Marsteller et al v. MD Helicopter Incorporated et al

Filing 596

ORDER granting in part and denying in part 512 Motion to Seal. FURTHER ORDERED The Clerk of Court shall UNSEAL the following: Doc. 440 ; Doc. [441-1]; Doc. [441-2]; Doc. [441-7]; Doc. [441-9]; Doc. [441-20]; Doc. [441-21]; Doc. [441-23]; Doc. [ 441-25]; Doc. [441-26]; Doc. [441-27]; Doc. [441-28]; Doc. [441-29]; Doc. [441-30]; Doc. [441-33]; Doc. [441-36]; Doc. [441-37]; Doc. [441-39]; Doc. [441-40]; Doc. [441-41]; Doc. [441-43]; Doc. [441-44]; Doc. [441-46]; Doc. [441-47]; Doc. [441-48]; Doc. [441-49]; Doc. [441-64]; Doc. [441-65]; Doc. 442 ; Doc. [442-1]; Doc. [442-2]; Doc. 447 ; Doc. 451 ; Doc. 452 ; Doc. 461 ; Doc. [461-1]; Doc. [461-2]; Doc. [461-3]; Doc. 464 ; Doc. [464-2]; Doc. [464-3]; Doc. [464-4]; Doc. [464-5]; Doc. [464-6]; Doc. [464-7]; Doc. 468 ; Doc. [468-2]; Doc. [468-3]; Doc. [468-4]; Doc. [468-5]; Doc. [468-6]; Doc. 471 (and all accompanying exhibits); Doc. 473 (and all accompanying exhibits); Doc. 476 (and all accompanying exhibits); Doc. 478 ; Doc. 483 ; Doc. 484 ; Doc. 488 ; and Doc. 489 . FURTHER ORDERED The following items shall REMAIN UNDER SEAL: Doc. 441 ; Doc. [441-6]; Doc. [441-56]; Doc. [441-59]; Doc. [441-60]; Doc. [441-61]; Doc. [441-62]; Doc. 445 ; Doc. 446 ; Doc. [4 48]; Doc. 449 ; Doc. 450 ; Doc. [461-4]; Doc. [464-1]; Doc. [468-1]; Doc. 479 ; Doc. [479-1]; Doc. [479-2]; Doc. [479-3]; and Doc. 501 . FURTHER ORDERED As explained in this order, however, not everything in these documents needs to be shield ed from public view. Because MDHI filed exhibits in groups rather than as individual attachments, MDHI will need to publically re-file the exhibits that are not properly sealed (for instance, Doc. 445 will remain entirely under seal, but MDHI sh all publicly re-file unredacted versions of Exhibits 23 and 24, which are currently contained within Doc. 445 ). Accordingly, by no later than October 12, 2018, MDHI shall do the following: (A). Publicly re-file the following exhibits to its st atement of fact (currently under seal at Docs. 445 , 446 , [448-50]): 23, 24, 29-31, 33, 34, 53, 54, 58-63, 65, 66, 69,78, 79, 81, 84, 88, 89, 92, 95, 97, 98, 101, 102, 104; (B). Publicly re-file the following exhibits to its Response to Plainti ffs' Statement of Facts (currently under seal at Doc. 497 ): 138-149, 151-157, 161, and 164; (C) Publicly re-file amended redacted versions of Doc. 438 ; Doc. 441 ; Doc. [441-6]; Doc. [441-59]; Doc. [461-4]; Doc. [468-1]; Doc. 479 ; and Doc. 501 that redact only the information found in this order to be properly sealed. Signed by Judge Douglas L Rayes on 9/27/18. (MAP)

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9

Philip A Marsteller, et al.,
Plaintiffs,

10
11

ORDER

v.

12

No. CV-14-01788-PHX-DLR

MD Helicopter Incorporated, et al.,

13

Defendants.

14
15
16

Before the Court is Defendant MD Helicopter Incorporated’s (“MDHI”) motion to

17

seal. (Doc. 512.) The issue has been fully briefed. (Docs. 525, 527.) For the following

18

reasons, the motion is granted in part and denied in part.

19

I. Legal Standard

20

Two standards generally govern requests to seal documents. “First, a ‘compelling

21

reasons’ standard applies to most judicial records.” Pintos v. Pac. Creditors Ass’n, 605

22

F.3d 665, 678 (9th Cir. 2009) (citing Kamakana v. City & Cty. of Honolulu, 447 F.3d

23

1172, 1178 (9th Cir. 2006)).

24
25
26

This standard derives from the common law right “to inspect and copy
public records and documents, including judicial records and documents.”
To limit this common law right of access, a party seeking to seal judicial
records must show that “compelling reasons supported by specific factual
findings . . . outweigh the general history of access and the public policies
favoring disclosure.”

27
28

Id. (quoting Kamakana, 447 F.3d at 1178-79).

1

The second standard applies to discovery materials. “‘Private materials unearthed

2

during discovery’ . . . are not part of the judicial record.” Id. (quoting Kamakana, 447

3

F.3d at 1180). The “good cause” standard set forth in Federal Rule of Civil Procedure

4

26(c) applies to this category of documents. Id. For good cause to exist under Rule

5

26(c), “the party seeking protection bears the burden of showing specific prejudice or

6

harm will result if no protective order is granted.” Phillips v. G.M. Corp., 307 F.3d 1206,

7

1210-11 (9th Cir. 2002).

8

examples or articulated reasoning, do not satisfy the Rule 26(c) test.” Beckman Indus.,

9

Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992) (quotation and citation omitted).

10

Instead, the party seeking protection must make a “particularized showing of good cause

11

with respect to [each] individual document.” San Jose Mercury News, Inc. v. U.S. Dist.

12

Court – N. Dist. (San Jose), 187 F.3d 1096, 1103 (9th Cir. 1999).

“Broad allegations of harm, unsubstantiated by specific

13

The good cause standard also applies to documents attached to non-dispositive

14

motions because those documents are often “‘unrelated, or only tangentially related, to

15

the underlying cause of action.’”

16

Documents attached to dispositive motions, by contrast, are governed by the compelling

17

reasons standard. See Pintos, 605 F.3d at 678-79. This higher standard applies because

18

the resolution of a dispute on the merits “is at the heart of the interest in ensuring the

19

‘public’s understanding of the judicial process and of significant public events.’”

20

Kamakana, 447 F.3d at 1179 (citation omitted).

21

II. Discussion

22
23

Phillips, 307 F.3d at 1213 (citation omitted).

MDHI seeks to seal information contained within the parties’ Daubert and
summary judgment filings. The Court discusses each in turn.

24

A. Daubert Filings

25

MDHI outlines two categories of information contained in the parties’ Daubert

26

filings it seeks to have filed under seal: “(1) private employment and salary information

27

of current and former MDHI employees; and (2) commercially sensitive financial

28

information related to MDHI’s pricing and compensation practices.” (Doc. 512 at 3-4.)

-2-

1

Because these documents are attached to non-dispositive motions, the good cause

2

standard applies.

3

1. Third Party Information

4

MDHI seeks to seal “sensitive personnel information regarding third parties—

5

other current or former employees of MDHI not involved in this litigation.” (Doc. 512 at

6

4.) Finding good cause to maintain under seal private, personnel information of non-

7

parties, the Court grants MDHI’s motion to seal in part. The names of current and former

8

employees found in Doc. 461-4; Doc. 464-1; and Doc. 468-1 shall remain under seal.

9

The only information MDHI seeks to maintain under seal in Doc. 464-3 is Marsteller’s

10

salary. Because Marsteller is party to this action and his salary is central to any damage

11

calculations, the Court finds no good cause for sealing this information.

12
13

2. Financial Information
MDHI requests that certain “commercially sensitive information,” like MDHI’s

14

“pricing and compensation strategy,” remain under seal.

15

contends that “disclosure of such information risks competitive harm to MDHI . . . .” (Id.)

16

Although there is some plausibility to this concern, the Court has doubts about the

17

concreteness of the harm MDHI claims would result from public disclosure of the

18

documents at issue, given the age of this information. See Saint Alphonsus Med. Ctr.-

19

Nampa, Inc. v. St. Luke’s Health Sys., Ltd., No. 12-CV-560-BLW, 2014 WL 3101716, at

20

*3 (D. Idaho July 3, 2014) (finding “no reason to seal” document memorializing business

21

negotiation that was five years old “given its age”).

22

disclosure of pricing, compensation, and contract information that is several years old

23

would inflict a financial or competitive injury.

(Doc. 512 at 5.)

MDHI

MDHI fails to explain how

24

MDHI also argues that the information reveals underlying strategies that remain

25

competitively sensitive. (Doc. 527 at 9.) After reviewing the documents under seal, the

26

Court disagrees that they reveal any specific business strategy. To the extent that the

27

information contains such strategies, the Court will not keep that information under seal

28

because doing so will interfere with the public’s interest in understanding the judicial

-3-

1

process. See e.g., Aviva USA Corp. v. Vazirani, 902 F. Supp. 2d 1246, 1273-74 (D. Ariz.

2

2012).

3

learning that MDHI had priced its helicopters in violation of the law.

4

understanding this allegation and the underlying pricing structure are MDHI’s pricing

5

dashboards, which MDHI seeks to seal. On the whole, concerns over the potentially

6

sensitive nature of these materials are outweighed by the public’s interest in

7

understanding these proceedings.

For instance, Marsteller alleges that he engaged in protected activity after
Central to

8

B. Summary Judgment Filings

9

MDHI also seeks to seal four categories of information contained within the

10

parties’ summary judgment filings, including: “(1) non-public investigatory activity; (2)

11

the names of third parties . . . ; (3) commercially sensitive business information, including

12

trade secrets; and (4) identifying information regarding MDHI’s security software.”

13

(Doc. 512 at 6.) Because these documents are attached to dispositive motions, the

14

compelling reasons standard applies.

15

1. Non-Public Investigatory Activity

16

MDHI seeks to keep under seal references to Agent Stamper’s criminal

17

investigation, involvement of federal agencies in this investigation, and activities that

18

Marsteller and Stamper undertook in investigating MDHI. MDHI’s request is denied

19

because compelling reasons do not support it. This information furthers the public’s

20

understanding of Marsteller’s cooperation with the government and its investigation of

21

MDHI and affiliated individuals and entities. Moreover, this information already is part

22

of the public record. (See, e.g., Doc. 555.)

23

2. Third Party Information

24

MDHI seeks to keep under seal the name of Mike Kelley, “whose abrupt

25

departure, caused by [Marsteller’s] inappropriate disclosure of confidential personnel

26

information, led to [Marsteller’s] termination.” (Doc. 512 at 8.) MDHI contends that

27

inclusion of his name “has no relevance” and “can only cause potential and unnecessary

28

harm to the individual[.]” (Id.) The Court disagrees. MDHI argues that Marsteller’s

-4-

1

firing was a direct result of him overhearing a conversation regarding MDHI’s interview

2

of a potential replacement for Kelley, and relaying that information to him. (Doc. 555 at

3

4-5.) Given the centrality of this information to the public’s understanding of this case,

4

the Court sees little reason for sealing it. Moreover, Kelley’s name already has shown up

5

in the public filings in this case. (See, e.g., Doc. 1-1 ¶ 55; Doc. 141 ¶ 39, Doc. 555 at 4-

6

5.)

7

MDHI also seeks to keep under seal the names of “other third parties where those

8

names are raised in a context that reveals private personnel information, including actual

9

or contemplated adverse employment actions.” (Doc. 512 at 8.) Finding compelling

10

reasons for some of these requests, the Court grants in part MDHI’s request to seal. Doc.

11

441-6 (¶ 19); Doc. 446 (DX 32); Doc. 449 (DX70); and Doc. 450 (DX105) will remain

12

under seal. Many other of these requests, however, concern the names of third parties

13

central to the underlying facts in this matter.

14

MDHI contends that the names of individuals Marsteller shared information with

15

in breach of his confidentiality agreement should remain under seal in order to minimize

16

the risk of further dissemination. (Doc. 512 at 9.) The Court finds MDHI’s proffered

17

reason for keeping this information under seal speculative. See Kamakana, 447 F.3d at

18

1182. It has been nearly 5 years since the alleged recipients received information from

19

Marsteller, yet MDHI offers no specific evidence that in that time any of the recipients

20

have further disseminated the information.

21

unpersuaded that this risk is anything more than conjecture. Moreover, the names of the

22

purported recipients already are part of the public record.

23

Therefore, MDHI’s request is denied with respect to this information.

24

3. Commercially Sensitive Information

Absent such evidence, the Court is

(See, e.g., Doc. 555.)

25

As discussed above, MDHI requests that certain “commercially sensitive

26

information” like “MDHI’s pricing and compensation strategy, internal performance

27

assessments, and the specific terms and conditions of contracts to which MDHI has

28

agreed” remain under seal. (Doc. 512 at 10.) MDHI contends that “[s]uch information is

-5-

1

commercially sensitive and, if disclosed, would have economic value to MDHI’s

2

customers . . . and its competitors . . . .” (Id.) For the reasons discussed above, the Court

3

finds most of the financial information is central to the public’s understanding and not

4

properly sealed. With that said, the Court will keep the following documents under seal

5

because the information contained therein is not central to the public’s interest in

6

understanding this proceeding: Doc. 445 (DX26, DX27); Doc. 448 (DX55); Doc. 449

7

(DX64, DX75); and Doc. 479 (DX158).

8
9

4. MDHI’s Security Software
In connection with MDHI’s counterclaims, the parties’ summary judgment filings

10

discuss MDHI’s specific software systems.

11

safeguards MDHI uses to protect its system could make it easier for malicious parties to

12

evade those safeguards” the Court finds compelling reasons to keep such information

13

under seal. See In re Google, Inc. Gmail Litig., No. 13-MD-2430-LHK, 2013 WL

14

5366963, at *3 (N.D. Cal. Sept. 25, 2013). The following therefore will remain under

15

seal: Doc. 441 (all redactions after page 14); Doc. 441-56; Doc. 441-59 (all redactions on

16

page 63); Doc. 441-60; Doc. 441-61; Doc. 441-62; Doc. 479 (all redactions after ¶ 34);

17

Doc. 479-1 (DX137); Doc. 479-2 (DX150); Doc. 501 (redaction on page 19). MDHI

18

notes that Doc. 438 contains redactions of security information on pages 31, 33-34. The

19

Court finds these redactions proper. But, because other redactions in Doc. 438 are not

20

properly subject to redaction, MDHI will be required to publicly file an amended

21

redacted version that redacts only the information on pages 31, 33-34.

22
23

“Because disclosure of the particular

IT IS ORDERED, that MDHI’s motion to seal (Doc. 512) is GRANTED in part
and DENIED in part as follows:

24

1. The Clerk of Court shall unseal the following: Doc. 440; Doc. 441-1; Doc. 441-

25

2; Doc. 441-7; Doc. 441-9; Doc. 441-20; Doc. 441-21; Doc. 441-23; Doc. 441-25; Doc.

26

441-26; Doc. 441-27; Doc. 441-28; Doc. 441-29; Doc. 441-30; Doc. 441-33; Doc. 441-

27

36; Doc. 441-37; Doc. 441-39; Doc. 441-40; Doc. 441-41; Doc. 441-43; Doc. 441-44;

28

Doc. 441-46; Doc. 441-47; Doc. 441-48; Doc. 441-49; Doc. 441-64; Doc. 441-65; Doc.

-6-

1

442; Doc. 442-1; Doc. 442-2; Doc. 447; Doc. 451; Doc. 452; Doc. 461; Doc. 461-1; Doc.

2

461-2; Doc. 461-3; Doc. 464; Doc. 464-2; Doc. 464-3; Doc. 464-4; Doc. 464-5; Doc.

3

464-6; Doc. 464-7; Doc. 468; Doc. 468-2; Doc. 468-3; Doc. 468-4; Doc. 468-5; Doc.

4

468-6; Doc. 471 (and all accompanying exhibits); Doc. 473 (and all accompanying

5

exhibits); Doc. 476 (and all accompanying exhibits); Doc. 478; Doc. 483; Doc. 484; Doc.

6

488; and Doc. 489.

7

2. The following items shall remain under seal: Doc. 441; Doc. 441-6; Doc. 441-

8

56; Doc. 441-59; Doc. 441-60; Doc. 441-61; Doc. 441-62; Doc. 445; Doc. 446; Doc. 448;

9

Doc. 449; Doc. 450; Doc. 461-4; Doc. 464-1; Doc. 468-1; Doc. 479; Doc. 479-1; Doc.

10

479-2; Doc. 479-3; and Doc. 501. As explained in this order, however, not everything in

11

these documents needs to be shielded from public view. Because MDHI filed exhibits in

12

groups rather than as individual attachments, MDHI will need to publically re-file the

13

exhibits that are not properly sealed (for instance, Doc. 445 will remain entirely under

14

seal, but MDHI shall publicly re-file unredacted versions of Exhibits 23 and 24, which

15

are currently contained within Doc. 445). Accordingly, by no later than October 12,

16

2018, MDHI shall do the following:

17

A. Publicly re-file the following exhibits to its statement of fact (currently

18

under seal at Docs. 445, 446, 448-50): 23, 24, 29-31, 33, 34, 53, 54, 58-63, 65, 66, 69,

19

78, 79, 81, 84, 88, 89, 92, 95, 97, 98, 101, 102, 104;

20

B. Publicly re-file the following exhibits to its Response to Plaintiffs’

21

Statement of Facts (currently under seal at Doc. 497): 138-149, 151-157, 161, and 164;

22

//

23

//

24

//

25

//

26

//

27

//

28

//

-7-

1

C. Publicly re-file amended redacted versions of Doc. 438; Doc. 441; Doc.

2

441-6; Doc. 441-59; Doc. 461-4; Doc. 468-1; Doc. 479; and Doc. 501 that redact only the

3

information found in this order to be properly sealed.

4

Dated this 27th day of September, 2018.

5
6
7
8
9

Douglas L. Rayes
United States District Judge

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

-8-