Ever.Ag, LLC v. Milk Moovement, Inc. ( 2023 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 DAIRY, LLC, a Delaware Limited No. 2:21-cv-02233 WBS AC Liability Company, 13 Plaintiff, 14 ORDER RE: REQUESTS TO SEAL v. 15 MILK MOOVEMENT, INC., a foreign 16 Corporation, and MILK MOOVEMENT, LLC, a Delaware Limited 17 Liability Company, 18 Defendants. 19 20 ----oo0oo---- 21 Dairy, LLC initiated this action against Milk 22 Moovement, Inc. and Milk Moovement, LLC alleging trade secret 23 misappropriation under federal and California law, and 24 intentional interference with contractual relations. (First Am. 25 Compl. (Docket No. 48).) Before the court are (1) Dairy’s and 26 Milk Moovement’s requests to file under seal redacted portions 27 the parties’ pleadings pertaining to Milk Moovement’s motion for 28 leave to amend counterclaims (Docket Nos. 205, 225, 234), (2) 1 their requests to file under seal exhibits and portions of 2 exhibits filed in support of the parties’ pleadings (id.), and 3 (3) Milk Moovement’s request to permanently seal Exhibit T filed 4 in support of Dairy’s opposition (Docket No. 228). 5 A party seeking to seal a judicial record bears the 6 burden of overcoming a strong presumption in favor of public 7 access. Kamakana v. City & County of Honolulu, 447 F.3d 1172, 8 1178 (9th Cir. 2006). The party must “articulate compelling 9 reasons supported by specific factual findings that outweigh the 10 general history of access and the public policies favoring 11 disclosure, such as the public interest in understanding the 12 judicial process.” Id. at 1178-79 (citation omitted); see also 13 Ctr for Auto Safety v. Chrysler Group, LLC, 809 F.3d 1092, 1098- 14 99 (9th Cir. 2016) (explaining that the compelling reasons 15 standard should apply to all motions which are correlated to the 16 underlying cause of action). In ruling on a motion to seal, the 17 court must balance the competing interests of the public and the 18 party seeking to keep records secret. Kamakana, 477 F.3d at 19 1179. 20 The Ninth Circuit has recognized that an example of a 21 compelling reason for sealing records includes “sources of 22 business information that might harm a litigant’s competitive 23 standing.” Ctr. For Auto Safety, 809 F.3d at 1097 (quoting Nixon 24 v. Warner Commc’ns, Inc., 435 U.S. 539, 598 (1978)); see also 25 Smith v. United States, 2022 WL 3578568, *1 (E.D. Cal. Aug. 19, 26 2022) (explaining that business information may include “pricing, 27 profit, and customer usage information kept confidential by a 28 company that could be used to the company’s competitive 1 disadvantage”). 2 Dairy identifies three specific documents it seeks to 3 protect: (1) the Software Assignment and Grant-Back License 4 Agreement between Dairy and United Dairymen of Arizona (“UDA”) 5 (Patchen Decl., Ex. A (Docket No. 224-2)); (2) the Nondisclosure 6 Agreement between Dairy and UDA (Patchen Decl., Ex. B (Docket No. 7 224-3)); and (3) the letter sent from Dairy to UDA (“UDA Letter”) 8 which references both the Software Assignment Agreement and the 9 Nondisclosure Agreement (Hagey Decl., Ex. 10 (Docket No. 204- 10 12)). (Dairy Req. to Seal at 4.) Dairy states that these 11 documents include confidential licensing agreements, commercial 12 arrangements, and business terms and strategies and that 13 disclosure of its purported confidential information would harm 14 Dairy’s competitive standing. (Id.) 15 This “boilerplate” statement alone does not outweigh 16 the history of access and public policies favoring disclosure to 17 the public. A party must still “articulate compelling reasons 18 supported by specific factual findings.” Kamakana, 447 F.3d at 19 1178. “Simply mentioning a category of privilege, without any 20 further elaboration or any specific linkage with the documents, 21 does not satisfy the burden.” Id. at 1184. Dairy provides no 22 further guidance as to what sensitive information these documents 23 contain that would merit and order sealing the documents from 24 public view. Therefore, the court must deny Dairy’s request to 25 seal the Software Assignment Agreement, Nondisclosure Agreement, 26 and UDA Letter without prejudice. The court will consider a more 27 tailored request which identifies the specific information to be 28 redacted or sealed and articulates the bases for redactiing or 1 sealing such information. 2 Milk Moovement seeks to permanently seal Exhibit T, an 3 Excel spreadsheet, which it contends contains “commercially- 4 sensitive, strategic information, including a recent overview of 5 its software goals, ongoing projects, budgets, expenses, 6 financial projections, and overall strategy and decisionmaking.” 7 (Milk Moovement Req. to Permanently Seal at 1.) The request to 8 permanently seal Exhibit T appears to sufficiently show that 9 sealing is necessary to protect Milk Moovement’s business 10 information. Accordingly, Milk Moovement’s request to 11 permanently seal Exhibit T will be granted. 12 In addition to the specific documents discussed above, 13 both parties seek to seal materials designated as “CONFIDENTIAL” 14 or “HIGHLY CONFIDENTIAL -- ATTORNEYS' EYES ONLY” under the 15 stipulated protective order (Docket Nos. 54 61). As both parties 16 correctly acknowledge, a confidentiality agreement between the 17 parties does not per se constitute a compelling reason to seal 18 documents outweighing the interests of public disclosure and 19 access. There needs to be an independent basis for sealing or 20 redacting a document beyond the fact that material is within the 21 purview of a stipulated protective order. 22 IT IS THEREFORE ORDERED that Milk Moovement’s request 23 to permanently seal Exhibit T (Docket No. 228) be, and the same 24 hereby is, GRANTED, and said document is ordered SEALED. 25 IT IS FURTHER ORDERED that the requests to seal 26 redacted portions of Milk Moovement’s motion for leave to amend 27 counterclaims and its reply; exhibits 1 and 2 of the proposed 28 Second Amended Counterclaims; exhibits 1, 5, 6, 7, 8, 9, 10, 11, nnn nn nn EE EE OSE NO 1 13, 14, and 15 of the Declaration of Hagey; Dairy’s opposition to 2 the motion for leave to amend counterclaims; the Declaration of 3 Patchen; and exhibits A, B, and N of the Declaration of Patchen 4 (Docket Nos. 205, 225, 234) be, and the same hereby are, DENIED 5 WITHOUT PREJUDICE. 6 | Dated: February 13, 2023 bette 2d. □□ 7 WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28