Judge: David S. Cunningham, Case: 19STCV40706, Date: 2023-09-13 Tentative Ruling

Case Number: 19STCV40706    Hearing Date: March 5, 2024    Dept: 11

Tentative Ruling Re: Motion to Seal Re: 19STCV40706 (Albright)

Date:                           3/5/24

Time:                          2:30 pm

Moving Party:           Farmers Insurance Company, Inc., et al. (collectively “Farmers Defendants” or “Defendants”)

Opposing Party:        James and Christine Albright and Paul Major (collectively “Plaintiffs”)

Department:              11

Judge:                        David S. Cunningham III

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TENTATIVE RULING

Defendants’ motion to seal is denied in full.

BACKGROUND

This is a putative class action.  The operative complaint alleges:

[T]he Farmers Defendants utilize a software program throughout California known as 360Value to determine the replacement cost of an insured’s dwelling. The Farmers Defendants use that replacement cost to set policy limits for the insurance policies they sell to insureds in California. However, 360Value is inherently inaccurate.  Nonetheless, despite the many flaws inherent to both 360Value and the Farmers Defendants’ use of it, the Farmers Defendants hold themselves out through their agents, marketing materials, websites (for both the Farmers Defendants and for their agents), and other publicly available information, as having expertise in the field of insurance and, more specifically, determining a dwelling’s replacement cost.  The Farmer Defendants and their agents tout 360Value as a sophisticated software program that accurately calculates the replacement cost of a dwelling. . . . By doing so, the Farmers Defendants and their agents undertake a duty to their insureds and breach that duty (along with California law) through their persistent and knowing implementation of their 360Value Scheme.

(Second Amended Complaint (“SAC”), ¶ 2.)

On September 18, 2023, the Court denied Plaintiffs’ motion for class certification.

Here, the Farmers Defendants move to seal certain documents that Plaintiffs filed in support of the certification motion.

LAW

The court may order that a record be filed under seal only if it expressly finds facts that establish:

(1)   There exists an overriding interest that overcomes the right of public access to the record;

(2)   The overriding interest supports sealing the record;

(3)   A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed;

(4)   The proposed sealing is narrowly tailored; and

(5)   No less restrictive means exist to achieve the overriding interest.

(Cal. Rules of Court, rule 2.550(d).) “These findings embody constitutional requirements for a request to seal court records, protecting the First Amendment right of public access to civil trials.  (Edmon & Karnow, Cal. Practice Guide: Civ. Procedure Before Trial (The Rutter Group June 2023 Update) ¶ 9:418, emphasis in original.) 

The parties’ agreement to seal documents is not enough to support a motion to seal.  (Id. at ¶ 9:417.1 [“Parties sometimes operate under an informal arrangement pursuant to which documents are ‘deemed filed under seal’ unless an objection is made. Such an arrangement ‘is entirely inconsistent with the mandatory requirements of rules 2.550 and 2.551 and the constitutional values informing those requirements.’”].)

“Only the specific words of documents that constitute the sensitive material should be sealed; generally, it is not permissible to seal the entire document.”  (Id. at ¶ 9:418.5.)

DISCUSSION

Defendants move to seal Exhibits A, M, Y, and AA to the February 10, 2023 declaration of attorney R. Martin Weber, Jr.

The first issue is whether the motion to seal is timely.  The answer is no.  “Rule 2.551(b)(3) governs the procedure for a party that files, in an adjudicatory proceeding, records that were subject to a confidentiality agreement or protective order, but does not intend to request the sealing of such records.”  (Savaglio v. Wal-Mart Stores, Inc. (2007) 149 Cal.App.4^th 588, 601.)  “Such party must notify the party that produced the records that the records will be placed in the public files unless the producing party brings a motion to seal within 10 days (or duly authorized extension) of receiving such notice.”  (Ibid., emphasis in original.)[1]  Plaintiffs lodged Exhibits A, M, Y, and AA on February 10^th. The notice of lodging states: “Plaintiffs hereby give notice under Rule 2.551(b)(3)(A)(iii) that the unredacted materials lodged conditionally under seal will be placed in the public court file unless the party concerned files a timely motion or application to seal all or part of the unredacted copies.”  (2/10/23 Notice of Lodging, p. 2.)  Defendants did not file the motion to seal until January 31, 2024, nearly a year later, so it is late.  (See Savaglio, supra, 149 Cal.App.4^th at 601 [recognizing “a 10-day time frame” for filing motions to seal]; see also 1/31/24 Motion to Seal, p. 7 [same].)

However, Defendants request relief under Code of Civil Procedure section 473(b).  They claim they filed the motion to seal late because of a calendaring error.  (See 1/31/24 Motion to Seal, pp. 7-8 [asserting mistake and excusable neglect].)

Plaintiffs contend “[t]he 10-day time frame . . . is ‘mandatory’ and cannot be extended.”  (2/21/24 Opposition, p. 4.)  Citing Savaglio, they claim the Court “lack[s] discretion” to hear the motion to seal.  (Ibid.)

Defendants disagree.  They assert that Savaglio is distinguishable and that there is no authority that bars application of section 473(b) to their motion.  (See 2/27/24 Reply, pp. 2-4.)

Savaglio was a wage-and-hour class action against Wal-Mart Stores, Inc. (“Wal-Mart”).  “After the case had been pending for over three years – and after substantive motions had been heard and decided – a local newspaper that attempted to review papers filed in connection with Wal–Mart’s summary adjudication motion “learn[ed] that ‘virtually all’ [pleadings and motion papers] had been filed conditionally under seal.”  (Mercury Interactive Corp. v. Klein (2007) 158 Cal.App.4^th 60, 88 [summarizing and quoting Savaglio].)  “Prior to the newspaper’s attempt to gain access to court records, Wal–Mart, in two separate proceedings, had sought writ review of trial court rulings on the plaintiffs’ motion for class certification and its motion for summary adjudication.”  (Ibid.)  “Large portions of the appendices to its writ petitions were filed in the appellate court without having been sealed.”  (Ibid.)  “The appellate court rejected Wal–Mart’s attempt to assert confidentiality as to those portions of the appendices that had included documents that had been previously filed conditionally under seal in the trial court.”  (Ibid.)  “It concluded that there had been a waiver, based upon Wal–Mart’s (1) failure to obtain a sealing order in the trial court as required by the sealed records rules, (2) failure to obtain a sealing order in the appellate court as required by the rules, and (3) unreasonable assertion, in a letter to the appellate court in which it claimed inadvertence, that it had complied with the rules in obtaining a sealing order from the trial court.”  (Ibid.)  “It therefore reversed the trial court’s finding that there had been no waiver, concluding that ‘Wal–Mart’s conduct was so inconsistent with an intent to enforce its rights to obtain sealed records under the Rules of Court as to induce a reasonable belief that it had relinquished such right. [Citation.]’”  (Ibid. [quoting Savaglio], footnote omitted; see also Lopez v. United Parcel Service, Inc. (N.D. Cal. Mar. 1, 2010) No. C08-05396 SI, 2010 WL 728205, at *8 n. 12 [noting: “In Savaglio, the state appellate court held that a party had waived its right to obtain a court order sealing certain documents where it failed to move the trial court for a sealing order, could point to ‘no court order granting the nonexistent motion,’ and had publicly filed the materials it sought to seal on the dockets of two parallel cases”], underlined case name added.)

“[I]rrespective of the waiver,” the appellate court also found that “the trial court lacked discretion to entertain a belated motion to seal.”  (Savaglio, supra, 149 Cal.App.4^th at 601.)  The opinion states:

As noted by the trial court, effective January 1, 2004, former rule 243.2(b)(3)(B) (current rule 2.551(b)(3)(B)) sets forth a 10–day time frame (subject to extension of time by court order) for bringing a motion to seal under circumstances that the court apparently deemed applicable to the instant matter. Rule 2.551(b)(3) governs the procedure for a party that files, in an adjudicatory proceeding, records that were subject to a confidentiality agreement or protective order, but does not intend to request the sealing of such records. Such party must notify the party that produced the records that the records will be placed in the public files unless the producing party brings a motion to seal within 10 days (or duly authorized extension) of receiving such notice. [Citation.]

In its order on the Daily Planet's motion to unseal, the trial court concluded, given the understanding the parties were operating under, that it would work an “injustice” to find that they waived any opportunity to file a motion to seal. Of course, whether there has been a waiver of a known right is a factual matter. More to the point, regardless of waiver, the court had no power under the Rules of Court to entertain a grossly untimely motion to seal. First, no one followed the 10–day time frame set forth in rule 2.551(b)(3). Second, heeding the call to construe our rules broadly to further the people’s right of access, we conclude that any reading of rules 2.550 and 2.551 that encourages an open-ended time frame for filing a motion to seal records long after the underlying substantive matter has been decided would defeat the purpose of the rules. Without the accountability of reasonable time frames for bringing such motions in conjunction with adjudicatory as opposed to discovery proceedings, the presumptive openness of court records would be subject to the whim of the parties, without regard to the public.

(Ibid., emphasis in original.)

Four points stand out:

* the Court of Appeal analyzed Wal-Mart’s inadvertence argument in connection with the waiver issue (see id. at 598-600);

* the timeliness analysis is independent of the waiver analysis (see id. at 601);

* the opinion emphasizes – three times – that, notwithstanding the waiver, the trial court lacked discretion to consider Wal-Mart’s motion (see id. at 593 [stating: “We conclude that Wal-Mart waived its right to file that motion and in any event the trial court lacked discretion to entertain it”]; see also id. at 601 [stating: “Further, irrespective of the waiver, the trial court lacked discretion to entertain a belated motion to seal”]; ibid. [stating: “More to the point, regardless of waiver, the court had no power under the Rules of Court to entertain a grossly untimely motion to seal”]); and

* Defendants fail to cite a case finding section 473(b) applicable to an almost one-year-late motion to seal.

These points compel the Court to deny Defendants’ motion to seal.

Alternatively, the Court finds section 473(b) unsatisfied.  Section 473(b) “offers two kinds of relief.  One is discretionary.  The other is mandatory.”  (Shayan v. Spine Care & Orthopedic Physicians (2020) 44 Cal.App.5^th 167, 170.)  “Discretionary relief may be granted for excusable neglect, and is available in connection with any order.”  (Edmon & Karnow, supra, at ¶ 5:290.)  “Mandatory relief may be sought only from defaults, default judgments and dismissals and requires an ‘attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect,’ including inexcusable neglect [citation].”  (Ibid., emphasis in original; see also Shayan, supra, 44 Cal.App.5^th at 170 [holding that mandatory relief is only available for “defaults, default judgments, and dismissals”].)  “While both types of motions must be made within [six] months of the order or default at issue, discretionary relief may as a practical matter have to be sought far earlier.”  (Edmon & Karnow, supra, at ¶ 5:290; see also id. at ¶ 5:374 [instructing that a motion for discretionary relief must be filed within a “reasonable time”].) There is no default, default judgment, or dismissal here; thus, the question is whether Defendants should get discretionary relief.  The Court answers no for two reasons.  One, Defendants filed their request for relief more than six months after the 10-day period.  Two, Defendants’ excuse is unavailing.  A calendaring error might be sufficient to explain missing a filing deadline by a few weeks but not by a year.  To repeat, Plaintiffs lodged Exhibits A, M, Y, and AA on February 10^th in support of the certification motion. The Court held three certification-related hearings and ordered two rounds of supplemental briefing.  (See 4/19/23 Minute Order; see also 6/21/23 Minute Order; 9/13/23 Minute Order.) Then Plaintiffs filed an appeal and designated Exhibits A, M, Y, and AA part of the appellate record.  (See 11/9/23 Appellant’s Notice Designating Record on Appeal, Attachment 4b, p. 1.)  Then the parties engaged in private mediation. (See 2/27/24 Reply, p. 1.)  During all that time, Defendants knew that Exhibits A, M, Y, and AA remained unsealed and that Plaintiffs were using them for adjudicatory purposes in adjudicatory proceedings, yet they did nothing.  Defendants’ inaction went beyond mistake or excusable neglect and does not qualify for section 473(b) relief.