Aloudi v. Intramedic Research Group, LLC

Filing 77

ORDER by Judge Haywood S. Gilliam, Jr. GRANTING IN PART AND DENYING IN PART PLAINTIFF'S RENEWED 74 ADMINISTRATIVE MOTION TO FILE UNDER SEAL. (ndrS, COURT STAFF) (Filed on 2/11/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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ALHARETH ALOUDI,

Case No. 15-cv-00882-HSG

Plaintiff,
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v.
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INTRAMEDIC RESEARCH GROUP, LLC,
Defendant.

ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFF'S
RENEWED ADMINISTRATIVE
MOTION TO FILE UNDER SEAL
Re: Dkt. Nos. 74, 76

United States District Court
Northern District of California

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On February 2, 2016, Plaintiff Alhareth Aloudi filed an administrative motion to file under

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seal the unredacted version of the Declaration of David Elliot in Support of Plaintiff’s Opposition

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to Motion to Dismiss the Second Amended Complaint (“Elliot Declaration”) and Exhibits A and B

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to the Elliot Declaration. Dkt. No. 70. Defendant Intramedic Research Group failed to comply

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with Civil Local Rule 79-5(e)(1) by filing a declaration within four days of Plaintiff’s

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administrative motion, and accordingly, the Court denied Plaintiff’s motion. Dkt. No. 72. On

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February 9, 2016, Plaintiff filed a renewed administrative motion to seal the Elliot Declaration and

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Exhibits A and B thereto. Dkt. No. 74. On February 10, 2016, Defendant filed a supporting

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declaration only as to Exhibit A to the Elliot Declaration. Dkt. No. 76. Accordingly, the Court

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GRANTS Plaintiff’s administrative motion as to Exhibit A and DENIES Plaintiff’s administrative

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motion as to the Elliot Declaration and Exhibit B.

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I.

LEGAL STANDARD

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

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

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2010). “This standard derives from the common law right ‘to inspect and copy public records and

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

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

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

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

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

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process.” Id. at 1178-79 (citations, internal quotation marks, and alterations omitted). “In general,

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‘compelling reasons’ sufficient to outweigh the public’s interest in disclosure and justify sealing

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court records exist when such ‘court files might have become a vehicle for improper purposes,’

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such as the use of records to gratify private spite, promote public scandal, circulate libelous

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statements, or release trade secrets.” Id. at 1179 (citing Nixon, 435 U.S. at 598). The Court must

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“balance the competing interests of the public and the party who seeks to keep certain judicial
records secret. After considering these interests, if the court decides to seal certain judicial

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United States District Court
Northern District of California

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

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ruling, without relying on hypothesis or conjecture.” Id. (internal quotation marks omitted).

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Civil Local Rule 79-5 further supplements the compelling reasons standard. The party

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

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

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

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material.” Civil L.R. 79-5(b).
Records attached to motions that are only “tangentially related to the merits of a case” are

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

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

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

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

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

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

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26(c).

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Because a motion to dismiss is not “tangentially related to the merits of a case,” the Court
applies the “compelling reasons” standard to Plaintiff’s motion to seal.

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II.

DISCUSSION
Plaintiff’s renewed motion seeks to file under seal three documents: (1) the unredacted

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version of the Elliot Declaration, (2) Exhibit A to the Elliot Declaration, and (3) Exhibit B to the

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Elliot Declaration. Dkt. No. 74.

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A.

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As an initial matter, Defendant’s Declaration of Steven W. Garff in support of Plaintiff’s

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renewed administrative motion (“Garff Declaration”) only addresses the justification for sealing

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Exhibit A to the Elliot Declaration; it does not address sealing the Elliot Declaration itself or

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Exhibit B. See Dkt. No. 76. Accordingly, the Court finds no reason to seal the Elliot Declaration

Elliot Declaration and Exhibit B Thereto

or Exhibit B and DENIES Plaintiff’s renewed administrative motion to the extent it seeks to file

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United States District Court
Northern District of California

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the Elliot Declaration and Exhibit B thereto under seal.

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B.

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The Garff Declaration argues that there exist both good cause and compelling reasons to

Exhibit A to the Elliot Declaration

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seal Exhibit A, which contains “confidential and proprietary business information” and trade

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secrets belonging to Defendant. Id. ¶¶ 4-5.

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In California, a trade secret is “information, including a formula, pattern, compilation,

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program, device, method, technique, or process, that: (1) [d]erives independent economic value,

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actual or potential, from not being generally known to the public or to other persons who can

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obtain economic value from its disclosure or use; and (2) [i]s the subject of efforts that are

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reasonable under the circumstances to maintain its secrecy.” Cal. Civ.Code 3426.1.

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The Garff Declaration contends that Exhibit A contains a comprehensive analysis of the

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substantiation claims for the JavaSLIM product. See Dkt. No. 76 ¶¶ 3, 5. According to the Garff

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Declaration, proper substantiation of product claims “is crucial to the supplement business” and

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requires a significant investment of time, money, and expertise. Id. ¶ 5. Defendant argues that

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therefore, public disclosure of Exhibit A would place Defendant at a competitive disadvantage by

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allowing competitors to benefit from Defendant’s analysis without investing any of their own time

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and money. Id. Finally, the Garff Declaration establishes that Defendant takes reasonable efforts

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to maintain the secrecy of Exhibit A by never disclosing Exhibit A, its contents, or similar analysis
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without strict non-disclosure agreements. Id. ¶ 5.

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The Court agrees that Defendant has articulated compelling reasons to seal Exhibit A. The

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Court therefore GRANTS IN PART Plaintiff’s renewed administrative motion to file under seal as

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it relates to Exhibit A to the Elliot Declaration.

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III.

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CONCLUSION
Accordingly, the Court GRANTS IN PART and DENIES IN PART Plaintiff’s

administrative motion to file under seal.
Pursuant to Civil Local Rule 79-5(f)(3), Plaintiff may file a revised redacted version of the
Elliot Declaration and Exhibits A and B thereto in the public record within 7 days of this Order.
In the revised redacted version, only Exhibit A shall be redacted. The Court will be unable to

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United States District Court
Northern District of California

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consider the document unless Plaintiff timely files a revised redacted version.

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IT IS SO ORDERED.
Dated: February 11, 2016
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HAYWOOD S. GILLIAM, JR.
United States District Judge

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