1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PRISM DATA TECHNOLOGIES, INC., Case No.: 24-cv-2300-RSH-MMP
12 Plaintiff, ORDER (1) DENYING MOTIONS TO 13 v. SEAL AND (2) DENYING REQUEST TO FILE SURREPLY 14 TOMOCREDIT, INC.,
15 Defendant. [ECF Nos. 47, 49, 53, 55, 57]
16 17 18 Pending before the Court are: (1) motions to seal filed by the Parties in connection 19 with briefing on the motion by plaintiff Prism Data Technologies, Inc. (“Prism”) to enforce 20 a settlement agreement; and (2) a motion by defendant TomoCredit, Inc. (“Tomo”) for 21 leave to file a sur-reply in opposition to that same motion to enforce. As set forth below, 22 the Court denies the motions. 23 I. BACKGROUND 24 On December 10, 2024, Prism filed this lawsuit against Tomo, bringing claims for 25 trademark infringement and unfair competition. ECF No. 1. On February 10, 2025, Tomo 26 filed its answer. ECF No. 6. On April 17, 2025, Tomo filed an amended answer with 27 counterclaims seeking cancellation of Prism’s trademark registration and a declaration that 28 the mark is invalid. ECF No. 17. Prism moved to dismiss the counterclaims. ECF No. 21. 1 The Parties thereafter engaged in extensive settlement discussions before U.S. 2 Magistrate Judge Michelle M. Pettit. On June 2, 2025, Judge Pettit advised by minute order 3 that “[o]n May 23, 2025, the Court held a continued Early Neutral Evaluation (ENE) 4 followed by the delivery of a mediator’s proposal that was accepted by all parties by the 5 May 30, 2025 deadline. The Parties are now in the process of finalizing their settlement.” 6 ECF No. 28. On July 30, 2025, Judge Pettit further advised that the Parties “have requested 7 a conference regarding disagreement of the settlement terms discussed at the Court’s Early 8 Neutral Evaluation.” ECF No. 32. Following numerous further conferences, Judge Pettit 9 set a scheduling order for Prism to file a motion to enforce a settlement agreement. ECF 10 No. 40. 11 On January 16, 2026, Prism filed its motion to enforce. ECF No. 46. Tomo timely 12 filed a response, and Prism a reply. ECF Nos. 51, 52. On February 19, 2026, Tomo filed a 13 motion requesting leave to file a sur-reply, attaching a copy of the proposed sur-reply brief. 14 ECF No. 57. 15 In connection with each of the four briefs, the Parties have filed motions to seal. ECF 16 Nos. 47, 49, 53, 55. The first of these motions to seal, filed by Prism, seeks to redact 17 references to or discussion of the terms of the alleged settlement agreement, on the grounds 18 that the “public disclosure of the terms … could result in injury to Prism by unilaterally 19 constituting a breach of the agreement and, potentially, orders of the Court.” ECF No. 47 20 at 5-6. Prism acknowledged the strong presumption in favor of access to public records, 21 and stated that the redacted material did not contain trade secrets. Id. at 6. Prism further 22 stated that “while it has no interest in breaching promises it made to the defendant and the 23 Court, or violating instructions expressly stated on transcripts, the documents should be 24 filed under seal only either: unless and until (1) the defendant in this action sufficiently 25 explains why and to what extent they should remain sealed; or (2) the Court determines 26 sua sponte that the documents subject to this Application should be filed publicly and in 27 full in light of the presumptive right of public access to court records.” Id. at 7. 28 1 Tomo did not respond to Prism’s motion to seal, but filed its own motion to seal in 2 connection with its opposition brief to Prism’s motion to enforce. ECF No. 49. Tomo’s 3 motion to seal sought to redact similar material, citing the confidentiality term, and urging 4 that “public disclosure of the terms contained therein could result in injury to the parties 5 by making it impossible later to enter into a settlement agreement whose terms are 6 confidential.” Id. at 6. Tomo further noted that the information under seal relates to the 7 proceedings of early neutral evaluation conferences that, as provided Civil Local Rule 8 16.1(c)(1)(B), “will be informal, off the record, privileged, and confidential.” Id. Tomo 9 argued that “[i]t would undermine the policy of this Court with respect to the ENE 10 procedure if transcripts and documents exchanged pursuant to the proceedings of an ENE 11 were made available in a public filing.” Id. 12 The Parties’ subsequent motions to seal—filed by Prism in connection with its reply 13 brief, and by Tomo in connection with its motion for leave to file a sur-reply brief— 14 advanced the same rationales as those previously offered by each Party. ECF Nos. 53, 55. 15 II. MOTIONS TO SEAL 16 Courts have historically recognized a “general right to inspect and copy public 17 records and documents, including judicial records.” Nixon v. Warner Commc’ns, Inc., 435 18 U.S. 589, 597 & n.7 (1978). “Unless a particular court record is one ‘traditionally kept 19 secret,’ a ‘strong presumption in favor of access’ is the starting point.” Kamakana v. City 20 & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Foltz v. State Farm 21 Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). “The presumption of access is 22 ‘based on the need for federal courts, although independent—indeed, particularly because 23 they are independent—to have a measure of accountability and for the public to have 24 confidence in the administration of justice.’” Ctr. for Auto Safety v. Chrysler Grp., LLC, 25 809 F.3d 1092, 1096 (9th Cir. 2016) (quoting United States v. Amodeo, 71 F.3d 1044, 1048 26 (2d Cir. 1995)). 27 To overcome this presumption of access, a party must show either “good cause” or 28 “compelling reasons” to seal a record, depending on the motion to which the record relates. 1 Id. at 1096-97. The Ninth Circuit has made it “clear that public access to filed motions and 2 their attachments does not merely depend on whether the motion is technically 3 ‘dispositive.’” Id. at 1100–01 (“[O]ur circuit looks past the literal 4 dispositive/nondispositive label.”). “Rather, public access will turn on whether the motion 5 is more than tangentially related to the merits of a case.” Id. If the motion is “more than 6 tangentially related to the merits of a case,” the movant must show “compelling reasons” 7 for overcoming the presumption in favor of public access. Id. at 1096-99. Otherwise, a 8 party need only show good cause. Id.; see, e.g., Baker v. SeaWorld Ent., Inc., No. 14-cv- 9 2129-MMA-AGS, 2017 WL 5029612, at *2 (S.D. Cal. Nov. 3, 2017). “[T]he ‘compelling 10 reasons standard applies to most judicial records.’” Ctr. for Auto Safety, 809 F.3d at 1098 11 (quoting Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 677–78 (9th Cir. 2010)). 12 Here, the Parties are in agreement that the “compelling reasons” standard applies to 13 Prism’s motion to enforce the settlement agreement. See ECF No. 47 at 6 (Prism’s motion 14 to seal); ECF No. 49 at 3 (Tomo’s motion to seal). “Under this stringent standard, a court 15 may seal records only when it finds ‘a compelling reason and articulate[s] the factual basis 16 for its ruling, without relying on hypothesis or conjecture.’” Ctr. for Auto Safety, 809 F.3d 17 at 1096-97 (alteration in original) (quoting Kamakana, 447 F.3d at 1179).
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PRISM DATA TECHNOLOGIES, INC., Case No.: 24-cv-2300-RSH-MMP
12 Plaintiff, ORDER (1) DENYING MOTIONS TO 13 v. SEAL AND (2) DENYING REQUEST TO FILE SURREPLY 14 TOMOCREDIT, INC.,
15 Defendant. [ECF Nos. 47, 49, 53, 55, 57]
16 17 18 Pending before the Court are: (1) motions to seal filed by the Parties in connection 19 with briefing on the motion by plaintiff Prism Data Technologies, Inc. (“Prism”) to enforce 20 a settlement agreement; and (2) a motion by defendant TomoCredit, Inc. (“Tomo”) for 21 leave to file a sur-reply in opposition to that same motion to enforce. As set forth below, 22 the Court denies the motions. 23 I. BACKGROUND 24 On December 10, 2024, Prism filed this lawsuit against Tomo, bringing claims for 25 trademark infringement and unfair competition. ECF No. 1. On February 10, 2025, Tomo 26 filed its answer. ECF No. 6. On April 17, 2025, Tomo filed an amended answer with 27 counterclaims seeking cancellation of Prism’s trademark registration and a declaration that 28 the mark is invalid. ECF No. 17. Prism moved to dismiss the counterclaims. ECF No. 21. 1 The Parties thereafter engaged in extensive settlement discussions before U.S. 2 Magistrate Judge Michelle M. Pettit. On June 2, 2025, Judge Pettit advised by minute order 3 that “[o]n May 23, 2025, the Court held a continued Early Neutral Evaluation (ENE) 4 followed by the delivery of a mediator’s proposal that was accepted by all parties by the 5 May 30, 2025 deadline. The Parties are now in the process of finalizing their settlement.” 6 ECF No. 28. On July 30, 2025, Judge Pettit further advised that the Parties “have requested 7 a conference regarding disagreement of the settlement terms discussed at the Court’s Early 8 Neutral Evaluation.” ECF No. 32. Following numerous further conferences, Judge Pettit 9 set a scheduling order for Prism to file a motion to enforce a settlement agreement. ECF 10 No. 40. 11 On January 16, 2026, Prism filed its motion to enforce. ECF No. 46. Tomo timely 12 filed a response, and Prism a reply. ECF Nos. 51, 52. On February 19, 2026, Tomo filed a 13 motion requesting leave to file a sur-reply, attaching a copy of the proposed sur-reply brief. 14 ECF No. 57. 15 In connection with each of the four briefs, the Parties have filed motions to seal. ECF 16 Nos. 47, 49, 53, 55. The first of these motions to seal, filed by Prism, seeks to redact 17 references to or discussion of the terms of the alleged settlement agreement, on the grounds 18 that the “public disclosure of the terms … could result in injury to Prism by unilaterally 19 constituting a breach of the agreement and, potentially, orders of the Court.” ECF No. 47 20 at 5-6. Prism acknowledged the strong presumption in favor of access to public records, 21 and stated that the redacted material did not contain trade secrets. Id. at 6. Prism further 22 stated that “while it has no interest in breaching promises it made to the defendant and the 23 Court, or violating instructions expressly stated on transcripts, the documents should be 24 filed under seal only either: unless and until (1) the defendant in this action sufficiently 25 explains why and to what extent they should remain sealed; or (2) the Court determines 26 sua sponte that the documents subject to this Application should be filed publicly and in 27 full in light of the presumptive right of public access to court records.” Id. at 7. 28 1 Tomo did not respond to Prism’s motion to seal, but filed its own motion to seal in 2 connection with its opposition brief to Prism’s motion to enforce. ECF No. 49. Tomo’s 3 motion to seal sought to redact similar material, citing the confidentiality term, and urging 4 that “public disclosure of the terms contained therein could result in injury to the parties 5 by making it impossible later to enter into a settlement agreement whose terms are 6 confidential.” Id. at 6. Tomo further noted that the information under seal relates to the 7 proceedings of early neutral evaluation conferences that, as provided Civil Local Rule 8 16.1(c)(1)(B), “will be informal, off the record, privileged, and confidential.” Id. Tomo 9 argued that “[i]t would undermine the policy of this Court with respect to the ENE 10 procedure if transcripts and documents exchanged pursuant to the proceedings of an ENE 11 were made available in a public filing.” Id. 12 The Parties’ subsequent motions to seal—filed by Prism in connection with its reply 13 brief, and by Tomo in connection with its motion for leave to file a sur-reply brief— 14 advanced the same rationales as those previously offered by each Party. ECF Nos. 53, 55. 15 II. MOTIONS TO SEAL 16 Courts have historically recognized a “general right to inspect and copy public 17 records and documents, including judicial records.” Nixon v. Warner Commc’ns, Inc., 435 18 U.S. 589, 597 & n.7 (1978). “Unless a particular court record is one ‘traditionally kept 19 secret,’ a ‘strong presumption in favor of access’ is the starting point.” Kamakana v. City 20 & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Foltz v. State Farm 21 Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). “The presumption of access is 22 ‘based on the need for federal courts, although independent—indeed, particularly because 23 they are independent—to have a measure of accountability and for the public to have 24 confidence in the administration of justice.’” Ctr. for Auto Safety v. Chrysler Grp., LLC, 25 809 F.3d 1092, 1096 (9th Cir. 2016) (quoting United States v. Amodeo, 71 F.3d 1044, 1048 26 (2d Cir. 1995)). 27 To overcome this presumption of access, a party must show either “good cause” or 28 “compelling reasons” to seal a record, depending on the motion to which the record relates. 1 Id. at 1096-97. The Ninth Circuit has made it “clear that public access to filed motions and 2 their attachments does not merely depend on whether the motion is technically 3 ‘dispositive.’” Id. at 1100–01 (“[O]ur circuit looks past the literal 4 dispositive/nondispositive label.”). “Rather, public access will turn on whether the motion 5 is more than tangentially related to the merits of a case.” Id. If the motion is “more than 6 tangentially related to the merits of a case,” the movant must show “compelling reasons” 7 for overcoming the presumption in favor of public access. Id. at 1096-99. Otherwise, a 8 party need only show good cause. Id.; see, e.g., Baker v. SeaWorld Ent., Inc., No. 14-cv- 9 2129-MMA-AGS, 2017 WL 5029612, at *2 (S.D. Cal. Nov. 3, 2017). “[T]he ‘compelling 10 reasons standard applies to most judicial records.’” Ctr. for Auto Safety, 809 F.3d at 1098 11 (quoting Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 677–78 (9th Cir. 2010)). 12 Here, the Parties are in agreement that the “compelling reasons” standard applies to 13 Prism’s motion to enforce the settlement agreement. See ECF No. 47 at 6 (Prism’s motion 14 to seal); ECF No. 49 at 3 (Tomo’s motion to seal). “Under this stringent standard, a court 15 may seal records only when it finds ‘a compelling reason and articulate[s] the factual basis 16 for its ruling, without relying on hypothesis or conjecture.’” Ctr. for Auto Safety, 809 F.3d 17 at 1096-97 (alteration in original) (quoting Kamakana, 447 F.3d at 1179). “The mere fact 18 that the production of records may lead to a litigant’s embarrassment, incrimination, or 19 exposure to further litigation will not, without more, compel the court to seal its 20 records.” Kamakana, 447 F.3d at 1180 (citing Foltz, 331 F.3d at 1136). Once a party 21 articulates their compelling reasons, “[t]he court must then ‘conscientiously balance[ ] the 22 competing interests of the public and the party who seeks to keep certain judicial records 23 secret.’” Ctr. for Auto Safety, 809 F.3d at 1097 (alteration in original) (quoting Kamakana, 24 447 F.3d at 1179). “What constitutes a ‘compelling reason’ is ‘best left to the sound 25 discretion of the trial court.’” Id. (quoting Nixon, 435 U.S. at 599). 26 “Trial courts have authority . . . to protect confidential settlement agreements.” 27 United Tactical Sys., LLC v. Real Action Paintball, Inc., No. 14-CV-04050-MEJ, 2015 WL 28 1534003, at *3 (N.D. Cal. Apr. 2, 2015). But “[p]roffering only the fact that the parties 1 agreed to keep the settlement agreement confidential is an insufficient basis for the Court 2 to seal a court record.” Gagliolo v. Kaweah Manor, Inc., Case No. 1:20-cv-01719-NONE- 3 SAB, 2021 WL 1549687, at *5 (E.D. Cal. Apr. 20, 2021); see also Ambrosino v. Home 4 Depot U.S.A., Inc., Civil No. 11cv1319 L(MDD), 2014 WL 931780, at *2 (S.D. Cal. Mar. 5 10, 2014) (“[T]he parties contend that the agreement should be filed under seal because 6 they agree that it should be. This is woefully insufficient to meet the parties’ burden.”) 7 Here, neither Party wishes to run afoul of a confidentiality term contained in a 8 settlement agreement, or a local rule governing confidentiality of early neutral evaluation 9 conferences. The Court acknowledges the caution undertaken by the Parties in this regard. 10 However, neither Party has presented compelling reasons to seal the material at issue here. 11 Neither Party identifies any harm or risk of harm—of any kind, even hypothetical or 12 conjectural—that would result from the Court’s denial of the motion. The Parties have not 13 overcome the strong presumption in favor of public access to judicial records. The motions 14 to seal are therefore denied. 15 III. MOTION FOR LEAVE TO FILE SUR-REPLY 16 Tomo moves to file a two-page sur-reply, in order “to respond to a single assertion 17 made by Plaintiff in its Reply.” ECF No. 57 at 1. Tomo’s proposed sur-reply does not 18 contain any additional factual material or legal authority, but instead offers further 19 argument as to how a certain provision, contained in a draft of the settlement agreement, 20 should be characterized. In short, Tomo simply seeks to have the last word. This is not a 21 valid basis for a sur-reply, and the Court is able to understand the issues in dispute without 22 further clarification from Tomo’s sur-reply. Tomo’s request is therefore denied. 23 // 24 // 25 // 26 // 27 // 28 // 1 |}IV. CONCLUSION 2 For the foregoing reasons, the Parties’ motions to seal [ECF Nos. 47, 49, 53, 55] are 3 || DENIED. Within five (5) days of this order, the Parties shall file on the docket unredacted 4 || versions of their briefing and exhibits. 5 Tomo’s motion to file a sur-reply brief [ECF No. 57] is DENIED. No further 6 || briefing on the motion to enforce will be accepted unless ordered by the Court. 7 IT IS SO ORDERED. Dated: February 20, 2026 Jehut C Loar 10 Hon. Robert S. Huie United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28