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GoDaddy.com LLC v. Rpost Communications Ltd.

United States District Court, D. Arizona

March 24, 2016

GoDaddy.com LLC, Plaintiff,
v.
RPost Communications Limited, et al., Defendants.

ORDER

James A. Teilborg Senior United States District Judge.

Pending before the Court are four motions to seal filed by Plaintiff GoDaddy.com LLC (“GoDaddy”) and three motions to seal filed by Defendants.[1] (Docs. 240, 246, 259, 262, 269, 275, 277). The Court now rules on the motions.

I. Legal Standard

It has long been recognized that 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). This right of access extends to all judicial records except those that have “traditionally been kept secret for important policy reasons, ” namely grand jury transcripts and certain warrant materials. Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006). Nevertheless, “the common-law right of inspection has bowed before the power of a court to insure that its records” do not “serve as . . . sources of business information that might harm the litigant’s competitive standing.” Nixon, 435 U.S. at 598.

“Unless a particular court record is one traditionally kept secret, a strong presumption in favor of access is the starting point.” Kamakana, 447 F.3d at 1178 (quotation omitted). A party seeking to seal a judicial record bears the burden of overcoming this presumption by either meeting the “compelling reasons” standard if the record is a dispositive pleading, or the “good cause” standard if the record is a non-dispositive pleading. Id. at 1180.[2]

What constitutes a “compelling reason” is “best left to the sound discretion of the trial court.” Nixon, 435 U.S. at 599. The Court must “balance the competing interests of the public and the party who seeks to keep certain judicial records secret.” Kamakana, 447 F.3d at 1179. If the Court decides to seal certain judicial records after considering these interests, “it must base its decision on a compelling reason and articulate the factual basis for its ruling, without relying on hypothesis or conjecture.” Id. Generally, “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. (quotation omitted).

In the business context, a “trade secret may consist of any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.” In re Elec. Arts, Inc., 298 F. App’x 568, 569-70 (9th Cir. 2008) (quoting Restatement (First) of Torts § 757, cmt. B (1939)). As this Court has observed in the past, “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.” PCT Int’l Inc. v. Holland Elecs. LLC, 2014 WL 4722326, at *2 (D. Ariz. Sept. 23, 2014) (quotation omitted). In other words, “[s]imply mentioning a general category of privilege, without any further elaboration or any specific linkage with the documents, does not satisfy the burden.” Kamakana, 447 F.3d at 1184.

Similarly, the less-stringent “good cause” standard requires a “particularized showing” that “specific prejudice or harm will result” if the information is disclosed. Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1130 (9th Cir. 2003) (quotation omitted); see Fed. R. Civ. P. 26(c). Thus, “[b]road allegations of harm, unsubstantiated by specific examples of articulated reasoning” is not enough to overcome the strong presumption in favor of public access. Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992).

II. Analysis

The parties move to seal documents appended to both dispositive and non- dispositive motions. Because different standards apply to each type of motion, see Kamakana, 447 F.3d at 1180, the Court will analyze each motion individually.

A. Non-Dispositive Motion

The parties ask the Court to seal various documents filed in conjunction with RPost’s motion to amend its infringement contentions. (Docs. 240, 246). The Court finds that the underlying motion was merely a procedural request by RPost for leave to amend its infringement contentions on the eve of the discovery deadline. See (Doc. 226). Thus, the motion was a non-dispositive motion that was not “more than tangentially related to the merits of a case.” Accordingly, the “good cause” standard for sealing treatment applies. See Kamakana, 447 F.3d at 1180; Auto Safety, 2016 WL 142440, at *6.

The Court concludes that the need for expedited resolution of these motions constitutes “good cause” to seal the documents. Also pending before the Court are cross motions for summary judgment and a Daubert motion that all must be briefed and decided prior to August 22, 2016, the firm trial date set for this ...


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