United States District Court, D. Arizona
JAMES A. TEILBORG, Senior District Judge.
Pending before the Court is Defendants' motion to seal its motion to dismiss, filed as Doc. 33 and captioned as "Defendants' Motion to Seal (I) Defendants RPost International Limited's and RMail Limited's Motion to Dismiss Counts II-XII of the Complaint Under Fed.R.Civ.P. 12(b)(1), (II) Declaration of Zafar Khan in Support Thereof, and (III) Exhibits A and B to the Khan Declaration Pursuant to LRCiv 5.6" (the "Motion"). The Court now rules on the Motion.
I. Legal Standard
The Ninth Circuit Court of Appeals has recognized "a strong presumption in favor of access to court records." Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003). The public has a general right of access "to inspect and copy... judicial records and documents, " Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597 (1978), which "extends to pretrial documents filed in civil cases." Foltz, 331 F.3d at 1134. The only exceptions are those documents that have "traditionally been kept secret for important policy reasons, " namely grand jury transcript and certain warrant materials. See Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006).
Because of the strong presumption in favor of access to court records, a party seeking to seal a judicial record "bears the burden of overcoming this strong presumption by meeting the compelling reasons' standard." Id. That party 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." Id. at 1178-79 (internal quotation marks and citations omitted). A court deciding to seal judicial records must "base its decision on a compelling reason and articulate the factual basis for its ruling, without relying on hypothesis or conjecture." Id. at 1179 (quoting Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir. 1995)).
"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. (quoting 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.
Accordingly, a party's allegations that material is "confidential" or "business information" are insufficient to justify sealing court records containing such material unless the party proves the existence of compelling reasons such as those set forth in Kamakana. Krause v. Nev. Mut. Ins. Co., 2013 WL 3776146, at *5 (D. Nev. July 16, 2013) (citing Kamakana, 447 F.3d at 1179). Moreover, because "confidentiality alone does not transform business information into a trade secret, " a party alleging trade secret protection as a basis for sealing court records must show that the business information is in fact a trade secret. St. Clair v. Nellcor Puritan Bennett LLC, 2011 WL 5335559, at *2 (D. Ariz. Nov. 7, 2011). Thus, only in extremely limited circumstances will confidential information actually merit the sealing of court records. See Kamakana, 447 F.3d at 1182 (finding that conclusory statements about the content of documents did not provide "compelling reasons sufficiently specific to bar the public access to the documents").
Defendants' sole basis for sealing their motion to dismiss is "because (i) the Khan Declaration and Exhibits A and B thereto contain Defendants' highly-confidential information and (ii) the Motion to Dismiss, which relies on the Khan Declaration and Exhibits A and B, includes therein much of this highly-confidential information." (Doc. 33 at 2). Defendants do not elaborate as to the nature of this "highly-confidential information, " and have not met their burden of proving compelling reasons exist for sealing.
For the foregoing reasons,
IT IS ORDERED denying Defendants' Motion to Seal (Doc. 33).
IT IS FURTHER ORDERED striking Defendants RPost International Limited's and RMail Limited's Motion to Dismiss Counts II-XII of the Complaint Under Fed.R.Civ.P. 12(b)(1) (currently lodged as Doc. 34) and Defendants' Proposed Additional Attachments to Main Document (currently lodged as Doc. 36). Docs. 34 & 36 shall remain under seal.
IT IS FURTHER ORDERED that on or before May 22, 2014 Defendants shall file an Answer or other responsive pleading addressing those counts that were ...