Facebook, Inc. v. Power Ventures, Inc.

Filing 469

Order by Hon. Lucy H. Koh Granting 466 Administrative Motion to File Under Seal.(lhklc2S, COURT STAFF) (Filed on 8/8/2017)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION United States District Court Northern District of California 11 12 FACEBOOK, INC., Plaintiff, 13 14 v. Case No. 08-CV-05780-LHK ORDER GRANTING MOTION TO SEAL Re: Dkt. No. 466 15 16 POWER VENTURES, INC., et al., Defendants. 17 18 19 20 Before the Court is Defendant Facebook’s Administrative Motion to Seal, ECF No. 445. For the reasons discussed below, the Court GRANTS Facebook’s motion. “Historically, courts have recognized a ‘general right to inspect and copy public records 21 and documents, including judicial records and documents.’” Kamakana v. City & Cnty. of 22 Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc’ns, Inc., 435 23 U.S. 589, 597 & n.7 (1978)). Thus, when considering a sealing request, “a strong presumption in 24 favor of access is the starting point.” Id. (internal quotation marks omitted). 25 Parties seeking to seal judicial records relating to motions that are “more than tangentially 26 related to the underlying cause of action,” Ctr. for Auto Safety v. Chrysler Grp., 809 F.3d 1092, 27 1099 (9th Cir. 2016), bear the burden of overcoming the presumption with “compelling reasons 1 28 Case No. 08-CV-05780-LHK ORDER GRANTING MOTION TO SEAL 1 supported by specific factual findings” that outweigh the general history of access and the public 2 policies favoring disclosure. Kamakana, 447 F.3d at 1178–79 (9th Cir. 2006). Compelling reasons 3 justifying the sealing of court records generally exist “when such ‘court files might have become a 4 vehicle for improper purposes,’ such as the use of records to gratify private spite, promote public 5 scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 (quoting Nixon, 435 6 U.S. at 598). However, “[t]he mere fact that the production of records may lead to a litigant’s 7 embarrassment, incrimination, or exposure to further litigation will not, without more, compel the 8 court to seal its records.” Id. 9 Records attached to motions that are “not related, or only tangentially related, to the merits of a case,” are not subject to the strong presumption of access. Ctr. for Auto Safety, 809 F.3d at 11 United States District Court Northern District of California 10 1099; see also Kamakana, 447 F.3d at 1179 (“[T]he public has less of a need for access to court 12 records attached only to non-dispositive motions because those documents are often unrelated, or 13 only tangentially related, to the underlying cause of action.” (internal quotation marks omitted)). 14 Parties moving to seal records attached to motions unrelated or only tangentially related to the 15 merits of a case must meet the lower “good cause” standard of Rule 26(c) of the Federal Rules of 16 Civil Procedure. Ctr. for Auto Safety, 809 F.3d at 1098-99; Kamakana, 447 F.3d at 1179–80. The 17 “good cause” standard requires a “particularized showing” that “specific prejudice or harm will 18 result” if the information is disclosed. Phillips v. Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th 19 Cir. 2002); see Fed. R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated by specific 20 examples or articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 21 470, 476 (9th Cir. 1992). 22 Pursuant to Rule 26(c), a trial court has broad discretion to permit sealing of court 23 documents for, inter alia, the protection of “a trade secret or other confidential research, 24 development, or commercial information.” Fed. R. Civ. P. 26(c)(1)(G). The Ninth Circuit has 25 adopted the definition of “trade secrets” set forth in the Restatement of Torts, holding that “[a] 26 trade secret may consist of any formula, pattern, device or compilation of information which is 27 28 2 Case No. 08-CV-05780-LHK ORDER GRANTING MOTION TO SEAL 1 used in one’s business, and which gives him an opportunity to obtain an advantage over 2 competitors who do not know or use it.” Clark v. Bunker, 453 F.2d 1006, 1009 (9th Cir. 1972) 3 (quoting Restatement (First) of Torts § 757 cmt. b). “Generally [a trade secret] relates to the 4 production of goods. . . . It may, however, relate to the sale of goods or to other operations in the 5 business. . . .” Id. (ellipses in original). In addition, the U.S. Supreme Court has recognized that 6 sealing may be justified to prevent judicial documents from being used “as sources of business 7 information that might harm a litigant’s competitive standing.” Nixon, 435 U.S. at 598. 8 9 In addition, parties moving to seal documents must comply with the procedures established by Civil Local Rule 79-5. Pursuant to that rule, a sealing order is appropriate only upon a request that establishes the document is “sealable,” or “privileged, protectable as a trade secret or 11 United States District Court Northern District of California 10 otherwise entitled to protection under the law.” Civ. L. R. 79-5(b). “The request must be narrowly 12 tailored to seek sealing only of sealable material, and must conform with Civil L.R. 79-5(d).” Id. 13 Civil Local Rule 79-5(d), moreover, requires the submitting party to attach a “proposed order that 14 is narrowly tailored to seal only the sealable material” and that “lists in table format each 15 document or portion thereof that is sought to be sealed,” as well as an “unredacted version of the 16 document” that “indicate[s], by highlighting or other clear method, the portions of the document 17 that have been omitted from the redacted version.” Id. R. 79-5(d)(1). 18 The material that Facebook seeks to seal is part of Facebook’s motion for attorney’s fees 19 and Facebook’s motion for contempt sanctions. See ECF No. 401 (Ninth Circuit opinion). The 20 instant case has already been closed, and the motion for attorney’s fees and the motion for 21 contempt sanctions are related to peripheral matters. See U.S. ex rel. Shutt v. Cmty. Home & 22 Health Care Servs., Inc., 550 F.3d 764, 766 (9th Cir. 2008) (“[T]he award of attorney’s fees . . . 23 raises factual issues ‘collateral to the main action’ because it involves a factual inquiry distinct 24 from one addressing the merits.’” (quoting Int’l Assoc. of Bridge Local Union 75 v. Madison 25 Indus., Inc., 733 F.2d 656, 659 (9th Cir.1984))). Thus, these motions are “not related, or only 26 tangentially related, to the merits of [the] case.” Ctr. for Auto Safety, 809 F.3d at 1099. The Court 27 28 3 Case No. 08-CV-05780-LHK ORDER GRANTING MOTION TO SEAL 1 therefore applies the “good cause” standard to the parties’ requests. See Digital Reg of Texas, LLC 2 v. Adobe Sys., Inc., 2015 WL 604055, at *1 (N.D. Cal. Feb. 11, 2015) (applying good cause 3 standard to motion to seal in connection with motion for attorney’s fees); United States ex rel. Doe 4 v. Biotronik, Inc., 2015 WL 6447489, at *6 (E.D. Cal. Oct. 23, 2015) (same); Agro v. Makhteshim 5 Agan of N. Am., Inc., 2013 WL 12178099, at *2 (M.D.N.C. Mar. 29, 2013) (applying good cause 6 to standard to motion to seal in connection with motion for contempt). 7 In support of the motions to seal, the parties have filed the Declaration of I. Neel 8 Chatterjee, ECF No. 466-1. Facebook seeks to seal information regarding counsel’s rate-setting 9 practices. Facebook states that this information is “commercially sensitive and not publically known and could prejudice Facebook and its outside counsel in future negotiation.” ECF No. 466- 11 United States District Court Northern District of California 10 1 ¶ 2. The Court agrees that this information deals with competitively sensitive rate-setting 12 practices that, if disclosed, could harm Facebook or its counsel in future negotiations or could 13 allow competitors to gain an advantage in rate-setting practices. For these reasons, the Court 14 GRANTS Facebook’s motion to file under seal. Specifically, the Court seals Paragraph 5 of the 15 Supplemental Declaration of Michael R. Caplan In Support Of Facebook’s Response to Order 16 Regarding Billing Records. 17 IT IS SO ORDERED. 18 19 Dated: August 8, 2017 ______________________________________ LUCY H. KOH United States District Judge 20 21 22 23 24 25 26 27 28 4 Case No. 08-CV-05780-LHK ORDER GRANTING MOTION TO SEAL

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