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)

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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 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

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