Evans v. Presidio Trust ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ROBERT EVANS, Case No. 19-cv-08025-HSG 8 Plaintiff, ORDER DENYING MOTION TO PROCEED IN FORMA PAUPERIS 9 v. AND MOTION TO SEAL 10 PRESIDIO TRUST, Re: Dkt. Nos. 3, 11 11 Defendant. 12 13 On December 9, 2019, Plaintiff Robert Evans, representing himself, filed a complaint 14 against Defendant Presidio Trust for trade secret misappropriation in violation of the Defense of 15 Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836, and the California Uniform Trade Secrets Act 16 (“CUTSA”), California Civil Code § 3426. See Dkt. No. 1. That same day, Plaintiff filed a 17 motion to proceed in forma pauperis. See Dkt. No. 3. On December 23, 2019, the Court denied 18 the motion, but granted Plaintiff the opportunity to amend the complaint to cure the deficiencies 19 that the Court identified. See Dkt. No. 9. Plaintiff timely filed a first amended complaint, see Dkt. 20 No. 10 (“FAC”), and an accompanying motion to file under seal, see Dkt. No. 11. The Court 21 considers Plaintiff’s motion to proceed in forma pauperis in light of the amended complaint, as 22 well as the motion to seal. 23 I. MOTION TO PROCEED IN FORMA PAUPERIS 24 A. Legal Standard 25 The Court may authorize the commencement of a civil action in forma pauperis if it is 26 satisfied that the would-be litigant cannot pay the filing fees necessary to pursue the action and 27 that the action states a claim on which relief may be granted. 28 U.S.C. § 1915(a)(1), (e)(2); 1 the Court review an in forma pauperis complaint before directing the United States Marshal to 2 serve the complaint. Escobedo, 787 F.3d at 1234, & n.8. The Court must dismiss a complaint if it 3 fails to state a claim upon which relief can be granted. Barren v. Harrington, 152 F.3d 1193, 1194 4 (9th Cir. 1998). 5 “The standard for determining whether a plaintiff has failed to state a claim upon which 6 relief can be granted under § 1915(e)(2)(B)(ii) is the same as the Federal Rule of Civil Procedure 7 12(b)(6) standard for failure to state a claim.” Watison v. Carter, 668 F.3d 1108, 1112 (9th Cir. 8 2012) (citing Lopez v. Smith, 203 F.3d 1122, 1127–31 (9th Cir. 2000)). The complaint must 9 include a “short and plain statement,” Fed. R. Civ. P. 8(a)(2), and “sufficient factual matter, 10 accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 11 662, 678 (2009) (quotation omitted). Plaintiff must provide the grounds that entitle him to relief. 12 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). 13 Because Plaintiff is pro se, the Court construes the complaint liberally and affords him the 14 benefit of any doubt. See Karim-Panahi v. L.A. Police Dep’t, 839 F.2d 621, 623 (9th Cir. 1988); 15 cf. Fed. R. Civ. P. 8(e) (“Pleadings must be construed so as to do justice.”). The Court is not, 16 however, required to accept as true allegations that are merely conclusory, unwarranted deductions 17 of fact, or unreasonable inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 18 2001). 19 B. Discussion 20 In denying Plaintiff’s motion to proceed in forma pauperis initially, the Court explained 21 that Plaintiff’s complaint did not contain any description of the trade secrets. See Dkt. No. 9. The 22 Court directed Plaintiff to file an amended complaint that provided sufficient detail regarding the 23 subject matter of the trade secrets to allow the Court to evaluate whether the purported trade 24 secrets are distinguishable from matters of general knowledge. See id. (citing Space Data Corp. v. 25 X, No. 16-CV-03260-BLF, 2017 WL 5013363, at *2 (N.D. Cal. Feb. 16, 2017)). Having reviewed 26 the FAC, the Court finds that Plaintiff has not provided this detail. The FAC remains almost 27 identical to the original complaint, with the exception of ¶ 23, entitled “Disclosure of Trade 1 the trade secrets in the complaint, however, Plaintiff states that the “[d]escription of the trade 2 secrets is included in Exhibit 4.” See id. Plaintiff then attaches two unredacted exhibits to the 3 administrative motion to seal, Exhibits 2 and 4. See Dkt. No. 11. Collectively, Plaintiff has 4 attached over thirty pages of alleged trade secrets. Id. However, critically, Plaintiff still does not 5 explain the subject matter of these trade secrets, and it is not self-evident from the face of the 6 documents. 7 The Court understands that Plaintiff is concerned about making public his alleged trade 8 secrets. But as the Court explained in its prior order, to prove that a plaintiff is the owner of a 9 trade secret, a plaintiff “need not ‘spell out the details of the trade secret,” but must “describe the 10 subject matter of the trade secret with sufficient particularity to separate it from matters of general 11 knowledge in the trade or of special persons who are skilled in the trade, and to permit the 12 defendant to ascertain at least the boundaries within which the secret lies.” Space Data Corp. v. X, 13 No. 16-CV-03260-BLF, 2017 WL 5013363, at *2 (N.D. Cal. Feb. 16, 2017) (quotations omitted). 14 Plaintiff must, therefore, provide sufficient detail to give both the Court and Defendant adequate 15 notice of the boundaries of the alleged trade secrets and an opportunity to assess whether 16 Plaintiff’s purported trade secrets are distinguishable from matters of general knowledge. 17 The Court finds that the FAC still fails to state a claim on which relief may be granted and 18 accordingly DENIES the motion to proceed in forma pauperis and DISMISSES the amended 19 complaint. 20 II. MOTION TO FILE UNDER SEAL 21 Plaintiff also moves to seal two documents, which he contends contain the trade secrets at 22 issue in this action. See Dkt. No. 11. He attaches these unredacted documents as Exhibits 2 and 4 23 to the administrative motion to file under seal. See Dkt. No. 11-3, Ex. 2; Dkt. No. 11-5, Ex. 4. 24 A. Legal Standard 25 Courts generally apply a “compelling reasons” standard when considering motions to seal 26 documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (quoting Kamakana 27 v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)). “This standard derives from the 1 and documents.’” Id. (quoting Kamakana, 447 F.3d at 1178). “[A] strong presumption in favor of 2 access is the starting point.” Kamakana, 447 F.3d at 1178 (quotations omitted). To overcome this 3 strong presumption, the party seeking to seal a judicial record attached to a dispositive motion 4 must “articulate compelling reasons supported by specific factual findings that outweigh the 5 general history of access and the public policies favoring disclosure, such as the public interest in 6 understanding the judicial process” and “significant public events.” Id. at 1178–79 (quotations 7 omitted). “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in 8 disclosure and justify sealing court records exist when such ‘court files might have become a 9 vehicle for improper purposes,’ such as the use of records to gratify private spite, promote public 10 scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 (quoting Nixon v. 11 Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). “The mere fact that the production of records 12 may lead to a litigant’s embarrassment, incrimination, or exposure to further litigation will not, 13 without more, compel the court to seal its records.” Id. 14 The Court must “balance[] the competing interests of the public and the party who seeks to 15 keep certain judicial records secret. After considering these interests, if the court decides to seal 16 certain judicial records, it must base its decision on a compelling reason and articulate the factual 17 basis for its ruling, without relying on hypothesis or conjecture.” Id. Civil Local Rule 79-5 18 supplements the compelling reasons standard set forth in Kamakana: the party seeking to file a 19 document or portions of it under seal must “establish[] that the document, or portions thereof, are 20 privileged, protectable as a trade secret or otherwise entitled to protection under the law . . . The 21 request must be narrowly tailored to seek sealing only of sealable material.” Civil L.R. 79-5(b). 22 B. Discussion 23 Plaintiff filed a motion to file under seal the documents that purportedly contain his trade 24 secrets at issue in this action. See Dkt. No. 11. The Court presumes that these documents are 25 intended to supplement the FAC. See Dkt. No. 3 at 8 (citing to “Exhibit 4”). Because the 26 complaint is more than tangentially related to the merits of the case, the compelling reasons 27 standard governs the motion to seal. See, e.g., Space Data Corp. v. Alphabet Inc., No. 16-CV- 1 standard governed motion to seal portions of the complaint). 2 However, as explained above, it is unclear from these additional documents—even when 3 read in conjunction with the complaint—what within these pages are the purported trade secrets. 4 Plaintiff’s accompanying declaration merely concluded that he has personal knowledge of the 5 “facts, data, and information comprising the trade secrets” contained in these documents. See Dkt. 6 No. 11. The Court finds that Plaintiff has not shown a compelling reason why the material should 7 be sealed, and DENIES the motion to file under seal. 8 III. CONCLUSION 9 Accordingly, the Court DENIES Plaintiff’s motion to proceed in forma pauperis and 10 DISMISSES the complaint. 11 Despite these deficiencies, the Court cannot say at this stage that amending the complaint 12 would be futile. See Lucas v. Dep’t of Corr., 66 F.3d 245, 248 (9th Cir. 1995) (“[A] pro se litigant 13 is entitled to notice of the complaint’s deficiencies and an opportunity to amend prior to dismissal 14 of the action.”). Plaintiff may still be able to allege sufficient facts to state a claim under both 15 DTSA and CUTSA. See Lopez, 203 F.3d at 1130. Therefore, Plaintiff shall file an amended 16 complaint by no later than April 10, 2020. In the amended complaint, Plaintiff should clearly 17 identify the facts supporting each of the two claims under DTSA and CUTSA, including sufficient 18 detail regarding the subject matter of the trade secrets at issue. To the extent Plaintiff directs the 19 Court to specific documents, he should still provide an explanation identifying the documents and 20 explaining their significance. The Court cautions that Plaintiff’s amended complaint will be 21 dismissed without leave to amend if he does not correct the deficiencies the Court has identified in 22 this order. 23 Alternatively, Plaintiff may proceed with this action by paying the required filing fee by 24 April 10, 2020. 25 The Court advises Plaintiff that the Legal Help Center at both the San Francisco and 26 Oakland Federal Courthouses provides free information and limited-scope legal advice to pro se 27 litigants in civil cases. Services are provided by appointment only. An appointment may be 1 Help Center in San Francisco or Oakland, or (2) calling (415) 782-8982 or emailing 2 || federalprobonoproject@ sfbar.org. 3 Further, the Court DENIES Plaintiffs administrative motion to seal. Dkt. No. 11. 4 Pursuant to Civil Local Rule 79-5(f), within seven (7) days of this order, Plaintiff must file 5 unredacted versions of the documents. Or, Plaintiff may file a renewed motion to file under seal 6 || within seven (7) days of this order if he can articulate why there is a compelling reason to seal the 7 material. 8 The Court also VACATES the case management conference currently scheduled for 9 || March 17, 2020. 10 IT IS SO ORDERED. 11 Dated: 3/11/2020 a (12 7 Haspacred Lh HAYWOOD S. GILLIAM, JR. 13 United States District Judge © 15 16 = 17 Z 18 19 20 21 22 23 24 25 26 27 28