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

Filing 86

ORDER granting 83 Plaintiffs' Motion to Seal Exhibits A and F attached to the First Amended Complaint. Signed by Magistrate Judge William G. Cobb on 7/11/2017. (Copies have been distributed pursuant to the NEF - HJ)

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1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 DISTRICT OF NEVADA 8 9 10 11 12 13 14 15 16 USSC HOLDINGS CORP., a Nevada corporation, MUSIC CITY FORE CO., a Nevada corporation, ROBERT J. BUCKLEY, an individual, STEVE PALADINO, an individual, ) ) ) ) ) ) Plaintiffs, ) ) v. ) TK PRODUCTS, LLC, an Oregon limited ) liability company, KURT O’ BAUER, an ) individual, TRENT C. FARRER, ) an individual, ) ) Defendants. ) _____________________________________) 3:16-cv-00398-RCJ-WGC ORDER 17 Before the court is Plaintiffs’ Motion to Seal. (ECF No. 83.) Plaintiffs seek an order sealing 18 certain discrete portions of their First Amended Complaint and two exhibits (Exhibits A and F) attached 19 thereto. 20 “Historically, courts have recognized a general right to inspect and copy public records and 21 documents, including judicial records and documents.” See Kamakana v. City and County of Honolulu, 22 447 F.3d 1172, 1178 (9th Cir. 2006) (internal quotation marks and citation omitted). “‘Throughout our 23 history, the open courtroom has been a fundamental feature of the American judicial system. Basic 24 principles have emerged to guide judicial discretion respecting public access to judicial proceedings. 25 These principles apply as well to the determination of whether to permit access to information contained 26 in court documents because court records often provide important, sometimes the only, bases or 27 explanations for a court’s decision.’” Oliner v. Kontrabecki, 745 F.3d 1024, 1025 (9th Cir. 2014) 28 (quoting Brown & Williamson Tobacco Corp. v. F.T.C., 710 F.2d 1165, 1177 (6th Cir. 1983)). /// 1 2 Documents that have been traditionally kept secret, including grand jury transcripts and warrant 3 materials in a pre-indictment investigation, come within an exception to the general right of public 4 access. See Kamakana, 447 F.3d at 1178. Otherwise, “a strong presumption in favor of access is the 5 starting point.” Id. (internal quotation marks and citation omitted). “The presumption of access is ‘based 6 on the need for federal courts, although independent—indeed, particularly because they are 7 independent—to have a measure of accountability and for the public to have confidence in the 8 administration of justice.’” Center for Auto Safety v. Chrysler Group, LLC, 809 F.3d 1092, 1096 (9th 9 Cir. 2016), cert. denied, 137 S.Ct. 38 (Oct. 3, 2016) (quoting United States v. Amodeo (Amodeo II), 10 71 F.3d 1044, 1048 (2nd Cir. 1995); Valley Broad Co. v. U.S. Dist. Court-D. Nev., 798 F.2d 1289, 1294 11 (9th Cir. 1986)). 12 There are two possible standards a party must address when it seeks to file a document under 13 seal: the compelling reasons standard or the good cause standard. See Center for Auto Safety, 809 F.3d 14 at 1096-97. Under the compelling reasons standard, “a court may seal records only when it finds ‘a 15 compelling reason and articulate[s] the factual basis for its ruling, without relying on hypothesis or 16 conjecture.” Id. (quoting Kamakana, 447 F.3d at 1179). “The court must then ‘conscientiously balance 17 [ ] the competing interests of the public and the party who seeks to keep certain judicial records secret.” 18 Id. “What constitutes a ‘compelling reason’ is ‘best left to the sound discretion of the trial court.’” Id. 19 (quoting Nixon v. Warner Comm., Inc., 435 U.S. 589, 599 (1978)). “Examples include when a court 20 record might be used to ‘gratify private spite or promote public scandal,’ to circulate ‘libelous’ 21 statements, or ‘as sources of business information that might harm a litigant’s competitive standing.’” 22 Id. (quoting Nixon, 435 U.S. at 598-99). 23 Center for Auto Safety described the good cause standard, on the other hand, as the exception to 24 public access that had been applied to “sealed materials attached to a discovery motion unrelated to the 25 merits of a case.” Id. (citing Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1213- 26 14 (9th Cir. 2002)). “The ‘good cause language comes from Rule 26(c)(1), which governs the issuance 27 of protective orders in the discovery process: ‘The court may, for good cause, issue an order to protect 28 a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” Id. (citing 2 1 Fed. R. Civ. P. 26(c)). 2 The Ninth Circuit has clarified that the key in determining which standard to apply in assessing 3 a motion for leave to file a document under seal is whether the documents proposed for sealing 4 accompany a motion that is “more than tangentially related to the merits of a case.” Center for Auto 5 Safety, 809 F.3d at 1101 (9th Cir. 2016). If that is the case, the compelling reasons standard is applied. 6 If not, the good cause standard is applied. 7 Here, Plaintiffs seek to file under seal the discrete portions of their First Amended Complaint and 8 Exhibits A and F attached thereto. They represent that the exhibits contain the operative agreement 9 between the parties and other information which the parties have deemed confidential pursuant to a 10 protective order. The motion for leave to amend does not go to the merits of the action itself, but to what 11 claims the Plaintiffs will be asserting. Therefore, the “good cause” standard applies. 12 The exhibits attach the agreements and references other confidential information subject to the 13 protective order entered in this case. Rule 26 allows the court to protect “trade secret[s] or other 14 confidential research, development or commercial information[.]” As such, the court finds that good 15 cause exists to seal exhibits A and F. Therefore, Plaintiffs’ motion (ECF No. 83) is GRANTED. 16 IT IS SO ORDERED. 17 DATED: July 11, 2017. 18 19 20 __________________________________________ WILLIAM G. COBB UNITED STATES MAGISTRATE JUDGE 21 22 23 24 25 26 27 28 3

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