MSK Covertech, Inc. v. Fevisa Industrial, S.A. de C.V.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 Case No.: 23-cv-00741-DMS-MSB MSK COVERTECH, INC., 11 Plaintiff, ORDER DENYING PLAITIFF’S 12 v. MOTION TO FILE UNDER SEAL 13 FEVISA INDUSTRIAL, S.A. de C.V., 14 Defendant. 15 16 17 Plaintiff MSK Covertech, Inc. (“MSK”) has initiated this Action against Defendant 18 Fevisa Industrial (“Fevisa”) to confirm a foreign arbitration award under Section 207 of 19 the Federal Arbitration Act, 9 U.S.C. § 207. Plaintiff has filed a redacted copy of its 20 Petition (ECF No. 1) and has moved to file an unredacted copy of the Petition along with 21 three Exhibits under seal (ECF No. 2). Because Plaintiff points to no compelling reason 22 justifying the sealing of the Petition or the Exhibits, the Motion is DENIED. 23 I. BACKGROUND 24 In this Action, MSK petitions the court for an order confirming a foreign arbitration 25 award under Section 207 of the Federal Arbitration Act, 9 U.S.C. § 207, and Article III of 26 the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 27 1958, 21 U.S.T. 2517 (the “New York Convention”). Plaintiff MSK is a Georgia 28 corporation with its principal place of business in the state of Georgia. MSK designs and 1 manufactures packaging systems and equipment. Defendant Fevisa is a glass 2 manufacturing company incorporated in Mexico with its headquarters in Mexicali, Baja 3 California, Mexico. In 2017, MSK and Fevisa entered a contract in which MSK agreed to 4 deliver products and services to Fevisa. The parties agreed to settle disputes arising out of 5 the contract under the Rules of Arbitration of the Arbitration Center of Mexico (Reglas de 6 Arbitraje del Centro de Arbitraje de México). In December 2019, Fevisa filed a request 7 for arbitration against MSK for breach of contract. MSK brought a counterclaim against 8 Fevisa. In January 2023, the Arbitrator concluded that Fevisa’s claims were without merit, 9 but that MSK was entitled to compensation for one if its counterclaims. 10 MSK argues that portions of its Petition along with three Exhibits in their entirety 11 should be filed under seal because they contain information that Defendant Fevisa “alleges 12 or may allege constitutes trade secret and proprietary information.” (Pl.’s Mot. to File 13 Under Seal at 2, ECF No. 2.) This is the sole reason MSK provides to justify sealing of 14 the Petition and Exhibits. 15 II. DISCUSSION 16 A. Legal Standard 17 Courts have long recognized “a general right to inspect and copy public records and 18 documents, including judicial records and documents.” Nixon v. Warner Commc'ns, Inc., 19 435 U.S. 589, 597 (1978). The Ninth Circuit has stated that there is “a strong presumption 20 in favor of access to court records.” Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 21 1122, 1135 (9th Cir.2003). “A party seeking to seal a judicial record . . . bears the burden 22 of overcoming this strong presumption by meeting the ‘compelling reasons’ standard.” 23 Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 2016) (quoting 24 Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)). A court 25 may seal records only when it finds “a compelling reason and articulate[s] the factual basis 26 for its ruling, without relying on hypothesis or conjecture.” Id. at 1096–97 (quoting 27 Kamakana, 447 F.3d at 1179). The Ninth Circuit has carved out an exception “for sealed 28 materials attached to a discovery motion unrelated to the merits of a case.” Id. at 1097. 1 For these materials, the party seeking to file under seal “need only satisfy the less exacting 2 ‘good cause’ standard.” Id. (quoting Foltz, 331 F.3d at 1135); see also Fed. R. Civ. P. 3 26(c). 4 The Court concludes that Plaintiff’s Motion to Seal the Petition and the attached 5 Exhibits must “meet the compelling reasons standard,” not the good cause standard. 6 Blackhawk Network Inc. v. SL Card Co., No. CV-21-00813, 2021 WL 2779497, at *1 (D. 7 Ariz. July 2, 2021); see also In re NVIDIA Corp. Derivative Litig., No. C 06-06110, 2008 8 WL 1859067, at *3 (N.D. Cal. Apr. 23, 2008) (concluding that “[u]nder the Ninth Circuit’s 9 jurisprudence,” a motion to seal a complaint must meet the compelling reasons standard 10 because a complaint is “the root, the foundation, the basis by which a suit arises”). The 11 district courts within the Ninth Circuit—including this District—have routinely held the 12 same. See, e.g., Alex Lee, Inc. v. Lion Cap. LLP, No. 22-cv-1694, 2023 WL 125013 (S.D. 13 Cal. Jan. 6, 2023); Blackhawk Network, 2021 WL 2779497 (D. Ariz.); McCrary v. Elations 14 Co., No. EDCV 13-00242, 2014 WL 1779243 (C.D. Cal. Jan. 13, 2014); Mendoza v. 15 Electrolux Home Prod., Inc., No. 20-cv-01133, 2020 WL 5847220 (E.D. Cal. Oct. 1, 16 2020); Billman Prop., LLC v. Bank of Am., N.A., No. 15-CV-00088, 2015 WL 575926 (D. 17 Nev. Feb. 11, 2015); In re NVIDIA Corp., 2008 WL 1859067 (N.D. Cal.). 18 B. Analysis 19 Plaintiff has not articulated any compelling reason to justify sealing portions of the 20 Petition or the entirety of the Exhibits attached to it. Examples of compelling reasons 21 include when a court record might be used to “gratify private spite or promote public 22 scandal,” to circulate “libelous” statements, or “as sources of business information that 23 might harm a litigant's competitive standing.” Nixon, 435 U.S. at 598. Plaintiff offers a 24 single conclusory sentence arguing that the Petition and Exhibits should be filed under seal 25 because they contain information that Defendant Fevisa “alleges or may allege constitutes 26 trade secret and proprietary information.” (Pl.’s Mot. to File Under Seal at 2.) Plaintiff 27 must specify the trade secrets and proprietary information contained within the filings and 28 articulate how their public disclosure might “harm a litigant’s competitive standing,” 1 || Nixon, 435 U.S. at 598, in order to overcome the “strong presumption in favor of access,” 2 || Foltz, 331 F.3d at 1135. Plaintiff's single sentence arguing that Defendant “alleges or may 3 allege” there to be trade secrets or proprietary information contained within the Petition 4 || and Exhibits, without more, is unsubstantiated “hypothesis or conjecture.” Kamakana, 447 5 || F.3d at 1179. 6 Il. CONCLUSION AND ORDER 7 Plaintiff has not made a sufficient showing of “compelling reasons” to justify sealing 8 || portions of the Petition and the entirety of its attached Exhibits. Accordingly, the Court 9 || HEREBY ORDERS the following: 10 1. Plaintiffs Motion to File Under Seal (ECF No. 2) is DENIED without prejudice. 11 Nonetheless, all filings in this case currently under seal shall remain provisionally 12 under seal. 13 2. On or before May 8, 2022 (within seven days of this Order), Plaintiff may file a 14 renewed motion which (a) specifies portions of the Petition and Exhibits sought to 15 be filed under seal and (b) articulates compelling reasons to justify the sealing of 16 those portions consistent with the standard explained in this Order. 17 3. If Plaintiff does not file a renewed motion by May 8, 2022, all filings currently under 18 seal in this case shall be published on the public docket in their entirety. 19 20 IT IS SO ORDERED. 21 22 || Dated: May 1, 2023 23 , Vine Yn. <,4\ 24 Hon. Dana M. Sabraw, Chief Judge 5 United States District Court 26 27 28