In re Lyft Inc. Securities Litigation ( 2021 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MATIAS MALIG, AS TRUSTEE FOR Case No. 19-cv-02690-HSG THE MALIG FAMILY TRUST, 8 ORDER DENYING ADMINISTRATIVE Plaintiff, MOTIONS TO SEAL 9 v. Re: Dkt. Nos. 116, 126, 134 10 LYFT, INC., et al., 11 Defendants. 12 13 Pending before the Court are the parties’ administrative motions to file documents in 14 connection with Plaintiff’s motion for class certification under seal. Dkt. Nos. 116, 126, 134. For 15 the reasons set forth below, the Court 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) (quoting Kamakana 19 v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)). “This standard derives from the 20 common law right ‘to inspect and copy public records and documents, including judicial records 21 and documents.’” Id. (quoting Kamakana, 447 F.3d at 1178). “[A] strong presumption in favor of 22 access is the starting point.” Kamakana, 447 F.3d at 1178 (quotations omitted). To overcome this 23 strong presumption, the party seeking to seal a judicial record attached to a dispositive motion 24 must “articulate compelling reasons supported by specific factual findings that outweigh the 25 general history of access and the public policies favoring disclosure, such as the public interest in 26 understanding the judicial process” and “significant public events.” Id. at 1178–79 (quotations 27 omitted). “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in 1 vehicle for improper purposes,’ such as the use of records to gratify private spite, promote public 2 scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 (quoting Nixon v. 3 Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). “The mere fact that the production of records 4 may lead to a litigant’s embarrassment, incrimination, or exposure to further litigation will not, 5 without more, compel the court to seal its records.” Id. 6 Civil Local Rule 79-5 supplements the “compelling reasons” standard. The party seeking 7 to file under seal must submit “a request that establishes that the document, or portions thereof, are 8 privileged, protectable as a trade secret or otherwise entitled to protection under the law . . . . The 9 request must be narrowly tailored to seek sealing only of sealable material . . . .” Civil L.R. 79- 10 5(b). Courts have found that “confidential business information” in the form of “license 11 agreements, financial terms, details of confidential licensing negotiations, and business strategies” 12 satisfies the “compelling reasons” standard. See In re Qualcomm Litig., No. 3:17-cv-0108-GPC- 13 MDD, 2017 WL 5176922, at *2 (S.D. Cal. Nov. 8, 2017) (observing that sealing such information 14 “prevent[ed] competitors from gaining insight into the parties’ business model and strategy”); 15 Finisar Corp. v. Nistica, Inc., No. 13-cv-03345-BLF (JSC), 2015 WL 3988132, at *5 (N.D. Cal. 16 June 30, 2015). 17 Records attached to nondispositive motions must meet the lower “good cause” standard of 18 Rule 26(c) of the Federal Rules of Civil Procedure, as such records “are often unrelated, or only 19 tangentially related, to the underlying cause of action.” Kamakana, 447 F.3d at 1179–80 20 (quotations omitted). This requires a “particularized showing” that “specific prejudice or harm 21 will result” if the information is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 22 307 F.3d 1206, 1210–11 (9th Cir. 2002); see also Fed. R. Civ. P. 26(c). “Broad allegations of 23 harm, unsubstantiated by specific examples of articulated reasoning” will not suffice. Beckman 24 Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992) (quotation omitted). 25 II. DISCUSSION 26 Because the motion for class certification is more than tangentially related to the 27 underlying action, the Court applies the “compelling reasons” standard in evaluating the motions 1 Grant, Dkt. No. 118, associated portions of their opposition, and a portion of the Grant 2 Declaration. Dkt. No. 116. Defendants also seek to seal the entirety of Exhibit 24 to the 3 Supplemental Grant Declaration. Dkt. No. 134. The Court denies Defendants’ motions because 4 Defendants have failed to provide a sufficient justification or narrowly tailor their requests. 5 Defendants seek to seal Exhibit 19, Plaintiff’s deposition transcript, because it was 6 designated as “Confidential” by Plaintiff. But a designation of confidentiality is not sufficient to 7 establish that a document is sealable. See Civ. L. R. 79-5(d)(1)(A). “Confidential” is merely the 8 parties’ initial designation of confidentiality to establish coverage under the stipulated protective 9 order. See Verinata Health, Inc. v. Ariosa Diagnostics, Inc., No. 12-cv-05501-SI, 2015 WL 10 5117083, at *5 (N.D. Cal. Aug. 31, 2015) (“But good cause ‘cannot be established simply by 11 showing that the document is subject to a protective order or by stating in general terms that the 12 material is considered to be confidential’”) (quoting Bain v. AstraZeneca LP, No. 09-cv-4147, 13 2011 WL 482767, at *1 (N.D. Cal. Feb. 7, 2011)). Plaintiff filed no supporting declaration, and 14 later stated in his motion to seal that he does not seek to seal his deposition transcript. Dkt. No. 15 126 at 2 n.3. The Court thus DENIES Defendants’ request to seal Exhibit 1 and portions of the 16 opposition referencing the deposition. 17 Defendants also seek to seal Exhibit 3, Lyft’s roadshow document, on the bases that it was 18 designated as highly confidential and that Lyft’s competitors “could use the information to Lyft’s 19 detriment.” Dkt. No. 116 at 2. The Court finds Defendants’ overly generalized justification 20 insufficient. In filing motions to seal, the burden is on the parties to justify, in detail, each 21 proposed fact that they want to seal. Civil Local Rule 79-5(b) requires that the “request must be 22 narrowly tailored to seek sealing only of sealable material.” Similarly, Defendants’ requests to 23 seal the entirety of Exhibit 1 and Exhibit 24, compilations of investor declarations, are 24 unjustifiably overbroad. Defendants contend that these exhibits contain “confidential trading 25 practices and research techniques [that] could [] be used by other to the investors’ competitive 26 disadvantage.” Dkt. Nos. 116, 134. But the Court disagrees, as these declarations largely contain 27 high-level statements describing the investors’ knowledge about the purportedly omitted 1 associated portions of the opposition.1 2 Plaintiff moves to seal three exhibits to the Declaration of Jeffrey C. Block, Dkt. No. 129, 3 portions of the Block Declaration, and portions of his reply. Dkt. No. 126.2 Specifically, Plaintiff 4 seeks to seal Exhibits 5-8 to the Block Declaration because Defendants designated those 5 documents as confidential. Id. at 4-5. But Defendants’ counsel filed a supporting declaration 6 indicating that Defendants do not seek confidential treatment of those exhibits. Dkt. No. 130 at 1, 7 3. Accordingly, the Court DENIES Plaintiff’s request to seal Exhibits 5-8 and related references 8 in the reply and Block Declaration. 9 // 10 // 11 // 12 // 13 // 14 // 15 // 16 // 17 // 18 // 19 // 20 // 21 // 22 // 23 // 24 // 25 1 As relevant to Exhibit 3, Defendants also seek to seal a portion of the Grant Declaration. Dkt. 26 No. 116. Because Defendants did not adequately address why sealing the title of Exhibit 3 is warranted, the Court DENIES denies that request. 27 2 Plaintiff requested to seal portions of its reply that reference Exhibits 1 and 3 to the Grant IW. CONCLUSION The Court DENIES the parties’ administrative motions to file under seal, and DIRECTS 2 the parties to file public versions of all documents for which the proposed sealing has been denied 3 within seven days of this order. The parties may also file a new motion to seal that comports with 4 the requirements discussed above within seven days of this order. Additionally, any proposed 5 order or responsive declaration must include in the table for each item sought to be sealed: (1) the 6 docket numbers of the public and provisionally sealed versions of documents sought to be filed 7 under seal; (2) the name of the document; (3) the specific portion(s) of the document sought to be 8 filed under seal; and (4) the filer’s reasons for seeking sealing of the material, along with citations 9 to the relevant declarations and any supporting legal authority. The reasons provided must be 10 specific and tailored to the portion(s) of the document sought to be sealed. 11 g 12 IT IS SO ORDERED. v 14 Dated: 8/20/2021 15 Up. J g 16 HAYWOOD S. GILLIAM, JR. United States District Judge (17 Z 18 19 20 21 22 23 24 25 26 27 28