LLC v. RPost Communications Limited et al

Filing 37

ORDER denying Defendants' 33 Motion to Seal. ORDERED striking Defendants' 34 Lodged Motion to Dismiss and 36 Proposed Additional Attachments. Docs. 34 and 36 shall remain under seal. IT IS FURTHER ORDERED that on or before May 22, 2014 Defendants shall file an Answer or other responsive pleading addressing those counts that were addressed in the now-stricken motion at Doc. 34. Signed by Senior Judge James A Teilborg on 5/20/2014.(LFIG)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 LLC, No. CV-14-00126-PHX-JAT Plaintiff, 10 11 v. 12 ORDER RPost Communications Limited, et al., 13 Defendants. 14 Pending before the Court is Defendants’ motion to seal its motion to dismiss, filed 15 as Doc. 33 and captioned as “Defendants’ Motion to Seal (I) Defendants RPost 16 International Limited’s and RMail Limited’s Motion to Dismiss Counts II-XII of the 17 Complaint Under Fed. R. Civ. P. 12(b)(1), (II) Declaration of Zafar Khan in Support 18 Thereof, and (III) Exhibits A and B to the Khan Declaration Pursuant to LRCiv 5.6” (the 19 “Motion”). The Court now rules on the Motion. 20 I. Legal Standard 21 The Ninth Circuit Court of Appeals has recognized “a strong presumption in favor 22 of access to court records.” Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 23 (9th Cir. 2003). The public has a general right of access “to inspect and copy . . . judicial 24 records and documents,” Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 (1978), 25 which “extends to pretrial documents filed in civil cases.” Foltz, 331 F.3d at 1134. The 26 only exceptions are those documents that have “traditionally been kept secret for 27 important policy reasons,” namely grand jury transcript and certain warrant materials. See 28 Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006). 1 Because of the strong presumption in favor of access to court records, a party 2 seeking to seal a judicial record “bears the burden of overcoming this strong presumption 3 by meeting the ‘compelling reasons’ standard.” Id. That party must “articulate 4 compelling reasons supported by specific factual findings that outweigh the general 5 history of access and the public policies favoring disclosure, such as the public interest in 6 understanding the judicial process.” Id. at 1178-79 (internal quotation marks and citations 7 omitted). A court deciding to seal judicial records must “base its decision on a 8 compelling reason and articulate the factual basis for its ruling, without relying on 9 hypothesis or conjecture.” Id. at 1179 (quoting Hagestad v. Tragesser, 49 F.3d 1430, 10 1434 (9th Cir. 1995)). 11 “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in 12 disclosure and justify sealing court records exist when such ‘court files might have 13 become a vehicle for improper purposes,’ such as the use of records to gratify private 14 spite, promote public scandal, circulate libelous statements, or release trade secrets.” Id. 15 (quoting Nixon, 435 U.S. at 598). “The mere fact that the production of records may lead 16 to a litigant’s embarrassment, incrimination, or exposure to further litigation will not, 17 without more, compel the court to seal its records.” Id. 18 Accordingly, a party’s allegations that material is “confidential” or “business 19 information” are insufficient to justify sealing court records containing such material 20 unless the party proves the existence of compelling reasons such as those set forth in 21 Kamakana. Krause v. Nev. Mut. Ins. Co., 2013 WL 3776146, at *5 (D. Nev. July 16, 22 2013) (citing Kamakana, 447 F.3d at 1179). Moreover, because “confidentiality alone 23 does not transform business information into a trade secret,” a party alleging trade secret 24 protection as a basis for sealing court records must show that the business information is 25 in fact a trade secret. St. Clair v. Nellcor Puritan Bennett LLC, 2011 WL 5335559, at *2 26 (D. Ariz. Nov. 7, 2011). Thus, only in extremely limited circumstances will confidential 27 information actually merit the sealing of court records. See Kamakana, 447 F.3d at 1182 28 (finding that conclusory statements about the content of documents did not provide -2- 1 “compelling reasons sufficiently specific to bar the public access to the documents”). 2 II. Analysis 3 Defendants’ sole basis for sealing their motion to dismiss is “because (i) the Khan 4 Declaration and Exhibits A and B thereto contain Defendants’ highly-confidential 5 information and (ii) the Motion to Dismiss, which relies on the Khan Declaration and 6 Exhibits A and B, includes therein much of this highly-confidential information.” (Doc. 7 33 at 2). Defendants do not elaborate as to the nature of this “highly-confidential 8 information,” and have not met their burden of proving compelling reasons exist for 9 sealing. 10 III. Conclusion 11 For the foregoing reasons, 12 IT IS ORDERED denying Defendants’ Motion to Seal (Doc. 33). 13 IT IS FURTHER ORDERED striking Defendants RPost International Limited’s 14 and RMail Limited’s Motion to Dismiss Counts II-XII of the Complaint Under Fed. R. 15 Civ. P. 12(b)(1) (currently lodged as Doc. 34) and Defendants’ Proposed Additional 16 Attachments to Main Document (currently lodged as Doc. 36). Docs. 34 & 36 shall 17 remain under seal. 18 IT IS FURTHER ORDERED that on or before May 22, 2014 Defendants shall 19 file an Answer or other responsive pleading addressing those counts that were addressed 20 in the now-stricken motion at Doc. 34. 21 Dated this 20th day of May, 2014. 22 23 24 25 26 27 28 -3-

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