PNY Technologies, Inc. v. Sandisk Corporation

Filing 192

ORDER DENYING ADMINISTRATIVE MOTION TO SEAL by Hon. William H. Orrick denying 191 Administrative Motion to File Under Seal. SanDisk may submit a renewed motion to seal within seven days of the date of this Order. (jmdS, COURT STAFF) (Filed on 2/20/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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PNY TECHNOLOGIES, INC.,

Case No. 11-cv-04689-WHO

Plaintiff,
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v.

ORDER DENYING ADMINISTRATIVE
MOTION TO SEAL

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SANDISK CORPORATION,

Re: Dkt. No. 191

Defendant.
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United States District Court
Northern District of California

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On February 18, 2014, defendant Sandisk Corporation filed an Administrative Motion to

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File Under Seal Limited Portions of SanDisk’s Motion to Dismiss Counts V and VI of the Second

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Amended Complaint, Portions of the Request for Judicial Notice and Certain Retailer Agreements.

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Dkt. No. 191. For the reasons below, the motion is DENIED WITHOUT PREJUDICE.

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LEGAL STANDARD

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Courts have long recognized a “general right to inspect and copy public records and

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documents, including judicial records and documents.” Nixon v. Warner Commc’ns, Inc., 435

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U.S. 589, 597 & n.7 (1978). But this right is not absolute. To balance the competing interests of

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the public’s right of inspection against litigants’ need for confidentiality, a party seeking to file

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under seal matters related to dispositive motions must provide “compelling reasons” to do so.

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Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1180 (9th Cir. 2006). “Broad allegations

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of harm, unsubstantiated by specific examples or articulated reasoning,” are insufficient. Beckman

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Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992) (internal quotation marks and

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citation omitted). “The mere fact that the production of records may lead to a litigant’s

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embarrassment, incrimination, or exposure to further litigation will not, without more, compel the

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court to seal its records.” Kamakana v. City and Cnty. of Honolulu, 447 F.3d 1172, 1179 (9th Cir.

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2006).

DISCUSSION

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Because the underlying motion is a dispositive motion, the “compelling reasons” standard
applies.
The Court recognizes SanDisk’s effort to provide a narrowly tailored motion to seal that

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complies with the Civil Local Rules. The motion is denied, however, because the proposed

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redactions are ultimately too broad and not sufficiently supported by compelling reasons to file the

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materials under seal. At the end of this Order, the Court identifies information that may be sealed

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if SanDisk wishes.
As an initial matter, for those documents for which SanDisk seeks to file under seal on the

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basis that the information was “[p]reviously ordered redacted by this Court on January 13, 2014[ ]

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United States District Court
Northern District of California

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(Dkt. 184 [ ]),” see Dkt. No. 191-2 at 1, the Court finds that the proposed redactions extend further

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than what the Court has actually ordered redacted. In several instances, the Court only ordered

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names of third parties to be redacted, but SanDisk’s proposed redactions go beyond those. This is

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not appropriate.

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More importantly, many of the proposed redactions—while they are not wholesale

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redactions of entire documents or pages—go beyond what is necessary to protect commercially

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sensitive and third-party information. SanDisk justifies its proposed redactions by arguing that

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“[d]isclosure of this information could allow SanDisk’s competitors to leverage non-public

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information . . . to undercut SanDisk’s negotiations” or could “allow other retailers to gain an

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unfair advantage in negotiations with SanDisk” by demanding terms that other agreements

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contain. SanDisk Decl. ¶ 5. SanDisk further contends that disclosure of the information can

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“giv[e] its competitors and other retailers improper insight into product and supply terms that

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SanDisk has or is willing to accept.” Id. These reasons are neither sufficiently “specific” nor

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“articulated.” Beckman Indus., 966 F.2d at 476. But even assuming that they are, having

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reviewed the materials submitted, the Court is not persuaded that more limited redactions cannot

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protect any “compelling reasons” SanDisk has for seeking to seal the materials.

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This case is ultimately about SanDisk’s agreements with third parties and whether those
agreements could have an unlawful anticompetitive effect. The terms of SanDisk’s agreements go
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to the heart of this case. Accordingly, the public has a right to know on what bases the Court will

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decide the merits of this action. Redacting the names and any particularized identifying

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information of third parties, as well as any numeric figures, is sufficient to protect SanDisk and

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third parties from any harm that disclosure of these documents may cause.

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As the Ninth Circuit decided in Foltz v. State Farm Mutual Auto Insurance Co., “Simply
redacting the identifying information of third parties (e.g., their names, addresses, telephone

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numbers[ ]) from these records and disclosing the remaining information would not injure the

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third parties but would reveal only [the defendant’s] actions . . . . This disclosure might harm [the

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defendant] by exposing it to additional liability and litigation . . . but a litigant is not entitled to the

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court's protection from this type of harm.” 331 F.3d 1122, 1137 (9th Cir. 2003). The same applies

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United States District Court
Northern District of California

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here. While SanDisk argues that the mere disclosure of contractual terms may harm it, a

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competitor or customer could not meaningfully use such information to its benefit without

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knowing who the third party is since that competitor or customer would have no context—such as

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the size, needs, competitive position, and other relevant characteristics of the third party—against

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which to understand those negotiated terms.

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CONCLUSION
The motion is DENIED WITHOUT PREJUDICE. SanDisk may submit a renewed motion

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to seal within seven days of the date of this Order. The only information that may be redacted are

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(1) information for which the Court has already allowed to be filed under seal; (2) the names and

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other discrete identifying information of third parties; and (3) numeric figures, such as dollar

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amounts or product quantities. As with its previous Order on PNY’s motion to file under seal, the

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Court is very unlikely to reconsider this Order. However, if SanDisk can identify any other

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narrow category of information which falls under the “compelling reasons” standard and provides

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specific, “articulable facts” that meet the “high threshold” for sealing documents related to

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dispositive motions, the Court may consider it. Kamakana, 447 F.3d at 1180-81.

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IT IS SO ORDERED.
Dated: February 20, 2014
______________________________________
WILLIAM H. ORRICK
United States District Judge

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United States District Court
Northern District of California

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