LAMBETH MAGNETIC STRUCTURES, LLC v. SEAGATE TECHNOLOGY (US) HOLDINGS, INC et al

Filing 418

ORDER reflecting that parties' joint Motions Regarding Proposed Redactions to their respective Pretrial Statement Exhibits, Docs. 252 & 257 , are GRANTED IN PART AND DENIED IN PART and directing parties to file joint redacted versions of the relevant documents pursuant to the Court's findings by March 22, 2022. Signed by Judge Cathy Bissoon on 3/17/2022. (ahm)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
LAMBETH MAGNETIC STRUCTURES, )
LLC,
)
Plaintiff,
)
)
v.
)
)
SEAGATE TECHNOLOGY (US)
)
HOLDINGS, INC., et al.,
)
)
Defendants.
)

Civil Action No. 16-538
Judge Cathy Bissoon

MEMORANDUM AND ORDER
I. MEMORANDUM
The parties’ joint motions Regarding Proposed Redactions to their respective Pretrial
Statement Exhibits, Doc. 252, (“Pl.’s Joint Mt.”) & Doc. 257, (“Defs.’ Joint Mt.), will be granted
in part and denied in part.
ANALYSIS
Based on In re Avandia Marketing Sales Practices & Products Liability Litigation, this
Court must assess if the common law right of access applies to the proposed redactions. 924
F.3d 662, 670–73 (3d Cir. 2019). If the common law right of access applies, then the Court must
assess if the parties’ reasoning to keep redactions under seal overcomes the common law
presumption of access. Id. Finally, if the Court determines that any documents should remain
sealed, the Court must then consider whether the First Amendment right of public access
attaches. Id. at 673, 680.
Here, parties do not dispute that the documents in question constitute judicial records and
are subject to the common law presumption of access. To overcome this presumption, parties
must demonstrate that their proposed redactions encompass “the kind of information that courts

will protect, and that disclosure will work a clearly defined and serious injury to the party
seeking closure.” Id. at 672. The Court finds that parties’ requests for redactions are compelling
enough to overcome the common law presumption of access.
Specifically, Plaintiff argues that its proposed redactions include details from confidential
presentations and agreements with various third parties. Pl.’s Joint Mt. at 1–2. According to
Plaintiff, disclosing such information would be detrimental to those third parties, as well as harm
their—i.e., both Plaintiff’s and the third parties’—negotiating positions in the marketplace. Id. at
3. Further, Plaintiff contends that sealing also is warranted to the extent Plaintiff is contractually
obligated not to disclose information from its licensing and settlement agreements with third
parties. Id.
Similarly, Defendants assert that their proposed redactions comprise internal research as
well as business and financial information, for which public has a reduced interest in disclosure.
Defs.’ Joint Mt. at 2. Defendants maintain that sealing is justified because, if made public, this
information could harm their standing in the market. Id. at 3. These, the Court finds, are
“compelling, countervailing interests to be protected.”1 Avandia, 924 F.3d at 672.
There also is no dispute that the proposed redactions are subject to the First Amendment
right of public access. See id. at 673. (“[T]he public and the press have a First Amendment right
of access to civil trials.”). When the First Amendment right attaches, “[a]ny restriction on the
right of public access is evaluated under strict scrutiny” and a party may only rebut the
presumption in favor of access by “demonstrat[ing] an overriding interest [in excluding the
public] based on findings that closure is essential to preserve higher values and is narrowly

1

The Court makes its specific findings as to each category of the proposed redactions later in
this Order.

tailored to serve that interest.” Id. Therefore, parties must demonstrate that their proposed
redactions consist of the “the kind of information that courts will protect and that there is good
cause for the order to issue.” Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1071 (3d Cir.
1984).
To determine whether the proposed redactions survive the First Amendment right of
public access, the Court reviews each category of the parties’ proposed redactions and makes the
following findings.2
i.

Category 1: Product Information

Defendants propose redacting the names of their products as well as information about
the products’ material configuration and measurements. According to Defendants, disclosure of
this information, in combination with other material in the exhibits, would enable their
competitors to copy Defendants’ designs.
In this Circuit, “an interest in safeguarding a trade secret may overcome a presumption of
openness.” Publicker, 733 F.2d at 1073. While Defendants do not explicitly characterize the
information in this category as a trade secret, the Court finds the analytical rubric of this category
of information provides an appropriate method by which to analyze the proposed redactions.
Cutsforth, Inc. v. Lemm Liquidating Co., LLC, No. CV 17-1025, 2020 WL 772442, at *2 (W.D.
Pa. Feb. 18, 2020).
The Court finds that the information that Defendants seek to redact derives independent
economic value from not being generally known by others who can obtain economic value from
its disclosure and is subject to efforts that are reasonable under the circumstances to maintain its

The Court notes that, after careful review of each of parties’ proposed redactions, that the type
of information requested can be categorized in this way and thus can receive the same type of
analysis.
2

secrecy. Defendants have shown that this is the type of information that courts seek to protect,
demonstrated their overriding interest in excluding the public from this information because of
the potential harm they may suffer and narrowly tailored the redactions only to include
information that would cause harm. Therefore, the information in Category 1 may be
safeguarded against the First Amendment right of access.
ii.

Category 2: Research and Development and Manufacturing Information

Defendants proposed redactions in this category encompass their research and
development and details of their manufacturing processes. The Court finds that much of this
information is appropriately redacted, for the reasons discussed above.
But Defendants also have proposed redacting certain information under this category
which—if disclosed—would not lead to the harm anticipated by Defendants. For example,
Defendants seek to redact details about locations of certain manufacturing facilities, but a brief
internet search reveals that Defendants have manufacturing facilities in Minnesota and Ireland.
Similarly, redactions related to an expert’s methods and calculations to estimate potential royalty
bases and damages do not fit the bill. To be sure, such methods/estimates do not reveal
information that competitors could leverage against Defendants. Accordingly, these proposed
redactions shall not be sealed.
iii.

Category 3: Licensing Agreements and Practices

Defendants and Plaintiff request redactions to their respective licensing and settlement
agreements and their licensing practices. Both parties argue that unsealing this information will
harm their negotiating position in the market.
Cole’s Wexford Hotel, Inc. v. Highmark, Inc. is instructive in evaluating whether this
information would overcome the First Amendment right of public access. 2019 WL 7606242, at

*16 (W.D. Pa. Dec. 19, 2019) adopted by and modified in part by 2020 WL 337522 (W.D. Pa.
Jan. 21, 2020). In that case, the court found that the negotiated reimbursement rates of UPMC
and Highmark “are confidential commercial information of the sort courts protect” because if the
rates were disclosed, other entities could use the information to negotiate better rates for
themselves. 2019 WL 7606242, at *28 (W.D. Pa. Dec. 19, 2019).
Here, disclosing parties’ licensing practices and agreement terms would cause the same
harm that was contemplated in Cole’s Wexford Hotel. Parties have shown that this is the type of
information that courts seek to protect, demonstrated the potential harm that may result from
disclosure, shown an overriding interest in keeping the requested redactions sealed and narrowly
tailored the redactions only to include information that would cause harm. Therefore, the Court
finds that parties have overcome the First Amendment presumption of access with respect to this
information.
However, Plaintiff also has proposed redactions of estimated agreement values from
expert witnesses. Because those estimates do not comprise terms from confidential agreements
and disclosure of such estimates would not reveal actual agreement terms, Plaintiff has not met
the burden of showing a specific harm that would occur from disclosure or that this is the kind of
information that courts seek to protect. Therefore, this information shall not be sealed.
iv.

Category 4: Licensing Agreements Made by Third Parties

Plaintiff requests that the Court seal information produced by third parties because it is
designated as “CONFIDENTIAL OUTSIDE COUNSEL’S EYE’S ONLY.” While calling
something “confidential” does not overcome either the common law, or First Amendment
presumption of access, the Courts finds that the information sought to be redacted in this
Category is similar to that discussed in Category 3—i.e., information containing the terms of

confidential agreements made by Plaintiff and Defendants. Disclosing this information would
subject the third parties to the same type of harm that Plaintiff and Defendants would suffer by
disclosure of the Category 3 information.
This is the type of information that courts seek to protect because there is a potential
harm from disclosure and an overriding interest in keeping the requested redactions sealed.
Additionally, Plaintiff narrowly tailored the redactions and only included information that would
cause harm. Accordingly, this information is appropriately safeguarded against the First
Amendment right of access.
v.

Category 5: Financial and Commercial Information

Defendants seek to redact financial and sales data as well as analyses based on that data.
According to Defendants, competitors could leverage this information to better compete with
them, thereby inflicting harm. However, much of what Defendants seek to seal as sensitive
financial information already is publicly available. For example, Defendants propose to redact
company-wide financial information that either is on the Securities and Exchange Commission
(SEC) website, or the proposed redaction easily is calculated from information disclosed by the
SEC. Because this information already is available to Defendants’ competitors, the harm
described by Defendants will not occur from disclosure. Accordingly, this information shall
remain unsealed.
Additionally, among the proposed redactions in this category are methods employed by
an expert witness to calculate hypothetical royalty bases. Defendants have not shown a
compelling, countervailing interest to justify sealing this information because disclosure of such
estimates does not provide substantial insight into Defendants’ business. Therefore, this
information also shall not be sealed.

The same cannot be said of information that is not in the public domain—i.e.,
Defendants’ internal transfer pricing, internal demand estimates, and HDD sales. The Court
finds that disclosure of this information would give Defendants’ competitors an unfair
advantage. Defendants have shown that this is the type of information that courts seek to protect,
demonstrated the potential harm that they may suffer from disclosure, shown an overriding
interest in keeping the requested redactions sealed and narrowly tailored the redactions to only
include information that would cause harm.
Accordingly, the only information in this category that may be safeguarded against the
First Amendment right of access is the financial and sales data that is not filed with the SEC and
cannot be calculated from publicly available information.
CONCLUSION
Consistent with the analyses above, the Court hereby enters the following:
II. ORDER
Consistent with the foregoing, parties’ joint motions Regarding Proposed Redactions to
their respective Pretrial Statement Exhibits, Docs. 252 & 257, are GRANTED IN PART AND
DENIED IN PART. Parties shall file joint redacted versions of the relevant documents
pursuant to the Court’s findings by March 22, 2022.
IT IS SO ORDERED.
March 17, 2022

cc (via ECF email notification):
All Counsel of Record

s/Cathy Bissoon
Cathy Bissoon
United States District Judge