Intuit Inc. v. H&R Block, Inc.

Filing 144

ORDER GRANTING ECF NO. 123 ; GRANTING IN PART AND DENYING IN PART ECF NO. 124 . Signed by Judge Beth Labson Freeman on September 25, 2024. (blflc2, COURT STAFF) (Filed on 9/25/2024)

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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 INTUIT INC., Plaintiff, 8 v. 9 10 HRB TAX GROUP, INC., et al., Defendants. 11 United States District Court Northern District of California Case No. 5:24-cv-00253-BLF ORDER GRANTING ECF NO. 123; GRANTING IN PART AND DENYING IN PART ECF NO. 124 [Re: ECF Nos. 123, 124] 12 13 Before the Court are two administrative motions filed in connection with Plaintiff Intuit 14 15 Inc.’s (“Intuit”) Reply in Support of Motion for Preliminary Injunction: 1. Intuit’s Administrative Motion to File Under Seal Portions of Its Reply in Support of 16 Motion for Preliminary Injunction. ECF No. 123. 17 2. Intuit’s Administrative Motion to Consider Whether Another Party’s Material Should 18 Be Sealed. ECF No. 124. 19 For the reasons described below, the Court rules as follows: the administrative motion at 20 21 ECF No. 123 is GRANTED and the administrative motion at ECF No. 124 is GRANTED IN 22 PART AND DENIED IN PART. 23 24 I. LEGAL STANDARD “Historically, courts have recognized a ‘general right to inspect and copy public records 25 and documents, including judicial records and documents.’” Kamakana v. City & Cty. of 26 Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc’ns, Inc., 435 27 U.S. 589, 597 & n.7 (1978)). Accordingly, when considering a sealing request, “a ‘strong 28 presumption in favor of access’ is the starting point.” Id. (quoting Foltz v. State Farm Mut. Auto. United States District Court Northern District of California 1 Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). Parties seeking to seal judicial records relating to 2 motions that are “more than tangentially related to the underlying cause of action” bear the burden 3 of overcoming the presumption with “compelling reasons” that outweigh the general history of 4 access and the public policies favoring disclosure. Ctr. for Auto Safety v. Chrysler Grp., 809 F.3d 5 1092, 1100–01 (9th Cir. 2016); Kamakana, 447 F.3d at 1178–79. 6 Records attached to motions that are “not related, or only tangentially related, to the merits 7 of a case,” however, are not subject to the strong presumption of access. Ctr. for Auto Safety, 809 8 F.3d at 1099; see also Kamakana, 447 F.3d at 1179 (“[T]he public has less of a need for access to 9 court records attached only to non-dispositive motions because those documents are often 10 unrelated, or only tangentially related, to the underlying cause of action.” (internal quotations 11 omitted)). Parties moving to seal the documents attached to such motions must meet the lower 12 “good cause” standard of Rule 26(c). Kamakana, 447 F.3d at 1180. This standard requires a 13 “particularized showing,” id., that “specific prejudice or harm will result” if the information is 14 disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th Cir. 15 2002); see Fed. R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated by specific 16 examples of articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 17 F.2d 470, 476 (9th Cir. 1992). 18 In addition, in this district, all parties requesting sealing must comply with Civil Local 19 Rule 79-5. That rule requires, inter alia, the moving party to provide “the reasons for keeping a 20 document under seal, including an explanation of: (i) the legitimate private or public interests that 21 warrant sealing; (ii) the injury that will result if sealing is denied; and (iii) why a less restrictive 22 alternative to sealing is not sufficient.” Civ. L.R. 79-5(c)(1). Further, Civil Local Rule 79-5 23 requires the moving party to provide “evidentiary support from declarations where necessary.” 24 Civ. L.R. 79-5(c)(2). And the proposed order must be “narrowly tailored to seal only the sealable 25 material.” Civ. L.R. 79-5(c)(3). 26 Further, when a party seeks to seal a document because it has been designated as 27 confidential by another party, the filing party must file an Administrative Motion to Consider 28 Whether Another Party’s Material Should be Sealed. Civ. L.R. 79-5(f). In that case, the filing 2 1 party need not satisfy the requirements of subsection (c)(1). Civ. L.R. 79-5(f)(1). Instead, the 2 party who designated the material as confidential must, within seven days of the motion’s filing, 3 file a statement and/or declaration that meets the requirements of subsection (c)(1). Civ. L.R. 79- 4 5(f)(3). A designating party’s failure to file a statement or declaration may result in the unsealing 5 of the provisionally sealed document without further notice to the designating party. Id. Any 6 party can file a response to that declaration within four days. Civ. L.R. 79-5(f)(4). United States District Court Northern District of California 7 II. DISCUSSION 8 A. ECF No. 123 9 Intuit filed the Administrative Motion to File Under Seal Portions of Its Reply in Support 10 of Motion for Preliminary Injunction on September 5, 2024, ECF No. 123, seeking to seal portions 11 of its Reply brief and supporting documents, id. at 2. Intuit writes that the materials should be 12 sealed because they contain “sensitive information related to Intuit’s provision of an expert final 13 review for free to TurboTax Live Assisted customers,” id., and “sensitive confidential business 14 data and metrics,” id. at 3. Intuit argues that its competitors could use the information to harm 15 Intuit’s competitive standing, such as by permitting them to develop similar expert assistance 16 services or to “modify their business strategies based on Intuit’s proprietary data.” Id. at 3–4. 17 Finally, Intuit states that it has limited its request for sealing to materials it believes pose a direct 18 threat to Intuit’s competitive standing. Id. at 4. Defendants HRB Tax Group, Inc. and HRB 19 Digital LLC (collectively, “Block”) did not oppose Intuit’s administrative motion. 20 The Court finds that compelling reasons exist to seal the portions of the documents for 21 which Intuit seeks to maintain sealing. “Sources of business information that might harm a 22 litigant’s competitive strategy may also give rise to a compelling reason to seal, as may pricing, 23 profit, and customer usage information kept confidential by a company that could be used to the 24 company’s competitive disadvantage.” Lawson v. Grubhub, Inc., No. 15-CV-05128, 2017 WL 25 2951608, at *9 (N.D. Cal. July 10, 2017) (internal alterations and citations omitted). Such 26 competitive information includes confidential training materials, marketing information, and 27 business data. See Baack v. Asurion, LLC, No. 220-CV-00336, 2021 WL 3115183, at *1–4 (D. 28 Nev. July 22, 2021); Adtrader, Inc. v. Google LLC, No. 17-CV-07082, 2020 WL 6387381, at *2 3 1 (N.D. Cal. Feb. 24, 2020); Johnstech Int’l Corp. v. JF Microtechnology SDN BHD, No. 14-CV- 2 02864, 2016 WL 4091388, at *2 (N.D. Cal. Aug. 2, 2016). The Court also finds that the request is 3 narrowly tailored. See Civ. L.R. 79-5(c)(3). The Court’s ruling is summarized below: 4 5 6 ECF No. Document Portion(s) to Seal 122 Intuit’s Reply in Support of Intuit’s Motion for Preliminary Injunction Highlighted portions at 4:8; 4:23–24; 4:27; 6:5; and 6:20–21. Granted, as containing sensitive material related to tax expert training, the tools used to provide expert final reviews, and confidential business data and metrics. See ECF No. 123-1 ¶¶ 5–7. 122-1 Joseph Lillie Declaration in Support of Intuit’s Reply Highlighted portions at 4:6–9; 4:19–20; 4:25–26; 5:9–13; 5:16–17; 5:19–20; and 5:22–23. Granted, as containing sensitive tax expert training materials, the tools used to provide expert final reviews, confidential business data and metrics regarding customer satisfaction with expert final reviews, and the number of consumers who completed such reviews. See ECF No. 123-1 ¶ 5. 122-4 Exhibit 60 – Elizabeth Berger Deposition Transcript Excerpts Highlighted portions at 160:13–17; 162:2–9; 162:11–20; 162:22; 162:24– 163:7; 163:12; 163:14–17; 163:19–21; 163:23–25; 164:2–5; and 171:25. Granted, as containing Intuit’s pricing and test-pricing practices and strategies. See ECF No. 123-1 ¶ 6. 122-5 Exhibit 61 – Joseph Highlighted portions at 43:1–6; 43:14–19; Lillie Deposition Transcript Excerpts 44:5–45:16; 46:4–21; 50:9–13; 57:18–58:1; 58:3–5; 58:7–15; 58:20–23; 58:25–59:3; 59:5–8; 59:10–11; 59:13– 60:2; 67:3–13; 67:15–22; 67:24–68:12; 68:23–70:1; 70:3–22; 109:1–2; 109:4–5; 109:7–8; 109:10–11; 110:4–5; 111:2–112:5; 112:7–113:1; 113:17–18; 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 Ruling 18 19 20 21 22 23 24 25 26 27 28 4 Granted, as containing sensitive tax expert training materials, the tools used to provide expert final reviews, confidential business data and metrics regarding customer satisfaction with expert final reviews, and data concerning consumers who completed such final reviews. See ECF No. 123-1 ¶ 7. 129:5; 129:9; 129:11–12; 129:13; 129:16; 129:18; 129:21–22; 129:23–24; 130:2–3; 130:7; 130:11; 130:24; 131:4; 131:7; 131:17; 131:23; 131:25; 135:7–18; and 136:11–25. 1 2 3 United States District Court Northern District of California 4 5 B. ECF No. 124 6 Intuit filed the Administrative Motion to Consider Whether Another Party’s Material 7 Should Be Sealed on September 5, 2024. ECF No. 124. Block filed a statement setting forth the 8 portions of Intuit’s Reply and supporting exhibits that it believed should remain under seal. ECF 9 No. 131. Block writes that the information should be sealed because it “contain[s] sensitive 10 business information and other highly confidential material, which, if disclosed, could harm 11 Block’s competitive strategy in the online tax preparation market.” Id. at 4. Block argues that 12 “competitors could use Block’s proprietary and confidential information to inform their own 13 business decisions and marketing strategies to gain an advantage over Block,” and that such 14 competitors could also gain “insights into Block’s internal workings” that might permit them to 15 “undercut Block in an already incredibly competitive market.” Id. at 4–5. Block notes that it is 16 “requesting the most narrowly tailored relief available,” including by declining to seek to maintain 17 under seal some of the materials conditionally filed under seal by Intuit. Id. at 5. 18 The Court finds that compelling reasons exist to seal the identified documents. “Sources 19 of business information that might harm a litigant’s competitive strategy may also give rise to a 20 compelling reason to seal, as may pricing, profit, and customer usage information kept 21 confidential by a company that could be used to the company’s competitive disadvantage.” 22 Lawson v. Grubhub, Inc., No. 15-CV-05128, 2017 WL 2951608, at *9 (N.D. Cal. July 10, 2017) 23 (internal alterations and citations omitted); Ehret v. Uber Techs., Inc., No. 14-CV-00113, 2015 24 WL 12977024, at *3 (N.D. Cal. Dec. 2, 2015) (finding compelling reasons to seal documents 25 containing confidential discussions about “proprietary business strategy, including pricing and 26 marketing decisions”); see Johnstech Int’l Corp. v. JF Microtechnology SDN BHD, No. 14-CV- 27 02864, 2016 WL 4091388, at *2 (N.D. Cal. Aug. 2, 2016). The Court also finds that the request is 28 narrowly tailored. See Civ. L.R. 79-5(c)(3). 5 The Court’s ruling is summarized below: 1 2 ECF No. 3 122 4 5 Document Intuit’s Reply in Support of Intuit’s Motion for Preliminary Injunction Portion(s) to Seal Highlighted Portions at 1:2–3, 3:20–21, 7:22–23, 8:14, 8:22–23, and 9:12– 13. 6 Ruling Denied as to the highlighted portions at 1:22, 1:23–24, 1:26, 3:2, 5:5–10, 5:13, 5:14–15, 5:18–19, and 5:27–28, as Block does not seek to keep those portions under seal. See ECF No. 131-1 ¶ 8. 7 Otherwise granted as to the highlighted portions indicated in this chart, as containing Block’s business strategies, marketing strategies, and pricing decisions. See ECF No. 131-1 ¶ 3. 8 9 10 United States District Court Northern District of California 11 12 122-6 Exhibit 62 – Watts Highlighted portion at 192:23. Deposition Transcript Excerpts Granted, as containing s testimony regarding Block’s business strategy and decisions and marketing strategies. See ECF No. 131-1 ¶ 4. 122-8 Exhibit 64 – In its entirety. Deplante Deposition Transcript Excerpts Denied, as Block does not seek to maintain this material under seal. See ECF No. 131-1 ¶ 8. 122-10 Exhibit 66 – HRB0001528 Granted, as containing sensitive material related to Block’s strategies with regard to the competitive pricing of its products. See ECF No. 131-1 ¶ 5. 13 14 15 16 17 18 19 20 In its entirety. 21 22 23 24 III. ORDER 25 For the foregoing reasons, IT IS HEREBY ORDERED that: 26 1. ECF No. 123 is GRANTED. 27 2. ECF No. 124 is GRANTED IN PART AND DENIED IN PART. 28 All denials are WITHOUT PREJUDICE. Any refiled administrative motion or declaration 6 1 SHALL be filed no later than October 10, 2024. The parties SHALL refile public versions of 2 each filing where the redactions and sealing granted by the Court are narrower than what was 3 redacted in the current public versions by October 10, 2024, unless they are filing a renewed 4 sealing motion for any document in that filing. 5 6 IT IS SO ORDERED. 7 8 9 10 Dated: September 25, 2024 ______________________________________ BETH LABSON FREEMAN United States District Judge United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7

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