Cypress Insurance Company v. SK Hynix America, Inc.

Filing 151

ORDER Striking the Parties' Motions to Seal. The Court STRIKES the parties' Motions to Seal. Dkt. ## 49 , 54 , 63 , 67 , 75 , 82 , 87 , 92 , 102 , 110 , 119 , 125 , 132 , 139 , 145 . The Clerk is also directed to strike the p ending motions regarding summary judgment, motions to exclude, and motions in limine. Dkt. ## 47 , 60 , 64 , 67 , 77 , 80 , 98 , 99 , 100 , 111 , 112 , 113 , 140 , 146 , 148 . The Parties are hereby ORDERED to meet and confer and file a joint statement concisely consolidating their positions on any materials for sealing by 1/25/2019. The parties are further ORDERED to resubmit their briefing on motions for summary judgment, motions to exclude, and motions in limine consistent with the instructions of this Order by 1/25/2019. Signed by Judge Richard A. Jones. (TH)

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The Honorable Richard A. Jones

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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CYPRESS INSURANCE COMPANY,
No. 2:17-cv-0467 RAJ

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Plaintiff,
ORDER STRIKING THE
PARTIES’ MOTIONS
TO SEAL

v.
SK HYNIX AMERICA INC.,

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Defendant.

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This matter comes before the Court on Plaintiff Cypress Insurance Company’s

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Motions to Seal (Dkt. ## 49, 63, 82, 102, 110, 132, 139) and Defendant SK Hynix

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America, Inc.’s Motions to Seal (Dkt. ## 54, 67, 75, 87, 92, 119, 125, 145). For the

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reasons stated below, the Court STRIKES the parties’ motions.

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I.

BACKGROUND

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Plaintiff Cypress Insurance Company (“Cypress”) is an Arizona corporation with

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its principal place of business in Phoenix, Arizona. Dkt. # 34 at ¶ 1. From July 1, 2013

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to July 1, 2014, Cypress insured Microsoft Corporation (“Microsoft”). Id. at ¶ 2.

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Defendant SK Hynix America, Inc. (“Hynix”) is an electronic memory chip supplier with

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its principal place of business in San Jose, California. Id. at ¶¶ 4, 11. On August 19,

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2004, Hynix entered into a contract with Microsoft to supply them with Dynamic Random

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Access Memory (“DRAM”) chips. Id. at ¶ 9. The contract, titled “Microsoft Component

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Purchase Agreement,” was modified by subsequent amendments, including by the Ninth

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Amendment, dated April 1, 2013. Id. at ¶ 10. Cypress alleges that Hynix breached this

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contract by failing to deliver the products contracted for in accordance with the agreed

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delivery schedule. Id. at ¶¶ 12, 14. As a result of this alleged breach, Microsoft then

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secured substitute products at a higher price in order to support its shipment requirements.

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Id. at ¶¶ 13, 14. These substitutions caused Microsoft to incur damages, and Cypress paid

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policy benefits of $175,000,000 to Microsoft because of those damages. Id. at ¶ 15.

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Cypress brings a breach of contract claim as a subrogee of Microsoft for the amounts

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paid. Id. at ¶ 16.

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Cypress filed its original Complaint against Hynix on March 23, 2017. Dkt. # 1.

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On July 26, 2017, the Court issued a scheduling order setting March 14, 2018 as the

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deadline to amend pleadings. Dkt. # 24. On March 5, 2018, the Court gave Cypress leave

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to file an Amended Complaint pursuant to a stipulated motion submitted by the parties.

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Dkt. # 33. Cypress filed the Amended Complaint on March 6, 2018. Dkt. # 34. Cypress

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filed a Motion for Partial Summary Judgment on September 18, 2018 and Hynix filed a

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Cross-Motion for Summary Judgment on November 13, 2018. Dkt. ## 47, 80. On

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December 13, 2018 and December 27, 2018, the parties filed several motions to exclude

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certain expert opinions. Dkt. ## 98, 99, 100, 111, 112, 113. The parties filed motions in

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limine on January 14, 2019. Dkt. ## 140, 146. The motions to seal that are the subject

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of this Order were filed in conjunction with the parties’ briefing on their motions for

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summary judgment, motions to exclude, and motions in limine.

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II.

DISCUSSION

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“Historically, courts have recognized a ‘general right to inspect and copy public

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records and documents, including judicial records and documents.’” Kamakana v. City

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& Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner

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Commc’ns, Inc., 435 U.S. 589, 597 & n.7 (1978)). Accordingly, when considering a

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sealing request, “a strong presumption in favor of access is the starting point.”

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Kamakana, 447 F.3d at 1178. (internal quotation marks omitted).

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Pursuant to Rule 26(c), a trial court has broad discretion to permit sealing of court

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documents for the protection of “a trade secret or other confidential research,

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development, or commercial information.” Fed. R. Civ. P. 26(c)(1)(G). As the Supreme

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Court has recognized, sealing may be justified to prevent judicial documents from being

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used “as sources of business information that might harm a litigant’s competitive

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standing.” Nixon, 435 U.S. at 598. The party seeking to seal a judicial record, however,

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must show that “compelling reasons supported by specific factual findings . . . outweigh

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the general history of access and the public policies favoring disclosure.” Kamakana,

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447 F.3d at 1178-79 (internal citations omitted).

“Broad allegations of harm,

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unsubstantiated by specific examples of articulated reasoning” will not suffice. Beckman

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Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992).

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Additionally, in the Western District of Washington, parties moving to seal

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documents must comply with the procedures established by Civil Local Rule 5(g).

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Pursuant to Local Rule 5(g), the party who designates a document confidential must

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provide a “specific statement of the applicable legal standard and the reasons for keeping

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a document under seal, including an explanation of: (i) the legitimate private or public

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interest that warrant the relief sought; (ii) the injury that will result if the relief sought is

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not granted; and (iii) why a less restrictive alternative to the relief sought is not sufficient.”

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W.D. Wash. Local Rules LCR 5(g)(3)(B). Furthermore, where the parties have entered

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into a litigation agreement or stipulated protective order governing the exchange of

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documents in discovery, a party wishing to file a confidential document it obtained from

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another party in discovery may file a motion to seal but need not satisfy subpart (3)(B).

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Instead, the party who designated the document confidential must satisfy subpart (3)(B)

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in its response to the motion to seal or in a stipulated motion. Id.

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As an initial matter, the Court notes that many, if not all, of the motions to seal fail

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to comply with the Local Rules and seek relief that is substantially overbroad. For

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example, where documents were filed under seal at the behest of a designating party, no

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response was then filed by the designating party in satisfaction of LCR 5(g)(3)(B).

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Additionally, the parties frequently relied on blanket assertions of harm to business

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interests in attempts to seal documents in their entirety without demonstrating why no

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less restrictive alternative would suffice. Id. Furthermore, only in rare circumstances

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should a party file a motion, opposition, or reply under seal. See LCR 5(g)(5). A court

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cannot allow documents to remain under seal unless it articulates its reasons for doing so.

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Apple Inc. v. Phystar Corp., 658 F.3d 1150, 1162 (9th Cir. 2011). The Court expects the

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parties to review and abide by the Local Civil Rules and warns that future violations may

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result in sanctions. See LCR 11(c).

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Accordingly, the Court will not entertain these motions. The parties have clearly

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failed to meaningfully meet and confer concerning their disagreements over which

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documents should be sealed and have not seriously explored alternatives such as

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redacting. See LCR 5(g). Instead, the parties have abused motions to seal to drag the

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Court through an inefficient, convoluted briefing process that serves no purpose other

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than to confuse, overwhelm, and distract the Court.

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Accordingly, the Court STRIKES the parties’ Motions to Seal. Dkt. ## 49, 54,
63, 67, 75, 82, 87, 92, 102, 110, 119, 125, 132, 139, 145.
CONCLUSION

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The Court will not continue to accept motions to seal that fail to comply with the

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Local Rules and offer only boilerplate reasons to seal documents from the public domain.

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The Parties are hereby ORDERED to meet and confer and file a joint statement concisely

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consolidating their positions on any materials for sealing by January 25, 2019. The joint

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statement, as discussed with the parties on the January 17, 2018 teleconference, must

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include (i) specific examples of harm from the designating party that would result from

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allowing the submitted materials, or portions thereof, into the public domain and (ii)

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articulated reasons as to why alternatives to sealing would be insufficient.

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The joint statement must include a chart of the parties’ positions in the form below.

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Additionally, the parties must jointly submit to the Court a courtesy copy of the proposed

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materials for sealing in a tabbed three-ring binder in the order they appear in the chart.

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Where the designating party is proposing that only portions of a document be sealed, the

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redacted version shall immediately precede the document for sealing in the tabbed binder.

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ECF Detailed
Designating Specific Harm
No. Document Party
to Business
Description
Interests

Reasons why alternatives to
sealing, such as redactions, are
insufficient

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The parties are further ORDERED to resubmit their briefing on motions for

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summary judgment, motions to exclude, and motions in limine consistent with the

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instructions of this Order by January 25, 2019. Should the parties continue to engage in

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a needless and protracted effort to seal materials without regard for court rules, the Court

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will impose swift and harsh sanctions on the offending party.

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For the reasons stated herein, the Court STRIKES the parties’ Motions to Seal.

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Dkt. ## 49, 54, 63, 67, 75, 82, 87, 92, 102, 110, 119, 125, 132, 139, 145. The Clerk is

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also directed to strike the pending motions regarding summary judgment, motions to

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exclude, and motions in limine. Dkt. ## 47, 60, 64, 67, 77, 80, 98, 99, 100, 111, 112,

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113, 140, 146, 148.

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DATED this 18th day of January, 2019

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A

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The Honorable Richard A. Jones
United States District Judge

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