Luna et al v. Marvell Technology Group, Ltd. et al

Filing 206

ORDER RE MOTION TO SEAL by Judge William Alsup granting in part and denying in part 159 Administrative Motion to File Under Seal.(whalc1, COURT STAFF) (Filed on 12/8/2017)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 DANIEL LUNA, No. C 15-05447 WHA 11 For the Northern District of California United States District Court 10 12 13 Plaintiff, v. ORDER RE MOTION TO SEAL 14 MARVELL TECHNOLOGY GROUP, et al., 15 Defendants. / 16 17 Lead plaintiff Plumbers and Pipefitters National Pension und moves to file portions of 18 their motion for class certification and accompanying exhibits under seal (Dkt. No. 159). 19 Defendants submitted a timely declaration in support of this motion (Dkt. No. 167). 20 In this circuit, courts start with a “strong presumption in favor of access” when deciding 21 whether to seal records. Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 22 2006) (citing Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). 23 Parties seeking to seal judicial records relating to motions that are “more than tangentially 24 related” to the merits bear the burden of overcoming the presumption with “compelling reasons” 25 that outweigh the general history of access and the public policies favoring disclosure. Ctr. for 26 Auto Safety v. Chrysler Grp., 809 F.3d 1092, 1099 (9th Cir. 2016). A particularized showing of 27 “good cause” under FRCP 26(c), however, suffices to warrant sealing of judicial records in 28 connection with a non-dispositive motion. Id. at 1179–80. 1 Our court of appeals has not ruled on whether a motion for class certification is more 2 than tangentially related to the merits for the purposes of determining whether the compelling 3 reasons standard applies. “[M]ost district courts to consider the question,” however, “have found 4 that a motion for class certification is more than tangentially related to the underlying cause of 5 action and therefore merits application of the compelling reasons standard. Philips v. Ford 6 Motor Co., No. 14-CV-02989-LHK, 2016 WL 7374214, at *2 (N.D. Cal. Dec. 20, 2016) (Judge 7 Lucy Koh). Here, it is certainly the case that the issues raised at class certification were 8 intertwined with the merits of the action, and therefore this order applies the compelling reasons 9 standard. Furthermore, Civil Local Rule 79-5(b) requires administrative motions to file under seal 11 For the Northern District of California United States District Court 10 to “be narrowly tailored to seek sealing only of sealable material.” Civil Local Rule 79-5(d) 12 states, “Reference to a stipulation or protective order that allows a party to designate certain 13 documents as confidential is not sufficient to establish that a document, or portions thereof, are 14 sealable.” 15 With the foregoing principles in mind, the Court ORDERS as follows: 16 1. Exhibit 2 to the Saham Declaration is a memorandum written by a former Marvell 17 Controller, Matthew Sepe, which discusses at length his concerns with Marvell’s pull-in sales, 18 the very topic lying at the core of this suit, and a topic that the parties have discussed in open 19 court, specifically referring to this and other documents authored by Sepe (see Dkt. No. 159-5). 20 Marvell notes that the document contains internal sales goals, business strategies, and 21 management and business processes, as well as confidential sales terms offered to certain 22 customers (see Dkt. No. 167 ¶ 5). On this basis, Marvell declares that public disclosure would 23 “giv[e] competitors insight into how Marvell conducts its business” and harm its competitive 24 standing (ibid.). Though business information “that might harm a litigant’s competitive 25 standing” is sealable, see Apple Inc., 727 F.3d at 1221–22, it is incumbent upon the party 26 requesting sealing to “narrowly tailor[]” their request such that it “seek[s] sealing only of 27 sealable material.” Civil Local Rule 79-5(b). Plaintiffs have failed to comply with the local rule 28 in this respect. They seek to seal Exhibit 2 in its entirety, when in fact very little of the 2 1 document concerns any particular business strategy or client such that it could harm their 2 competitive standing. Rather, most of the document details the controller’s discontent with the 3 use of pull-in transactions, and explains that he raised these concerns with other Marvell 4 personnel on numerous occasions. Moreover, defendant’s assertion that the documents were 5 designated “confidential” pursuant to the protective order in this case is unavailing as Civil 6 Local Rule 79-5(d) expressly states that “[r]eference 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.” Accordingly, the motion to seal Exhibit 2 is 9 DENIED and shall be filed on the public docket except to the following extent: (1) the sentence on page 4, under the second bullet point which begins “For example, in a meeting on 8/3/15 . . .” 11 For the Northern District of California United States District Court 10 and (2) the two sentences on page 5, which begin “This was the summary of other discussions 12 about where they could pull in from . . .” 13 2. Exhibit 3 to the Saham declaration is the resignation letter of former Marvell 14 Controller, Sepe (see Dkt. No. 159-5). As with Exhibit 2, Marvell notes that the document 15 contains internal sales goals, business strategies, and management and business processes, and 16 on this basis seeks to maintain the entire letter under seal (see Dkt. No. 167 ¶ 5). The letter, 17 however, does not reveal particular business strategies, customers, or other proprietary 18 information. Instead, it discusses pull-in transactions, and the ballooning sales figures in the last 19 weeks of the fiscal quarters at issue. The parties have not provided compelling reasons why this 20 document should be filed under seal. Accordingly, the motion to seal Exhbit 3 is DENIED. 21 3. Exhibits 4–6 to the Saham declaration are excel charts of customer orders 22 showing the number and price of parts ordered by each customer. These are the sort of business 23 information that could harm competitive standing because they reveal particular customers’ 24 needs and the pricing that Marvell offers each customer. Accordingly, the motion to seal 25 Exhibits 4–6 is GRANTED. 26 4. The parties further seek to seal several statements in lead plaintiff’s motion for 27 class certification derived from these exhibits. These statements consist of Sepe’s expression of 28 general concern regarding pull-in transactions, as well as statements regarding the amount of 3 1 extended payment terms required to induce pull-ins in various quarters. No Marvell customers 2 are specifically named, nor are any of the details of these transactions revealed beyond the 3 statement of the total amount of extended payment terms offered to all customers in the 4 aggregate across particular quarters. This is not sealable material for the reasons stated above. 5 Moreover, Sepe’s concerns over pull-in transaction and the fact that a number of these 6 transactions required extended payment terms has been discussed at length in open court (see, 7 e.g., Dkt. No. 203 at 10:3–12, 11:19–12:6). The motion to seal portions of the motion for class 8 certification is DENIED. 9 consistent with this order by DECEMBER 21. 11 For the Northern District of California United States District Court 10 Lead plaintiff shall file revised redacted versions of the aforementioned documents 12 13 Dated: December 8, 2017. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

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