Nanometrics, Incorporated v. Optical Solutions, Inc.

Filing 183

ORDER REGARDING 158 159 160 ADMINISTRATIVE SEALING MOTIONS. Signed by Judge Beth Labson Freeman on 10/17/2023. (mdllc, COURT STAFF) (Filed on 10/17/2023)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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NANOMETRICS, INCORPORATED, et
al.,

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Plaintiffs,
v.
OPTICAL SOLUTIONS, INC., et al.,

United States District Court
Northern District of California

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ORDER REGARDING
ADMINISTRATIVE SEALING
MOTIONS
Re: ECF Nos. 158, 159, 160

Defendants.
OPTICAL SOLUTIONS, INC., et al.,

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Case No. 18-cv-00417-BLF

Cross-Plaintiffs,
v.
NANOMETRICS, INCORPORATED, et
al.,
Cross-Defendants.

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Before the Court are three administrative sealing motions (the “Motions”) filed by Plaintiff

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and Cross-Defendant Nanometrics, Inc. (“Nanometrics”): (1) an Administrative Motion to File

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Under Seal, ECF No. 158; (2) an Administrative Motion to Consider Whether Another Party’s

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Material Should be Sealed, ECF No. 159; and (3) an Administrative Motion to Consider Whether

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a Third Party’s Material Should be Sealed, ECF No. 160. All three Motions concern information

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contained in the report of Nanometrics’s expert, Julie H. Knox (the “Knox Report”), submitted

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with the witness list filed by the parties in advance of the pretrial conference set for October 20,

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2023. Defendant and Cross-Plaintiff Optical Solutions, Inc. (“Optical”) has not responded to any

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Motion. For the reasons stated below, Nanometrics’s Administrative Motion to File Under Seal is

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GRANTED, and the Administrative Motions to Consider Whether Another Party’s or a Third

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Party’s Material Should be Sealed are DENIED WITHOUT PREJUDICE.

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I.

“Historically, courts have recognized a ‘general right to inspect and copy public records

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United States District Court
Northern District of California

LEGAL STANDARD

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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)). Consequently, access to motions and their attachments that are

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“more than tangentially related to the merits of a case” may be sealed only upon a showing of

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“compelling reasons” for sealing. Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092,

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1101–02 (9th Cir. 2016). Filings that are only tangentially related to the merits may be sealed

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upon a lesser showing of “good cause.” Id. at 1097. In addition, in this district, all parties

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requesting sealing must comply with Civil Local Rule 79-5. That rule requires, inter alia, the

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moving party to provide “the reasons for keeping a document under seal, including an explanation

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of: (i) the legitimate private or public interests that warrant sealing; (ii) the injury that will result if

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sealing is denied; and (iii) why a less restrictive alternative to sealing is not sufficient.” Civ. L.R.

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79-5(c)(1). Civil Local Rule 79-5 additionally requires the moving party to provide “evidentiary

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support from declarations where necessary.” Civ. L.R. 79-5(c)(2). The proposed order must be

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“narrowly tailored to seal only the sealable material.” Civ. L.R. 79-5(c)(3).
Further, when a party seeks to seal a document because it has been designated as

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confidential by another party, the filing party must file an Administrative Motion to Consider

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Whether Another Party’s Material Should be Sealed. Civ. L.R. 79-5(f). In that case, the filing

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party need not satisfy the requirements of subsection (c)(1). Civ. L.R. 79-5(f)(1). Instead, the

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party who designated the material as confidential must, within seven days of the motion’s filing,

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file a statement and/or declaration that meets the requirements of subsection (c)(1). Civ. L.R. 79-

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5(f)(3). A designating party’s failure to file a statement or declaration may result in the unsealing

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of the provisionally sealed document without further notice to the designating party. Id. Any

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party can file a response to that declaration within four days. Civ. L.R. 79-5(f)(4).

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II.

DISCUSSION

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The Court finds that the “good cause” standard applies to all three Motions because the

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Knox Report is submitted in connection with a joint pretrial conference statement, which is not
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United States District Court
Northern District of California

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more than tangentially related to the merits of a case. See Int’l Swimming League, Ltd. v.

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Federation Internationale de Natation, No. 18-cv-07394, 2021 WL 624172, at *1 (N.D. Cal. Jan.

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19, 2021) (applying good cause standard for sealing case management statement); Jones v. PGA

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Tour, No. 22-cv-04486, 2023 WL 2232094, at *2 (N.D. Cal. Feb. 23, 2023) (same).
Nanometrics’s Administrative Motion to File Under Seal (ECF No. 158)

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A.

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Nanometrics seeks to file under seal portions of the Knox Report and certain exhibits

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attached thereto because the information sought to be sealed contains either (1) confidential, non-

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public information about Nanometrics’s business strategy and analysis regarding its products,

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including information about the pricing, product release strategy, revenue, and competitive

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decision-making related to those products, or (2) confidential and private employee salary and

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sales commission information. See Decl. of Amy M. Smith (“Smith Decl.”) ¶ 3, ECF No. 158-1.

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Nanometrics further submits that the public disclosure of the former type of information could

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cause competitive harm by giving competitors insight into Nanometrics’s business strategies, and

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that disclosure of the latter type of information would reveal sensitive private information about

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former and current employees who are not parties to this action. See id. Optical has not opposed

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the sealing request.

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The “good cause” standard for sealing is met for confidential business information and

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private employee information that Nanometrics seeks to seal, as courts have found similar material

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to meet even the more stringent “compelling reasons” standard. See In re Elec. Arts, Inc., 298 F.

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App'x. 568, 569 (9th Cir. 2008) (finding compelling reasons for sealing “business information that

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might harm a litigant’s competitive strategy”); Hernandez v. County of Monterey, No. 13-cv-

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02354, 2023 WL 4688522, at *3–4 (N.D. Cal. July 21, 2023) (finding compelling reasons to seal

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email addresses and other personal contact information). The Court finds that Nanometrics’s

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sealing requests are narrowly tailored in accordance with the local rules of this district, and sets

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forth its rulings in the chart below.

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ECF No.

Document

Proposed
Redactions

Ruling

158-2

Knox Report

158-2

Knox Report

Highlighted
portions at pages
14–28 and
Exhibits 4–5
Highlighted
portions at
Exhibits 6, 7.1.

GRANTED, as containing
information related to Nanometrics’s
internal financial results and
sensitive business issues.
GRANTED, as containing
confidential and private employee
salary and sales commission
information.

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7

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Nanometrics’s Administrative Motions to Consider Whether Another Party’s
Information Should be Sealed (ECF No. 159) and Whether a Third Party’s
Information Should be Sealed (ECF No. 160)

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Nanometrics has submitted two administrative motions to consider sealing portions of the

United States District Court
Northern District of California

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B.

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Knox Report containing or referring to material designated confidential by either Optical, see ECF

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No. 159, or third party Opticraft Inc. (“Opticraft”), see ECF No. 160. Both motions were filed on

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October 5, 2023. Accordingly, Optical and Opticraft were required to file a statement or

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declaration meeting the requirements of Civil Local Rule 79-5(c)(1) by October 12, 2023, in order

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to maintain their material under seal. See Civ. L.R. 79-5(f)(3). As of the date of the entry of this

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order, neither Optical nor Opticraft has submitted such a statement or declaration. A designating

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party’s failure to file a statement or declaration may result in the unsealing of the provisionally

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sealed document without further notice to the designating party. See Civ. L.R. 79-5(f)(3);

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Plexxikon Inc. v. Novartis Pharms. Corp., No. 17-CV-04405, 2022 WL 1131725, at *2 (N.D. Cal.

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Mar. 31, 2022) (denying motions to consider whether another party’s material should be sealed

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because the designating party failed to comply with Civ. L.R. 79-5(f)(3)). Thus, the Court rules as

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follows:
ECF
Document
No.

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Designating Conditionally
Party
Redacted Material

Ruling

DENIED WITHOUT
PREJUDICE, as failing to
comply with Civ. L.R. 79-5(f)(3).
DENIED WITHOUT
PREJUDICE, as failing to
comply with Civ. L.R. 79-5(f)(3).

158-2

Knox Report

Optical

Highlighted portions
at Exhibit 11.

158-2

Knox Report

Opticraft

Highlighted portions
at page 35 and
Exhibit 12.

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ORDER
For the foregoing reasons, the Court hereby ORDERS that:
1. Nanometrics’s Administrative Motion to File Under Seal, ECF No. 158, is
GRANTED.
2. Nanometrics’s Administrative Motion to Consider Whether Another Party’s

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Material Should be Sealed, ECF No. 159, is DENIED WITHOUT PREJUDICE.

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Optical may file a statement and/or declaration under Civil Local Rule 79-5(f)(3)

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within 10 days of the entry of this order.

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United States District Court
Northern District of California

III.

3. Nanometrics’s Administrative Motion to Consider Whether A Third Party’s

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Material Should be Sealed, ECF No. 160, is DENIED WITHOUT PREJUDICE.

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Opticraft may file a statement and/or declaration under Civil Local Rule 79-5(f)(3)

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within 10 days of service of the entry of this order.

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4. Nanometrics SHALL serve a copy of this order upon Opticraft or its counsel within
three days of the entry of this order, and it SHALL file proof of such service.
5. If Optical or Opticraft fails to timely file a statement and/or declaration,

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Nanometrics SHALL, within three days of Opticraft’s deadline to submit a

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statement or declaration, file a copy of the Knox Report on the public docket that

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removes the conditional redactions of materials designated confidential by the

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respective entity.

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IT IS SO ORDERED.
Dated: October 17, 2023

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Beth Labson Freeman
United States District Judge

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