Johnson v. Quantum Learning Network, Inc.

Filing 47

ORDER by Judge Lucy H. Koh granting 44 Administrative Motion to File Under Seal. (lhklc3, COURT STAFF) (Filed on 8/22/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

United States District Court
Northern District of California

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TREVOR JOHNSON, et al.,
Plaintiffs,

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Case No. 15-CV-05013-LHK
ORDER GRANTING JOINT MOTION
TO SEAL

v.

Re: Dkt. No. 44
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QUANTUM LEARNING NETWORK,
INC.,
Defendant.

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Plaintiffs Trevor Johnson and Samantha Harmon (“Plaintiffs”), along with Defendant

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Quantum Learning Network, Inc. (“Defendant”), jointly seek to seal portions of a declaration

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submitted in support of Plaintiffs’ amended motion for preliminary approval of class action

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settlement. ECF No. 44 (motion to seal); ECF No. 45 (amended motion for preliminary approval

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of class action settlement). “Historically, courts have recognized a ‘general right to inspect and

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copy public records and documents, including judicial records and documents.’” Kamakana v.

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

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

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

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Case No. 15-CV-05013-LHK
ORDER GRANTING JOINT MOTION TO SEAL

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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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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. Compelling reasons justifying the

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sealing of court records generally exist “when such ‘court files might have become a vehicle for

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

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

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598). However, “[t]he mere fact that the production of records may lead to a litigant’s
embarrassment, incrimination, or exposure to further litigation will not, without more, compel the

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United States District Court
Northern District of California

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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

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

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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.

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

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

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11 (9th Cir. 2002); see Fed. R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated by

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

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966 F.2d 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
documents for, inter alia, the protection of “a trade secret or other confidential research,

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Case No. 15-CV-05013-LHK
ORDER GRANTING JOINT MOTION TO SEAL

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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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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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United States District Court
Northern District of California

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information that might harm a litigant’s competitive standing.” Nixon, 435 U.S. at 598.
In addition, parties moving to seal documents must comply with the procedures established

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

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that establishes the document is “sealable,” or “privileged, 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

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narrowly tailored to seek sealing only of sealable material, and must conform with Civil L.R. 79-

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

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

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

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

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

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In the instant case, the parties seek to seal ¶¶ 3, and 4 of the declaration of Roberta

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DePorter (“DePorter”), which is offered in support of Plaintiffs’ amended motion for preliminary

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approval of class action settlement. ECF No. 44. The parties submit that there are “compelling

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reasons” to seal the designated portions of Deporter’s declaration. Id. at 3; see also In re Google

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Inc. Gmail Litig., 2014 WL 10537440, at *4 (N.D. Cal. Aug. 6, 2016) (applying “compelling

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reasons” standard to documents submitted with briefing on motion for class certification). With

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Case No. 15-CV-05013-LHK
ORDER GRANTING JOINT MOTION TO SEAL

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this standard in mind, the Court GRANTS the parties’ joint motion to seal. The parties’ motion is

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narrowly tailored and seeks to seal only the sensitive financial information of non-parties DePorter

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and DePorter’s spouse, as well as sensitive financial information of Defendant that, if made

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public, could harm Defendant’s business interests. See Ctr. for Auto Safety, 809 F.3d at 1097

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(noting that “harm [to] a litigant’s competitive standing” is a “compelling reason” to seal

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information).

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IT IS SO ORDERED.

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Dated: August 22, 2016
______________________________________
LUCY H. KOH
United States District Judge

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United States District Court
Northern District of California

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Case No. 15-CV-05013-LHK
ORDER GRANTING JOINT MOTION TO SEAL