Bloom Energy Corporation v. Badger et al

Filing 35

ORDER DENYING 19 [29-3] COUNTER MOTION FOR VACATUR OF FINAL AWARD, GRANTING 1 PETITION TO CONFIRM THAT AWARD, AND DENYING 2 34 REQUESTS TO SEAL by Judge Phyllis J. Hamilton.(pjhlc2S, COURT STAFF) (Filed on 9/8/2021)

Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 1 of 25

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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BLOOM ENERGY CORPORATION,

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Petitioner,

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v.
DWIGHT BADGER, et al.,

United States District Court
Northern District of California

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Respondents.

Case No. 21-cv-02154-PJH
ORDER DENYING COUNTER
MOTION FOR VACATUR OF FINAL
AWARD, GRANTING PETITION TO
CONFIRM THAT AWARD, AND
DENYING REQUESTS TO SEAL
Re: Dkt. No. 1, 2, 19, 29, 29-3, 30, 34

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Before the court is petitioner Bloom Energy Corporation’s (“petitioner”) petition to

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confirm arbitration award (the “petition”) and for entry of judgment. Dkt. 1. Also before

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the court is respondents’ counter motion for vacatur of th e subject arbitration award (the

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“counter motion”). Dkt. 19; Dkt. 29-3. Further before the court are petitioner’s requests

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to seal various documents filed in support of the petition and counter motion. Dkt. 2

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(motion to seal the arbitration award); Dkt. 34 (declaration filed in support of respondents’

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administrative motion to seal (Dkt. 29) supplemental response filings).

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The matter is fully briefed and suitable for decision without oral argument. Having

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read the parties’ papers and considered their arguments and the relevant legal authority,

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the court DENIES the counter motion, GRANTS the petition, and DENIES the requests to

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seal.

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BACKGROUND
Petitioner is a company that provides electricity. Dkt. 1 ¶ 1. Advanced Equities,

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Inc. (“AEI”) was an investment advisory firm. Id. ¶ 2. AEI was the parent company of

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Advanced Equities Financial Corp., Inc. (“AEFC”). Id. Respondents Dwight Badger

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(“Badger”) and Keith Daubenspeck (“Daubenspeck”) (collectively, “respondents”) were,

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respectively, an officer and director of AEFC. Id.
In March 2009, petitioner engaged AEI to raise money for petitioner. Id. ¶ 6.

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Respondents led AEI in that effort. Id. When raising that money, respondents

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purportedly made misrepresentations concerning petitioner’s business. Compare id. with

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Dkt. 19 ¶ 6. The Securities and Exchange Commission (“SEC”) caught wind and initiated

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an investigation. Dkt. 1 ¶ 6. In 2012, the SEC issued an order sanctioning respondents.

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Id. The SEC did not take any action against petitioner. Id. The relationship between

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petitioner and respondents soured. Id. ¶ 7. The parties disputed responsibility for the

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misrepresentations. Id.

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In 2014, the parties were thought to have settled that fight. Id. Two writings reflect

United States District Court
Northern District of California

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that settlement, namely the Confidential Agreement (“CA”) (Dkt. 1-3) and the Securities

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Acquisition Agreement (“SAA”) (Dkt. 1-4) (collectively, the “settlement agreements”). Id.

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Those agreements include provisions requiring the parties to arbitrate any future dispute

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between them (without qualification) before the American Arbitration Association (“AAA”)

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in Santa Clara, California. Dkt. 1 ¶ 7. Those provisions are materially similar. Id. ¶ 8.

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Neither party disputes the validity of either provision.

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Fast-forward a few years. On July 20, 2018, respondents initiated an arbitration

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proceeding against petitioner. Dkt. 1 ¶ 9. That proceeding is marked AAA “case no. 01-

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18-0002-7891.” Id. at 1. In that proceeding, respondents allege that they were

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fraudulently induced into signing the CA and SAA. Id. On May 2019, the AAA appointed

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a three-member arbitration panel (the “panel”) to the proceeding. Id. ¶ 10. In relevant

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part, the panel included a Loyola Law School professor, Hiro Aragaki (“Aragaki”). Id.

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On March 16, 2021, the panel issued the subject arbitration award (the “Final

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Award”). Id. ¶ 11; Dkt. 2-4 (sealed version of Final Award). In it, the panel (1) dismissed

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respondents’ claims with prejudice and (2) ordered respondents to pay petitioner

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$966,760.31 in attorneys’ fees and costs pursuant to the settlement agreements’ fee-

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shifting conditions. Dkt. 1 ¶ 11; Dkt. 2-4 at 28.

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On March 17, 2021, petitioner served respondents with a copy of the Final Award.
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Id. ¶ 11 n.2. On March 26, 2021, petitioner filed the instant petition asking the court to

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confirm the Final Award under the Federal Arbitration Act, Title 9 U.S.C. § 9. Id. ¶¶ 12-

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15. Petitioner requests that the court enter judgment in conformity with that award. Id. ¶¶

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16-17. Petitioner further requests pre- and post-judgment interest on the $966,760.31

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awarded in attorney’s fees and costs. Id. ¶ 18.

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On June 9, 2021, respondents filed a 13-page response (the “initial response”) to

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the petition. Dkt. 19.1 In their initial response, respondents argue that the court should

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deny the petition, vacate the Final Award, and direct the AAA to continue the arbitration

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with a new panel. Id. at 1-2. Respondents failed to file any evidence in support of their

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initial response.

United States District Court
Northern District of California

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On July 15, 2021, the court held a case management conference in this action.

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Dkt. 27. At that conference, counsel for respondents, Andrew Munro (“Counsel Munro”),

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requested an opportunity to supplement the initial response. Dkt. 28. Counsel Munro

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indicated that such supplement would serve as a viable substitute for some unspecified

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“counter petition” that respondents suggested (in their initial response) they intended to

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later file. Dkt. 28. The court permitted respondents to file a supplemental brief with

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accompanying evidence and, correspondingly, petitioner to file a reply to that brief. Id.

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On July 23, 2021, respondents filed their supplemental brief (the “supplemental

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response”). Dkt. 29-3. In it, they re-characterize paragraph 13 of their initial response

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(and only that paragraph) as a “counter motion” for vacatur. Id. at 4. They further state

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that they file their supplemental response both in opposition to the petition and in support

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of their counter motion. Id. On July 30, 2021, petitioner filed its reply to the supplemental

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response (the “supplemental reply”).

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In this order, the court will construe respondents’ responses as both an opposition

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to the petition and an independent counter motion to vacate the Final Award. Given that

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Respondents refiled their initial response on July 12, 2021. Compare Dkt. 19 (dated
June 3, 2021) with Dkt. 25 (dated July 12, 2021). At the case management conference,
the court ordered that duplicative filing stricken. Dkt. 27. Given that, the court will refer to
only docket 19 when discussing the initial response.
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respondents rely on identical arguments in support of both their opposition and counter

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motion, the court will simultaneously address the counter motion and petition. The court

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will detail additional facts and procedural events concerning the arbitration as necessary

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below.

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DISCUSSION
I.

Counter Motion to Vacate and Petition to Confirm Arbitration Award

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A.

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Title 9 U.S.C. § 9 provides that a party to an arbitration may apply for an order

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Legal Standard

confirming an arbitration award within one year after such award is made. 9 U.S.C. § 9.
If the parties’ arbitration agreement does not specify a court in which to file that

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United States District Court
Northern District of California

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application, then the applying party may file it in the district court within which such award

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was made. Id.

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When presented with an application to confirm an arbitration award, the district

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court “must grant an order unless the award is vacated, modified, or corrected.” Id.

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“There is nothing malleable about ‘must grant,’ which unequivocally tells courts to gran t

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confirmation in all cases, except when one of the ‘prescribed’ exceptions applies.” Hall

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St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 587 (2008).

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The Ninth Circuit has explained that “judicial review of an arbitrator's decision is

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both limited and highly deferential.” Barnes v. Logan, 122 F.3d 820, 821 (9th Cir. 1997).

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As succinctly put by another court in this district, “grounds for vacating an award are

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limited to those specified by statute.” Int'l Petroleum Prod. & Additives Co., Inc. v. Black

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Gold, S.A.R.L., 418 F. Supp. 3d 481, 487 (N.D. Cal. 2019). “Neither erroneous legal

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conclusions nor unsubstantiated factual findings justify federal court review of an arbitral

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award.” Bosack v. Soward, 586 F.3d 1096, 1102 (9th Cir. 2009). Rather, “[t]he

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confirmation of an arbitration award is meant to be a summary proceeding.” Int'l

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Petroleum Prod. & Additives Co., Inc., 418 F. Supp. 3d at 487.

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Pursuant to Title 9 U.S.C. § 10, a district court may vacate an award only if one of
the following four conditions are present:
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(1) The award was procured by corruption, fraud, or undue means.

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(2) There was evident partiality or corruption in any of the arbitrators.

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(3) The arbitrators were guilty of misconduct in refusing either to postpone the

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hearing or to hear evidence pertinent and material to the controversy, as well

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as any other misbehavior by which the rights of any party have been

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prejudiced.

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(4) The arbitrators exceeded their powers, or so imperfectly executed them that a

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mutual, final, and definite award upon the subject matter was not made.

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9 U.S.C. § 10(a)(1)-(4).

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The Ninth Circuit has explained that this section’s “limited grounds are designed to

United States District Court
Northern District of California

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preserve due process but not to permit unnecessary public intrusion into private

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arbitration procedures.” U.S. Life Ins. Co. v. Superior Nat. Ins. Co., 591 F.3d 1167, 1173

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(9th Cir. 2010). Finally, “[t]he burden of establishing grounds for vacating an arbitration

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award is on the party seeking it.” Id.

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B.

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In their filings, respondents primarily assert that the court should vacate the Final

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Award under Title 9 U.S.C. § 10(a)(2). To a lesser extent, the parties add that vacatur is

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proper under § 10(a)(3) and § 10(a)(1). The court analyzes each argument in turn.

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Analysis

1.

Aragaki Did not Act with Evident Partiality or Corruption

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To show “evident partiality” within the meaning of Title 9 U.S.C. § 10(a)(2), a

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litigant challenging an arbitration award must either (1) “establish specific facts indicating

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actual bias toward or against a party” or (2) “show that [the arbitrator] failed to disclose . .

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. information that creates ‘a reasonable impression of bias.’” Lagstein v. Certain

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Underwriters at Lloyd's, London, 607 F.3d 634, 645-46 (9th Cir. 2010).

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In their responses, respondents do not articulate whether vacatur is proper on

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grounds of actual bias, a reasonable impression of bias, or both. Respondents cite four

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cases as the “governing authorities int his matter.” Dkt. 19 ¶ 13 (11:1-6); Dkt. 29-3 at 17.

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Those four cases comprise the following: (1) Commonwealth Coatings v. Continental
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Cas., 393 U.S. 145 (1968); (2) In re Sussex Court, 776 F.3d 1092, 1099 (9th Cir. 2015);

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(3) Schmitz v. Zilveti, 20 F.3d 1043, 1046 (9th Cir. 1994); and (4) New Regency Prods.,

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Inc. v. Nippon Herald Films, Inc., 501 F.3d 1101 (9th Cir. 2007).

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All four of these cases describe only the reasonable impression of bias standard.

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As a formal matter, then, the court understands that respondents limit their challenge

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under Title 9 U.S.C. § 10(a)(2) to its reasonable impression of bias condition.

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But respondents also suggest that vacatur is proper under that section’s actual

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bias condition. They accuse Aragaki of abusing his authority to skew the arbitration in

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favor of petitioner. Dkt. 19 ¶ 13 (11:25-12:1); Dkt. 29-3 at 5. Respondents do not,

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United States District Court
Northern District of California

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however, cite any authorities addressing the actual bias condition.
Regardless, the court will analyze respondents’ Title 9 U.S.C. § 10(a)(2) challenge
under both its reasonable impression of bias and actual bias conditions.
a.

Reasonable Impression of Bias

The Supreme Court has held that a federal court may vacate an arbitration award

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when an arbitrator fails to “disclose to the parties any dealings that might create an

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impression of possible bias.” Commonwealth Coatings Corp., 393 U.S. at 149. In the

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Ninth Circuit, “long past, attenuated, or insubstantial connections” between a party and

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the arbitrator do not give rise to a reasonable impression of partiality. In re Sussex, 781

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F.3d 1065, 1074 (9th Cir. 2015). An arbitrator is also not required to disclose matters that

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are only of “some interest” to a party. Lagstein, 607 F.3d at 646.

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An arbitrator is, however, “required to disclose only facts indicating that [the

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arbitrator] might reasonably be thought biased against one litigant and favorable to

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another.” Id. (italics in the original). Such facts extend to those showing “direct financial

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connections between a party and an arbitrator or its law firm, or a concrete possibility of

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such connections.” In re Sussex, 781 F.3d at 1074.

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When a party challenges an award based on an arbitrator’s purported interest in a

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third-party entity with some connection to another litigant, the Ninth Circuit has

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acknowledged that the challenging litigant must show the following two conditions to
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justify vacatur: (1) that the arbitrator's undisclosed interest in a third-party entity is

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substantial; and (2) that the third-party entity's business dealings with the litigant are

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nontrivial. Monster Energy Co. v. City Beverages, LLC, 940 F.3d 1130, 1136 (9th Cir.

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2019), cert. denied, 141 S. Ct. 164 (2020). The Ninth Circuit recently confirmed the

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viability of this requirement. EHM Prods., Inc. v. Starline Tours of Hollywood, Inc., 1

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F.4th 1164, 1172 (9th Cir. 2021) (“We decline to stretch the Monster Energy opinion to

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require disclosure of nontrivial business dealings with counsel.”).

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The holding in Monster Energy Co. is instructive here. In that case, the court
considered a vacatur request premised on a JAMS arbitrator’s failure to disclose to the

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litigants that he had a shareholder interest in that organization. Id. at 1132. The court

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United States District Court
Northern District of California

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found that interest “substantial.” Id. at 1136. The court also determined that JAMS’

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relationship with petitioner-Monster Energy was “non-trivial” because petitioner’s “form

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contracts contain[ed] an arbitration provision that designates [JAMS] as its arbitrator,”

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resulting in JAMS having “administered 97 arbitrations” for petitioner over the prior five

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years. Id. Based on these findings, the Ninth Circuit held that the arbitrator’s interest in

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JAMS “creates an impression of bias” that he “should have [] disclosed.” Id.

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In this case, respondents base their reasonable impression of bias argument on

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Aragaki’s failure to disclose his affiliation with a nonprofit organization focused on

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advancing alternative dispute resolutions throughout the world (namely, the Foundation

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for Sustainable Rule of Law Initiatives (“FSRI”)) prior to his appointment as an arbitrator.

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Dkt. 19 at 1-2, ¶ 13 (6:15-24); Dkt. 29-3 at 17. That affiliation linked Aragaki to petitioner

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by way of petitioner’s outside counsel, Fenwick and West LLP (“Fenwick”). Dkt. 19 ¶ 13

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(6:25-7:5). According to respondents, that link matters because FSRI receives money

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from Fenwick. Id. ¶ 13 (6:24-7:5); Dkt. 29-3 at 10-11. Respondents say that, “had [they]

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known these facts, they would never have allowed Aragaki to serve on the panel .” Dkt.

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19 ¶ 13 (7:2-5); Dkt. 29-3 at 5-6.

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The court concludes that respondents fail to show a reasonable impression of bias
by Aragaki. Various reasons support this conclusion.
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As an initial matter, a party waives its right to seek vacatur of an arbitration award

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when it “has constructive knowledge of a potential conflict but fails to timely object.” Fid.

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Fed. Bank, FSB v. Durga Ma Corp., 386 F.3d 1306, 1313 (9th Cir. 2004). In this case,

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AAA appointed Aragaki to the panel in May 2019. Dkt. 21-1 ¶ 5. Respondents did not

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object to Aragaki’s appointment until November 21, 2019. Id. ¶ 8. Petitioner presented

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evidence showing that a simple Google search of the terms “Hiro Aragaki Fenwick”

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immediately shows his affiliation with FSRI. Dkt. 33-1 ¶¶ 2-5.

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Respondents say in their supplemental response that they “spent between 15

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[and] 20 hours scouring the internet” to find connections between candidates for the
panel and either petitioner or Fenwick. Dkt. 29-3 at 7. To support that purported fact,

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United States District Court
Northern District of California

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respondents cite “Munro Aff. ¶ 17; Ex. 2.” Id.

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The court reviewed the evidence proffered by respondents in this action. That

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evidence is consolidated at docket 29. That docket does not include a “Munro affidavit.”

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While Counsel Munro does include two declarations at docket 29, neither declaration

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includes a paragraph 17. See Dkt. 29-1 (three paragraph declaration regarding

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respondents’ administrative motion to seal); Dkt. 29-5 (16 paragraph declaration in

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support of supplemental response).

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Respondents’ citation to “Ex. 2” also does not account for that shortcoming.

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Based on the “list of exhibits” attached to the supplemental response, Dkt. 29-3 at 19, it

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appears that exhibit two is the “declaration of Andrew Munro” filed at docket 29-5, which,

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again, is only sixteen paragraphs. Thus, the fact that respondents “scoured the internet”

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looking for connections between proposed arbitrators and Fenwick appears entirely

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unsubstantiated. Given that, the court will credit petitioner’s evidence showing the ease

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with which a Google search would show Aragaki’s afiiliation with FSRI. Accordingly, the

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court finds that respondents had at least constructive knowledge of that affiliation prior to

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their November 21, 2019 objection to Aragaki’s appointment.

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In fact, other indicia suggests that respondents had actual knowledge of Aragaki’s

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affiliation with FSRI prior to that date. For starters, the objection came just two days after
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the panel issued a ruling adverse to respondents. Compare Dkt. 21-1 ¶ 7 (detailing

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panel’s November 19, 2019 order granting petitioner’s emergency motion and directing

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respondents to surrender petitioner’s confidential information to Counsel Munro) with id. ¶

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8 (detailing respondents’ November 21, 2019 contact with AAA that a panel member had

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a connection with FSRI).

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Respondents argue that they received the information about Aragaki’s affiliation

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with FSRI as an anonymous “tip” shortly before they reached out to AAA. Dkt. 29-3 at 9.

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However, they do not offer any declaration (under penalty of perjury) attesting to that fact.

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What’s worse is that the subject arbitration (including the panel’s membership) was
confidential. Under these circumstances, the court finds respondents’ “tip” argument

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United States District Court
Northern District of California

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highly suspect. Instead, the court finds it more probable that the evidence proffered (or,

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perhaps more tellingly, omitted) supports the alternative explanation that respondents

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previously learned about Aragaki’s affiliation with FSRI but kept that information in

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reserve to for future use should the panel render a decision that was unfavorable to

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respondents. Either way, the court holds that respondents were on notice of Aragaki’s

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affiliation with FSRI but failed to timely object to his appointment and, thus, waived their

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right to challenge the Final Award on the basis of his affiliation with FSRI. This holding

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alone justifies denying respondents’ vacatur request under § 10(a)(2). Monster Energy

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Co., 940 F.3d at 1134 (“In [Fidelity], we joined several of our sister circuits that utilize a

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constructive knowledge standard when considering whether a party has waived an

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evident partiality claim.”).

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But even on the merits, the court concludes that respondents are not entitled to

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vacatur under § 10(a)(2) for at least three separate reasons. First, respondents’ theory of

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Aragaki’s purported bias rests on an attenuated relationship between him and petitioner.

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According to respondents, a reasonable litigant would view Aragaki as biased because

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(1) he sits on the board of FSRI, which (2) receives funding and pro bono support from

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Fenwick, which (3) wants to generate goodwill with its client, petitioner. That theory adds

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a connection (FSRI to Fenwick) not contemplated by the court in Monster Energy when it
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held that an arbitrator must disclose his or her interest in a third-party entity doing

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business with a litigant.

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Second, petitioner submitted evidence showing that, on October 19, 2018, Cooley

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LLP (“Cooley”) substituted for Fenwick as petitioner’s counsel of record, i.e., six months

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before Aragaki’s appointment. Compare Dkt. 21-5 (October 19, 2018 letter from Cooley

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to AAA noting substitution) with Dkt. 21-7 (May 14, 2019 letter from AAA noting Aragaki’s

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appointment). Thus, Aragaki did not preside over the arbitration at any point during

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Fenwick’s representation. That timing renders Aragaki’s relationship with FSRI irrelevant:

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Aragaki could not give a reasonable impression of bias when, in fact, the lawyers he
purportedly sought to curry favor with (Fenwick) no longer served as petitioner’s counsel.

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United States District Court
Northern District of California

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Absent that relationship, respondents’ theory lacks any connection that would cause a

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reasonable person to link Aragaki’s interest to that of petitioner. 2

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Third, respondents fail to explain or otherwise show how or why Aragaki maintains

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a “substantial” interest in FSRI. At best, respondents suggest that such interest exists by

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virtue of FSRI’s supposed role in “arranging” for the World Bank to hire Aragaki to provide

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mediation training abroad in Liberia. Dkt. 19 ¶ 13 (6:24-7:2; 8:6-9).

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But Aragaki refutes that suggestion in his supplemental disclosure. The World

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Bank did not hire Aragaki. It hired FSRI. Dkt. 21-9 (“After Mr. Schacter severed his ties

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with Fenwick, Loyola Law School and FSRI were retained by the World Bank Group

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to help train mediators for a court-connected mediation program at the Commercial Court

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in Monrovia, Liberia.”) (emphasis added).

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In their supplemental response, respondents failed to proffer any evidence

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contesting this showing. Instead, they summarily assert that Aragaki’s supplemental

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disclosure “ignores[] the fact that as a result of Aragaki’s position with FSRI, he was able

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to get a World Bank Group contract for Loyola Law School, which also paid for several of

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Respondents’ theory of Aragaki’s bias toward Fenwick cuts against the conclusion that
he would have an interest in ruling in petitioner’s favor. Why? Because, under that
theory, Aragaki would want petitioner to replace Cooley with Fenwick. So, if anything,
Aragaki would be incentivized to rule against petitioner during Cooley’s representation.
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his trips to India . . .” Dkt. 29-3 at 11. That assertion is insufficient to show the requisite

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substantial interest.

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For the above reasons, the court rejects respondents’ argument that vacatur is
proper under Title 9 U.S.C. § 10(a)(2)’s reasonable impression of bias standard.

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b.

Actual Bias

A district court may vacate an arbitration award on grounds of actual bias only if a

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moving party establishes “specific facts” that “indicate improper motives.” Woods v.

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Saturn Distribution Corp., 78 F.3d 424, 427 (9th Cir. 1996). In an unpublished decision,

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the Ninth Circuit has suggested that such a motive requires action by an arbitrator that
qualifies as “affirmative misconduct” or plain “irrationality.” Ruhe v. Masimo Corp., 640 F.

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United States District Court
Northern District of California

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App'x 685, 686 (9th Cir. 2016).

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Respondents advance two theories of actual prejudice. The court analyzes each
theory in turn.
As their first theory, respondents assert that Aragaki sought to serve petitioner’s

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interest by “skewing” the arbitration in its favor and “orchestrating” the dismissal of

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respondents’ claims on non-substantive grounds. Dkt. 19 ¶ 13 (8:19-20); Dkt. 29-3 at 5.

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To substantiate that assertion, respondents primarily rely on the following procedural

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events in the arbitration:

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(1) The panel’s decision to sua sponte raise the issue of which remedies

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respondents would be entitled to in the event they prevailed on the claims

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brought in the arbitration. Dkt. 19 ¶ 13 (8:20-27); Dkt. 29-3 at 12, 18.

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(2) The panel’s instruction that the parties’ brief whether it should order

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respondents to place money in escrow pending the adjudication of respondents

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claims. Dkt. 19 ¶ 13 (9:2-6); Dkt. 29-3 at 13.

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(3) The panel’s instruction that the parties’ brief whether it should dismiss
respondents claims if they were unable to fund the escrow. Dkt. 29-3 at 14-15.
The above course of events does not establish that Aragaki (or the panel more
generally) acted with any improper motive when presiding over the arbitration . Two
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reasons support this conclusion.

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First, the panel’s decision to raise the remedies issue was appropriate under the

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circumstances. In the arbitration, respondents sought both rescission of the settlement

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agreements and damages. Dkt. 2-4 ¶ 23(b). On January 30, 2020, the panel identified

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that position as an unaddressed issue and stated its belief that “there is benefit to dealing

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with [that issue] head-on.” Id. ¶ 23(a). The panel then explained that the “problem” with

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respondents’ request is that it:

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United States District Court
Northern District of California

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Appears to be something of a Catch-22: If they unwind the
allegedly fraudulent sale of securities pursuant to the CA and
SAA, there would appear to be no affirmative fraud claim left on
which to sue for damages. If they do not and the Release
remains intact, the Release would appear to bar their
affirmative claims because those claims existed at the same
time as the Release was entered. Id. ¶ 23(c)
The court holds that the panel’s stated rationale shows that, by raising the

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remedies issue, the panel simply intended to get in front of an antecedent (and potentially

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dispositive) question in the arbitration. Given that holding, the court rejects respondents’

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argument that the sua sponte instruction shows any improper motive.

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Second, the panel reasonably required respondents to escrow $1.8 million

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pending the adjudication of their claims. The panel noted that respondents had

18

previously declared that they “own[ed] no assets that could be placed in escrow or that

19

could serve as security for a bond.” Dkt. 2-4 ¶ 62(b). The panel found that:

20

[I]n light of [respondents’] financial condition, [petitioner] will
face substantial prejudice if it were to prevail in this arbitration
and yet be unable to recoup the attorneys’ fees, costs, and
expenses to which it would be entitled under the CA and SAA.
Id. ¶ 62(d) (emphasis added).

21
22
23

Relying on both California Civil Code § 1693 and the panel’s inherent authority to

24

require pre-hearing security, Dkt. 2-4 ¶ 60, 61, the panel then ordered respondents to

25

escrow the $1.8 million within 60 days of its order, id. ¶ 62.

26

The court holds that the panel’s stated finding of potential prejudice to petitioner

27

serves as a reasonable, substantiated basis to require respondents to escrow the $1.8

28

million. The court further holds that this finding serves as the most plausible explanation
12

Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 13 of 25

1

for that requirement. Given these holdings, the court rejects respondents’ argument that

2

that requirement shows any improper motive. In light of the above, the court concludes

3

that respondents’ first theory of actual prejudice lacks merit.

4

Respondents’ second theory of actual prejudice is unclear. From what the court

5

can tell, it appears that respondents argue that, despite its substitution, Fenwick “had a

6

great deal at stake” in the arbitration because it represented petitioner in its 2018 initial

7

public offering (“IPO”). Dkt. 29-3 at 17-18. According to respondents, that representation

8

matters because, in its S-1 IPO filings, petitioner stated that the subject claims “lack

9

merit.” Id. at 18. Thus, respondents’ theory seems to go, “[b]y orchestrating the
dismissal of respondents’ claims[,] [Aragaki] protected [Fenwick] and its very important

11

United States District Court
Northern District of California

10

client, “ namely, petitioner. Id.

12

This theory fails to show that the panel acted with any improper motive when

13

presiding over the arbitration. The court reiterates that, under the circumstances at hand,

14

the most plausible explanation for the panel’s decision to dismiss respondents’ claims is

15

that they were unable to escrow the amount that the panel determined would be

16

necessary to avoid potential prejudice to petitioner. The panel made that determination

17

reasonably and within its discretion. Accordingly, the court finds that respondents’

18

second theory of actual bias similarly lacks merit.

19

For the above reasons, the court rejects respondents’ argument that vacatur is

20

proper under Title 9 U.S.C. § 10(a)(2)’s actual bias condition. Accordingly, the court

21

holds that respondents failed to show that they are entitled to vacatur under that section.

22
23

2.

The Panel Did Not Improperly Refuse to Hear Evidence

When construing Title 9 U.S.C. § 10(a)(3), the Ninth Circuit has explained that

24

[a]rbitrators enjoy wide discretion to require the exchange of evidence, and to admit or

25

exclude evidence, how and when they see fit.” U.S. Life Ins. Co. v. Superior Nat. Ins.

26

Co., 591 F.3d 1167, 1175 (9th Cir. 2010). Courts in this district have observed that “[t]o

27

meet the standard for vacating the award, the arbitrator's refusal to hear evidence must

28

demonstrate bad faith or be so gross as to amount to affirmative misconduct.” Immersion
13

Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 14 of 25

1
2
3
4

Corp. v. Sony Computer Ent. Am. LLC, 188 F. Supp. 3d 960, 974 (N.D. Cal. 2016).
In this case, respondents assert that the panel failed to adequately consider two
sorts of related evidence. The court analyzes each challenge in turn.
As its first ground, respondents assert that the panel failed to make a “legitimate

5

attempt” at valuing the so-called “restorable consideration” that petitioner would owe

6

them in the event the CA were rescinded. Dkt. 19 ¶ 13 (9:17-26); Dkt. 29-3 at 14-15, 18.

7

Respondents say that that failure matters because such consideration included a claim

8

worth up to $139 million against petitioner (and other parties). Dkt. 29-3 at 15.

9

The court holds that this challenge does not support vacating the Final Award.
First, the panel did not ignore respondents’ argument concerning the value of their pre-

11

United States District Court
Northern District of California

10

CA claims. To the contrary, it explained that it need not value those claims when

12

determining the consideration that petitioner would owe respondents in the event of

13

rescission because they had not been filed and remained unadjudicated. Dkt. 2-4 ¶ 50

14

(“Prior to the alleged fraud, [respondents] had not yet even filed their pre-CA claims; thus,

15

an adjudication of liability and damages on those claims . . . is not necessary to a

16

‘judgment’ that returns Claimants to the status quo ante.”)

17

Second, the court finds the panel’s explanation for that decision is reasonable.

18

Respondents do not contest that their pre-settlement claims had not yet been

19

adjudicated. Thus, if judgment were granted in respondents’ favor, they would be

20

restored with only some unadjudicated causes of action . Respondents would still need to

21

litigate those claims to monetary judgment. Whether or not such litigation would yield

22

anything for respondents (other than additional attorney’s fees) is an open question.

23

Third, even if the panel were required to “value” respondents’ pre-CA claims, the

24

panel’s decision to effectively assign a zero-dollar value to them is not unreasonable.

25

There had been no liability determination on those unadjudicated claims. There had

26

been no affirmative defense determination on such claims. There had been no damages

27

determination on such claims. Accordingly, any valuation of the subject claims would

28

prove speculative, thus supporting even a zero-dollar valuation.
14

Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 15 of 25

Fourth, the court holds that, even if the panel’s consideration of the evidence

1
2

relating to respondents’ restorable consideration were deficient, that deficiency does not

3

rise to the level of bad faith or gross dereliction. Immersion Corp., 188 F. Supp. 3d at

4

974. It certainly would not justify vacatur. Bosack, 586 F.3d at 1102 (“Neither erroneous

5

legal conclusions nor unsubstantiated factual findings justify federal court review of an

6

arbitral award under the statute, which is unambiguous in this regard.”).

7

As its second ground, respondents similarly argue that the panel failed to
adequately consider the value of their pre-settlement claims against various Bloom

9

directors and officers (the “Bloom D&Os”). Dkt. 29-3 at 14-16.3 Respondents argue that

10

by “ignoring” those claims, the panel “effectively ruled” that they had “no value.” Dkt. 29

11

United States District Court
Northern District of California

8

at 16.

12

Again, the court rejects this argument. First, respondents fail to show that the

13

panel was obligated (in the first instance) to take evidence on the value of their claims

14

against the Bloom D&Os. Respondents fail to establish that the Bloom D&Os were even

15

parties to the arbitration. Moreover, from what the court can tell, the only other non -

16

Bloom persons sued in the arbitration were venture capital firms. Dkt. 2-4 ¶ 51-52.

17

Second, respondents fail to proffer any authority showing that the panel was

18

required to consider the value of the claims against any non-Bloom party when valuing

19

the net restorable consideration owed to petitioner.
Third, and in any event, the court finds that respondents’ challenge to the panel’s

20
21

treatment of the value of any claims against any non-Bloom party fails for the same

22

reasons noted above with respect to such valuation for any unadjudicated claim against

23

petitioner.

24

In light of the above, the court holds that respondents failed to show that they are

25

entitled to vacatur under Title 9 U.S.C. § 10(a)(3).

26

///

27
28

3

One such director includes former Secretary of State and retired four-star Army General
Colin Powell. Dkt. 29-3 at 14.
15

Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 16 of 25

1

3.

2
3

Respondents Failed to Show that the Final Award Was Procured
by Fraud, Corruption, or Other Undue Means

To justify vacatur under Title 9 U.S.C. § 10(a)(1), a challenging litigant must show

4

that the subject fraud satisfies the following three requirements: (1) the fraud was “not

5

discoverable upon the exercise of due diligence prior to the arbitration”; (2) the fraud was

6

“materially related to an issue in the arbitration”; and (3) the fraud is established “by clear

7

and convincing evidence.” Lafarge Conseils Et Etudes, S.A. v. Kaiser Cement & Gypsum

8

Corp., 791 F.2d 1334, 1339 (9th Cir. 1986).
In this case, respondents assert that Aragaki “clearly received significant personal

10

benefits,” including “FSRI’s obtaining a World Bank contract for Aragaki . . .” Dkt. 19 ¶ 13

11

United States District Court
Northern District of California

9

(8:6-9). They do not elaborate on this argument.

12
13

The court concludes that respondents failed to show that the Final Award was
procured by unlawful means. Four reasons support this conclusion.

14

First, and as an initial matter, it appears that respondents have waived their

15

position on this issue. In their supplemental response, respondents fail to address any of

16

the arguments about the inapplicability of this section that petitioner raised in its reply.

17

Second, respondents do not make any attempt to define the purported fraud or

18
19

corruption.
Third, to the extent respondents base such corruption on their suggestion that

20

Aragaki engaged in a quid pro quo, they do not proffer any evidence showing that

21

Aragaki, in fact, received any “personal benefit” from petitioner, FSRI, or Fenwick.

22

Fourth, as decided in Section I.B.1.a., respondents fail to show how they could not

23

discover Aragaki’s “affiliation” with FSRI (and FSRI’s corresponding relationship with

24

Fenwick) following their exercise of due diligence prior to Aragaki’s appointment.

25
26
27
28

For the above reasons, the court holds that respondents failed to show that they
are entitled to vacatur under Title 9 U.S.C. § 10(a)(1).
*

*

*

The court concludes that respondents failed to show that the court should vacate
16

Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 17 of 25

1

the Final Award. Accordingly, the court grants the petition, Dkt. 1, and confirms the Final

2

Award, Dkt. 2-4. Hall St. Assocs., L.L.C., 552 U.S. at 582 (“Under the terms of § 9, a

3

court “must” confirm an arbitration award “un less” it is vacated, modified, or corrected “as

4

prescribed” in §§ 10 and 11.”). Accordingly, the court will enter a separate judgment

5

dismissing respondents’ claims with prejudice and awarding petitioner’s attorney’s fees.

6

II.

7

Motions to Seal
“There is a general principle in favor of public access to federal court records.

8

Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597 (1978). “The proponent of sealing

9

bears the burden with respect to sealing. A failure to meet that burden means that the
default posture of public access prevails.” Kamakana v. City & City of Honolulu, 447 F.3d

11

United States District Court
Northern District of California

10

1172, 1182 (9th Cir. 2006).

12

The Ninth Circuit has recognized that two different standards may apply when a

13

request to seal a document is made in connection with a motion—namely the “compelling

14

reasons” standard or the “good cause” standard. Center For Auto Safety v. Chrysler

15

Grp., LLC, 809 F.3d 1092, 1096-97 (9th Cir. 2016). The compelling reasons standard

16

applies to any sealing request made in connection with a motion that is “more than

17

tangentially related to the merits of a case.” Id. at 1099, 1101.

18

Under the good cause standard, a party requesting sealing must show that, for

19

“each particular document” it seeks to seal, “specific prejudice or harm will result if no

20

protective order is granted.” Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1130

21

(9th Cir. 2003). Under the compelling reasons standard, a court may seal a record only if

22

it finds a “compelling reason” to support such treatment and articulates “the factual basis

23

for its ruling, without relying on hypothesis or conjecture.” Center For Auto Safety v.

24

Chrysler Grp., LLC, 809 F.3d at 1096-97.

25

If the court makes such finding, it “must then conscientiously balance the

26

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

27

secret.” Id. at 1097. Factors relevant to that balancing test include the public interest “in

28

understanding the judicial process,” Pintos v. Pac. Creditors Ass'n, 605 F.3d 665, 679 n.6
17

Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 18 of 25

1

(9th Cir. 2010), as well as the volume of material sought to be sealed, Algarin v.

2

Maybelline, LLC, 2014 WL 690410, at *3 (S.D. Cal. Feb. 21, 2014).

3

The Ninth Circuit has acknowledged that “[w]hat constitutes a ‘compelling reason’

4

is best left to the sound discretion of the trial court.” Center for Auto Safety, 809 F.3d at

5

1097. “Examples include when a court record might be used to gratify private spite or

6

promote public scandal, to circulate ‘libelous’ statements, or ‘as sources of business

7

information that might harm a litigant's competitive standing.’” Id.

8

In this case, petitioner filed two requests to seal various documents filed in

9

connection with the petition and counter motion. Dkt. 2 (petitioner’s motion to seal Final
Award filed in support of petition); Dkt. 34 (petitioner’s declaration in support of

11

United States District Court
Northern District of California

10

respondents’ administrative motion (Dkt. 29) to seal supplemental response filings).

12

Respondents do not oppose either request. The court considers each request in turn.

13

A.

Motion to Seal the Final Award

14

In its motion to seal, petitioner seeks to seal all portions of the Final Award except

15

its caption page, introduction, and conclusion. Dkt. 2. The portions sought for sealing

16

comprise 108 paragraphs. Dkt. 2-4. They detail the procedural and substantive

17

background of the parties’ dispute, id. ¶¶ 1-25, a statement and analysis of the remedies

18

and escrow issues, id. ¶¶ 26-70, and an analysis of whether to award petitioner its

19

attorney’s fees and costs, id. ¶¶ 71-108.

20

In its motion, petitioner asserts that the good cause standard controls its request.

21

Dkt. 2 at 2. Petitioner reasons that that standard controls because the 108 paragraphs it

22

seeks to seal “are only tangentially related to the merits of this action.” Id.

23

Petitioner asserts that its request satisfies the good-cause standard because

24

“public disclosure of the entire Final Award . . . threatens substantial prejudice” to

25

petitioner. Id. at 3. To substantiate that assertion, petitioner explains that, when

26

agreeing to the SA and CAA, it “specifically bargained” that its dispute with respondents

27

would remain confidential. Id. Thus, petitioner reasons, disclosure would “deprive” it of

28

the “benefit of its bargain.” Id.
18

Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 19 of 25

1

Petitioner later adds that compelling reasons also support sealing the Final Award.

2

Id. at 3. Petitioner says that its disclosure would be “particularly unjust” because

3

respondents “have not yet paid” the Final Award. Id. Thus, petitioner reasons,

4

respondents should not be permitted to simultaneously “flout” that award and “force” the

5

disclosure of that award. Id.

6

The court denies petitioner’s request to seal the Final Award. First, petitioner
misapprehends the relevant inquiry for determining whether the good cause or

8

compelling reasons standard applies. The key question for determining the applicable

9

standard is whether the sealing request is made in connection with a motion (or other

10

pleading) that is more than tangentially related to the merits of an action. Ctr. for Auto

11

United States District Court
Northern District of California

7

Safety, 809 F.3d at 1099, 1101 (“The focus in all of our cases is on whether the motion

12

at issue is more than tangentially related to the underlying cause of action . . . . Rather,

13

public access will turn on whether the motion is more than tangentially related to the

14

merits of a case. . . . Our precedent, which always has focused on whether the pleading

15

is more than tangentially related to the merits, recognizes this essential point.”)

16

(emphasis added). Petitioner’s position, however, mistakenly focuses on whether the

17

portions of the subject document sought for sealing is more than tangentially related to

18

merits of an action. Dkt. 2 at 2.

19

The court understands that a lone remark in Kamakana somewhat explains

20

petitioner’s mistaken legal position. Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172,

21

1179 (9th Cir. 2006) (“The public has less of a need for access to court records attached

22

only to non-dispositive motions because those documents are often “’unrelated, or only

23

tangentially related, to the underlying cause of action.’”) (emphasis added). The panel in

24

Center for Auto Safety, however, interpreted and clarified Kamakana when articulating

25

the above rule. 809 F.3d at 1099 (citing four authorities, including Kamakana, 447 F.3d

26

at 1179). In any event, other recent Ninth Circuit authority has reiterated that the panel’s

27

decision in Center for Auto Safety provides the operative test in this circuit for

28

determining whether the good cause or compelling reasons standard applies to a sealing
19

Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 20 of 25

1

request. United States v. Sleugh, 896 F.3d 1007, 1014 (9th Cir. 2018) (“We observed

2

how ‘the focus in all of our cases is on whether the motion at issue is more than

3

tangentially related to the underlying cause of action.’”) (citing Center for Auto Safety, 809

4

F.3d at 1099).

5

Second, with the above clarification in mind, the court finds that the compelling

6

reasons standard applies. The obvious point of the petition is to confirm the Final Award.

7

That award disposes of respondents’ claims. Petitioner cannot reasonably argue that a

8

pleading requesting the court’s imprimatur of such disposition is less than tangentially

9

related to the merits of the action.4

10

Third, with that finding in hand, the court holds that none of the reasons identified

United States District Court
Northern District of California

11

by petitioner in support of its motion satisfy the compelling reasons standard. The fact

12

that the parties privately bargained to keep a proceeding confidential does not nullify the

13

requirement that a party proffer a qualifying reason to justify sealing that document when

14

put at issue in a public forum. If the court accepted petitioner’s position that the mere

15

existence of such a “bargain” (and whatever its unspecified “benefits” to petitioner)

16

provides the necessary justification , then the parties in any litigation could circumvent the

17

right of public access through private agreement. That outcome is untenable.

18

Petitioner also fails to proffer any binding authority finding a compelling reason to

19

seal an arbitration award simply because a party has refused to pay that award. The

20

record does not show that respondents intend to “flout” any confidentiality obligation.

21

Respondents did not even file an opposition to the petitioner’s motion to seal the Final

22

Award. In fact, based on respondents’ administrative motion to seal its supplemental

23

response filings (more on that below), it appears that respondents may actually agree

24

that the court should seal the Final Award. Dkt. 29 at 1 (“Respondent agrees [sic] with

25

the legal arguments made by petitioner in its Administrator [sic] Motion to File Under Seal

26
27
28

4

Even if the remark in Kamakana controlled (it does not), the compelling reasons
standard would still apply. Given its disposition of respondents’ claims, the Final Award
(itself) is also more than tangentially related to the merits of an action .
20

Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 21 of 25

1
2

and incorporates them into this motion.”).
Fourth, petitioner does not make any attempt to narrowly tailor its sealing requests

3

to only those (even arguably) protectable portions of the Final Award. Oregonian Pub.

4

Co. v. U.S. Dist. Ct. for Dist. of Oregon , 920 F.2d 1462, 1465 (9th Cir. 1990) (“Under the

5

first amendment, the press and the public have a presumed right of access to court

6

proceedings and documents. . . . This presumed right can be overcome only by an

7

overriding right or interest ‘based on findings that closure is essential to preserve higher

8

values and is narrowly tailored to serve that interest.’”) (emphasis added); See also

9

Civ. L.R. 79-5(b) (“The request must be narrowly tailored to seek sealing only of sealable

10

United States District Court
Northern District of California

11

material . . .”).
For example, petitioner seeks to seal mere statements of the law recited by the

12

panel in the Final Award. See, e.g,. Dkt. 2-4 ¶ 41(a)-(b). Other low-hanging fruit include

13

provisions in the Final Award that are identical to those alleged by petitioner in its

14

publicly filed petition. Compare Dkt. 1 ¶ 7 (detailing CA arbitration provision) with Dkt. 2-

15

4 ¶ 3 (same). Petitioner’s failure to comply with the narrowly tailored requirement provide

16

an independent ground for denying its motion to seal the Final Award.

17

Fifth, and finally, petitioner does not make any attempt to show that its private

18

interest in sealing the Final Award outweigh any competing public interest in accessing

19

that document. Center For Auto Safety, 809 F.3d at 1097. That failure provides another

20

independent ground to deny this motion.

21

B.

Request to Seal the Supplemental Response Filings

22

In support of their supplemental response, respondents filed 20 “exhibits” under

23

seal. Dkt. 29-4, Dkts. 29-6 – 29-24. These exhibits comprise panel orders, party briefs,

24

and other miscellaneous documents. In addition to these exhibits, respondents also filed

25

under seal their supplemental response (Dkt. 29-3), Counsel Munro’s declarations (Dkts.

26

29-1 and 29-5), their administrative motion to seal (Dkt. 29), and that motion’s proposed

27
28
21

Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 22 of 25

1

order (Dkt. 29-2).5

2
3

In a declaration submitted by its counsel, petitioner asks that the court maintain
under seal 14 of these documents. Dkt. 34 ¶ 7. Those documents include the following:
•

Counsel Munro’s declaration in support of the supplemental response. Dkt. 29-5.

5

•

The panel’s January 20, 2020 Order No. 8. Dkt. 29-4.

6

•

Respondents’ objections to Aragaki’s supplemental disclosure. Dkt. 29-6.

7

•

Respondents’ motion for emergency relief. Dkt. 29-8.

8

•

The panel’s November 19, 2019 Order No. 7. Dkt. 29-15.

9

•

Aragaki’s invoices for the arbitration. Dkt. 29-16.

10

•

The panel’s January 30, 2020 tentative ruling. Dkt. 29-17.

11

United States District Court
Northern District of California

4

•

Petitioner’s February 24, 2020 brief. Dkt. 29-18.

12

•

Respondents’ April 19, 2020 brief. Dkt. 29-19.

13

•

The panel’s March 24, 2020 Order No. 11. Dkt. 29-20.

14

•

Respondents’ April 19, 2020 brief. Dkt. 29-21.

15

•

The panel’s May 15, 2020 Order No. 12. Dkt. 29-22.

16

•

The declaration of petitioner’s counsel, John Dwyer. Dkt. 29-23.

17

•

The panel’s June 22, 2020 Order No. 13. Dkt. 29-24.

18

To support its request to seal these filings bulleted above, petitioner proffers the

19

same reasons that it advanced to support its request to seal the Final Award. Dkt. 34 ¶ ¶

20

6-7. In relevant part, petitioner adds that the court should seal docket 29-5 because it

21

“identifies” certain non-parties who entered a confidential settlement with respondent, as

22

well as some “confidential information about them,” Dkt. 34 ¶ 8 (citing Dkt. 29-5 ¶ 8).

23

As an initial matter, the court does not cite and need not refer to the latter 13

24
25
26
27
28

5

The court notes that respondents were not particularly careful in assembling and
labeling the documents in this filing. As petitioner helpfully clarifies, respondents filed two
exhibits that maintain an identical counterpart. Compare Dkt. 29-12 (Loyola Law School
article) with Dkt. 29-14 (same); Compare Dkt. 29-19 (exhibit 18) (respondents’ April 19,
2020 arbitration brief) with Dkt. 29-21 (same). And despite its listing in an attachment to
the supplemental response, a so-called “exhibit 6” detailing petitioner’s above-noted S-1
filings was not, in fact, filed. Dkt. 29-3 at 6.
22

Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 23 of 25

1

documents when reaching its decision on the counter motion and petition. Given that,

2

the court does not need to consider whether to seal them. On that basis, the court

3

denies as moot petitioner’s request to seal these documents. These 13 documents will

4

remain protected from public view. That leaves only docket 29-5.

5

The court denies petitioner’s request to seal that document. First, as explained in

6

Section II.A., petitioner’s proffered justifications for sealing the Final Award do not satisfy

7

the compelling reasons standard. Thus, the court finds that those same justifications do

8

not support sealing docket 29-5.

9

The court further finds that petitioner fails to articulate a separate compelling
reason counseling against disclosure of the identities of the non-parties referenced in

11

United States District Court
Northern District of California

10

docket 29-5. The court understands petitioner’s citation to the court’s decision to seal

12

third-party Foxconn’s pricing information in Cisco Systems Inc. v. Chung, et. al., 19-cv-

13

7562, Dkt. 179. Petitioner is correct that, when reaching that decision, the court

14

emphasized Foxconn’s status as a non-party in that litigation. 19-cv-7562, Dkt. 179 at

15

12.

16

What petitioner omits, however, is that Foxconn itself appeared in that action to

17

protect its information. 19-cv-7562, Dkt. 177. Foxconn also filed a declaration of its

18

employee attesting to the competitive harm that Foxconn would suffer in the event the

19

subject pricing information were disclosed. 19-7562, Dkt. 179 at 11-12. The court then

20

went on to note the existence of a protective order in that litigation that provided some

21

process for third parties when their information was subject to production. Id. at 12. The

22

court further indicated that the record did not show that plaintiff in that action afforded

23

Foxconn that process prior to production. Id. None of these facts are present here.

24

Second, and independent of the above, petitioner again fails to narrowly tailor its

25

sealing request. For example, petitioner seeks to seal the entirety of Counsel Munro’s

26

declaration (Dkt. 29-5). Dkt. 34 ¶¶ 7-8. Yet, petitioner overlooks that its supplemental

27

reply extensively refers to or cites that declaration when advancing its argument that

28

respondents waived their right to challenge Aragaki’s appointment. Dkt. 33 at 6-7, 9 n.2.
23

Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 24 of 25

1
2
3
4

C.

The Court Denies Petitioner’s Request to File a Renewed Motion to
Seal the Final Award

In its motion to seal, petitioner asks that the court permit it to file a “renewed”
motion in the event the court denies its first motion to seal the Final Award. Dkt. 2 at 4.

5

The court will not permit petitioner to file a “renewed” motion to seal the Final

6

Award. As decided in Section II.A., petitioner cannot reasonably argue that its petition (or

7

the Final Award, for that matter) is less than tangentially related to the merits of the

8

arbitration. Indeed, that’s likely why, in its motion to seal, petitioner proffered its

9

alternative “compelling reasons,” Dkt. 2 at 3, just two paragraphs after claiming that the

10

United States District Court
Northern District of California

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good cause standard controls, id. at 2.
The court evaluated all of petitioner’s proffered reasons in both of its sealing

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requests. In effect, then, petitioner had not one but two opportunities to satisfy its

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showing. Petitioner failed. Petitioner does not offer any reason to suggest that a third

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attempt would yield a different result. But even if it had, as decided above, petitioner

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neglected any attempt to narrowly tailor the portions of any document sought for sealing.

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Again, such an attempt is also required by established Ninth Circuit authority as well as

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this district’s Civil Local Rules.

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The court has expended ample resources deciding the counter motion and

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petition. It will not entertain a successive motion to seal simply because a litigant holds

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back its showing on an initial motion with the expectation that it will get a second shot.

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CONCLUSION

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For the above reasons, the court DENIES the counter motion to vacate the Final

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Award, Dkt. 19; Dkt. 29-3, and GRANTS the petition, Dkt. 1, to confirm that award, Dkt.

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2-4. The court will separately enter judgment in conformity with the Final Award.

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The court also DENIES petitioner’s motion to seal the Final Award, Dkt. 2, as well

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as its request to seal the above-noted 14 documents filed by respondents in support of

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their supplemental response, Dkt. 34. Incident to that decision, the court TERMINATES

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respondents’ administrative motion to seal (Dkt. 29) all documents filed in support of the
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Case 4:21-cv-02154-PJH Document 35 Filed 09/08/21 Page 25 of 25

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supplemental response as well the proposed orders (Dkt. 30) filed as part of that motion .

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Within ten days of this order, petitioner must file on the public docket an

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unredacted version of the Final Award (Dkt. 2-4). By that same date, respondents must

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file on the public docket an unredacted version of Counsel’s Munro’s declaration in

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support of the supplemental response (Dkt. 29-5). Given that petitioner does not request

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that the court seal dockets 29, 29-1 through 29-3, or 29-9 through 29-14, respondents

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must file those documents on the public docket. The court will not reconsider its sealing

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decisions.

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United States District Court
Northern District of California

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IT IS SO ORDERED.
Dated: September 8, 2021
/s/ Phyllis J. Hamilton
PHYLLIS J. HAMILTON
United States District Judge

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