USSC Holdings Corp. et al v. TK Products, LLC et al

Filing 69

ORDER granting 66 Plaintiffs' Motion to Seal. Signed by Magistrate Judge William G. Cobb on 4/19/2017. (Copies have been distributed pursuant to the NEF - HJ)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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USSC HOLDINGS CORP., a Nevada
corporation, MUSIC CITY FIRE CO., a Nevada
corporation, ROBERT J. BUCKLEY, an
individual, and STEVE PALADINO, an
individual,

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ORDER

Plaintiffs,

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Case No. 3:16-cv-00398-RCJ-WGC

v.
TK PRODUCTS, LLC, an Oregon limited
liability company, KURT O. BAUER, an
individual, TRENT C. FARRER, an individual,
Defendants.

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Before the court is Plaintiffs’ Motion to Seal portions of their reply filed in support of
their motion to compel. (ECF No. 66.) Plaintiffs note that Defendants designated their
interrogatory responses and portions of their brief opposing the motion to compel confidential
pursuant to the protective order entered in this case, and as a result, they move to seal portions of
their reply brief that make reference to that designated confidential information. (Id.)
“Historically, courts have recognized a general right to inspect and copy public records
and documents, including judicial records and documents.” See Kamakana v. City and County of
Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (internal quotation marks and citation omitted).
“‘Throughout our history, the open courtroom has been a fundamental feature of the American
judicial system. Basic principles have emerged to guide judicial discretion respecting public
access to judicial proceedings. These principles apply as well to the determination of whether to
permit access to information contained in court documents because court records often provide
important, sometimes the only, bases or explanations for a court’s decision.’” Oliner v.
Kontrabecki, 745 F.3d 1024, 1025 (9th Cir. 2014) (quoting Brown & Williamson Tobacco Corp.
v. F.T.C., 710 F.2d 1165, 1177 (6th Cir. 1983)).

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Documents that have been traditionally kept secret, including grand jury transcripts and
warrant materials in a pre-indictment investigation, come within an exception to the general right
of public access. See Kamakana, 447 F.3d at 1178. Otherwise, “a strong presumption in favor of
access is the starting point.” Id. (internal quotation marks and citation omitted). “The
presumption of access is ‘based on the need for federal courts, although independent—indeed,
particularly because they are independent—to have a measure of accountability and for the
public to have confidence in the administration of justice.’” Center for Auto Safety v. Chrysler
Group, LLC, 809 F.3d 1092, 1096 (9th Cir. 2016), cert. denied, 137 S.Ct. 38 (Oct. 3, 2016)
(quoting United States v. Amodeo (Amodeo II), 71 F.3d 1044, 1048 (2nd Cir. 1995); Valley
Broad Co. v. U.S. Dist. Court-D. Nev., 798 F.2d 1289, 1294 (9th Cir. 1986)).
There are two possible standards a party must address when it seeks to file a document
under seal: the compelling reasons standard or the good cause standard. See Center for Auto
Safety, 809 F.3d at 1096-97. Under the compelling reasons standard, “a court may seal records
only when it finds ‘a compelling reason and articulate[s] the factual basis for its ruling, without
relying on hypothesis or conjecture.” Id. (quoting Kamakana, 447 F.3d at 1179). “The court
must then ‘conscientiously balance[ ] the competing interests of the public and the party who
seeks to keep certain judicial records secret.” Id. “What constitutes a ‘compelling reason’ is ‘best
left to the sound discretion of the trial court.’” Id. (quoting Nixon v. Warner Comm., Inc., 435
U.S. 589, 599 (1978)). “Examples include when a court record might be used to ‘gratify private
spite or promote public scandal,’ to circulate ‘libelous’ statements, or ‘as sources of business
information that might harm a litigant’s competitive standing.’” Id. (quoting Nixon, 435 U.S. at
598-99).
Center for Auto Safety described the good cause standard, on the other hand, as the
exception to public access that had been applied to “sealed materials attached to a discovery
motion unrelated to the merits of a case.” Id. (citing Phillips ex rel. Estates of Byrd v. Gen.
Motors Corp., 307 F.3d 1206, 1213-14 (9th Cir. 2002)). “The ‘good cause language comes from
Rule 26(c)(1), which governs the issuance of protective orders in the discovery process: ‘The
court may, for good cause, issue an order to protect a party or person from annoyance,
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embarrassment, oppression, or undue burden or expense.” Id. (citing Fed. R. Civ. P. 26(c)).
The Ninth Circuit has clarified that the key in determining which standard to apply in
assessing a motion for leave to file a document under seal is whether the documents proposed for
sealing accompany a motion that is “more than tangentially related to the merits of a case.”
Center for Auto Safety, 809 F.3d at 1101 (9th Cir. 2016). If that is the case, the compelling
reasons standard is applied. If not, the good cause standard is applied.
Here, Plaintiffs seek to file under seal portions of their reply brief. The brief is filed in
support of a motion to compel a discovery response, and is not related to the merits of the case.
This comes within the parameters of the “good cause” standard.
According to Plaintiffs, portions of their reply brief reference interrogatory responses and
portions of Defendants’ opposition brief that have been designated as confidential information
concerning trade secrets pursuant to the protective order entered in this case. Rule 26 allows the
court to protect “trade secret[s] or other confidential research, development or commercial
information[.]” The parties have already been granted leave to file portions of the motion to
compel, and opposing brief and exhibits under seal. As such, the court finds that good cause
exists to seal portions of the reply brief. Therefore, Plaintiffs’ motion (ECF No. 66) is
GRANTED.
IT IS SO ORDERED.
DATED: April 19, 2017.

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__________________________________________
WILLIAM G. COBB
UNITED STATES MAGISTRATE JUDGE

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