Starbucks Corporation v. Amcor Packaging Distribution, et al.,

Filing 110

ORDER RE; REQUEST TO SEAL DOCUMENTS signed by Senior Judge William B. Shubb on 3/18/16. IT IS THEREFORE ORDERED that Plaintiff Starbucks Corporation's and cross-defendant Ozburn-Hessey Logistics' requests to seal or redact the Agreement, (Docket Nos. 42, 108), be, and the same hereby, are DENIED. IT IS FURTHER ORDERED that Exhibits A through C submitted in support of Ozburn-Hessey Logistics' MOTION for Summary Judgment, (Docket Nos. 107-2 to 107-4), and all other written materials in this action shall not be filed under seal.(Mena-Sanchez, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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----oo0oo----

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STARBUCKS CORPORATION, a
corporation,
Plaintiff,

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ORDER RE: REQUESTS TO SEAL
DOCUMENTS

v.
AMCOR PACKAGING DISTRIBUTION,
a corporation; AMCOR
PACKAGING (USA), INC., a
corporation; and PALLETS
UNLIMITED, LLC, a limited
liability company,

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Civ. No. 2:13-1754 WBS CKD

Defendants,
v.
OZBURN-HESSEY LOGISTICS, a
corporation,
Third-Party Defendant.

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----oo0oo---Plaintiff Starbucks Corporation (“Starbucks”) brought

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this action against defendants Amcor Packaging Distribution,

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Amcor Packaging (USA), Inc., and Pallets Unlimited, LLC (“Pallets
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Unlimited”) after discovering mold on its unroasted green coffee

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that was stored and shipped on wooden pallets provided by

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defendants.

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supplied it with defective pallets that caused the mold.

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Pallets Unlimited filed a third-party complaint against Ozburn-

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Hessey Logistics (“OHL”), the owner and operator of a warehouse

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located in Sparks, Nevada (“Sparks facility”) where Starbucks’

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unroasted green coffee and the wooden pallets were stored before

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they were shipped to Starbucks’ roasting plants.

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(Docket No. 1.)

Starbucks alleges that defendants
(Id.)

(First Am.

Third-Party Compl. ¶¶ 7-10 (Docket No. 46).)

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On March 8, 2016, OHL moved for summary judgment on

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Pallets Unlimited’s sole claim for equitable indemnity.

(Docket

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No. 104.)

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version of the written contract between OHL and Starbucks

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detailing OHL’s duties regarding the storage of Starbucks’ coffee

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at its warehouses (the “Agreement”).

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A-C (“Ag.”) (Docket Nos. 107-1 to 107-4).)

In support of the motion, OHL included a redacted

(Johnson Decl. ¶¶ 4-6, Exs.

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The Agreement is comprised of the Master Warehouse-

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Logistics Agreement, Nashville Distribution Center supplement

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regarding OHL’s facility in Nashville, Tennessee (“Nashville

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Supplement”), Sparks Green Bean Warehouse supplement regarding

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OHL’s Sparks facility in Sparks, Nevada (“Sparks Supplement”),

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and an amendment to the Sparks Supplement where OHL agrees to

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store certain Starbucks finished goods at its Sparks facility in

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addition to green coffee.

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issued in this case concerning the Agreement.

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To date, no protective order has

A party seeking to seal a judicial record bears the
burden of overcoming a strong presumption in favor of public
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access.

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1178 (9th Cir. 2006).

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reasons supported by specific factual findings that outweigh the

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general history of access and the public policies favoring

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disclosure, such as the public interest in understanding the

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judicial process.”

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Kamakana v. City & County of Honolulu, 447 F.3d 1172,
The party must “articulate compelling

Id. at 1178-79 (citation omitted).

“[T]he strong presumption of access to judicial records

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applies fully to dispositive pleadings, including motions for

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summary judgment and related attachments . . . because the

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resolution of a dispute on the merits, whether by trial or

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summary judgment, is at the heart of the interest in ensuring the

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‘public’s understanding of the judicial process and of

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significant public events.’”

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ruling on a motion to seal, notwithstanding the other party’s

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failure to object, the court must balance the competing interests

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of the public and the party seeking to keep the records secret.

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Id.

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I. OHL’s Request to Seal or Redact the Agreement

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Id. at 1179 (citation omitted).

In

OHL states it filed the redacted version of the

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Agreement at Starbucks’ request because the document contains

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sensitive business information that is subject to a

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confidentiality agreement between OHL and Starbucks.

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108 at 2; Shipley Decl. ¶ 4 (Docket No. 109).)

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explanation why the confidentiality agreement contained in the

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Sparks Supplement has been fully redacted, but an exactly

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identical confidentiality agreement in the Nashville Supplement

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has been filed unredacted.

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id. Ex. B at OHL0045.)

(Docket No.

There is no

(Compare Ag. Ex. A at OHL0028, with

Both confidentiality agreements also
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contain provisions titled “EXCEPTIONS TO CONFIDENTIAL

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INFORMATION,” which provide that information is not confidential

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if it must be disclosed “pursuant to judicial order or other

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compulsion of law.”

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(E.g., id. Ex. A at OHL0028.)

This court has previously pointed out that a private

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confidentiality agreement does not per se constitute a compelling

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reason to seal or redact a record that outweighs the interests of

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public disclosure and access.

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(Docket No. 33)); Sept. 3, 2015 Order at 3, Foster Poultry Farms,

(E.g., Oct. 8, 2014 Order at 2

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Inc. v. Certain Underwriters at Lloyd’s, London, Civ. No. 1:14-

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953; Sept. 18, 2015 Order at 2, Rosales v. City of Chico, Civ.

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No. 2:14-2152.

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it asserts constitute sensitive business information or explain

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why that information is sensitive and should be sealed or

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redacted from the public record.

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cannot find a compelling reason to seal the document.

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II. Starbucks’ Request to Seal or Redact the Agreement

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OHL does not specifically identify the provisions

Absent any guidance, the court

Starbucks had filed a request to seal or redact the

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Agreement in connection with OHL’s motion to dismiss Pallet

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Unlimited’s original third-party complaint.

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Docket Nos. 29-31, 33.)

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contained “trade secret and proprietary information” and attached

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a redacted version it claimed “eliminate[d] the sensitive and

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confidential information of concern.”

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No. 42-1); Kirsch Decl. Ex. A (Docket Nos. 42-2 to 42-4).)

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court, however, declined to consider the Agreement altogether for

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purposes of OHL’s motion to dismiss.

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7 (Docket No. 44).)

(Docket No. 42; see

Starbucks argued that the Agreement

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(Ferrell Decl. ¶ 5 (Docket
The

(See Nov. 5, 2014 Order at

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Starbucks’ previously-filed version of the Agreement

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had redacted the entirety of the Sparks Supplement based upon

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Starbucks’ assertions it contained trade secrets and sensitive

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information that, if disclosed, presented a security risk and

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commercial disadvantage to Starbucks.

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Ferrell Decl. ¶¶ 3-4.)

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here in support of OHL’s motion for summary judgment as having

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“been redacted of such assertedly confidential or proprietary

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information”; yet this version discloses the majority of the

(See Kirsch Decl. Ex. A;

But Starbucks approved the version filed

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Sparks Supplement.

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inconsistency suggests that Starbucks’ assertions about the

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sensitive nature of the information contained in the Agreement

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were not entirely accurate.

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(Shipley Decl. ¶ 4; see Ag. Ex. B.)

This

Starbucks argued that disclosing intake procedures and

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security services at its storage facilities “present[ed] very

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real security risks for Starbucks facilities and products.”

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(Ferrell Decl. ¶ 3.)

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describes its intake procedures at length, (Ag. Ex. B at OHL0053–

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57), and details the physical requirements of the storage

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facility and surrounding grounds, (e.g., id. at OHL0049 (facility

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floors must be “sealed concrete, minimum 6" thick” and exterior

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doors “fitted with tight seals”)).

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security services OHL provided, (e.g., id. at OHL0054 (“assist

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fully with cargo security investigations involving theft,

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contraband, contamination, mismatched/missing seals”)), and

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provides the types of security credentials required at OHL’s

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facilities, (e.g., id. Ex. A § 3.4 (granting “Starbucks 24-hour

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access, via a security password, to its computerized inventory

Yet the version Starbucks approved here

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Starbucks also discloses the

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and distribution software system”)).

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contended that the “mere disclosure of the location of such large

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amounts of Starbucks green coffee presents a commercial risk to

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Starbucks which cannot be quantified.”

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version approved here, however, discloses the address of the

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Sparks facility.

Starbucks had additionally

(Ferrell Decl. ¶ 3.)

The

(Ag. Ex. B at OHL0042.)

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Starbucks also argued that information such as

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temperature specifications and product handling requirements were

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trade secrets because they took “years of experience to develop

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and many hours to negotiate.”

(Ferrell Decl. ¶ 4.)

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reason to believe this information constitutes sensitive business

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information given that the version Starbucks approved for public

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view reveals its temperature specifications, (Ag. Ex. B at

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OHL0050 (“storage temperature of 45-85 degrees Fahrenheit and a

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relative humidity of 50-55%”)), and describes its product

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handling requirements in full detail, (e.g., id. at OHL0055-61

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(requiring OHL to palletize bags of coffee on pre-weighed pallet

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boards, weigh the full pallets, and receive into inventory; sew

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torn bags of coffee on the spot using a large needle and twine;

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record product item numbers, devanning dates, bag counts, lot

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codes, and weights on all pallet tags; set aside stained bags of

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coffee into a reconditioning area containing three clean burlap

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sacks, “two dustpans, a utility knife, a sack sewing needle,

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twine, and a tare scale”; cut stained bags in crisscross manner,

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peel back, and use dustpans to isolate “moldy or adulterated

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coffee from the good coffee by creating a barrier between the

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two”; remove adulterated coffee and the outer layer of good

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coffee, place good coffee into clean bags, and send samples from
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It strains

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bags to Starbucks; rotate all products first-in-first-out).)

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Accordingly, because the above facts demonstrate that

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Starbucks’ assertions regarding the sensitive nature of the

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information in the Agreement are not entirely accurate, the court

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will deny Starbucks’ request to seal or redact the Agreement.

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III. Relevance of the Agreement to Motion for Summary Judgment

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Once a matter is brought to the court for resolution,

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it is a public matter.

M.P. ex rel. Provins v. Lowe’s Cos., Civ.

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No. 2:11-1985 GEB CKD, 2012 WL 1574801, at *2 (E.D. Cal. May 3,

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2012).

OHL asserts that the redactions in the version it filed

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“do not include any of the contractual terms cited or relied upon

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in OHL’s motion [for summary judgment]” and “have no apparent

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bearing on the merits [of] OHL’s motion or this action.”

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(Shipley Decl. ¶ 5.)

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The court disagrees.

OHL argues in its motion that “no

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provision of the [Agreement] required OHL to physically inspect

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incoming pallets.”

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amount of information bearing on that issue is redacted from the

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Agreement.

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65).)

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“coffee samples were shipped to Starbucks in a timely manner.”

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(Mot. at 14.)

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sampling and outbound shipping procedures are also redacted here.

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(E.g., Ag. Ex. A at OHL0030-31, Ex. B at OHL0058-60.)

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further argues that it “minimized the likelihood of a problem

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arising with any of the Starbucks property stored in its

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facility” by following standard operating procedures.

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14.)

(Mot. at 5 (Docket No. 104).)

A considerable

(E.g., Ag. Ex. A at OHL0030-31, Ex. B at OHL0062-

OHL also contends in its motion that its employees ensured

The provisions governing OHL’s green coffee

OHL

(Mot. at

Yet substantial portions of those standard operating
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procedures are redacted from the Agreement.

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OHL0030-33, Ex. B at OHL0047-65.)

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(E.g., Ag. Ex. A at

OHL’s motion for summary judgment also puts into issue

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Pallets Unlimited’s contentions that OHL’s failure to comply with

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operating procedures and meet Starbucks’ minimum performance

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standards constitute evidence of OHL’s breach of its duty to act

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as a reasonable warehouse services provider.

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e.g., App. of Evid. in Supp. of OHL’s Mot. (“App. Evid.”) Ex. L

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at 7 (indicating that OHL failed several Starbucks’ compliance

(Mot. at 12 n.6;

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sections) (Docket No. 107-14).)

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measured OHL’s performance and determined whether it met minimum

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acceptable levels are also redacted.

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OHL0034-39, Ex. B at OHL0066-69.)

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contends that Starbucks ultimately canceled the Agreement with

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OHL because OHL had stored improper products near the green

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coffee.

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section of the Sparks Supplement amendment regarding OHL’s

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storage of Starbucks’ finished goods has been redacted.

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C at OHL0004.)

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The methods by which Starbucks

(E.g., Ag. Ex. A at

Pallets Unlimited further

(Mot. Ex. R at 7 (Docket No. 107-20).)

An entire

(Ag. Ex.

Furthermore, the court has previously indicated that

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the Agreement is relevant to Pallets Unlimited’s equitable

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indemnity claim.

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(Docket No. 45) (“[W]e don’t know that [OHL’s duty of care]

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arises from the contract because we have to look to the contract

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to see whether it does.”), 21:5-7 (“I can't get away from the

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fact that I think the contract has some relevant provisions that

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would bear upon my decision on this motion.”).

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that Starbucks, in bringing this action, and OHL, in bringing its

(E.g., Tr. Hr’g at 5:15-17, Nov. 3, 2014

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It thus appears

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pending motion for summary judgment, have waived any privilege

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that may have existed in the Agreement.

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will deny their requests to seal or redact the Agreement.

Accordingly, the court

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IT IS THEREFORE ORDERED that plaintiff Starbucks

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Corporation’s and cross-defendant Ozburn-Hessey Logistics’

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requests to seal or redact the Agreement, (Docket Nos. 42, 108),

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be, and the same hereby, are DENIED.

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IT IS FURTHER ORDERED that Exhibits A through C
submitted in support of Ozburn-Hessey Logistics’ motion for

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summary judgment, (Docket Nos. 107-2 to 107-4), and all other

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written materials in this action shall not be filed under seal.

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IT IS SO ORDERED.
Dated:

March 18, 2016

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