Intuit Inc. v. H&R Block, Inc. ( 2024 )

1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 INTUIT INC., Case No. 5:24-cv-00253-BLF 8 Plaintiff, ORDER GRANTING ECF NO. 114; 9 v. GRANTING IN PART AND DENYING IN PART ECF NOS. 115, 117 10 HRB TAX GROUP, INC., et al., [Re: ECF Nos. 114, 115, 117] 11 Defendants. 12 13 14 Before the Court are two administrative motions filed in connection with Defendants HRB 15 Tax Group, Inc. and HRB Digital LLC’s (“Block”) Opposition to Plaintiff Intuit Inc.’s (“Intuit”) 16 Motion for Preliminary Injunction: 17 1. Block’s Administrative Motion to Seal Portions of Its Opposition to Intuit’s Motion for 18 Preliminary Injunction. ECF No. 114. 19 2. Block’s Administrative Motion to Consider Whether Another Party’s Material Should 20 Be Sealed. ECF Nos. 115, 117. 21 For the reasons described below, the Court rules as follows: the administrative motion at 22 ECF No. 114 is GRANTED, and the administrative motion at ECF Nos. 115 and 117 is 23 GRANTED IN PART AND DENIED IN PART. 24 I. LEGAL STANDARD 25 “Historically, courts have recognized a ‘general right to inspect and copy public records 26 and documents, including judicial records and documents.’” Kamakana v. City & Cty. of 27 Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc’ns, Inc., 435 1 presumption in favor of access’ is the starting point.” Id. (quoting Foltz v. State Farm Mut. Auto. 2 Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). Parties seeking to seal judicial records relating to 3 motions that are “more than tangentially related to the underlying cause of action” bear the burden 4 of overcoming the presumption with “compelling reasons” that outweigh the general history of 5 access and the public policies favoring disclosure. Ctr. for Auto Safety v. Chrysler Grp., 809 F.3d 6 1092, 1100–01 (9th Cir. 2016); Kamakana, 447 F.3d at 1178–79. 7 Records attached to motions that are “not related, or only tangentially related, to the merits 8 of a case,” however, are not subject to the strong presumption of access. Ctr. for Auto Safety, 809 9 F.3d at 1099; see also Kamakana, 447 F.3d at 1179 (“[T]he public has less of a need for access to 10 court records attached only to non-dispositive motions because those documents are often 11 unrelated, or only tangentially related, to the underlying cause of action.” (internal quotations 12 omitted)). Parties moving to seal the documents attached to such motions must meet the lower 13 “good cause” standard of Rule 26(c). Kamakana, 447 F.3d at 1180. This standard requires a 14 “particularized showing,” id., that “specific prejudice or harm will result” if the information is 15 disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th Cir. 16 2002); see Fed. R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated by specific 17 examples of articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 18 F.2d 470, 476 (9th Cir. 1992). 19 In addition, in this district, all parties requesting sealing must comply with Civil Local 20 Rule 79-5. That rule requires, inter alia, the moving party to provide “the reasons for keeping a 21 document under seal, including an explanation of: (i) the legitimate private or public interests that 22 warrant sealing; (ii) the injury that will result if sealing is denied; and (iii) why a less restrictive 23 alternative to sealing is not sufficient.” Civ. L.R. 79-5(c)(1). Further, Civil Local Rule 79-5 24 requires the moving party to provide “evidentiary support from declarations where necessary.” 25 Civ. L.R. 79-5(c)(2). And the proposed order must be “narrowly tailored to seal only the sealable 26 material.” Civ. L.R. 79-5(c)(3). 27 Further, when a party seeks to seal a document because it has been designated as 1 Whether Another Party’s Material Should be Sealed. Civ. L.R. 79-5(f). In that case, the filing 2 party need not satisfy the requirements of subsection (c)(1). Civ. L.R. 79-5(f)(1). Instead, the 3 party who designated the material as confidential must, within seven days of the motion’s filing, 4 file a statement and/or declaration that meets the requirements of subsection (c)(1). Civ. L.R. 79- 5 5(f)(3). A designating party’s failure to file a statement or declaration may result in the unsealing 6 of the provisionally sealed document without further notice to the designating party. Id. Any 7 party can file a response to that declaration within four days. Civ. L.R. 79-5(f)(4). 8 II. DISCUSSION 9 A. ECF No. 114 10 Block filed the Motion to Seal Portions of Its Opposition to Intuit’s Motion for Preliminary 11 Injunction on August 23, 2024. ECF No. 114. Block seeks to seal selected portions of its exhibits 12 submitted in support of its Opposition to Intuit’s Motion for Preliminary Injunction. Id. at 1. 13 Block writes that the information should be sealed because it “consist[s] of proprietary 14 information which Block keeps confidential and does not publicly disclose” and “contain[s], or 15 refer[s] to, Block’s internal business metrics.” Id. at 2. If the information was publicly disclosed, 16 Block argues that it would permit “competitors [to] use Block’s proprietary and confidential 17 information to inform their own business decisions and marketing strategies to gain an advantage 18 over Block” and would put Block “at a competitive disadvantage in the online tax preparation 19 services marketplace.” Id. Block argues that the portions identified for sealing are narrowly 20 tailored. Id. at 3. Intuit did not oppose Block’s administrative motion. 21 The Court finds that compelling reasons exist to seal the identified documents. “Sources 22 of business information that might harm a litigant’s competitive strategy may also give rise to a 23 compelling reason to seal, as may pricing, profit, and customer usage information kept 24 confidential by a company that could be used to the company’s competitive disadvantage.” 25 Lawson v. Grubhub, Inc., No. 15-CV-05128, 2017 WL 2951608, at *9 (N.D. Cal. July 10, 2017) 26 (internal alterations and citations omitted); Ehret v. Uber Techs., Inc., No. 14-CV-00113, 2015 27 WL 12977024, at *3 (N.D. Cal. Dec. 2, 2015) (finding compelling reasons to seal documents 1 marketing decisions”); see Johnstech Int’l Corp. v. JF Microtechnology SDN BHD, No. 14-CV- 2 02864, 2016 WL 4091388, at *2 (N.D. Cal. Aug. 2, 2016). The Court also finds that the request is 3 narrowly tailored. See Civ. L.R. 79-5(c)(3). 4 The Court’s ruling is summarized below: 5 ECF No. Document Portion(s) to Seal Ruling 6 113-16 Exhibit 15 to Baron Entire document Granted, as the document contains Declaration sensitive material related to internal 7 communications about marketing, 8 business data, and strategies regarding Block’s Tax Pro Review product. See 9 ECF No. 114-1 ¶ 4. 10 113-17 Exhibit 16 to Baron Entire document Granted, as the document contains Declaration sensitive material related to business data 11 and strategies for its DIY tax products. 12 See ECF No. 114-1 ¶ 5. 13 14 B. ECF Nos. 115, 117 15 Block initially filed the Administrative Motion to Consider Whether Another Party’s 16 Material Should Be Sealed as ECF No. 115 on August 23, 2024. ECF No. 115. Shortly 17 thereafter, Block filed a Motion to Remove Incorrectly Filed Documents, informing the Court that 18 it had “inadvertently omitted certain redactions of material Intuit Inc. claims is confidential” from 19 its Opposition to Intuit’s Motion for Preliminary Injunction as well as two exhibits. ECF No. 116 20 at 1. Block explained that it would file corrected versions of the documents as well as “corrected 21 versions of ECF Nos. 115 and 115-2.” Id. Later that day, the Administrative Motion to Consider 22 Whether Another Party’s Material Should Be Sealed was refiled as ECF No. 117, attaching the 23 corrected documents. 24 Intuit filed a statement setting forth the portions of Block’s Opposition, the supporting 25 Declaration of Marissa Baron, and the Exhibits attached thereto that it believed should remain 26 under seal. ECF No. 119. Intuit writes that it seeks to maintain sealing of materials that “contain 27 sensitive information related to Intuit’s provision of an expert final review for free to TurboTax 1 “leverage Intuit’s efforts to develop their own training and offer similar expert assistance, directly 2 harming Intuit’s competitive standing.” Id. at 1–2. In addition, Intuit argues that sensitive 3 confidential business data and metrics for which it seeks to maintain sealing “would harm Intuit’s 4 competitive standing if publicly disclosed: It would allow Intuit’s competitors to modify their 5 business strategies based on Intuit’s proprietary data and give competitors insight into metrics and 6 pricing information that influence Intuit’s confidential business strategies.” Id. at 2. Finally, 7 Intuit seeks to maintain sealing of “confidential information about Intuit’s marketing strategies 8 and priorities” because that information, if disclosed, could “enable Intuit’s competitors to gain an 9 unfair competitive advantage.” Id. at 3. Block did not oppose Intuit’s statement. 10 The Court finds that compelling reasons exist to seal the portions of the documents for 11 which Intuit seeks to maintain sealing. “Sources of business information that might harm a 12 litigant’s competitive strategy may also give rise to a compelling reason to seal, as may pricing, 13 profit, and customer usage information kept confidential by a company that could be used to the 14 company’s competitive disadvantage.” Lawson v. Grubhub, Inc., No. 15-CV-05128, 2017 WL 15 2951608, at *9 (N.D. Cal. July 10, 2017) (internal alterations and citations omitted). Such 16 competitive information can include confidential training materials, marketing information, and 17 business data. See Baack v. Asurion, LLC, No. 220-CV-00336, 2021 WL 3115183, at *1–4 (D. 18 Nev. July 22, 2021); Adtrader, Inc. v. Google LLC, No. 17-CV-07082, 2020 WL 6387381, at *2 19 (N.D. Cal. Feb. 24, 2020); Johnstech Int’l Corp. v. JF Microtechnology SDN BHD, No. 14-CV- 20 02864, 2016 WL 4091388, at *2 (N.D. Cal. Aug. 2, 2016); Algarin v. Maybelline, LLC, No. 12- 21 CV-3000, 2014 WL 690410, at *3 (S.D. Cal. Feb. 21, 2014) (finding compelling reasons to seal 22 “confidential business material, marketing strategies, [and] product development plans [that] could 23 result in improper use by business competitors seeking to replicate” those strategies). The Court 24 also finds that the request is narrowly tailored. See Civ. L.R. 79-5(c)(3). 25 The Court’s ruling is summarized below: 26 27 ECF No. Document Portion(s) to Seal Ruling 1 2 117-1 Block’s Opposition to Highlighted Denied as to the highlighted portions at Intuit’s Preliminary portions 11:3–4, 12:11–12, 12:24–27, and 13:1– 3 Injunction Motion at 2:18; 6:14; 13:3, as Intuit does not seek to maintain 7:2; 7:7–8; 7:21– those portions under seal. 4 22; 11:5–6; 11:12; 11:23–24; Otherwise granted, as containing 5 12:4; 12:10; sensitive material related to tax expert 6 12:28; 13:16; training and confidential business data and 17:23–25. and metrics regarding customer 7 satisfaction, product usage, and price testing. See ECF No. 119-1 ¶¶ 5–12. 8 113-1 Declaration of Marissa Highlighted Denied as to the highlighted portions at 9 Baron in Support of portions ECF No. 113-1 at 1:13–19, 1:21–22, 10 Block’s Opposition to at 1:20; 1:23; 1:24, 1:26–27 and 2:3–13, as Intuit Intuit’s Preliminary 1:25; and 2:1–2. does not seek to maintain these 11 Injunction Motion portions under seal. 12 Otherwise granted as to the highlighted portions indicated in this chart, as 13 containing sensitive material related to 14 tax expert training and confidential business data and metrics regarding 15 customer satisfaction and product usage. See ECF No. 119-1 ¶¶ 6–7. 16 17 113-6 Exhibit 5 to the Portions Granted as to the portions indicated in Declaration of Marissa at ¶¶ 5–8. this chart, as containing sensitive and 18 Baron in Support of confidential business data and metrics Block’s Opposition to regarding customer satisfaction. See 19 Intuit’s Preliminary ECF No. 119-1 ¶ 5. Injunction Motion 20 Otherwise denied, as Intuit does not seek to maintain the entire document under 21 seal. 22 113-7 Exhibit 6 to the In its entirety Granted, as containing sensitive and Declaration of Marissa confidential business data 23 Baron in Support of regarding the number of 24 Block’s Opposition to customers who filed using Intuit’s Preliminary TurboTax Live Assisted and fell into 25 Injunction Motion certain sub-categories. See ECF No. 119- 1 ¶ 6. 26 113-8 Exhibit 7 to the In its entirety Granted, as containing sensitive tax 27 Declaration of Marissa expert training materials. See ECF No. Intuit’s Preliminary 1 Injunction Motion 2 113-9 Exhibit 8 to the In its entirety Granted, as containing sensitive tax 3 Declaration of Marissa expert training materials. See ECF No. Baron in Support of 119-1 ¶ 7. 4 Block’s Opposition to Intuit’s Preliminary 5 Injunction Motion 6 113-10 Exhibit 9 to the In its entirety Denied, as Intuit does not seek to Declaration of Marissa maintain this document under seal. 7 Baron in Support of Block’s Opposition to 8 Intuit’s Preliminary 9 Injunction Motion 10 113-11 Exhibit 10 to the In its entirety Granted, as containing sensitive Declaration of Marissa information related to tax expert training. 11 Baron in Support of See ECF No. 119-1 ¶ 8. Block’s Opposition to 12 Intuit’s Preliminary Injunction Motion 13 113-13 Exhibit 12 to the In its entirety Denied, as Intuit does not seek to 14 Declaration of Marissa maintain this document under seal. 15 Baron in Support of Block’s Opposition to 16 Intuit’s Preliminary Injunction Motion 17 113-14 Exhibit 13 to the Portions at Granted as to the portions indicated in 18 Declaration of Marissa 19:19–20. this chart, as containing sensitive and Baron in Support of confidential business data 19 Block’s Opposition to regarding the number of Intuit’s Preliminary customers who filed using 20 Injunction Motion TurboTax Live Assisted and fell into 21 certain sub-categories. See ECF No. 119- 1 ¶ 9. 22 Otherwise denied, as Intuit does not seek 23 to maintain the entire document under seal. 24 113-15 Exhibit 14 to the In its entirety Denied, as Intuit does not seek to 25 Declaration of Marissa maintain this document under seal. Baron in Support of 26 Block’s Opposition to Intuit’s Preliminary 27 Injunction Motion 113-23 Exhibit 22 to the Portions Granted as to the portions indicated in 1 Declaration of Marissa at 150:21–151:4; this chart, as containing discussions of Baron in Support of 151:21–152:25; sensitive and confidential business 2 Block’s Opposition to 153:9–10; pricing and price testing strategy and 3 Intuit’s Preliminary 153:13; data. See ECF No. 119-1 ¶ 10. Injunction Motion 153:18; 155:14– 4 15; 155:17–23; Otherwise denied, as Intuit does not seek and 156:2–5. to maintain the entire document under 5 seal. 6 113-24 Exhibit 23 to the Portions Granted as to the portions indicated in Declaration of Marissa at 178:20–23; this chart, as containing discussions of 7 Baron in Support of 179:12–15; and sensitive and confidential business Block’s Opposition to 179:22–23. strategy. See ECF No. 119-1 ¶ 10. 8 Intuit’s Preliminary Injunction Motion Otherwise denied, as Intuit does not seek 9 to maintain the entire document under seal. 10 11 113-27 Exhibit 26 to the Portion Granted as to the portion indicated in this Declaration of Marissa at 296:19–25. chart, as containing sensitive information 12 Baron in Support of related to tax expert training. See ECF Block’s Opposition to No. 119-1 ¶ 10. 13 Intuit’s Preliminary Injunction Motion Otherwise denied, as Intuit does not seek 14 to maintain the entire document under seal. 15 113-28 Exhibit 27 to the Portion Granted as to the portion indicated in this 16 Declaration of Marissa at 87:2–25. chart, as containing sensitive documents 17 Baron in Support of related to tax expert training. See ECF Block’s Opposition to No. 119-1 ¶ 11. 18 Intuit’s Preliminary Injunction Motion Otherwise denied, as Intuit does not seek 19 to maintain the entire document under seal. 20 113-29 Exhibit 28 to the Portions at Granted as to the portions indicated in 21 Declaration of Marissa 128:4–7; 128:9– this chart, as containing sensitive Baron in Support of 129:10; 129:11– business data and metrics. See ECF No. 22 Block’s Opposition to 13; 129:16; 119-1 ¶ 11. Intuit’s Preliminary 129:18; 129:21– 23 Injunction Motion 24; 130:2–3; Otherwise denied, as Intuit does not seek 24 130:7; 130:11; to maintain the entire document under 130:24; 131:4; seal. 25 131:7; and 131:16–132:20. 26 117-2 Exhibit 29 to the Portion at 26:21– Granted as to the portion indicated in this 27 Declaration of Marissa 27:8. chart, as containing sensitive marketing Baron in Support of strategy information. See ECF No. 119- Intuit’s Preliminary 1 Injunction Motion Otherwise denied, as Intuit does not seek 4 to maintain the entire document under seal. 117-3 Exhibit 30 to the Portions at 36:5— | Granted as to the portions indicated in 4 Declaration of Marissa |7; 36:9-13; this chart, as containing sensitive Baron in Support of 36:20-21; 36:23—| marketing strategy information. See 5 Block’s Opposition to |25; and 37:24. |ECF No. 119-14 12. Intuit’s Preliminary 6 Injunction Motion Otherwise denied, as Intuit does not seek to maintain the entire document under 7 seal. 8 113-35 | Exhibit 34 to the Portions at 41:1— | Granted as to the portions indicated in 9 Declaration of Marissa |42:12; 43:4-6; this chart, as containing sensitive Baron in Support of 43:14-19; and _|information regarding tax expert 10 Block’s Opposition to /44:5—25. training. See ECF No. 119-14 11. Intuit’s Preliminary 11 Injunction Motion Otherwise denied, as Intuit does not seek to maintain the entire document under a 12 seal. 13 v 14 Il. ORDER © 15 For the foregoing reasons, IT IS HEREBY ORDERED that: 16 1. The motion at ECF No. 114 is GRANTED. = 17 2. The motion at ECF Nos. 115, 117 is GRANTED IN PART AND DENIED IN PART. 18 All denials are WITHOUT PREJUDICE. Any refiled administrative motion or declaration 19 || SHALL be filed no later than October 10, 2024. The parties SHALL refile public versions of 20 || each filing where the redactions and sealing granted by the Court are narrower than what was 21 redacted in the current public versions by October 10, 2024, unless they are filing a renewed 22 sealing motion for any document in that filing. 23 24 IT IS SO ORDERED. 25 26 || Dated: September 25, 2024 27 hay CGH | BETH LABSON FREEMAN 28 United States District Judge