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In Re Hydroxycut Marketing and Sales

March 11, 2011

IN RE HYDROXYCUT MARKETING AND SALES PRACTICES LITIGATION


The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART EX PARTE APPLICATION TO FILE UNDER SEAL CERTAIN EXHIBITS

Defendant Kerr Investment Holding Corp. f/k/a Iovate Health Sciences Group Inc. ("Defendant") has filed an ex parte application to file under seal certain exhibits to Plaintiff's Memorandum of Points and Authorities in Opposition to Defendant's Consolidated Motion to Dismiss for Lack of Personal Jurisdiction. For the reasons discussed below, Defendant's motion is GRANTED IN PART and DENIED IN PART.

I. GOVERNING LAW

The courts in this country recognize a "general right to inspect and copy public records and documents, including judicial records and documents." Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597 (1978). Unless a court record falls within the limited category of records "traditionally kept secret," a "strong presumption in favor of access is the starting point." Kamakana v. City and County of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006). The strong presumption of access to judicial records applies fully to discovery documents attached to dispositive motions. San Jose Mercury News, Inc. v. U.S. Dist. Ct., 187 F.3d 1096, 1102 (9th Cir. 1999).

The party seeking to seal a judicial record bears the burden of overcoming this strong presumption by articulating compelling reasons supported by specific factual findings. Foltz v. State Farm Mutual Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003). As explained by the Ninth Circuit:

In general, "compelling reasons" sufficient to outweigh the public's interest in disclosure and justify sealing court records exist when such "court files might have become a vehicle for improper purposes," such as the use of records to gratify private spite, promote public scandal, circulate libelous statements, or release trade secrets. Nixon, 435 U.S. at 598, 98 S.Ct. 1306; accord Valley Broadcasting Co., 798 F.2d at 1294.

Kamakana, 447 F.3d at 1172. "[T]he common-law right of inspection has bowed before the power of a court to insure that its records are not used . . . as sources of business information that might harm a litigant's competitive standing." Nixon, 435 U.S. at 598. However, "The mere fact that the production of records may lead to a litigant's embarrassment, incrimination, or exposure to further litigation will not, without more, compel the court to seal its records. Kamakana, 447 F.3d at 1172.

II. DISCUSSION

Defendant seeks to file under seal Exhibits 1-7, 9-12, 14, 15, 19-23, 25-59, 61-243, 253 and 254. The Court has carefully reviewed each of the exhibits and concludes that there are compelling reasons to file some, but not all, of the exhibits under seal.

The Court GRANTS the motion to seal as to the following exhibits, or portions thereof, because they reveal: private information that could cause injury upon being made public; trade secrets; and information akin to trade secrets that could cause competitive harm if publicly divulged.

* Exhibit 1 - p. 138:3, because it reveals the work e-mail address of Jo-Ann Heikkila which could expose Ms. Heikkila to unnecessary harassment. Plaintiff shall redact this portion of the deposition and electronically file the redacted exhibit on the public docket.

* Exhibit 2 - pp. 63:19-64:2, which discuss information on a tax return (information that is confidential under 26 U.S.C. § 6103); pp. 100:22 & 101:19-24, which reveal the e-mail address of Fernando Pica and others employed by the Iovate group of companies; pp. 147:13-169-11, which discuss specific information on tax returns and related filings; pp. 170:3-23, which reveal pricing terms in distribution agreements; pp. 174:5-196:9; 199:6-202:10; 210:17-229:23, which reveal detailed information about wages and compensation of officers and directors, profit-sharing plans, company profit and loss, and company assets and liabilities. Plaintiff shall redact the portions of Pica's deposition identified above and shall file the redacted exhibit on the public docket.

* Exhibits 30-33. These are agreements between Iovate entities and retailers who sell their products. The agreements include pricing and marketing information.

* Exhibits 40-52. These are state, federal, and T2 Corporation income tax returns. * Exhibits 55-56. These banking agreements reveal account numbers. Plaintiff shall redact the account numbers ...


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