Munoz, et al. vs. PHH Mortgage Corp., et al.

Filing 374

ORDER Approving the Filing of Radian's Cendant Mortgage, Captive Mortgage Reinsurance Presentation Under Seal, signed by District Judge Dale A. Drozd on 11/14/2016. (1. Plaintiffs' unopposed 361 motion to seal is granted; 2. Radians Cedant Mortgage, Captive Mortgage Reinsurance Presentation, Exhibit twenty-two in support of plaintiff's motion for summary judgment (Doc. No. 340-4 at 79), shall be filed under seal.)(Gaumnitz, R)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

FOR THE EASTERN DISTRICT OF CALIFORNIA

10
11
12

EFRAIN MUNOZ, et al., individually and
on behalf of all others similarly situated,
Plaintiffs,

13
v.

14
15

No. 1:08-cv-00759-DAD-BAM

PHH CORP., et. al.,
Defendants.

16

ORDER APPROVING THE FILING OF
“RADIAN’S CENDANT MORTGAGE,
CAPTIVE MORTGAGE REINSURANCE
PRESENTATION” UNDER SEAL
(Doc. No. 361)

17
In this certified class action, plaintiffs seek to recover damages for alleged kickbacks and

18
19

fee-splits in violation of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §

20

2601. (Doc. No. 288.) On September 9, 2016, both parties filed motions for summary judgment.

21

(Doc. Nos. 340 and 342.) On the same date, defendants also filed a motion seeking to decertify

22

the class as well as a motion to strike plaintiffs’ expert witnesses. (Doc. Nos. 336 and 339.) On

23

September 16, 2016, the court issued an order denying without prejudice a joint administrative

24

motion for leave to file under seal numerous documents and deposition transcripts in support of

25

these motions. (Doc. No. 343.) On October 11, 2016, plaintiffs filed an unopposed renewed

26

administrative motion, this time seeking leave to file under seal a single document: “Radian’s

27

Cedant Mortgage, Captive Mortgage Reinsurance Presentation” (“Radian Presentation”), Exhibit

28

/////
1

1

twenty-two in support of plaintiff’s motion for summary judgment. (Doc. No. 361 at 3.) For the

2

following reasons, the motion to seal is granted.

3
4
5
6
7
8
9
10

LEGAL STANDARDS
“Two standards generally govern motions to seal documents[.]” Pintos v. Pac. Creditors
Ass’n, 605 F.3d 665, 677 (9th Cir. 2010).
[J]udicial records attached to dispositive motions [are treated]
differently from records attached to non-dispositive motions. Those
who seek to maintain the secrecy of documents attached to
dispositive motions must meet the high threshold of showing that
“compelling reasons” support secrecy. A “good cause” showing
under Rule 26(c) will suffice to keep sealed records attached to
non-dispositive motions.
Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1180 (9th Cir. 2006).

11

Under the “compelling reasons” standard applicable to dispositive motions,

12

[T]he court must conscientiously balance the competing interests of
the public and the party who seeks to keep certain judicial records
secret. After considering these interests, if the court decides to seal
certain judicial records, it must base its decision on a compelling
reason and articulate the factual basis for its ruling, without relying
on hypothesis or conjecture.

13
14
15
16

Id. at 1178–79 (internal quotation marks, brackets and citations omitted).

17

“In general, ‘compelling reasons’ sufficient to . . . justify sealing court records exist when

18

such ‘court files might . . . become a vehicle for improper purposes,’ such as the use of records to

19

gratify private spite, promote public scandal, circulate libelous statements, or release trade

20

secrets.” Id. at 1179 (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). “The

21

mere fact that the production of records may lead to a litigant’s embarrassment, incrimination, or

22

exposure to further litigation will not, without more, compel the court to seal its records.” Id.

23

“The ‘compelling reasons’ standard is invoked even if the dispositive motion, or its attachments,

24

were previously filed under seal or protective order.” Kamakana, 447 F.3d at 1178–79.

25
26

ANALYSIS
Plaintiffs now move to file under seal only the Radian Presentation document in support

27

of the motion for summary judgment. Because the request is in connection to a dispositive

28

motion, the “compelling reasons” standard applies. Plaintiffs move to seal the single document at
2

1

issue at the request of Radian, who is not a party to this lawsuit but who originally produced the

2

document to defendants under a confidentiality order in connection with proceedings before the

3

Consumer Financial Protection Bureau. (Doc. No. 361 at 3–4.) Plaintiffs argue that the Radian

4

Presentation should now be filed under seal because it contains compiled commercial information

5

of the type not customarily released to the public that Radian has consistently designated as

6

confidential for many years. (Id. at 4.) Specifically,
The Radian Presentation was prepared to market Radian’s services
and to outline the unique benefits that Radian could offer to PHH’s
predecessor, Cendant Mortgage. See Exhibit 22 attached to EWC
Decl. Plaintiffs understand that Radian believes that having the
Radian Presentation become part of the public record would
negatively affect it because it would give its competitors access to
non-public information that Radian uses to promote its own
business.

7
8
9
10
11
12

(Id.) Accordingly, plaintiffs argue that the Radian Presentation constitutes “trade secrets” and

13

should remain sealed. (Id. at 4–7.)
“In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in disclosure

14
15

and justify sealing court records exist when such ‘court files might have become a vehicle for

16

improper purposes,’ such as the use of records to . . . release trade secrets.” Kamakana, 447 F.3d

17

at 1179 (quoting Nixon, 435 U.S. at 598).
A “trade secret may consist of any formula, pattern, device or
compilation of information which is used in one’s business, and
which gives him an opportunity to obtain an advantage over
competitors who do not know or use it.” Restatement of Torts
§ 757, cmt. b; see also Clark v. Bunker, 453 F.2d 1006, 1009 (9th
Cir. 1972) (adopting the Restatement definition and finding that “a
detailed plan for the creation, promotion, financing, and sale of
contracts” constitutes a trade secret); Whyte v. Schlage Lock Co.,
101 Cal.App.4th 1443, 1455–56 (2002).

18
19
20
21
22
23

In re Elec. Arts, Inc., 298 F. App’x 568, 569–70 (9th Cir. 2008).1

24

The court has reviewed the document in question and finds that it indeed contains

25

information constituting “trade secrets.” The Radian Presentation includes Radian’s confidential

26

financial projections for its product captive mortgage reinsurance. Therefore, there are

27
28

1

Citation to this unpublished Ninth Circuit opinion is appropriate pursuant to Ninth Circuit Rule
36-3(b).
3

1

“compelling reasons” to file this document under seal and the present motion is granted.

2

CONCLUSION

3

For the reasons set forth above:

4

1. Plaintiffs’ unopposed motion to seal (Doc. No. 361) is granted;

5

2. “Radian’s Cedant Mortgage, Captive Mortgage Reinsurance Presentation,” Exhibit

6

twenty-two in support of plaintiff’s motion for summary judgment (Doc. No. 340-4 at

7

79), shall be filed under seal.

8
9

IT IS SO ORDERED.
Dated:

November 14, 2016
UNITED STATES DISTRICT JUDGE

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4