Chen v. Allied Waste Systems, Inc.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 QIHAI CHEN and DUALTONE Case No.: 3:22-cv-00099-JO-AHG AUTOMOTIVE, INC., on behalf of 12 themselves and all others similarly ORDER GRANTING DEFENDANT’S 13 situated, MOTION TO SEAL AND DENYING PLAINTIFFS’ MOTION TO SEAL 14 Plaintiffs, 15 v. 16 ALLIED WASTE SYSTEMS, INC., and DOES 1-50, 17 Defendants. 18 19 20 Defendant Allied Waste Systems, Inc. (“Defendant”) requested to seal certain 21 exhibits in support of their opposition to Plaintiffs’ class certification motion. Dkt. 68. 22 Plaintiffs Qihai Chen and Dualtone Automotive, Inc. (“Plaintiffs”) also requested to seal 23 an exhibit in support of Plaintiffs’ reply in support of their motion for class certification. 24 Dkt. 72. For the reasons set forth below, Defendant’s motion to seal is GRANTED and 25 Plaintiffs’ motion to seal is DENIED. 26 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) (citations 4 omitted). “The presumption of access is ‘based on the need for federal courts, although 5 independent—indeed, particularly because they are independent—to have a measure 6 of accountability and for the public to have confidence in the administration of 7 justice.’” Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 2016) 8 (quoting United States v. Amodeo (Amodeo II), 71 F.3d 1044, 1048 (2d Cir. 1995)). 9 A party seeking to seal a judicial record bears the burden of overcoming the strong 10 presumption of access. Kamakana, 447 F.3d at 1178 (citing Foltz v. State Farm Mut. 11 Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). If the documents to be sealed relate 12 to a motion that “is more than tangentially related to the merits of the case []” the party 13 must establish that “compelling reasons” justify the requested sealing. Ctr. For Auto 14 Safety, 809 F.3d at 1101. When the underlying motion does not surpass the tangential 15 relevance threshold, the “good cause” standard applies. Id. at 1097–99. Courts have 16 held that motions for class certification are more than tangentially related to the merits of 17 the case and applied the “compelling reasons” standard in considering requests to seal 18 documents related to such motions. See Ctr. for Auto Safety, 809 F.3d at 1099–1102; see 19 also Al Otro Lado, Inc. v. McAleenan, Case No. 17-cv-02366-BAS-KSC, 2019 WL 20 6220898 (S.D. Cal. Nov. 21, 2019) (finding motions for preliminary injunction and class 21 certification to be more than tangentially related to merits of the case). 22 ANALYSIS 23 Here, Defendant seeks to seal portions of documents that contain its customer 24 pricing terms. Dkt. 68 at 2–4. Plaintiff, on the other hand, seeks to seal excerpts from the 25 deposition transcript of Javara Perrilliat, a company witness for Defendant. Dkt. 72 at 2. 26 The Court will address each request to seal in turn. 27 First, Defendant requests the Court seal sensitive and proprietary pricing information 28 contained in Exhibits 3–10 of the Rojas Declaration. Dkt. 68 at 2:15–23. “The publication 1 of materials that could result in infringement upon trade secrets has long been considered 2 a factor that would overcome [the] strong presumption” in favor of public access to court 3 records. Apple Inc. v. Psystar Corp., 658 F.3d 1150, 1162 (9th Cir. 2011). Likewise, 4 “[d]ocuments containing commercially sensitive information,” Orthopaedic Hosp. v. 5 Encore Med., L.P., No. 19-CV-970 JLS (AHG), 2021 WL 1966121, at *2 (S.D. Cal. 6 Apr. 12, 2021) (collecting cases), or “‘[s]ources of business information that might harm a 7 litigant’s competitive standing’ often warrant protection under seal.” Williams v. U.S. Bank 8 Nat’l Ass’n, 290 F.R.D. 600, 604–05 (E.D. Cal. 2013) (quoting Nixon, 435 U.S. at 598); In 9 re Incretin-Based Therapies Prod. Liab. Litig., No. 13MD2452 AJB (MDD), 2021 WL 10 873290, at *1 (S.D. Cal. Mar. 9, 2021) (“Courts have long acknowledged that the risk of 11 competitive harm through disclosure of confidential and proprietary information warrants 12 maintaining documents under seal, even in light of the general presumption of public 13 access to judicial documents.”). 14 Here, Defendant has asserted that portions of Exhibits 3–10 contain confidential 15 and trade secret information regarding the prices that it offers and charges customers. Dkt. 16 68 at 2:15–23; 3:20–26; 4:1–5. The Court finds that the competitive harm that could result 17 from disclosing this information is a “compelling reason” to justify sealing. The Court 18 therefore GRANTS Defendant’s motion to seal. 19 Second, Plaintiffs seek to seal Exhibit 7 which contains excerpts from the deposition 20 transcript of Javara Perrilliat, Defendant’s company witness. Dkt. 71, Ex. 7 of Pls.’ Reply 21 in Supp. of Mot. Class Certification. Plaintiffs’ only justification for their request is that 22 “the language of the Protective Order prohibits the entirety of Exhibit 7 from being 23 disseminated to the public”. Dkt. 72 at 2. The terms of a stipulated protective order alone 24 are insufficient to meet the “compelling reasons” standard and does not supply a legal basis 25 to curtail the public’s access to judicial records. See also Benchmark Young Adult Sch., 26 Inc. v. Launchworks Life Servs., LLC, 2015 WL 2062046, at *2 (S.D. Cal. Apr. 30, 2015) 27 (“A blanket protective order, however, is insufficient to meet the ‘compelling reasons’ 28 standard.”); see also In re Ferrero Litig., No. 11-CV-205 H(CAB), 2011 WL 3360443, *2 1 ||(S.D. Cal. Aug. 3, 2011) (holding that a protective order itself does not satisfy the standard 2 required of a sealing order). Because Plaintiffs have not met their burden of establishing a 3 ||compelling reason, the Court DENIES Plaintiffs’ motion to seal. Kamakana, 447 F.3d at 4 ||1178. (‘In order to overcome this strong presumption, a party seeking to seal a judicial 5 ||record must articulate justifications for sealing that outweigh the public policies favoring 6 || disclosure.’’) 7 In light of the foregoing, the Court GRANTS Defendant’s motion to seal [Dkt. 68] 8 |}and DENIES Plaintiffs’ motion to seal [Dkt. 72]. Within fourteen days of the electronic 9 || docketing of this Order: 10 1. The Clerk of Court shall publicly file Plaintiffs’ Exhibit 7 which was lodged 11 under seal in support of Plaintiffs’ reply in support of Plaintiffs’ motion for class 12 certification [Dkts. 73 and 74]. 13 IT ISSO ORDERED. 14 || Dated: November 27, 2023 15 16 Ho orgbfe Tinsook Ohta 17 United States District Judge 18 19 20 21 22 23 24 25 26 27 28