Judge Gary Y. Tanaka, Case 20TRCV00731 2023-01-19 Tentative Ruling

LOS ANGELES SUPERIOR COURT – SOUTHWEST DISTRICT

Honorable Gary Y. Tanaka Thursday, January 19, 2023

Department B Calendar No. 9

Plaintiff filed the Complaint on October 9, 2020. Fisker, Inc. is an electric vehicle automaker. The individual Defendants are the cofounders of Fisker Inc. Henrik Fisker is the Chief Executive Officer of Fisker Inc., and Dr. Geeta Fisker is the Chief Financial Officer of Fisker Inc. In 2016, Plaintiff provided consulting services to Fisker Inc., and from 2017 until 2019, Plaintiff was an employee of Fisker Inc. Defendants failed to honor their stock purchase agreement and on May 23, 2019, Plaintiff was forced to resign.

Plaintiff pleads the following causes of action: 1) fraudulent inducement; 2) intentional misrepresentation; 3) promissory fraud; 4) negligent misrepresentation; 5) conversion; 6) declaratory relief; 7) quantum meruit; 8) unjust enrichment; 9) constructive fraud; 10) breach of contract; 11) constructive trust; 12) discrimination in violation of the Fair Employment and Housing Act (FEHA); 13) harassment in violation of FEHA; 14) retaliation in violation of FEHA; and 15) successor liability.

On November 19, 2020, Defendants’ motion to compel arbitration was granted. On July 7, 2022, an interim arbitration award was entered.

“A record must not be filed under seal without a court order. The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.” Cal Rules of Court, Rule 2.551(a).

“A party requesting that a record be filed under seal must file a motion or an application for an order sealing the record. The motion or application must be accompanied by a memorandum and a declaration containing facts sufficient to justify the sealing.” California Rules of Court, Rule 2.551(b)(1). California Rules of Court, Rule 2.551(b)(4) also provides that the party requesting that a record be filed under seal must lodge it with the court when the motion or application is made and, pending the determination of the motion or application, the lodged record will be conditionally under seal.

“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;

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

Defendants move for an order to seal portions of the Memorandum of Points and Authorities in support of Defendants’ Petition to Vacate the Arbitration Award and Exhibits 1-12, 16-19, 21-22, and 25 to the declaration of Robert S. Shwarts.

Plaintiff moves for an order sealing certain exhibits to the declaration of Christopher Mader filed in support of the opposition to Defendants’ Petition to Vacate Arbitration Award. Specifically, Plaintiff applies to seal Exhibits F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, Y and Z to the declaration of Christopher Mader, Esq.

The Court finds that neither party have made a competent showing to support a finding that there exists an overriding interest to seal the records sought to be sealed that overcomes the public right of public access to the records, that a substantial probability that the overriding interest will be prejudiced if the requested documents are not sealed, that the sealing is narrowly tailored, and that there are no less intrusive means to achieve any purported overriding interest.

Defendants simply contend that the arbitration proceeding was confidential, and that the arbitrator made certain statements concerning the confidential nature of the proceeding. However, no specific authority was presented to show that an arbitrator’s statements and opinions regarding confidentiality constitutes the sufficient overriding interest to qualify to seal a record under Cal. Rules of Court, Rule 2.551. Plaintiff provided no competent facts or evidence to support any of the elements noted above, and, in fact, filed an opposition to Defendants’ own application.

The Court takes judicial notice of the AAA Statement of Ethical Principles which outline that the AAA staff and arbitrators have an ethical obligation to keep arbitration information confidential. Certainly, the arbitrator’s statements at the arbitration proceeding can be seen as an attempt to comply with his ethical obligations. However, this does not mean that any statements by the arbitrator provide grounds to order the sealing of any documents in a Court record. Again, the parties must provide facts to meet the elements of Rule 2.551 noted above. In fact, the AAA reiterates that the parties themselves may enter into a separate confidentiality agreement. The existence of any such agreement has not been established by any party.

“In NBC Subsidiary (KNBC–TV), Inc. v. Superior Court, supra, 20 Cal.4th at page 1222, footnote 46, 86 Cal.Rptr.2d 778, 980 P.2d 337, the Supreme Court explained that closure of a court hearing and, by inference, sealing of documents may be justified if necessary to protect a civil litigant's fair trial rights. The Supreme Court then identified other examples of where an overriding interest had been found which warranted closure of civil proceedings as follows: “Courts have acknowledged various other overriding interests. (Globe [Newspaper Co. v. Superior Court (1982) ] 457 U.S. 596, 607 [102 S.Ct. 2613, 73 L.Ed.2d 248] [protection of minor victims of sex crimes from further trauma and embarrassment]; accord, Press–Enterprise [Co. v. Superior Court (1986) ] 478 U.S. 1, 9, fn. 2 [106 S.Ct. 2735, 92 L.Ed.2d 1]; Press–Enterprise [Co. v. Superior Court of Cal. (1984) ] 464 U.S. 501, 512 [104 S.Ct. 819, 78 L.Ed.2d 629] [privacy interests of a prospective juror during individual voir dire]; Rovinsky [v. McKaskle (5th Cir.1984) ] 722 F.2d 197, 200 [protection of witnesses from embarrassment or intimidation so extreme that it would traumatize them or render them unable to testify]; Publicker [Industries, Inc. v. Cohen (3d Cir.1984) ] 733 F.2d 1059, 1073 [protection of trade secrets, protection of information within the attorney-client privilege, and enforcement of binding contractual obligations not to disclose]....” (NBC Subsidiary (KNBC–TV), Inc. v. Superior Court, supra, 20 Cal.4th at p. 1222, fn. 46, 86 Cal.Rptr.2d 778, 980 P.2d 337.) [¶] In Publicker Industries, the Third Circuit decision cited in footnote 46 of the NBC Subsidiary decision, the “enforcement of binding contractual obligation[ ]” justification for closure and inferentially sealing was described follows: “Unless such an overriding interest exists, there is a presumption that the proceedings will be open to the public. [Citation.] [¶] The overriding interest can involve the content of the information at issue, the relationship of the parties, or the nature of the controversy.” Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1280–81(stating that a mere agreement between the parties alone is insufficient to overcome the public’s right to access).

Here, the parties have failed to even demonstrate the existence of a contractual confidentiality agreement between the parties, which as noted above, would not, in and of itself, be sufficient to constitute an overriding interest to support sealing the records, without providing the other underlying facts to demonstrate that the public’s right of access should not be recognized.

Therefore, for the foregoing reasons, Defendants and Plaintiff’s Applications to Seal Record are denied.

Each party is ordered to file with the Court, in the Court’s case management operating system – eCourt - all documents that have been filed under seal in fully unredacted form by the end of day, Monday, January 23, 2023.