Opinion
3:22-cv-01145-RBM-DDL
07-31-2024
SAN DIEGO DETOX, LLC, Plaintiff, v. DETOX CENTER OF SAN DIEGO LLC, et al., Defendants.
ORDER GRANTING MOTION TO SEAL [DOC. 96]
HON. RUTH BERMUDEZ MONTENEGRO UNITED STATES DISTRICT JUDGE
Currently pending before the Court is Defendants' motion for leave to file under seal documents in support of memorandum of points and authorities in support of Defendants' opposition to Plaintiff's motion regarding proposed preliminary injunction language and necessity of a bond (“Motion to Seal”). (Doc. 96.)
For the reasons discussed below, Defendants' Motion to Seal is GRANTED .
I. LEGAL STANDARD
“[T]he courts of this country recognize a general right to inspect and copy public records and documents, including judicial records and documents.” Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597 (1978). “Unless a particular court record is one ‘traditionally kept secret,' a ‘strong presumption in favor of access' is the starting point.” Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (citing Foltz v. State Farm Mut. Auto Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). “The presumption of access is ‘based on the need for federal courts ... to have a measure of accountability and for the public to have confidence in the administration of justice.'” Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 2016) (quoting United States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995)).
A party seeking to seal a judicial record bears the burden of overcoming the strong presumption of public access. Foltz, 331 F.3d at 1135. The showing required to meet this burden depends upon whether the documents to be sealed relate to a motion that is “more than tangentially related to the merits of the case.” Ctr. for Auto Safety, 809 F.3d at 1102. When the underlying motion is more than tangentially related to the merits, the “compelling reasons” standard applies. Id. at 1096-98. When the underlying motion does not surpass the tangential relevance threshold, the “good cause” standard applies. Id.
The “compelling reasons” standard applies to documents related to a motion for summary judgment as well as a motion for preliminary injunction. Foltz, 331 F.3d at 113536; Ctr. for Auto Safety, 809 F.3d at 1103; see also In re Midland Nat. Life Ins. Co. Annuity Sales Pracs. Litig., 686 F.3d 1115, 1119-20 (9th Cir. 2012) (compelling reasons standard applied to Daubert motion filed in connection with pending summary judgment motion). The “compelling reasons” standard is generally satisfied if the moving party can show that the “‘court files might have become a vehicle for improper purposes,' such as the use of records to gratify private spite, promote public scandal, circulate libelous statements, or release trade secrets.” Kamakana, 447 F.3d at 1179 (quoting Nixon, 435 U.S. at 598). The decision to seal documents is “one best left to the sound discretion of the trial court” upon consideration of “the relevant facts and circumstances of the particular case.” Nixon, 435 U.S. at 599.
Compelling reasons may exist if sealing is required to prevent documents from being used “as sources of business information that might harm a litigant's competitive standing.” Nixon, 435 U.S. at 598. “[A] trial court has broad discretion to permit sealing of court documents for, inter alia, the protection of ‘a trade secret or other confidential research, development, or commercial information.'” GPNE Corp. v. Apple Inc., No. 12-cv-2885-LHK, 2015 WL 4381244, at *1 (N.D. Cal. July 16, 2015) (quoting Fed.R.Civ.P. 269(c)(1)(G)). Additionally, courts have been willing to seal court filings containing confidential business material, “such as marketing strategies, product development plans, licensing agreements, and profit, cost, and margin data,” where the “parties have been able to point to concrete factual information” to justify sealing. Cohen v. Trump, No. 13-cv-2519-GPC-WVG, 2016 WL 3036302, at *5 (S.D. Cal. May 27, 2016) (collecting cases); see also In re Electronic Arts, 298 Fed.Appx. 568, 569 (9th Cir. 2008) (finding compelling reasons to seal “pricing terms, royalty rates, and guaranteed minimum payment terms”); Quidel Corp. v. Siemens Med. Sols. USA, Inc., No. 16-CV-3059-BAS-AGS, 2020 WL 1062949, at *2 (S.D. Cal. Mar. 4, 2020) (applying compelling reasons standard to seal plaintiff's “confidential financial and pricing information”). Because Defendants' sealing motion concern their briefing on Plaintiff's motion for a preliminary injunction, the compelling reasons standard applies.
II. DISCUSSION
In their Motion to Seal, Defendants seek to file under seal: (1) Exhibit 1 to the Declaration of Mercedes “Nina” Cornejo (“Cornejo Decl.”), (2) Exhibit 2 to the Cornejo Declaration, (3) portions of the Cornejo Declaration referring to Exhibits 1 and 2, (4) portions of the Declaration of Abdul Ahmed (“Ahmed Decl.”), and (5) portions of Defendants' Opposition quoting from or referring to Exhibits 1 and 2. (Doc. 96 at 2.) Defendants lodged those sealed documents. (Doc. 97.)
A. Exhibits 1 and 2, Portions of Cornejo Declaration, Portions of Defendants' Opposition
Defendants explain Exhibit 1 “is a copy of a Defendant Detox Centers of San Deigo LLC's [“DCSD”] profit and loss statement from January to June of 2024 which contains non-public sensitive financial information including revenue and expenses of a non-public company.” (Id. at 3.) Defendants explain Exhibit 2 “is a copy of a letter from DCSD's marketing company providing estimation and strategy for the process of rebranding.” (Id. at 4.) The Court has reviewed Exhibits 1 and 2 and determines there are compelling reasons to seal this confidential profit and loss and prospective marketing information. See Nixon, 435 U.S. at 598. For the same reasons, upon review, the Court finds compelling reasons to seal those portions of Cornejo's Declaration and Defendants' Opposition that reference portions of Exhibit 1 and 2.
B. Portions of Ahmed Declaration
Defendants explain portions of Ahmed's Declaration “reference portions of Exhibit 1 through projections from which information in Exhibit 1 could be derived.” (Doc. 96 at 4.) The Court has reviewed Ahmed's Declaration and determines there are compelling reasons to seal the portions identified estimating potential lost revenue associated with the renaming process. See Nixon, 435 U.S. at 598.
III. CONCLUSION
For the reasons discussed above, Defendants' Motion to Seal (Doc. 96) is GRANTED .
IT IS SO ORDERED.