Opinion
2:21-cv-02233 WBS AC
02-13-2023
DAIRY, LLC, a Delaware Limited Liability Company, Plaintiff, v. MILK MOOVEMENT, INC., a foreign Corporation, and MILK MOOVEMENT, LLC, a Delaware Limited Liability Company, Defendants.
ORDER RE: REQUESTS TO SEAL
WILLIAM B. SHUBB, UNITED STATES DISTRICT JUDGE.
Dairy, LLC initiated this action against Milk Moovement, Inc. and Milk Moovement, LLC alleging trade secret misappropriation under federal and California law, and intentional interference with contractual relations. (First Am. Compl. (Docket No. 48).) Before the court are (1) Dairy's and Milk Moovement's requests to file under seal redacted portions the parties' pleadings pertaining to Milk Moovement's motion for leave to amend counterclaims (Docket Nos. 205, 225, 234), (2) their requests to file under seal exhibits and portions of exhibits filed in support of the parties' pleadings (id.), and (3) Milk Moovement's request to permanently seal Exhibit T filed in support of Dairy's opposition (Docket No. 228).
A party seeking to seal a judicial record bears the burden of overcoming a strong presumption in favor of public access. Kamakana v. City & County of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006). The party must “articulate compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure, such as the public interest in understanding the judicial process.” Id. at 1178-79 (citation omitted); see also Ctr for Auto Safety v. Chrysler Group, LLC, 809 F.3d 1092, 1098 99 (9th Cir. 2016) (explaining that the compelling reasons standard should apply to all motions which are correlated to the underlying cause of action). In ruling on a motion to seal, the court must balance the competing interests of the public and the party seeking to keep records secret. Kamakana, 477 F.3d at 1179.
The Ninth Circuit has recognized that an example of a compelling reason for sealing records includes “sources of business information that might harm a litigant's competitive standing.” Ctr. For Auto Safety, 809 F.3d at 1097 (quoting Nixon v. Warner Commc'ns, Inc., 435 U.S. 539, 598 (1978)); see also Smith v. United States, 2022 WL 3578568, *1 (E.D. Cal. Aug. 19, 2022) (explaining that business information may include “pricing, profit, and customer usage information kept confidential by a company that could be used to the company's competitive disadvantage”).
Dairy identifies three specific documents it seeks to protect: (1) the Software Assignment and Grant-Back License Agreement between Dairy and United Dairymen of Arizona (“UDA”) (Patchen Decl., Ex. A (Docket No. 224-2)); (2) the Nondisclosure Agreement between Dairy and UDA (Patchen Decl., Ex. B (Docket No. 224-3)); and (3) the letter sent from Dairy to UDA (“UDA Letter”) which references both the Software Assignment Agreement and the Nondisclosure Agreement (Hagey Decl., Ex. 10 (Docket No. 20412)). (Dairy Req. to Seal at 4.) Dairy states that these documents include confidential licensing agreements, commercial arrangements, and business terms and strategies and that disclosure of its purported confidential information would harm Dairy's competitive standing. (Id.)
This “boilerplate” statement alone does not outweigh the history of access and public policies favoring disclosure to the public. A party must still “articulate compelling reasons supported by specific factual findings.” Kamakana, 447 F.3d at 1178. “Simply mentioning a category of privilege, without any further elaboration or any specific linkage with the documents, does not satisfy the burden.” Id. at 1184. Dairy provides no further guidance as to what sensitive information these documents contain that would merit and order sealing the documents from public view. Therefore, the court must deny Dairy's request to seal the Software Assignment Agreement, Nondisclosure Agreement, and UDA Letter without prejudice. The court will consider a more tailored request which identifies the specific information to be redacted or sealed and articulates the bases for redactiing or sealing such information.
Milk Moovement seeks to permanently seal Exhibit T, an Excel spreadsheet, which it contends contains “commercially-sensitive, strategic information, including a recent overview of its software goals, ongoing projects, budgets, expenses, financial projections, and overall strategy and decisionmaking.” (Milk Moovement Req. to Permanently Seal at 1.) The request to permanently seal Exhibit T appears to sufficiently show that sealing is necessary to protect Milk Moovement's business information. Accordingly, Milk Moovement's request to permanently seal Exhibit T will be granted.
In addition to the specific documents discussed above, both parties seek to seal materials designated as “CONFIDENTIAL” or “HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY” under the stipulated protective order (Docket Nos. 54 61). As both parties correctly acknowledge, a confidentiality agreement between the parties does not per se constitute a compelling reason to seal documents outweighing the interests of public disclosure and access. There needs to be an independent basis for sealing or redacting a document beyond the fact that material is within the purview of a stipulated protective order.
IT IS THEREFORE ORDERED that Milk Moovement's request to permanently seal Exhibit T (Docket No. 228) be, and the same hereby is, GRANTED, and said document is ordered SEALED.
IT IS FURTHER ORDERED that the requests to seal redacted portions of Milk Moovement's motion for leave to amend counterclaims and its reply; exhibits 1 and 2 of the proposed Second Amended Counterclaims; exhibits 1, 5, 6, 7, 8, 9, 10, 11, 13, 14, and 15 of the Declaration of Hagey; Dairy's opposition to the motion for leave to amend counterclaims; the Declaration of Patchen; and exhibits A, B, and N of the Declaration of Patchen (Docket Nos. 205, 225, 234) be, and the same hereby are, DENIED WITHOUT PREJUDICE.