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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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

United States District Court
Northern District of California

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FACEBOOK, INC.,
Plaintiff,

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v.

Case No. 08-CV-05780-LHK
ORDER GRANTING MOTION TO
SEAL
Re: Dkt. No. 466

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POWER VENTURES, INC., et al.,
Defendants.

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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

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and documents, including judicial records and documents.’” Kamakana v. City & Cnty. of

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Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc’ns, Inc., 435

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U.S. 589, 597 & n.7 (1978)). Thus, when considering a sealing request, “a strong presumption in

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favor of access is the starting point.” Id. (internal quotation marks omitted).

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Parties seeking to seal judicial records relating to motions that are “more than tangentially

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related to the underlying cause of action,” Ctr. for Auto Safety v. Chrysler Grp., 809 F.3d 1092,

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1099 (9th Cir. 2016), bear the burden of overcoming the presumption with “compelling reasons
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Case No. 08-CV-05780-LHK
ORDER GRANTING MOTION TO SEAL

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supported by specific factual findings” that outweigh the general history of access and the public

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policies favoring disclosure. Kamakana, 447 F.3d at 1178–79 (9th Cir. 2006). Compelling reasons

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justifying the sealing of court records generally exist “when such ‘court files might have become a

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

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scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 (quoting Nixon, 435

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U.S. at 598). However, “[t]he mere fact that the production of records may lead to a litigant’s

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embarrassment, incrimination, or exposure to further litigation will not, without more, compel the

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court to seal its records.” Id.

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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

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United States District Court
Northern District of California

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1099; see also Kamakana, 447 F.3d at 1179 (“[T]he public has less of a need for access to court

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records attached only to non-dispositive motions because those documents are often unrelated, or

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only tangentially related, to the underlying cause of action.” (internal quotation marks omitted)).

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Parties moving to seal records attached to motions unrelated or only tangentially related to the

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merits of a case must meet the lower “good cause” standard of Rule 26(c) of the Federal Rules of

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Civil Procedure. Ctr. for Auto Safety, 809 F.3d at 1098-99; Kamakana, 447 F.3d at 1179–80. The

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“good cause” standard requires a “particularized showing” that “specific prejudice or harm will

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result” if the information is disclosed. Phillips v. Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th

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

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examples or articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d

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470, 476 (9th Cir. 1992).

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Pursuant to Rule 26(c), a trial court has broad discretion to permit sealing of court

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documents for, inter alia, the protection of “a trade secret or other confidential research,

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development, or commercial information.” Fed. R. Civ. P. 26(c)(1)(G). The Ninth Circuit has

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adopted the definition of “trade secrets” set forth in the Restatement of Torts, holding that “[a]

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trade secret may consist of any formula, pattern, device or compilation of information which is

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Case No. 08-CV-05780-LHK
ORDER GRANTING MOTION TO SEAL

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used in one’s business, and which gives him an opportunity to obtain an advantage over

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competitors who do not know or use it.” Clark v. Bunker, 453 F.2d 1006, 1009 (9th Cir. 1972)

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(quoting Restatement (First) of Torts § 757 cmt. b). “Generally [a trade secret] relates to the

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production of goods. . . . It may, however, relate to the sale of goods or to other operations in the

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business. . . .” Id. (ellipses in original). In addition, the U.S. Supreme Court has recognized that

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sealing may be justified to prevent judicial documents from being used “as sources of business

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information that might harm a litigant’s competitive standing.” Nixon, 435 U.S. at 598.

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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

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United States District Court
Northern District of California

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otherwise entitled to protection under the law.” Civ. L. R. 79-5(b). “The request must be narrowly

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tailored to seek sealing only of sealable material, and must conform with Civil L.R. 79-5(d).” Id.

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Civil Local Rule 79-5(d), moreover, requires the submitting party to attach a “proposed order that

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is narrowly tailored to seal only the sealable material” and that “lists in table format each

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document or portion thereof that is sought to be sealed,” as well as an “unredacted version of the

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document” that “indicate[s], by highlighting or other clear method, the portions of the document

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that have been omitted from the redacted version.” Id. R. 79-5(d)(1).

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The material that Facebook seeks to seal is part of Facebook’s motion for attorney’s fees

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and Facebook’s motion for contempt sanctions. See ECF No. 401 (Ninth Circuit opinion). The

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instant case has already been closed, and the motion for attorney’s fees and the motion for

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contempt sanctions are related to peripheral matters. See U.S. ex rel. Shutt v. Cmty. Home &

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Health Care Servs., Inc., 550 F.3d 764, 766 (9th Cir. 2008) (“[T]he award of attorney’s fees . . .

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raises factual issues ‘collateral to the main action’ because it involves a factual inquiry distinct

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from one addressing the merits.’” (quoting Int’l Assoc. of Bridge Local Union 75 v. Madison

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Indus., Inc., 733 F.2d 656, 659 (9th Cir.1984))). Thus, these motions are “not related, or only

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tangentially related, to the merits of [the] case.” Ctr. for Auto Safety, 809 F.3d at 1099. The Court

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Case No. 08-CV-05780-LHK
ORDER GRANTING MOTION TO SEAL

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therefore applies the “good cause” standard to the parties’ requests. See Digital Reg of Texas, LLC

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v. Adobe Sys., Inc., 2015 WL 604055, at *1 (N.D. Cal. Feb. 11, 2015) (applying good cause

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standard to motion to seal in connection with motion for attorney’s fees); United States ex rel. Doe

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v. Biotronik, Inc., 2015 WL 6447489, at *6 (E.D. Cal. Oct. 23, 2015) (same); Agro v. Makhteshim

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Agan of N. Am., Inc., 2013 WL 12178099, at *2 (M.D.N.C. Mar. 29, 2013) (applying good cause

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to standard to motion to seal in connection with motion for contempt).

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In support of the motions to seal, the parties have filed the Declaration of I. Neel

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Chatterjee, ECF No. 466-1. Facebook seeks to seal information regarding counsel’s rate-setting

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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-

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United States District Court
Northern District of California

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1 ¶ 2. The Court agrees that this information deals with competitively sensitive rate-setting

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practices that, if disclosed, could harm Facebook or its counsel in future negotiations or could

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allow competitors to gain an advantage in rate-setting practices. For these reasons, the Court

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GRANTS Facebook’s motion to file under seal. Specifically, the Court seals Paragraph 5 of the

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Supplemental Declaration of Michael R. Caplan In Support Of Facebook’s Response to Order

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Regarding Billing Records.

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IT IS SO ORDERED.

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Dated: August 8, 2017
______________________________________
LUCY H. KOH
United States District Judge

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Case No. 08-CV-05780-LHK
ORDER GRANTING MOTION TO SEAL