1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MICHAEL MENDELL, Case No. 19-cv-01227-BAS-KSC
12 Plaintiff, ORDER GRANTING DEFENDANT’S 13 v. MOTION TO SEAL (ECF No. 80)
14 AMERICAN MEDICAL RESPONSE, INC., 15 Defendant. 16 17 18 I. BACKGROUND 19 In this putative class action that Plaintiff Michael Mendell brings against American 20 Medical Response, Inc. (“AMR”), the parties each filed several motions to file under seal 21 certain documents in support of or opposition to Mendell’s motion for class certification. 22 (ECF Nos. 47, 59, 65.) The Court denied the motions without prejudice and directed the 23 parties to reapply for a sealing order. (ECF No. 75.) AMR filed an amended motion to 24 file documents under seal. (ECF No. 80.) The Court finds the motion suitable for 25 determination on the papers submitted and without oral argument. See Civ. L.R. 7.1(d)(1). 26 // 27 // 28 // 1 II. LEGAL STANDARD 2 “[T]he courts of this country recognize a general right to inspect and copy public 3 records and documents, including judicial records and documents.” Nixon v. Warner 4 Commc’ns, Inc., 435 U.S. 589, 597 (1978). “Unless a particular court record is one 5 ‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the starting point.” 6 Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (citing Foltz v. 7 State Farm Mut. Auto Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). “The presumption 8 of access is ‘based on the need for federal courts, although independent—indeed, 9 particularly because they are independent—to have a measure of accountability and for the 10 public to have confidence in the administration of justice.’” Ctr. for Auto Safety v. Chrysler 11 Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 2016) (quoting United States v. Amodeo, 71 F.3d 12 1044, 1048 (2d Cir. 1995)). 13 A party seeking to seal a judicial record bears the burden of overcoming the strong 14 presumption of access. Foltz, 331 F.3d at 1135. The showing required to meet this burden 15 depends upon whether the documents to be sealed relate to a motion that is “more than 16 tangentially related to the merits of the case.” Ctr. for Auto Safety, 809 F.3d at 1102. When 17 the underlying motion is more than tangentially related to the merits, the “compelling 18 reasons” standard applies. Id. at 1096–98. When the underlying motion does not surpass 19 the tangential relevance threshold, the “good cause” standard applies. Id. 20 “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in 21 disclosure and justify sealing court records exists when such ‘court files might have 22 become a vehicle for improper purposes,’ such as the use of records to gratify private spite, 23 promote public scandal, circulate libelous statements, or release trade secrets.” Kamakana, 24 447 F.3d at 1179 (quoting Nixon, 435 U.S. at 598). However, “[t]he mere fact that the 25 production of records may lead to a litigant’s embarrassment, incrimination, or exposure 26 to further litigation will not, without more, compel the court to seal its records.” Id. (citing 27 Foltz, 331 F.3d at 1136). The decision to seal documents is “one best left to the sound 28 1 discretion of the trial court” upon consideration of “the relevant facts and circumstances of 2 the particular case.” Nixon, 435 U.S. at 599. 3 4 III. ANALYSIS 5 AMR moves to file under seal documents in support of or opposition to Mendell’s 6 motion for class certification. (ECF No. 80.) A motion for class certification is “more than 7 tangentially related to the merits of [the] case,” and therefore “compelling reasons” must 8 be shown to seal the documents attached thereto. See Krommenhock v. Post Foods, LLC, 9 334 F.R.D. 552, 586 (N.D. Cal. 2020) (applying the “compelling reasons” standard to class 10 certification motion). 11 In the previous Order, the Court found that the parties’ motions to seal were not 12 supported by sufficient factual evidence to satisfy the “compelling reason” standard. 13 (Order, ECF No. 75.) AMR’s amended motion supplements the factual evidence, which 14 demonstrates specific harm that would result from the disclosure of the documents and 15 narrows the scope of the requested sealing order. The Court grants AMR’s amended 16 motion for the reasons stated below. 17 18 A. Competitive Business Information of Third-Party Collection Agencies 19 AMR seeks to file under seal confidential business information of four third- 20 party collection companies that contract with AMR: Centrex Revenue Solutions, LLC 21 (“Centrex”), Credence Resource Management (“Credence”), Bay Area Credit Services 22 (“BACS”), and Wakefield & Associates (“Wakefield”). Compelling reasons may exist if 23 sealing is required to prevent documents from being used “as sources of business 24 information that might harm a litigant’s competitive standing.” Nixon, 435 U.S. at 598. 25 “[A] trial court has broad discretion to permit sealing of court documents for, inter alia, the 26 protection of ‘a trade secret or other confidential research, development, or commercial 27 information.’” GPNE Corp. v. Apple Inc., 2015 WL 4381244, at *1 (N.D. Cal. July 16, 28 2015) (quoting Fed. R. Civ. P. 269(c)(1)(G)); see also Bauer Bros. LLC v. Nike, Inc., No. 1 09cv500–WQH–BGS, 2012 WL 1899838, *2 (S.D. Cal. May 24, 2012) (finding 2 compelling reasons to seal because “public disclosure of Nike’s confidential business 3 materials . . . could result in improper use by business competitors seeking to replicate 4 Nike’s business practices and circumvent the considerable time and resources necessary in 5 product and marketing development”). 6 7 1. Centrex 8 AMR seeks to file under seal three documents that contain confidential business 9 information of Centrex, attached as Exhibits 7, 9, and 12 to the declaration of Neal Marder 10 (“Marder Declaration”). 11 Exhibit 7. Exhibit 7 is a transcript of the deposition of John Connolly. Connolly 12 is an executive at Centrex. (Foust Decl. ¶ 12, ECF No. 80-2 at 155.1) AMR seeks to redact 13 pages 18–19, 50–56 of the copy of the deposition transcript, which allegedly contain 14 confidential business information. As evidence, AMR offers a declaration of Eric Foust, 15 who is the President of Centrex. (Foust Decl., ECF No. 80-2 at 152–58.) Foust states that 16 the redacted portions of Connolly’s deposition discuss “Centrex’s proprietary methods and 17 processes that differentiate Centrex from its competitors,” including (1) “how and when 18 Centrex receives billing and collections information from its client (AMR)”; (2) a 19 description of “Centrex’s proprietary system for processing that information”; and 20 (3) “Centrex’s proprietary processes and workflows for various collections scenarios . . . 21 [not limited to] Centrex’s use of multiple confidential third party vendors.” (Foust Decl. 22 ¶¶ 13, 15–16.) 23 Exhibit 9. AMR seeks to file under seal the deposition transcript of Dr. Bhaskar 24 Patil, who is an executive of an organization with which Centrex contracts to outsource 25 staffing services. (Foust Decl. ¶¶ 7, 18.) AMR alleges that certain parts of the transcript2 26
27 1 All citations to the supplemental compendium of evidence (ECF No. 80-2) follow the page number following “COMPENDIUM OF EVIDENCE REDACTED- PAGE.” 28 1 contain confidential business information and should be redacted.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MICHAEL MENDELL, Case No. 19-cv-01227-BAS-KSC
12 Plaintiff, ORDER GRANTING DEFENDANT’S 13 v. MOTION TO SEAL (ECF No. 80)
14 AMERICAN MEDICAL RESPONSE, INC., 15 Defendant. 16 17 18 I. BACKGROUND 19 In this putative class action that Plaintiff Michael Mendell brings against American 20 Medical Response, Inc. (“AMR”), the parties each filed several motions to file under seal 21 certain documents in support of or opposition to Mendell’s motion for class certification. 22 (ECF Nos. 47, 59, 65.) The Court denied the motions without prejudice and directed the 23 parties to reapply for a sealing order. (ECF No. 75.) AMR filed an amended motion to 24 file documents under seal. (ECF No. 80.) The Court finds the motion suitable for 25 determination on the papers submitted and without oral argument. See Civ. L.R. 7.1(d)(1). 26 // 27 // 28 // 1 II. LEGAL STANDARD 2 “[T]he courts of this country recognize a general right to inspect and copy public 3 records and documents, including judicial records and documents.” Nixon v. Warner 4 Commc’ns, Inc., 435 U.S. 589, 597 (1978). “Unless a particular court record is one 5 ‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the starting point.” 6 Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (citing Foltz v. 7 State Farm Mut. Auto Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). “The presumption 8 of access is ‘based on the need for federal courts, although independent—indeed, 9 particularly because they are independent—to have a measure of accountability and for the 10 public to have confidence in the administration of justice.’” Ctr. for Auto Safety v. Chrysler 11 Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 2016) (quoting United States v. Amodeo, 71 F.3d 12 1044, 1048 (2d Cir. 1995)). 13 A party seeking to seal a judicial record bears the burden of overcoming the strong 14 presumption of access. Foltz, 331 F.3d at 1135. The showing required to meet this burden 15 depends upon whether the documents to be sealed relate to a motion that is “more than 16 tangentially related to the merits of the case.” Ctr. for Auto Safety, 809 F.3d at 1102. When 17 the underlying motion is more than tangentially related to the merits, the “compelling 18 reasons” standard applies. Id. at 1096–98. When the underlying motion does not surpass 19 the tangential relevance threshold, the “good cause” standard applies. Id. 20 “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in 21 disclosure and justify sealing court records exists when such ‘court files might have 22 become a vehicle for improper purposes,’ such as the use of records to gratify private spite, 23 promote public scandal, circulate libelous statements, or release trade secrets.” Kamakana, 24 447 F.3d at 1179 (quoting Nixon, 435 U.S. at 598). However, “[t]he mere fact that the 25 production of records may lead to a litigant’s embarrassment, incrimination, or exposure 26 to further litigation will not, without more, compel the court to seal its records.” Id. (citing 27 Foltz, 331 F.3d at 1136). The decision to seal documents is “one best left to the sound 28 1 discretion of the trial court” upon consideration of “the relevant facts and circumstances of 2 the particular case.” Nixon, 435 U.S. at 599. 3 4 III. ANALYSIS 5 AMR moves to file under seal documents in support of or opposition to Mendell’s 6 motion for class certification. (ECF No. 80.) A motion for class certification is “more than 7 tangentially related to the merits of [the] case,” and therefore “compelling reasons” must 8 be shown to seal the documents attached thereto. See Krommenhock v. Post Foods, LLC, 9 334 F.R.D. 552, 586 (N.D. Cal. 2020) (applying the “compelling reasons” standard to class 10 certification motion). 11 In the previous Order, the Court found that the parties’ motions to seal were not 12 supported by sufficient factual evidence to satisfy the “compelling reason” standard. 13 (Order, ECF No. 75.) AMR’s amended motion supplements the factual evidence, which 14 demonstrates specific harm that would result from the disclosure of the documents and 15 narrows the scope of the requested sealing order. The Court grants AMR’s amended 16 motion for the reasons stated below. 17 18 A. Competitive Business Information of Third-Party Collection Agencies 19 AMR seeks to file under seal confidential business information of four third- 20 party collection companies that contract with AMR: Centrex Revenue Solutions, LLC 21 (“Centrex”), Credence Resource Management (“Credence”), Bay Area Credit Services 22 (“BACS”), and Wakefield & Associates (“Wakefield”). Compelling reasons may exist if 23 sealing is required to prevent documents from being used “as sources of business 24 information that might harm a litigant’s competitive standing.” Nixon, 435 U.S. at 598. 25 “[A] trial court has broad discretion to permit sealing of court documents for, inter alia, the 26 protection of ‘a trade secret or other confidential research, development, or commercial 27 information.’” GPNE Corp. v. Apple Inc., 2015 WL 4381244, at *1 (N.D. Cal. July 16, 28 2015) (quoting Fed. R. Civ. P. 269(c)(1)(G)); see also Bauer Bros. LLC v. Nike, Inc., No. 1 09cv500–WQH–BGS, 2012 WL 1899838, *2 (S.D. Cal. May 24, 2012) (finding 2 compelling reasons to seal because “public disclosure of Nike’s confidential business 3 materials . . . could result in improper use by business competitors seeking to replicate 4 Nike’s business practices and circumvent the considerable time and resources necessary in 5 product and marketing development”). 6 7 1. Centrex 8 AMR seeks to file under seal three documents that contain confidential business 9 information of Centrex, attached as Exhibits 7, 9, and 12 to the declaration of Neal Marder 10 (“Marder Declaration”). 11 Exhibit 7. Exhibit 7 is a transcript of the deposition of John Connolly. Connolly 12 is an executive at Centrex. (Foust Decl. ¶ 12, ECF No. 80-2 at 155.1) AMR seeks to redact 13 pages 18–19, 50–56 of the copy of the deposition transcript, which allegedly contain 14 confidential business information. As evidence, AMR offers a declaration of Eric Foust, 15 who is the President of Centrex. (Foust Decl., ECF No. 80-2 at 152–58.) Foust states that 16 the redacted portions of Connolly’s deposition discuss “Centrex’s proprietary methods and 17 processes that differentiate Centrex from its competitors,” including (1) “how and when 18 Centrex receives billing and collections information from its client (AMR)”; (2) a 19 description of “Centrex’s proprietary system for processing that information”; and 20 (3) “Centrex’s proprietary processes and workflows for various collections scenarios . . . 21 [not limited to] Centrex’s use of multiple confidential third party vendors.” (Foust Decl. 22 ¶¶ 13, 15–16.) 23 Exhibit 9. AMR seeks to file under seal the deposition transcript of Dr. Bhaskar 24 Patil, who is an executive of an organization with which Centrex contracts to outsource 25 staffing services. (Foust Decl. ¶¶ 7, 18.) AMR alleges that certain parts of the transcript2 26
27 1 All citations to the supplemental compendium of evidence (ECF No. 80-2) follow the page number following “COMPENDIUM OF EVIDENCE REDACTED- PAGE.” 28 1 contain confidential business information and should be redacted. Foust states that the 2 redacted portions of the deposition transcript discuss Centrex’s proprietary business 3 methods and processes, which include (1) Centrex’s “workflows for various collections 4 scenarios”; (2) “the specific campaigns that Centrex uses for AMR”; (3) “Centrex’s 5 operational and quality assurance capabilities based on its use of its proprietary billing 6 system as well as its use of LiveVox”; and (4) “the specifics of the procedure by which 7 Centrex trains Omega personnel assigned to Centrex regarding HIPAA . . . [including] the 8 administrative, physical, and technical safeguards Centrex implements.” (Id. ¶¶ 21–24.) 9 Exhibit 12. AMR seeks to file under seal the “Outbound Training Process” 10 PowerPoint presentation that Centrex uses to train its representatives on its outbound call 11 procedures. Foust states that the presentation contains confidential training materials that 12 Centrex uses to train call center service representatives. (Foust Decl. ¶ 9.) According to 13 Foust, the presentation 14 reflects critical information about how Centrex trains and manages, in pertinent part, the [offshore] call-representatives furnished by Omega. The 15 nuanced training details are proprietary and confidential, and ensure that 16 offshore workforce members (to wit call center representatives) are properly trained to manage, triage, and document phone calls and facilitate payments 17 and resolve payment issues and disputes, a key component of Centrex’s value 18 proposition and a market differentiator.
19 20 (Id. ¶ 10.) 21 The Court finds compelling reasons to seal the Exhibits. Foust’s declaration 22 establishes that the public disclosure of the redacted information contained in Exhibits 7, 23 9, and 12 would substantially harm Centrex by placing Centrex at a significant competitive 24 disadvantage. (Foust Decl. ¶¶ 11, 17, 25.) AMR has met its burden to show compelling 25 reasons to seal Exhibits 7, 9, and 12 to the Marder Declaration. 26 // 27 // 28 // 1 2. Credence 2 AMR argues that Exhibits 13 and 15 to the Marder Declaration contain confidential 3 business information of Credence that must be filed under seal.3 The Exhibits consist of 4 call scripts used by Credence’s customer service representatives and excerpts from the 5 deposition transcript of Karan Negi, who is the CEO of Credence.4 AMR provides Negi’s 6 declaration as factual evidence supporting its sealing request. (Negi Decl., ECF No. 80-2 7 at 162–64.) According to Negi, the information requested to be sealed include “internal 8 policies that are not known outside of the business, which have value to both the business 9 and its competitors and required a substantial amount of effort and money to develop.” (Id. 10 ¶ 11.) Negi states that the information discussed in the redacted parts of the deposition is 11 kept confidential at Credence and is not available to the public. (Id. ¶ 12.) Negi’s 12 declaration establishes that the public disclosure of the Exhibits can harm Credence’s 13 competitive standing if disclosed to the public. Compelling reasons exist to maintain the 14 requested information under seal. 15 16 3. BACS 17 AMR requests to seal BACS’s internal policies and procedures for its call center 18 operations, filed as Exhibit 18 to the Marder Declaration. AMR provides the declaration 19 of Kelly Wilson, who is the Director of Operations for BACS, in support of the sealing 20 request. (Wilson Decl., ECF No. 80-2 at 165.) Wilson states that Exhibit 18 consists of 21 “BACS’ internal policies and procedures for its call center operations, including scripts 22 drafted by BACS for training and use by its call center representatives.” (Id. ¶ 4.) 23 According to Wilson, the disclosure of Exhibit 18 “would cause substantial harm to the 24 company as they contain proprietary policies, training[,] and scripts, which give [BACS] a 25
26 3 Credence contracted with AMR to provide collection services. (Negi Depo. 20:15–25, 21:13– 15, ECF No. 80-2 at 69–109.) 27 4 As to the transcript of the deposition of Negi, AMR requests to redact pages 32:12–33:16; 33:25– 43:5; 43:19–55:19; and 73:3–9 of the copy of the transcript to be filed for public disclosure. As to the call 28 1 competitive advantage over [its] competitors.” (Id. ¶ 5.) Wilson’s declaration establishes 2 that the public disclosure of the Exhibit can harm BACS’s competitive standing if disclosed 3 to the public. AMR has met its burden to show compelling reasons to seal Exhibit 18. 4 5 4. Wakefield 6 AMR requests to seal an outbound call opening script produced by Wakefield, filed 7 as Exhibit 19 to the Marder Declaration. AMR submits the declaration of Karen Scheibe 8 Eliason, who is the Chief Compliance Officer of Wakefield, as evidence supporting its 9 sealing request. (Eliason Decl., ECF No. 80-2 at 167–70.) Eliason states that Wakefield 10 developed the script with AMR based on “a significant amount of review and consultation” 11 of federal, state, and city rules and regulations, and thus its disclosure to the public will 12 cause “irreparable damage” to Wakefield. (Id. ¶¶ 9–16, 23.) Eliason’s declaration 13 establishes that the public disclosure of the Exhibit can harm Wakefield’s competitive 14 standing if disclosed to the public. AMR has met its burden to show compelling reasons 15 to seal Exhibit 19. The Court finds compelling reasons to seal the Exhibit. 16 17 B. Protected Personal Information 18 AMR next seeks to file under seal information that contain putative class members’ 19 sensitive personal information. This includes (1) patient care reports affiliated with two 20 ambulance services that AMR provided to Mendell in 2017 and 2018, attached as Exhibits 21 10 and 11 to the Marder Declaration; (2) a list of sample audio recordings of calls with 22 putative class members throughout the class period, attached as Exhibit P1 to the 23 Declaration of Dr. Bhaskar Patil and Exhibit 1 to the Declaration of Joshua Swigart; and 24 (3) Mendell’s sensitive personal information including his social security number, date of 25 birth, and address contained in Exhibit 14 to the Marder Declaration. 26 Compelling reasons may exist to seal protected health information and other 27 personal information that may be abused if disclosed to the public. See Hendricks v. Aetna 28 Life Ins. Co., No. CV1906840CJCMRWX, 2019 WL 9054346, at *4 (C.D. Cal. Nov. 7, 1 2019) (finding compelling reasons to seal “personal health information as required by the 2 || Health Insurance Portability and Accountability Act (HIPAA)”); see also Stafford v. Rite 3 ||Aid Corp., No. 17-CV-1340-AJB-JLB, 2019 WL 3818015, at *1 (sealing personal 4 ||information under Fed. R. Civ. P. 5.2). 5 Here, AMR submits as evidence the declaration of Lynsey Henkel, who is the 6 || Privacy Officer and Compliance Director for AMR’s parent company Global Medical 7 || Response. (Henkel Decl., ECF No. 80-2 at 159-61.) Henkel states that patient care reports 8 ||}contain “confidential and HIPAA-protected personal health information including the 9 || patient’s medical condition and the circumstances surrounding their medical transport.” 10 || (Henkel Decl. 95.) Henkel also states that the call recordings at issue “contain confidential 11 |}and HIPAA-protected [personal health information],” in particular, “the fact that 12 || participants on the calls were provided medical services by AMR.” (/d. § 8.) Henkel’s 13 declaration provides evidence that “[b]ased on [her] experience as the Privacy Officer and 14 ||Compliance Director for GMR, . . . the public disclosure of this [information] would 15 |}amount to a breach of privacy” for the individuals involved. (Henkel Decl. J 9.) Social 16 ||security number, date of birth, and address of Plaintiff are also sensitive personal 17 ||information that risks abuse if disclosed to the public. The Court finds compelling reasons 18 seal putative class members’ sensitive personal information. 19 20 ||IV. CONCLUSION 21 The Court GRANTS AMR’s motion to seal. (ECF No. 80.) The Court directs the 22 || Clerk of the Court to accept and FILE UNDER SEAL the lodged documents. (ECF Nos. 23 ||47-2, 47-3, 82.) 24 25 IT IS SO ORDERED. 26 /\ yf 27 || DATED: March 1, 2021 ( itl A (Lohan 6 28 United States District Judge