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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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 6 PNY TECHNOLOGIES, INC., Case No. 11-cv-04689-WHO Plaintiff, 7 v. ORDER DENYING ADMINISTRATIVE MOTION TO SEAL 8 9 SANDISK CORPORATION, Re: Dkt. No. 191 Defendant. 10 United States District Court Northern District of California 11 On February 18, 2014, defendant Sandisk Corporation filed an Administrative Motion to 12 13 File Under Seal Limited Portions of SanDisk’s Motion to Dismiss Counts V and VI of the Second 14 Amended Complaint, Portions of the Request for Judicial Notice and Certain Retailer Agreements. 15 Dkt. No. 191. For the reasons below, the motion is DENIED WITHOUT PREJUDICE. 16 LEGAL STANDARD 17 Courts have long recognized a “general right to inspect and copy public records and 18 documents, including judicial records and documents.” Nixon v. Warner Commc’ns, Inc., 435 19 U.S. 589, 597 & n.7 (1978). But this right is not absolute. To balance the competing interests of 20 the public’s right of inspection against litigants’ need for confidentiality, a party seeking to file 21 under seal matters related to dispositive motions must provide “compelling reasons” to do so. 22 Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1180 (9th Cir. 2006). “Broad allegations 23 of harm, unsubstantiated by specific examples or articulated reasoning,” are insufficient. Beckman 24 Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992) (internal quotation marks and 25 citation omitted). “The mere fact that the production of records may lead to a litigant’s 26 embarrassment, incrimination, or exposure to further litigation will not, without more, compel the 27 court to seal its records.” Kamakana v. City and Cnty. of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 28 2006). DISCUSSION 1 2 3 4 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 5 complies with the Civil Local Rules. The motion is denied, however, because the proposed 6 redactions are ultimately too broad and not sufficiently supported by compelling reasons to file the 7 materials under seal. At the end of this Order, the Court identifies information that may be sealed 8 if SanDisk wishes. As an initial matter, for those documents for which SanDisk seeks to file under seal on the 10 basis that the information was “[p]reviously ordered redacted by this Court on January 13, 2014[ ] 11 United States District Court Northern District of California 9 (Dkt. 184 [ ]),” see Dkt. No. 191-2 at 1, the Court finds that the proposed redactions extend further 12 than what the Court has actually ordered redacted. In several instances, the Court only ordered 13 names of third parties to be redacted, but SanDisk’s proposed redactions go beyond those. This is 14 not appropriate. 15 More importantly, many of the proposed redactions—while they are not wholesale 16 redactions of entire documents or pages—go beyond what is necessary to protect commercially 17 sensitive and third-party information. SanDisk justifies its proposed redactions by arguing that 18 “[d]isclosure of this information could allow SanDisk’s competitors to leverage non-public 19 information . . . to undercut SanDisk’s negotiations” or could “allow other retailers to gain an 20 unfair advantage in negotiations with SanDisk” by demanding terms that other agreements 21 contain. SanDisk Decl. ¶ 5. SanDisk further contends that disclosure of the information can 22 “giv[e] its competitors and other retailers improper insight into product and supply terms that 23 SanDisk has or is willing to accept.” Id. These reasons are neither sufficiently “specific” nor 24 “articulated.” Beckman Indus., 966 F.2d at 476. But even assuming that they are, having 25 reviewed the materials submitted, the Court is not persuaded that more limited redactions cannot 26 protect any “compelling reasons” SanDisk has for seeking to seal the materials. 27 28 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 2 1 to the heart of this case. Accordingly, the public has a right to know on what bases the Court will 2 decide the merits of this action. Redacting the names and any particularized identifying 3 information of third parties, as well as any numeric figures, is sufficient to protect SanDisk and 4 third parties from any harm that disclosure of these documents may cause. 5 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 7 numbers[ ]) from these records and disclosing the remaining information would not injure the 8 third parties but would reveal only [the defendant’s] actions . . . . This disclosure might harm [the 9 defendant] by exposing it to additional liability and litigation . . . but a litigant is not entitled to the 10 court's protection from this type of harm.” 331 F.3d 1122, 1137 (9th Cir. 2003). The same applies 11 United States District Court Northern District of California 6 here. While SanDisk argues that the mere disclosure of contractual terms may harm it, a 12 competitor or customer could not meaningfully use such information to its benefit without 13 knowing who the third party is since that competitor or customer would have no context—such as 14 the size, needs, competitive position, and other relevant characteristics of the third party—against 15 which to understand those negotiated terms. 16 17 CONCLUSION The motion is DENIED WITHOUT PREJUDICE. SanDisk may submit a renewed motion 18 to seal within seven days of the date of this Order. The only information that may be redacted are 19 (1) information for which the Court has already allowed to be filed under seal; (2) the names and 20 other discrete identifying information of third parties; and (3) numeric figures, such as dollar 21 amounts or product quantities. As with its previous Order on PNY’s motion to file under seal, the 22 Court is very unlikely to reconsider this Order. However, if SanDisk can identify any other 23 narrow category of information which falls under the “compelling reasons” standard and provides 24 25 26 27 28 3 1 specific, “articulable facts” that meet the “high threshold” for sealing documents related to 2 dispositive motions, the Court may consider it. Kamakana, 447 F.3d at 1180-81. 3 4 5 6 IT IS SO ORDERED. Dated: February 20, 2014 ______________________________________ WILLIAM H. ORRICK United States District Judge 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

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