Federal Trade Commission v. Adept Management, Inc. et al
ORDER: Denying Motion for Leave 218 to File Under Seal a Motion for Sanctions. The Court respects the parties' and third party's "Confidential" designation of the exhibits pursuant to the protective order. However, a fter reviewing the exhibits at issue, the Court does not find any privilege that applies, nor does it appear that any potential for embarrassment, harassment, public scandal, incrimination, or other possible negative impact might result from unsealin g such documents. On balance, the Court finds that the Hoyaldefendants have failed to make a particularized showing of harm to meet even the lower standard of "good cause" under Federal Rule of Civil Procedure 26(c). The motion 218 is den ied. The Hoyal defendants are directed to file their motion electronically in accordance with the Local Rules of Civil Procedure. Please access entire text by document number hyperlink. Signed on 01/08/2018 by Magistrate Judge Mark D. Clarke. (rsm)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
FEDERAL TRADE COMMISSION,
Civ. No. 1: 16-cv-00720-CL
OPINION AND ORDER
ADEPT MANAGEMENT INC., et al,
CLARKE, Magistrate Judge.
This case comes before the Court on the Hoyal defendants' Motion (#218) for Leave to
File Under Seal A Motion for Sanctions. The motion for leave to file under seal is unopposed.
For the reasons below, the motion (#218) is denied. The Hoyal defendants are instructed to file
their Motion for Sanctions electronically, in accordance with the Local Rules of Civil Procedure.
Historically, courts have recognized a "general right to inspect and copy public records
and documents. including judicial records and documents." Kamakana v. City & Cty. of
Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc'ns, Inc., 435
U.S. 589, 597 & n. 7 (1978)). This right is justified by the interest of citizens in "keep[ing] a
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watchful eye on the workings of public agencies." Id. at 598. Such vigilance is aided by the
efforts of newspapers to "publish information concerning the operation of government." Id.
Unless a particular court record is one "traditionally kept secret," 1 a "strong presumption in favor
of access·' is the starting point. Foltz v. State Farm Mut. Auto. Ins. Co., 331F.3d1122, 1135
(9th Cir. 2003) (citing Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir.1995)). A party
seeking to seal a judicial record then bears the burden of overcoming this strong presumption by
meeting the "compelling reasons" standard. Foltz, 33 l F.3d at 1135. That is, the party must
.. articulate[ ] compelling reasons supported by specific factual findings," id. (citing San Jose
Mercury News, Inc. v. U.S. Dist. Ct., 187 F.3d 1096, 1102-03 (9th Cir.1999)), that outweigh the
general history of access and the public policies favoring disclosure, such as the " 'public interest
in understanding the judicial process."' Hagestad, 49 F.3d at 1434 (quoting EEOC v. Erection
Co., 900 F.2d 168, 170 (9th Cir.1990)). In tum, the court must "conscientiously balance the
competing interests" of the public and the party who seeks to keep certain judicial records secret.
Foltz, 331 F.3d at 1135.
In general, "compelling reasons" sufficient to outweigh the public's interest in disclosure
and justify sealing court records exist when such "court files might have become a vehicle for
improper purposes," such as the use ofrecords to gratify private spite, promote public scandal,
circulate libelous statements, or release trade secrets. Nixon, 435 U.S. at 598; accord Valley
Broadcasting Co., 798 F .2d at 1294. The mere fact that the production of records may lead to a
litigant's embarrassment, incrimination, or exposure to further litigation will not, without more,
compel the court to seal its records. Foltz, 33 l F.3d at 1136.
Ninth Circuit case law has identified two categories of documents that fall in this category: grand jury
transcripts and warrant materials in the midst of a pre-indictment investigation. Times Mirror Co. v.
United States, 873 F .2d 1210, 1219 (9th Cir.1989). Neither applies in this case.
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Additionally, the Ninth Circuit has held that a non-party's reliance on a blanket protective
order is unreasonable and is not a "compelling reason" that rebuts the presumption of access. Id.
at 1138; Beckman Indus., Inc. v. Int'! Ins. Co., 966 F.2d 470, 4 75-76 (9th Cir.1992) (noting that
''[t]he extent to which a party can rely on a protective order should depend on the extent to which
the order induced the party to allow discovery" and that reliance on a ·'stipulated ... blanket
protective order" does not justify sealing court records).
Finally, the Court treats judicial records attached to dispositive motions differently from
records attached to non-dispositive motions. Kamakana, 447 F.3d at 1180. Those who seek to
maintain the secrecy of documents attached to dispositive motions must meet the high threshold
of showing that "compelling reasons" support secrecy. Id (citing Foltz. 331 F.3d at 1136). A
·'good cause" showing under Rule 26(c) will suffice to keep sealed records attached to nondispositive motions. Id. However, the Court has broad discretion to consider all of the
competing interests, including the presumption of public access and whether or not a party has
made a particularized showing of harm or specific prejudice that will result from unsealing such
records. Kamakana, 447 F.3d at 1187 (affirming the district court's order to unseal documents
attached to non-dispositive motions).
In this case, the Court has reviewed the motions, briefs, and exhibits for the Motion for
Leave to File Under Seal and the Motion for Sanctions, which was submitted conventionally for
review, but not docketed. A motion for sanctions is not "dispositive," however the exhibits that
the defendants seek to keep sealed are included for a purpose, which the Court can only assume
is an attempt to call into question the substantive legitimacy of this litigation. Thus, while the
motion is not dispositive, the merits of the case appear to be brought into question by documents
at issue. Therefore, while the defendants need not show a "compelling reason," the Court will
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consider the strong presumption in favor of public access when it evaluates whether the
defendants have shown "good cause" under Rule 26( c).
The Court respects the parties' and third party's "Confidential" designation of the
exhibits pursuant to the protective order. However, after reviewing the exhibits at issue, the
Court does not find any privilege that applies, nor does it appear that any potential for
emban-assment, harassment, public scandal, incrimination, or other possible negative impact
might result from unsealing such documents. On balance, the Court finds that the Hoyal
defendants have failed to make a particularized showing of harm to meet even the lower standard
of"good cause" under Federal Rule of Civil Procedure 26(c). The motion (#218) is denied.
The Hoyal defendants are directed to file their motion electronically in accordance with
the Local Rules of Civil Procedure.
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