1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 LEANNE TAN, Case No.: 20cv1082-LL-DDL
12 Plaintiff, AMENDED1 ORDER: 13 v. (1) GRANTING MOTION TO 14 QUICK BOX, LLC, et al., REMOVE INCORRECTLY FILED 15 Defendants. DOCUMENTS AND TO RE-FILE DOCUMENTS UNDER SEAL [ECF 16 No. 320]; 17 CHAD BIGGINS, (2) GRANTING MOTION TO FILE 18 Cross Claimant, DOCUMENTS UNDER SEAL [ECF 19 v. No. 339]; AND
20 LA PURA DEFENDANTS and JOHN (3) DENYING MOTION TO DOES 1-10, as defined in Plaintiff’s First 21 REMOVE INCORRECTLY FILED Amended Complaint, DOCUMENTS AND TO RE-FILE 22 Cross Defendants. DOCUMENTS UNDER SEAL AS 23 MOOT [ECF No. 341]
24 [ECF Nos. 320, 339, 341] 25 26
27 1 This amended order requests Defendants to file redacted copies of their opposition and 28 1 Before the Court is Defendants Converging Resources Corp. (formerly known as 2 Konnektive Group), Konnektive LLC, Konnektive Rewards LLC, Kathryn Martorano, and 3 Matthew Martorano (“Konnektive Defendants”) and Defendants Quick Box LLC, Stephen 4 Adele, Chad Biggins, and James Martell’s (“Quick Box Defendants”) (and collectively 5 “Defendants”) Motion to Remove Incorrectly Filed Documents and to Re-File Documents 6 Under Seal. ECF No. 320, Motion to Remove Incorrectly Filed Documents and to Re-File 7 Documents Under Seal (“Motion to Remove and Re-File Under Seal”). Defendants also 8 filed a duplicate Motion to Remove and Re-File Under Seal.2 See ECF No. 341. In addition, 9 the Konnektive Defendants filed a related Motion to Seal. ECF No. 339. No oppositions 10 have been filed. See generally Docket. For the reasons stated below, the Court GRANTS 11 Defendants’ Motion to Remove and Re-File Under Seal [ECF No. 320], GRANTS the 12 Konnektive Defendants’ Motion to Seal [ECF No. 339], and DENIES the Defendants’ 13 duplicate Motion to Remove and Re-File Under Seal as MOOT [ECF No. 341]. 14 I. LEGAL STANDARD 15 In the Ninth Circuit, there is a strong presumption in favor of access to court records. 16 Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003) (citation 17 omitted). This provides federal courts with “a measure of accountability and for the public 18 to have confidence in the administration of justice.” Ctr. for Auto Safety v. Chrysler Grp., 19 LLC, 809 F.3d 1092, 1096 (9th Cir. 2016) (citation omitted). When a party seeks to seal a 20 filing that is more than tangentially related to the underlying merits of a case, the movant 21 must show compelling reasons for overcoming the presumption in favor of public access. 22 Id. at 1101. Filings that are unrelated or only tangentially related to the merits may be 23 sealed upon a showing of good cause. Id. at 1097. Courts must consider “the public interest 24 in understanding the judicial process and whether disclosure of the material could result in 25
26 27 2 It is unclear why Defendants filed a duplicate motion a month after filing the first Motion to Remove and Re-File Under Seal, but, in the future, Defendants should refrain from 28 1 improper use of the material for scandalous or libelous purposes or infringement upon trade 2 secrets.” Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir. 1995) (citation omitted). An 3 order sealing documents should be narrowly tailored to serve those compelling reasons. 4 See Ervine v. Warden, 214 F. Supp. 3d 917, 919 (E.D. Cal. 2016) (citing Press-Enter. Co. 5 v. Superior Ct. of California, Riverside Cnty., 464 U.S. 501, 513 (1984)). 6 Additionally, pursuant to Rule 26(c), a trial court has broad discretion to permit 7 sealing of court documents for, inter alia, the protection of “a trade secret or other 8 confidential research, development, or commercial information.” Fed. R. Civ. P. 9 26(c)(1)(G). Sealing may be justified to prevent judicial documents from being used “as 10 sources of business information that might harm a litigant's competitive standing.” See 11 Nixon v. Warner Communications, Inc., 435 U.S. 589, 598 (1978). 12 II. DISCUSSION 13 Defendants’ Motion to Remove and to Re-File Under Seal seeks to: “(1) remove 14 incorrectly e-filed documents containing information designated as by non-party 15 Mastercard as confidential pursuant to the Amended Protective Order and replace them 16 with copies redacting the information designated as confidential and (2) re-file unredacted 17 copies the documents containing confidential information under seal.” ECF No. 320 at 2. 18 Specifically, Defendants seek to remove and re-file Defendants’ Opposition to Plaintiff’s 19 Motion for Class Certification [ECF No. 311], and Exhibit A [ECF No. 312-1], Exhibit B 20 [ECF No. 312-2], and Exhibit C [ECF No. 312-3] attached to the Declaration of 21 Christopher Queally in support of the Defendants’ Opposition [ECF No. 312]. Id. at 8. 22 Further, the Konnektive Defendants’ Motion to Seal seeks to seal the following 23 portions of Defendant Kathryn Martorano’s Motion for Summary Judgment: (1) the 24 Memorandum of Points and Authorities in support of Defendant Kathryn Martorano’s 25 Motion for Summary Judgment; (2) the Separate Statement of Undisputed Material Facts; 26 (3) Exhibit A to the Declaration of Matthew Martorano, a report prepared by MasterCard 27 transmitted to Konnektive LLC; and (4) the deposition transcript of third party witness 28 1 David Press attached as Exhibit E to the Declaration of Christopher B. Queally. See ECF 2 No. 339 at 5. 3 First, on motions for class certification, Defendants contend that the good cause 4 standard should apply because “the evaluation of merits of the underlying dispute is not a 5 particularly relevant consideration when determining whether class certification is 6 appropriate.” ECF No. 320 at 7. However, this Court and many courts in the Ninth Circuit 7 have found that documents relating to class certification are more than tangentially related 8 to the merits of the case. See Adtrader, Inc. v. Google LLC, 2020 WL 6387381, at *2 (N.D. 9 Cal. Feb. 24, 2020) (citing cases). “[A] class certification motion ‘generally involves 10 considerations that are enmeshed in the factual and legal issues comprising plaintiff’s cause 11 of action,’ which require a district court to engage in a ‘rigorous analysis’ that ‘entail[s] 12 some overlap with the merits of the plaintiff’s underlying claim.’ ” McCurley v. Royal Seas 13 Cruises, Inc., 2018 WL 3629945, at *2 (S.D. Cal. July 31, 2018) (quoting Wal-Mart Stores, 14 Inc. v. Dukes, 564 U.S. 338, 351 (2011) and finding the compelling reasons standard 15 applies in deciding whether to seal filings in a motion for class certification). Accordingly, 16 the Court applies the compelling reasons standard to the Defendants’ Motion to Remove 17 and Re-File Under Seal. 18 Second, on motions for summary judgment, this Court and other courts have applied 19 the compelling reasons standard, “because the resolution of a dispute on the merits, whether 20 by trial or summary judgment, is at the heart of the interest in ensuring the ‘public's 21 understanding of the judicial process and of significant public events.’ ” Kamakana v. City 22 and County of Honolulu,
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 LEANNE TAN, Case No.: 20cv1082-LL-DDL
12 Plaintiff, AMENDED1 ORDER: 13 v. (1) GRANTING MOTION TO 14 QUICK BOX, LLC, et al., REMOVE INCORRECTLY FILED 15 Defendants. DOCUMENTS AND TO RE-FILE DOCUMENTS UNDER SEAL [ECF 16 No. 320]; 17 CHAD BIGGINS, (2) GRANTING MOTION TO FILE 18 Cross Claimant, DOCUMENTS UNDER SEAL [ECF 19 v. No. 339]; AND
20 LA PURA DEFENDANTS and JOHN (3) DENYING MOTION TO DOES 1-10, as defined in Plaintiff’s First 21 REMOVE INCORRECTLY FILED Amended Complaint, DOCUMENTS AND TO RE-FILE 22 Cross Defendants. DOCUMENTS UNDER SEAL AS 23 MOOT [ECF No. 341]
24 [ECF Nos. 320, 339, 341] 25 26
27 1 This amended order requests Defendants to file redacted copies of their opposition and 28 1 Before the Court is Defendants Converging Resources Corp. (formerly known as 2 Konnektive Group), Konnektive LLC, Konnektive Rewards LLC, Kathryn Martorano, and 3 Matthew Martorano (“Konnektive Defendants”) and Defendants Quick Box LLC, Stephen 4 Adele, Chad Biggins, and James Martell’s (“Quick Box Defendants”) (and collectively 5 “Defendants”) Motion to Remove Incorrectly Filed Documents and to Re-File Documents 6 Under Seal. ECF No. 320, Motion to Remove Incorrectly Filed Documents and to Re-File 7 Documents Under Seal (“Motion to Remove and Re-File Under Seal”). Defendants also 8 filed a duplicate Motion to Remove and Re-File Under Seal.2 See ECF No. 341. In addition, 9 the Konnektive Defendants filed a related Motion to Seal. ECF No. 339. No oppositions 10 have been filed. See generally Docket. For the reasons stated below, the Court GRANTS 11 Defendants’ Motion to Remove and Re-File Under Seal [ECF No. 320], GRANTS the 12 Konnektive Defendants’ Motion to Seal [ECF No. 339], and DENIES the Defendants’ 13 duplicate Motion to Remove and Re-File Under Seal as MOOT [ECF No. 341]. 14 I. LEGAL STANDARD 15 In the Ninth Circuit, there is a strong presumption in favor of access to court records. 16 Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003) (citation 17 omitted). This provides federal courts with “a measure of accountability and for the public 18 to have confidence in the administration of justice.” Ctr. for Auto Safety v. Chrysler Grp., 19 LLC, 809 F.3d 1092, 1096 (9th Cir. 2016) (citation omitted). When a party seeks to seal a 20 filing that is more than tangentially related to the underlying merits of a case, the movant 21 must show compelling reasons for overcoming the presumption in favor of public access. 22 Id. at 1101. Filings that are unrelated or only tangentially related to the merits may be 23 sealed upon a showing of good cause. Id. at 1097. Courts must consider “the public interest 24 in understanding the judicial process and whether disclosure of the material could result in 25
26 27 2 It is unclear why Defendants filed a duplicate motion a month after filing the first Motion to Remove and Re-File Under Seal, but, in the future, Defendants should refrain from 28 1 improper use of the material for scandalous or libelous purposes or infringement upon trade 2 secrets.” Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir. 1995) (citation omitted). An 3 order sealing documents should be narrowly tailored to serve those compelling reasons. 4 See Ervine v. Warden, 214 F. Supp. 3d 917, 919 (E.D. Cal. 2016) (citing Press-Enter. Co. 5 v. Superior Ct. of California, Riverside Cnty., 464 U.S. 501, 513 (1984)). 6 Additionally, pursuant to Rule 26(c), a trial court has broad discretion to permit 7 sealing of court documents for, inter alia, the protection of “a trade secret or other 8 confidential research, development, or commercial information.” Fed. R. Civ. P. 9 26(c)(1)(G). Sealing may be justified to prevent judicial documents from being used “as 10 sources of business information that might harm a litigant's competitive standing.” See 11 Nixon v. Warner Communications, Inc., 435 U.S. 589, 598 (1978). 12 II. DISCUSSION 13 Defendants’ Motion to Remove and to Re-File Under Seal seeks to: “(1) remove 14 incorrectly e-filed documents containing information designated as by non-party 15 Mastercard as confidential pursuant to the Amended Protective Order and replace them 16 with copies redacting the information designated as confidential and (2) re-file unredacted 17 copies the documents containing confidential information under seal.” ECF No. 320 at 2. 18 Specifically, Defendants seek to remove and re-file Defendants’ Opposition to Plaintiff’s 19 Motion for Class Certification [ECF No. 311], and Exhibit A [ECF No. 312-1], Exhibit B 20 [ECF No. 312-2], and Exhibit C [ECF No. 312-3] attached to the Declaration of 21 Christopher Queally in support of the Defendants’ Opposition [ECF No. 312]. Id. at 8. 22 Further, the Konnektive Defendants’ Motion to Seal seeks to seal the following 23 portions of Defendant Kathryn Martorano’s Motion for Summary Judgment: (1) the 24 Memorandum of Points and Authorities in support of Defendant Kathryn Martorano’s 25 Motion for Summary Judgment; (2) the Separate Statement of Undisputed Material Facts; 26 (3) Exhibit A to the Declaration of Matthew Martorano, a report prepared by MasterCard 27 transmitted to Konnektive LLC; and (4) the deposition transcript of third party witness 28 1 David Press attached as Exhibit E to the Declaration of Christopher B. Queally. See ECF 2 No. 339 at 5. 3 First, on motions for class certification, Defendants contend that the good cause 4 standard should apply because “the evaluation of merits of the underlying dispute is not a 5 particularly relevant consideration when determining whether class certification is 6 appropriate.” ECF No. 320 at 7. However, this Court and many courts in the Ninth Circuit 7 have found that documents relating to class certification are more than tangentially related 8 to the merits of the case. See Adtrader, Inc. v. Google LLC, 2020 WL 6387381, at *2 (N.D. 9 Cal. Feb. 24, 2020) (citing cases). “[A] class certification motion ‘generally involves 10 considerations that are enmeshed in the factual and legal issues comprising plaintiff’s cause 11 of action,’ which require a district court to engage in a ‘rigorous analysis’ that ‘entail[s] 12 some overlap with the merits of the plaintiff’s underlying claim.’ ” McCurley v. Royal Seas 13 Cruises, Inc., 2018 WL 3629945, at *2 (S.D. Cal. July 31, 2018) (quoting Wal-Mart Stores, 14 Inc. v. Dukes, 564 U.S. 338, 351 (2011) and finding the compelling reasons standard 15 applies in deciding whether to seal filings in a motion for class certification). Accordingly, 16 the Court applies the compelling reasons standard to the Defendants’ Motion to Remove 17 and Re-File Under Seal. 18 Second, on motions for summary judgment, this Court and other courts have applied 19 the compelling reasons standard, “because the resolution of a dispute on the merits, whether 20 by trial or summary judgment, is at the heart of the interest in ensuring the ‘public's 21 understanding of the judicial process and of significant public events.’ ” Kamakana v. City 22 and County of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2006). Accordingly, the Court also 23 applies the compelling reasons standard to the Konnektive Defendants’ Motion to Seal. 24 Here, Defendants seek to seal documents related to an “internal Mastercard report 25 that outlines Mastercard’s Franchise Management Program (“FMP”) service provider 26 review of Konnektive, LLC, a Customer Relationship Management company used by 27 merchants and a service provider in the Mastercard ecosystem.” ECF No. 320 at 2; see also 28 ECF No. 320-1, Declaration of Christopher B. Queally in Support of Defendants’ Motion 1 to Remove and Re-File Under Seal (“Queally Decl. to Motion to Remove and Re-File”) ¶ 2 4; ECF No. 339 at 2; ECF No. 339-1, Declaration of Christopher B. Queally in Support of 3 the Konnektive Defendants’ Motion to Seal (“Queally Decl. to Motion to Seal”) ¶ 4. 4 Defendants state that the report “reflects MasterCard’s internal impressions relating to the 5 FMP review, the analysis by MasterCard, the methods of how it gathers data, and the 6 evaluations it performs.” ECF No. 320 at 2–3; see also Queally Decl. to Motion to Remove 7 and Re-File ¶ 5; ECF No. 339 at 2–3; Queally Decl. to Motion to Seal ¶ 5. Additionally, 8 according to MasterCard, the report was designated as “CONFIDENTIAL” because 9 “public disclosure of this report or reports like it could be detrimental to the integrity of the 10 FMP review process, as other entities subject to review could attempt to use information 11 from other investigations to influence a subject investigation.” ECF No. 320 at 3; see also 12 Queally Decl. to Motion to Remove and Re-File ¶¶ 5, 11; ECF No. 339 at 2–3; Queally 13 Decl. to Motion to Seal ¶ 5. 14 The Court finds that Defendants have shown compelling reasons to support the 15 sealing of the material related to the internal MasterCard report that outlines MasterCard’s 16 FMP service provider review. Courts have found that a party’s privacy interest in such 17 business records outweighs the public’s interest in access. See Nixon, 435 U.S. at 598; see 18 also Adtrader, 2020 WL 6387381, at *2 (finding compelling reasons to seal confidential 19 business information related to how a business operates, its internal policies, and its internal 20 strategic business and financial decision-making); Algarin v. Maybelline, LLC, 2014 WL 21 690410, at *3–4 (S.D. Cal. Feb. 21, 2014) (finding compelling reasons to seal business 22 reports and internal data). Moreover, Defendants’ requests are narrowly tailored to seal 23 only the confidential business information related to MasterCard’s FMP review procedure 24 and review of Konnektive, LLC. See Ervine, 214 F. Supp. 3d at 919. Therefore, the Court 25 GRANTS Defendants’ Motion to Remove and Re-File Under Seal and GRANTS the 26 Konnektive Defendants’ Motion to Seal. 27 / / / 28 / / / 1 III. CONCLUSION 2 For the reasons stated above, the Court ORDERS the following: 3 1. Defendants’ Motion to Remove Incorrectly Filed Documents and to Re-File 4 Documents Under Seal [ECF No. 320] is GRANTED. The Clerk of Court is instructed to 5 remove the publicly filed and unredacted copies of Defendants’ Opposition to Plaintiff’s 6 Motion for Class Certification [ECF No. 311], and Exhibit A [ECF No. 312-1], Exhibit B 7 [ECF No. 312-2], and Exhibit C [ECF No. 312-3] attached to the Declaration of 8 Christopher Queally in Support of the Defendants’ Opposition [ECF No. 312]. 9 Additionally, the Clerk of the Court is instructed to file and seal on the public docket the 10 unredacted copies of Defendants’ Opposition to Plaintiff’s Motion for Class Certification, 11 and Exhibit A, Exhibit B, and Exhibit C attached to the Declaration of Christopher Queally 12 in Support of the Defendants’ Opposition.3 Further, on before January 11, 2024, the 13 Defendants shall file redacted copies of: (1) Defendants’ Opposition to Plaintiff’s Motion 14 for Class Certification; (2) Exhibit A attached to the Declaration of Christopher Queally in 15 Support of the Defendants’ Opposition; (3) Exhibit B attached to the Declaration of 16 Christopher Queally in Support of the Defendants’ Opposition; and (4) Exhibit C attached 17 to the Declaration of Christopher Queally in Support of the Defendants’ Opposition. 18 2. The Konnektive Defendants’ Motion to Seal [ECF No. 339] is GRANTED. 19 The Clerk of Court is instructed to file the currently sealed lodged proposed Motion for 20 Summary Judgment of Kathryn Martorano under seal. Further, on or before January 11, 21 2024, the Konnektive Defendants shall file unredacted copies of: (1) the Memorandum of 22 Points and Authorities in support of Defendant Kathryn Martorano’s Motion for Summary 23 Judgment; (2) the Separate Statement of Undisputed Material Facts; (3) Exhibit A to the 24 Declaration of Matthew Martorano, a report prepared by MasterCard transmitted to 25
26 27 3 Per the Court’s previous order, the unredacted copies have been filed and sealed on the public docket by the Clerk. See ECF No. 383 (Defendants’ Opposition to Plaintiff’s Motion 28 1 || Konnektive LLC; and (4) the deposition transcript of third party witness David Press 2 || attached as Exhibit E to the Declaration of Christopher B. Queally. 3 3. Defendants’ duplicate Motion to Remove Incorrectly Filed Documents and to 4 Re-File Documents Under Seal [ECF No. 341] is DENIED AS MOOT. 5 IT IS SO ORDERED. 6 ||Dated: January 2, 2024 NO 7 Qe ft | 8 Honorable Linda Lopez 9 United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28