Judge: Monica Bachner, Case: 20STCV33078, Date: 2023-03-14 Tentative Ruling

Department 71: Attorneys who elect to submit on these published tentative rulings, without making an appearance at the hearing, may so notify the Court by communicating this to the Department's staff at (213) 830-0771 before the set hearing time.  See, e.g., CRC Rule 324(b).   All parties are otherwise encouraged to appear by Court Call for all matters.

Case Number: 20STCV33078    Hearing Date: March 14, 2023    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Defendants Jon Gimbel’s, Anthony Guagliano’s, and Gallant Capital Partners, LLC’s, unopposed motion to seal is granted.

Plaintiffs The Gores Group, LLC’s, and AEG Holdings, LLC’s, unopposed motion to seal is granted in part.  Exhibit 13 shall be sealed in part.  The following portion shall not be sealed: pgs. 1 and 11. Otherwise the motion is granted.

          Defendants Jon Gimbel (“Gimbel”), Anthony Guagliano (“Guagliano”), and Gallant Capital Partners, LLC (“GCP”) (collectively, “Defendants”) move unopposed for an order sealing several exhibits supporting their motion for summary judgment, or, in the alternative, summary adjudication.  (Notice of Defendants’ Motion, pg. 2; CRC, Rules 2.550, 2.551.)  Specifically, Defendants request the Court seal Exhs. 7, 8, 9, 15, 16, 21, and 28 to the Declaration of

Daniel Sheehan (“Sheehan”) in support of Defendants’ motion for summary judgment, or, in the alternative, summary adjudication.  (Notice of Defendants’ Motion, pg. 2.)  Defendants offer proposed redactions for the public file.

Plaintiffs The Gores Group, LLC (“TGG”) and AEG Holdings, LLC (“AEGH”) (collectively, “Plaintiffs”) move unopposed for an order sealing several exhibits supporting Defendants’ motion for summary judgment, or, in the alternative, summary adjudication.  (Notice of Plaintiff’s Motion, pg. 2; CRC, Rules 2.550, 2.551.)  Specifically, Plaintiffs request the Court seal the following documents: (1) portions of Exhs. 1-3, 11, 12, 14-16, 19, 22, and 28 to the Declaration of Sheehan; (2) Exhs. 6 and 13 to the Declaration of Sheehan in their entirety; (3) portions of Defendants’ motion for summary judgment that refer to or quote from the aforementioned exhibits; and (4) portions of Defendants’ separate statement of undisputed material facts in support of Defendants’ motion for summary judgment that refer to or quote from the aforementioned exhibits (collectively, “Lodged Documents”).  (Notice of Plaintiff’s Motion, pg. 2.)  Plaintiffs offer proposed redactions for the public file.

Background

Plaintiffs allege four causes of action against Defendants arising from Plaintiffs’ alleged agreement to support Defendant GCP, and Defendants allegedly reneging on the agreement and refusing to provide Plaintiffs the consideration they promised in exchange for Plaintiffs’ support.  (See Second Amended Complaint (“SAC”).)  On December 9, 2022, Defendants filed their motion for summary judgment, or in the alternative, motion for summary adjudication, concurrently filed with their separate statement of undisputed materials facts in support of their motion, the Declaration of Sheehan, and Defendants’ compendium of evidence (“D-COE”). 

On December 9, 2022, Defendants moved for an order sealing the following documents: Exhs. 7, 8, 9, 15, 16, 21, and 28 to the Declaration of Daniel Sheehan (“Sheehan”) in support of Defendants’ motion for summary judgment, or, in the alternative, summary adjudication.  As of the date of this hearing, Plaintiffs have not filed an opposition to Defendants’ motion.

On December 19, 2022, Plaintiffs moved for an order sealing the following documents: (1) portions of Exhs. 1-3, 11, 12, 14-16, 19, 22, and 28 to the Declaration of Sheehan; (2) Exhs. 6 and 13 to the Declaration of Sheehan in their entirety; (3) portions of Defendants’ motion for summary judgment that refer to or quote from the aforementioned exhibits; and (4) portions of Defendants’ separate statement of undisputed material facts in support of Defendants’ motion for summary judgment that refer to or quote from the aforementioned exhibits (collectively, “Lodged Documents”).  As of the date of this hearing, Defendants have not filed an opposition to Plaintiffs’ motion.

On February 15, 2023, Plaintiffs and Defendants (collectively, “Parties”) filed a joint stipulation to withdraw documents from the public record and refile with additional redactions subject to the instant motions to seal.  This Court granted Parties’ joint stipulation on the same day.

Legal Standard

CRC Rule 2.551(a) provides, as follows: “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.”

CRC Rule 2.551(b)(1) provides, as follows: “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.”

CRC Rule 2.550(d) provides, as follows: “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.” 

CRC Rule 2.550(e) provides: “An order sealing the record must:

(A) Specifically state the facts that support the findings; and (B) Direct the sealing of only those documents and pages, or, if reasonably practicable, portions of those documents and pages, that contain the material that needs to be placed under seal. All other portions of each document or page must be included in the public file.”

California courts ordinarily grant requests to seal information “involv[ing] confidential matters relating to . . . business operations,” particularly where “public revelation of these matters would interfere with its ability to effectively compete in the marketplace.”  (Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1286; see also Huffy Corp. v. Superior Court (2003) 112 Cal.App.4th 97, 108 [“[D]ocuments which are not trade secrets may nonetheless be subject to sealing in the face of a proper . . . showing of prejudice to an overriding interest.”], citation omitted.)

A.   Defendants’ Motion to Seal Records

Defendants move to seal on grounds that the right of public access to the documents relevant to the instant motion is overcome by the overriding interests of preventing harm to prospective investors by disclosing sensitive communications between Defendants and prospective investors, including communications concerning the negotiation of documents governing the terms of non-public investments, as well as draft and finalized investment documents.  (Decl. of Guagliano ¶4.)  Defendants argue a substantial probability exists that the overriding interest will be prejudiced if the records are not sealed because Defendants do not publicly disclose the identities of their investors, nor the terms under which each investor agrees to invest in a fund, and prospective investors are often highly sensitive to confidentiality concerns, and such investors value Defendants’ commitment to protect non-public information about the terms of their investments.  (Decl. of Guagliano ¶¶4-6.)  Defendants further argue that if the terms of current investments in Defendants’ funds were publicly disclosed, such disclosure would hinder Defendants’ position in future negotiations and would harm Defendants’ ability to attract investors and compete in the private equity industry.  (Decl. of Guagliano ¶¶4-6.)  Defendants argue there is no less restrictive means to achieve the overriding interest and their request is narrowly tailored to seal only those exhibits that would undermine Defendants’ competitive position if publicly disclosed.  (Motion Defendants, pg. 5.)  Plaintiffs do not oppose Defendants’ motion to seal the records. After reviewing Defendants’ proposed redactions, the Court agrees.

Exhibit 7, in its entirety, contains Gallant’s Limited Partnership Agreement and Subscription Booklet which, in turn, contain the terms and conditions governing investors’ commitments to the Gallant fund and reflect negotiations with prospective investors pertaining to those terms and conditions.  Exhibit 8, at page 2, discloses the terms and conditions of pre-final drafts of Gallant’s Limited Partnership Agreement and Subscription Booklet, which reflect negotiations with prospective investors pertaining to those terms and conditions.  Exhibit 9, in its entirety, discloses the terms and conditions of pre-final drafts of Gallant’s Limited Partnership Agreement and General Partner Agreement, which reflect negotiations with prospective investors pertaining to those terms and conditions.  Exhibit 15, in its entirety, contains pre-final drafts of Gallant’s Subscription Booklet and Limited Partnership Agreement which, in turn, contain the terms and conditions governing investors’ commitments to the Gallant fund and reflects negotiations with prospective investors pertaining to those terms and conditions. Exhibit 16, at pages 1-3, discloses the terms and conditions of pre-final drafts of Gallant’s Subscription Booklet, Limited Partnership Agreement, and Management Company Agreement, which govern investors’ commitments to the Gallant fund and reflect negotiations with prospective investors pertaining to such terms and conditions.  Exhibit 21, in its entirety, contains Gallant’s Amended and Restated Operating Agreement and Structure Chart which, in turn, contain the terms and conditions governing investors’ commitments to the Gallant fund and reflects negotiations with prospective investors pertaining to such terms and conditions.  Finally, Exhibit 28, at portions of page 2, contains draft terms and conditions governing proposed agreement with prospective investor in Gallant fund and reflects negotiations with that prospective investor pertaining to such terms and conditions.

Defendants sufficiently demonstrated that the information contained in the exhibits amounts to confidential information such that there exists an overriding interest that overcomes the right of the public access to the records, the overriding interest supports sealing the record, a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed, and Defendants’ proposed redactions are the least restrictive way of protecting the interests of third-parties to this litigation. Accordingly, the Court orders the following:

Exhibit 7 shall be sealed in its entirety. The redacted version proposed by parties’ stipulation shall be publicly filed.  (Stipulation, Exh. 3.)

Exhibit 8 at page 2 shall be sealed. The redacted version proposed by parties’ stipulation shall be publicly filed.  (Stipulation, Exh. 3.)

Exhibit 9 shall be sealed in its entirety. The redacted version proposed by parties’ stipulation shall be publicly filed.  (Stipulation, Exh. 3.)

Exhibit 15 shall be sealed in its entirety. The redacted version proposed by parties’ stipulation shall be publicly filed.  (Stipulation, Exh. 3.)

Exhibit 16 at pages 1-3 shall be sealed. The redacted version proposed by parties’ stipulation shall be publicly filed.  (Stipulation, Exh. 3.)

Exhibit 21 shall be sealed in its entirety. The redacted version proposed by parties’ stipulation shall be publicly filed.  (Stipulation, Exh. 3.)

Exhibit 28, at portions of page 2 shall be sealed. The redacted version proposed by parties’ stipulation shall be publicly filed.  (Stipulation, Exh. 3.)

Based on the foregoing, Defendants’ unopposed motion to seal is granted.

B.   Plaintiffs’ Motion to Seal Records

Plaintiffs move to seal on grounds that the right of public access to the documents attached to the Declaration of Sheehan in support of Defendants’ motion for summary judgment is overcome by the overriding interest in protecting the confidentiality of Plaintiffs’ competition business information as well as the private financial and personal information of non-party Alec Gores and Plaintiff TGG’s employees.  (Motion Plaintiffs, pg. 5.)  Plaintiffs and Defendants further stipulate that portions of Defendants’ motion for summary judgment require additional redactions, including the motion itself, the separate statement of material fact, as well as the Declaration of Harris in support of the instant motion to seal.  (Stipulation, pgs. 5-6.)  Plaintiffs argue a substantial probability exists that their overriding interests and those of non-Party Alec Gores will be prejudiced if the records are not sealed because the relevant documents would provide Plaintiffs’ competitors with detailed, commercially sensitive information concerning Plaintiffs’ business operations in raising private equity funds and making investments, including the detailed performance metrics for Plaintiffs’ investments, Plaintiffs’ confidential investor lists, and the proprietary structure and ownership of Plaintiffs and related entities.  (Decl. of Pollard ¶¶4-5; Decl. of Harris ¶4.)  Plaintiffs argue competitors could use this information regarding Plaintiffs’ proprietary, strategic business decisions to undercut Plaintiffs on prospective deals and improve their own methods in the marketplace.  (Decl. of Pollard ¶¶4-5; Decl. of Harris ¶4.)  Further, non-party Alec Gores would be prejudiced by the disclosure of his financial and personal information because it would violate his right to privacy.  (Decl. of Pollard ¶6; Decl. of Harris ¶4.)  Plaintiffs argue there is no less restrictive means to achieve the overriding interest and the redactions are narrowly tailored to include only Plaintiffs’ confidential and commercially sensitive business information, as well as non-party Alec Gores’ private financial and personal information.  (Motion Plaintiffs, pg. 10.)  Defendants do not oppose Plaintiffs’ motion to seal the records.  After reviewing Plaintiffs’ proposed redactions, the Court agrees.

Exhibit 1 at pages TGG_00003962-00003964 contains Plaintiff TGG’s proprietary investment track record and a list of investors in TGG’s private equity funds. Exhibit 2 at pages 14:2-3; 28:3, 5; 40:1-41:25; 66:1-25; 118:2-24; 153:19-154:2; and 154:6-24 contains proprietary information related to Alec Gores’ personal living situation, phone number, financial information, investment entities, and investment amounts raised; Plaintiffs’ employment structure, including the number of individuals who are employed by Plaintiffs and report to Alec Gores; the performance of Plaintiffs’ funds; and Plaintiffs’ and Alec Gores’ deal compensation.  Exhibit 3 at pages 103:7-25; 105:1-25; 113:1-115:25; 117:1-25; 132:1-6; 133:7-25; 146:1-25; 173:13-174:22; 179:1-25; 211:4-213:21; 282:3-7, 18-19; and 360:9-361:25 contains proprietary information related to Alec Gores’ private financial information and investments and Plaintiffs’ business operations, including marketing strategies; transaction structuring; timing of raising funds and soliciting investments; investment document review procedures; fund-raising decisions; and the formation, ownership, purpose, structure, assets, and assignment of Plaintiffs’ investment entities.  Exhibit 6, in its entirety, contains Plaintiff TGG’s investment track record, which reflects Plaintiff TGG’s trade secrets, including proprietary information regarding Plaintiff TGG’s business operations and strategic decisions.  Exhibit 11 at pages 45:20-23 and 152:19-24 contains proprietary information related to the ownership and structure of Plaintiffs’ investment entities, as well as Plaintiff TGG’s employee compensation.  Exhibit 12, only at the cell phone number listed, contains Plaintiff TGG’s employee’s private cell phone number protected by an individual’s constitutional right to privacy.  Exhibit 13, contains proprietary information related to Plaintiffs’ investment entities, such as their ownership and assignments.  However, pgs. 1 and 11, lines 11-18, and line 22-pg. 14 does not contain any confidential information.  Exhibit 14, only at the cell phone number listed, contains Plaintiff TGG’s employee’s private cell phone number protected by an individual’s constitutional right to privacy.  Exhibit 15, only at the cell phone number listed, contains Plaintiff TGG’s employee’s private cell phone number protected by an individual’s constitutional right to privacy.  Exhibit 16, only at the cell phone number listed, contains Plaintiff TGG’s employee’s private cell phone number protected by an individual’s constitutional right to privacy.  Exhibit 19 at pages 8:15, 18, 25, and 27-28 contains proprietary information related to TGG’s relationship to an investment entity, as well as a request for information about the formation of this entity.  Exhibit 22, only at the cell phone number listed, contains Plaintiff TGG’s employee’s private cell phone number protected by an individual’s constitutional right to privacy.  Exhibit 28, only at the cell phone number listed, contains Plaintiff TGG’s employee’s private cell phone number protected by an individual’s constitutional right to privacy.

          Defendants’ summary judgment motion at pages 3:12-14, 17-19, 26-27; 6:15; 9:14-15; 10:4; 16:24; 17:18-20; and 20:5-6, 18-22 contains proprietary information related to Plaintiffs’ investment amounts raised, investment fund performance, investment structure, marketing strategies, deal compensation, and

investment track record, as well as Plaintiffs’ investment entities’ assignments and

relationships among these entities.  Defendants’ separate statement of undisputed material facts at pages 2:22, 24; 3:5-7, 13-19; 7:14-17; and 9:3-4, 6-16, 19-22 contains proprietary information related to Plaintiffs’ investment entities’ assignments, ownership, and relationships, as well as Plaintiffs’ deal compensation and structure, marketing, and investment track record.

Plaintiffs sufficiently demonstrated that the information contained in the exhibits amounts to confidential information such that there exists an overriding interest that overcomes the right of the public access to the records, the overriding interest supports sealing the record, a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed, and Plaintiffs’ proposed redactions are the least restrictive way of protecting the interests of third-parties to this litigation. Accordingly, the Court orders the following:

Exhibit 1 at pages TGG_00003962-00003964 shall be sealed. The redacted version proposed by parties’ stipulation shall be publicly filed.  (Stipulation, Exh. 3.)

Exhibit 2 at pages 14:2-3; 28:3, 5; 40:1-41:25; 66:1-25; 118:2-24; 153:19-154:2; and 154:6-24 shall be sealed. The redacted version proposed by Plaintiffs shall be publicly filed.  (Decl. of Harris, Exh. A.)

Exhibit 3 at pages 103:7-25; 105:1-25; 113:1-115:25; 117:1-25; 132:1-6; 133:7-25; 146:1-25; 173:13-174:22; 179:1-25; 211:4-213:21; 282:3-7, 18-19; and 360:9-361:25 shall be sealed. The redacted version proposed be Plaintiffs shall by publicly filed.  (Decl. of Harris, Exh. B.)

Exhibit 6 shall be sealed in its entirety. The redacted version proposed by parties’ stipulation shall be publicly filed.  (Stipulation, Exh. 3.)

Exhibit 11 at pages 45:20-23 and 152:19-24 shall be sealed. The redacted version proposed by Plaintiffs shall be publicly filed.  (Decl. of Harris, Exh. C.)

Exhibit 12 at the cell phone number shall be sealed. The redacted version proposed by Plaintiffs shall be publicly filed.  (Decl. of Harris, Exh. D.)

Exhibit 13 shall be sealed in part.  The following portion shall not be sealed: pgs. 1 and 11, lines 11-18, and line 22-pg. 14.  Plaintiffs to submit a redacted version reflecting this order.

Exhibit 14 at the cell phone number shall be sealed. The redacted version proposed by Plaintiffs shall be publicly filed.  (Decl. of Harris, Exh. E.)

Defendants have already moved to seal Exhibit 15 in its entirety.

Defendants have already moved to seal Exhibit 16 in its entirety.

Exhibit 19 at page 8:15, 18, 25, and 27-28 shall be sealed. The redacted version proposed by Plaintiffs shall be publicly filed.  (Decl. of Harris, Exh. H.)

Exhibit 22 at the cell phone number shall be sealed. The redacted version proposed by Plaintiffs shall be publicly filed.  (Decl. of Harris, Exh. I.)

Exhibit 28 at the cell phone number shall be sealed. The redacted version proposed by Plaintiffs shall be publicly filed.  (Decl. of Harris, Exh. J.)

Defendants’ summary judgment motion at pages 3:12-14, 17-19, 26-27; 6:15; 9:14-15; 10:4; 16:24; 17:18-20; and 20:5-6, 18-22 shall be sealed.  The redacted versions proposed in parties’ stipulation shall be publicly filed.  (Stipulation, Exh. 1.)

Defendants’ separate statement of undisputed material facts at pages 2:22, 24; 3:5-7, 13-19; 7:14-17; and 9:3-4, 6-16, 19-22 shall be sealed.  The redacted versions proposed in parties’ stipulation shall be publicly filed.  (Stipulation, Exh. 2.)

Plaintiffs’ Declaration of Harris in support of the instant motion shall be withdrawn.  The redacted version proposed in parties’ stipulation shall be publicly filed.  (Stipulation, Exh. 4.)

Based on the foregoing, Plaintiffs’ motion to seal is granted in part.

Dated:  March ____, 2023

Hon. Monica Bachner

Judge of the Superior Court