Unlockd Media, Inc. Liquidation Trust v. Google LLC

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 UNLOCKD MEDIA, INC. LIQUIDATION Case No. 21-cv-07250-HSG TRUST, 8 Plaintiff, ORDER GRANTING MOTIONS TO 9 SEAL v. 10 Re: Dkt. Nos. 102, 109 GOOGLE LLC, et al., 11 Defendants.

12 13 Pending before the Court is Plaintiff Unlockd Media, Inc. Liquidation Trust’s 14 administrative motion to file under seal portions of the Second Amended Complaint (“SAC”). See 15 Dkt. No. 102. Defendant Google LLC also filed an administrative motion to consider whether 16 another party’s materials should be sealed. See Dkt. No. 109. Defendant’s motion pertains to 17 discrete sections of its pending motion to dismiss that Plaintiff contends are non-public and 18 protectable trade secrets. Id. (citing Dkt. No. 62). For the reasons detailed below, the Court 19 GRANTS both motions. 20 I. LEGAL STANDARD 21 Courts generally apply a “compelling reasons” standard when considering motions to seal 22 documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 677–78 (9th Cir. 2010). “This standard 23 derives from the common law right ‘to inspect and copy public records and documents, including 24 judicial records and documents.’” Id. (quoting Kamakana v. City & Cnty. of Honolulu, 447 F.3d 25 1172, 1178 (9th Cir. 2006)). “[A] strong presumption in favor of access is the starting point.” 26 Kamakana, 447 F.3d at 1178 (quotations omitted). To overcome this “strong presumption,” the 27 party seeking to seal a document attached to a dispositive motion must articulate compelling 1 public policies favoring disclosure, such as the public interest in understanding the judicial process 2 and significant public events. Id. at 1178–79. “In general, ‘compelling reasons’ sufficient to 3 outweigh the public’s interest in disclosure and justify sealing court records exist when such ‘court 4 files might have become a vehicle for improper purposes,’ such as the use of records to gratify 5 private spite, promote public scandal, circulate libelous statements, or release trade secrets.” Id. at 6 1179 (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). 7 However, documents attached to non-dispositive motions are not subject to the same 8 strong presumption of access. Kamakana, 447 F.3d at 1179. Because such records “are often 9 unrelated, or only tangentially related, to the underlying cause of action,” parties moving to seal 10 must meet the lower “good cause” standard of Federal Rule of Civil Procedure 26(c). Id. at 1179– 11 80 (quotations omitted). This requires only a “particularized showing” that “specific prejudice or 12 harm will result” if the information is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors 13 Corp., 307 F.3d 1206, 1210–11 (9th Cir. 2002); see also Fed. R. Civ. P. 26(c). “Broad allegations 14 of harm, unsubstantiated by specific examples of articulated reasoning” will not suffice. Beckman 15 Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992) (quotations omitted). 16 II. DISCUSSION 17 As for the first motion, Plaintiff seeks to seal portions of the SAC. See Dkt. No. 102. 18 Because the complaint is the operative pleading on which this action is based, the Court applies 19 the “compelling reasons” standard to these motions. See, e.g., Space Data Corp. v. Alphabet Inc., 20 No. 16-CV-03260-BLF, 2018 WL 10454862, at *2 (N.D. Cal. Aug. 31, 2018) (finding compelling 21 reasons standard governed motion to seal portions of the amended complaint); In re NVIDIA Corp. 22 Derivative Litig., No. C 06-06110 SBA, 2008 WL 1859067, at *3 (N.D. Cal. Apr. 23, 2008) 23 (“While a complaint is not, per se, the actual pleading by which a suit may be disposed of, it is the 24 root, the foundation, the basis by which a suit arises and must be disposed of.”). 25 Plaintiff seeks to seal the same information that the Court ordered sealed as to the First 26 Amended Complaint. See Dkt. No. 92. Specifically, Plaintiff requests an order sealing excerpts 27 from the SAC that contain confidential business and financial information relating to the click- 1 smartphone user that Plaintiff received from its partners, the dollar value(s) of the rewards that 2 smartphone users received for seeing advertisements, user attrition rates, and prospective partners 3 that Plaintiff sought to work with in the future. In short, Plaintiff seeks to seal discrete 4 information related to the company’s business model. Such terms, if public, could be used by both 5 Plaintiff’s and its partners’ competitors to give them an unfair advantage in the development and 6 negotiations of rival products. See Dkt. No. 102 at 3–4. The Court finds that such confidential 7 business information satisfies the compelling reasons standard. See In re Qualcomm Litig., No. 8 3:17-CV-0108-GPC-MDD, 2017 WL 5176922, at *2 (S.D. Cal. Nov. 8, 2017) (observing that 9 sealing such information “prevent[ed] competitors from gaining insight into the parties’ business 10 model and strategy”); see also Finisar Corp. v. Nistica, Inc., No. 13-CV-03345-BLF (JSC), 2015 11 WL 3988132, at *5 (N.D. Cal. June 30, 2015). 12 As for the second motion, Plaintiff seeks to seal portions of a footnote in Defendant’s 13 motion to dismiss. See Dkt. No. 109 (citing Dkt. Nos. 62, 102). Because Defendants seek to seal 14 documents related to a dispositive motion, the Court applies the “compelling reasons” standard. 15 In the motion to dismiss, Defendant references dollar amounts that Plaintiff cites in the SAC. 16 These figures represent the average revenue per user that Plaintiff received on a monthly basis, as 17 well as a projection of its future revenue had its business continued. The Court previously 18 concluded that there are compelling reasons to seal such confidential business and financial 19 information contained in prior pleadings, see Dkt. No. 100, and comes to the same conclusion as 20 to the operative pleadings, see Dkt. No. 102. Accordingly, the Court GRANTS the motion on the 21 same basis. 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// I. CONCLUSION The Court therefore GRANTS the motions to seal. Dkt. Nos. 102, 109. Pursuant to Civil 2 Local Rule 79-5(f)(1), documents filed under seal as to which the administrative motions are 3 granted will remain under seal. 4 IT IS SO ORDERED. 5 Dated: 2/6/2024 6 Abespurerd 3 8 HAYWOOD S. GILLIAM, JR. 9 United States District Judge 10 11 12

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