Judge: Martha K. Gooding, Case: 2020-01152005, Date: 2022-11-07 Tentative Ruling
Motion to Strike
The Motion to Seal brought by Defendants Uber Technologies, Inc., Raiser, LLC and Raiser-CA, LLC is DENIED.
Initially, although it is titled a “Motion to Strike,” the Motion cites only authorities relevant to sealing court filings. Thus, the Court interprets the Motion as a motion to seal the entirety of ROA No. 140.
Defendants seek to seal ROA No. 140 on the basis that it contains information the parties contractually agreed to keep confidential. (Spinola Decl. ¶3.)
In support of this request, Defendants cite to NBC Subsidiary (KNBC-TV), Inc. v. Super. Ct. (Locke) (1999) 20 Cal.4th 1178, in which the Court acknowledged that a “contractual obligation[] not to disclose” has been recognized as an overriding interest. (Id. at 1222, n. 46). This principle has been repeated by subsequent courts. (Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1283; See also Huffy Corp. v. Superior Court (2003) 112 Cal.App.4th 97, 107 [abrogation on another point recognized in Curtis v. Superior Court (2021) 62 Cal.App.5th 453]).
However, as explained in Huffy Corp. v. Superior Court (2003) 112 Cal.App.4th 97: “In Universal City Studios, citing Publicker and NBC Subsidiary, we held that a settlement agreement which had a confidentiality provision could not be sealed unless there was a showing of serious injury which would result from public disclosure.” (Id. at 106, citing Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273 and Publicker Industries, Inc. v. Cohen (3d Cir. 1984) 733 F.2d 1059).
Both the court in Huffy and Universal City Studios indicated that such injury must involve “prejudice to [a] legitimate proprietary or business interest” and/or prejudice to “legitimate commercial interests.” (Huffy Corp. v. Superior Court (2003) 112 Cal.App.4th 97, 107: “No prejudice to defendant’s legitimate business and proprietary interests will occur if the settlement agreement is ordered unsealed;” see also Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1284: “Defendant has presented no evidence that disclosure of any of the substantive provisions…will prejudice any legitimate confidential business practice.”)
Based on the above, the “risk” of breaching a confidentiality agreement is generally insufficient to justify sealing court records. This makes sense because, pursuant to CRC 2.551(a), a Court cannot seal documents based solely on the agreement of the parties. Absent a further showing by the parties of prejudice, a confidentiality agreement amounts to a unilateral agreement for sealing, contrary to CRC 2.551(a).
Per Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, courts ordinarily seal “matters relating to the business operations of defendant” where “public revelation of these matters would interfere with its ability to effectively compete in the marketplace” or “there is a substantial probability that their revelation would prejudice the…legitimate interest of defendant.” (Id. at 1286).
In support of this motion, Defendants offer only the Declaration of their counsel, Jessica R. Spinola (the “Spinola Decl.”), who states: “Defendants’ financial privacy and trade secrets are being revealed as long as the terms of the confidential settlement agreement remain on the public docket, contained in ROA #140, the Notice of Lodgment.” (Spinola Decl. ¶ 5). Thereafter, Counsel declares: “The Parties will be prejudiced if information contained in ROA #140 regarding Defendants’ Consideration is not redacted, because (1) confidentiality was a material consideration for Defendants in reaching the resolution, and (2) Plaintiff is contractually obligated to maintain said confidentiality.” (Id. ¶ 13).
The above makes no attempt to demonstrate a risk of prejudice to specific business interests and, indeed, it does not appear that Ms. Spinola has personal knowledge to offer such information. In contrast, in seeking to establish overriding business interests, the moving party in Universal City Studios offered a declaration from its senior vice-president and controller. (Universal City Studios, supra, 110 Cal.App.4th at 1286).
Ultimately, because Defendants failed to make a showing of prejudice to any legitimate commercial interests, (Universal City Studios, supra, 110 Cal.App.4th at 1284), the Court finds Defendants did not establish “[a] substantial probability exists that the overriding interest will be prejudiced if the record is not sealed,” as required by CRC 2.550(d)(3).
The Court also finds the proposed sealing is not narrowly tailored. (CRC 2.550(d)(4)). Although Defendants repeatedly assert that they are limiting their request “to redact only isolated lines from the Notice of Lodgment (ROA #140) that reveal Defendants’ Consideration,” (Motion: 5:9-11 and 4:15-19; See also Spinola Decl. ¶14), the Notice of Motion seeks to strike all of ROA No. 140 from the public record. (Notice of Motion: 2:1-3). Similarly, the Motion itself asks “that the Court strike the Notice of Lodgment, document ROA #140, from the public record…” (Motion: 5:27).
Although the Motion also asks, in the alternative, that the Court “redact all financial information from the document,” Defendants made no attempt to identify, by page and line number, where such material is located. Instead, Defendants invite the Court to independently review the 59 pages included in ROA No. 140, to identify financial information.
Defendants are ordered to give notice.