Sumotext Corp. -v- Zoove, Inc., et al

Filing 375

OMNIBUS ORDER RE 337 , 339 , 340 , 342 , 346 , 347 , 349 , 355 , 356 PARTIES' ADMINISTRATIVE MOTIONS TO FILE UNDER SEAL. Signed by Judge Beth Labson Freeman on 12/16/2019. (blflc1S, COURT STAFF) (Filed on 12/16/2019)

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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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SUMOTEXT CORP.,
Plaintiff,

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v.

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Case No. 16-cv-01370-BLF

ZOOVE, INC., et al.,
Defendants.

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OMNIBUS ORDER RE PARTIES’
ADMINISTRATIVE MOTIONS TO
FILE UNDER SEAL
[Re: ECF 337, 339, 340, 342, 346, 347,
349, 355, 356]

United States District Court
Northern District of California

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Before the Court are a number of administrative motions to file under seal which fall into

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two buckets: (1) sealing motions relating to Defendants’ motion for summary judgment (ECF

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337, 355, and 356); and (2) sealing motions relating to Plaintiff’s Daubert motions regarding

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defense experts Greg J. Regan and Debra Aron, Ph.D. (ECF 339, 340, 342, 346, 347, and 349).

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The sealing motions are GRANTED IN PART AND DENIED IN PART for the reasons

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discussed below.
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 and 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)). Consequently, filings that are “more than tangentially related to the

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merits of a case” may be sealed only upon a showing of “compelling reasons” for sealing. Ctr. for

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Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1101-02 (9th Cir. 2016). Filings that are only

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tangentially related to the merits may be sealed upon a lesser showing of “good cause.” Id. at

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1097.

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Sealing motions filed in this district also must be “narrowly tailored to seek sealing only of
sealable material.” Civil L.R. 79-5(b). A party moving to seal a document in whole or in part

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must file a declaration establishing that the identified material is “sealable.” Civ. L.R. 79-

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5(d)(1)(A). “Reference to a stipulation or protective order that allows a party to designate certain

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

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sealable.” Id.
Where the moving party requests sealing of documents because they have been designated

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confidential by another party or a non-party under a protective order, the burden of establishing

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adequate reasons for sealing is placed on the designating party or non-party. Civ. L.R. 79-5(e).

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The moving party must file a proof of service showing that the designating party or non-party has

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been given notice of the motion to seal. Id. “Within 4 days of the filing of the Administrative
Motion to File Under Seal, the Designating Party must file a declaration . . . establishing that all of

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United States District Court
Northern District of California

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the designated material is sealable.” Civ. L.R. 79-5(e)(1). “If the Designating Party does not file a

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responsive declaration . . . and the Administrative Motion to File Under Seal is denied, the

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Submitting Party may file the document in the public record no earlier than 4 days, and no later

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than 10 days, after the motion is denied.” Civ. L.R. 79-5(e)(2).

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II.

DISCUSSION
Because the parties’ sealing motions relate to Defendants’ motion for summary judgment,

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and expert opinions relevant to the motion for summary judgment, the Court finds that the

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compelling reasons standard applies. The Court’s rulings on the sealing motions are set forth

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below.

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A.

Sealing Motions Related to Defendants’ Motion for Summary Judgment
(ECF 337, 355, 356)

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Defendants have filed a motion to seal exhibits submitted in support of their motion for

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summary judgment. See ECF 337. That motion to seal is opposed by Plaintiff. See ECF 343.

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Plaintiff argues that Defendants’ sealing request is not narrowly tailored or supported by

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compelling reasons. Defendants move to seal 7 of 44 exhibits, and they do not move to seal any

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portion of their memorandum in support of their motion for summary judgment. The Court finds

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that Defendants have shown compelling reasons for sealing the 7 exhibits in question, as set forth

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in the chart below.
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Plaintiff has filed a motion to seal portions of its memorandum and exhibits submitted in

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opposition to summary judgment. See ECF 355. Plaintiff’s motion is based on confidentiality

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designations of Defendants and ex-Defendant Mblox. Plaintiff makes clear in its motion that it

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does not believe sealing is warranted, and that Defendants and Mblox have the burden of

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demonstrating adequate reasons for sealing. Counsel for Mblox received email service of

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Plaintiff’s sealing motion via the Court’s electronic filing system, but Mblox has not responded to

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Plaintiff’s sealing motion. Accordingly, Mblox has failed to demonstrate that sealing is warranted

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as to documents for which it is the designating party. Defendants filed their own sealing motion in

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response to Plaintiff’s sealing motion, requesting sealing of a narrower subset of documents than
those identified in Plaintiff’s motion. See ECF 356. The Court finds that Defendants have

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Northern District of California

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demonstrated compelling reasons for sealing that narrower subset of documents.

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The sealing motions relating to the summary judgment briefing are GRANTED as to the

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redactions requested by Defendants, as set forth in the chart below, and otherwise are DENIED.

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ECF No.

Document(s) to be
Sealed
Bloch Decl. Exh. Y

GRANTED as to Agreement between a current
entire document. StarStar Mobile customer and
Zoove Corp. Shows specific
prices for a current customer
through 2020. Public disclosure
of this information would harm
VHT StarStar. Hayden Decl. ¶ 2,
ECF 337-1.

337-6

Bloch Decl. Exh. Z

GRANTED as to Document discloses VHT
highlighted
StarStar’s commercial contracts
portions.
with customers other than
Sumotext, including sensitive
personal information and
proprietary business information.
No sealing is sought as to
Sumotext’s contracts with its
customers. Hayden Decl. ¶ 3,
ECF 337-1.

337-8

Bloch Decl. Exh. AA

GRANTED as to Internal VHT StarStar email
highlighted
forwarding a pricing
portions.
communication with a current**
customer. VHT StarStar
considers this document
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Reasoning

337-4

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Ruling

confidential and would be
harmed if competitors in the
market for mobile engagement
were able to see its pricing
negotiations with this customer.
Hayden Decl. ¶ 4, ECF 337-1.

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337-10

Bloch Decl. Exh. FF

GRANTED as to VHT StarStar’s commercial
highlighted
contracts with customers other
portions.
than Sumotext, and summaries of
same, contain sensitive personal
information and proprietary
business information. Hayden
Decl. ¶ 5, ECF 337-1.

337-12

Bloch Decl. Exh. GG

GRANTED as to StarStar Mobile’s referral
highlighted
agreements with 17 referral
portions.
agents, are treated as confidential
and disclosure could harm
StarStar Mobile’s business.
Hayden Decl. ¶ 6, ECF 337-1.

337-14

Bloch Decl. Exh. OO

GRANTED as to Contains confidential information
highlighted
regarding a contract between
portions.
StarStar Mobile and a current
customer. StarStar Mobile treats
is customer contracts as
confidential and would be
harmed if competitors could see
its contracts. Hayden Decl. ¶ 7,
ECF 337-1.

337-16

Bloch Decl. Exh. PP

GRANTED as to Contains historical information
highlighted
about major customers that
portions.
Defendants treat as confidential
and competitively sensitive.
Hayden Decl. ¶ 8, ECF 337-1.

355-4

Plaintiff’s opposition to
Defendants’ motion for
summary judgment

GRANTED as to Memorandum quotes from
portions
confidential materials as to which
highlighted by
the Court grants sealing.
Defendants in
ECF 356-48.

355-6

Greathouse Decl. Exh. 7

GRANTED as to Discloses StarStar Mobile’s
portions
future business plans. Hayden
highlighted by
Decl. ¶ 2, ECF 356-1.
Defendants in
ECF 356-4.

355-7

Greathouse Decl. Exh. 10 GRANTED as to Discloses StarStar Mobile’s
portions
future business plans. Hayden
highlighted by
Decl. ¶ 3, ECF 356-1.
Defendants in
ECF 356-6.
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355-13

Greathouse Decl. Exh. 13 GRANTED as to Discloses specific discounts and
portions
proprietary pricing information.
highlighted by
Levitt Decl. ¶ 2, ECF 342-1.
Defendants at
ECF 356-8.

355-8

Greathouse Decl. Exh. 15 GRANTED as to Discloses identify of potential
portions
customer. Hayden Decl. ¶ 4,
highlighted by
ECF 356-1.
Defendants at
ECF 356-10.

355-8

Greathouse Decl. Exh. 16 GRANTED as to
portions
highlighted by
Defendants at
ECF 356-12.

Discloses specifics of contractual
arrangements with mobile
carriers. Hayden Decl. ¶ 5, ECF
356-1.

355-8

Greathouse Decl. Exh. 17 GRANTED as to
portions
highlighted by
Defendants at
ECF 356-14.

Discloses specifics of pricing and
contractual arrangements with
potential ** customer. Hayden
Decl. ¶ 6, ECF 356-1.

355-9

Greathouse Decl. Exh. 20 GRANTED as to
portions
highlighted by
Defendants at
ECF 356-16.

Exhibit 20 is a compilation of
unrelated emails. The
defendants seek to seal only
those portions revealing
confidential business
discussions, including prices and
bank routing and account
information. Doumar Dec. ¶ 13,
ECF 356-2.

355-9

Greathouse Decl. Exh. 21 GRANTED as to
portions
highlighted by
Defendants at
ECF 356-18

Summary of events prepared by
StarSteve in connection with
fundraising for the acquisition of
Zoove that includes valuation and
investor information that is
confidential could harm
StarSteve if made public.
Doumar Decl. ¶ 3, ECF 356-2.

355-9

Greathouse Decl. Exh. 22 GRANTED as to
portions
highlighted by
Defendants at
ECF 356-20.

E-mail that included a draft of the
Letter of Intent and that explains
confidential internal negotiations
regarding the structure of VHT
StarStar, LLC and the possible
financial arrangements among its
owners. Doumar Decl. ¶ 4, ECF
356-2.

355-9

Greathouse Decl. Exh. 23 GRANTED as to E-mail sent to investors for
portions
StarSteve that contains (a)
highlighted by
a summary of business methods
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Defendants at
ECF 356-22.

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355-10

Greathouse Decl. Exh. 26 GRANTED as to
portions
highlighted by
Defendants at
ECF 356-24.

Contains information as to what
** numbers StarStar Mobile
continues to be most valuable,
which impacts pricing
information. StarStar Mobile
treats such internal information
as highly confidential. Hayden
Decl. ¶ 7, ECF 356-1.

355-10

Greathouse Decl. Exh. 27 GRANTED as to
portions
highlighted by
Defendants at
ECF 356-26.

E-mail discussing the carrier
relationships with Zoove for
VHT StarStar’s business going
forward, treated as confidential.
Doumar Decl. ¶ 6, ECF 356-2.

355-10

Greathouse Decl. Exh. 28 GRANTED as to Duplicate of Exh. 10 and sealable
portions
for same reasons. Hayden Decl.
highlighted by
¶ 3, ECF 356-1.
Defendants at
ECF 356-28.

355-11

Greathouse Decl. Exh. 32 GRANTED as to
portions
highlighted by
Defendants at
ECF 356-30.

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that reflects strategic direction
and key insights into business
approaches, as well as financial
summaries, all of which would be
harmful if it were provided to
competitors, as well as (b) a draft
letter of intent with financial
information regarding the VHT
StarStar, LLC entity and the
valuation of the business, which
is also highly confidential and
would be harmful if made public.
Doumar Decl. ¶ 5, ECF 356-2.

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E-mail sent to a potential investor
in StarSteve, that contains (a) a
summary of business methods
that reflects strategic direction
and key insights into business
approaches, as well as financial
summaries, all of which would be
harmful if it were provided to
competitors, (b) the summary of
events discussed above, and (c) a
draft letter of intent with
financial information regarding
the VHT StarStar, LLC entity
and the valuation of the business,
which is also highly confidential
and would be harmful if made
public. Doumar Decl. ¶ 7, ECF
356-2.

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355-11

Greathouse Decl. Exh.33

GRANTED as to
portions
highlighted by
Defendants at
ECF 356-32.

Communications regarding a
potential investment (which did
not occur) including (a) private
financial account information and
(b) details about StarSteve and its
business activities and its
financial structure which is
confidential and would be
potentially damaging to the
Company’s future efforts to raise
money if publicly known.
Doumar Decl. ¶ 8, ECF 356-2.

ECF 355-12 Greathouse Decl. Exh. 35 GRANTED as to
portions
highlighted by
Defendants at
ECF 356-34.

Financial due diligence report on
Zoove, prepared by Mblox
and furnished to VHT StarStar in
November 2015. It contains
highly detailed financial
information concerning Zoove
that would be damaging if
known, even two or three years
after the fact. Hayden Decl. ¶ 8,
ECF 356-1.

ECF 355-13 Greathouse Decl. Exh. 39 GRANTED as to
portions
highlighted by
Defendants at
ECF 356-36.

Discloses StarStar Mobile’s
financial performance over time,
customer and reseller business
arrangements, particular business
prospects, and problems with
StarStar Mobile’s vendors.
Leavitt Decl. ¶ 3, ECF 342-1.

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355-14

Greathouse Decl. Exh. 41 GRANTED as to
portions
highlighted by
Defendants at
ECF 356-38.

E-mail regarding pricing for
**HYATT, which information is
confidential competitive
information and commercially
sensitive. Doumar Decl. ¶ 9,
ECF 356-2.

355-15

Greathouse Decl. Exh. 43 GRANTED as to
portions
highlighted by
Defendants at
356-40.

Email exchange disclosing
pricing and contractual
arrangements for a particular **
customer seeking to least
particular ** numbers. Pricing
discussions are treated as
confidential by StarStar Mobile
and would be harmful if revealed.
Hayden Decl. ¶ 9, ECF 356-1.

355-16

Greathouse Decl. Exh.47

Operating Agreement for VHT
StarStar, LLC containing
confidential information about
the Company’s ownership and
financial structure. Doumar
Decl. ¶ 10, ECF 356-2.

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GRANTED as to
portions
highlighted by
Defendants at
ECF 356-42.
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Greathouse Decl. Exh. 48 GRANTED as to
portions
highlighted by
Defendants at
ECF 356-44.

Stock Purchase Agreement by
which VHT StarStar acquired
Zoove from Mblox. The
Agreement specifies it is to
remain confidential and it has
been held in confidence. Hayden
Decl. ¶ 10, ECF 356-1.

355-16

Greathouse Decl. Exh. 51 GRANTED as to
portions
highlighted by
Defendants at
ECF 356-46

Excerpts of Doumar deposition
discussing ownership structure of
StarSteve and identity of
investors, all of which is and has
been treated as confidential.
Doumar Decl. ¶ 11, ECF 356-2.

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B.

United States District Court
Northern District of California

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Sealing Motions Related to Plaintiff’s Daubert Motions
(ECF 339, 340, 342, 346, 347, 349 )

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Plaintiff filed two Daubert motions noticed for hearing on October 24, 2019, one directed

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to defense expert Greg J. Regan and the other directed to defense expert Debra Aron, Ph.D., each

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with a corresponding administrative sealing motion. See ECF 339, 340. Plaintiff’s sealing

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motions were based on Defendants’ confidentiality designations. Defendants filed their own

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sealing motion in response to Plaintiff’s sealing motions. See ECF 342. The Court took the

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Daubert motions off-calendar because Plaintiff had not reserved the October 24, 2019 hearing

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date. See ECF 341.

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Plaintiff thereafter reserved a hearing date of December 12, 2019 for its Daubert motions.

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Instead of simply re-noticing their Daubert motions, however, Plaintiff filed two new Daubert

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motions directed to defense experts Regan and Aron, each with a correspondent administrative

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sealing motion. See ECF 346, 347. Defendants filed their own sealing motion in response. See

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ECF 349.

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As a result, the Court has been presented with six administrative sealing motions relating

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to Plaintiff’s Daubert motions, a first set of motions (ECF 339, 340, and 342), and a substantially

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similar second set of motions (ECF 346, 347, and 349). The Court addresses only the second set

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of motions, but its rulings extend to the duplicate documents submitted with the first set of

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motions. Defendants request that the Court seal a narrower subset of the material identified in
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Plaintiff’s sealing motions. The Court finds that Defendants have demonstrated compelling

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reasons for sealing that narrower subset of material.
The sealing motions relating to the Daubert briefing are GRANTED as to the redactions

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requested by Defendants, as set forth in the chart below, and otherwise are DENIED. The Court’s

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sealing order as to each specific document, for example, Exhibit 1 to the Regan Daubert, extend to

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all copies of the document filed at different ECF numbers.

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ECF
No.

Document(s) to be Sealed

Ruling

Reasoning

346-4

Plaintiff’s Motion to
Exclude Certain Opinions
of Greg J. Regan

DENIED.

Defendants, designating parties,
do not seek sealing of any portion
of the Motion to Exclude Certain
Opinions of Greg J. Regan. See
Levitt Decl. ¶ 2, ECF 349-1.

346-6

Exhibit 1 to Regan
Daubert (Goedde expert
report)

GRANTED as to
portions highlighted
by Defendants at
ECF 349-3.

Discloses proprietary pricing
information for StarStar Mobile
that is treated as highly
confidential and would cause
harm to StarStar Mobile if
revealed to competitors. Levitt
Decl. ¶ 2, ECF 349-1.

346-7

Exhibit 2 to Regan
Daubert (Regan expert
rebuttal report)

GRANTED as to
portions highlighted
by Defendants at
ECF 349-7.

Discloses details concerning the
capitalization and value of
StarStar Mobile, including
specific revenues and specific
amounts it has lost over time;
StarStar Mobile’s current
customers, their average monthly
fees, and their cancellation rates;
and the specifics of StarStar
Mobile’s profit-share with the
four major mobile carriers. This
information is treated as
confidential and could allow
competitors to undercut StarStar
Mobile if commonly known.
Levitt Decl. ¶ 2, ECF 349-1.

346-8

Exhibit 3 to Regan
Daubert (Goedde expert
reply report)

DENIED.

Defendants, designating parties,
do not seek sealing of any portion
of the Goedde expert reply
report. See Levitt Decl. ¶ 2, ECF
349-1.

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Exhibit 4 to Regan
Daubert (Regan
deposition excerpts)

DENIED.

Defendants, designating parties,
do not seek sealing of any portion
of the Regan deposition excerpts.
See Levitt Decl. ¶ 2, ECF 349-1.

347-4

Plaintiff’s Motion to
Exclude Certain Opinions
of Dr. Debra Aron

DENIED.

Defendants, designating parties,
do not seek sealing of any portion
of the Motion to Exclude Certain
Opinions of Dr. Debra Aron. See
Levitt Decl. ¶ 3, ECF 349-1.

347-6

Exhibit 1 to Aron Daubert
(Aron expert report)

GRANTED as to
portions highlighted
by Defendants at
ECF 349-5

Discloses the specific price paid
for Zoove; the historical and
current performance of the
StarStar Mobile platform;
specific StarStar Mobile
customers or former customers
and information about the
particular commercial
arrangement with those
customers; specifics of StarStar
Mobile’s problems with carriers;
and similar information that is
treated as confidential and could
cause competitive harm if
commonly known. See Levitt
Decl. ¶ 3, ECF 349-1.

347-7

Exhibit 2 to Aron Daubert
(Sullivan expert reply
report)

GRANTED as to
portions highlighted
by Defendants at
ECF 349-9.

Discloses StarStar Mobile’s
revenues, loses, customer
identities, specifics of
commercial agreements, business
prospects, and similar
information that is treated as
confidential and could cause
competitive harm if commonly
known. See Levitt Decl. ¶ 3,
ECF 349-1.

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III.

ORDER
The parties’ administrative motions to file under seal are GRANTED IN PART AND

DENIED IN PART as set forth herein.
This order disposes of ECF 337, 339, 340, 342, 346, 347, 349, 355, and 356.

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Dated: December 16, 2019

______________________________________
BETH LABSON FREEMAN
United States District Judge
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