Loop AI Labs, Inc. v. Gatti et al

Filing 695

ORDER by Judge Haywood S. Gilliam, Jr. Granting in part and denying in part 643 Administrative Motion to File Under Seal. (ndrS, COURT STAFF) (Filed on 5/20/2016)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

LOOP AI LABS INC,
Plaintiff,

8
v.

9
10

ANNA GATTI, et al.,
Defendants.

United States District Court
Northern District of California

11

Case No. 15-cv-00798-HSG
ORDER GRANTING IN PART AND
DENYING IN PART
ADMINISTRATIVE MOTION TO FILE
UNDER SEAL
Re: Dkt. No. 643

In conjunction with Plaintiff’s opposition to the motion to dismiss, Plaintiff has renewed

12
13

its administrative motion to file exhibits under seal, Dkt. No. 643.

14

I.

15

LEGAL STANDARD
Courts apply a “compelling reasons” standard when considering motions to seal documents

16

like the ones at issue here. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010).

17

“This standard derives from the common law right ‘to inspect and copy public records and

18

documents, including judicial records and documents.’” Id. “[A] ‘strong presumption in favor of

19

access’ is the starting point.” Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th

20

Cir. 2006). To overcome this strong presumption, the moving party must “articulate compelling

21

reasons supported by specific factual findings that outweigh the general history of access and the

22

public policies favoring disclosure, such as the public interest in understanding the judicial

23

process.” Id. at 1178-79 (citations, internal quotation marks, and alterations omitted). The Court

24

must “balance the competing interests of the public and the party who seeks to keep certain

25

judicial records secret. After considering these interests, if the court decides to seal certain

26

judicial records, it must base its decision on a compelling reason and articulate the factual basis for

27

its ruling, without relying on hypothesis or conjecture.” Id. at 1179 (internal quotation marks

28

omitted).

Records attached to motions that are only “tangentially related to the merits of a case” are

1
2

not subject to the strong presumption of access. Ctr. for Auto Safety v. Chrysler Grp., LLC, 809

3

F.3d 1092, 1101 (9th Cir. 2016). Accordingly, parties moving to seal such records must meet the

4

lower “good cause” standard of Rule 26(c) of the Federal Rules of Civil Procedure. Id. at 8-9.

5

The “good cause” standard requires a “particularized showing” that “specific prejudice or harm

6

will result” if the information is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp.,

7

307 F.3d 1206, 1210-11 (9th Cir. 2002) (internal quotation marks omitted); see Fed. R. Civ. P.

8

26(c). “Broad allegations of harm, unsubstantiated by specific examples of articulated reasoning”

9

will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992).
Civil Local Rule 79-5 further supplements the compelling reasons standard. The party

11
United States District Court
Northern District of California

10

seeking to file a document or portions of it under seal must “establish[ ] that the document, or

12

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

13

under the law. . . .The request must be narrowly tailored to seek sealing only of sealable material.”

14

Civil L.R. 79-5(b).

15

II.

16

DISCUSSION
Because the motion to dismiss for lack of jurisdiction is more than tangentially related to

17

the merits of the underlying action, the Court applies the “compelling reasons” standard in

18

evaluating the motion to seal.

19
20

A.

Documents sought to be filed under seal where Plaintiff is the designating
party

Of the documents Plaintiff seeks to file under seal, Loop is the designating party for the
21
following two: Dkt. Nos. 643-24 and 643-27.
22
Dkt. No. 643-24 is an email exchange between officers of Almaviva S.p.A. and Almawave
23

S.r.l. reporting on Anna Gatti’s discussion of Loop AI’s valuation. Plaintiff contends that the

24
document should be filed under seal because it contains highly confidential financial information
25
that is not publicly available. Dkt. No. 643, Ex. A. The email is in Italian and Plaintiff has
26
provided translation for only a portion of the entire document. Having reviewed the translated
27
portion, the Court finds that Plaintiff has not established a compelling reason that disclosure of the
28
2

1

company’s valuation or the company’s law firm constitutes confidential, sealable information.

2

Accordingly, the motion to file Dkt. No. 643-24 under seal is DENIED. Should Plaintiff want to

3

rely on this email, it should file an unredacted copy on the public docket within 4 days of the date

4

of this order.

5

Dkt. No. 643-27 is an internal presentation that Loop prepared in preparation for a meeting

6

with a California company; Plaintiff contends that the document includes “highly confidential and

7

competitively sensitive information of Loop AI, discusses aspects of Loop AI’s technology and

8

business ideas that could be presented to the target company in question” and that “[d]isclosure of

9

this document in the public domain would be harmful to Loop AI’s business.” Dkt. No. 643, Ex.
A. Having reviewed the presentation, the Court agrees that the document contains sealable

11
United States District Court
Northern District of California

10

confidential information on Loop’s technology and business ideas, and that disclosure of the

12

information could harm Loop’s business. Because there is a compelling reason to file the

13

document under seal, the motion is GRANTED as to Dkt. No. 643-27.

14
15
16

B.

Documents sought to be filed under seal where designating party is Almawave
or General Electric

On May 9, 2016, Almawave filed a response to Loop’s administrative motion to file under
seal, Dkt. No. 662, and non-party GE Capital Corporation filed a notice joining Almawave’s

17
response, Dkt. No. 663. Almawave contends that only three documents are sealable, Dkt. Nos.
18
19
20

643-20, 643-21, 643-22, as they contain “confidential and sensitive information about
Almawave’s business, including marketing plans, business strategies, and private financial
information.” Dkt. No. 662. Having reviewed the attached declaration, and the specific exhibits,

21
the Court agrees that the documents contain confidential, sealable information. The Court grants
22

Plaintiff’s motion to file Dkt. No. 643-21 under seal. In the interest of following the narrowly

23
tailored requirements of the local rules, the Court agrees that the redacted copies of Dkt. Nos. 64324
22 and 643-20 (found as attachments to Dkt. No. 662) should be filed on the public record, and
25
that the unredacted copies should be filed under seal.
26
With respect to the remaining documents where Almawave is the designating party, the
27
Court DENIES the motion to file the exhibits under seal. Almawave, as the designating party,
28
3

1

does not contend that these documents contain sealable information; moreover, the Court has not

2

been presented with a “compelling reason” to warrant sealing. Accordingly, should Plaintiff want

3

to rely on Dkt. Nos. 643-3, 643-4, 643-8, 643-9, 643-10, 643-11, 643-14, 643-15, 643-19, 643-25,

4

643-28, 643-29, 643-30, and 643-31, it should file unredacted copies on the public docket no

5

sooner than four days and no later than ten days from the date of this order.

6

For the following documents, although Almawave is the designating party, Loop

7

separately contends that the documents contain sealable information. The Court DENIES

8

Plaintiff’s request to file Dkt. Nos. 643-12 and 643-13 under seal; there is nothing in the email

9

correspondence, including the exchange of contact information, suggesting a compelling reason to
file the communications under seal. Should Plaintiff want to rely on these documents, it should

11
United States District Court
Northern District of California

10

file an unredacted version on the public record no sooner than four days and no later than ten days

12

from the date of this order.

13

The Court also DENIES Plaintiff’s request to file Dkt. No. 643-26 under seal. The

14

document is in Italian, and the Court cannot evaluate whether it contains confidential sealable

15

information.

16

C.

17

Documents sought to be filed under seal where Carr & Ferrell is the
designating party

Plaintiff seeks to file three documents under seal where Carr & Ferrell LLP is the
18
designating party: Dkt. Nos. 643-5, 643-6, 643-7. Pursuant to Local Rule 79-5(e), on May 4, 2016
19
Plaintiff served Carr & Ferrell the declaration, identifying the document or portions that contained
20
designated confidential material. See Dkt. No. 644. The local rules require that the designating
21
party, here Carr & Ferrell, file a responsive declaration within four days of receiving the
22
declaration establishing that all of the designated material is sealable. L-R 79-5(e)(1). Carr &
23

Ferrell has failed to file a responsive declaration. Accordingly, the Court DENIES Plaintiff’s

24
motion to file these documents under seal; pursuant to Rule 79-5(e)(2), Plaintiff may file the
25
documents in the public record no earlier than four days and no later than 10 days from the date of
26
this order.
27
28
4

D.

1

Documents sought to be filed under seal where SentiMetrix is the designating
party

2

Plaintiff seeks to file under seal three documents that SentiMetrix designated as

3

confidential: Dkt. Nos. 643-16, 643-17, 643-18. On May 9, 2016, Vadim Kagan filed a

4

declaration in support of filing the three exhibits under seal, except for the first page of Dkt. No.

5

643-17, a signature page. Dkt. No. 661. Having reviewed the three documents, the Court agrees

6

that all three exhibits contains confidential information, such as SentiMetrix’s financial

7

information (including statements of income, liabilities and equities), pricing data, and technical

8

business information of the company’s product. The Court, however, does not find a compelling

9

reason to seal the signature page in Dkt. No. 643-17. Accordingly, the Court GRANTS the
motion to file the three documents under seal, except for the first page of Dkt. No. 643-17; the

11
United States District Court
Northern District of California

10

latter should be filed on the public docket if Plaintiff wants to rely on it.

12

III.

13
14
15
16

CONCLUSION
For the reasons described, Plaintiff’s motion to file under seal is GRANTED IN PART and

DENIED IN PART.
IT IS SO ORDERED.
Dated: 5/20/2016

17
18
HAYWOOD S. GILLIAM, JR.
United States District Judge

19
20
21
22
23
24
25
26
27
28
5