Pinterest, Inc. v. Pintrips, Inc.

Filing 112

Order by Magistrate Judge Kandis A. Westmore denying 107 Renewed Administrative Motion to File under Seal.(kawlc2S, COURT STAFF) (Filed on 11/20/2014)

1
2
3
4
5

UNITED STATES DISTRICT COURT

6

NORTHERN DISTRICT OF CALIFORNIA

7
PINTEREST, INC.,

8

Case No. 13-cv-04608-RS (KAW)

Plaintiff,
9
v.

ORDER DENYING RENEWED
ADMINISTRATIVE MOTION TO FILE
UNDER SEAL

10
PINTRIPS, INC.,

11

Re: Dkt. No. 107

United States District Court
Northern District of California

Defendant.
12
13

Before the Court is Defendant's renewed administrative motion to file documents under

14
15

seal. Plaintiff opposes the motion, which is now ripe for ruling pursuant to Civil Local Rules 79-

16

5(d) and 7-11(c). For the reasons set forth below, the motion is DENIED.

17

I.

BACKGROUND

On November 7, 2014, this Court denied Plaintiff's administrative motion to file four

18
19

exhibits to its motion for sanctions under seal. (Nov. 7, 2014 Order, Dkt. No. 104.) The exhibits

20

included a list of investors and potential investors, portions of deposition transcripts, and

21

responses to interrogatories. (Pl.'s Mot., Exs. G-I, K, Dkt. No. 103.) Plaintiff brought the motion

22

for the sole reason that the exhibits "contain information disclosed during discovery that

23

Defendant . . . designated as 'Highly Confidential – Attorneys' Eyes Only." (Id. at 1, 2.)
On November 14, 2014, Defendant filed a "Renewal of Administrative Motion to File

24
25

Under Seal."1 (Def.'s Mot., Dkt. No. 107.) In the motion, Defendant requests that the four

26
27
28

1

Despite this caption, Defendant docketed the motion as one for reconsideration. The Court notes
that construed as such, the filing would be improper because Defendant has not sought leave of
Court as required by Civil Local Rule 7-9(b).

1

exhibits at issue in Plaintiff's motion, which have now been filed on the public docket, be filed

2

under seal. (Id. at 1.)
II.

3

LEGAL STANDARD

4

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

5

documents, including judicial records and filings. Nixon v. Warner Commc’ns, Inc., 435 U.S. 589,

6

597 (1978). Unless a particular record is one traditionally kept secret, i.e., grand jury transcripts

7

or pre-indictment warrant materials, a strong presumption in favor of access applies. Kamakana v.

8

City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006).

9

Two standards generally govern motions to file documents under seal. Pintos v. Pac.
Creditors Ass’n, 605 F.3d 665, 677 (9th Cir. 2010). The "compelling reasons standard" applies to

11
United States District Court
Northern District of California

10

most court documents, including those filed in connection with a dispositive motion, while the

12

"good cause" standard applies to private materials "unearthed during discovery," including those

13

filed in connection with a non-dispositive motion. Id.; Phillips v. General Motors Corp., 307 F.3d

14

1206, 1213 (9th Cir. 2002).

15

Because sealed discovery documents attached to a non-dispositive motion "are often

16

unrelated or only tangentially related to the underlying cause of action," the usual presumption of

17

access is rebutted. Kamakana, 447 F.3d at 1179 (citing Phillips, 307 F.3d at 1213) (internal

18

quotations and further citations omitted). For this reason, a "particularized showing" of good

19

cause as contemplated by Federal Rule of Civil Procedure 26(c) will suffice to seal documents

20

produced in discovery and attached to non-dispositive motions. Kamakana, 447 F.3d at 1180;

21

Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003) (holding that the

22

Phillips exception is "expressly limited to the status of materials filed under seal when attached to

23

a non-dispositive motion"). The moving party must demonstrate "for each particular document it

24

seeks to protect, . . . that specific prejudice or harm will result if no protective order is granted."

25

Foltz, 331 F.3d at 1130. Broad allegations of harm, unsubstantiated by specific examples or

26

articulated reasoning are insufficient. Beckman Indus., Inc. v. Int'l Ins. Co., 966 F.2d 470, 476

27

(9th Cir. 1992).

28

In this district, motions to file documents under seal in civil cases are governed by Civil
2

1

Local Rule 79-5. That rule provides: "A sealing order may issue only upon a request that

2

establishes that the document, or portions thereof, are privileged, protectable as a trade secret or

3

otherwise entitled to protection under the law . . . ." Civil L.R. 79-5(b). In addition, if a party

4

seeks "to file under seal a document that has been designated confidential by an opposing party or

5

a non-party . . . the designating party must file a declaration establishing that all of the designated

6

material is sealable." Civil L.R. 79-5(e). "Reference to a stipulation or protective order that

7

allows a party to designate certain documents as confidential is not sufficient to establish that a

8

document, or portions thereof, are sealable." Civil L.R. 79-5(d)(1)(A).
III.

9
A.

10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21

Court explained that the sole reason for bringing the motion, i.e., that Defendant designated the
information confidential pursuant to the parties' stipulated protective order, was insufficient to
establish that the documents were sealable pursuant to Civil Local Rule 79-5(b). (Nov. 7, 2014
Order at 1 (citing Civil L.R. 79-5(b)).) The Court explained that, as stated in Civil Local Rule 795(d)(1)(A), "'[r]eference to a stipulation or protective order that allows a party to designate certain
documents as confidential is not sufficient to establish that a document, or portions thereof, are
sealable.'" (Nov. 7, 2014 Order at 2 (citing Civil L.R. 79-5(d)(1)(A)).) The Court also highlighted
that Defendant had not, as required by Civil Local Rule 79-5(e)(1), filed a "'declaration . . .
establishing that all of the designated material is sealable.'" (Nov. 7, 2014 Order at 1-2 (citing
Civil L.R. 79-5(e)(1)).
B.

23

25
26

The Court's November 7, 2014 order denying Plaintiff's administrative motion
to file documents under seal

In the order denying Plaintiff's administrative motion to file documents under seal, the

22

24

DISCUSSION

Defendant's renewed administrative motion to file documents under seal

In its renewed motion, Defendant essentially challenges the Court's previous order based
on two declarations from Defendant's founder and CEO, Stephen Gotlieb. (Def.'s Mot. at 1.) The
first declaration, filed on August 21, 2014, was submitted in support of a motion for a protective
order2 concerning certain discovery to be propounded on Defendant's investors. (Mot. for

27
28

2

The Court denied the motion for a protective order. It determined that Mr. Gotlieb's good faith
3

1
2
3
4
5
6
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

Protective Order, Dkt. No. 73.) That declaration reads, in pertinent part:
6.
Pintrips is prepared, willing, and able to comply with this Court's
order. Pintrips remains concerned about the possible crippling harm that would
result from Pinterest's taking the identifying information about the investors and
potential investors, and issuing subpoenas to those individuals.
7.
I have a good faith basis to believe that, were Pinterest to issue such
subpoenas, Pintrips' investors and potential investors would react to the resulting
intrusion by either ceasing to invest in Pintrips, or declining to invest or invest
further in Pintrips.
8.
As a startup, similarly to Pinterest, Pintrips relies on investor
funding for the capital necessary to develop its business. Revenues to date for
Pintrips are insufficient to supply that capital. If Pintrips were to no longer receive
funding from investors, Pintrips' ability to continue in business would be severely
compromised.
(Gotlieb Decl. I, Dkt. No. 73-13.) This declaration was not filed within four days of Plaintiff's
motion to file documents under seal, see Civil Local Rule 79-5(e)(1), nor was it included with
Defendant's renewed motion. (See Def.'s Mot.)
The relevant portion of the second declaration, dated November 13, 2014, reads:
4.
Exhibits G, H, I, and K of Pinterest's Motion for Sanctions contain
Pintrips' highly confidential information, relating to identification of Pintrips'
investors and potential investors (Exhibits G and K), and questioning of me by
Pinterest's counsel at my deposition about investors and potential investors
(Exhibits H and I).
5.
My August 21, 2014 Declaration indicated the extreme sensitivity of
information relating to Pintrips' investors and potential investors. The sensitivity of
this information has remained unchanged since then.
(Gotlieb Decl. II, Dkt. No. 107-1.) This is the only declaration filed with the instant motion.
This Court rejects Defendant's position that it was Plaintiff's responsibility to reference the
declaration in its motion to file under seal. Civil Local Rule 79-5(e)(1) only requires that a party
seeking to file another party's confidential information under seal (1) identify the document that
contains the designated confidential material, (2) identify the party that has designated the material
as confidential, and (3) serve a declaration containing that information on the designating party.
The responsibility to file a supporting declaration that establishes the sealable nature of the
material at issue falls squarely on the designating party, in this case, Defendant. Civil L.R. 79-

belief that involving Defendant's investors in this litigation would cripple its business was
speculation. Sept. 4, 2014 Order, Dkt. No. 83. The declaration did not establish good cause then,
and as discussed below, it does not establish good cause now.
4

1

5(e)(1) ("Within 4 days of the filing of the Administrative Motion to File Under Seal, the

2

Designating Party must file a declaration as required by subsection 79-5(d)(1)(A) establishing that

3

all of the designated material is sealable."). If, as Defendant asserts, "Mr. Gotlieb's August 21

4

Declaration adequately placed before the Court the highly confidential nature of the information

5

contained in the Exhibits sought to be filed under seal," then Defendant should have filed it in

6

response to Plaintiff's motion, or, at the very least, together with the instant motion.

7

Nonetheless, even if the August 21 declaration were properly before the Court, it does not,

8

either by itself or together with the November 13 declaration, establish good cause for sealing the

9

documents at issue. Neither Mr. Gotlieb's beliefs about the possible effects of involving
Defendant's investors in this litigation, nor his opinions about the sensitivity of the documents at

11
United States District Court
Northern District of California

10

issue, establish good cause for filing the documents under seal. These broad allegations of harm,

12

unsubstantiated by specific examples or articulated reasoning, fall short of the particularized

13

showing necessary to justify a sealing order. See, e.g., In re Blackwell, 263 B.R. 505 (W.D. Tex.

14

2000) (bankruptcy court abused its discretion by permitting investors to conceal their identities in

15

court documents because they feared for their safety). Cf. Caxton Int'l Ltd. v. Reserve Int'l

16

Liquidity Fund, Ltd., No. 09 Civ. 782 (PGG), 2009 WL 2365246, at *6 (S.D.N.Y. July 30, 2009)

17

(permitting filing of investor names under seal because in cases involving non-party investors in

18

certain funds or non-party customers of a business, "courts in th[e] District have allowed parties"

19

to do so). In this District, motions to file under seal are not granted as a matter of course. A party

20

must make the requisite showing. Here, Mr. Gotlieb's statements simply fail to establish that "the

21

document, or portions thereof, are privileged, protectable as a trade secret or otherwise entitled to

22

protection under the law." See Civil L.R. 79-5(b).

23

In addition, while Mr. Gotlieb's August 21 declaration may have had some understandable

24

connection to Defendant's earlier motion for a protective order, it does not help Defendant here.

25

In that declaration, Mr. Gotlieb stated that his company would suffer "crippling harm" if the

26

identity of his company's investors and potential investors were revealed to Plaintiff. (See Gotlieb

27

Decl. I ¶ 6.) Yet Plaintiff now knows the identities of those investors and potential investors, see

28

Pl.'s Opp'n at 3, and interestingly, Mr. Gotlieb's November 13 declaration is free of any reference
5

1

to any harm, much less crippling harm, that has resulted from the disclosure of that information to

2

Plaintiff. (See Gotlieb Decl. II.) For this reason, what have proved to be unfounded concerns

3

about revealing the identities of investors and potential investors to Plaintiff do not persuade the

4

Court that this same information should be concealed from the public.

5

On a final note, the Court acknowledges that Plaintiff initially filed its administrative

6

motion to file documents under seal at 5:49 p.m. on October 24, 2014, not on October 28, 2014 as

7

indicated in the Court's previous order. The Court agrees that an email to defense counsel at 2:42

8

p.m. on the day of the filing gave defense counsel insufficient time to meaningfully comment on

9

Plaintiff's motion. Nonetheless, Defendant had notice of the motion as early as October 24, 2014,
and it still did not act within the 4 days following the filing of the original motion to file under

11
United States District Court
Northern District of California

10

seal, which occurred on October 24, 2014, or the re-filed motion to file under seal, which was

12

docketed on October 28, 2014. Instead, Defendant waited until November 14, 2014, seven days

13

after the Court's November 7, 2014 order, to file anything concerning the exhibits at issue. There

14

is no justification for Defendant's failure to act promptly, and Defendant has failed to establish that

15

the designated material is sealable.
IV.

16

CONCLUSION

17

For the reasons set forth above, Defendant's renewed motion is DENIED.

18

IT IS SO ORDERED.

19
20
21

Dated: 11/20/2014
______________________________________
KANDIS A. WESTMORE
United States Magistrate Judge

22
23
24
25
26
27
28
6