United States District Court, N.D. California
ORDER RE SEALING MOTION
WILLIAM ALSUP UNITED STATES DISTRICT JUDGE
Ford Motor Company moves to seal the amount it agreed to pay
to plaintiff First American Specialty Insurance Company in
connection with the forthcoming good-faith-settlement motion.
Defendants Carmax Auto Superstores California, LLC, and
Carmax Auto Superstores West Coast, Inc. oppose Ford's
American provided insurance for Anthony Santos's home in
Fremont, California, and acts as subrogee in this action.
First American alleges that insured purchased a 2002 Ford
F-150 from Carmax, which had a defective speed control
deactivation switch (“SCDS”). The SCDS was the
subject of a recall because it was known to fail without
warning and combust, but defendants failed to inform insured
of the recall. The defective SCDS caught fire while on
insured's property and caused damage to his home (Compl.
American sued Ford and Carmax, and Ford reached a settlement
with First American on April 28, 2017 (Dkt. No. 32). Ford
moves to seal the settlement amount in its forthcoming motion
for a determination of good-faith settlement on the grounds
that the settlement agreement includes a contractual
obligation to maintain the settlement's confidentiality,
and disclosing the settlement amount will cause Ford
prejudice in pending and future lawsuits. Carmax opposes
Ford's motion. For the reasons set forth herein,
Ford's request is Denied.
determine whether the “compelling reason” or the
“good cause” standard applies to this sealing
motion, the Court must first determine whether a motion for
good-faith settlement is dispositive or non-dispositive.
See Kamakana v. City & Cnty. of Honolulu, 447
F.3d 1172, 1178-80 (9th Cir. 2006). Our court of appeals has
not provided guidance on this issue and only two decisions in
this district have directly addressed it. In Prosurance
Group., Inc. v. Liberty Mutual Group, Inc., No.
10-CV-02600-LHK, 2011 WL 704456, at *1 (N.D. Cal. Feb. 18,
2011) (Judge Lucy Koh), Judge Koh held that “a motion
to determine good faith settlement is only tangentially
related to the merits of the underlying cause of
action” and should therefore be subject to the
good-cause standard for sealing. Since that ruling, one other
court in this district has considered a sealing motion in
connection with a determination of good faith settlement, and
likewise applied the good cause standard. Wendell v.
Johnson & Johnson, No. C 09-4124 CW, 2014 WL
12644224, at *2 (N.D. Cal. June 10, 2014) (Chief Judge
Claudia Wilken). The Court agrees with Judge Koh's
reasoning, and will therefore consider whether Ford has made
a particularized showing of good cause as to why this motion
should be granted.
must make a “particularized showing” of good
cause with respect to any individual document in order to
justify sealing the document. Kamakana, 447 F.3d at
1180. “Broad allegations of harm, unsubstantiated by
specific examples or articulated reasoning” are not
sufficient. Beckman Indus., Inc. v. Int'l Ins.
Co., 966 F.2d 470, 476 (9th Cir.1992) (internal
quotation marks and citation omitted). Moreover, Ford must
establish that “the document, or portions thereof [are]
privileged or protectable as a trade secret or otherwise
entitled to protection under the law.” Civil L.R.
support of its motion, Ford submits an attorney declaration
stating that disclosing the settlement amount will prejudice
Ford because “similar claims and lawsuits involving
Ford vehicles are still active and additional claims and
lawsuits can be brought” (Gaus Decl. ¶ 6). It
further observes that the settlement agreement was entered
into subject to a confidentiality clause and was marked
confidential pursuant to the parties' protective order
(¶¶ 3-4), and that making the amount of the
settlement public would contravene the public policy of
adhering to contractual obligations and promoting settlement
(Mot. at 2-3). Ford does not identify any relevant legal
authority supporting its arguments, instead mistakenly citing
only California state law in its motion.
reasoning is unpersuasive. The parties' private agreement
to keep the settlement confidential is insufficient reason to
seal the Court's records. Moreover, Ford's argument
“that the production of records may lead to . . .
exposure to further litigation will not, without more, compel
the court to seal . . . .” Kamakana, 447 F.3d
at 1179. The public has a strong interest in understanding
how this Court applies California's good faith settlement
law - the application of which would be constrained if the
Court cannot publicize its analysis of the settlement.
as Carmax points out, it is entitled to learn the amount that
Ford has agreed to pay in order to decide whether to oppose
Ford's motion to determine good faith settlement. Ford
has not explained how the non-settling defendant will know
the amount of the settlement if it is sealed. To afford
Carmax an opportunity to challenge the good faith settlement,
Carmax must know what it is up against.
foregoing reasons, Ford's administrative motion to seal
its settlement amount is Denied. Ford shall re-file its
settlement agreement consistent with ...