Deserae Ryan et al v. Microsoft Corporation

Filing 66

ORDER by Judge Lucy H. Koh denying 60 Administrative Motion to File Under Seal (lhklc1, COURT STAFF) (Filed on 6/8/2015)

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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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DESERAE RYAN, et al.,
Plaintiffs,

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Case No. 14-cv-04634-LHK
ORDER DENYING MOTION TO SEAL

v.

Re: Dkt. No. 60

MICROSOFT CORPORATION,
Defendant.

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Before the Court is Plaintiffs’ motion to file portions of their First Amended Complaint
under the seal. ECF No. 60. Defendant Microsoft filed a response. ECF No. 63.
“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)). Accordingly, when considering a sealing request, “a strong

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

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Parties seeking to seal judicial records relating to dispositive motions bear the burden of

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overcoming the presumption with “compelling reasons supported by specific factual findings” that

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outweigh the general history of access and the public policies favoring disclosure. Kamakana, 447

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Case No.14-cv-04634-LHK
ORDER DENYING MOTION TO SEAL

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F.3d at 1178–79. Compelling reasons justifying the sealing of court records generally exist “when

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such ‘court files might have become a vehicle for improper purposes,’ such as the use of records to

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gratify private spite, promote public scandal, circulate libelous statements, or release trade

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secrets.” Id. at 1179 (quoting Nixon, 435 U.S. at 598). However, “[t]he mere fact that the

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production of records may lead to a litigant’s embarrassment, incrimination, or exposure to further

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litigation will not, without more, compel the court to seal its records.” Id. Dispositive motions

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include “motions for summary judgment.” Id.

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Records attached to nondispositive motions are not subject to the strong presumption of
access. See Kamakana, 447 F.3d at 1179. Because the documents attached to nondispositive

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motions “are often unrelated, or only tangentially related, to the underlying cause of action,”

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United States District Court
Northern District of California

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parties moving to seal must meet the lower “good cause” standard of Rule 26(c) of the Federal

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Rules of Civil Procedure. Id. at 1179–80 (internal quotation marks omitted). The “good cause”

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standard requires a “particularized showing” that “specific prejudice or harm will result” if the

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information is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206,

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1210–11 (9th Cir. 2002) (internal quotation marks omitted); see Fed. R. Civ. P. 26(c). “Broad

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allegations of harm, unsubstantiated by specific examples of articulated reasoning” will not

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suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992).

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As other courts in this District have concluded, the Court finds that “a request to seal all or

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part of a complaint must clearly meet the ‘compelling reasons’ standard and not the ‘good cause’

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standard.” In re NVIDIA Corp. Deriv. Litig., No. 06-6110-SBA, 2008 WL 1859067, at *3 (N.D.

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Cal. Apr. 23, 2008); see also In re Google Inc. Gmail Litig., No. 13-MD-2430-LHK, 2013 WL

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5366963, at *2 (N.D. Cal. Sept. 25, 2013). The Court therefore applies the “compelling reasons”

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standard to Plaintiffs’ request.

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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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Case No.14-cv-04634-LHK
ORDER DENYING MOTION TO SEAL

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

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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 Supreme Court has recognized that sealing

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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

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United States District Court
Northern District of California

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

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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). “Within 4 days of the filing

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of the Administrative Motion to File Under Seal, the Designating Party must file a declaration as

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required by subsection 79-5(d)(1)(A) establishing that all of the designated material is sealable.”

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Id. R. 79-5(e)(1).

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Here, the Court DENIES without prejudice Plaintiffs’ motion to seal. ECF No. 60.

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Applying the “compelling reasons” standard, the Court finds that Plaintiffs have not stated

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compelling reasons to seal portions of the First Amended Complaint. In support of Plaintiffs’

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motion to seal, Plaintiffs state only that the documents were designated confidential by either

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Defendant or “third parties,” but provide no other reason why any of the information should be

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sealed. However, “[r]eference to a stipulation or protective order that allows a party to designate

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Case No.14-cv-04634-LHK
ORDER DENYING MOTION TO SEAL

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certain documents as confidential is not sufficient to establish that a document, or portions thereof,

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are sealable.” Civ. L.R. 79-5(d)(1)(A). Defendant Microsoft has taken no position on Plaintiffs’

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motion, and has withdrawn its confidentiality designations as to many of Plaintiffs’ proposed

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redactions. See ECF No. 63. That information should no longer be redacted. As to the “third

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parties” Plaintiffs reference, the Court notes that Plaintiffs are obligated to identify the non-parties

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that designated information or documents as confidential, serve the designating parties, and file

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proofs of service. See Civ. L.R. 79-5(e). Plaintiffs have failed to do so.

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The Court therefore DENIES without prejudice Plaintiffs’ sealing request. Any renewed
sealing request shall comply with Civ. L.R. 79-5 and shall be filed within 7 days of this Order.
IT IS SO ORDERED.

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United States District Court
Northern District of California

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Dated: June 8, 2015
______________________________________
LUCY H. KOH
United States District Judge

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Case No.14-cv-04634-LHK
ORDER DENYING MOTION TO SEAL