1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 TRI TOOL, INC., Case No. 2:22-cv-1515-DAD-CSK 12 Plaintiff, 13 v. ORDER DENYING REQUEST TO SEAL 14 THAD HALES, et al., (ECF No. 48) 15 Defendants. 16 17 Pending before the Court is Plaintiff Tri Tool, Inc.’s request to seal portions of 18 documents it plans to file in connection with an anticipated motion for terminating 19 sanctions. See 7/25/2024 Pl. Req. Seal (ECF No. 48); 7/25/2024 Pl. Mem. (submitted for 20 in camera review). 21 Plaintiff maintains claims for, among other things, misappropriation of trade 22 secrets, 18 U.S.C. § 1836, against Defendants Thad Hales, Mike Bracikowski, and 23 Enerpac Tool Group Corp. (ECF No. 29.) On July 19, 2024, Plaintiff filed a motion for 24 sanctions, which included a declaration from attorney Dylan Wiseman (ECF Nos. 45 and 25 45-1), and a request to seal documents for its sanctions motion (ECF No. 44). On July 26 24, 2024, the Court denied Plaintiff’s motions without prejudice for failure to follow Local 27 Rule 141. (ECF No. 47.) The Court noted Plaintiff failed to submit unredacted versions of 28 five exhibits to chambers, and improperly filed redacted versions of the documents on 1 the docket before the request to seal had been approved. (Id.) For guidance, the Court 2 stated that any renewed request to seal should clearly identify which portions of the 3 documents Plaintiff seeks to have sealed, and include legal authority justifying Plaintiff’s 4 request to seal. (Id.) 5 On July 25, 2024, Plaintiff filed a renewed request to seal portions of its 6 anticipated motion for terminating sanctions. See 7/25/2024 Pl. Req. Seal; 7/25/2024 Pl. 7 Mem. (submitted for in camera review). Plaintiff sent unredacted versions of the 8 documents to chambers for review, except for the same five exhibits which were 9 resubmitted in redacted form. 7/25/2024 Pl. Mot. Sanct.; 7/25/2024 Wiseman Decl. 10 (submitted for in camera review). The Court ordered Defendant Enerpac to submit an 11 opposition or statement of non-opposition to the motion to seal and also requested 12 unredacted versions of the five exhibits if any party possessed them. (ECF No. 50.) 13 Defendant Enerpac submitted a statement of non-opposition directly to chambers, and 14 no party provided unredacted versions of the five exhibits. (ECF No. 52.) 15 Courts recognize “a general right to inspect and copy public records and 16 documents, including judicial records and documents.” Nixon v. Warner Commnc'ns, 17 Inc., 435 U.S. 589, 597 (1978). Thus, courts in the Ninth Circuit “start with a strong 18 presumption in favor of access to court records.” Foltz v. State Farm Mut. Auto. Ins. Co., 19 331 F.3d 1122, 1135 (9th Cir. 2003). When a request to seal is tied to a “dispositive” 20 motion, i.e., a motion that is “more than tangentially related to the merits of a case, the 21 legal standard used is a “compelling reasons” standard. Ctr. for Auto Safety v. Chrysler 22 Grp., LLC, 809 F.3d 1092, 1101 (9th Cir. 2016). Here, because terminating sanctions are 23 dispositive of a party’s claim or defense, the compelling reasons standard applies. See 24 Keating v. Jastremski, 2020 WL 1813549, at *2 (S.D. Cal. Apr. 9, 2020) (utilizing 25 compelling reasons standard for request to seal related to motion for terminating 26 sanctions because the substantive motion was “more than tangentially related to the 27 merits of this case” and so “counsels against applying the good cause standard”); 28 Charles v. Target Corp., 2022 WL 3205047, at *3 (N.D. Cal. July 6, 2022) (applying 1 compelling reasons standard to motion for spoliation sanctions). 2 To decide whether the party requesting to seal has carried its burden under the 3 compelling reasons standard, the court balances the reasons for secrecy with the 4 public's interests in disclosure. Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 5 1178-79 (9th Cir. 2006). The court cannot rely on “hypothesis or conjecture” nor on 6 assertions that merely cite a general category of privilege. Id. at 1184. Instead, a party 7 that wishes to keep its documents secret must point out a “specific linkage” between its 8 interests in secrecy and those documents. Id. at 1182, 1184 (“[C]onclusory offerings do 9 not rise to the level of ‘compelling reasons’ sufficiently specific to bar the public access to 10 the documents.”). 11 Here, Plaintiff’s request is specific in the portions of the two documents it wishes 12 to file in redacted form on the public docket. 7/25/2024 Pl. Req. Seal. Plaintiff identifies 13 seven segments of its anticipated motion for terminating sanctions; four paragraphs in 14 the anticipated declaration of Dylan Wiseman; substantial portions of Exhibits 3-7; and 15 nine identical paragraphs in Exhibit 13. Id. at 2-3. As to why it seeks sealing, Plaintiff 16 cites the parties’ stipulated protective order (ECF No. 22), general principles of 17 “confidential and proprietary information,” and the “attorney-client privilege and attorney 18 work product doctrine.” Id. at 3. 19 Plaintiff’s memorandum in support of its request to seal cites the same documents 20 and principles, and makes the following argument: 21 A party’s reasons are deemed compelling when the judicial record might become “a vehicle for improper purposes” 22 including a “release of trade secrets.” [Kamakana, 447 F.3d 1172, 1179 (9th Cir. 2006)] (citing Nixon v. Warner 23 Commc’ns, Inc., 435 U.S. 589, 598 (1978)). Where a filing contains confidential business information, the disclosure of 24 which would create the risk of competitive injury, there is a compelling reason sufficient to justify sealing that information. 25 Apple, Inc. v. Psystar Corp, 658 F.3d 1150, 1161-62 (9th Cir. 2011) (finding that releasing confidential information would 26 cause injury, and sealing the record to prevent such injury); see also Phillips v. Gen. Motors Corp., 307 F.3d 1206, 1211 27 (9th Cir. 2006) (finding the same); Karl Storz Endoscopy- America, Inc. v. Stryker Corp.[,] 2016 WL 2855260, at *9-10 28 (N.D. Cal. May 13, 2016); Berlanga v. Polaris Indus., Inc.[,] 1 2023 WL 2752483, *1 (E.D. Cal. Mar. 31, 2023) (citing E.D. Cal. L.R. 140(b) (stating that redaction is also appropriate to 2 protect “proprietary or trade secret information.”). Further, attorney-client privilege and the work-product doctrine are 3 sufficient justifications for sealing. In re Hewlett-Packard Co. Shareholder Derivative Litig., 716 Fed. App’x. 603, 609 (9th 4 Cir. 2017). 5 7/25/2024 Pl. Mem. at 3-4. Plaintiff concludes the redacted portions of the proposed 6 filings “fall[] within the well-recognized exceptions to the general right of access to 7 judicial records and documents for confidential business information” because they have 8 been designated by Plaintiff as “CONFIDENTIAL” or “HIGHLY CONFIDENTIAL – 9 ATTORNEYS’ EYES ONLY,” citing generalized confidentiality principles and “the 10 attorney-client privilege and work product doctrine.” Id. This is the extent of Plaintiff’s 11 analysis. See id. 12 As an initial matter, no party to the case has unredacted versions of Exhibits 3-7 13 of the Wiseman declaration, and therefore, Plaintiff has no option but to file the redacted 14 versions of these exhibits. (See ECF No.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 TRI TOOL, INC., Case No. 2:22-cv-1515-DAD-CSK 12 Plaintiff, 13 v. ORDER DENYING REQUEST TO SEAL 14 THAD HALES, et al., (ECF No. 48) 15 Defendants. 16 17 Pending before the Court is Plaintiff Tri Tool, Inc.’s request to seal portions of 18 documents it plans to file in connection with an anticipated motion for terminating 19 sanctions. See 7/25/2024 Pl. Req. Seal (ECF No. 48); 7/25/2024 Pl. Mem. (submitted for 20 in camera review). 21 Plaintiff maintains claims for, among other things, misappropriation of trade 22 secrets, 18 U.S.C. § 1836, against Defendants Thad Hales, Mike Bracikowski, and 23 Enerpac Tool Group Corp. (ECF No. 29.) On July 19, 2024, Plaintiff filed a motion for 24 sanctions, which included a declaration from attorney Dylan Wiseman (ECF Nos. 45 and 25 45-1), and a request to seal documents for its sanctions motion (ECF No. 44). On July 26 24, 2024, the Court denied Plaintiff’s motions without prejudice for failure to follow Local 27 Rule 141. (ECF No. 47.) The Court noted Plaintiff failed to submit unredacted versions of 28 five exhibits to chambers, and improperly filed redacted versions of the documents on 1 the docket before the request to seal had been approved. (Id.) For guidance, the Court 2 stated that any renewed request to seal should clearly identify which portions of the 3 documents Plaintiff seeks to have sealed, and include legal authority justifying Plaintiff’s 4 request to seal. (Id.) 5 On July 25, 2024, Plaintiff filed a renewed request to seal portions of its 6 anticipated motion for terminating sanctions. See 7/25/2024 Pl. Req. Seal; 7/25/2024 Pl. 7 Mem. (submitted for in camera review). Plaintiff sent unredacted versions of the 8 documents to chambers for review, except for the same five exhibits which were 9 resubmitted in redacted form. 7/25/2024 Pl. Mot. Sanct.; 7/25/2024 Wiseman Decl. 10 (submitted for in camera review). The Court ordered Defendant Enerpac to submit an 11 opposition or statement of non-opposition to the motion to seal and also requested 12 unredacted versions of the five exhibits if any party possessed them. (ECF No. 50.) 13 Defendant Enerpac submitted a statement of non-opposition directly to chambers, and 14 no party provided unredacted versions of the five exhibits. (ECF No. 52.) 15 Courts recognize “a general right to inspect and copy public records and 16 documents, including judicial records and documents.” Nixon v. Warner Commnc'ns, 17 Inc., 435 U.S. 589, 597 (1978). Thus, courts in the Ninth Circuit “start with a strong 18 presumption in favor of access to court records.” Foltz v. State Farm Mut. Auto. Ins. Co., 19 331 F.3d 1122, 1135 (9th Cir. 2003). When a request to seal is tied to a “dispositive” 20 motion, i.e., a motion that is “more than tangentially related to the merits of a case, the 21 legal standard used is a “compelling reasons” standard. Ctr. for Auto Safety v. Chrysler 22 Grp., LLC, 809 F.3d 1092, 1101 (9th Cir. 2016). Here, because terminating sanctions are 23 dispositive of a party’s claim or defense, the compelling reasons standard applies. See 24 Keating v. Jastremski, 2020 WL 1813549, at *2 (S.D. Cal. Apr. 9, 2020) (utilizing 25 compelling reasons standard for request to seal related to motion for terminating 26 sanctions because the substantive motion was “more than tangentially related to the 27 merits of this case” and so “counsels against applying the good cause standard”); 28 Charles v. Target Corp., 2022 WL 3205047, at *3 (N.D. Cal. July 6, 2022) (applying 1 compelling reasons standard to motion for spoliation sanctions). 2 To decide whether the party requesting to seal has carried its burden under the 3 compelling reasons standard, the court balances the reasons for secrecy with the 4 public's interests in disclosure. Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 5 1178-79 (9th Cir. 2006). The court cannot rely on “hypothesis or conjecture” nor on 6 assertions that merely cite a general category of privilege. Id. at 1184. Instead, a party 7 that wishes to keep its documents secret must point out a “specific linkage” between its 8 interests in secrecy and those documents. Id. at 1182, 1184 (“[C]onclusory offerings do 9 not rise to the level of ‘compelling reasons’ sufficiently specific to bar the public access to 10 the documents.”). 11 Here, Plaintiff’s request is specific in the portions of the two documents it wishes 12 to file in redacted form on the public docket. 7/25/2024 Pl. Req. Seal. Plaintiff identifies 13 seven segments of its anticipated motion for terminating sanctions; four paragraphs in 14 the anticipated declaration of Dylan Wiseman; substantial portions of Exhibits 3-7; and 15 nine identical paragraphs in Exhibit 13. Id. at 2-3. As to why it seeks sealing, Plaintiff 16 cites the parties’ stipulated protective order (ECF No. 22), general principles of 17 “confidential and proprietary information,” and the “attorney-client privilege and attorney 18 work product doctrine.” Id. at 3. 19 Plaintiff’s memorandum in support of its request to seal cites the same documents 20 and principles, and makes the following argument: 21 A party’s reasons are deemed compelling when the judicial record might become “a vehicle for improper purposes” 22 including a “release of trade secrets.” [Kamakana, 447 F.3d 1172, 1179 (9th Cir. 2006)] (citing Nixon v. Warner 23 Commc’ns, Inc., 435 U.S. 589, 598 (1978)). Where a filing contains confidential business information, the disclosure of 24 which would create the risk of competitive injury, there is a compelling reason sufficient to justify sealing that information. 25 Apple, Inc. v. Psystar Corp, 658 F.3d 1150, 1161-62 (9th Cir. 2011) (finding that releasing confidential information would 26 cause injury, and sealing the record to prevent such injury); see also Phillips v. Gen. Motors Corp., 307 F.3d 1206, 1211 27 (9th Cir. 2006) (finding the same); Karl Storz Endoscopy- America, Inc. v. Stryker Corp.[,] 2016 WL 2855260, at *9-10 28 (N.D. Cal. May 13, 2016); Berlanga v. Polaris Indus., Inc.[,] 1 2023 WL 2752483, *1 (E.D. Cal. Mar. 31, 2023) (citing E.D. Cal. L.R. 140(b) (stating that redaction is also appropriate to 2 protect “proprietary or trade secret information.”). Further, attorney-client privilege and the work-product doctrine are 3 sufficient justifications for sealing. In re Hewlett-Packard Co. Shareholder Derivative Litig., 716 Fed. App’x. 603, 609 (9th 4 Cir. 2017). 5 7/25/2024 Pl. Mem. at 3-4. Plaintiff concludes the redacted portions of the proposed 6 filings “fall[] within the well-recognized exceptions to the general right of access to 7 judicial records and documents for confidential business information” because they have 8 been designated by Plaintiff as “CONFIDENTIAL” or “HIGHLY CONFIDENTIAL – 9 ATTORNEYS’ EYES ONLY,” citing generalized confidentiality principles and “the 10 attorney-client privilege and work product doctrine.” Id. This is the extent of Plaintiff’s 11 analysis. See id. 12 As an initial matter, no party to the case has unredacted versions of Exhibits 3-7 13 of the Wiseman declaration, and therefore, Plaintiff has no option but to file the redacted 14 versions of these exhibits. (See ECF No. 50.) As a result, Plaintiff’s request to seal as to 15 Exhibits 3-7 is denied as moot because the Court cannot grant a request to seal already 16 redacted documents that the Court cannot evaluate. 17 As to the remaining portions of Plaintiff’s request to seal, Plaintiff does not 18 sufficiently meet the compelling reasons standard. First, Plaintiff makes no effort to 19 describe why any of the redacted portions contain protectable trade secret information. 20 In reviewing the unredacted versions of the anticipated motion and Wiseman 21 Declaration, the Court notes the only portions that arguably relate to Plaintiff’s trade 22 secret claims is the statement at 7:7-10 of the forthcoming motion for sanctions, as 23 repeated in the nine redacted paragraphs of Exhibit 13 of the Wiseman Declaration. 24 7/25/2024 Pl. Mot. Sanct., 7/25/2024 Wiseman Decl. However, these statements do not 25 appear to contain any trade secret information, but are merely a portion of Defendant 26 Enerpac’s response to Plaintiff’s discovery requests concerning the fact of its possession 27 of electronically stored information. Thus, Plaintiff’s request fails. See Kamakana, 447 28 F.3d at 1184 (“The mere fact that the production of records may lead to a litigant's 1 embarrassment, incrimination, or exposure to further litigation will not, without more, 2 compel the court to seal its records.”); Berlanga, 2023 WL 3168514, at *2 (denying 3 renewed request to seal for failure to meet compelling reasons standard where parties 4 failed to explain why alleged information was protectable as trade secret). 5 Second, a majority of the information Plaintiff seeks to redact appears based on 6 Plaintiff’s attorney-client and work product arguments. See 7/25/2024 Pl. Mot. Sanct., 7 7/25/2024 Wiseman Decl. However, Plaintiff makes no effort to explain why the attorney- 8 client privilege and work product doctrine apply to the redacted lines in the anticipated 9 motion for sanctions and paragraphs 6-9 of the Wiseman declaration. See Kamakana, 10 447 F.3d at 1184 (stating that the court cannot rely on “hypothesis or conjecture” or 11 assertions that merely cite a general category of privilege). 12 Third, the Court notes that much of the information contained in the portions 13 Plaintiff seeks to redact appear in unredacted form in other places in the anticipated 14 motion and Wiseman Declaration. See, e.g., 7/25/2024 Pl. Req. Seal at 2:11-28 15 (disclosing information about the fact of an attorney-client relationship), 5:10-13 (same); 16 7/25/2024 Wiseman Decl. at 2 (same), 4:12-15 (disclosing the same information as in 17 the proposed redactions in the nine paragraphs of Exhibit 13), 35 (disclosing name of 18 counsel that was redacted in the request to seal at 8:4). Thus, Plaintiff’s request to seal 19 fails because it requests to seal the same information disclosed to the public elsewhere. 20 See Kamakana, 447 F.3d at 1184 (“[C]onclusory offerings do not rise to the level of 21 ‘compelling reasons’ sufficiently specific to bar the public access to the documents.”). 22 ORDER 23 As to Exhibits 3-7 of the Wiseman declaration, Plaintiff’s request to seal is denied 24 as moot because the only version of these exhibits that Plaintiff and Defendants have is 25 the redacted version. (See ECF No. 50.) Plaintiff may therefore file Exhibits 3-7 in their 26 redacted form. For the reasons stated above, the remainder of Plaintiff’s request to seal 27 (ECF No. 48) is denied without prejudice. 28 / / / 1 | Dated: August 7, 2024 > . S 2 tN L— 3 UNITED STATES MAGISTRATE JUDGE 4 || 3, trit 1545 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28