United States District Court, N.D. California
BOARD OF TRUSTEES OF THE KEN LUSBY CLERKS & LUMBER HANDLERS PENSION FUND, Plaintiff,
PIEDMONT LUMBER & MILL COMPANY, et al., Defendants.
ORDER REGARDING ADMINISTRATIVE MOTION TO SEAL RE:
DKT. NO. 94
HAYWOOD S. GILLIAM, Jr., District Judge.
On March 18, 2015, Plaintiff Board of Trustees of the Ken Lusby Clerks & Lumber Handlers Pension Fund filed an administrative motion seeking permission to publicly file fifteen documents designated as confidential by the defendants in this action. See Dkt. No. 94. The parties actively participating in the litigation agree that fourteen of the fifteen documents should not be sealed. Exhibits A through O attached to the Declaration of Sean T. Strauss (the "Strauss Declaration") are the subject of Plaintiff's administrative motion solely because: (1) William Myers has not responded to Plaintiff's request to remove his confidentiality designation as to those documents; and (2) Piedmont Lumber & Mill Company is unrepresented at this time and thus cannot consent to removing its designations. Id. at 3.
The only contested issue arising from Plaintiff's administrative motion is whether the expert report of Lawrence Wood (the "Wood Report" or "Exhibit P"), which contains detailed analysis of the defendants' financial investments and tax returns, should be sealed. The Court has read and considered the arguments and evidence offered by the parties, both in their written submissions to the Court and during the Case Management Conference held on this matter on March 24, 2015. For the foregoing reasons, the Court DENIES Plaintiff's administrative motion to seal as to Exhibits A through O of the Strauss Declaration ( i.e., those exhibits may be filed on the public docket) and orders the parties to meet and confer as to the information contained in the Wood Report as directed by this Order.
I. LEGAL STANDARD
"Two standards generally govern motions to seal documents.... First, a compelling reasons' standard applies to most judicial records. This standard derives from the common law right to inspect and copy public records and documents, including judicial records and documents.'" Pintos v. P. Creditors Ass'n, 605 F.3d 665, 678 (9th Cir. 2010) (quoting Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597 & n.7). "[A] strong presumption in favor of access' is the starting point." Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). To overcome this strong presumption, the party seeking to seal a judicial record must "articulate compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure, such as the public interest in understanding the judicial process" and "significant public events." Id. at 1178-79 (internal citations, quotation marks, and alterations 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." Id. at 1179 (citing Nixon, 435 U.S. at 598). "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." Id.
The court must "balance the competing interests of the public and the party who seeks to keep certain judicial records secret. After considering these interests, if the court decides to seal certain judicial records, it must base it decision on a compelling reason and articulate the factual basis for its ruling, without relying on hypothesis or conjecture." Id. at 1179. Civil Local Rule 79-5 supplements the compelling reasons standard set forth in Kamakana: the party seeking to file a document or portions of it under seal must "establish that the document, or portions thereof, are privileged, protectable as a trade secret or otherwise entitled to protection under the law.... The request must be narrowly tailored to seek sealing only of sealable material." Civil L.R. 79-5(b).
The second standard is a "good cause" standard. It applies to "private materials unearthed during discovery, as such documents are not part of the judicial record." Pintos, 605 F.3d at 678 (internal citation omitted). For such materials, "Rule 26(c) of the Federal Rules of Civil Procedure governs [ ], providing that a trial court may grant a protective order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.'" Id. This "good cause" standard presents a lower burden for the party wishing to seal documents than the "compelling reasons" standard, because "[t]he cognizable public interest in judicial records that underlies the compelling reasons' standard does not exist for documents produced between private litigants." Id.
A. Documents Designated as Confidential by William Myers and Piedmont Lumber & Mill Company
Under Local Rule 79-5(e)(1), a party designating a document as confidential must submit a declaration supporting that designation within four days of the filing of an administrative motion to file under seal. That four-day period elapsed without any defendant submitting a declaration supporting the confidential designation of the first fourteen documents attached to the Strauss Declaration. Nevertheless, the Court independently reviewed those documents and determined that they do not contain the type of confidential or proprietary information that could be used as 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. Instead, they appear to largely consist of routine commercial agreements and communications related to the properties that are the subject of this action.
Accordingly, this Court DENIES the administrative motion to seal as to Exhibits A through O of the Strauss Declaration. Those documents may be filed in the public record.
B. The Expert Report of Lawrence Wood
The only contested issue raised by Plaintiff's motion is the status of Exhibit P, the Wood Report. On March 23, 2014, Wendy Oliver filed a response to Plaintiff's administrative motion, arguing that the Wood Report should be sealed in its entirety because it "includes private and confidential information from nine years [of her] tax returns, including information about her personal investments, deductions, income, and other private information." Dkt. No. 95 at 1. Ms. Oliver further argues that public policy, California's constitutional right to privacy, and federal law support filing the tax-return information under seal. See id. at 1-3.
For its part, Plaintiff argues that the financial information related to the properties at issue in this case is directly relevant to the legal issues to be decided in connection with its forthcoming motion for summary judgment. See Dkt. No. 94 at 4. Plaintiff represents that the rental income received and the tax deductions taken by defendants in connection with those properties informs whether defendants' "commercial rental operations" constitute a trade or business under 29 U.S.C. § 1301(b)(1). See id. at ...