Advanced Steel Recovery, LLC v. X-Body Equipment, Inc. et al

Filing 59

ORDER signed by District Judge Kimberly J. Mueller on 10/31/16 GRANTING 57 Request to seal documents. (Washington, S)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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ADVANCED STEEL RECOVERY, LLC,

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Plaintiff,

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No. 2:16-cv-00148-KJM-EFB

v.

ORDER

X-BODY EQUIPMENT, INC., et al.,

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Defendants.

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Defendants X-Body Equipment, Inc. and Jewell Attachments, LLC (collectively,

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“defendants”) renew their request for an order sealing exhibits one, two and four to the

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declaration of Greg Bushong filed in connection with defendants’ motion to dismiss with

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prejudice or, in the alternative, for summary judgment, and for sanctions. Renewed Req. Seal,

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ECF No. 57-1. Defendants’ request is unopposed. As explained below, the court GRANTS

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defendants’ request to seal.

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I.

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BACKGROUND
A.

First Request to Seal
On September 9, 2016, defendants requested the court issue an order sealing

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exhibits one, two and four to the declaration of Greg Bushong. ECF No. 53-1 at 2. In support of

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their request, defendants provided little more than conclusory statements, contending the exhibits
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were invoices that contained pricing, product, and customer information, all of which was highly

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confidential. Id.

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The court denied defendants’ request to seal without prejudice. ECF No. 55 at 1.

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In denying defendants’ request, the court concluded defendants did not meet the high threshold

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showing of “compelling reasons” to support the requested secrecy. Id. at 3. In particular,

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defendants’ request did not clarify “what information on the invoices [was] confidential, why it

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might harm defendants for that information to become public, or why defendants’ interests could

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not be protected instead by redaction.” Id. In the end, the court admonished the defendants,

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warning if they again filed another unsupported request to seal, they would be required to show

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cause why they should not be subject to monetary sanctions. Id.

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B.

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Renewed Request to Seal
On September 20, 2016, defendants filed their renewed request to seal. Renewed

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Req. Seal at 2. In this request, defendants ask the court approve redaction of the “confidential

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pricing and cost information” contained in exhibits one, two and four and seal the unredacted

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versions of the exhibits. Id. Before making their request, however, defendants filed redacted

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versions of exhibits one, two and four on the docket. See ECF Nos. 56-1, 56-2, 56-4.

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II.

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LEGAL STANDARD
“[T]he courts of this country recognize a general right to inspect and copy public

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records and documents, including judicial records and documents.” Nixon v. Warner Commc’ns,

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435 U.S. 589, 597 (1978). While “the right to inspect and copy judicial records is not absolute,”

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access in civil cases is properly denied for clearly justifiable reasons: to protect against

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“gratif[ication of] private spite or promot[ion of] public scandal” or to preclude court dockets

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from becoming “reservoirs of libelous statements” or “sources of business information that might

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harm a litigant’s competitive standing.” Id. at 598 (citations omitted). As the Ninth Circuit

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instructs, a “strong presumption in favor of access” to the record governs in a court of law unless

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the case or a part of it qualifies for one of the relatively few exceptions “traditionally kept secret,”

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with secrecy allowed for good reasons. Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122,

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1135 (9th Cir. 2003). “Those who seek to maintain the secrecy of documents attached to
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dispositive motions must meet the high threshold of showing that ‘compelling reasons’ support

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secrecy.” Kamakana v. City and Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (citing

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Foltz, 331 F.3d at 1136). The compelling-reasons standard applies even if contents of the

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dispositive motion or its attachments have previously been filed under seal or are covered by a

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generalized protective order, including a discovery phase protective order. See Foltz, 331 F.3d

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at 1136.

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III.

DISCUSSION

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Here, the court finds defendants have met the “compelling reasons” standard. As

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recounted above, “the right to inspect and copy judicial records is not absolute,” and access in

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civil cases may be properly denied for clearly justifiable reasons, including the need to protect

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against revealing “sources of business information that might harm a litigant’s competitive

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standing.” Nixon, 435 U.S. at 598. Here, defendants have now articulated why the pricing

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information in exhibits one, two and four qualifies was confidential; they contend such

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information is not generally disseminated to the public, and they have taken steps to protect the

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information as trade secret; if competitors knew the specifics of defendants’ pricing, they could

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use the information to undercut defendants’ pricing and make sales at defendants’ expense.

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Renewed Req. Seal at 3. The court finds these reasons compelling. This court’s conclusion

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aligns with the Ninth Circuit’s unpublished but persuasive decision in In re Elec. Arts, Inc., 298

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F. App’x 568, 570 (9th Cir. 2008). In that case, the court found compelling reasons to grant the

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petitioner company’s motion to seal pricing terms; it concluded if the information was released,

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the company “would be irreparably damaged in a way not correctable on appeal.” Id.1 Moreover,

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defendants’ position that the pricing information itself is not material to the motion pending

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before the court appears sound, offsetting the need for this particular information to be made

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public.

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The Ninth Circuit’s holding is not binding on this court. See Ninth Circuit Rule 36–3;
Johnson v. Nevada ex rel. Bd. of Prison Comm’rs, No. 11–00487, 2013 WL 5428423, at *7
(D. Nev. Sept. 26, 2013) (under Ninth Circuit Rule 36–3, unpublished Ninth Circuit opinions
have “only persuasive rather than authoritative or precedential value”); see also Gray v. Astrue,
No. 11–294, 2012 WL 4097762, at *9 (D. Idaho Sept. 17, 2012) (same).
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Accordingly, defendants’ request to seal the unredacted versions of exhibits one,

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two and four is GRANTED. The court notes that defendants filed redacted versions of the

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exhibits on the docket without first requesting court authorization, in violation of Local Rule

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140(b). See E.D. Cal. L.R. 140(b) (“No other redactions are permitted unless the Court has

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authorized the redaction.”). Because the court concludes compelling reasons exist to redact the

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exhibits, the court will not strike redacted exhibits one, two and four from the docket. Instead, the

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court admonishes defendants to comply with the Local Rules in the future or risk sanctions.

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IV.

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CONCLUSION
For the foregoing reasons, defendants’ motion to seal unredacted versions of

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exhibits one, two and four to the declaration of Greg Bushong, filed in connection with

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defendants’ motion to dismiss with prejudice or, in the alternative, for summary judgment, and

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for sanctions, is GRANTED.

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IT IS SO ORDERED.
DATED: October 31, 2016.

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UNITED STATES DISTRICT JUDGE

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