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)

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