Stewart v. Quest Diagnostics Clinical Laboratories, Inc.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PAMELA STEWART and ZULEKHA Case No.: 3:19-cv-02043-RBM-KSC ABDUL, individually and on behalf of all 12 similarly situated employees of ORDER GRANTING PLAINTIFFS’ 13 Defendants in the State of California, MOTION TO SEAL 14 Plaintiffs, [Doc. 134] 15 v. 16 QUEST DIAGNOSTICS CLINICAL LABORATORIES, INC. and DOES 1 17 THROUGH 50, inclusive, 18 Defendants. 19 20 21 On August 17, 2022, Plaintiffs Pamela Stewart and Zulekha Abdul (“Plaintiffs”) 22 filed the instant motion to seal documents in support of Plaintiff Pamela Stewart’s class 23 certification motion and Plaintiffs’ opposition to Defendant Quest Diagnostics Clinical 24 Laboratories, Inc.’s (“Defendant”) motion to strike Plaintiffs’ PAGA claims. (Doc. 134.) 25 For the reasons discussed below, Plaintiffs’ motion is GRANTED. 26 I. LEGAL STANDARD 27 “[T]he courts of this country recognize a general right to inspect and copy public 28 records and documents, including judicial records and documents.” Nixon v. Warner 1 Commc’ns, Inc., 435 U.S. 589, 597 (1978). “Unless a particular court record is one 2 ‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the starting point.” 3 Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (citing Foltz v. 4 State Farm Mut. Auto Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). “The presumption 5 of access is ‘based on the need for federal courts, although independent—indeed, 6 particularly because they are independent—to have a measure of accountability and for the 7 public to have confidence in the administration of justice.’” Ctr. for Auto Safety v. Chrysler 8 Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 2016) (quoting United States v. Amodeo, 71 F.3d 9 1044, 1048 (2d Cir. 1995)). 10 A party seeking to seal a judicial record bears the burden of overcoming the strong 11 presumption of public access. Foltz, 331 F.3d at 1135. The showing required to meet this 12 burden depends upon whether the documents to be sealed relate to a motion that is “more 13 than tangentially related to the merits of the case.” Ctr. for Auto Safety, 809 F.3d at 1102. 14 When the underlying motion is more than tangentially related to the merits, the 15 “compelling reasons” standard applies. Id. at 1096–98. When the underlying motion does 16 not surpass the tangential relevance threshold, the “good cause” standard applies. Id. 17 The “compelling reasons” standard is generally satisfied if the moving party can 18 show that the “‘court files might have become a vehicle for improper purposes,’ such as 19 the use of records to gratify private spite, promote public scandal, circulate libelous 20 statements, or release trade secrets.” Kamakana, 447 F.3d at 1179 (quoting Nixon, 435 21 U.S. at 598). The decision to seal documents is “one best left to the sound discretion of 22 the trial court” upon consideration of “the relevant facts and circumstances of the particular 23 case.” Nixon, 435 U.S. at 599. 24 Compelling reasons may exist if sealing is required to prevent documents from being 25 used “as sources of business information that might harm a litigant’s competitive standing.” 26 Nixon, 435 U.S. at 598. “[A] trial court has broad discretion to permit sealing of court 27 documents for, inter alia, the protection of ‘a trade secret or other confidential research, 28 development, or commercial information.’” GPNE Corp. v. Apple Inc., No. 12-cv-2885- 1 LHK, 2015 WL 4381244, at *1 (N.D. Cal. July 16, 2015) (quoting FED. R. CIV. P. 2 269(c)(1)(G)). Additionally, courts have been willing to seal court filings containing 3 confidential business material, “such as marketing strategies, product development plans, 4 licensing agreements, and profit, cost, and margin data,” where the “parties have been able 5 to point to concrete factual information” to justify sealing. Cohen v. Trump, No. 13-cv- 6 2519-GPC-WVG, 2016 WL 3036302, at *5 (S.D. Cal. May 27, 2016) (collecting cases); 7 see also In re Electronic Arts, 298 F. App’x 568, 569 (9th Cir. 2008) (finding compelling 8 reasons to seal “pricing terms, royalty rates, and guaranteed minimum payment terms”); 9 Quidel Corp. v. Siemens Med. Sols. USA, Inc., No. 16-CV-3059-BAS-AGS, 2020 WL 10 1062949, at *2 (S.D. Cal. Mar. 4, 2020) (applying compelling reasons standard to seal 11 plaintiff's “confidential financial and pricing information”). 12 II. DISCUSSION 13 Because the underlying motions for class certification and to strike Plaintiffs’ PAGA 14 allegations are “more than tangentially related to the merits of the case,” Ctr. for Auto 15 Safety, 809 F.3d at 1102, the compelling reasons standard applies. 16 Here, Plaintiffs seek to seal various exhibits attached to Plaintiff Pamela Stewart’s 17 class certification motion and Plaintiffs’ opposition to Defendant’s motion to strike 18 Plaintiffs’ PAGA claims. More specifically, Plaintiffs seek an order sealing documents 19 such as: (1) Defendant’s payroll records; (2) compensation records and historical 20 employment data; (3) Defendant’s salary calculator spreadsheet; (4) Defendant’s career 21 progressions program outline; and (5) versions of Defendant’s staffing model. (See Doc. 22 134-1 at 4–7; see also Docs. 134-3, 134-4.) 23 In support of their motion to seal, Plaintiffs filed declarations from Scott Brady, 24 Defendant’s Senior Director and Human Resources Business Partner, and Tiffani Walten, 25 Defendant’s Patient Services Manager. (Docs. 134-3, 134-4.) Mr. Brady states that the 26 historical employment data subject to Plaintiffs’ motion to seal “contains highly sensitive 27 information regarding each [Patient Service Representative]’s compensation (including 28 changes to compensation and reasons therefore), demographic information (i.e., ethnicity), 1 and work location” and that such information about its employees, if made public to 2 Defendant’s competitors, would put Defendant at a competitive disadvantage. (Doc. 134- 3 3 ¶¶ 4–9.) Ms. Walten states that Defendant’s staffing model “helps supervisors assess 4 their staffing needs and prepare a justification for any requested staffing adjustments.” 5 (Doc. 134-4 ¶ 4.) Ms. Walten further states that Defendant’s staffing model “contains 6 highly sensitive information regarding Quest’s staffing practices and patient flow” and 7 “contains information reflecting Quest’s internal decision-making regarding its business 8 practices related to productivity metrics and customer service strategies for [Patient Service 9 Center]s.” (Id. ¶ 5.) Finally, Ms. Walten states the staffing model “contains highly 10 sensitive information reflecting Quest’s internal decision-making regarding its business 11 practices related to progressions and performance expectations for PSRs” and is not 12 accessible to the public given the risk of a competitor obtaining the information. (Id. ¶¶ 5– 13 7.) 14 The Court finds compelling reasons to seal the documents subject to Plaintiffs’ 15 motion. Having reviewed the relevant documents and the declarations from Defendant’s 16 employees, the Court finds that Plaintiffs seek to seal information that, if publicly 17 disclosed, could potentially put Defendant at a competitive disadvantage. Additionally, 18 some of the information at issue involves putative class members’ names, earnings, and 19 other employee information which Defendant does not publicly disclose. See Nixon, 435 20 U.S. at 598; see also Algarin v. Maybelline, LLC, No. 12CV3000 AJB DHB, 2014 WL 21 690410, at *3 (S.D. Cal. Feb. 21, 2014) (“Where a party shows that its documents contain 22 sources of business information that might harm its competitive standing, the need for 23 public access to the records is lessened.”). 24 III. CONCLUSION 25 Accordingly, the Court GRANTS Plaintiffs’ motion to seal (Doc. 134). The Court 26 directs the Clerk of the Court to accept and FILE UNDER SEAL the lodged documents. 27 (Docs. 135–44.) 28 / / / I IT IS SO ORDERED. 2 ||DATE: August 29, 2022 _ Earns Haig 4 HON. RUTH BERMUDEZ MONTENEGRO UNITED STATES DISTRICT JUDGE 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28