Sentynl Therapeutics, Inc. v. U.S. Specialty Insurance Company

• Court: District Court, S.D. California
• Decided: March 1, 2021
• Docket: 3:19-cv-01667
• Status: Unknown

Opinion

8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 SENTYNL THERAPEUTICS, INC., CASE NO. 19cv1667-LAB-AHG 11 Plaintiff, ORDER: 12 v. 1) DENYING WITHOUT 13 PREJUDICE USSI’s U.S. SPECIALTY INSURANCE CO., APPLICATION FOR LEAVE TO 14 FILE UNDER SEAL [Dkt. 52]; 15 Defendants. 2) DENYING WITHOUT PREJUDICE USSI’s

16 APPLICATION FOR LEAVE TO FILE UNDER SEAL [Dkt. 65]; 17 3) GRANTING IN PART AND 18 DENYING WITHOUT PREJUDICE IN PART 19 SENTYNL’S APPLICATION FOR LEAVE TO FILE UNDER SEAL 20 [Dkt. 74] 4) DENYING WITHOUT 21 PREJUDICE USSI’S 22 APPLICATION FOR LEAVE TO FILE UNDER SEAL [Dkt. 77] 23 5) DENYING WITHOUT PREJUDICE SENTYNL’S 24 APPLICATION FOR LEAVE TO 25 FILE UNDER SEAL [Dkt. 81]

26 27 Plaintiff Sentynl Therapeutics (“Sentynl”) and Defendant U.S. Specialty Insurance Company (“USSI”) have filed separate Consent Ex Parte 1 Applications seeking leave to file various documents under seal. (Dkt. 2 Nos. 52, 65, 74, 77, 81.) While the parties provide compelling reasons to 3 protect the identities of non-litigants, they fail to justify shielding the 4 remaining information from public view. The Motions are DENIED WITHOUT 5 PREJUDICE except Dkt. 74, which is DENIED WITHOUT PREJUDICE IN 6 PART AND GRANTED IN PART as to Hercz Exs. B and C to Sentynl’s 7 Cross-Motion for Summary Judgment, the public versions of which redact 8 only non-party personal identifying information. 9 STANDARD OF REVIEW 10 Each of the motions to seal was filed in connection with a dispositive 11 motion—either a motion for judgment on the pleadings or a motion for 12 summary judgment. Accordingly, they are subject to a stricter standard than 13 that applied to nondispositive motions. In re Midland Nat. Life Ins. Co. 14 Annuity Sales Practices Litig., 686 F.3d 1115, 1118-19 (9th Cir. 2012). The 15 standard here requires the movant to provide “compelling reasons” for 16 sealing the record in order to overcome the “strong presumption in favor of 17 access to court records.” Id. at 1119 (quoting Foltz v. State Farm Mut. Auto. 18 Ins. Co., 331 F.3d 1122, 1129 (9th Cir. 2003)). The Court can only find 19 compelling reasons to seal where those reasons are supported with specific 20 facts. Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 21 2006) (internal marks and citation omitted). 22 DISCUSSION 23 I. Exhibits to USSI’s Opposition to Sentnyl’s Motion for Judgment 24 on the Pleadings (Dkt. 52) 25 USSI first asks to seal exhibits to its opposition to Senynl’s motion for 26 judgment on the pleadings. It argues that the exhibits are confidential and 27 sensitive because they contain discussions between Sentynl and a third- party insurance broker “contain[ing] confidential and sensitive information to 1 Sentynl’s insurance policies and the non-public [DOJ] investigation for which 2 Sentynl is seeking coverage.” (Dkt. 52 at 3.) 3 This is the extent of USSI’s argument, and it doesn’t include specific 4 facts establishing a compelling reason that the documents should be sealed. 5 The documents may be related to a non-public investigation, but they discuss 6 a wholly public part of that investigation: subpoenas filed on the public 7 docket, redacting only information not discussed in the exhibits in question. 8 (See, e.g., Dkt. 51-1 at 10-31.)1 The Motion is DENIED WITHOUT 9 PREJUDICE. (Dkt. 52.) 10 II. Memorandum and Exhibits in Support of USSI’s Motion for 11 Summary Judgment (Dkt. 65) 12 USSI next asks for leave to file under seal its unredacted memorandum 13 in support of its motion for summary judgment and Pettey Exs. B and D and 14 Bailey Exs. A, B, D, E, G, H, I, J, K, L, M, N, O, and P in support of that 15 motion. 16 A. Documents the Parties Designated as Confidential 17 Those exhibits, it argues, were either designated as “CONFIDENTIAL” 18 pursuant to a Protective Order or “contain or reflect confidential information 19 Sentynl provided pursuant to a pre-suit confidentiality agreement.” (Dkt. 65 20 at 2.) In either case, the confidentiality designation comes from the parties— 21 it doesn’t signify a court’s determination that there are compelling reasons to 22 shield the documents from public view while nevertheless considering them 23 in connection with a dispositive motion. The Court can’t delegate its role as 24 guardian of the public’s interest in access by deferring to the parties’ 25 determination that documents are confidential. See Foltz, 331 F.3d at 1136 26

27 1 In briefing on other motions addressed by this Order, the parties argue that such conversations could prejudice Sentynl’s defense or reveal confidential 1 (“[T]he presumption of access is not rebutted where, as here, documents 2 subject to a protective order are filed under seal as attachments to a 3 dispositive motion”). 4 Even if a party properly designated a document as “CONFIDENTIAL” 5 under the Protective Order, that designation indicates only a “good faith 6 belief [that] the unrestricted disclosure of such information could be 7 potentially prejudicial to the business or operations of such party or could 8 reveal otherwise confidential, proprietary, or sensitive non-public 9 information.” (Dkt. 29.) This rough approximation of Rule 26(c)(1)(G) might 10 amount to good cause. Foltz, 331 F.3d at 1138. But even had the Court found 11 that the documents fall within that Rule, mere good cause isn’t enough to 12 satisfy the stricter “compelling reasons” standard applicable here. See 13 Kamakana, 447 F.3d at 1180. 14 B. Documents Discussing the Subpoena and Insurance Coverage 15 Issues 16 Bailey Exs. B, D, and E, USSI contends, “are either e-mails between 17 Sentynl and Marsh or internal Marsh e-mails . . . [that include] their initial 18 interpretations of the subpoena and identify insurance coverage issues 19 relating to same.” (Dkt. 65 at 3.) As discussed supra, Section I, this line of 20 argument can’t stand as a compelling reason to seal without supporting facts. 21 And as before, USSI doesn’t provide any. 22 In this instance, though, Sentynl’s counsel adds that disclosure of 23 USSI’s filings might prejudice Sentynl’s defense of the investigation, risk 24 disclosing confidential government information, “negatively impact [its] 25 commercial standing,” and “risk[] unfairly, improperly, and incorrectly 26 suggesting that Sentynl . . . committed wrongdoing.” (Dkt. 65 at 4.) The latter 27 two concerns amount to “a litigant’s embarrassment, incrimination, or 1 support of a dispositive motion without more. Kamakana, 447 F.3d at 1179. 2 The parties provide nothing more of substance. Prejudice to defense of an 3 ongoing investigation and disclosure of potentially confidential government 4 information might constitute compelling reasons, but even if they are, they 5 must still be supported with specific facts. The bare assertion that some of 6 the information among hundreds of pages is “likely to materially prejudice 7 Sentynl’s ongoing defense of the investigation [or] risk[] disclosure of 8 confidential government information regarding the investigation” isn’t specific 9 enough to support a finding of compelling reasons to permit filing all or any 10 of them under seal. 11 Moreover, the record currently before the Court gives no reason to 12 believe that these documents, subject to the Civil Rules’ disclosure 13 requirements, aren’t also subject to DOJ’s subpoena power. Indeed, the DOJ 14 appears to have sought documents like these, and Sentynl may have already 15 produced them. (See Dkt. 64-4 at 14 (subpoena purporting to require 16 production of “[a]ll Documents related to any . . . federal investigation(s)” and 17 “any lawsuit(s)” “related to Levorphanol and/or Abstral, including but not 18 limited to all related communications”).) Of course, the fact of the request 19 doesn’t demonstrate that the documents have been produced. The 20 documents may not be covered by the request, Sentynl may have objected, 21 DOJ may have narrowed its request since issuing the subpoena, and 22 documents created after the subpoena’s compliance date may not have 23 been produced. But these unknowns only underscore the absence of specific 24 facts that could support a finding of compelling reasons to seal. 25 C. Non-Party Personal Identifying Information 26 USSI argues that non-parties’ personal identifying information in 27 numerous exhibits should be redacted from public filings. Because that 1 information connects the individuals to a criminal investigation of a high- 2 profile issue, the Court finds that public disclosure of the non-parties’ names 3 runs a substantial risk of exposing those individuals to harassment.2 4 Avoidance of this risk is a compelling reason outweighing the public’s interest 5 in disclosure. See, e.g., United States v. Mayers, 2017 WL 2215805 6 (W.D. Wash. May 19, 2017) (permitting third-party identifying information to 7 be filed under seal); Romero v. County of Santa Clara, 2014 WL 12641990 8 (N.D. Cal. Jun. 17, 2014) (same). 9 D. USSI’s Memorandum 10 Finally, USSI seeks leave to file under seal its unredacted 11 Memorandum in Support of its Motion for Summary Judgment “for the same 12 reasons [it] seeks leave to file the exhibits in question under seal.” Because 13 those reasons (with the exception of non-party personal identifying 14 information) are insufficiently supported as to the exhibits, they won’t justify 15 sealing the Memorandum, either. 16 While redaction of non-party personal identifiers is warranted, no 17 document USSI seeks to file under seal in connection with this Application 18 redacts only such properly-redacted information. Accordingly, the Motion is 19 DENIED WITHOUT PREJUDICE as to each document it addresses. 20 III. Memorandum and Exhibits in Support of Sentynl’s Response 21 to USSI’s Motion for Summary Judgment and in Support of 22 Senytnl’s Cross-Motion for Summary Judgment (Dkt. 74) 23 Sentynl has likewise moved its unredacted Memorandum in response 24 to USSI’s Motion for Summary Judgment and in support of Sentynl’s own 25 Cross-Motion for Summary Judgment, Exs. B, C, D, and F to the Declaration

26 2 The subpoenas state that they seek documents “in the performance of the 27 responsibility of the U.S. Department of Justice to investigate Federal health care offenses as defined in 18 U.S.C. § 24(a),” a criminal statute defining 1 of Michael G. Hercz, and Exs. B and C to the Declaration of Dominic I. 2 Rupprecht. 3 Sentynl contends that Hercz Exs. B and C contain personal identifying 4 information of Sentynl’s former employees and that they should be redacted 5 to protect them from potential harassment. As discussed supra, 6 Section II(C), this consideration forms a compelling reason warranting 7 sealing of the non-parties’ personal identifying information. 8 Sentynl’s remaining arguments, which relate to Hercz Exs. D and F 9 and Rupprecht Exs. B and C, are limited to those already discussed: they 10 contain information that the parties designated as confidential and/or they 11 could “severely prejudice Sentynl’s defense.” (Dkt. 74 at 2.) And, as already 12 discussed, these arguments don’t provide the Court with specific facts on 13 which to base a finding of compelling reasons—particularly in light of the 14 subpoena’s direction that Sentynl produce categories of documents that 15 appear to include these documents. 16 IV. Consolidated Reply and Opposition and Exhibits in Support of 17 USSI’s Motion for Summary Judgment and in Opposition to 18 Sentynl’s Cross-Motion (Dkt. 77) 19 USSI also asks the Court to seal: (1) Its Memorandum replying in 20 support of its Motion for Summary Judgment and opposing Sentynl’s Cross- 21 Motion for Summary Judgment; and (2) Exs. Q, V, W and X to the 22 Supplemental Declaration of Joseph A. Bailey III. USSI offers the same 23 broad reasoning that it advanced in its previous applications to seal. It argues 24 that the documents in question contain sensitive information that the parties 25 designated as confidential, their disclosure might harm Sentynl’s defense of 26 the investigation, and they include “confidential communications . . . [with] 27 the government.” (Dkt. 77 at 3.) For the reasons discussed above, the 1 parties’ declaration of confidentiality isn’t entitled to deference, nor do 2 conclusory statements of non-specific harm suffice without factual support. 3 The Application is DENIED WITHOUT PREJUDICE. (Dkt. 77.) 4 V. Reply in Support of Sentynl’s Cross-Motion for Summary 5 Judgment and Opposition to Defendant’s Objection to 6 Plaintiff’s Evidence (Dkt. 81) 7 In its last Application seeking leave, Sentynl moves to seal the 8 unredacted versions of its reply in support of its Cross-Motion for Summary 9 Judgment and its Opposition to USSI’s evidentiary objection. These 10 documents, it argues, should be sealed “for the same reasons that Sentynl 11 previously sought leave to file the exhibits in question under seal” without 12 further elaboration or facts. (Dkt. 81 at 2-3.) For the same reasons the Court 13 denies those other requests, it DENIES this one WITHOUT PREJUDICE, 14 too. (Dkt. 81.) 15 CONCLUSION 16 For the reasons stated above: 17 1) USSI’s application for leave to file under seal Exs. C and D to its 18 Opposition to Sentynl’s Motion for Judgment on the Pleadings, 19 (Dkt. 52), is DENIED WITHOUT PREJUDICE. The Clerk is ordered 20 to STRIKE the sealed documents, (Dkt. 53 and 54), from the 21 docket; 22 2) USSI’s application for leave to file under seal its Memorandum and 23 certain exhibits in support of its Motion for Summary Judgment, 24 (Dkt. 65), is DENIED WITHOUT PREJUDICE. The Clerk is ordered 25 to STRIKE the sealed documents, (Dkt. 66), from the docket; 26 3) Sentynl’s application for leave to file under seal its Memorandum 27 and certain exhibits in support of its Response to USSI’s Motion for 1 Judgment, (Dkt. 74), is GRANTED IN PART AND DENIED 2 WITHOUT PREJUDICE IN PART. Hercz Exs. B and C, (Dkt. 75-1 3 and 75-2), may be filed under seal. The Clerk is ordered to STRIKE 4 the remaining sealed documents, (Dkt. 75, 75-3, 75-4, 75-5, and 5 75-6), from the docket; 6 4) USSI’s application for leave to file under seal its Consolidated Reply 7 and Opposition and exhibits thereto, (Dkt. 77), is DENIED 8 WITHOUT PREJUDICE. The Clerk is ordered to STRIKE the 9 sealed documents, (Dkt. 78), from the docket; 10 5) Sentynl’s application for leave to file under seal its Reply in support 11 of its Cross-Motion for Summary Judgment and its Opposition to 12 USSI’s evidentiary objection, (Dkt. 81), is DENIED WITHOUT 13 PREJUDICE. The Clerk is ordered to STRIKE the sealed 14 documents, (Dkt. 82 and 83), from the docket. 15 Pursuant to Paragraph 12 of the Protective Order, the parties may 16 renew their motions or file the documents in the public docket on or before 17 March 12, 2021. 18 19 IT IS SO ORDERED. 20 DATED: March 1, 2021 21 Hon. Larry A. Burns 22 United States District Judge 23 24 25 26 27