Tapestry on Central Condominium Association v. Liberty Insurance Underwriters Incorporated

Opinion

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9 Tapestry on Central Condominium No. CV-19-01490-PHX-MTL Association, Plaintiff, 11 v. 12 Liberty Insurance Underwriters 13 Incorporated,

14 Defendant. 15 16 Before the Court is Defendant/Counterclaimant’s Liberty Insurance Underwriters 17 Inc.’s (“Liberty”) Motion for Leave to File Under Seal. (Doc. 43.) For the following 18 reasons, the motion is denied without prejudice. 19 I. 20 Liberty seeks to file under seal a Settlement Agreement and Release entered into 21 between the parties in 2017 (the “Settlement Agreement”); its Motion for Summary 22 Judgment, which “discusses the terms of the Settlement Agreement”; and “any other 23 documents filed in connection with summary-judgment briefing that discusses the terms of 24 the Settlement Agreement.” (Id. at 2.) Liberty argues that these documents should be sealed 25 because the Settlement Agreement “contains a clause requiring the parties to keep the terms 26 of the agreement confidential.” (Id.) Liberty further states that to require it to violate “that 27 provision and file the agreement publicly would discourage parties from settling lawsuits 28 if they knew that confidentiality provisions could simply be disregarded.” (Id. at 2-3.) 1 Liberty has lodged unredacted versions of its Motion for Summary Judgment and the 2 Settlement Agreement. (Docs. 44, 44-1.) It has also filed a redacted, unsealed version of 3 its Motion for Summary Judgement that omits the Settlement Agreement. (Docs. 46, 46- 4 3.) 5 Plaintiff/Counter-defendant Tapestry on Central Condominium Association (the 6 “Association”) filed a response in opposition. (Doc. 49.) The Association argues that 7 Liberty has not made the requisite showing to seal either document because “[l]itigants’ 8 agreement to secret information is not, by itself, cause to seal the judicial record.” (Id. at 9 2.) The Association also argues that, by suing for an alleged breach of the Settlement 10 Agreement, Liberty has put “its terms squarely at issue.” (Id. at 3.) It also notes that, by the 11 terms of the Settlement Agreement, disclosure is authorized “in connection with enforcing 12 this Agreement.” (Id. at 4.) Liberty filed a reply. (Doc. 51.) Neither party requested oral 13 argument. 14 II. 15 The public has a general right of access “to inspect and copy . . . judicial records 16 and documents.” Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 (1978). Generally, 17 any analysis regarding a motion to seal begins with a “strong presumption in favor of 18 [public] access.” Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 19 2003). This presumption is far stronger for dispositive motions than non-dispositive 20 because dispositive motions may resolve the dispute in lieu of trial. Kamakana v. City & 21 Cty. of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2006). A party must demonstrate 22 “compelling reasons” to seal a dispositive motion or its exhibits. Id. at 1179.* Under the 23 “compelling reasons” standard, the party seeking to seal bears the burden of “articulat[ing] 24 compelling reasons supported by specific factual findings . . . that outweigh the general 25 history of access and the public policies favoring disclosure, such as the public interest in 26 understanding the judicial process.” Id. at 1178–79 (internal citations and quotation marks 27 * A party seeking to seal records in connection with a non-dispositive motion must show 28 “good cause” under Federal Rule of Civil Procedure 26(c). In re Midland Nat’l Life Ins. Co. Annuity Sales Practices Litig., 686 F.3d 1115, 1119 (9th Cir. 2012). 1 omitted). “Compelling reasons” include that the information may become “a vehicle for 2 improper purposes, such as the use of records to gratify private spite, promote public 3 scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 (internal 4 quotation marks omitted). Local Rule of Civil Procedure (“LRCiv”) 5.6(b) also requires “a 5 clear statement of the facts and legal authority justifying the filing of the document under 6 seal.” 7 Numerous courts have found that an agreement to keep a settlement agreement 8 confidential, absent other considerations, “fail[s] to satisfy the ‘compelling reasons’ 9 standard for dispositive motions.” Alcaide v. Thomas, No. CV-11-01162-JAT-JFM, 2015 10 WL 6087560, at *3 (D. Ariz. Oct. 16, 2015). See also El Paso Natural Gas Co. v. Southwest 11 Forest Products, Inc., 2008 WL 4808892 (D. Ariz. Oct. 28, 2008) (denying parties’ joint 12 request to seal confidential settlement agreement for “fail[ing] to articulate how the parties’ 13 need for confidentiality of the settlement agreement overcomes the strong presumption of 14 public access to the parties’ agreement”); United Tactical Sys., LLC v. Real Action 15 Paintball, Inc., No. 14-CV-04050-MEJ, 2017 WL 1881157, at *2 (N.D. Cal. May 9, 2017) 16 (“That the Settlement Agreement ‘by its own terms’ is designated confidential does not 17 relieve Plaintiff and Counter-Defendants of their burden to show compelling reasons to 18 seal the document.”). LRCiv 5.6(b) also states that the “Court generally will not enter an 19 order that gives advance authorization to file documents under seal that are designated for 20 such treatment by parties under a . . . confidentiality agreement.” 21 Liberty has not met its burden to show that compelling reasons justify sealing its 22 Motion for Summary Judgment and the attached Settlement Agreement. The present 23 motion does not indicate any justification other than that the Settlement Agreement 24 contains a confidentiality provision. In its reply, Liberty argues for the first time that certain 25 parties to the Settlement Agreement are not parties to the present case, and have therefore 26 “not indicated their consent to the disclosure of the terms of the Settlement Agreement.” 27 (Doc. 51 at 3.) Liberty has not provided authority indicating that this is a “compelling 28 reason” to seal. 1 II. 2 Accordingly, 3 IT IS ORDERED that Liberty’s Motion for Leave to File Under Seal (Doc. 43) is 4|| denied without prejudice. Liberty may file another motion to seal that identifies, with 5 || specificity and compelling reasons, those portions of the Motion for Summary Judgment || and Settlement Agreement that contain sealable material. 7 IT IS FURTHER ORDERED that Liberty shall re-file its motion to seal, if it so 8 || chooses, within 14 days of the date of this Order. 9 IT IS FINALLY ORDERED that the Clerk of the Court shall maintain the seal on 10 || the documents lodged at Docs. 44 and 44-1. If Liberty does not timely re-file a motion to seal, the Court will direct the Clerk to lift the seal on those documents. 12 Dated this 21st day of September, 2020. 13 Wicked T. diburde Michael T. Liburdi 16 United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28

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