Milliner et al v. Bock Evans Financial Counsel, Ltd.

Filing 101

ORDER re Dkt. Nos. 92 , 93 . Signed by Judge James Donato on 3/27/2020. (jdlc4S, COURT STAFF) (Filed on 3/27/2020)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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CHARLOTTE B. MILLINER et al.,

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Plaintiffs,

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ORDER

v.

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Re: Dkt. Nos. 92, 93
BOCK EVANS FINANCIAL COUNSEL,
LTD.,

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United States District Court
Northern District of California

Case No. 15-cv-01763-JD

Defendant.

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This order resolves pending administrative motions brought by non-party National

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Financial Services (“NFS”) to file documents under seal, Dkt. No. 92, and to retain confidentiality

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of documents produced in discovery, Dkt. No. 93. The requests to seal are granted.

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I.

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LEGAL STANDARD
In our circuit, in evaluating a motion to seal, different standards apply depending on

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whether the request is being made in connection with a dispositive motion or a non-dispositive

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motion. For dispositive motions, the historic “strong presumption of access to judicial records”

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fully applies, and a party seeking sealing must establish “compelling reasons” to overcome that

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presumption. Kamakana v. City & County of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2006). For

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non-dispositive motions, the less-stringent “good cause” standard applies. Id. Motions to seal

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must also comply with Civil Local Rule 79-5, including the rule’s requirement that the request

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must “establish[] that the document, or portions thereof, are privileged, protectable as a trade

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secret or otherwise entitled to protection under the law,” i.e., is “sealable.” Civil L.R. 79-5(b).

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The sealing request must also “be narrowly tailored to seek sealing only of sealable material.” Id.

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The same “good cause” standard for sealing documents attached to non-dispositive

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motions also applies to motions to retain confidentiality under a stipulated protective order, as

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“[t]he cognizable public interest in judicial records that underlies the ‘compelling reasons’

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standard does not exist for documents produced between private litigants.” Pintos v. Pacific

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Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (citing Kamakana, 447 F.3d at 1180); see also

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In re Roman Catholic Archbishop of Portland in Oregon, 661 F.3d 417, 424-25 (9th Cir. 2011).

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II.

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DISCUSSION
Both motions are subject to the “good cause” standard. NFS seeks to file sealed

documents in support of its motion to retain confidentiality, “a discovery motion unrelated to the

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merits of” this dormant action. Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1097

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(9th Cir. 2016); see also Dkt. Nos. 90, 100. The “good cause” standard of Rule 26(c) also governs

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motions to retain confidentiality under a protective order. See In re Roman Catholic Archbishop,

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United States District Court
Northern District of California

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661 F.3d at 424-25.

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NFS withdrew its confidentiality designations for certain categories of documents that

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have been sufficiently redacted to protect sensitive information. Dkt. No. 93 at 6. NFS also

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withdrew designations for the financial records of consenting customers represented by plaintiffs’

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counsel. Id. at 10. The only documents at issue in these motions are a clearing agreement

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between NFS and Mutual Securities, Inc. (“MSI”), id. at 4-5, and three categories of financial

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records relating to non-party customers of NFS who have not consented to disclosure, id. at 5-6.

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NFS has carried its burden of showing “good cause” for filing these documents under seal, and for

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retaining confidentiality over other such documents it produced in this action.

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Rule 26(c) expressly authorizes protection of confidential commercial information. Fed.

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R. Civ. P. 26(c)(1)(G). NFS has made a particularized showing that disclosure of its highly

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negotiated agreement with MSI would expose it to competitive harm. Dkt. No. 93 at 7-8. Courts

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have allowed confidential commercial agreements to be sealed even under the “compelling

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reasons” standard. E.g., Nicolosi Distrib., Inc. v. Finishmaster, Inc., No. 18-cv-03587-BLF, 2018

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WL 3932554, at *3 (N.D. Cal. Aug. 16, 2018). Plaintiffs say that the agreement is already in the

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public domain, but that is based on a nine-year-old NFS clearing agreement with a different firm.

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Dkt. No. 96 at 5; see also Dkt. No. 97 at 3-4. Plaintiffs have not established that NFS’s clearing

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agreement with MSI “[has] been publicly released,” and so no wavier occurred. Upshaw v.
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Alameda County, No. 18-cv-07814-JD, Dkt. No. 68 at 3 (N.D. Cal. Sept. 16, 2019).
Documents containing customer financial information may also be entitled to protection.

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See, e.g., Wells Fargo & Co. v. ABD Ins. & Fin. Servs., No. 12-cv-03856-PJH, 2013 WL 897914,

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at *2 (N.D. Cal. Mar. 8, 2013). NFS has established that further redaction of these documents

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would not provide sufficient protection to its customers. Dkt. No. 93 at 9. NFS’s showing of

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good cause for protecting these documents is bolstered by SEC regulations requiring NFS to keep

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them such records and information confidential. Id. at 10 (citing 17 C.F.R. § 248.30(a)(1)).
CONCLUSION

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NFS’s administrative motion to file documents under seal is granted. NFS’s motion to
retain confidentiality for its clearing agreement with MSI and for records containing financial

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United States District Court
Northern District of California

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information of non-parties who have not consented to disclosure is also granted.

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IT IS SO ORDERED.
Dated: March 27, 2020

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JAMES DONATO
United States District Judge

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