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United Tactical Systems, LLC v. Real Action Paintball, Inc.

United States District Court, N.D. California

January 21, 2015

UNITED TACTICAL SYSTEMS, LLC, Plaintiff,
v.
REAL ACTION PAINTBALL, INC., et al., Defendants.

ORDER RE: MOTION TO SEAL Re: Dkt. No. 118

MARIA-ELENA JAMES, Magistrate Judge.

BACKGROUND

Before the Court is Defendants' Motion to Seal "Amended Document, "[1] originally filed by Plaintiff UTS. Dkt. No. 118 ("Mot."). The Court previously granted another motion to seal by Defendants, finding good cause to seal portions of UTS's Preliminary Injunction Motion[2] (originally filed at Dkt. No. 27, now available in its redacted form at Dkt. No. 76-1). Dkt. No. 83 ("Dec. 2 Order"). The information in the Amended Document is substantially similar to the information the Court sealed in the Dec. 2 Order. Defendants thus seek an order sealing those similar portions of the Amended Document as well.

UTS opposes Defendants' Motion, arguing that Defendants have not met their burden to show compelling reasons for sealing the Amended Document, because, among other things, Defendants left this information unsealed in the earlier Indiana Litigation since July 12, 2013 (Dkt. No. 120, Ex. A (the Indiana Docket)), and likewise left the information unsealed in this case for approximately two months. Apparently, Defendants made a similar motion to seal in the Indiana Litigation on January 9, 2015. See Dkt. No. 120, Ex. B.[3] UTS also asserts that Defendants themselves have submitted unsealed documents that contain similar, if not more sensitive, information than what they now seek to seal. Finally, UTS raises two issues with the Dec. 2 Order: (1) UTS asserts the Dec. 2 Order applied the wrong standard to the motion to seal, specifically only finding "good cause" to seal, rather than "compelling reasons" to seal; and (2) UTS notes that while originally it was given the opportunity to respond to Defendants' First Motion to Seal ( see Dkt. No. 79, UTS's Opposition to Dkt. No. 76), it did not have the opportunity to respond to Defendants' revised motion (Dkt. No. 82). Defendants have objected to UTS's request that the Court reconsider the Dec. 2 Order ( see Dkt. No. 121), and UTS has objected to Defendants' objection as it came in the form of a Reply brief, which is not expressly permitted by the Local Rules. See Dkt. No. 122.

DISCUSSION

A. Legal Standard

A "compelling reasons" standard applies to a motion to seal most judicial records. See Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (holding that "[a] party seeking to seal a judicial record... bears the burden of... meeting the compelling reasons' standard"). This standard derives from the common law right "to inspect and copy public records and documents, including judicial records and documents." Id. (citation and internal quotation marks omitted). To limit this common law right of access, a party seeking to seal judicial records must generally show that "compelling reasons supported by specific factual findings... outweigh the general history of access and the public policies favoring disclosure." Id. at 1178-79 (internal quotation marks and citations omitted).

The strong presumption of public access to judicial documents applies fully to dispositive motions because the resolution of a dispute on the merits is at the heart of the interest in ensuring that the public understands the judicial process. Id. at 1179. The presumption does not apply in the same way to non-dispositive motions, "such that the usual presumption of the public's right of access is rebutted." Id. (citing Phillips v. General Motors Corp., 307 F.3d 1206, 1213 (9th Cir. 2002). "Good cause" is the proper standard when parties wish to keep records attached to a non-dispositive motion under seal. Pintos v. P. Creditors Ass'n, 605 F.3d 665, 678 (9th Cir. 2010). Simply put, records attached to dispositive motions require the court to apply the compelling reasons standard, whereas records attached to non-dispositive motions require the court to apply the "good cause" standard. See id. at 678-79.

Under the "compelling reasons" standard, a court must weigh "relevant factors, " base its decision "on a compelling reason, " and "articulate the factual basis for its ruling, without relying on hypothesis or conjecture." Id. at 679 (quoting Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir. 1995)). "Relevant factors" include the "public interest in understanding the judicial process and whether disclosure of the material could result in improper use of the material for scandalous or libelous purposes or infringement upon trade secrets." Id. at 679 n.6 (citation omitted). 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. Kamakana, 447 F.3d at 1179.

Under the "good cause" standard, the party seeking protection bears the burden of showing specific prejudice or harm will result if no protective order is granted. If a court finds particularized harm will result from disclosure of information to the public, then it balances the public and private interests to decide whether a protective order is necessary. See Phillips, 307 F.3d at 1210-11.

B. Application to the Case at Bar

1. Dec. 2 Order to Seal

The Court agrees that UTS should have been given the opportunity to respond to Defendants' revised motion to seal prior to issuing the Dec. 2 Order. See Civ. L.R. 7-11. Thus, the Court will now sua sponte reconsider the Dec. 2 Order. See United States v. Smith, 389 F.3d 944, 949 (9th Cir. 2004) (holding that a district court may sua sponte reconsider a prior, interlocutory ruling over which it has continuing jurisdiction); Amarel v. Connell, 102 F.3d 1494, 1515 (9th Cir. 1996), as amended (Jan. 15, 1997) ("the interlocutory orders and rulings made pre-trial by a district judge are subject to modification by the district judge at any time prior to final judgment" (citation and internal marks omitted)).

The information sealed by the Dec. 2 Order relates to UTS's Preliminary Injunction Motion, a non-dispositive motion. See Helio, LLC v. Palm, Inc., 2007 WL 1063507, at *2 (N.D. Cal. Apr. 9, 2007) ("A ruling on a preliminary injunction, is not of course, a ruling on a dispositive motion. It is a preliminary assessment of the likelihood of success where there is a danger of an irreparable injury."). However, while not a dispositive motion, the Court agrees with the line of cases that treats preliminary injunctions as dispositive motions for the purpose of sealing, because preliminary injunctions go to the merits of the case and are not merely "tangentially related" to the cause of action. See F.T.C. v. AMG Servs., Inc., 2012 WL 3562027, at *1 ...


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