Opinion

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA 8 9 KADIMA NEUROPSYCHIATRY Case No.: 3:26-cv-04359-WQH-JAC INSTITUTE, MEDICAL CORP., 10 a California corporation; and M.D., PH.D. ORDER 11 DAVID FEIFEL, an individual, 12 Plaintiffs, 13 v. 14 NRx PHARMACEUTICALS, INC., a 15 Delaware corporation; HTX 16 MANAGEMENT COMPANY, LLC, a Delaware limited liability company; 17 HOPE THERAPEUTICS, INC.; a 18 Delaware corporation; and DOES 1 through 10, inclusive, 19 Defendants. 20 21 HAYES, Judge: 22 On May 15, 2026, Plaintiffs Kadima Neuropsychiatry Institute, Medical Corp. and 23 David Feifel, M.D., Ph.D. initiated this action by filing a Complaint in the Superior Court 24 of the State of California, County of San Diego, Case No. 26CU030547C. (Compl., ECF 25 No. 1-4 at 1–14.) 26 On July 29, 2026, Defendants NRx Pharmaceuticals, Inc.; HTX Management 27 Company, LLC; and Hope Therapeutics, Inc. (collectively, “Defendants”) removed the 28 1 action to this Court. (ECF No. 1.) Defendants attach a redacted Complaint as Exhibit 1 to 2 the Declaration of Michael Shipley. (ECF No. 1-4.) 3 On July 30, 2026, Defendants filed the pending Motion for Order to File Under Seal. 4 (ECF No. 5.) Defendants contend that the Complaint was filed under seal in California 5 state court and that maintaining the seal in this action is required “to prevent disclosure of 6 confidential information,” including the “confidential and proprietary financial and 7 business terms” reflected in an Asset Purchase and Contribution Agreement attached to the 8 Complaint. Id. at 2. 9 Courts begin with a “strong presumption in favor of access to court records” but may 10 grant a motion to seal documents “given sufficiently compelling reasons.” Foltz v. State 11 Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003). “In general, ‘compelling 12 reasons’ sufficient to outweigh the public’s interest in disclosure and justify sealing court 13 records exist when such ‘court files might have become a vehicle for improper purposes,’ 14 such as the use of records to gratify private spite, promote public scandal, circulate libelous 15 statements, or release trade secrets.” Kamakana v. City & Cnty. of Honolulu, 447 F.3d 16 1172, 1179 (9th Cir. 2006) (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 17 (1978)). 18 Upon review, the redacted portions of the Complaint pertain to communications 19 regarding Defendants’ alleged plans to acquire Kadima and the financial terms of that 20 acquisition. The information falls within the definition of “trade secrets” such that the 21 Court finds a compelling reason to seal the unredacted version of the Complaint at this 22 stage in the proceedings. See In re Elec. Arts, Inc., 298 F. App’x 568, 569 (9th Cir. 2008) 23 (stating, in an unpublished opinion, that “pricing terms, royalty rates, and guaranteed 24 minimum payment terms” in a licensing agreement “plainly [fell] within the definition of 25 ‘trade secrets’”); Pulse Elecs., Inc. v. U.D. Elec. Corp., 530 F. Supp. 3d 988, 1031 (S.D. 26 Cal. 2021) (granting a motion to seal exhibits containing “customer information, financial 27 information, or third-parties’ sensitive information” that a competitor could use “to their 28 1 ||advantage in their own contract negotiations”), aff’d, No. 2021-1856, 2022 WL 1436146 2 || (Fed. Cir. May 6, 2022). 3 IT IS HEREBY ORDERED that Defendants’ Motion to File Documents Under Seal 4 ||(ECF No. 5) is granted. This ruling is without prejudice to any interested party filing a 5 ||motion to unseal accompanied by an appropriate showing. 6 7 8 ||Dated: August 11, 2026 BE: KL Z. a 9 Hon, William Q. Hayes 10 United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28