Ostrovskaya v. Allegro Cozumel Resort ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 YELENA OSTROVSKAYA, et al., Case No. 18-cv-06903-HSG 8 Plaintiffs, ORDER GRANTING: (1) JOINT ADMINISTRATIVE MOTION TO 9 v. SEAL, AND (2) JOINT MOTION TO APPROVE MINOR’S COMPROMISE 10 ALLEGRO COZUMEL RESORT, et al., Re: Dkt. Nos. 43, 44 11 Defendants. 12 13 Pending before the Court are the joint (1) motion for approval of minor’s compromise, see 14 Dkt. No. 44 (“Mot.”); and (2) administrative motion to file under seal, see Dkt. No. 43. The Court 15 GRANTS the motion for approval of the minor’s compromise and GRANTS the administrative 16 motion to file under seal. 17 I. MOTION FOR APPROVAL OF COMPROMISE 18 A. Legal Standard 19 “District courts have a special duty, derived from Federal Rule of Civil Procedure 17(c), to 20 safeguard the interests of litigants who are minors.” Robidoux v. Rosengren, 638 F.3d 1177, 1181 21 (9th Cir. 2011); see Fed. R. Civ. P. 17(c) (providing that district court “must appoint a guardian ad 22 litem—or issue another appropriate order—to protect a minor or incompetent person who is 23 unrepresented in an action”). When there is a proposed settlement in a suit involving a minor 24 plaintiff, this “special duty requires a district court to ‘conduct its own inquiry to determine 25 whether the settlement serves the best interests of the minor.’” Robidoux, 638 F.3d at 1181 26 (quoting Dacanay v. Mendoza, 573 F.2d 1075, 1080 (9th Cir. 1978)). As part of this inquiry, the 27 “court must independently investigate and evaluate any compromise or settlement of a minor’s 1 recommended or negotiated by the minor’s parent or guardian ad litem.” Salmeron v. United 2 States, 724 F.2d 1357, 1363 (9th Cir. 1983). The district court must review “whether the net 3 amount distributed to each minor plaintiff in the settlement is fair and reasonable, in light of the 4 facts of the case, the minor’s specific claim, and recovery in similar cases.” Robidoux, 638 F.3d at 5 1182. But the court must disregard the “proportion of the total settlement value designated for 6 adult co-plaintiffs or plaintiffs’ counsel” because the court has “no special duty to safeguard” their 7 interests. Id. 8 B. Discussion 9 Based on its review of the parties’ submissions, the Court finds that the proposed 10 settlement is fair and reasonable and serves the best interests of the minors. The settlement 11 provides certain recovery, as opposed to the uncertainty and delays associated with a possible 12 unfavorable result in a case where liability is contested. The Court finds the settlement 13 particularly fair and reasonable given the substantial difficulties and uncertainties inherent in 14 litigating these claims, as well as the considerable efforts that went into settlement negotiations. 15 For example, Defendants filed a colorable motion to dismiss, arguing, among other things, that 16 this Court lacked personal jurisdiction. See, e.g., Dkt. No. 27. Settling with the Defendants now 17 and receiving the payment offered by Defendants provides the minor children with funds to 18 compensate them for their loss. 19 The Court therefore GRANTS approval of the minors’ compromise submitted by the 20 parties and the distribution of the settlement amounts owed to the minor Plaintiffs into UMTA-CA 21 accounts at Morgan Stanley. The Court also finds the request for approval of attorney’s fees and 22 costs to be fair and reasonable in light of the facts of this case, and approves the distribution of 23 attorney’s fees as set forth in the motion to approve minors’ compromise. 24 II. MOTION TO SEAL 25 A. Legal Standard 26 Courts generally apply a “compelling reasons” standard when considering motions to seal 27 documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (quoting Kamakana 1 the common law right ‘to inspect and copy public records and documents, including judicial 2 records and documents.’” Id. (quoting Kamakana, 447 F.3d at 1178). “[A] strong presumption in 3 favor of access is the starting point.” Kamakana, 447 F.3d at 1178 (quotation omitted). 4 To overcome this strong presumption, the party seeking to seal a judicial record attached to 5 a dispositive motion must “articulate compelling reasons supported by specific factual findings 6 that outweigh the general history of access and the public policies favoring disclosure, such as the 7 public interest in understanding the judicial process” and “significant public events.” Id. at 1178– 8 79 (quotation omitted). “In general, ‘compelling reasons’ sufficient to outweigh the public’s 9 interest in disclosure and justify sealing court records exist when such ‘court files might have 10 become a vehicle for improper purposes,’ such as the use of records to gratify private spite, 11 promote public scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 12 (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). “The mere fact that the 13 production of records may lead to a litigant’s embarrassment, incrimination, or exposure to further 14 litigation will not, without more, compel the court to seal its records.” Id. 15 The Court must “balance[] the competing interests of the public and the party who seeks to 16 keep certain judicial records secret. After considering these interests, if the court decides to seal 17 certain judicial records, it must base its decision on a compelling reason and articulate the factual 18 basis for its ruling, without relying on hypothesis or conjecture.” Id. Civil Local Rule 79-5 19 supplements the compelling reasons standard set forth in Kamakana: the party seeking to file a 20 document or portions of it under seal must “establish[] that the document, or portions thereof, are 21 privileged, protectable as a trade secret or otherwise entitled to protection under the law . . . The 22 request must be narrowly tailored to seek sealing only of sealable material.” Civil L.R. 79-5(b). 23 B. Discussion 24 Because approval of the compromise of the action will terminate this suit, the Court will 25 apply the “compelling reasons” standard to the parties’ administrative motion to file under seal. 26 See Doe v. Mt. Diablo Unified Sch. Dist., No. 14-CV-02167-HSG, 2015 WL 5438951, at *2 (N.D. 27 Cal. Sept. 14, 2015); see also Keirsey v. eBay, Inc., No. 12-cv-1200, 2013 WL 5609318, at *2 1 of the case may be effectively dispositive. While the Court has not identified any authority 2 discussing the appropriate standard for a motion of this type, the Court concludes that the 3 ‘compelling reasons’ standard is the appropriate standard.”). 4 The parties have entered into a confidential settlement agreement and seek to seal limited 5 and targeted “confidential information” related to the minor Plaintiffs, as well as trade secrets and 6 information related to non-parties. See Dkt. No. 43 at 2-4. As the parties note, “[t]wo of the 7 Plaintiffs are minors and will not have access to the settlement funds until the age of 25 pursuant 8 to the terms of the minor's compromise motion,” and these minors “should be entitled to have the 9 settlement amount redacted, as that information now constitutes their personal financial 10 information.” Id. at 4. 11 The Court agrees, and finds that the information in the motion to seal and supporting 12 documents meets the compelling reasons standard and should thus be shielded from public 13 disclosure. Plaintiffs have made a narrowly tailored request and articulated a compelling reason to 14 seal each category of information identified. The redactions are modest, such that any interested 15 observer would be able to understand these proceedings. The motion to seal identifies “a 16 compelling reason to seal [with] tailored redactions of only the information to which that 17 compelling reason applies.” Doe, 2015 WL 5438951, at *2. 18 Accordingly, Plaintiffs’ motion to seal is GRANTED. 19 III. CONCLUSION 20 For the reasons described above, the Court GRANTS the motion for approval of the 21 compromise of the action and GRANTS the administrative motion to file under seal. This Order 22 terminates Dkt. Nos. 9 and 27. 23 IT IS SO ORDERED. 24 Dated: 2/20/2020 25 ______________________________________ HAYWOOD S. GILLIAM, JR. 26 United States District Judge 27