Autodesk, Inc. v. Alter et al

Filing 103

ORDER RE 94 ADMINISTRATIVE MOTION TO SEAL by Hon. William H. Orrick. (jmdS, COURT STAFF) (Filed on 7/21/2017)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 AUTODESK, INC., Plaintiff, 8 9 10 United States District Court Northern District of California 11 12 Case No. 16-cv-04722-WHO ORDER RE ADMINISTRATIVE MOTION TO SEAL v. JOSEPH ALTER, et al., Dkt. No. 94 Defendants. Autodesk has filed a motion to seal in conjunction with its First Amended Complaint 13 (“FAC”). Dkt. No. 94. It seeks to seal one document that it has designated confidential, Exhibit 14 B, two documents designated confidential by Alter, Exhibits E & F, and redacted portions of the 15 FAC, where is quotes language from Exhibits E & F. Id. Because these documents are all related 16 to Autodesk’s FAC, they are central to the merits of Autodesk’s claims against Alter and the 17 compelling justification standard for sealing applies. See Ctr. for Auto Safety v. Chrysler Grp., 18 LLC, 809 F.3d 1092, 1101 (9th Cir. 2016), cert. denied sub nom. FCA U.S. LLC v. Ctr. for Auto 19 Safety, 137 S. Ct. 38 (2016); Krieger v. Atheros Comm’cns, Inc., No. 11-CV-00640-LHK, 2011 20 WL 2550831, at *1 (N.D. Cal. Jun. 25, 2011) (applying compelling justifications standard to 21 request to file First Amended Complaint and related exhibits under seal). 22 Requests to seal must be narrowly tailored to cover only specific potions of documents 23 containing truly confidential and highly sensitive information. Under Local Rule 79-5, the party 24 designating certain documents as confidential must file a declaration in support of any 25 administrative motion to seal those documents. L.R. 79-5(d)(1); 79-5(e)(1). Sealing declarations 26 should be made by individuals with knowledge, which generally means the clients seeking to 27 protect their information, not their attorneys. They must be supported by specific factual findings 28 rather than conclusory assertions of harm. See generally WHO Standing Order on Administrative 1 2 Motions to Seal (Effective 6/2014). Under the compelling reasons standard, a court may only seal records if it finds “a 3 compelling reason and articulate[s] the factual basis for its ruling, without relying on hypothesis or 4 conjecture.” Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2006). The 5 court must “conscientiously balance[] the competing interests of the public and the party who 6 seeks to keep certain judicial records secret.” Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 7 1122, 1135 (9th Cir. 2003). Some compelling reasons that might justify sealing records include 8 when the court record might be abused to “gratify private spite or promote public scandal” or 9 when the record contains “sources of business information that might harm a litigant’s competitive standing.” Nixon v. Warner Commnc’ns, Inc., 435 U.S. 589, 598-99 (1978). This is a higher 11 United States District Court Northern District of California 10 standard than the “good cause” standard which permits sealing of documents that might cause a 12 litigant annoyance, embarrassment, oppression, or undue burden or expense, and which applies to 13 documents filed in conjunction with discovery motions unrelated to the merits of a case. Ctr. for 14 Auto Safety, 809 F.3d at 1097. 15 Autodesk has filed a declaration from one of its attorneys in support of sealing Exhibit B, a 16 confidential licensing agreement between Autodesk and Disney. See Huckelbridge Decl. (Dkt. 17 No. 94-2). Huckelbridge asserts that the license agreement contains “confidential business 18 information” that has not been shared with Autodesk’s competitors, customers, or with the general 19 public, and that disclosure of this information “would cause serious competitive and business 20 harm to Autodesk by giving third parties the opportunity to benefit from Autodesk’s proprietary 21 information.” Huckelbridge Decl. ¶ 4. He also asserts that Exhibit B contains “proprietary Disney 22 information that Autodesk is contractually required to keep confidential.” Id. Huckelbridge’s 23 vague and conclusory statements that Autodesk will be harmed if the license agreement is released 24 are not sufficient to meet the compelling justification standard and justify sealing the entire 25 licensing agreement. Further, while Autodesk may have a contractual obligation to keep 26 information in the licensing agreement confidential, such an obligation does not, on its own, meet 27 the compelling reasons standard. See e.g., No Cost Conference, Inc. v. Windstream Comm’cns, 28 Inc., 940 F.Supp.2d 1285 (S.D. Cal. 2013) (fact that document was covered by confidentiality 2 1 2 agreement was insufficient to meet compelling reasons test). Autodesk’s conclusory declaration is not sufficient to meet the compelling justification 3 standard. Autodesk has not distinguished between its own proprietary information and Disney’s, 4 has not provided specific factual explanations as to how it will be harmed if this information is 5 released, and, has not made a credible effort to narrowly tailor its request, requesting instead to 6 seal the entirety of the licensing agreement. Autodesk may file a supplemental, narrowly tailored 7 request to seal Exhibit B. Any declaration should be filed by someone with knowledge. With 8 regard to Disney’s proprietary information, that may require Disney filing a separate declaration in 9 support of the sealing. Autodesk will have until August 4, 2017 to file a supplemental declaration 10 United States District Court Northern District of California 11 in support of sealing Exhibit B; otherwise, it will be unsealed without further order. The remaining three documents, Exhibit E, F, and the FAC contain information that has 12 been designated confidential by Alter. Exhibits E and F are emails between Alter and Disney 13 discussing, in broad terms, a settlement agreement between Disney and Alter, and the FAC 14 contains quotes from these documents. Under Local Rule 79-5, the designating party must file a 15 declaration in support of sealing any confidential information within four days of the filing of the 16 sealing motion. Alter has not filed any declaration in support of sealing these documents and it 17 does not appear that there are compelling reasons to seal any information in Exhibit E, Exhibit F, 18 or the FAC. The request to seal these documents is DENIED. 19 The current disposition of the sealing motion is summarized in the chart below. 20 21 22 23 24 25 26 27 Dkt. No. 94 Autodesk’s First Amended Complaint for Declaratory Judgment and Breach of Contract Document Dkt. Portions of Sought to Be No. Document Sealed Sought to Be Sealed First Amended 94-5 Redacted Complaint Portions Designating Party Sealing Decl. Basis for Sealing Ruling Joseph Alter, Inc. & Joseph Alter None Protective Order DENIED – Unseal 28 3 1 2 DENIED – Remain Sealed None Confidential business information regarding a license between Autodesk and Disney. Proprietary third party information that Autodesk is contractually required to keep confidential. Protective Order None Protective Order DENIED – Unseal Exhibit B to First Amended Complaint 94-6 Entire Document Autodesk / Disney Huckelbridge Decl. Dkt. No. 94-2 Exhibit E to First Amended Complaint 94-7 Entire Document Exhibit F to First Amended Complaint 94-8 Entire Document Joseph Alter, Inc. & Joseph Alter Joseph Alter, Inc. & Joseph Alter 3 4 5 6 7 8 9 10 United States District Court Northern District of California 11 12 IT IS SO ORDERED. Dated: July 21, 2017 13 14 William H. Orrick United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 DENIED – Unseal

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