Oracle Partners, L.P. et al v. Concentric Analgesics, Inc. et al

Filing 67

ORDER by Judge Haywood S. Gilliam, Jr. GRANTING IN PART AND DENYING IN PART ( #2 , #37 , #41 , #50 ) ADMINISTRATIVE MOTIONS TO SEAL. This order grants in part and denies in part docket nos. #2 and #37 and denies docket nos. #41 and #50 . (ndrS, COURT STAFF) (Filed on 3/17/2021)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

ORACLE PARTNERS, L.P., et al.,
Plaintiffs,

8
v.

9
10
11

CONCENTRIC ANALGESICS, INC., et
al.,

Case No. 20-cv-03775-HSG
ORDER GRANTING IN PART AND
DENYING IN PART
ADMINISTRATIVE MOTIONS TO
SEAL
Re: Dkt. Nos. 2, 37, 41, 50

United States District Court
Northern District of California

Defendants.
12
13

Pending before the Court are three motions to seal filed by the parties related to the

14

complaint and motion to dismiss. See Dkt. Nos. 2, 37, 41, 50. For the reasons detailed below, the

15

Court GRANTS IN PART and DENIES IN PART the motions.

16
17

I.

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

18

documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (quoting Kamakana

19

v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)). “This standard derives from the

20

common law right ‘to inspect and copy public records and documents, including judicial records

21

and documents.’” Id. (quoting Kamakana, 447 F.3d at 1178). “[A] strong presumption in favor of

22

access is the starting point.” Kamakana, 447 F.3d at 1178 (quotations omitted). To overcome this

23

strong presumption, the party seeking to seal a judicial record attached to a dispositive motion

24

must “articulate compelling reasons supported by specific factual findings that outweigh the

25

general history of access and the public policies favoring disclosure, such as the public interest in

26

understanding the judicial process” and “significant public events.” Id. at 1178–79 (quotations

27

omitted). “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in

28

disclosure and justify sealing court records exist when such ‘court files might have become a

1

vehicle for improper purposes,’ such as the use of records to gratify private spite, promote public

2

scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 (quoting Nixon v.

3

Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). “The mere fact that the production of records

4

may lead to a litigant’s embarrassment, incrimination, or exposure to further litigation will not,

5

without more, compel the court to seal its records.” Id.
Records attached to nondispositive motions must meet the lower “good cause” standard of

6

Rule 26(c) of the Federal Rules of Civil Procedure, as such records “are often unrelated, or only

8

tangentially related, to the underlying cause of action.” Id. at 1179–80 (quotations omitted). This

9

requires a “particularized showing” that “specific prejudice or harm will result” if the information

10

is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th

11

United States District Court
Northern District of California

7

Cir. 2002); see also Fed. R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated by specific

12

examples of articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966

13

F.2d 470, 476 (9th Cir. 1992) (quotation omitted).

14
15

II.

DISCUSSION
Because the parties seek to seal portions and documents which pertain to the allegations in

16

the complaint and motion to dismiss, the Court applies the compelling reasons standard to these

17

documents. See In re NVIDIA Corp. Derivative Litig., No. C 06-06110 SBA, 2008 WL 1859067,

18

at *3 (N.D. Cal. Apr. 23, 2008) (“While a complaint is not, per se, the actual pleading by which a

19

suit may be disposed of, it is the root, the foundation, the basis by which a suit arises and must be

20

disposed of.”).

21

As detailed in the table below, the majority of the information sought to be sealed pertains

22

to information about the clinical trial of CA_008, a pain-relieving product that Defendant

23

Concentric Analgesics, Inc. is developing. Defendants assert that it does not publicly disclose the

24

specific efficacy and safety targets that it is analyzing in clinical trials, or the information it

25

provides to the Food and Drug Administration (“FDA”) about such trials. See, e.g., Dkt. No. 22-3.

26

Such information, Defendants contend, could signal its goals for pharmaceutical products under

27

development, as well as its progress toward meeting those goals. Id. at 2. Accordingly,

28

Defendants conclude that the public release of such information could give non-party competitors
2

1
2

an unfair advantage in the development or marketing of rival products. Id.
However, the allegations contained in the proposed redactions of the complaint are critical

3

(even central) to Plaintiffs’ claims in this case. Defendants seek to seal the alleged

4

misrepresentations and omissions about the clinical trial presented to prospective investors, which

5

underlie all of Plaintiffs’ causes of action. The “interest in ensuring the public’s understanding of

6

the judicial process and of significant public events,” Kamakana, 447 at 1179, is thus not served if

7

the fundamental basis for Plaintiffs’ claims is redacted from the complaint. Moreover,

8

notwithstanding Defendants’ characterizations, the allegations in the complaint appear to contain

9

only high-level takeaways about the structure and results of the clinical trial that Concentric shared
with its investors. These overly broad redactions continue in Defendants’ motions to seal the

11

United States District Court
Northern District of California

10

briefing related to its motion to dismiss, obscuring the nature of the parties’ arguments.

12

Defendants have not explained with sufficient specificity how the disclosure of this information

13

could harm Concentric’s competitive advantage. Nevertheless, the Court finds that Defendants

14

have narrowly tailored some of their requested redactions to confidential and proprietary business

15

and intellectual property information. The public release of these documents could give non-party

16

competitors an unfair advantage in the development or marketing of rival products. See In re Elec.

17

Arts, Inc., 298 F. App’x 568, 569 (9th Cir. 2008) (ordering sealing where documents could be

18

used “‘as sources of business information that might harm a litigant’s competitive standing’”)

19

(quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). Thus, the Court finds that

20

in those circumstances Defendants have established compelling reasons to grant the motions to file

21

under seal. See, e.g., Linex Techs., Inc. v. Hewlett-Packard Co., No. C 13-159 CW, 2014 WL

22

6901744 (N.D. Cal. Dec. 8, 2014); Apple Inc. v. Samsung Elecs. Co., Ltd., No. 11-CV-01846-

23

LHK, 2012 WL 6115623 (N.D. Cal. Dec. 10, 2012).

24

Additionally, Defendants seek to seal the names of non-party shareholders and the values

25

of their respective shareholdings. Such financial information is nonpublic, and irrelevant to the

26

allegations in the complaint. See G&C Auto Body Inc v. Geico Gen. Ins. Co., No. C06-04898

27

MJJ, 2008 WL 687372, at *2 (N.D. Cal. Mar. 11, 2008) (sealing third-party information that is of

28

“little or no relevance to the issues that were raised”). Thus, the Court finds that Defendants have
3

1

established compelling reasons to grant in part the motions to file under seal on this basis.

2
3
4
5
6

Docket No.
Public/
(Sealed)
Dkt. No. 1/
(Dkt. No. 2-4)

7
8
9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Dkt. No. 1-1/
(Dkt. No. 2-6)

Document

Portion(s) Sought to
be Sealed

Ruling

Dkt. No. 2 – GRANTED IN PART and DENIED IN PART
Complaint
Excerpts
DENIED
The high-level information about
the pharmaceutical clinical trial is
critical to the public’s
understanding of Plaintiffs’
allegations and this case, and
Defendants have not established a
compelling reason that overrides
this interest or narrowly tailored
the requested redactions.
Ex. A to
Excerpts
GRANTED IN PART
Complaint
The following pages contain third
(Series B
parties’ confidential financial
Preferred
information:
Stock
Purchase
• 36–44
Agreement),
• 46–65
• 67–88
• 90–167
• 172–217

See Dkt. No. 22-3. See also Dkt.
No. 22-2, Ex. 2 (portions of
complaint and Exhibit A for which
Defendants withdraw sealing
request).
Dkt. No. 37 – GRANTED IN PART and DENIED IN PART
Dkt. No. 38/
Defendants’
Excerpts
DENIED
(Dkt. No. 37-4) Joint Motion
The information about the
to Dismiss
pharmaceutical clinical trial is
critical to the public’s
understanding of Plaintiffs’
allegations and this case, and
Defendants have not established a
compelling reason that overrides
this interest or narrowly tailored
the requested redactions.
Dkt. No. 38-2/
Ex. A to the
Entire Document
DENIED
(Dkt. No. 37-5) Declaration of
The information about the
Travis Silva
pharmaceutical clinical trial is
4

1
2

Docket No.
Public/
(Sealed)

Document

Portion(s) Sought to
be Sealed

3
4
5
6
7

Dkt. No. 38-3/
(Dkt. No. 37-6)

Ex. B to the
Declaration of
Travis Silva

Entire Document

Dkt. No. 38-5/
(Dkt. No. 37-7)

Ex. D to the
Declaration of
Travis Silva

Entire Document

Dkt. No. 38-7/
(Dkt. No. 37-9)

Ex. F to the
Declaration of
Travis Silva

Excerpts

Dkt. No. 38-8/
(Dkt. No. 3711)

Ex. G to the
Declaration of
Travis Silva

Excerpts

8
9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
5

Ruling
critical to the public’s
understanding of Plaintiffs’
allegations and this case, and
Defendants have not established a
compelling reason that overrides
this interest or narrowly tailored
the requested redactions.
DENIED
The information about the
pharmaceutical clinical trial is
critical to the public’s
understanding of Plaintiffs’
allegations and this case, and
Defendants have not established a
compelling reason that overrides
this interest or narrowly tailored
the requested redactions.
DENIED
The information about the
pharmaceutical clinical trial is
critical to the public’s
understanding of Plaintiffs’
allegations and this case, and
Defendants have not established a
compelling reason that overrides
this interest or narrowly tailored
the requested redactions.
DENIED
The information about the
pharmaceutical clinical trial is
critical to the public’s
understanding of Plaintiffs’
allegations and this case, and
Defendants have not established a
compelling reason that overrides
this interest or narrowly tailored
the requested redactions.
GRANTED IN PART
The following contains
confidential proprietary business
information, including market
analysis; description of intellectual
property and products under
development; and prior studies of
products under development, that

1
2

Docket No.
Public/
(Sealed)

Document

Portion(s) Sought to
be Sealed

do not directly pertain to the
alleged misrepresentations in this
action:

3
4

•
•
•
•
•
•
•
•
•
•
•
•

5
6
7
8
9
10
11

United States District Court
Northern District of California

Ruling

Pages 14–15
Pages 17–20
Pages 22–24
Pages 26–36
Page 38
Page 48
Pages 55–68
Pages 74–95
Page 97
Pages 104–105
Page 113
Pages 124–125

12
13
14

Dkt. No. 38-9/
(Dkt. No. 3713)

Ex. H to the
Declaration of
Travis Silva

See Dkt. No. 37-1.
GRANTED IN PART
The following contains
confidential proprietary business
information, including market
analysis; description of intellectual
property and products under
development; and prior studies of
products under development, that
do not directly pertain to the
alleged misrepresentations in this
action:

Excerpts

15
16
17
18
19

•
•
•
•

20
21
22
23
24
25

Dkt. No. 38-10/
(Dkt. No. 3715)

Ex. I to the
Declaration of
Travis Silva

Page 4
Page 26
Page 47–54
Page 57

See Dkt. No. 37-1.
GRANTED IN PART
The following contains
confidential proprietary business
information, including market
analysis; description of intellectual
property and products under
development; and prior studies of
products under development, that

Excerpts

26
27
28
6

1
2

Docket No.
Public/
(Sealed)

Document

Portion(s) Sought to
be Sealed

do not directly pertain to the
alleged misrepresentations in this
action:

3
4

•
•
•
•
•
•
•
•

5
6
7
8
9
10

United States District Court
Northern District of California

11
12

Ruling

Dkt. No. 38-11/
(Dkt. No. 3717)

Ex. J to the
Declaration of
Travis Silva

13
14
15
16

Excerpts

Page 3
Pages 6–12
Page 20
Pages 21–24
Page 27–29
Page 32
Page 34
Pages 36–37

See Dkt. No. 37-1.
GRANTED IN PART
The following contains
confidential proprietary business
information, including market
analysis; description of intellectual
property and products under
development; and prior studies of
products under development, that
do not directly pertain to the
alleged misrepresentations in this
action:

17
•
•
•
•

18
19

Page 3
Pages 5–6
Pages 16–17
Page 19

20
21
22

Dkt. No. 42/
(Dkt. No. 41-4)

Opposition to
Defendants’
Joint Motion to
Dismiss

Dkt. No. 51/
(Dkt. No. 50-5)

Reply Brief in
Support of

23
24
25
26
27
28

Dkt. No. 41 - DENIED
Excerpts
DENIED
The information about the
pharmaceutical clinical trial is
critical to the public’s
understanding of Plaintiffs’
allegations and this case, and
Defendants have not established a
compelling reason that overrides
this interest or narrowly tailored
the requested redactions.
Dkt. No. 50 - DENIED
Excerpts
DENIED
The information about the
7

1
2

Docket No.
Public/
(Sealed)

Document

Portion(s) Sought to
be Sealed

Defendants’
Joint Motion
to Dismiss

3
4

Ruling
pharmaceutical clinical trial is
critical to the public’s
understanding of Plaintiffs’
allegations and this case, and
Defendants have not established a
compelling reason that overrides
this interest or narrowly tailored
the requested redactions.

5
6
7
8
9

III.

CONCLUSION
The Court GRANTS IN PART and DENIES IN PART the administrative motion to file

under seal portions of the complaint, Dkt. No. 2, and GRANTS IN PART and DENIES IN

11

United States District Court
Northern District of California

10

PART the administrative motion to seal the motion to dismiss and accompanying exhibits, Dkt.

12

No. 37, and otherwise DENIES the remaining administrative motions to seal without prejudice,

13

Dkt. Nos. 41, 50. The Court DIRECTS the parties to file revised public versions of all documents

14

for which the proposed sealing has been denied, in whole or in part, within seven days of this

15

order. Pursuant to Civil Local Rule 79-5(f)(1), documents filed under seal as to which the

16

administrative motions are granted will remain under seal.

17
18
19
20

IT IS SO ORDERED.
Dated: 3/17/2021
______________________________________
HAYWOOD S. GILLIAM, JR.
United States District Judge

21
22
23
24
25
26
27
28
8