Towers v. Iger et al

Filing 59

ORDER GRANTING 56 DEFENDANTS' ADMINISTRATIVE MOTION TO SEAL DOCUMENT. Signed by Judge Beth Labson Freeman on 11/22/2016.(blflc2S, COURT STAFF) (Filed on 11/22/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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EUGENE F. TOWERS,

Case No. 15-cv-04609-BLF

Plaintiff,
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v.
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ROBERT A. IGER, et al.,
Defendants.

ORDER GRANTING DEFENDANTS'
ADMINISTRATIVE MOTION TO SEAL
DOCUMENT
[Re: ECF 56]

United States District Court
Northern District of California

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Before the Court is Defendants’ administrative motion to seal portions of their

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memorandum of points and authorities in support of their motion to dismiss the verified amended

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stockholder derivative complaint for breach of fiduciary duty and unjust enrichment (“motion to

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dismiss”). Mot., ECF 56. For the reasons discussed below, the motion is GRANTED.

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I.

LEGAL STANDARD
“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 & Cty. 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. (quoting Foltz v. State Farm Mut. Auto.

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Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). Parties seeking to seal judicial records relating to

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motions that are “more than tangentially related to the underlying cause of action” bear the burden

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of overcoming the presumption with “compelling reasons” that outweigh the general history of

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access and the public policies favoring disclosure. Ctr. for Auto Safety v. Chrysler Grp., 809 F.3d

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1092, 1099 (9th Cir. 2016); Kamakana, 447 F.3d at 1178–79.

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However, “while protecting the public’s interest in access to the courts, we must remain

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mindful of the parties’ right to access those same courts upon terms which will not unduly harm

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their competitive interest.” Apple Inc. v. Samsung Elecs. Co., Ltd., 727 F.3d 1214, 1228–29 (Fed.

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Cir. 2013). Records attached to motions that are “not related, or only tangentially related, to the

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merits of a case” therefore are not subject to the strong presumption of access. Ctr. for Auto

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Safety, 809 F.3d at 1099; see also Kamakana, 447 F.3d at 1179 (“[T]he public has less of a need

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for access to court records attached only to non-dispositive motions because those documents are

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often unrelated, or only tangentially related, to the underlying cause of action.”). Parties moving

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to seal the documents attached to such motions must meet the lower “good cause” standard of

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Rule 26(c). Kamakana, 447 F.3d at 1179 (internal quotations and citations omitted). This
standard requires a “particularized showing,” id., that “specific prejudice or harm will result” if the

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United States District Court
Northern District of California

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

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by specific examples of articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins.

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Co., 966 F.2d 470, 476 (9th Cir. 1992). A protective order sealing the documents during

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discovery may reflect the court’s previous determination that good cause exists to keep the

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documents sealed, see Kamakana, 447 F.3d at 1179–80, but a blanket protective order that allows

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the parties to designate confidential documents does not provide sufficient judicial scrutiny to

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determine whether each particular document should remain sealed. See Civ. L.R. 79-5(d)(1)(A)

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(“Reference to a stipulation or protective order that allows a party to designate certain documents

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as confidential is not sufficient to establish that a document, or portions thereof, are sealable.”).

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In addition to making particularized showings of good cause, parties moving to seal

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documents must comply with the procedures established by Civ. L.R. 79-5. Pursuant to Civ. L.R.

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79-5(b), a sealing order is appropriate only upon a request that establishes the document is

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“sealable,” or “privileged or protectable as a trade secret or otherwise entitled to protection under

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the law.” “The request must be narrowly tailored to seek sealing only of sealable material, and

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must conform with Civil L.R. 79-5(d).” Civ. L.R. 79-5(b). In part, Civ. L.R. 79-5(d) requires the

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submitting party to attach a “proposed order that is narrowly tailored to seal only the sealable

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material” which “lists in table format each document or portion thereof that is sought to be
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sealed,” Civ. L.R. 79-5(d)(1)(b), and an “unredacted version of the document” that indicates “by

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highlighting or other clear method, the portions of the document that have been omitted from the

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redacted version.” Civ. L.R. 79-5(d)(1)(d). “Within 4 days of the filing of the Administrative

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Motion to File Under Seal, the Designating Party must file a declaration as required by subsection

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79-5(d)(1)(A) establishing that all of the designated material is sealable.” Civ. L.R. 79-5(e)(1).

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II.

DISCUSSION
Because the sealing motion at issue relates to Defendants’ motion to dismiss, which is

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more than tangentially related to the merits of the case, the motion is resolved under the

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compelling reasons standard.

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Defendants seek to seal portions of their motion to dismiss that relate to meetings of The

United States District Court
Northern District of California

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Walt Disney Company’s (the “Company”) board of directors during which the directors discussed

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confidential matters regarding the Company’s acquisition of Pixar, Inc. (“Pixar”), including the

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board of directors’ negotiations, strategic considerations for entering into the acquisition, and post-

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acquisition operational issues. Mot. 1; Horvath Decl. ¶ 3, ECF 56-1. These matters were not

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disclosed at the time of the Company’s acquisition of Pixar, and the Company has maintained the

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confidentiality of that information since. Mot. 1; Horvath Decl. ¶ 3.

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The Court finds these reasons compelling and the request narrowly tailored. Accordingly,

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the Court GRANTS Defendants’ sealing motion as to the identified portions of the motion to

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dismiss.

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IT IS SO ORDERED.
Dated: November 22, 2016
______________________________________
BETH LABSON FREEMAN
United States District Judge

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