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

United States District Court, N.D. California

April 2, 2015

REAL ACTION PAINTBALL, INC., et al., Defendants.


MARIA-ELENA JAMES, Magistrate Judge.


United Tactical Systems, LLC ("UTS") and related counter-Defendants filed this Motion to Seal following Real Action's public filing of a confidential settlement agreement between ATO and a third-party, as well as other sensitive documents. Dkt. No. 132. The Motion comes before the Court after a series of prior administrative motions to seal by both parties. The parties have begun an unnecessary pattern of antagonistically filing documents in the public docket while knowing the other party wishes to maintain the confidentiality of those documents. Having considered the parties' positions, the Court issues the following Order.


The center of the parties' dispute involves a settlement agreement between UTS's predecessor, Advanced Tactical Ordnance Systems, LLC ("ATO"), and a third-party, Conrad Sun. Real Action sought this document through a subpoena to Conrad Sun's attorneys, and upon learning of this subpoena, ATO objected, after which the parties filed letter briefs to Magistrate Judge Nandor Vadas in the related case disputing the discoverability of this document. ATO Case, Dkt. No. 88.[1] ATO argued that the settlement agreement had a confidentiality clause and that the settlement agreement and related documents contained ATO's confidential financial terms of the settlement and trade secrets. Id.

Judge Vadas ordered Sun's attorneys to produce the settlement agreement and instructed the parties to amend the protective order in the ATO case (ATO Case, Dkt. No. 77) to cover confidential documents produced by non-parties. ATO Case, Dkt. Nos. 105 & 110 ("The Court finds that ATO should be allowed to so designate such documents produced by a Non-Party in response to a subpoena if the document would otherwise qualify under the Protective Order for such a designation by ATO."). At the hearing, Judge Vadas explained that:

if the protective order doesn't already state it, it should be modified or an addendum made to it that in this particular instance, the production pursuant to these subpoenas, if they do in fact contain trade secrets or other highly confidential information that concerns the defendants in this matter, that they should also be subject to the protective order and both defendants or the producer-the third party producer of the documents can request that they be marked confidential.

Kirke Decl. ¶ 4, Dkt. No. 132-1. Real Action's counsel responded: "We'll make those changes, your Honor." Id. UTS asserts that "[w]ith this understanding, the Settlement Agreement was provided to [Real Action] shortly thereafter." Mot. at 2. This Court's November 10, 2014 Order did not revise Judge Vadas's decision concerning the protective order. See ATO Case, Dkt. No. 120.

The parties were unable to come to an agreement as to how the protective order should be modified, and they submitted competing versions to Judge Vadas. Mot. at 3. Judge Vadas has not ruled on those protective orders at this time. Id.

Now pending before the Court are motions to dismiss for lack of personal jurisdiction by defendants and counter-defendants Perfect Circle, Gary Gibson, Michael Blumenthal, and David Piell. As part of its opposition to the personal jurisdiction motions, Real Action submitted supporting evidence, including the settlement agreement between Sun and ATO. Dkt. Nos. 153-6; 159-4. The title of this document is "Confidential Settlement Agreement." Id. (both). Real Action gave UTS no notice that it was going to file this document. Kirke Decl. ¶ 5.

UTS also seeks to seal filings at docket numbers 131, 131-4, 131-5, 131-9, and 131-10. Mot. at 1. Docket number 131 is Real Action's opposition to the motions to dismiss for lack of personal jurisdiction; docket number 131-4 is the settlement agreement; docket number 131-5 is the guaranty for the settlement agreement; docket number 131-9 is a letter concerning the settlement with Sun; docket number 131-10 is an email between ATO's counsel and what appears to be another attorney.


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 (citations and internal quotation marks omitted).

The strong presumption of public access to judicial documents applies 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 ...

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