14 No. 19-cv-01878-HSG, 2020 WL 5576346, at *2 (N.D. Cal. Sept. 17, 2020). The 15 sensitivity of these excerpts to Defendants’ business model presents a compelling reason 16 to file these excerpts under seal. 17 Fourth, Defendants seek to file under seal some deposition excerpts which do not 18 identify their customers, do not contain business strategy or future business planning, and 19 do not discuss Defendants’ contract negotiations and procurement procedures. Often in 20 these excerpts, Defendants seek to seal deposition excerpts which are central to this 21 litigation or may be perceived as embarrassing. (See, e.g., Dep. of Francine Vaccari 99:17– 22 20.) Possible embarrassment or legal risk are not compelling reasons to file documents 23 under seal. The deposition excerpts lacking a compelling reason to seal are identified in 24 Appendix A attached to this Order. Defendants’ motion with respect to the excerpts 25 identified in Appendix A is denied. Defendants’ motion with respect to all other deposition 26 excerpts is granted. 27 28 1 CONCLUSION 2 Based on the foregoing, the Court: 3 (1) GRANTS the parties’ joint request to file documents under seal in ECF No. 4 245. The Clerk of the Court is directed to file the following document under 5 seal: Exhibits attached to Defendants’ Daubert motion to exclude □□□□□□□□□□□ 6 experts (ECF No. 246); 7 (2) GRANTS Defendants’ request to file documents under seal in support of 8 Plaintiff's Daubert motion to exclude Defendants’ expert in ECF No. 248. 9 The Clerk of the Court is directed to file the following document under seal: 10 Exhibits attached to Plaintiff's Daubert motion to exclude Defendants’ expert 11 (ECF No. 249); and 12 (3) GRANTS IN PART and DENIES IN PART Defendants’ request to file 13 documents under seal attached to Plaintiffs motion for partial summary 14 judgment and Plaintiffs opposition to Defendants’ motion for partial 15 summary judgment in ECF No. 251. The Clerk of the Court is not directed to 16 file any documents under seal at this time. 17 If Plaintiff or Defendants wish to file a renewed motion to seal for the denied 18 ||requests, they may do so no later than April 10, 2024 after the issuance of this order. 19 || Otherwise, Plaintiff and Defendants are instructed to file the unredacted versions of the 20 || aforementioned documents as directed by the Court in this Order on the public docket no 21 || later than April 3, 2024 after the issuance of this order. When filing the documents on the 22 ||public docket, the parties must strictly adhere to the relevant Federal Rules of Civil 23 || Procedure, this district’s Civil Local Rules, this Court’s Standing Order for Civil Cases, 24 || and this district’s Electronic Case Filing Administrative Policies & Procedures Manual. 25 IT IS SO ORDERED. 26 /\ yy 27 || DATED: March 25, 2024 asf rd A Haha, 6 28 United States District Judge

Case 3:21-cv-01305-BAS-DDL Document 282 Filed 03/25/24 PageID.8707 Page 11 of 11

Appendix A Deposition Selections in Support of Plaintiff's Motion for Partial Summary Judgment Exhibit Deponent Page Line Ruling DENIED. The transcript portion does not contain any confidential business information, does not include customer names, and does not include any 2 Traci Inman 99 17–20 private health information. DENIED. The transcript portion does not contain any confidential business information, does not include customer names, and does not include any 2 Traci Inman 130 10–12 private health information. DENIED. The transcript portion does not contain any confidential business information, does not include customer names, and does not include any 2 Traci Inman 146 22–24 private health information. DENIED. The transcript portion does not contain any confidential business information, does not include customer names, and does not include any 3 Francine Vaccari 73 20–25 private health information.

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