MMV Capital Partners, Inc. v. HotChalk, Inc. et al

Filing 34

ORDER GRANTING 26 BERTELSMANN DEFENDANTS UNOPPOSED ADMINISTRATIVE MOTION TO SEAL. Signed by Judge Beth Labson Freeman on 10/1/2018.(blflc2S, COURT STAFF) (Filed on 10/1/2018)

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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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MMV CAPITAL PARTNERS, INC.,

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Plaintiff,

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v.
HOTCHALK, INC., et al.,

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United States District Court
Northern District of California

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Defendants.

Case No. 18-cv-03713-BLF
ORDER GRANTING BERTELSMANN
DEFENDANTS’ UNOPPOSED
ADMINISTRATIVE MOTION TO
SEAL
[Re: ECF 26]

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Before the Court is Defendants Bertelsmann Education Services LLC and Bertelsmann,

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Inc.’s (collectively, “BES”) unopposed administrative motion to seal their motion to dismiss and

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certain exhibits to the declaration filed in support thereof. ECF 26. For the reasons that follow,

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the motion is GRANTED.

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“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)). 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, sealing motions filed in this

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district must be “narrowly tailored to seek sealing only of sealable material.” Civil L.R. 79-5(b).

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A party moving to seal a document in whole or in part must file a declaration establishing that the

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identified material is “sealable.” Civ. L.R. 79-5(d)(1)(A). “Reference to a stipulation or

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protective order that allows a party to designate certain documents as confidential is not sufficient

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to establish that a document, or portions thereof, are sealable.” Id.

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BES seeks to file the following three documents under seal: (1) portions of their Motion to

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Dismiss, ECF 27; (2) the entirety of Exhibit A to the Declaration of Catherine Moreno in Support

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of their Motion to Dismiss, ECF 27-4; and (3) the entirety of Exhibit B to the Declaration of

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Catherine Moreno in Support of its Motion to Dismiss, ECF 27-5.

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The two exhibits include sensitive, non-public information related to financial transactions
involving BES and Defendant HotChalk, Inc. (“HotChalk”). See Mot. at 1, ECF 26; Moreno Decl.

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ISO Mot. to Seal ¶ 3, ECF 26-1. Exhibit A is an offer of purchase by BES, which contains

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confidential information concerning HotChalk’s financial performance and risks associated with

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its business. Moreno Decl. ¶ 4. Exhibit B is a confidential letter from HotChalk to its preferred

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United States District Court
Northern District of California

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stockholders, containing information concerning HotChalk’s debt, the terms of its Series AA

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financing, and its valuation. Id. ¶ 5. Both documents also include other BES and HotChalk

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financial and business information relating to HotChalk’s capital structure, investor investments,

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financing terms, and confidential disclosures. Id. ¶ 6. The portions of the motion to dismiss BES

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seek to seal describe or quote portions of these exhibits. Id ¶ 3.

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The Court finds compelling reasons to seal these documents because they contain BES’s

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and HotChalk’s confidential financing information. See Schwartz v. Cook, No. 5:15-cv-03347-

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BLF, 2016 U.S. Dist. LEXIS 45526, at *4-5 (N.D. Cal. Apr. 4, 2016). Release of these private

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companies’ information could harm their competitive standing in future equity raises and

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financing transactions and could disclose HotChalk’s internal business strategies and limitations to

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HotChalk’s detriment. See Mot. at 2. Moreover, the proposed redactions to the motion to dismiss

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are narrowly tailored to exclude only sealable material as required by Civil L.R. 79-5(b).

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As such, BES’s motion to seal is GRANTED. Because BES has publicly filed a redacted

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version and filed under seal an unredacted version of the motion to dismiss, and filed under seal

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unredacted versions of the exhibits, no further action is necessary.

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IT IS SO ORDERED.
Dated: October 1, 2018
______________________________________
BETH LABSON FREEMAN
United States District Judge

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United States District Court
Northern District of California

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