Vuz v. DCSS III, Inc.

S.D. California

Vuz v. DCSS III, Inc.

DecidedJune 8, 2021

Docket3:20-cv-00246

StatusUnknown

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Vuz v. DCSS III, Inc., (S.D. Cal. 2021).

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ASHLEY R. VUZ, Case No.: 3:20-cv-00246-GPC-AGS

12 Plaintiff, ORDER DENYING WITHOUT 13 v. PREJUDICE PLAINTIFF’S EX PARTE APPLICATION FOR LEAVE 14 DCSS III, INC. (d/b/a GOSSIP GRILL), TO FILE DOCUMENTS UNDER et al., 15 SEAL Defendants. 16 [ECF No. 121] 17 18 On June 4, 2021, Plaintiff filed an ex parte application for leave to file under seal 19 documents in connection to the Motion for Settlement Approval and Dismissal Pursuant 20 to Rule 41(a)(2) filed by Plaintiff and Defendants DCSS III, Casteel, Rocha, and Wynne 21 (ECF No. 123). ECF No. 121. Specifically, Plaintiff seeks to file the related 22 memorandum of points and authorities and supporting declaration with the settlement 23 amount and amount of an attorney lien redacted, and to file unredacted versions under 24 seal. For the reasons that follow, the Court DENIES Plaintiff’s application without 25 prejudice. 26 \ \ \ 27 1 There is a presumptive right of public access to court records based upon the 2 common law and the first amendment. See Nixon v. Warner Commc’ns, Inc., 435 U.S. 3 589, 597 (1978); Phillips ex rel. Estates of Byrd v. General Motors Corp., 307 F.3d 1206, 4 1212–13 (9th Cir. 2002). Nonetheless, access may be denied to protect sensitive 5 confidential information. “Unless a particular court record is one ‘traditionally kept 6 secret,’ a ‘strong presumption in favor of access’ is the starting point.” Kamakana v. City 7 & Cty. of Honolulu, 447 F.3d 1172, 1178–80 (9th Cir. 2006) (citing Foltz v. State Farm 8 Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). To overcome this strong 9 presumption, a party seeking to seal a judicial record attached to a dispositive motion 10 must articulate justifications for sealing that “outweigh the historical right of access and 11 the public policies favoring disclosure.” Id. at 1178–79. 12 Parties seeking to seal documents in a dispositive motion must meet the high 13 threshold requiring “compelling reasons” with specific factual findings to support a 14 sealing. Id. at 1178–80. However, for non-dispositive motions, the parties must show a 15 lesser “particularized showing” under the “good cause” standard pursuant to Federal Rule 16 of Civil Procedure 26(c) to rebut the presumption of public access. Id. at 1180. The 17 Ninth Circuit has suggested that the technical dispositive or non-dispositive label on the 18 motion does not necessarily control, but rather that courts must consider how closely the 19 motion bears on issues central to the merits. See In re Midland National Life Insurance 20 Company Annuity Sales Practices Litigation, 686 F.3d 1115 (9th Cir. 2012); Ctr. for Auto 21 Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1100 (9th Cir. 2016). Without Ninth 22 Circuit guidance on the issue, lower courts have differed on the question of whether a 23 motion for settlement approval is dispositive or non-dispositive for the purpose of 24 deciding a motion to file documents under seal. See Select Portfolio Servicing v. 25 Valentino, No. C 12-0334 SI, 2013 WL 1800039, at *2 (N.D. Cal. Apr. 29, 2013) 26 (collecting cases). 27 1 A noticed motion for approval of settlement under Federal Rule of Civil Procedure 2 41(a)(2) is unusual, and thus case law related to whether such motions should be 3 considered dispositive or non-dispositive for the purposes of a motion to seal is scarce. 4 Applying the general principles articulated by the Ninth Circuit, the Court finds that the 5 motion can likely be considered non-dispositive. Technically, approval of the settlement 6 would dismiss certain parties from the case. However, resolving the motion would likely 7 not touch on substantive issues related to the merits, as a Rule 41(a)(2) is generally not an 8 adjudication on the merits. See Fed. R. Civ. P. 41(a)(2); Kamakana, 447 F.3d at 1179 9 (quoting Seattle Times Co. v. Rhinehart, 467 U.S. 20, 33 (1984)) (noting that non- 10 dispositive motions “are often ‘unrelated, or only tangentially related, to the underlying 11 cause of action’”); Foltz, 331 F.3d at 1135–36 (quoting Rushford v. The New Yorker 12 Magazine, 846 F.2d 249, 252 (4th Cir. 1988)) (finding good reason to distinguish right of 13 access to materials attached to summary judgment motions from those attached to non- 14 dispositive motions because “summary judgment adjudicates substantive rights and 15 serves as a substitute for trial”). Accordingly, the Court presumes for the purposes of this 16 Order that the good cause standard applies. 17 “[B]road allegations of harm, unsubstantiated by specific examples or articulated 18 reasoning, do not satisfy the Rule 26(c) test” for good cause. In re Roman Archbishop of 19 Portland Oregon, 661 F.3d 417, 424 (9th Cir. 2011) (quoting Beckman Indus., Inc. v. 20 Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992)). Confidential settlement agreements 21 may be protected under Rule 26(c), but the parties still must demonstrate good cause for 22 protection. See Phillips, 307 F.3d at 1212; cf. Foltz, 331 F.3d at 1136–38 (existence of 23 confidentiality provisions in protective order governing discovery does not constitute 24 compelling reason for maintaining documents under seal when they are attached to 25 dispositive motion). 26 \ \ \ 27 1 Here, the settlement amount has been disclosed to counsel for the non-settling 2 || Defendants, see ECF No. 123-1 (Gilbert Decl.) ¥ 4, and Plaintiff has narrowly tailored 3 || her request to redact only the settlement amount and the amount of a lien filed by 4 || Plaintiff’s formal counsel, which could reveal the settlement amount if there are 5 || references to the relative size of the lien compared to the settlement amount. See ECF 6 || No. 121-2 (Graham Decl.) 4/7, 9. However, Plaintiff only supports her argument that 7 || good cause exists for redaction of the settlement amount with reference to the fact that 8 || the settlement agreement contains a confidentiality provision. However, as the Ninth 9 || Circuit indicated in Phillips and Foltz, a confidentiality agreement, standing alone, does 10 || not by itself constitute good cause or a compelling reason to seal. The Court cannot 11 conclude that good cause supports Plaintiff's motion to seal without any indication of 12 || what specific harm or prejudice will result if the information is disclosed. Kamakana, 13 F.3d at 1179-80. 14 The Court therefore DENIES WITHOUT PREJUDICE Plaintiff’s application to 15 |}seal. On or before June 14, 2021, Plaintiff shall either: (1) file unredacted versions of the 16 || Declaration of Ryan A. Graham, Esq.

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ASHLEY R. VUZ, Case No.: 3:20-cv-00246-GPC-AGS

12 Plaintiff, ORDER DENYING WITHOUT 13 v. PREJUDICE PLAINTIFF’S EX PARTE APPLICATION FOR LEAVE 14 DCSS III, INC. (d/b/a GOSSIP GRILL), TO FILE DOCUMENTS UNDER et al., 15 SEAL Defendants. 16 [ECF No. 121] 17 18 On June 4, 2021, Plaintiff filed an ex parte application for leave to file under seal 19 documents in connection to the Motion for Settlement Approval and Dismissal Pursuant 20 to Rule 41(a)(2) filed by Plaintiff and Defendants DCSS III, Casteel, Rocha, and Wynne 21 (ECF No. 123). ECF No. 121. Specifically, Plaintiff seeks to file the related 22 memorandum of points and authorities and supporting declaration with the settlement 23 amount and amount of an attorney lien redacted, and to file unredacted versions under 24 seal. For the reasons that follow, the Court DENIES Plaintiff’s application without 25 prejudice. 26 \ \ \ 27 1 There is a presumptive right of public access to court records based upon the 2 common law and the first amendment. See Nixon v. Warner Commc’ns, Inc., 435 U.S. 3 589, 597 (1978); Phillips ex rel. Estates of Byrd v. General Motors Corp., 307 F.3d 1206, 4 1212–13 (9th Cir. 2002). Nonetheless, access may be denied to protect sensitive 5 confidential information. “Unless a particular court record is one ‘traditionally kept 6 secret,’ a ‘strong presumption in favor of access’ is the starting point.” Kamakana v. City 7 & Cty. of Honolulu, 447 F.3d 1172, 1178–80 (9th Cir. 2006) (citing Foltz v. State Farm 8 Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). To overcome this strong 9 presumption, a party seeking to seal a judicial record attached to a dispositive motion 10 must articulate justifications for sealing that “outweigh the historical right of access and 11 the public policies favoring disclosure.” Id. at 1178–79. 12 Parties seeking to seal documents in a dispositive motion must meet the high 13 threshold requiring “compelling reasons” with specific factual findings to support a 14 sealing. Id. at 1178–80. However, for non-dispositive motions, the parties must show a 15 lesser “particularized showing” under the “good cause” standard pursuant to Federal Rule 16 of Civil Procedure 26(c) to rebut the presumption of public access. Id. at 1180. The 17 Ninth Circuit has suggested that the technical dispositive or non-dispositive label on the 18 motion does not necessarily control, but rather that courts must consider how closely the 19 motion bears on issues central to the merits. See In re Midland National Life Insurance 20 Company Annuity Sales Practices Litigation, 686 F.3d 1115 (9th Cir. 2012); Ctr. for Auto 21 Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1100 (9th Cir. 2016). Without Ninth 22 Circuit guidance on the issue, lower courts have differed on the question of whether a 23 motion for settlement approval is dispositive or non-dispositive for the purpose of 24 deciding a motion to file documents under seal. See Select Portfolio Servicing v. 25 Valentino, No. C 12-0334 SI, 2013 WL 1800039, at *2 (N.D. Cal. Apr. 29, 2013) 26 (collecting cases). 27 1 A noticed motion for approval of settlement under Federal Rule of Civil Procedure 2 41(a)(2) is unusual, and thus case law related to whether such motions should be 3 considered dispositive or non-dispositive for the purposes of a motion to seal is scarce. 4 Applying the general principles articulated by the Ninth Circuit, the Court finds that the 5 motion can likely be considered non-dispositive. Technically, approval of the settlement 6 would dismiss certain parties from the case. However, resolving the motion would likely 7 not touch on substantive issues related to the merits, as a Rule 41(a)(2) is generally not an 8 adjudication on the merits. See Fed. R. Civ. P. 41(a)(2); Kamakana, 447 F.3d at 1179 9 (quoting Seattle Times Co. v. Rhinehart, 467 U.S. 20, 33 (1984)) (noting that non- 10 dispositive motions “are often ‘unrelated, or only tangentially related, to the underlying 11 cause of action’”); Foltz, 331 F.3d at 1135–36 (quoting Rushford v. The New Yorker 12 Magazine, 846 F.2d 249, 252 (4th Cir. 1988)) (finding good reason to distinguish right of 13 access to materials attached to summary judgment motions from those attached to non- 14 dispositive motions because “summary judgment adjudicates substantive rights and 15 serves as a substitute for trial”). Accordingly, the Court presumes for the purposes of this 16 Order that the good cause standard applies. 17 “[B]road allegations of harm, unsubstantiated by specific examples or articulated 18 reasoning, do not satisfy the Rule 26(c) test” for good cause. In re Roman Archbishop of 19 Portland Oregon, 661 F.3d 417, 424 (9th Cir. 2011) (quoting Beckman Indus., Inc. v. 20 Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992)). Confidential settlement agreements 21 may be protected under Rule 26(c), but the parties still must demonstrate good cause for 22 protection. See Phillips, 307 F.3d at 1212; cf. Foltz, 331 F.3d at 1136–38 (existence of 23 confidentiality provisions in protective order governing discovery does not constitute 24 compelling reason for maintaining documents under seal when they are attached to 25 dispositive motion). 26 \ \ \ 27 1 Here, the settlement amount has been disclosed to counsel for the non-settling 2 || Defendants, see ECF No. 123-1 (Gilbert Decl.) ¥ 4, and Plaintiff has narrowly tailored 3 || her request to redact only the settlement amount and the amount of a lien filed by 4 || Plaintiff’s formal counsel, which could reveal the settlement amount if there are 5 || references to the relative size of the lien compared to the settlement amount. See ECF 6 || No. 121-2 (Graham Decl.) 4/7, 9. However, Plaintiff only supports her argument that 7 || good cause exists for redaction of the settlement amount with reference to the fact that 8 || the settlement agreement contains a confidentiality provision. However, as the Ninth 9 || Circuit indicated in Phillips and Foltz, a confidentiality agreement, standing alone, does 10 || not by itself constitute good cause or a compelling reason to seal. The Court cannot 11 conclude that good cause supports Plaintiff's motion to seal without any indication of 12 || what specific harm or prejudice will result if the information is disclosed. Kamakana, 13 F.3d at 1179-80. 14 The Court therefore DENIES WITHOUT PREJUDICE Plaintiff’s application to 15 |}seal. On or before June 14, 2021, Plaintiff shall either: (1) file unredacted versions of the 16 || Declaration of Ryan A. Graham, Esq. in Support of Motion for Settlement Approval and 17 ||Memorandum of Points and Authorities in Support of Motion for Settlement Approval; or 18 || (2) file a renewed application to seal making a “particularized showing” of the specific 19 harm or prejudice that will result if the information is disclosed to enable the Court to 20 || determine whether good cause exists to permit sealing of the unredacted documents. 21 IT IS SO ORDERED. 22 ||Dated: June 7, 2021 <=

24 United States District Judge 25 26 27 28 3:20-cv-00246-GPC-AGS