Global Industrial Investment Limited v. Chung ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11 12 GLOBAL INDUSTRIAL INVESTMENT Case No. 19-CV-07670-LHK LIMITED, 13 Plaintiff, ORDER GRANTING ADMINISTRATIVE MOTION TO FILE 14 v. UNDER SEAL 15 Re: Dkt. No. 46 ANDREW CHUNG, 16 Defendant. 17 18 Before the Court is Defendant Andrew Chung’s administrative motion to file under seal 19 filed in connection with his reply in support of his motion to dismiss. ECF No. 46. For the 20 following reasons, the Court GRANTS Chung’s administrative motion to file under seal. 21 I. LEGAL STANDARD 22 “Historically, courts have recognized a ‘general right to inspect and copy public records 23 and documents, including judicial records and documents.’” Kamakana v. City & Cty. Of 24 Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 25 589, 597 & n.7 (1978)). Accordingly, when considering a sealing request, a “strong presumption in 26 favor of access is the starting point.” Id. (quoting Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 27 1122, 1135 (9th Cir. 2003)). In the Ninth Circuit, documents that are more than “tangentially 1 related . . . to the underlying cause of action” are not sealable unless the Court agrees that 2 “compelling reasons” exist to overcome the presumption of access. See id. at 1179. Exhibit 8, 3 which supports Chung’s motion to dismiss, is more than tangentially related to the underlying 4 causes of action. The compelling reasons standard therefore applies. See, e.g., Doe v. Walmart Inc., 5 No. 18-CV-02125-LHK, 2019 WL 636362, at *2 (N.D. Cal. Feb. 11, 2019) (collecting cases 6 applying the “compelling reasons” standard to exhibits to a motion to dismiss). 7 Compelling reasons justifying the sealing of court records generally exist “when such 8 ‘court files might have become a vehicle for improper purposes,’ such as the use of records to 9 gratify private spite, promote public scandal, circulate libelous statements, or release trade 10 secrets.” Id. (quoting Nixon, 435 U.S. at 598). However, “[t]he mere fact that the production of 11 records may lead to a litigant’s embarrassment, incrimination, or exposure to further litigation will 12 not, without more, compel the court to seal its records.” Id. 13 In addition, parties moving to seal documents must comply with the procedures established 14 by Civil Local Rule 79-5. Pursuant to that rule, a sealing order is appropriate only upon a request 15 that establishes the document is “sealable,” or “privileged, protectable as a trade secret or 16 otherwise entitled to protection under the law.” Civ. L.R. 79-5(b). “The request must be narrowly 17 tailored to seek sealing only of sealable material, and must conform with Civil L.R. 79-5(d).” Id. 18 Civil Local Rule 79-5(d), in turn, requires the submitting party to attach a “declaration 19 establishing that the document sought to be filed under seal, or portions thereof, are sealable,” a 20 “proposed order that is narrowly tailored to seal only the sealable material,” and a proposed order 21 that “lists in table format each document or portion thereof that is sought to be sealed,” as well as 22 an “unredacted version of the document” that “indicate[s], by highlighting or other clear method, 23 the portions of the document that have been omitted from the redacted version.” Id. 24 II. DISCUSSION 25 The Court now turns to the merits of the instant sealing motion. Chung moves to seal parts 26 of Exhibit 8, which he cites in his reply in support of his motion to dismiss. ECF No. 46. In 27 support of his sealing motion, Chung submits a narrowly tailored declaration identifying sealable 1 material in compliance with Civil Local Rule 79-5. Chung identifies about eleven lines from 2 || Exhibit 8 to his Reply that contain the names and compensation arrangements of employees (and 3 || potential hires) at his venture capital firm, 1955 Capital. ECF No. 46-1 at § 8. 4 The Court holds that the portions of Exhibit 8 identified by Chung are sealable. Public 5 disclosure of the sensitive business information that Chung identified could “harm a litigant’s 6 || competitive standing.” Jn re Elec. Arts, Inc., 298 F. App’x 568, 569 (9th Cir. 2008) (quoting Nixon, 7 435 U.S. at 598). Indeed, another court in this district sealed the same information in another case 8 involving the same arbitration award that underlies Chung’s motion to dismiss. See Order 9 || Granting Administrative Motion to File Under Seal, China Fortune Land Development v. 1955 10 || Capital Fund I GP, No. 19-CV-07043-VC (N.D. Cal. Feb. 8, 2020), ECF No. 70 (sealing limited 11 portions of Final Award that identify the names or terms of employment of employees and 12 || potential employees). United States District Judge Vince Chhabria found, based on Chung’s 13 declaration, that (1) there are “compelling reasons” to seal the business information that S 14 || “overcomes the right of public interest to that information”; (2) the compelling reasons support 3 15 sealing; (3) a “substantial probability exists” that public disclosure of the information would cause 16 || prejudice; (4) the proposed sealing is narrowly tailored; and (5) “there is no less restrictive means i 17 || to achieve protection” of the interests protected by sealing. /d. Z, 18 Accordingly, the Court GRANTS Defendant Andrew Chung’s motion to file portions of 19 || Exhibit 8 under seal. 20 || ITIS SO ORDERED. 21 22 Dated: September 7, 2020 23 J uy He. LUCY. KOH 24 United States District Judge 25 26 27 28 Case No. 19-CV-O7670-LHK ee