Peter Velasco et al v. Chrysler Group LLC

Filing 105

ORDER RE CENTER FOR AUTO SAFETYS MOTION TO UNSEAL 82 AND MOTION TO INTERVENE 81 by Judge Dean D. Pregerson: However, the denial is without prejudice, and CAS is free to move to intervene again in the event that future motions also present questi ons of public access to court records. Additionally, as all parties agree to the unsealing of certain documents, the Court hereby ORDER the Plaintiffs to file a single new document entitled DOCUMENTS PREVIOUSLY FILED, UNSEALED AS ORDERED BY THE COURT comprised of one unredacted copy of each of the following: Naor Decl. (Dkt. No. 55) & Ex. P thereto; Exs. H, Q to Stein Decl. (Dkt. No. 57); Ex. Q. to Hughes Decl. (Dkt. No. 74). (lc). Modified on 12/30/2014. (lc).

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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PETER VELASCO, CHRISTOPHER
WHITE, JACQUELINE YOUNG, and
CHRISTOPHER LIGHT, on behalf
of themselves and all others
similarly situated,

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Plaintiffs,

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v.

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CHRYSLER GROUP LLC ,

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Defendant.
___________________________

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Case No. CV 13-08080 DDP (VBKx)
ORDER RE CENTER FOR AUTO SAFETY’S
MOTION TO UNSEAL AND MOTION TO
INTERVENE
[Dkt. Nos. 81, 82]

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Presently before the Court are motions by nonparty Center for

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Auto Safety (“CAS”) to intervene in this matter and to unseal

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documents related to Plaintiffs’ prior motion for a preliminary

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injunction, (Dkt. No. 49), which was denied on October 27, 2014.

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(Dkt. No. 88.)

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arguments, the Court adopts the following order.

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I.

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Having considered the parties’ submissions and oral

BACKGROUND
This case is a putative class action regarding the alleged

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failure of an electronic control unit, known as the “TIPM-7,”

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installed in a number of late-model Chrysler vehicles.

On March

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26, 2014, Magistrate Judge Kenton issued a protective order

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allowing any party to designate a document in the case

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“Confidential,” which would protect the document from public view.

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(Dkt. No. 35.)

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preliminary injunction authorizing them to send potential class

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members a preliminary notice warning of the potential for dangerous

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component failures in Chryslers equipped with the TIPM-7.

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No. 49.)

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the motion “provisionally under seal,” because the parties were

On September 18, 2014, Plaintiffs moved for a

(Dkt.

Plaintiffs applied to submit certain documents related to

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still attempting to reach settlement.

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nonetheless expressed the opinion that the documents should be in

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the public record, and they requested the right to subject the

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documents to “later motion practice” to unseal “should the parties

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be unable to resolve their disagreement.”

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(Dkt. No. 51.)

Plaintiffs

(Id.)

Defendant similarly filed an application to submit documents

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in opposition to the motion under seal, primarily because the

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documents constituted confidential business information.

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63.)

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documents filed under seal were as follows:

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(Dkt. No.

The Court granted both parties leave to file under seal.

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The

Unredacted copies of the Motion and Memorandum in Support

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of the Motion, the proposed Order, the Opposition, and

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the Reply;

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•

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attached thereto;
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Unredacted declaration of David Stein and Exhibits A-U

Unredacted declaration of Rachel Naor and Exhibit P
attached thereto;

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Unredacted declaration of James Bielenda and Exhibits A-D
attached thereto;
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•

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Exhibits B, C, E, F, and Q attached to the declaration of
Dylan Hughes;

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The parties’ various applications and proposed orders

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regarding the sealing of the above documents.

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On October 27, 2014 the Court heard oral arguments and denied the

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motion for preliminary injunction.

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(Dkt. No. 88.)

On October 23, 2014, nonparty CAS filed these motions to

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intervene in the case and to unseal the sealed portions of the

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record on the motion for preliminary injunction.

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82.)

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II.

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Defendant opposes the motions.

(Dkt. Nos. 81,

(Dkt. Nos. 95, 96.)

LEGAL STANDARD
“Nonparties seeking access to a judicial record in a civil

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case may do so by seeking permissive intervention under Rule 24(b)

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. . . .”

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(San Jose), 187 F.3d 1096, 1100 (9th Cir. 1999).

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ordinarily requires the intervenor to show “(1) an independent

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ground for jurisdiction; (2) a timely motion; and (3) a common

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question of law and fact between the movant's claim or defense and

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the main action.”

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470, 473 (9th Cir. 1992).

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intervene solely for the limited purpose of ensuring public access

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to court documents, no independent ground for jurisdiction is

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required.

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San Jose Mercury News, Inc. v. U.S. Dist. Court--N. Dist.
Rule 24(b)

Beckman Indus., Inc. v. Int'l Ins. Co., 966 F.2d
However, where a nonparty proposes to

Id.

Ordinarily, there is a strong presumption that court records

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should be open to public inspection.

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Inc., 435 U.S. 589, 597 (1978).

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absolute, and public access may be denied, for example, where the

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records involved contain sensitive business information, the

Nixon v. Warner Commc'ns,

However, the right is not

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release of which “might harm a litigant’s competitive standing.”

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Id. at 598.

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court finds ‘compelling reasons.’

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cause’ standard applies to . . . previously sealed discovery

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attached to a nondispositive motion.’”

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F.3d 1024, 1025 (9th Cir. 2014) (citations omitted) (internal

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quotation marks omitted).

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III. ANALYSIS

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A.

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“[M]ost judicial records may be sealed only if the
However, a less exacting ‘good

Oliner v. Kontrabecki, 745

Motion to Intervene
CAS argues that it has satisfied the requirements for

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permissive intervention under Rule 24(b), because it has intervened

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in a timely manner and its attempt to unseal documents in the case

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clearly shares “common questions of law and fact” with the main

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action.

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requirements, but argues that the Court should nonetheless deny the

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motion to intervene because the intervention could prejudice the

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adjudication of its rights, CAS’s interests are adequately

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represented by the original parties, and it does not serve the

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principle of judicial economy to allow CAS to intervene.

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Mot. Intervene at 2-8.)

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Defendant does not dispute that CAS meets these

(Opp’n to

On the merits, the Court finds it likely that CAS has the

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better argument.

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sole purpose of unsealing the documents in question, and the Motion

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to Unseal is denied, Part III.B. infra.

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for CAS to be a party to this action.

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therefore denied without prejudice.

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B.

Motion to Unseal

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1.

Legal Standard

Nonetheless, the proposed intervention is for the

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There is no other reason

The Motion to Intervene is

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The public is presumptively entitled to review court records.

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Ordinarily, a party must show “compelling reasons” to seal a court

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document.

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1178 (9th Cir. 2006).

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cause” to keep sealed records attached to a “non-dispositive”

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motion.

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preliminary injunction was such a “non-dispositive” motion.

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argues, on the other hand, that a motion for preliminary injunction

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can be “dispositive” if “the documents at issue are, in fact,

Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172,

Id. at 1180.

However, the party need only show “good

Defendant argues that the motion for
CAS

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relevant to the merits of a case.”

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14.)

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merits, the preliminary injunction motion should be considered

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“dispositive,” and Defendant should be required to show “compelling

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reasons” why the documents should remain sealed.

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(Reply ISO Mot. Unseal at 5:12-

Here, CAS argues, the documents sought are relevant to the

There is little clarity as to what, exactly, constitutes a

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“dispositive” motion.

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motions are dispositive, and that discovery sanctions motions are

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non-dispositive, the distinction has not been articulated by the

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Ninth Circuit.”

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09-CV-1553 L (NLS), 2009 WL 2224596, at *6 (S.D. Cal. July 23,

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2009) (citations omitted).

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Idaho case, Melaleuca Inc. v. Bartholomew, for the proposition that

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a motion for preliminary injunction is a dispositive motion,

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because “[i]njunctive relief proceedings involve significant

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discussion of the merits of the case.”

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WL 5931690, at *2 (D. Idaho Nov. 27, 2012) (internal quotation mark

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omitted).

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2011 WL 1630338, *5 (D.Nev.2011); Dish Network, 2009 WL 2224596, at

“Aside from noting that summary judgment

Dish Network L.L.C. v. Sonicview USA, Inc., No.

Plaintiff cites a recent District of

No. 4:12-CV-00216-BLW, 2012

See also Selling Source, LLC v. Red River Ventures, LLC,

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*6.

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reasons.

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The Court does not find this argument persuasive, for two

First, it ignores the plain meaning of the word “dispositive”:

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motions for preliminary injunction do not actually create any sort

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of “disposition,” in the sense of a final determination on some

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issue.1

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almost identical to those made by CAS here, precisely because the

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preliminary injunction did not offer a final resolution on the

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merits:

The Northern District of California rejected arguments

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According to the media entities . . . a preliminary injunction

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is dispositive because such a motion “inevitably involve[s]

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consideration of the merits of a dispute.”

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misconstrues the discussion in Kamakana, which emphasizes the

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“resolution of a dispute on the merits,” not the mere

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“consideration” of the merits.

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place undue emphasis on the Kamakana court's characterization

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of non-dispositive motions (that such motions “are often

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unrelated, or only tangentially related, to the underlying

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cause of action.”) . . . .

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In view of the Ninth Circuit's reasoning, the court concludes

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that a preliminary injunction motion is not dispositive

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because, unlike a motion for summary adjudication, it neither

But this argument

The media entities similarly

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Black's, for example, defines “disposition” as “[a] final
settlement or determination” and “dispositive” as “bringing about a
final determination.” Black's Law Dictionary 505 (8th ed.2004).
See also In re Seracare Life Sciences, Inc., No. 05-CV-2335-H
(CAB), 2007 WL 935583, at *16 (S.D. Cal. Mar. 19, 2007) (“[B]ecause
the case against KPMG will be over if the Court grants its motion,
KMPG's motion is dispositive.”).
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resolves a case on the merits nor serves as a substitute for

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trial.

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In re Nat'l Sec. Agency Telecommunications Records Litig., No. MDL

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06-1791 VRW, 2007 WL 549854, at *3-4 (N.D. Cal. Feb. 20, 2007)

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(emphasis added).

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C06-04332 SI, 2007 WL 196682 (N.D. Cal. Jan. 24, 2007) (treating

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motion for TRO as non-dispositive).

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See also Reilly v. MediaNews Grp. Inc., No.

Second, even if the Melaleuca, Selling Source, and Dish
Network courts are correct that a motion for a preliminary

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injunction can be a dispositive motion, it does not follow that

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every motion for an injunction will be dispositive.

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determination should depend on the nature of the relief requested.

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For example, in Dish Network, the district court granted

Likely that

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plaintiff satellite television companies’ ex parte motion for a

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temporary restraining order and a writ of civil seizure against

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manufacturers of equipment allowing consumers to “intercept and

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steal” the plaintiffs’ signals.

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*1.

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continuing a disputed business practice – a temporary version of

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the relief requested in the underlying lawsuit.

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order to grant the motion, the court had to peek into the merits of

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the case, in order to determine that there was sufficient evidence

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of the piracy alleged in the underlying case.

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covered no other extraneous matters; thus, the court’s decision on

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the TRO was limited to, and fundamentally dependent on, an

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examination of the merits of the case.

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Dish Network, 2009 WL 2224596, at

The motion asked the court to enjoin a defendant from

Necessarily, in

Moreover, the TRO

In this case, however, the motion was not a motion to
temporarily grant the relief ultimately sought in underlying suit;
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rather, it was a request to send notice of potential problems with

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Defendant’s vehicles to thousands of purchasers.

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whether to send such notice necessarily involved consideration of

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the widest possible range of vehicles, some of which may ultimately

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be weeded out by the parties in the course of litigation.

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involved evidence and issues which may ultimately not factor into

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the underlying case.

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requested a writ of seizure, which was necessary to prevent the

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destruction of evidence crucial to the main case.

Determining

Thus, it

Moreover, in Dish Network the plaintiff

Here, however,

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the prosecution of the main case did not turn on the outcome of the

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motion; the case could easily have continued without the motion

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ever being filed at all.

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the motion in this case was not even intended to aid in the

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ultimate disposition of the case.

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Thus, unlike the motion in Dish Network,

Because the motion for preliminary injunction here was not a

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resolution of any issue on the merits, was broader and shallower in

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scope than a true consideration of the merits, and was not

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necessary to the resolution of the case, the Court finds that the

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motion was not dispositive.

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Because the motion was a non-dispositive motion, and the

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exhibits attached to it were sealed under the magistrate’s

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protective order, the Court conducts its analysis under the good

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cause standard, not the compelling reasons standard.

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2.

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Good Cause to Keep Documents Sealed
The Court finds that in this case there is good cause to keep

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the documents sealed at this time, for at least three reasons.

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First, a number of the documents seem to include Defendant’s

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technical information, which could comprise trade secrets.
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Of

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course, technical information is only a trade secret if it provides

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competitors with some useful advantage.2

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which are obvious to anyone in the industry do not count as trade

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secrets.3

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Techniques and processes

In a declaration attached to the Opposition, James Bielenda,

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Chrysler’s Manager of Product Investigations, explains that some of

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the documents could provide competitors with information about

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Defendant’s manufacturing and testing processes, specifications,

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and standards, as well as Defendant’s “operational capacity.”

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(Bielenda Decl., ¶¶ 14-17.)

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competitors with specific guidance as to how to manufacture their

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own products more efficiently, without having to engage in the

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expensive research and development that Defendant has already done.

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The disclosure of such specific technical information, in other

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words, would enable competitors to “leapfrog” Defendant’s hard

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engineering work and unfairly reap the competitive rewards.

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Under this rationale, documents which contain specific

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technical information about Defendant’s manufacturing and testing

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processes, or product standards and tolerances, are likely to be

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trade secrets.

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limited briefing, the group of documents containing such

Such information could provide

As far as the Court can determine at present, given

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“The economic value of that property right [in a trade
secret] lies in the competitive advantage over others that Monsanto
enjoys by virtue of its exclusive access to the data, and
disclosure or use by others of the data would destroy that
competitive edge.” Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1012
(1984).
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Self Directed Placement Corp. v. Control Data Corp., 908 F.2d
462, 465 (9th Cir. 1990) (affirming a district court holding that
“[i]t would be absurd to permit [the [plaintiff] to appropriate as
his own ‘secrets’ common pedagogical and job search techniques
which would be used in any job placement course.”).
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information would likely encompass at least the following: Exhibits

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A-C, E, and J-P (Dkt. No. 57); the Bielenda Decl. (Dkt. No. 65) and

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Exhibit A thereto; and Exhibits E and F to Hughes Decl. (Dkt. No.

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74).

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Other documents currently under seal seem to have less claim

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to trade secret status; the bulk of the remaining documents are

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internal communications among Defendant’s employees, or between its

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employees and outside contractors, that do not appear to contain

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significant technical information.

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between counsel.

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A few others are letters

this time.

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Nonetheless, the Court declines to unseal them at

Important policy considerations favor not unsealing the

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documents.

As Defendant points out, the record at this time is

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incomplete.

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failures, and manufacturers’ responsibility for such failures, is

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one of the key functions of this kind of litigation, it is also

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important that the Court not release information that could become

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“a vehicle for improper purposes.”

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435 U.S. 589, 598 (1978).

One such improper purpose would be to

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“promote public scandal.”

Id.

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no reference to CAS itself, there is some danger that the wide

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publication of selected, out-of-context materials, in a matter that

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is only in the early stages of litigation, could unnecessarily harm

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Defendant and present an unfair picture of the alleged facts to the

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public.4

While bringing to light and publicly examining product

Nixon v. Warner Commc'ns, Inc.,

Speaking generally, with absolutely

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Of course, “[t]he mere fact that the production of records
may lead to a litigant's embarrassment, incrimination, or exposure
to further litigation will not, without more, compel the court to
(continued...)
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This concern is bolstered by the fact that, even with complete

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access to the sealed documents, the Court could not come to any

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solid conclusion as to what they might prove – which is why the

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Court denied the motion for preliminary injunction in the first

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place.

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discovery documents that the Court itself found inconclusive has

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great potential to mislead the public.

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(Dkt. No. 88.)

The disclosure of early, incomplete

This is particularly the case when it comes to the disclosure
of small snippets of informal corporate communications, which may

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frequently be incomplete, inaccurate, jocular, or filled with an

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insider’s shorthand or jargon.

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easily become the “gotcha” quote in headlines and press releases,

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and Defendant would be forced to litigate the case in court and

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litigate in the press.

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TIPM-7 failures are ongoing both inside and outside the company,

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the Court is leery of creating an environment that would chill free

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and open communication among Defendant’s engineers, or incentivize

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the use of closed-door meetings that leave no paper trail.

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An offhand remark in an email can

Moreover, as investigations of alleged

The motion to unseal is therefore denied, except for the
documents described in Part III.B.4., infra.
This is not to say that these documents may never be unsealed,

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or that identical information will not become available to the

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public in the course of the litigation.

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upon to make dispositive rulings, the “compelling reasons” standard

When the Court is called

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(...continued)
seal its records.” Kamakana v. City & Cnty. of Honolulu, 447 F.3d
1172, 1179 (9th Cir. 2006). Certainly, in the event that the full
adjudication of this case reveals facts that are embarrassing to
Defendant, that will provide no reason to hide them from public
view.
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will apply, and Defendant will be granted much less deference in

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protecting its technical information and its internal

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communications.

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will be less concern that disclosure could give a false impression

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or unnecessarily promote public scandal.

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subject Defendant’s alleged trade secrets to significantly more

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scrutiny at that point.

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limited to the narrow question posed – whether the sealed documents

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documents submitted in support of arguments about the motion for

Because the record will be more complete, there

The Court may also

The Court emphasizes that this order is

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preliminary injunction should be unsealed at this time.

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3.

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Briefs and Declarations
In its Reply, CAS argues that “[b]ecause the parties’ briefing

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and declarations on the motion for preliminary injunction are not

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even arguably discovery documents, they cannot possibly fall under

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the exception to the presumption of public access for sealed

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discovery documents attached to non-dispositive motions.

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. . . the compelling reasons standard indisputably applies to these

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records.”

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highly literal reading of the rule that completely negates its

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intended effect.

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document to a motion or brief except in order to make reference to

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its contents, and it would be nonsensical to carefully exempt the

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discovery document from disclosure, only to allow full disclosure

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of citations to it in a briefing paper.

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to the discovery documents and to the references to them in the

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briefs and declarations.

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declarations remain under seal.

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///

(Reply ISO Mot. Unseal at 6.)

Therefore

This argument relies on a

There can be no reason to attach a discovery

The same standard applies

The redacted portions of the briefs and

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4.

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Disclosures Agreed to by Defendant
Defendant has no objection to the unsealing of: Naor Decl. &

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Ex. P thereto; Stein Decl., Exs. H, Q; Hughes Decl., Ex. Q.

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to Mot. Unseal at 1 n.1.).

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unsealed.

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IV.

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(Opp’n

These documents will therefore be

CONCLUSION
CAS’s Motion to Intervene and Motion to Unseal are DENIED.

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However, the denial is without prejudice, and CAS is free to move

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to intervene again in the event that future motions also present

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questions of public access to court records.

Additionally, as all

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parties agree to the unsealing of certain documents, the Court

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hereby ORDER the Plaintiffs to file a single new document entitled

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“DOCUMENTS PREVIOUSLY FILED, UNSEALED AS ORDERED BY THE COURT”

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comprised of one unredacted copy of each of the following: Naor

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Decl. (Dkt. No. 55) & Ex. P thereto; Exs. H, Q to Stein Decl. (Dkt.

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No. 57); Ex. Q. to Hughes Decl. (Dkt. No. 74).

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IT IS SO ORDERED

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Dated: December 30, 2014
DEAN D. PREGERSON
United States District Judge

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