William Philips et al v. Ford Motor Company

Filing 223

Order by Judge Lucy H. Koh Granting in Part and Denying in Part #195 Administrative Motion to File Under Seal; Granting in Part and Denying in Part #199 Administrative Motion to File Under Seal; Granting in Part and Denying in Part #206 Administrative Motion to File Under Seal; Denying as Moot #193 Provisional Motion to File Under Seal; Denying as Moot #203 Administrative Motion to File Under Seal. (lhklc2S, COURT STAFF) (Filed on 12/20/2016)

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

WILLIAM PHILIPS, et al.,
Plaintiffs,

13
14
15
16

v.
FORD MOTOR COMPANY,

Case No. 14-CV-02989-LHK
ORDER GRANTING IN PART AND
DENYING IN PART SEALING
MOTIONS
Re: Dkt. Nos. 195, 199, 206

Defendant.

17
18

Before the Court are the parties’ “Joint Administrative Motion to File Under Seal Ford’s

19

Opposition to Plaintiffs’ Motion for Class Certification and Certain Exhibits to that Opposition,”

20

ECF No. 195, the “Joint Administrative Motion to File Under Seal Plaintiffs’ Motion for Class

21

Certification and Certain Exhibits to that Motion,” ECF No. 199, and the “Joint Administrative

22

Motion to File Under Seal Plaintiffs’ Reply in Support of Motion for Class Certification and

23

Exhibit 52 to that Reply,” ECF No. 206.

24

Pursuant to the Court’s order, ECF No. 188, Ford filed a “Provisional Motion to Seal

25

Ford’s Opposition to Plaintiffs’ Motion for Class Certification and Certain Exhibits to that

26

Opposition” (“Provisional Motion”), ECF No. 193, and Plaintiffs filed a provisional motion to file

27

Plaintiffs’ Reply under seal, ECF No. 203. Because the joint motions to seal, ECF Nos. 195 &
1

28

Case No. 14-CV-002989-LHK
ORDER GRANTING IN PART AND DENYING IN PART SEALING MOTIONS

1
2

206, supersede the provisional motions, the provisional motions to seal are DENIED AS MOOT.
As to the remaining motions, “[h]istorically, courts have recognized a ‘general right to

3

inspect and copy public records and documents, including judicial records and documents.’”

4

Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v.

5

Warner Commc’ns, Inc., 435 U.S. 589, 597 & n.7 (1978)). Thus, when considering a sealing

6

request, “a strong presumption in favor of access is the starting point.” Id. (internal quotation

7

marks omitted).

8

Parties seeking to seal judicial records relating to motions that are “more than tangentially
related to the underlying cause of action,” Ctr. for Auto Safety v. Chrysler Grp., 809 F.3d 1092,

10

1099 (9th Cir. 2016), bear the burden of overcoming the presumption with “compelling reasons

11
United States District Court
Northern District of California

9

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

12

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

13

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

14

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

15

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

16

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

17

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

18

court to seal its records.” Id.

19

Records attached to motions that are “not related, or only tangentially related, to the merits

20

of a case,” are not subject to the strong presumption of access. Ctr. for Auto Safety, 809 F.3d at

21

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

22

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

23

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

24

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

25

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

26

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

27
28

2
Case No. 14-CV-002989-LHK
ORDER GRANTING IN PART AND DENYING IN PART SEALING MOTIONS

1

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

2

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

3

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

4

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

5

470, 476 (9th Cir. 1992).

6

Pursuant to Rule 26(c), a trial court has broad discretion to permit sealing of court
documents for, inter alia, the protection of “a trade secret or other confidential research,

8

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

9

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

10

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

11
United States District Court
Northern District of California

7

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

12

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

13

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

14

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

15

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

16

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

17

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

18

In addition, parties moving to seal documents must comply with the procedures established

19

by Civil Local Rule 79-5. Pursuant to that rule, a sealing order is appropriate only upon a request

20

that establishes the document is “sealable,” or “privileged, protectable as a trade secret or

21

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

22

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

23

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

24

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

25

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

26

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

27
28

3
Case No. 14-CV-002989-LHK
ORDER GRANTING IN PART AND DENYING IN PART SEALING MOTIONS

1
2

that have been omitted from the redacted version.” Id. R. 79-5(d)(1).
Since the Ninth Circuit’s decision in Center for Auto Safety v. Chrysler Group, 809 F.3d

3

1092, 1099 (9th Cir. 2016), most district courts to consider the question have found that a motion

4

for class certification is “more than tangentially related to the underlying cause of action” and

5

therefore merits application of the “compelling reasons” standard. See Opperman v. Path, Inc.,

6

2016 WL 1321296 (N.D. Cal. Feb. 11, 2016); Corvello v. Wells Fargo Bank N.A., 2016 U.S. Dist.

7

LEXIS 11647 (N.D. Cal. Jan. 29, 2016); Cohen v. Trump, 2016 WL 3036302 (S.D. Cal. May 27,

8

2016); but see Gustafson v. Goodman Mfg. Co. LP, 2016 WL 393640, at *2 (D. Ariz. Feb. 2,

9

2016) (declining to “decid[e] which standard applies in this case . . . because the same records

10

United States District Court
Northern District of California

11

would be sealed under either standard”).
The Court need not decide whether, in general, motions for class certification are “more

12

than tangentially related to the underlying cause of action.” Ctr. for Auto Safety, 809 F.3d at 1099.

13

Instead, the Court merely decides that the instant motion for class certification meets this standard.

14

See In re Google Inc. Gmail Litig., 2014 WL 10537440, at *3 (N.D. Cal. Aug. 6, 2014) (holding

15

that the particular circumstances of a class certification motion justified applying the “compelling

16

reasons” standard). The dispute over class certification in the instant case has focused in large part

17

on whether the evidence shows that the power steering systems in certain Ford vehicles failed

18

because of a class-wide defect or because of individual issues. Thus, the issues on class

19

certification “entail some overlap with the merits of the plaintiff’s underlying claim.” Wal-Mart

20

Stores, Inc. v. Dukes, 564 U.S. 338 (2011). This conclusion is reinforced by the fact that in their

21

sealing motions, the parties appear to agree that the compelling reasons standard should apply.

22

See, e.g., ECF No. 199 at 2 (discussing the “compelling reasons” standard in the motion’s “Legal

23

Standard” section). In these circumstances, the Court finds that the instant motion for class

24

certification is “more than tangentially related to the underlying cause of action.” Ctr. for Auto

25

Safety, 809 F.3d at 1099. The Court therefore applies the “compelling reasons” standard to the

26

parties’ requests.

27
28

4
Case No. 14-CV-002989-LHK
ORDER GRANTING IN PART AND DENYING IN PART SEALING MOTIONS

1

In support of the motions to seal, the parties have filed the following declarations:

2

(1) Declaration of Jeffrey Williams, see ECF No. 195

3

(2) Declaration of Amir Nassihi, see ECF No. 195

4

(3) Declaration of Jeffrey Williams, see ECF No. 199

5

(4) Declaration of Amir Nassihi, see ECF No. 199

6

(5) Declaration of Jeffrey Williams, see ECF No. 206

7

(6) Declaration of Andrew Chang, see ECF No. 206
Although the motions to seal are filed as joint motions, Plaintiffs have specified that they join the

9

motions only to indicate that they do not oppose sealing. Plaintiffs do not seek to seal any portion

10

of the briefing and do not endorse Ford’s analysis. ECF No. 195, at 1; ECF No. 199, at 1; ECF No.

11
United States District Court
Northern District of California

8

206, at 1.

12

In the motions to seal and the supporting declarations, Ford argues that the documents

13

which Ford seeks to seal contain “sensitive, confidential, and proprietary business and company

14

information.” ECF No. 199, at 2. This includes information about the EPAS systems at issue in the

15

instant case, including the design of the EPAS systems; the evaluation, performance, and

16

investigation of the EPAS systems; corrective actions that Ford took with respect to the EPAS

17

systems; root cause analysis for faults in EPAS systems. ECF No. 195, at 2; ECF No. 199, at 2;

18

ECF No. 206, at 2. The documents also contain information about specific costs associated with

19

the EPAS systems, including component costs, replacement costs, warranty costs, and the costs of

20

corrective actions. Finally, the documents contain other information such as “information

21

concerning certain types of warranty claims,” information about Ford’s business procedures and

22

databases, and information about the units of vehicles produced for sale in the United States. ECF

23

No. 199, at 2.

24

Ford argues that public release of these categories of information would give a competitive

25

advantage to Ford’s competitors. First, Ford claims that “research, development, testing,

26

evaluation, investigations, and root cause analyses pertaining to vehicle components may take

27
28

5
Case No. 14-CV-002989-LHK
ORDER GRANTING IN PART AND DENYING IN PART SEALING MOTIONS

1

several years,” and that Ford’s competitors could use this information to free ride off of Ford’s

2

advanced diagnostic systems and research methods. ECF No. 195, at 4; ECF No. 199, at 4; ECF

3

No. 206, at 4. The Court agrees that the details of Ford’s diagnostic procedures are valuable and

4

that Ford could suffer competitive harm if they were publicly revealed. Nevertheless, the Court

5

also finds that some of Ford’s sealing requests are not narrowly tailored to this goal. Most notably,

6

Ford has sought to redact any statement by Ford employees indicating that electro-mechanical

7

relays should not have been used in EPAS systems or suggesting that the relays could or should be

8

replaced in future EPAS systems with solid state relays. The Court finds that Ford’s concerns

9

regarding free-riding do not constitute a compelling reason for sealing these statements. The
filings in this case are full of Plaintiffs’ arguments and suggestions that electro-mechanical relays

11
United States District Court
Northern District of California

10

should not be used in EPAS systems. In these circumstances, it is unlikely that similar statements

12

from Ford employees that offer only general opinions would cause competitive harm to Ford.

13

Second, Ford argues that information regarding pricing decisions and costs, if disclosed,

14

would allow Ford’s competitors “to undercut Ford’s costs and timetables without incurring the

15

substantial research and development costs incurred by Ford.” ECF No. 199, at 4. Ford also argues

16

that these costs would cause competitive harm by revealing Ford’s “motives, goals, and strategies

17

with respect to automobile design and development.” Id. The Court finds that the need to avoid

18

competitive disadvantage in contract negotiations and undercutting by competitors is a compelling

19

reason that justifies sealing specific pricing and cost information. See Apple Inc. v. Samsung Elecs.

20

Co., 727 F.3d 1214, 1225 (Fed. Cir. 2013) (applying Ninth Circuit law and stating that “it seems

21

clear that if Apple’s and Samsung’s suppliers have access to their profit, cost, and margin data, it

22

could give the suppliers an advantage in contract negotiations, which they could use to extract

23

price increases for components.”). However, here again the Court finds that Ford’s requests are

24

not sufficiently narrowly tailored to this goal. Specifically, Ford seeks to redact all mention that

25

Ford or its dealers have a “markup” when selling replacement EPAS systems, as well as any

26

suggestion by Ford employees that the price for replacement EPAS systems should be lower. Ford

27
28

6
Case No. 14-CV-002989-LHK
ORDER GRANTING IN PART AND DENYING IN PART SEALING MOTIONS

1

has identified no competitive harm that could result from generalized acknowledgement of a profit

2

margin or vague statements that the margin should be lower, and therefore these statements do not

3

meet the “compelling reason” standard.
With these particular findings and the overall standard in mind, the Court rules on the

4
5

instant motions as follows:

6
7
8
9
10

Motion Standard
to Seal
195
Compelling
Reason

195

11
United States District Court
Northern District of California

195
12
13
14

195

195

15
16
17

195
199

Ruling

Ford’s
Opposition

Compelling
Reason
Compelling
Reason
Compelling
Reason

Exhibit A

DENIED as to page 6 because page 6 contains
information that is discussed elsewhere without redaction,
see, e.g., Ex. B at 42, and thus there is no compelling
reason to redact this information. GRANTED otherwise.
GRANTED.

Exhibit B

GRANTED.

Exhibit D

Compelling
Reason
Compelling
Reason
Compelling
Reason

Exhibit G

Exhibit D to Ford’s Opposition is identical to Exhibit 2 to
Plaintiffs’ Motion for Class Certification. See Exhibit 2
below for the Court’s ruling.
GRANTED.

Exhibit S

GRANTED.

18
19

Document

Plaintiff’s
Motion for
Class
Certification
Ex. 2

199

Compelling
Reason

199

Compelling
Reason
Compelling
Reason

Ex. 3

Compelling
Reason

Ex. 5

20
21
22
23
24

199

25
26
27
28

199

Ex. 4

DENIED as to page 1, pages 3 lines 1–7 and 12–26, page
4 lines 1–8 and lines 10–23, page 5, page 6 lines 5–10,
page 7 lines 1–8, page 8 lines 17–28, page 9. GRANTED
otherwise.
GRANTED as to pages 6, 8, 18, 19, 20, 25, the second
requested redaction on page 28, and the first and third
proposed redactions on page 35. GRANTED as to the
portions of page 14 for which redaction was requested
both for Exhibit 2 and Exhibit 4. GRANTED as to the
portions of page 24 for which redaction was requested
both for Exhibit 2 and Exhibit 6. DENIED otherwise.
DENIED.
GRANTED as to the portions of page 62 for which
redaction was requested both for Exhibit 2 page 14 and
Exhibit 4. DENIED otherwise.
DENIED as to page 68. GRANTED otherwise.
7

Case No. 14-CV-002989-LHK
ORDER GRANTING IN PART AND DENYING IN PART SEALING MOTIONS

1
2

Motion Standard
to Seal
199
Compelling
Reason

Document

Compelling
Reason
Compelling
Reason

Ex. 8

GRANTED as to the portions of page 71 for which
redaction was requested both for Exhibit 2 page 24 and
Exhibit 6. DENIED otherwise.
GRANTED.

Ex. 9

GRANTED.

199

3

Compelling
Reason

Ex. 10

199

Compelling
Reason
Compelling
Reason
Compelling
Reason
Compelling
Reason
Compelling
Reason

Ex. 11

DENIED because Ford has identified no competitive harm
or other compelling reason that would justify sealing the
number of warranty returns.
DENIED.

Ex. 12

GRANTED.

Ex. 13

GRANTED.

Ex. 15

DENIED as to page 114. GRANTED otherwise.

Ex. 16

DENIED as to page 122 and page 125. GRANTED
otherwise.

Compelling
Reason
Compelling
Reason
Compelling
Reason
Compelling
Reason
Compelling
Reason

Ex. 17

DENIED.

Ex. 18

DENIED.

Ex. 19

GRANTED.

Ex. 21

DENIED.

Ex. 23

Compelling
Reason
Compelling
Reason
Compelling
Reason
Compelling
Reason
Compelling
Reason

Ex. 26

DENIED because Ford has identified no competitive harm
or other compelling reason that would justify sealing the
number of warranty returns.
GRANTED.

4

199

5

199

Ex. 6

Ruling

6
7
8
9
199
10

United States District Court
Northern District of California

11

199

12

199

13

199

14
15

199

16

199

17

199

18

199

19

199

20
21
22

199
199

23
199
24
25
26

199
199

Ex. 28
Ex. 29
Ex. 30
Ex. 38

GRANTED as to pages 166–68 and as to the second
proposed redaction on page 173. DENIED otherwise.
GRANTED.
DENIED as to the first proposed redaction on page 187.
GRANTED otherwise.
GRANTED.

27
28

8
Case No. 14-CV-002989-LHK
ORDER GRANTING IN PART AND DENYING IN PART SEALING MOTIONS

1
2
3
4
5
6

Motion Standard
to Seal
199
Compelling
Reason
199
Compelling
Reason
199
Compelling
Reason
199
Compelling
Reason

Document
Ex. 39

GRANTED.

Ex. 43

GRANTED.

Ex. 44

GRANTED as to the first proposed redaction under the
caption “08/11/2011, Exhibit 4.” DENIED otherwise.
DENIED as to first two proposed redactions on page 313.
Ford did not seek redaction of these portions of the
document when the document was reproduced in Exhibit
2 page 28. GRANTED otherwise.
DENIED because Ford has not identified any competitive
harm or other compelling reason to seal discussion of the
timing of Ford’s meetings with its supplier.
GRANTED as to page 1. DENIED otherwise.

Ex. 45

7
8

199

Compelling
Reason

206

Compelling
Reason

206

Compelling
Reason

Ex. 46

9
10

United States District Court
Northern District of California

11
12
13
14

Ruling

Plaintiffs’
Reply in
Support of
Motion for
Class
Certification
Ex. 52
DENIED as to page 360. GRANTED otherwise.

15
16

IT IS SO ORDERED.

17
18
19
20

Dated: December 20, 2016
______________________________________
LUCY H. KOH
United States District Judge

21
22
23
24
25
26
27
28

9
Case No. 14-CV-002989-LHK
ORDER GRANTING IN PART AND DENYING IN PART SEALING MOTIONS