Markus v. Aerojet RocketDyne Holdings, Inc. ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 UNITED STATES OF AMERICA ex rel. No. 2:15-cv-02245 WBS AC BRIAN MARKUS, individually, 13 Relator, 14 ORDER RE: REQUEST TO SEAL v. 15 AEROJET ROCKETDYNE HOLDINGS, 16 INC., a corporation and AEROJET ROCKETDYNE, INC., a corporation, 17 Defendants. 18 19 ----oo0oo---- 20 Plaintiff Brian Markus brought this action against 21 defendants Aerojet Rocketdyne Holdings, Inc. and Aerojet 22 Rocketdyne, Inc. arising from defendants’ allegedly wrongful 23 conduct in violation of the False Claims Act (“FCA”), 31 U.S.C. 24 §§ 3729 et seq. The documents at issue here were filed in 25 connection with defendants’ motion for summary judgment. (Docket 26 No. 116). Defendants request to file under seal (1) redacted 27 portions of defendants’ memorandum in support of its motion for 28 1 summary judgment (“defendants’ motion”) (2) redacted portions of 2 defendants’ statement of undisputed facts in support of the 3 motion (“defendants’ statement”), and (3) the exhibits and 4 portions of exhibits to the declaration of Tammy A. Tsoumas in 5 support of defendants’ motion (“exhibits”). Defendants claim 6 exhibits 1-5 reflect information about the government’s FCA 7 investigation, and the remaining requests for seal pertain to 8 information about the cybersecurity status of Aerojet and other 9 contractors and Aerojet’s non-public business operations. 10 A party seeking to seal a judicial record bears the 11 burden of overcoming a strong presumption in favor of public 12 access. Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 13 (9th Cir. 2006). The party must “articulate compelling reasons 14 supported by specific factual findings that outweigh the general 15 history of access and the public policies favoring disclosure, 16 such as the public interest in understanding the judicial 17 process.” Id. at 1178-79 (citation omitted). 18 “[T]he strong presumption of access to judicial records 19 applies fully to dispositive pleadings, including motions for 20 summary judgment and related attachments . . . because the 21 resolution of a dispute on the merits, whether by trial or 22 summary judgment, is at the heart of the interest in ensuring the 23 ‘public’s understanding of the judicial process and of 24 significant public events.’” Id. at 1179 (citation omitted). In 25 ruling on a motion to seal, notwithstanding the other party’s 26 failure to object, the court must balance the competing interests 27 of the public and the party seeking to keep the records secret. 28 Id. 1 I. Information About Aerojet and Other Contractors’ Cybersecurity and Aerojet’s Non-Public Business Operations 2 3 Defendants request to redact portions of their motion, 4 portions of their statement, and seal in their entirety several 5 exhibits and redact several exhibits as non-public business and 6 cybersecurity information. (Docket No. 121). 7 Defendants state these documents were designated as 8 confidential under the parties stipulated to protective order. 9 This court has previously pointed out that a confidentiality 10 agreement between the parties does not per se constitute a 11 compelling reason to seal documents that outweighs the interests 12 of public disclosure and access. See Harper v. Charter 13 Communications, LLC, No. 2:19-cv-00902-WBS-DC, 2021 WL 600960, at 14 *2 (E.D. Cal. Feb. 16, 2021); Foster Poultry Farms, Inc. v. 15 Certain Underwriters at Lloyd’s, London, No. 1:14-cv-00953-WBS- 16 SAB, 2015 WL 5608241, at *1 (E.D. Cal. Sept. 23, 2015). The fact 17 that the assigned magistrate judge signed the stipulated 18 protective order does not change this principle. See Harper, 19 2021 WL 600960, at *2. 20 Beyond its contention that the documents are subject to 21 the Stipulation and Protective Order, Aerojet alleges these 22 documents include trade secrets, and commercial, financial, or 23 business confidential information which competitors could use. 24 Defendants also claim these documents contain cybersecurity 25 information that potential attackers could use. 26 The Ninth Circuit has recognized that an example of a 27 compelling reason for sealing records includes “sources of 28 1 business information that might harm a litigant’s competitive 2 standing.” Ctr. for Auto Safety v. Chrysler Group, LLC, 809 F.3d 3 1092, 1097 (9th Cir. 2016) (quoting Nixon v. Warner Commc’ns, 4 Inc., 435 U.S. 589, 598 (1978)). Courts have also held that 5 cybersecurity is a compelling reason to seal documents. See 6 Connor v. Quora, Inc., No. 18-cv-07597-BLF, 2020 WL 8474750, at 7 *2 (N.D. Cal. Oct. 26, 2020) (granting the request to seal 8 cybersecurity information as public disclosure could cause 9 attack); In Re Anthem, Inc. Data Breach Litigation, No. 15-MD- 10 02617-LHK, 2017 WL 9614789, at *2 (N.D. Cal. Aug. 25, 2017) 11 (granting the request to seal because if “specific information 12 regarding Anthem’s cybersecurity practices were disclosed, this 13 could allow cyberattackers greater opportunity to defeat these 14 defenses . . . .”). The request to seal here appears to 15 sufficiently show that sealing is necessary to protect 16 defendants’ protected business information and cybersecurity 17 information. Accordingly, the request to seal will be granted as 18 to defendants’ motion, defendants’ statement, and exhibits 19 reflecting cybersecurity and non-public business information. 20 II. Information Regarding the Government’s Investigation 21 Defendants request to seal exhibits 1-5 because they 22 reflect information about the government’s FCA investigation. 23 Defendants cite 31 U.S.C. § 3730(b)(2) as an example of courts 24 sealing information related to the government’s FCA 25 investigation. However, 31 U.S.C. § 3730(b)(2) pertains to the 26 initial sealing of FCA complaints. Here, defendants, not the 27 government, are requesting to seal these documents without 28 articulating any compelling reasons that outweigh the strong nnn ene nnn nnn nn en ee on SE ON ONO EEO 1 presumption of public access. Therefore, the court must deny 2 defendants’ request to seal as to exhibits 1-5 without prejudice. 3 IT IS THEREFORE ORDERED that the defendants’ request to 4 seal redacted portions of defendants’ motion, redacted portions 5 of defendants’ statement, and exhibits 18-19, 38-44, 46, 48, 50, 6 | 52, 54-56, 58, 60-68, 70-73, 76-79, 81-86, 88-89, 91-95, 97, 101- 7 106, 108, 110-111, 115-120, 122-131, 134, 136, 138, 140, 142, 8 144, 146, 148-158, 160-176, 178-181, 186-191, 193-202, 205-206! 9 of the Declaration of Tsoumas be, and the same hereby is, 10 GRANTED, and said documents are ordered SEALED. 11 IT IS FURTHER ORDERED that defendants’ requests to seal 12 exhibits 1-5 of the Declaration of Tsoumas be, and the same 13 hereby are, DENIED WITHOUT PREJUDICE. 14 | Dated: October 22, 2021 he ble 7H. De. Kt 15 WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE 17 18 19 20 21 22 23 24 25 26 1 Defendants list exhibits 7-10 in the request to seal emailed to the courtroom deputy, but do not list those exhibits 27 as part of the filed request to seal. Due to this discrepancy, the court does not consider exhibits 7-10 as part of the request 28 | to seal.