Richards v. Centripetal Networks, Inc. ( 2023 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ALBERT RICHARDS, Case No. 23-cv-00145-HSG 8 Plaintiff, ORDER DENYING MOTIONS TO SEAL 9 v. Re: Dkt. Nos. 4, 27 10 CENTRIPETAL NETWORKS, INC., et al., 11 Defendants. 12 13 Pending before the Court are Defendant Centripetal Networks, Inc.’s administrative 14 motions to file under seal. See Dkt. Nos. 4, 27. For the reasons detailed below, the Court 15 DENIES the motions. 16 I. LEGAL STANDARD 17 Courts generally apply a “compelling reasons” standard when considering motions to seal 18 documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010). “This standard 19 derives from the common law right ‘to inspect and copy public records and documents, including 20 judicial records and documents.’” Id. (quoting Kamakana v. City & Cnty. of Honolulu, 447 F.3d 21 1172, 1178 (9th Cir. 2006)). “[A] strong presumption in favor of access is the starting point.” 22 Kamakana, 447 F.3d at 1178 (quotations omitted). To overcome this strong presumption, the 23 party seeking to seal a document attached to a dispositive motion must “articulate compelling 24 reasons supported by specific factual findings that outweigh the general history of access and the 25 public policies favoring disclosure, such as the public interest in understanding the judicial 26 process” and “significant public events.” Id. at 1178–79 (quotations omitted). “In general, 27 ‘compelling reasons’ sufficient to outweigh the public’s interest in disclosure and justify sealing 1 such as the use of records to gratify private spite, promote public scandal, circulate libelous 2 statements, or release trade secrets.” Id. at 1179 (quoting Nixon v. Warner Commc’ns, Inc., 435 3 U.S. 589, 598 (1978)). 4 However, documents attached to non-dispositive motions are not subject to the same 5 strong presumption of access. See id. at 1179. Because such records “are often unrelated, or only 6 tangentially related, to the underlying cause of action,” parties moving to seal must meet the lower 7 “good cause” standard of Federal Rule of Civil Procedure 26(c). Id. at 1179–80 (quotations 8 omitted). This requires only a “particularized showing” that “specific prejudice or harm will 9 result” if the information is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 10 F.3d 1206, 1210–11 (9th Cir. 2002); see also Fed. R. Civ. P. 26(c). “Broad allegations of harm, 11 unsubstantiated by specific examples of articulated reasoning” will not suffice. Beckman Indus., 12 Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992) (quotations omitted). 13 II. DISCUSSION 14 Here, Defendant seeks to file under seal portions of the initial and first amended 15 complaints and incorporated exhibits. Dkt. Nos. 4, 27. Because the complaint is the pleading on 16 which this action is based, the Court applies the “compelling reasons” standard to these motions. 17 See, e.g., Space Data Corp. v. Alphabet Inc., No. 16-CV-03260-BLF, 2018 WL 10454862, at *2 18 (N.D. Cal. Aug. 31, 2018) (finding compelling reasons standard governed motion to seal portions 19 of the complaint); In re NVIDIA Corp. Derivative Litig., No. C 06-06110 SBA, 2008 WL 20 1859067, at *3 (N.D. Cal. Apr. 23, 2008) (“While a complaint is not, per se, the actual pleading by 21 which a suit may be disposed of, it is the root, the foundation, the basis by which a suit arises and 22 must be disposed of.”). As the Civil Local Rules make clear, “[o]nly in rare circumstances should 23 a party seek to file portions of a pleading or brief under seal.” See Civil L.R. 79-5(e). 24 As to Defendant’s motion to seal portions of the initial complaint, see Dkt. No. 4, the 25 Court did not rely on that pleading because Plaintiff Albert Richards filed an amended complaint. 26 Thus, the initial complaint is less significant to the public’s understanding of the judicial 27 proceedings in this case. See In re iPhone Application Litig., No. 11-MD-02250-LHK, 2013 WL 1 even further diminished in light of the fact that the Court will not have occasion to rule on 2 || Plaintiffs’ Motion for Class Certification.”). In any event, the reasons that Defendant seeks to seal 3 || portions of the initial complaint are the same as its reasons for sealing portions of the first 4 amended complaint. Compare Dkt. No. 4, with Dkt. No. 31. The Court therefore addresses those 5 arguments below. 6 Defendant argues that the documents and excerpts it seeks to seal “contain confidential and 7 sensitive information of a non-public company” that “competitors could use . . . to replicate the 8 || company’s business practices.” See Dkt. No. 31 at 46. Specifically, these documents contain 9 some of Centripetal’s investor reports, capitalization and financial information, and a settlement 10 || agreement with Plaintiff. 7d. at The Court finds that Defendant’s generic explanation is 11 insufficient to warrant sealing, particularly here, where many of the allegations contained in the 12 || proposed redactions are critical to Plaintiffs claims in this case. At bottom, Plaintiff contends 5 13 || that Defendant made numerous misstatements and failed to disclose key information related to his 14 || investment in Centripetal. Defendant seeks to seal some of these alleged misrepresentations. The 3 15 “interest in ensuring the public’s understanding of the judicial process and of significant public 16 events,” Kamakana, 447 at 1179, is thus not served if the basis for Plaintiffs claims is redacted 3 17 from the complaint. Moreover, documents like investor reports by their nature were at least 18 somewhat widely shared, and the fact that the parties to the settlement agreement designated it 19 || “confidential” does not establish that the very high Kamakana standard for sealing has been met. 20 || Accordingly, the Court DENIES the administrative motions to seal. 21 || I. CONCLUSION 22 The Court DENIES the administrative motions to file under seal. Dkt. Nos. 4, 27. The 23 || Court DIRECTS the parties to file public versions of all documents for which the proposed 24 sealing has been denied within seven days of this order. 25 IT IS SO ORDERED. 26 || Dated: 4/20/2023 Absurd 5 Mbt) 28 HAYWOOD S. GILLIAM, JR. United States District Judge