Ojmar US, LLC v. Security People, Inc. et al

Filing 18

ORDER by Judge Haywood S. Gilliam, Jr. Granting GRANTING 14 MOTION TO SEAL. (ndrS, COURT STAFF) (Filed on 10/19/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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OJMAR US, LLC,

Case No. 16-cv-04948-HSG

Plaintiff,
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ORDER GRANTING MOTION TO
SEAL

v.
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SECURITY PEOPLE, INC., et al.,

Re: Dkt. No. 14

Defendants.

United States District Court
Northern District of California

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On October 13, 2016, Plaintiff Omjar U.S., LLC submitted an administrative motion to file

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under seal highlighted portions of Plaintiff’s First Amended Complaint (“FAC”). Dkt. No. 14

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(“Mot.”). Plaintiff took no position on whether the highlighted portions meet the applicable legal

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standard. Id. at 2:26-27. On October 16, counsel for Defendants Security People, Inc. and Asil

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Kokcebay filed a declaration in support of Plaintiff’s motion, arguing that the highlighted portions

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of the FAC meet the “compelling reasons” standard and the requirements of Local Rule 79-5.

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Dkt. No. 16 (“Hainline Decl.”).

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I.

LEGAL STANDARD

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

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documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 677-78 (9th Cir. 2010). “This standard

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derives from the common law right ‘to inspect and copy public records and documents, including

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judicial records and documents.’” Id. (quoting Kamakana v. City & Cnty. of Honolulu, 447 F.3d

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1172, 1178 (9th Cir. 2006)). “[A] strong presumption in favor of access is the starting point.”

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Kamakana, 447 F.3d at 1178 (citation and internal quotation marks omitted). To overcome this

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strong presumption, the moving party must “articulate compelling reasons supported by specific

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factual findings that outweigh the general history of access and the public policies favoring

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disclosure, such as the public interest in understanding the judicial process.” Id. at 1178-79

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(citations, internal quotation marks, and alterations omitted). “In general, compelling reasons

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sufficient to outweigh the public’s interest in disclosure and justify sealing court records exist

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when such court files might have become a vehicle for improper purposes, such as the use of

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records to gratify private spite, promote public scandal, circulate libelous statements, or release

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trade secrets.” Id. at 1179 (citation and internal quotation marks omitted). The Court must

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“balance the competing interests of the public and the party who seeks to keep certain judicial

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records secret. After considering these interests, if the court decides to seal certain judicial

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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. (citations, brackets, and internal

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quotation marks omitted).
Civil Local Rule 79-5 supplements the “compelling reasons” standard. The party seeking

United States District Court
Northern District of California

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

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

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law. . . . The request must be narrowly tailored to seek sealing only of sealable material . . . . .”

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Civil L.R. 79-5(b).

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Finally, records attached to motions that are only “tangentially related to the merits of a

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case” are not subject to the strong presumption of access. Ctr. for Auto Safety v. Chrysler Grp.,

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LLC, 809 F.3d 1092, 1101 (9th Cir. 2016). Accordingly, parties moving to seal such records must

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

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1097. The “good cause” standard requires a “particularized showing” that “specific prejudice or

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

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Corp., 307 F.3d 1206, 1210–11 (9th Cir. 2002) (citation and internal quotation marks omitted); see

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also Fed. R. Civ. P. 26(c).

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II.

DISCUSSION
In considering the motion to seal portions of the FAC, the Court applies the “compelling

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reasons” standard. Although the Ninth Circuit appears not to have explicitly stated what standard

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applies to the sealing of a complaint, many courts in this district and elsewhere have found that the

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compelling reasons standard applies. See Sjostrom v. Kraatz, No. 16-CV-01381-DMR, 2016 WL
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3940886, at *2 (N.D. Cal. July 21, 2016); In re Google Inc. Gmail Litig., No. 13-MD-02430-LHK,

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2013 WL 5366963, at *2 (N.D. Cal. Sept. 25, 2013); Nucal Foods, Inc. v. Quality Egg LLC, 10–

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3105, 2012 WL 260078, at *2 (E.D. Cal. Jan. 27, 2012); TriQuint Semiconductor, Inc. v. Avago

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Techs. Ltd., 09–1531, 2010 WL 2474387, at *1 (D. Ariz. June 11, 2010); Dunbar v. Google, Inc.,

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12–3305, 2013 WL 4428853, at *2 (N.D. Cal. Aug. 14, 2013); In re NVIDIA Corp. Derivative

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Litig., 06–06110, 2008 WL 1859067, at *3-4 (N.D. Cal. Apr. 23, 2008). This makes sense

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because the complaint is more than “tangentially related to the merits of the case.” See Ctr. for

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Auto Safety, 809 F.3d at 1101; see also Sjostrom, 2016 WL 3940886, at *2 (“Because the

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complaint is more than tangentially related to the merits of the case, the compelling reasons

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United States District Court
Northern District of California

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standard governs the sealing request.”).
Here, Defendants have carried their burden of “articulating compelling reasons supported

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by specific factual findings.” See Kamakana, 447 F.3d at 1178. The highlighted portions of the

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FAC are derived from Defendants’ customer agreements, which “contain confidential information

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regarding Defendants’ products, services, and business practices.” Hainline Decl. ¶ 4. This

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information includes “cancellation, renewal, durational, and pricing information that is not

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publically known.” Id. ¶ 5. Disclosure of this confidential information would result in “unfair

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harm” to Defendants’ business and customers. Id. ¶ 5.

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Moreover, the compelling reasons articulated by Defendants outweigh the public interest

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in disclosure. See Kamakana, 447 F.3d at 1178. The motion involves small portions of just six

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pages of the FAC. See Docket No. 14-2, at 14:25, 14:28-15:6, 15:10-13, 17:3, 22:9-10, 23:27-

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24:7. After careful review, the Court is convinced that sealing these passages will not interfere

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with the public’s ability to understand the judicial process. See Kamakana, 447 F.3d at 1179.

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Thus, the “compelling reasons” standard is satisfied.

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Lastly, the highlighted portions of the FAC meet the standard set out in Local Rule 79-5.

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The confidential information reflected in those sections is drawn from communications that were

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designated as “Attorneys Eyes Only.” Hainline Decl. ¶ 4. In addition, the proposed sealing of a

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small number of passages is “narrowly tailored” to prevent harm to Defendants’ business and

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customers. See Civil L.R. 79-5.
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III.

CONCLUSION
For the foregoing reasons, the Court GRANTS Plaintiff’s motion to seal the highlighted

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portions of the FAC.
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IT IS SO ORDERED.
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Dated: 10/19/2016
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______________________________________
HAYWOOD S. GILLIAM, JR.
United States District Judge

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United States District Court
Northern District of California

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