Houston Casualty Company v. Cibus US LLC ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 HOUSTON CASUALTY COMPANY, Case No. 19-cv-00828-BAS-LL 12 Plaintiff, ORDER ON MOTIONS TO SEAL 13 v. (ECF Nos. 35, 41, 44, 54, 57, 64, 66, 74) 14 CIBUS US LLC, 15 Defendant. 16 17 And Related Counterclaim 18 19 20 This case is an insurance coverage dispute between Houston Casualty Company 21 (“HCC”) and Cibus US LLC (“Cibus”). Cibus is a company that develops seeds for crops, 22 including hybrid canola plants. Cibus developed its canola hybrids to be tolerant of a 23 specific herbicide. It then sold seeds to commercial growers. But after some of those 24 growers applied herbicide, their canola hybrids suffered more phytotoxicity—plant 25 damage—than expected. Cibus turned to HCC, its insurer, to cover the growers’ losses 26 under an errors and omissions policy. HCC paid out the maximum of its policy with Cibus 27 subject to the right to seek reimbursement. The insurer then sued, seeking a determination 28 that its policy did not cover the growers’ crop injuries. 1 The parties filed several motions, including a motion to bifurcate, cross-motions for 2 summary judgment, and motions to exclude experts. The Court resolved several of these 3 motions at oral argument, but other motions remain pending. And as part of these motions, 4 HCC and Cibus filed eight motions to seal. All the sealing motions were unopposed. After 5 reviewing the motions, the Court determined it needed more information from Cibus to 6 apply the sealing standard. (ECF No. 79.) Cibus filed a response to the Court’s order, 7 including two supporting declarations from employees and proposed redactions to many 8 of the exhibits lodged under seal. (Resp. to Order, ECF No. 82.) Hence, the Court now 9 resolves the sealing motions. 10 LEGAL STANDARD 11 “[T]he courts of this country recognize a general right to inspect and copy public 12 records and documents, including judicial records and documents.” Nixon v. Warner 13 Commc’ns, Inc., 435 U.S. 589, 597 (1978). “Unless a particular court record is one 14 ‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the starting point.” 15 Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (citing Foltz v. 16 State Farm Mut. Auto Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). “The presumption 17 of access is ‘based on the need for federal courts, although independent—indeed, 18 particularly because they are independent—to have a measure of accountability and for the 19 public to have confidence in the administration of justice.” Ctr. for Auto Safety v. Chrysler 20 Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 2016) (quoting United States v. Amodeo, 71 F.3d 21 1044, 1048 (2d Cir. 1995)). 22 A party seeking to seal a judicial record bears the burden of overcoming the strong 23 presumption of access. Foltz, 331 F.3d at 1135. The showing required to meet this burden 24 depends upon whether the documents to be sealed relate to a motion that is “more than 25 tangentially related to the merits of the case.” Ctr. for Auto Safety, 809 F.3d at 1102. When 26 the underlying motion is more than tangentially related to the merits, the “compelling 27 reasons” standard applies. Id. at 1096–98. 28 1 “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in 2 disclosure and justify sealing court records exist when such ‘court files might have become 3 a vehicle for improper purposes,’ such as the use of records to gratify private spite, promote 4 public scandal, circulate libelous statements, or release trade secrets.” Kamakana, 447 5 F.3d at 1179 (quoting Nixon, 435 U.S. at 598). However, “[t]he mere fact that the 6 production of records may lead to a litigant’s embarrassment, incrimination, or exposure 7 to further litigation will not, without more, compel the court to seal its records.” Id. (citing 8 Foltz, 331 F.3d at 1136). The decision to seal documents is “one best left to the sound 9 discretion of the trial court” upon consideration of “the relevant facts and circumstances of 10 the particular case.” Nixon, 435 U.S. at 599. 11 STANDING ORDER FOR CIVIL CASES 12 Consistent with the presumptive right of public access to court records, this Court’s 13 Standing Order for Civil Cases provides: 14 The Court may seal documents to protect sensitive information, however, the 15 documents to be filed under seal will be limited by the Court to only those documents, or portions thereof, necessary to protect such sensitive 16 information. 17 Parties seeking a sealing order must provide the Court with: (1) a specific 18 description of particular documents or categories of documents they need to 19 protect; and (2) declarations showing a compelling reason or good cause to protect those documents from disclosure. The standard for filing documents 20 under seal will be strictly applied. 21 . . . . 22 23 The fact that both sides agree to seal or that a protective order was issued at the onset of the case alone is insufficient cause for sealing. 24 25 (Standing Order ¶ 5.) 26 // 27 // 28 // 1 ANALYSIS 2 I. HCC’s Motion to Seal (ECF No. 35) 3 HCC moves to seal portions of: 4 1. Its Summary Judgment Motion; 5 2. Exhibits B through H, J through O, Q, S, U, W through GG, II, and KK to the 6 Summary Judgment Motion; 7 3. Its Daubert Motion to Exclude or Limit the Expert Testimony of Dr. Jim 8 Radtke; and 9 4. Exhibits E, G, H through N, and Q through U to the Daubert Motion. 10 (ECF No. 35.) As the Court noted, many of these documents are items where Cibus was 11 the proponent of keeping them secret under the parties’ stipulated protective order. 12 Summary Judgment Motion. Cibus “does not contend that HCC’s brief requires 13 redaction, with the exception of those portions redacted on page 13, lines 17 through 20; 14 and page 19, line 16 through page 20, line 4, which contain attorney-client privileged 15 information.” (Resp. to Order 2.) The Court agrees. See Guidiville Rancheria of Cal. v. 16 United States, No. 12-cv-1326, 2013 WL 6571945, at *9 (N. D. Cal. Dec. 13, 2013) (“[T]he 17 attorney-client privilege . . . establishes compelling reasons for sealing.”). Accordingly, 18 the Court directs HCC to file a revised copy of its summary judgment brief on the docket 19 as part of a “Notice Regarding Exhibit Attachment” that links to HCC’s Motion for 20 Summary Judgment and only redacts the attorney-client privilege information. Relatedly, 21 Exhibit GG is the source of the attorney-client privileged information mentioned in HCC’s 22 brief. Thus, the Court finds retaining under seal the redacted portions of this exhibit is 23 appropriate. 24 For Exhibit B to HCC’s Summary Judgment Motion, a deposition of Cibus’s Dr. 25 Jim Radtke, Cibus proposes more limited redactions regarding the parentage of Cibus’s 26 canola hybrids and their development process. Cibus argues sealing this information is 27 appropriate because it meets the definition of a trade secret and releasing the information 28 could harm its competitive standing. (Resp. to Order 3–5.) The company submits a 1 supporting declaration from Dr. Radtke. (ECF No. 82-2.) The Court is satisfied that there 2 are compelling reasons to seal this information in an insurance coverage dispute. See 3 Kamakana, 447 F.3d at 1179. Given Cibus’s revised, redacted version is already on the 4 docket, no further action is necessary. The Court reaches the same conclusion for Exhibit 5 E to HCC’s Summary Judgment Motion, which contains similar information from Dr. 6 Radtke’s deposition. No revised version is needed for this item. Finally, the Court reaches 7 the same conclusion for Exhibit L, which again involves developmental materials 8 concerning Cibus’s hybrids. As Cibus has filed a revised version of this item with 9 redactions, no further action is necessary. 10 For Exhibit C to HCC’s Summary Judgment Motion, Cibus “does not contend that 11 this exhibit need remain under seal.” (Resp. to Order 5.) Cibus states the same for Exhibit 12 G, Exhibit H, Exhibit M, Exhibit N, Exhibit O, Exhibit S, Exhibit U, Exhibit W, and Exhibit 13 II. Hence, the Court directs HCC to file unredacted copies of these exhibits as part of the 14 Notice Regarding Exhibit Attachment mentioned above. 15 For Exhibit D, this item is a monthly report to Cibus’s Board of Directors that 16 describes the status of various business initiatives and research and development efforts 17 across Cibus. HCC relies on one paragraph of this report for its Summary Judgment 18 Motion. Cibus “does not contend that the entirety of this exhibit, or this cited portion of 19 the exhibit,” should stay sealed. (Resp. to Order 6.) Cibus argues, however, that “because 20 other portions of this report—all of which have no bearing on the merits of this case— 21 contain sensitive and confidential business information, the Court should allow them to be 22 redacted.” (Id.) Cibus provides a supporting declaration from a member of its senior 23 management team (ECF No. 82-1) and proposed redactions. The Court finds Cibus meets 24 the burden to show this information should be sealed. See Ctr. for Auto Safety, 809 F.3d 25 at 1097 (noting compelling reasons exist when records “might be used . . . ‘as sources of 26 business information that might harm a litigant’s competitive standing’” (quoting Nixon, 27 435 U.S. at 598)). Given Cibus’s redacted version is already on the docket, no further 28 action is necessary. The Court reaches the same conclusion for Exhibit K, which involves 1 similar information. Again, no further action is necessary in light of Cibus filing the exhibit 2 with limited redactions. 3 For Exhibit F, this item has limited redactions to conceal the identities of Cibus’s 4 customers who are not parties to this action. Cibus argues the identities of these customers 5 are not generally known to the public and those customers have an interest in maintaining 6 their privacy. Further, the company contends its customers’ identities are inconsequential 7 to the merits of this insurance coverage dispute, substantially attenuating the need for 8 public access. (Resp. to Order 8.) These redactions are narrowly tailored, and the Court 9 agrees that the identifying information of Cibus’s customers is inconsequential to the 10 merits of this coverage dispute. Hence, the Court will maintain this information under seal, 11 and no further action is necessary. Several other exhibits have narrow redactions to conceal 12 the personal information of individuals or the identities of Cibus’s customers. Under the 13 same reasoning, the Court finds it appropriate to seal those parts of Exhibit J, Exhibit Q, 14 Exhibit X, Exhibit Y, Exhibit Z, Exhibit AA, Exhibit BB, Exhibit CC, Exhibit DD, Exhibit 15 EE, Exhibit FF, and Exhibit KK. No further action is needed for these exhibits. 16 Daubert Motion–Dr. Radtke. Starting with the redactions to HCC’s brief, Cibus 17 says the brief does not require redaction, “with the exception of those portions redacted on 18 page 7, lines 14 through page 8, line 1; and page 8, footnote 7 (lines 27 through 28), which 19 set forth the quantitative results of Cibus’s trials on its canola hybrids, and page 11, 20 footnote 12 (lines 26 through 28), which sets forth the parentage of Cibus’ C5507 and 21 C5522 canola hybrids.” (Resp. to Order 17–18.) Like above, Cibus argues there are 22 compelling reasons to seal its proprietary information concerning the design and testing of 23 its canola hybrids. The Court agrees. Accordingly, the Court directs HCC to file a revised 24 copy of its brief on the docket as part of a “Notice Regarding Exhibit Attachment” that 25 links to HCC’s Dr. Radtke Daubert Motion and only redacts the information that Cibus 26 requests remain under seal. 27 For Exhibit E to the Dr. Radtke Daubert Motion, Cibus “does not contend that this 28 exhibit need remain under seal.” (Resp. to Order 18.) Cibus states the same for Exhibit G, 1 Exhibit J, Exhibit M, Exhibit N, and Exhibit Q. (Id. 18–20.) Hence, the Court directs 2 HCC to file unredacted copies of these exhibits as part of the Notice Regarding Exhibit 3 Attachment for this Motion mentioned above. 4 For Exhibit H, which contains excerpts of the deposition of Dr. Radtke, Cibus 5 contends redactions are not warranted except those portions regarding Cibus’s 6 development process for its canola hybrids and its trials on the hybrids. (Resp. to Order 7 18–19.) For the same reasons as above, the Court finds sealing this information is 8 appropriate and accepts Cibus’s proposed redactions. As this revised version is already on 9 the docket, no further action is necessary. The same holds true for several other exhibits 10 where Cibus submits proposed redactions concerning the quantitative results of its trials 11 for its hybrids or the company’s design process. These are Exhibit I, Exhibit K, Exhibit L, 12 Exhibit R, Exhibit S, Exhibit T, and Exhibit U. Again, as Cibus has already filed revised 13 versions of these documents, no further action is necessary. 14 Thus, the Court grants in part and denies in part HCC’s Motion to Seal (ECF No. 15 35). 16 II. Cibus’s Motion to Seal (ECF No. 41) 17 Cibus moves to seal unredacted versions of Exhibits F, G, and H to the Declaration 18 of Douglas J. Brown filed in support of Cibus’s Motion for Partial Summary Judgment 19 (ECF No. 40). (ECF No. 41.) The redacted information is the names and addresses of the 20 company’s commercial customers who participated in the canola hybrid program. The 21 Court previously recognized this information may be sealable but requested Cibus support 22 its motion with evidence. Cibus now has done so in connection with the items discussed 23 above that concern the same information. The Court finds sealing this information is 24 appropriate for the same reasons. Hence, the Court grants Cibus’s Motion to Seal (ECF 25 No. 41). 26 III. Cibus’s Motion to Seal (ECF No. 44) 27 Cibus moves to seal an unredacted version of Exhibit A to the Declaration of 28 Douglas J. Brown filed in support of Cibus’s Motion to Exclude the Expert Opinion of 1 Jerry L. Cass (ECF No. 43). (ECF No. 44.) This request seeks to seal the same type of 2 information as Cibus’s Motion to Seal (ECF No. 41) discussed immediately above. The 3 analysis is identical. The Court likewise now grants this Motion to Seal (ECF No. 44). 4 IV. HCC’s Motion to Seal (ECF No. 54) 5 HCC moves to seal Exhibits C, D, and E to its Reply in support of HCC’s Dr. Radtke 6 Daubert Motion (ECF No. 38). (ECF No. 54.) Cibus responds by proposing narrow 7 redactions to the same kind of information the Court found appropriate to seal above for 8 items attached to HCC’s moving papers. The Court reaches the same conclusion here, and 9 no further action is necessary because Cibus has already filed revised versions of these 10 documents. Therefore, the Court grants in part and denies in part this Motion to Seal (ECF 11 No. 54). 12 V. Cibus’s Motion to Seal (ECF No. 57) 13 Cibus moves to seal unredacted versions of Exhibit E and Exhibit F to the 14 Declaration of Douglas J. Brown filed in support of Cibus’s Opposition to HCC’s Motion 15 to Exclude or Limit The Expert Testimony of Denise Schmidt and Christopher French 16 (ECF No. 56). (ECF No. 57.) Like above, this request concerns limited information about 17 Cibus’s customers. In light of Cibus augmenting its request, the Court will maintain this 18 information under seal and therefore grants Cibus’s Motion to Seal (ECF No. 57). 19 VI. HCC’s Motion to Seal (ECF No. 64) 20 HCC moves to seal Exhibits PP through VV to its Opposition to Cibus’s Motion for 21 Partial Summary Judgment (ECF No. 62). (ECF No. 64.) Cibus responds that Exhibit PP, 22 Exhibit QQ, Exhibit RR, Exhibit SS, Exhibit UU, and Exhibit VV contain commercially 23 sensitive information concerning the design and testing of its canola hybrids. (Resp. to 24 Order 24–27.) Cibus submits proposed redactions that are narrowly tailored to this 25 information. The Court again finds sealing this information is appropriate, and no further 26 action is necessary because Cibus has filed revised versions of these documents. 27 As to Exhibit TT, “Cibus does not contend that this exhibit need remain under seal.” 28 (Resp. to Order 26.) Hence, the Court directs HCC to file an unredacted copy of this 1 exhibit as a Notice Regarding Exhibit Attachment to its Opposition to Cibus’s Motion for 2 Partial Summary Judgment (ECF No. 62). Accordingly, the Court grants in part and denies 3 in part HCC’s Motion to Seal (ECF No. 64). 4 VII. Cibus’s Motion to Seal (ECF No. 66) 5 Cibus moves to seal unredacted versions of Exhibit C and Exhibit E to the 6 Declaration of Douglas J. Brown filed in connection with Cibus’s Opposition to HCC’s 7 Motion for Summary Judgment (ECF No. 63). (ECF No. 66.) Again like above, this 8 request concerns limited information about Cibus’s customers. In light of Cibus 9 augmenting its request, the Court will maintain this information under seal and hence 10 grants Cibus’s Motion to Seal (ECF No. 66). 11 VIII. HCC’s Motion to Seal (ECF No. 74) 12 HCC moves to seal Exhibits YY, AAA, and BBB to HCC’s Reply in Support of Its 13 Motion for Summary Judgment (ECF No. 71). (ECF No. 74.) Cibus responds that Exhibit 14 AAA need not remain under seal. (Resp. to Order 28.) Hence, the Court directs HCC to 15 file an unredacted copy of this exhibit as a Notice Regarding Exhibit Attachment to its 16 Reply in Support of Its Motion for Summary Judgment (ECF No. 71). For the other items, 17 Cibus argues they are nearly identical to items analyzed by the Court above for HCC’s 18 Summary Judgment Motion. (Resp. to Order 27–28.) The Court agrees, and no further 19 action is necessary for these items. Consequently, the Court grants in part and denies in 20 part HCC’s Motion to Seal (ECF No. 74). 21 CONCLUSION 22 In light of the foregoing, the Court: 23 1. GRANTS IN PART and DENIES IN PART HCC’s Motion to Seal (ECF 24 No. 35); 25 2. GRANTS Cibus’s Motion to Seal (ECF No. 41); 26 3. GRANTS Cibus’s Motion to Seal (ECF No. 44); 27 4. GRANTS IN PART and DENIES IN PART HCC’s Motion to Seal (ECF 28 No. 54); 1 5. GRANTS Cibus’s Motion to Seal (ECF No. 57); 2 6. GRANTS IN PART and DENIES IN PART HCC’s Motion to Seal (ECF No. 3 64); 4 7. GRANTS Cibus’s Motion to Seal (ECF No. 66); and 5 8. GRANTS IN PART and DENIES IN PART HCC’s Motion to Seal (ECF No. 6 7A). 7 The Court will not direct the Clerk to comb through the voluminous lodged filings 8 divide out the exhibits that should now be publicly filed. Rather, as identified in italics 9 || above, the Court ORDERS HCC to separate and file certain lodged exhibits publicly on 10 || the docket. HCC shall also file revised versions of the briefs discussed above. HCC shall 11 so no later than October 18, 2021. Finally, the Court directs the Clerk of Court to 12 accept and file under seal all the lodged documents for these motions to seal. (ECF Nos. 13 37, 42, 45, 55, 58, 65, 67, 75.) 14 IT IS SO ORDERED. 15 16 ||DATED: September 20, 2021 ( y tdig □□ Ly han £ 17 Hoy. Cynthia Bashant 8 United States District Judge 19 20 21 22 23 24 25 26 27 28