Quidel Corporation v. Siemens Medical Solutions USA, Inc. ( 2020 )

1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 QUIDEL CORPORATION, Case No. 16-cv-3059-BAS-AGS 12 Plaintiff, ORDER GRANTING MOTIONS 13 TO SEAL 14 v. [ECF Nos. 302, 304, 307, 311, 316] 15 SIEMENS MEDICAL SOLUTIONS USA, INC., et al., 16 Defendants. 17 18 Both parties have filed motions to seal. (ECF Nos. 302, 304, 307, 311, 316.) 19 The parties seek to seal various exhibits filed as attachments of their motions, 20 oppositions, and reply briefs. For the most part, the parties seek to seal exhibits 21 solely because the other party has marked information within the exhibits as 22 confidential pursuant to a protective order. Therefore, the Court ordered each party 23 to respond to the other’s motions to seal and provide compelling reasons for the 24 sealing of the material, as well as file a public version of that document with proposed 25 redactions. The parties did so. 26 I. LEGAL STANDARD 27 “[T]he courts of this country recognize a general right to inspect and copy 1 Warner Commc’ns, Inc., 435 U.S. 589, 597 (1978). “Unless a particular court record 2 is one ‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the 3 starting point.” Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 4 2006) (citing Foltz v. State Farm Mut. Auto Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 5 2003)). “The presumption of access is ‘based on the need for federal courts, although 6 independent—indeed, particularly because they are independent—to have a measure 7 of accountability and for the public to have confidence in the administration of 8 justice.’” Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 9 2016) (quoting United States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995)). 10 A party seeking to seal a judicial record bears the burden of overcoming the 11 strong presumption of access. Foltz, 331 F.3d at 1135. The showing required to meet 12 this burden depends upon whether the documents to be sealed relate to a motion that 13 is “more than tangentially related to the merits of the case.” Ctr. for Auto Safety, 809 14 F.3d at 1102. When the underlying motion is more than tangentially related to the 15 merits, the “compelling reasons” standard applies. Id. at 1096–98. When the 16 underlying motion does not surpass the tangential relevance threshold, the “good 17 cause” standard applies. Id. 18 “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest 19 in disclosure and justify sealing court records exists when such ‘court files might 20 have become a vehicle for improper purposes,’ such as the use of records to gratify 21 private spite, promote public scandal, circulate libelous statements, or release trade 22 secrets.” Kamakana, 447 F.3d at 1179 (quoting Nixon, 435 U.S. at 598). However, 23 “[t]he mere fact that the production of records may lead to a litigant’s embarrassment, 24 incrimination, or exposure to further litigation will not, without more, compel the 25 court to seal its records.” Id. (citing Foltz, 331 F.3d at 1136). The decision to seal 26 documents is “one best left to the sound discretion of the trial court” upon 27 consideration of “the relevant facts and circumstances of the particular case.” Nixon, 1 II. ANALYSIS 2 Because all documents to be sealed relate to the parties’ motions for summary 3 judgment, which are “more than tangentially related to the merits of the case,” the 4 compelling reasons standard applies. 5 ECF No. 302 6 Quidel seeks to seal Exhibit G to the Declaration of T. Kevin Roosevelt, as 7 well as portions of its Motion that reference the exhibit. Siemens claims this exhibit 8 “contains confidential Siemens information related to its product development and 9 regulatory strategy” for a product. (ECF No. 324, at 6.) Siemens claims disclosure 10 of this document could cause Siemens harm because it would allow competitors to 11 see how Siemens approaches product development decisions. Compelling reasons 12 may exist if sealing is required to prevent documents from being used “as sources of 13 business information that might harm a litigant’s competitive standing.” Nixon, 435 14 U.S. at 598; see Algarin v. Maybelline, LLC, No. 12-3000, 2014 WL 690410, at *3 15 (S.D. Cal. Feb. 21, 2014) (granting L’Oreal’s motion to seal where “[p]ublic 16 disclosure of L’Oréal's confidential business material, marketing strategies, [and] 17 product development plans could result in improper use by business competitors 18 seeking to replicate L’Oréal's business practices and circumvent the time and 19 resources necessary in developing their own practices and strategies”). Accordingly, 20 the Court finds compelling reasons to seal Exhibit G and GRANTS ECF No. 302. 21 ECF Nos. 304 and 316 22 Siemens moves to seal Exhibits 1–3, 8–10, 14, 19–20, and 26 to the 23 Declaration of Erik Haas filed in support of Siemens’ MSJ. (ECF No 304.)1 Siemens 24 also seeks to seal Exhibits 27 and 29–32 to the Haas reply declaration. (ECF No. 25 26 1 The Court has previously sealed Exhibit 8 and it finds compelling reasons to seal it again. (ECF 27 No. 283, at 3 (finding the exhibit “reflect[s] Quidel's confidential financial and pricing information 1 316.) 2 Quidel contends the redacted information in Exhibit 9 “reflects in detail the 3 direct and indirect costs attributable to Quidel's manufacturing, marketing and sales 4 of Thyretain from 2010 through 2018, including employee wages and benefits, 5 research and development, and sales and marketing costs.” (ECF No. 322, at 4.) 6 Exhibits 10 and 14 “reflect Quidel’s monthly sales of Thyretain to certain customers 7 from 2009 through 2018, including the price of Thyretain, how many units were sold, 8 the revenue Quidel earned, whether sales were increasing quarter over quarter, and 9 other metrics.” (Id.) Exhibit 19 contains excerpts of expert witness Robert 10 Wunderlich’s deposition and contains information on Quidel’s sales and costs of 11 goods. (Id. at 5.) Exhibit 1 and Exhibit 30 (to the reply declaration) and Quidel’s 12 own Exhibit ZZ contain excerpts from the deposition of Michelle Brooks, and the 13 redacted portions contain financial revenue information, financial reports, marketing 14 and pricing strategy, and Thyretain costs. (Id. at 7.) Exhibit 3 and Quidel’s own 15 Exhibit YY contain excerpts from the deposition of Kristen Caltrider, who testified 16 regarding Quidel’s pricing strategy, compensation details, and financial reports. 17 Exhibit 31 (to the reply declaration) and Quidel’s own Exhibit XX contain excerpts 18 from the deposition of Jeffrey Houtz, who testified regarding Quidel’s marketing 19 plan. 20 “[U]nder Ninth Circuit law, pricing, profit, and customer usage information, 21 when kept confidential by a company, is appropriately sealable under the 22 ‘compelling reasons’ standard where that information could be used to the 23 company’s competitive disadvantage.” Icon-IP Pty Ltd. v. Specialized Bicycle 24 Components, Inc., No. 12-cv-03844-JST, 2015 WL 984121, at *2 (N.D. Cal. Mar. 4, 25 2015) (citation omitted). Further, business and marketing plans reflecting “internal 26 discussions and plans” are sealable. United States v. Celgene Corp., No. CV 10- 27 3165 GHK (SS), 2016 WL 6609375, at *4 (C.D. Cal. Aug. 23, 2016). For these 1 Quidel contends the redacted information in Exhibits 2, 20, 27, and its own 2 Exhibit CCC reflect Quidel’s confidential customer list. (ECF No. 322, at 9.) The 3 Court agrees and finds compelling reasons to seal the exhibits. See Mezzadri v. Med. 4 Depot, Inc., No. 14-cv-2330-AJB-DHB, 2015 WL 12564223, at *2 (S.D. Cal. Dec. 5 18, 2015) (“A customer list may qualify as a trade secret because of its economic 6 value when its disclosure would allow a competitor to direct its sales efforts to those 7 customers who have already shown a willingness to use a unique type of service or 8 product as opposed to a list of people who only might be interested and [the parties] 9 took reasonable steps to protect this information.” (internal citations omitted)). 10 Exhibit 26 contains Thyretain’s launch plan and contains trade secret sales and 11 marketing strategy, and Exhibit 32 contains information regarding Quidel’s contract 12 with Sonic. The Court finds compelling reasons to seal the exhibits. See Algarin, 13 2014 WL 690410, at *3. Exhibits F and HH contains pricing information and 14 Exhibits II, JJ, and NN reflect internal communication between LabCorp employees. 15 The Court finds compelling reasons to seal the exhibits. See Icon-IP Pty Ltd., 2015 16 WL 984121, at *2. Exhibit 29 is a deposition excerpt that contains pricing 17 information for Sonic that Sonic asserts is confidential. (ECF No. 316, at 3.) The 18 Court finds confidential pricing information in the exhibit and finds it to be sealable. 19 The Court finds compelling reasons to seal the exhibits and GRANTS ECF 20 Nos. 304 and 316. 21 ECF No. 307 22 Siemens seeks to seal Exhibits 1–2, 6, 8–10, 12, and 20–21 to the Declaration 23 of Erik Haas filed in support of Siemens’ opposition to Quidel’s MSJ.2 24 25 2 Exhibits 1, 2, and 6 have already been sealed by the Court and the Court again finds compelling reasons to seal these exhibits. (See ECF No 283, at 3 (finding the exhibits "reflect Quidel's 26 confidential financial and pricing information regarding Thyretain," and "reflect[] confidential reimbursement analysis for products not related to this litigation”). 27 Quidel contends that Exhibit 8, 9, and 10 need not be filed under seal. (ECF No. 323 at 1 1 Quidel contends that Exhibits 12 and 21 contain confidential internal sales 2 briefing and strategy for Thyretain, namely a presentation and internal guide 3 regarding sales and strategies. (ECF No. 323, at 4–5.) Although these exhibits 4 contain information the Court believes is publicly available, the Court finds 5 compelling reasons to seal the document because it contains Quidel’s strategy and 6 method for launching Thyretain. (See Houtz Decl. ECF No. 323-2, ¶ 4 (attesting that 7 the exhibits “reflect Quidel’s proprietary and trade secret methods for launching a 8 product, developing leads, developing a market for a product, and ultimately 9 generating revenue from that product”)). 10 Exhibit 20 is a copy of Quidel’s Premarket Notification 510(k) Submission to 11 the FDA for Thyretain. Upon review, the Court finds that the 510(k) submission 12 contains confidential material that may harm Quidel’s competitive standing. See 13 Lucas v. Breg, Inc., 15-cv-258-BAS-NLS, 2016 WL 5464549, at *2 (S.D. Cal. Sept. 14 28, 2016). 15 The Court finds compelling reasons to seal the exhibits and GRANTS ECF 16 No. 307. 17 ECF No. 311 18 Quidel seeks to file under seal multiple exhibits. 19 As to exhibits F, HH, II, JJ, and NN, Quidel contends that LabCorp designated 20 these exhibits as confidential. (ECF No. 311, at 3.)3 The Court finds confidential 21 pricing information in these exhibits and finds them to be sealable. See Icon-IP Pty 22 Ltd., 2015 WL 984121, at *2. 23 Quidel designated Exhibits XX, YY, ZZ, AAA, BBB, and CCC as 24 confidential. “The information contained in Exhibits XX and ZZ reflect Quidel’s 25 confidential strategy in how to communicate with clinicians regarding whether they 26 would continue to order Thyretain despite the fact that it would no longer be offered 27 1 by LabCorp and the costs associated with doing so.” (ECF No. 311, at 3.) Exhibit 2 YY contains information on “the specific entities with whom Quidel contracted and 3 the amounts it spent to communicate with clinicians regarding Siemens’ false 4 advertising.” (Id. at 4.) Because customer lists and marketing strategies are 5 confidential, the Court agrees this information should be sealed. 6 Exhibit AAA contains discussion by Dr. Kahaly regarding activities “that are 7 confidential under the terms of his consulting agreement.” (Id.) “The public release 8 of the terms of Dr. Kahaly’s consulting agreement would severely harm Quidel 9 because it regularly negotiates and enters into consulting agreements related to the 10 development and promotion of its products and information about the activities that 11 Dr. Kahaly conducts on behalf of Quidel could be used against Quidel in future 12 negotiations for similar agreements. This would seriously impact Quidel's business 13 operations, as it relies upon the work of its consultants to conduct research, generate 14 knowledge and goodwill, and promote its products.” (Id.) The Court finds 15 compelling reasons to seal this exhibit. 16 Quidel contends Exhibits BBB and CCC contain “Quidel’s highly sensitive 17 financial information, reflecting its revenues, costs, strategic plans, and pricing for 18 Thyretain.” (Id. at 5.) The Court finds compelling reasons to seal these exhibits. 19 See Icon-IP Pty Ltd., 2015 WL 984121, at *2. 20 Siemens has designated Exhibits H, I, K, M, R, X, EE, GG, KK, QQ, and VV 21 as confidential. The Court has evaluated these documents and finds the redacted 22 information “contains confidential business material, such as marketing strategies, 23 product development plans, licensing agreements, and profit, cost, and margin data.” 24 See Cohen v. Trump, No. 13-cv-2519-GPC-WVG, 2016 WL 3036302, at *5 (S.D. 25 Cal. May 27, 2016). Disclosure of this information would cause competitive harm 26 to Siemens. 27 The Court finds compelling reasons to seal the exhibits and GRANTS ECF | | TH. CONCLUSION 2 The Court GRANTS the pending Motions to Seal: ECF Nos. 302, 304, 307, 3 ||311,316. Because Quidel now contends that Exhibits 8, 9, and 10 to the Declaration 4 || of Erik Haas filed in support of Siemens’ opposition to Quidel’s MSJ need not be 5 || filed under seal, Quidel must file these documents on the public docket within seven 6 || days of the date of this order. 7 IT IS SO ORDERED. 8 9 || DATED: August 17, 2020. (ip thig ( Wy han 10 Hoy. Cynthia Bashant United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28