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Autodesk, Inc. v. Alter

United States District Court, N.D. California

July 21, 2017

AUTODESK, INC., Plaintiff,
v.
JOSEPH ALTER, et al., Defendants.

          ORDER RE ADMINISTRATIVE MOTION TO SEAL DKT. NO. 94

          William H. Orrick United States District Judge

         Autodesk has filed a motion to seal in conjunction with its First Amended Complaint (“FAC”). Dkt. No. 94. It seeks to seal one document that it has designated confidential, Exhibit B, two documents designated confidential by Alter, Exhibits E & F, and redacted portions of the FAC, where is quotes language from Exhibits E & F. Id. Because these documents are all related to Autodesk's FAC, they are central to the merits of Autodesk's claims against Alter and the compelling justification standard for sealing applies. See Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1101 (9th Cir. 2016), cert. denied sub nom. FCA U.S. LLC v. Ctr. for Auto Safety, 137 S.Ct. 38 (2016); Krieger v. Atheros Comm'cns, Inc., No. 11-CV-00640-LHK, 2011 WL 2550831, at *1 (N.D. Cal. Jun. 25, 2011) (applying compelling justifications standard to request to file First Amended Complaint and related exhibits under seal).

         Requests to seal must be narrowly tailored to cover only specific potions of documents containing truly confidential and highly sensitive information. Under Local Rule 79-5, the party designating certain documents as confidential must file a declaration in support of any administrative motion to seal those documents. L.R. 79-5(d)(1); 79-5(e)(1). Sealing declarations should be made by individuals with knowledge, which generally means the clients seeking to protect their information, not their attorneys. They must be supported by specific factual findings rather than conclusory assertions of harm. See generally WHO Standing Order on Administrative Motions to Seal (Effective 6/2014).

         Under the compelling reasons standard, a court may only seal records if it finds “a compelling reason and articulate[s] the factual basis for its ruling, without relying on hypothesis or conjecture.” Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2006). The court must “conscientiously balance[] the competing interests of the public and the party who seeks to keep certain judicial records secret.” Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003). Some compelling reasons that might justify sealing records include when the court record might be abused to “gratify private spite or promote public scandal” or when the record contains “sources of business information that might harm a litigant's competitive standing.” Nixon v. Warner Commnc'ns, Inc., 435 U.S. 589, 598-99 (1978). This is a higher standard than the “good cause” standard which permits sealing of documents that might cause a litigant annoyance, embarrassment, oppression, or undue burden or expense, and which applies to documents filed in conjunction with discovery motions unrelated to the merits of a case. Ctr. for Auto Safety, 809 F.3d at 1097.

         Autodesk has filed a declaration from one of its attorneys in support of sealing Exhibit B, a confidential licensing agreement between Autodesk and Disney. See Huckelbridge Decl. (Dkt. No. 94-2). Huckelbridge asserts that the license agreement contains “confidential business information” that has not been shared with Autodesk's competitors, customers, or with the general public, and that disclosure of this information “would cause serious competitive and business harm to Autodesk by giving third parties the opportunity to benefit from Autodesk's proprietary information.” Huckelbridge Decl. ¶ 4. He also asserts that Exhibit B contains “proprietary Disney information that Autodesk is contractually required to keep confidential.” Id. Huckelbridge's vague and conclusory statements that Autodesk will be harmed if the license agreement is released are not sufficient to meet the compelling justification standard and justify sealing the entire licensing agreement. Further, while Autodesk may have a contractual obligation to keep information in the licensing agreement confidential, such an obligation does not, on its own, meet the compelling reasons standard. See e.g., No Cost Conference, Inc. v. Windstream Comm'cns, Inc., 940 F.Supp.2d 1285 (S.D. Cal. 2013) (fact that document was covered by confidentiality agreement was insufficient to meet compelling reasons test).

         Autodesk's conclusory declaration is not sufficient to meet the compelling justification standard. Autodesk has not distinguished between its own proprietary information and Disney's, has not provided specific factual explanations as to how it will be harmed if this information is released, and, has not made a credible effort to narrowly tailor its request, requesting instead to seal the entirety of the licensing agreement. Autodesk may file a supplemental, narrowly tailored request to seal Exhibit B. Any declaration should be filed by someone with knowledge. With regard to Disney's proprietary information, that may require Disney filing a separate declaration in support of the sealing. Autodesk will have until August 4, 2017 to file a supplemental declaration in support of sealing Exhibit B; otherwise, it will be unsealed without further order.

         The remaining three documents, Exhibit E, F, and the FAC contain information that has been designated confidential by Alter. Exhibits E and F are emails between Alter and Disney discussing, in broad terms, a settlement agreement between Disney and Alter, and the FAC contains quotes from these documents. Under Local Rule 79-5, the designating party must file a declaration in support of sealing any confidential information within four days of the filing of the sealing motion. Alter has not filed any declaration in support of sealing these documents and it does not appear that there are compelling reasons to seal any information in Exhibit E, Exhibit F, or the FAC. The request to seal these documents is DENIED.

         The current disposition of the sealing motion is summarized in the chart below.

Dkt. No. 94

Autodesk’s First Amended Complaint for Declaratory Judgment and Breach of Contract

Document Sought to Be Sealed

Dkt. No.

Portions of Document Sought to Be Sealed

Designating Party

Sealing Decl.

Basis for Sealing

Ruling

First Amended Complaint 94-5 Redacted Portions Joseph Alter, Inc. & Joseph Alter None Protective Order DENIED –

Unseal

Exhibit B to First

Amended

Complaint

94-6 Entire Document Autodesk / Disney Huckelbridge Decl. Dkt. No. 94-2 Confidential business information regarding a license between Autodesk and Disney. Proprietary third party information that Autodesk is contractually required to keep confidential. DENIED –

Remain

Sealed

Exhibit E to First

Amended

Complaint

94-7 Entire Document Joseph Alter, Inc. & Joseph Alter None Protective Order DENIED –

Unseal

Exhibit F to First

Amended

Complaint

94-8 Entire Document Joseph Alter, Inc. & Joseph Alter None Protective Order DENIED –

Unseal


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