SolarCity Corporation v. Salt River Project Agricultural Improvement and Power District

Filing 329

ORDER granting 268 Motion to Seal. The Clerk of Court shall file under seal Exhibits 2 and 3 (lodged at Doc. 271-2 and 271-3) and Plaintiff's Motion and SSUF (lodged Docs. 276 and 277 ). FURTHER ORDERED granting/denying in part 295 M otion to Seal as follows: (1) Defendant's motion to seal Exhibits 1, 4-20, and 22 (lodged at Doc. 271-1, 272-4 through 271-11, 272-1 through 272-9, 272-11) is denied. Within 10 days of the date of this order, Plaintiff shall publicly file u nredacted versions of these exhibits. (2) Defendant's motion to seal Exhibit 21 (lodged at 272-10) is granted in part. The Clerk shall file Exhibit 21 under seal, but within 10 days of the date of this order Plaintiff shall publicly file a re vised version of Exhibit 21 that redacts only customer names. FURTHER ORDERED that, within 10 days of the date of this order, Plaintiff shall publicly file a revised version of its Motion and SSUF that redacts only the information the Court has ordered to be sealed. Signed by Judge Douglas L Rayes on 12/8/17. (MAP)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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SolarCity Corporation,

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Plaintiff,

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ORDER

v.

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No. CV-15-00374-PHX-DLR

Salt River Project Agricultural
Improvement and Power District,

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Defendant.

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Before the Court are Plaintiff SolarCity Corporation’s motion to seal (Doc. 268),

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and Defendant Salt River Project Agricultural Improvement and Power District’s motion

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to seal (Doc. 295). Neither party filed a responsive motion or requested oral argument.

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For the following reasons, Plaintiff’s motion (Doc. 268) is granted and Defendant’s

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motion (Doc. 295) is granted in part and denied in part.

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I. Legal Standard

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Where, as here, parties seek leave to file under seal documents attached to a

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dispositive motion, they must show compelling reasons for doing so. Pintos v. Pac.

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Creditors Ass’n, 605 F.3d 665, 678-79 (9th Cir. 2009) (citing Kamakana v. City & Cty. of

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Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)). The standard is high because the

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

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

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

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II. Plaintiff’s Motion to Seal (Doc. 268)

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Plaintiff seeks to file under seal: an unredacted version of its Renewed Motion for

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Summary Judgment (Motion); an unredacted version of its Separate Statement of

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Undisputed Facts (SSUF); and unredacted versions of the exhibits cited in the Motion

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and the SSUF. (Doc. 268 at 2.) The documents included in this request fall into three

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categories, which the Court discusses in turn.

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First, Plaintiff seeks to seal “certain portions of deposition transcripts” of two

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employees because they contain “highly sensitive business information and trade

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secrets.” (Id. at 4.) Specifically, these depositions discuss “strategic pricing decisions

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and their effect on internal financial metrics,” the public disclosure of which Plaintiff

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argues would give its competitors an advantage in “determining how to profitably price

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their own offerings and better compete” against Plaintiff. (Id.) Importantly, because the

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portions Plaintiff seeks to seal concern service areas not at issue in this case, disclosure

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offers limited assistance to the public in better understanding the judicial proceedings.

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See e.g., Aviva USA Corp. v. Vazirani, 902 F. Supp. 2d 1246, 1273-74 (D. Ariz. 2012)

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(finding that sealing document did not interfere with understanding of the judicial process

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because the dispositive motion did not address information found in that document). The

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Court therefore finds that compelling reasons justify sealing these portions of the

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identified depositions.

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Next, Plaintiff requests that the Court seal portions of its Motion and SSUF

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containing private consumer information. Plaintiff argues that release of this information

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would result in an invasion of privacy interests of third parties, and that consumers’

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identities should be sealed because disclosure is not necessary for the public to

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understand the parties’ positions or the Court’s rulings. Plaintiff notes, correctly, that

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consumer identities become a matter of the public record if they testify at trial. The

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Court finds that compelling reasons justify sealing the identified portions of Plaintiff’s

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Motion and SSUF.

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Finally, at Defendant’s request, Plaintiff has lodged under seal a series of exhibits

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that Defendant designated as confidential pursuant to the Court’s Protective Order.

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Plaintiff “does not agree that th[ese] exhibits should be sealed, but has agreed to lodge

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them under seal” in accordance with the Court’s Protective Order and Local Rule 5.6.

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(Doc. 268 at 2; Doc. 56.) In turn, Defendant filed a separate motion to seal these

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documents, which the Court discusses below.

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III. Defendant’s Motion to Seal (Doc. 295)

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Defendant seeks to have sealed 20 exhibits that Plaintiff filed in support of its

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motion for partial summary judgment, arguing that these exhibits contain information that

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“affect[s] net revenue” and is “not the sort of information a utility typically makes

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public.” (Doc. 295 at 2-5.) Defendant offers a brief explanation as to why each exhibit

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should be sealed. For example, Defendant argues that Exhibit 8 consists of internal

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emails discussing pricing decisions “that necessarily affect” Defendant’s net revenue.

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(Doc. 295 at 2.) Defendant also argues that Exhibit 9 consists of an internal presentation

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concerning strategic decision making that is “related to issues that affect [Defendant’s]

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overall net revenue.” (Id.) In support of its arguments, Defendant cites four cases in

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which business confidentiality and competitive standing have been deemed sufficient

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reasons to justify sealing court records. (Id. (citing Ctr. for Auto Safety v. Chrysler Grp.

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LLC, 809 F.3d 1092, 1098 (9th Cir. 2016); Bean v. Pearson Educ., Inc., No. CV 11-

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8030-PCT-PGR, 2013 WL 2455930, at *4 (D. Ariz. June 5, 2013); TriQuint

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Semiconductor, Inc. v. Avago Techs. Ltd., No. CV 09-1531-PHX-JAT, 2011 WL

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4947343, at *2 (D. Ariz. Oct. 18, 2011); Aviva, 902 F. Supp. 2d at 1273).)

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The Court agrees that, in some circumstances, business confidentiality and

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competitive standing can be compelling reasons justifying sealing court records, and

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acknowledges that there is some plausibility to Defendant’s concerns. But the Court also

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has doubts as to the concreteness of the harm Defendant claims would result from public

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disclosure of the documents at issue.

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information it seeks to seal is not “the kind of information a utility would ordinarily make

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public.” (Doc. 295 at 4.) Simply because information is not ordinarily made public does

For example, Defendant argues that certain

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not mean its publication necessarily results in harm. Lawsuits regularly result in the

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public disclosure of information that otherwise would remain private. Without a more

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specific explanation linking public disclosure with concrete harm, the Court is left with

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guesswork.

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Moreover, Defendant’s requests seem overbroad. In close cases involving some

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degree of conjecture as to the harm that would result from public disclosure of

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information, courts may grant a motion to seal provided that sealing the document will

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not interfere with the public’s interest in understanding the judicial process. See Aviva

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USA Corp., 902 F. Supp. 2d at 1273. The Court, however, has reviewed the exhibits at

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issue and finds that the information contained within is valuable to the public’s

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understanding of the case.

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Plaintiff brings claims under the Sherman Antitrust Act. The central allegation in

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this case is that Defendant has monopoly power over the electrical grid and has used a

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pricing strategy to eliminate competition from Plaintiff and other distributed solar entities

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by assessing a penalty against customers who use solar energy systems but still need grid

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access. (Doc. 39 ¶¶ 2, 4.) Plaintiff alleges that this pricing strategy exploits the practical

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reality that customers using solar energy systems are unable to completely disconnect

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from the grid. According to Plaintiff, “[t]he penalty is so significant that it eliminates the

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economic value to customers of generating their own power.” (¶ 5.)

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With this context, the Court is concerned that the exhibits Defendant seeks to seal

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contain information necessary for the public to understand the parties’ positions and the

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Court’s rulings. For example, Defendant seeks to seal Exhibit 6 in its entirety. The

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exhibit consists of emails between Defendant’s employees in which the employees

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discuss the amount of kilowatt-hours required for its average customer to completely

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disconnect from the grid. Without this information, the public lacks critical information

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for understanding why Plaintiff believes the fee imposed on customers using distributed

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solar is inescapable (i.e., that as a practical reality, customers are unable to produce and

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store enough energy to completely disconnect from the grid).

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Defendant also seeks to seal Exhibit 11, an internal presentation concerning

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“Emerging Customer Programs.” (Doc. 295 at 3.) Defendant argues that the presentation

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contains “internal forecasts and analyses related to potential future strategies.” (Id.)

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After reviewing the exhibit, the Court notes that the presentation characterizes several

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solar providers as “competition” and offers information on these various entities. The

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presentation also shows the effect on Defendant’s revenue if it does nothing to counteract

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the competition it faces.

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information likely is relevant and valuable to the public’s understanding of the case. (See

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e.g., Doc. 39 ¶ 147 (“[Defendant’s pricing plan] has the purpose and effect of excluding

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competition from distributed solar, including by actually foreclosing competition in the

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market and preventing entry).)

Given the nature of the claims against Defendant, this

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There might be select pieces of information contained within these exhibits that is

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not relevant or only tangentially related to the proceedings before the Court. The Court,

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however, is unable to grant Defendant’s broad requests without also depriving the public

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of other vital information contained within these documents. For example, Defendant

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seeks to seal the entirety of Exhibit 14, an internal strategic planning chart. In part, the

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chart discusses effects of the economy, cybersecurity, and water supply on Defendant’s

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business. Arguably, not all of that information is relevant to this case. The chart,

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however, also includes information on the impact of varying degrees of market

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penetration of distributed solar. If Defendant’s interest in confidentiality pertains only to

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a discrete potion of a document, then its motion to seal should be appropriately limited.

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For these reasons, the Court denies Defendant’s request as it pertains to Exhibits 1,

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4-20, and 22. The Court, however, grants in part Defendant’s request to seal Exhibit 21.

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The exhibit “contains confidential customer information relating to non-sanctioned

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consumer generation as well as aggregated customer data concerning use of certain

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renewable energy technologies.” (Doc. 295 at 5.) Defendant argues that the exhibit

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should be sealed in its entirety because “internal customer data is not the kind of

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information typically made public.” (Id.) As discussed, although the Court finds this

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explanation somewhat plausible, the Court also finds that Defendant’s concern somewhat

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conjectural. The Court will not seal the entire exhibit because information contained

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within the exhibit is useful to the public, but in light of customers’ privacy interests, the

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Court will require that customer last names included in the document be redacted from

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the publicly filed version of the exhibit.

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IT IS ORDERED that Plaintiff’s motion to seal (Doc. 268) is GRANTED. The

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Clerk of Court shall file under seal Exhibits 2 and 3 (lodged at Doc. 271-2 and 271-3)

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and Plaintiff’s Motion and SSUF (lodged Docs. 276 and 277).

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IT IS FURTHER ORDERED that Defendant’s motion (Doc. 295) is
GRANTED IN PART and DENIED IN PART as follows:

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1. Defendant’s motion to seal Exhibits 1, 4-20, and 22 (lodged at Doc. 271-1,

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272-4 through 271-11, 272-1 through 272-9, 272-11) is denied. Within 10 days of the

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date of this order, Plaintiff shall publicly file unredacted versions of these exhibits.

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2. Defendant’s motion to seal Exhibit 21 (lodged at 272-10) is granted in part.

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The Clerk shall file Exhibit 21 under seal, but within 10 days of the date of this order

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Plaintiff shall publicly file a revised version of Exhibit 21 that redacts only customer

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names.

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IT IS FURTHER ORDERED that, within 10 days of the date of this order,

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Plaintiff shall publicly file a revised version of its Motion and SSUF that redacts only the

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information the Court has ordered to be sealed.

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Dated this 8th day of December, 2017.

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Douglas L. Rayes
United States District Judge

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