Toppan Interamerica, Inc. v. Whalen LLC

Opinion

1 2 3 4 5 6 7 10 11 TOPPAN INTERAMERICA, INC., Case No. 23-cv-1948-BAS-BGS Plaintiff, 12 v. ORDER 13 1. GRANTING PLAINTIFF’S UNOPPOSED MOTION TO 14 WHALEN LLC, FILE A SECOND AMENDED 15 Defendant. COMPLAINT (ECF No. 24), AND 16 2. GRANTING PLAINTIFF’S (ECF No. 26) 18

19 Before the Court is Plaintiff Toppan Interamerica, Inc.’s (“Plaintiff” or “Toppan”) 20 Unopposed Motion for Leave to File Second Amended Complaint (“SAC Motion”). (ECF 21 No. 24.) Plaintiff indicates its counsel have met and conferred with counsel for Whalen 22 LLC (“Defendant” or “Whalen”) and that Defendant does not oppose Plaintiff’s SAC 23 Motion. (Id. at 2.) Plaintiff also moves to file the Second Amended Complaint under seal 24 (“Sealing Motion”). (ECF No. 26.) Plaintiff does so at Defendant’s request, but itself does 25 not find a compelling reason for the Court to seal any portion of its Second Amended 26 Complaint. (See id. at 1:24–25.) 27 \\ 28 \\ 1 I. The SAC Motion 2 “In general, a court should liberally allow a party to amend its pleading.” Sonoma 3 Cnty. Ass’n of Retired Emps. v. Sonoma Cnty., 708 F.3d 1109, 1117 (9th Cir. 2013) (citing 4 Fed. R. Civ. P. 15(a)); see also Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 5 712 (9th Cir. 2001) (“A district court shall grant leave to amend freely when justice so 6 requires.”). Further, a party may amend its pleading without a court order where the 7 opposing party consents in writing. Fed. R. Civ. P. 15(a)(2). 8 Here, considering (i) the broad policy favoring amendments to pleadings, and 9 (ii) that Plaintiff’s SAC Motion is unopposed, the Court GRANTS the SAC Motion. (ECF 10 No. 24.) 11 12 II. The Sealing Motion 13 When it comes to court records, courts adhere to a strong presumption in favor of 14 public access. See, e.g., Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 (1978) 15 (“[T]he courts of this country recognize a general right to inspect and copy public records 16 and documents, including judicial records and documents.” (citation omitted)); see also 17 Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (“Unless a 18 particular court record is one ‘traditionally kept secret,’ a ‘strong presumption in favor of 19 access’ is the starting point.”); see also Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 20 F.3d 1092, 1096 (9th Cir. 2016) (“The presumption of access is based on the need for 21 federal courts, although independent . . . to have a measure of accountability and for the 22 public to have confidence in the administration of justice.” (citation omitted)). 23 Thus, a party seeking to seal a judicial record bears the burden of overcoming this 24 strong presumption of access. Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 25 1135 (9th Cir. 2003). The heft of that burden depends on the type of motion tied to the 26 documents sought to be sealed. When the related information is more than “tangentially 27 related to the merits of the case,” the more rigorous “compelling reasons” standard applies. 28 Chrysler, 809 F.3d at 1096–98, 1102. If the related information is not more than 1 tangentially related to the merits of the case, the more relaxed “good cause” standard 2 applies. Id. at 1096–98. 3 Here, in the Court’s judgment, a motion seeking leave to amend a complaint is more 4 than tangentially related to the merits of the case because the complaint is the cornerstone 5 of any case. Therefore, the Court shall apply the “compelling reasons” standard. Chrysler, 6 809 F.3d at 1096–98, 1102; see also Muhaymin v. City of Phoenix, No. CV-17-04565- 7 PHX-DLR, 2021 WL 5173767, at *4 (D. Ariz. Nov. 3, 2021) (applying the compelling 8 reasons standard to a motion to seal portions of the complaint); see also Skillz Platform 9 Inc. v. AvaiGames Inc., No. 21-CV-02436-BLF, 2023 WL 8430420, at *1 (N.D. Cal. Dec. 10 4, 2023) (applying the compelling reasons standard to a motion to seal portions of the 11 complaint); see also Pardi v. Tricida, Inc., No. 21-CV-00076-HSG, 2023 WL 6165694, at 12 *2 (N.D. Cal. Sept. 21, 2023) (applying the compelling reasons standard to a motion to seal 13 portions of the complaint). 14 Plaintiff, by its own admission, seeks to seal portions of the Second Amended 15 Complaint at Defendant’s behest rather than for its own purposes. (See ECF No. 26.) Per 16 this Court’s Standing Order on Civil Cases, Defendant had seven days to file a reply in 17 support of the Sealing Motion. Standing Order for Civil Cases, Rule 5.B. Defendant timely 18 filed a Declaration in support of the Sealing Motion. (ECF No. 30.) 19 Defendant seeks to seal Exhibits 9–11 of the Second Amended Complaint because, 20 while they are documents drafted by Toppan (per the letterhead), Whalen signed them. In 21 their affidavit, Whale’s counsel Baraa Kahf states that the documents could put Whalen at 22 a competitive disadvantage due to “divulgence of the conditions under which Whalen 23 and/or its affiliates engage in business with potential suppliers.” (Id. at 2:14–15.) Indeed, 24 courts have held that confidential business information in the form of “license agreements, 25 financial terms, details of confidential licensing negotiations, and business strategies” can 26 be “compelling reasons” to prevent competitors from accessing and then leveraging this 27 information to harm the designating parties in future negotiations. See Exeltis USA Inc. v. 28 First Databank, Inc., No. 17-cv-04810-HSG, 2020 WL 2838812, at *1 (N.D. Cal. 2020) 1 ||(citation omitted); see also In re Qualcomm Litig., No. 3:17-cv-0108-GPC-MDD, 2017 2 || WL 5176922, at *2 (S.D. Cal. 2017); see also DeMartini v. Microsoft Corp., No. 22-CV- 3 ||08991-JSC, 2023 WL 4205770, at *2 (N.D. Cal. June 26, 2023). Accordingly, the Court 4 ||shall grant Plaintiff's Sealing Motion as to Exhibits 9-11 and the text of the Second 5 || Amended Complaint that references the contents of those exhibits. (ECF No. 26.) 6 Similarly, the Court finds that the remaining redactions Defendant requests are 7 ||appropriately tailored to protect information that could grant Whalen’s competitors a 8 ||competitive edge and therefore Defendant presents a compelling reason to seal such 9 |}information. Thus, the Court shall grant Plaintiff's Sealing Motion as to the remaining 10 || proposed redactions in the Second Amended Complaint. 11 12 II. Conclusion 13 Having GRANTED Plaintiff's SAC Motion (ECF No. 24), Plaintiff is ORDERED 14 || to file the public version of its Second Amended Complaint in the docket on or before July 15 2024. The Court also VACATES Defendant’s deadline to respond to □□□□□□□□□□□ 16 |}Complaint. (ECF No. 25.) Defendant is hereby ORDERED to answer or file an otherwise 17 ||responsive pleading to Plaintiff's Second Amended Complaint on or before July 10, 2024. 19 /\ oY 20 || DATED: July 1, 2024 ( itl A (Hiphan 21 United States District Judge 22 23 24 25 26 27 28 A.