Trone et al v. Peanut Corporation of America

Filing 332

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Trone et al v. Peanut Corporation of America Doc. 332 1 QUINN EMANUEL URQUHART OLIVER & HEDGES, LLP Timothy L. Alger (Bar No. 160303) 2 Leah J. Russin (Bar No. 225336) 3 4 865 South Figueroa Street, 10th Floor Los Angeles, California 90017-2543 5 Telephone: (213) 443-3000 6 Facsimile: (213) 443-3100 7 Attorneys for CondéNet Inc. and Wired News 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN FRANCISCO DIVISION 11 12 TASH HEPTING, GREGORY HICKS, CAROLYN JEWEL and ERIC KNUTZEN 13 on Behalf of Themselves and All Others Similarly Situated, 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 09325/1932356.1 CASE NO. CV-06-0672-VRW NOTICE OF MATTER UNDER SUBMISSION AND REQUEST TO BE HEARD AT CASE MANAGEMENT CONFERENCE Hearing Date: August 8, 2006 Time: 2:00 p.m. Place: Courtroom 6, 17th Floor (Hon. Vaughn R. Walker) Complaint Filed: January 31, 2006 Plaintiffs, vs. AT&T CORP., et al., Defendants. Case No. CV-06-0672-VRW NOTICE OF MATTER UNDER SUBMISSION AND REQUEST TO BE HEARD 1 2 INTRODUCTION Proposed intervenors CondéNet Inc. and Wired News respectfully provide 3 notice to the Court and the parties, pursuant to Local Rule 7-13, that their motion to 4 intervene and for an order unsealing documents remains under submission. Proposed 5 intervenors urge the Court to rule on the motion, notwithstanding the Court's interim stay 6 of proceedings or any stay on appeal, and request the opportunity to be heard on this issue 7 at the Case Management Conference to be held on August 8, 2006. 8 9 10 BACKGROUND Lycos, Inc. and Wired News moved to intervene and for an order unsealing 11 documents in this action on May 23, 2006 (Docket No. 139). The motion sought the 12 disclosure of the Klein and Marcus Declarations and Exhibits A-C to the Klein 13 Declaration, which were filed under seal in support of plaintiffs' Motion for Preliminary 14 Injunction (Docket Nos. 229, 230, 231). The motion to intervene and for unsealing was 15 taken under submission by the Court after hearing on June 23, 2006 (Docket No. 281). 16 On July 20, 2006, the Court denied the motions of defendant AT&T 17 Corporation and intervenor United States to dismiss the complaint (Docket No. 308). 18 However, the Court has not ruled on the motion of Lycos and Wired News, nor has it ruled 19 on the motion to intervene and for an order unsealing documents filed by USA Today, 20 Associated Press, Bloomberg News, Los Angeles Times, San Francisco Chronicle, and San 21 Jose Mercury News (Docket No. 133). 22 On August 2, 2006, the Court granted an interim stay, and informed the 23 parties that it would hear argument on the motions of AT&T and the government to stay 24 proceedings pending appeal on August 8, 2006 (Docket No. 330). 25 On August 4, 2006, Lycos, Inc., Wired News and the parties stipulated to the 26 substitution of CondéNet Inc. for proposed intervenor Lycos, Inc. (which sold Wired News 27 to CondéNet Inc. on July 11, 2006) and submitted a proposed order to the Court (Docket 28 No. 331). 09325/1932356.1 Case No. CV-06-0672-VRW -1NOTICE OF MATTER UNDER SUBMISSION AND REQUEST TO BE HEARD 1 2 ARGUMENT The United States Supreme Court and the Circuits consistently have held that 3 the presumption of access to judicial records necessarily includes a right of immediate and 4 contemporaneous access. See Nebraska Press Ass'n v. Stuart, 427 U.S. 539, 560 (1976); 5 Continental Illinois Securities Litigation, 732 F.2d, 1302, 1310 (7th Cir. 1984). "The 6 newsworthiness of a particular story is often fleeting. To delay or postpone disclosure 7 undermines the benefit of public scrutiny and may have the same result as complete 8 suppression." Grove Fresh Distributors, Inc. v. Everfresh Juice Co., 24 F.3d 893, 897 (7th 9 Cir. 1994); see also Valley Broadcasting Co. v. U.S. District Court, 798 F.2d 1289, 1292, 10 1297 (9th Cir. 1986) (writ relief proper where judge denied immediate access to trial 11 exhibits). "[E]ach passing day may constitute a separate and cognizable infringement of 12 the First Amendment." Nebraska Press Ass'n v. Stuart, 423 U.S. 1327, 1329 (1975) 13 (Blackmun, J., in chambers). 14 Immediate access is not merely for the convenience of the press; rather, it is 15 a critical structural element in our judicial system. "[P]ublic access to court proceedings is 16 one of the numerous 'checks and balances' of our system, because 'contemporaneous 17 review in the form of public opinion is an effective restraint on possible abuse of judicial 18 power.'" Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 588, 592 (Brennan, J., 19 concurring) (quoting In re Oliver, 333 U.S. 257, 270 (1943)); see also State of Cal. v. 20 Safeway, Inc., 355 F. Supp. 2d 1111, 1125 (C.D. Cal. 2005) (presumption of access exists 21 to permit citizens "to observe, monitor, understand and critique their courts . . . because 22 what transpires within our courtrooms belongs to our citizens in a fundamental way"). 23 Intervention was properly and timely sought in this action for the purpose of 24 obtaining access to documents that had been filed under seal. See San Jose Mercury News 25 v. U.S. District Court, 187 F.3d 1096, 1100 (9th Cir. 1999) (approving intervention by the 26 press). Although the parties have filed redacted versions of the Klein and Marcus 27 declarations (Docket Nos. 147, 277), substantial portions of those documents remain 28 secret, and the exhibits to the Klein Declaration remain sealed in their entirety. 09325/1932356.1 Case No. CV-06-0672-VRW -2NOTICE OF MATTER UNDER SUBMISSION AND REQUEST TO BE HEARD 1 Proposed intervenors argued in their moving papers and at the June 23 2 hearing that (1) AT&T has not carried its burden of establishing that the sealed documents 3 and redacted portions of the declarations are protected trade secrets, and, in any event, 4 (2) AT&T's private interests must yield the far more important public interest in access to 5 court proceedings involving the privacy and speech rights of many millions of Americans. 6 Proposed intervenors requested that the Court, if it is not inclined to unseal the documents 7 in their entirety, appoint a neutral technical advisor to assist the Court in determining 8 whether any of the documents at issue contain trade secrets and, if so, what redactions are 9 appropriate. 10 The Court acknowledged the importance of the Klein Declaration in its 11 Order denying the motions to dismiss. While the Court made its factual determination that 12 the subject matter of the litigation was not a "secret" based on the public statements of 13 AT&T and the government, the Court quoted extensively from the Klein Declaration and a 14 statement by Klein published by Wired News, and the Court reached its conclusions about 15 the disclosures of AT&T and the government based in part on press reports, many of 16 which were based on the Klein materials. (See Docket No. 308 at 23-27, 29-31.)1 Also, 17 the Court heard argument based on, and has placed under seal, a binder prepared by 18 plaintiffs' counsel that apparently contains information extracted from the Klein materials. 19 (See Docket Nos. 284 (transcript at 65-69), 320, 327.) 20 21 22 23 24 25 26 27 28 09325/1932356.1 The absurdity of the continued redaction of the Klein Declaration and sealing of its exhibits is established by the Court's citation on pages 23-24 of its Order to the Wired News posting on April 7, 2006 of Klein's out-of-court, unsworn statement describing AT&T's installation of fiber-optic splitting equipment for the government. Rather than cite to the redacted Klein Declaration, which even redacts the location of the AT&T facilities in question, the Court was compelled to turn to an unsworn statement published by the news media. (Exhibit J to the Erickson Declaration (Docket No. 43-2).) It also is noteworthy that, while the Court retains information under seal at the request of AT&T, in possibly one of the most important cases now pending in this country, AT&T has sought no other legal remedy for what it contends was a theft of its trade secrets. Case No. CV-06-0672-VRW -3NOTICE OF MATTER UNDER SUBMISSION AND REQUEST TO BE HEARD 1 1 Plaintiffs' reliance on this evidence and the Court's references to Klein's in- 2 and out-of-court statements in its July 20, 2006 Order establish that the redacted and sealed 3 documents go to the heart of this case. Given this, only the Court, and not the parties, can 4 determine what should be sealed. See San Jose Mercury News, 187 F.3d at 1101 ("The 5 right of access to court documents belongs to the public, and the Plaintiffs were in no 6 position to bargain that right away."); Kamakana v. City & County of Honolulu, 447 F.3d 7 1172, 1183 (9th Cir. 2006) (court is not bound by agreement of the parties). The Court 8 may not simply accept the redacted filings by the parties -- which plaintiffs' counsel 9 acknowledged at the June 23 hearing were the product of compromise. (Docket No. 284, 10 at 120-21.) Rather, the Court must independently determine whether AT&T has met its 11 burden of establishing that the materials are trade secrets and, if they are, whether AT&T's 12 private interests outweigh those of the public. Kamakana, 447 F.3d at 1179-80 ("a district 13 court must 'base its decision on a compelling reason and articulate the factual basis for its 14 ruling, without relying on hypothesis or conjecture'").2 15 As the Court is aware, appeal from the July 20, 2006 Order will consume 16 many months. If the Court does not rule on the submitted motions to intervene and for 17 unsealing, the public will be deprived throughout this period of access to vital evidence 18 that the Court has read and considered, simply because AT&T has made a self-interested 19 and unscrutinized assertion that the materials contain trade secrets. Given that plaintiffs' 20 claims rest on inferences drawn from the Klein materials; the public should have access to 21 22 23 24 25 26 27 28 09325/1932356.1 The Court's election not to explicitly base its July 20, 2006 Order on the Klein Declaration does not make moot the motion to intervene and for unsealing. In In re Coordinated Pretrial Proceedings., 101 F.R.D. 34, 44 (C.D. Cal. 1984), the court rejected the defendants' "conclusory statements regarding commercial sensitivity" and required them to establish that there was "a significant and specific need for continued protection." This applied to materials that had not been the basis for any adjudication: "If the rationale behind access is to allow the public an opportunity to assess the corrrectness of the judge's decision, documents that the judge should have considered or relied upon, but did not, are just as deserving of disclosure as those that actually entered the judge's decision." Id. at 43 (original emphasis). Case No. CV-06-0672-VRW -4NOTICE OF MATTER UNDER SUBMISSION AND REQUEST TO BE HEARD 2 1 the documents to judge for itself whether those inferences are properly drawn or whether, 2 as AT&T contends, the interception described by Klein is benign. Further, it is now that 3 the public and Congress are debating the legality and propriety of the government's 4 interception program, and a national election approaches. Delaying access in this case is 5 undoubtedly the same as denying access. 6 The Court declined to dismiss the action because a blanket assertion of 7 secrecy did not trump the Court's constitutional duty to adjudicate the disputes that come 8 before it, "particularly because the very subject matter of this litigation has been so 9 publicly aired." (Docket No. 308, at 36.) The Court should similarly consider the well10 settled public right of contemporaneous access to judicial records, particularly in light of 11 the gravity of plaintiffs' claims and the importance of this litigation to the public. 12 Accordingly, the Court should rule on the submitted motion of CondéNet 13 Inc. and Wired News to intervene and for an order unsealing documents. The motion was 14 timely filed and heard, and prompt public access to the documents remains as critical today 15 as it was when they were filed under seal. Neither the interim stay nor any stay pending 16 appeal should delay or preclude a ruling on the motion. 17 18 19 CONCLUSION For the foregoing reasons, as well as those stated in the moving papers, 20 CondéNet Inc. and Wired News request that the Court rule on their motion to intervene 21 and to unseal the Declaration of Mark Klein and Exhibits A-C (Docket No. 230), and the 22 Declaration of J. Scott Marcus (Docket No. 231). 23 DATED: August 7, 2006 24 25 26 27 28 09325/1932356.1 Respectfully submitted, QUINN EMANUEL URQUHART OLIVER & HEDGES, LLP By /s/ Timothy L. Alger Timothy L. Alger Attorneys for CondéNet Inc. and Wired News Case No. CV-06-0672-VRW -5NOTICE OF MATTER UNDER SUBMISSION AND REQUEST TO BE HEARD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 09325/1932356.1 Case No. CV-06-0672-VRW -6NOTICE OF MATTER UNDER SUBMISSION AND REQUEST TO BE HEARD

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