Skillz Platform Inc. v. AviaGames Inc. ( 2023 )

1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 SKILLZ PLATFORM INC., Case No. 21-cv-02436-BLF 8 Plaintiff, ORDER RE: SEALING MOTIONS ON 9 v. OPPOSITION TO MOTION TO REOPEN DISCOVERY AND FOR 10 AVIAGAMES INC., SANCTIONS 11 Defendant. [Re: ECF No. 216, 217] 12 13 Before the Court are two administrative motions to file under seal relating to Defendant 14 AviaGames Inc.’s Opposition, ECF No. 218, to Plaintiff Skillz Platform Inc.’s Motion to Reopen 15 Discovery and for Sanctions, ECF No. 208. See ECF Nos. 216, 217. The Court has considered 16 the motions. The Court’s ruling is laid out below. 17 I. LEGAL STANDARD 18 “Historically, courts have recognized a ‘general right to inspect and copy public records 19 and documents, including judicial records and documents.’” Kamakana v. City and Cnty. of 20 Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc’ns, Inc., 435 21 U.S. 589, 597 & n.7 (1978)). Consequently, access to motions and their attachments that are 22 “more than tangentially related to the merits of a case” may be sealed only upon a showing of 23 “compelling reasons” for sealing. Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 24 1101–02 (9th Cir. 2016). Filings that are only tangentially related to the merits may be sealed 25 upon a lesser showing of “good cause.” Id. at 1097. 26 In addition, in this district, all parties requesting sealing must comply with Civil Local 27 Rule 79-5. That rule requires, inter alia, the moving party to provide “the reasons for keeping a 1 warrant sealing; (ii) the injury that will result if sealing is denied; and (iii) why a less restrictive 2 alternative to sealing is not sufficient.” Civ. L.R. 79-5(c)(1). Further, Civil Local Rule 79-5 3 requires the moving party to provide “evidentiary support from declarations where necessary.” 4 Civ. L.R. 79-5(c)(2). And the proposed order must be “narrowly tailored to seal only the sealable 5 material.” Civ. L.R. 79-5(c)(3). 6 Further, when a party seeks to seal a document because it has been designated as 7 confidential by another party, the filing party must file an Administrative Motion to Consider 8 Whether Another Party’s Material Should be Sealed. Civ. L.R. 79-5(f). In that case, the filing 9 party need not satisfy the requirements of subsection (c)(1). Civ. L.R. 79-5(f)(1). Instead, the 10 party who designated the material as confidential must, within seven days of the motion’s filing, 11 file a statement and/or declaration that meets the requirements of subsection (c)(1). Civ. L.R. 79- 12 5(f)(3). A designating party’s failure to file a statement or declaration may result in the unsealing 13 of the provisionally sealed document without further notice to the designating party. Id. Any 14 party can file a response to that declaration within four days. Civ. L.R. 79-5(f)(4). 15 II. DISCUSSION 16 The good cause standard applies here because the sealing motions relate to briefing on the 17 motion to reopen discovery and for sanctions, which is only tangentially related to the merits of 18 the case. Cf. Ctr. for Auto Safety, 809 F.3d at 1097; LELO, Inc. v. Standard Innovation (US) 19 Corp., No. 13-CV-01393-JD, 2014 WL 2879851 (N.D. Cal. June 24, 2014) (applying “good 20 cause” standard to evaluate sealing of documents submitted with a motion to stay); E. W. Bank v. 21 Shanker, 2021 WL 4916729, at *1 (N.D. Cal. Aug. 31, 2021) (same). The Court will address each 22 motion in turn. 23 A. AviaGames’ Administrative Motion to File Under Seal Re: Opposition to Motion to Reopen Discovery and for Sanctions (ECF No. 216) 24 On August 18, 2023, AviaGames filed an administrative motion to file under seal portions 25 of its Opposition to Skillz’s motion to reopen discovery and for sanctions and certain exhibits 26 attached to AviaGames’ opposition. ECF No. 216. Skillz filed an opposition to AviaGames’ 27 motion. ECF No. 222. Skillz argues that AviaGames’ motion should be denied because 1 AviaGames’ proposed redactions do not discuss source code in any detail and the public has a 2 right to know about AviaGames’ allegedly fraudulent conduct. Id. at 2–5. AviaGames responds 3 that Skillz misrepresents or fails to acknowledge the information that AviaGames seeks to seal. 4 ECF No. 226 at 1–2. 5 Good cause exists to seal trade secrets. Kamakana, 447 F.3d at 1179. Confidential source 6 code and confidential business information that would harm a party’s competitive standing meet 7 the compelling reasons standard, and thus also meet the “less exacting” good cause standard. See 8 Ctr. for Auto Safety, 809 F.3d at 1097; see also Apple, Inc. v. Samsung Elecs. Co., Ltd., No. 11- 9 CV-01846-LHK, 2012 WL 6115623, at *2 (N.D. Cal. Dec. 10, 2012) (finding that “[c]onfidential 10 source code clearly meets the definition of a trade secret,” and meets the compelling reasons 11 standard); Jam Cellars, Inc. v. Wine Grp. LLC, No. 19-cv-01878-HSG, 2020 WL 5576346, at *2 12 (N.D. Cal. Sept. 17, 2020) (finding compelling reasons for “confidential business and proprietary 13 information relating to the operations of both Plaintiff and Defendant”); Fed. Trade Comm’n v. 14 Qualcomm, Inc., No. 17-cv-00220-LHK, 2019 WL 95922, at *3 (N.D. Cal. Jan. 3, 2019) (finding 15 compelling reasons for “information that, if published, may harm [a party’s] or third parties’ 16 competitive standing and divulges terms of confidential contracts, contract negotiations, or trade 17 secrets”); In re Elec. Arts, Inc., 298 F. App’x 568, 569 (9th Cir. 2008) (finding sealable “business 18 information that might harm a litigant’s competitive standing”). 19 The Court agrees with AviaGames that what AviaGames seeks to seal satisfies the good 20 cause standard, but it finds that some of AviaGames’ proposed redactions are overbroad. Skillz’s 21 argument that AviaGames’ redactions include only “a single piece of source code” is incorrect— 22 two of the documents that AviaGames seeks to seal contain only source code, and there are other 23 good causes to seal the documents. To the extent that AviaGames seeks to seal information that 24 does not contain source code, that information is still sealable because it discusses AviaGames’ 25 internal business plans and propriety information about its products. See Jam Cellars, 2012 WL 26 6115623, at *2 (finding “confidential business and proprietary information” sealable). Skillz 27 further argues the public interest is stronger in causes of fraud or anticompetitive conduct, but 1 AviaGames’ redactions are not confidential business information. Although the Court finds that 2 some of the information in AviaGames’ motion may be filed under seal, it finds that AviaGames’ 3 proposed redactions are overbroad. For example, AviaGames seeks to seal declarations of its 4 employees and an expert report in their entirety—including name, age, and job title information 5 for which there is no good cause to seal. 6 The Court rules as follows: 7 ECF No. Document Portions to Seal Ruling 216-3 AviaGames’ Highlighted GRANTED as containing 8 Opposition to Plaintiff Portions confidential business information 9 Skillz Platform Inc.’s the release of which would harm Emergency Motion a party’s competitive standing. 10 216-4 Declaration of V. Chen Entire Document DENIED as not narrowly tailored. 11 216-5 Declaration of J. Leung Entire Document DENIED as not narrowly 12 tailored. 216-6 Declaration of P. Entire Document DENIED as not narrowly 13 Zhang tailored. 216-7 Declaration of M. Highlighted GRANTED as containing 14 Bombach Portions confidential business information the release of which would harm 15 a party’s competitive standing. 16 216-8 AVIA_SC_000001- Entire Document GRANTED as containing 188 confidential source code. 17 216-9 Skillz Platform Inc.’s Entire Document DENIED as not narrowly Amended and tailored. 18 Supplemental 19 Responses and Objections to 20 AviaGames Inc.’s Second Set of 21 Interrogatories 216-10 Opening Expert Report Entire Document DENIED as not narrowly 22 of Jose P. Zagal tailored. 23 Regarding Infringement 24 216-11 AVIA_SC_0003331- Entire Document GRANTED as containing 359 confidential source code. 25 216-12 Deposition Transcript Entire Document DENIED as not narrowly of Peng Zhang tailored. 26 The above denials are WITHOUT PREJUDICE to refiling a renewed motion that seeks to seal 27 1 tailored to seal only the sealable material.” Civ. L.R. 79-5(c)(3). 2 B. AviaGames’ Administrative Motion to Consider Whether Another Party’s Material Should be Sealed Re: Opposition to Motion to Reopen Discovery and for 3 Sanctions (ECF No. 217) 4 AviaGames filed an administrative motion to consider whether another party’s material 5 should be sealed in connection with its opposition to Skillz’s motion to reopen discovery and for 6 sanctions. ECF No 218. AviaGames identifies the potentially sealable material to include 7 Exhibits 2, 3, 6, 7, 16, 17, and 19 to the Bombach Declaration in support of its opposition, which 8 Skillz has designated as highly confidential. Id. at 2. 9 Skillz filed a statement in support of the motion. ECF No. 227. Skillz states that Exhibit 3 10 contains descriptions of Skillz’s financial information and market research; Exhibits 2 and 19 11 contain notes on the revision and improvement of Skillz’s products; and Exhibits 6, 7, 16, and 17 12 contain descriptions of AviaGames’ source code, which Skillz does not oppose sealing. Id. Skillz 13 provides that it would be competitively harmed by the publication of the information in Exhibits 2, 14 3, and 19, but it does not make any representation about injury from Exhibits 6, 7, 16, and 17 nor 15 does it specify why a less restrictive alternative to sealing is not sufficient. Id. 16 The confidential business information that would harm a party’s competitive standing 17 meets the higher “competitive reasons” standard. See Jam Cellars, 2020 WL 5576346, at *2 18 (finding compelling reasons for “confidential business and proprietary information relating to the 19 operations of both Plaintiff and Defendant”); Qualcomm, 2019 WL 95922, at *3 (finding 20 compelling reasons for “information that, if published, may harm [a party’s] or third parties’ 21 competitive standing and divulges terms of confidential contracts, contract negotiations, or trade 22 secrets”); Elec. Arts, 298 F. App’x at 569 (finding sealable “business information that might harm 23 a litigant’s competitive standing”). Such information is therefore sealable under the “less 24 exacting” good cause standard. See Ctr. for Auto Safety, 809 F.3d at 1097. 25 As noted above, trade secrets, including confidential source code, meet the compelling 26 reasons standard. Apple, 2012 WL 6115623, at *2. However, for certain exhibits, the Court does 27 not find good cause to seal them in their entirety. 1 ECF No. Document Portions to Seal Ruling 2 217-2 Exhibit 2 to Bombach Entire Document GRANTED as containing Decl. ISO AviaGames’ confidential business information 3 Opposition the release of which would harm a party’s competitive standing. 4 217-3 Exhibit 3 to Bombach Entire Document GRANTED as containing Decl. ISO AviaGames’ confidential business information 5 Opposition the release of which would harm 6 a party’s competitive standing. 217-4 Exhibit 6 to Bombach Entire Document DENIED as not narrowly tailored 7 Decl. ISO AviaGames’ Opposition 8 217-5 Exhibit 7 to Bombach Entire Document GRANTED as containing trade 9 Decl. ISO AviaGames’ secrets. Opposition 10 217-6 Exhibit 16 to Bombach Entire Document DENIED as not narrowly tailored Decl. ISO AviaGames’ 11 Opposition 217-7 Exhibit 17 to Bombach Entire Document GRANTED as discussing trade 12 Decl. ISO AviaGames’ secrets. 13 Opposition 217-8 Exhibit 19 to Bombach Entire Document GRANTED as containing 14 Decl. ISO AviaGames’ confidential business information Opposition the release of which would harm 15 a party’s competitive standing. 16 The above denials are WITHOUT PREJUDICE to Skillz filing a renewed statement in support of 17 the motion that seeks to seal specified redacted portions of these exhibits. The Court notes that 18 redactions must be “narrowly tailored to seal only the sealable material.” Civ. L.R. 79-5(c)(3). 19 III. ORDER 20 For the foregoing reasons, IT IS HEREBY ORDERED that: 21 1. Defendant AviaGames Inc.’s Administrative Motion to File Under Seal Re: 22 Opposition to Motion to Reopen Discovery and for Sanctions (ECF No. 216) is GRANTED in 23 part and DENIED WITHOUT PREJUDICE in part. AviaGames may file a renewed motion to file 24 under seal within 10 days of this Order. 25 2. Defendant AviaGames Inc.’s Administrative Motion to Consider Whether Another 26 Party’s Material Should Be Sealed Re: Opposition to Motion to Reopen Discovery and for 27 Sanctions (ECF No. 217) is GRANTED in part and DENIED WITHOUT PREJUIDCE in part. 1 portions of these exhibits within 10 days of this Order. 2 3 Dated: September 18, 2023 4 BETH LABSON FREEMAN 5 United States District Judge 6 7 8 9 10 11 a 12 13 © 15 16 it Z 18 19 20 21 22 23 24 25 26 27 28