Judge: Monica Bachner, Case: 20STCV38383, Date: 2023-02-24 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: 20STCV38383    Hearing Date: February 24, 2023    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Plaintiff Pierre Chraghchian’s unopposed motion to seal is granted.

          Plaintiff Pierre Chraghchian (“Plaintiff”) moves unopposed for an order sealing several exhibits supporting Defendant Alexander Sardarian’s (“Defendant”) Opposition to Summary Judgment. Specifically, Plaintiff requests the Court seal Exhibits 3, 7, 11, 12 and 18 of Defendant’s Opposition to Summary Judgment.  (Supplemental Brief, pg. 3, Revised/Reduced Exh. A.) Plaintiff offers proposed redactions for the public file.

          Request for Judicial Notice

          Plaintiff’s 10/6/2022 request for judicial notice of the 8/23/22 Stipulation and Order to Seal Records in Chraghchian v. Erickson International, LLC, Case No. A-20-823779-B in the Eighth Judicial District Court of Clark County, Nevada is granted.  (P-RJN, Exh. 1.)

Plaintiff’s 10/6/2022 request for judicial notice of the Proposed Order on Stipulation to Seal in this case is denied, as there is no need to take judicial notice since the Court can review the records of the case at hand.

Background

Plaintiff brought this action to enforce a promissory note allegedly issued to Defendant.  Throughout the proceedings, Plaintiff and Defendant (collectively, “Parties”) filed pleadings, motions, declarations, and exhibits that contained references to various business ventures that the Parties owned together—including Erickson International LLC, Marco Management LLC, Cartel Trading, Inc., Concept One Distributing, Inc., ASWF Ohio L.L.C., and ASWF Australia Pty. Ltd., which are third-party business entities that did not participate in this action.  (Motion, pg. 3.)   The Parties participated in a global settlement in Nevada which resolved all disputes between them, including disputes related to the various business entities and the promissory note that was the subject of this action.  (Id. at pg. 4.)  As part of the settlement, the Parties agreed that all court records that reference, relate to, or mention the various third-party business entities must be sealed to avoid the disclosure of confidential information—including their financial status, organizational status, and ongoing business to avoid the information becoming publicly available to competitors and customers of the business entities.  (Id.; P-RJN, Exh. 1 ¶¶5, 12 & Exh. A.)

Plaintiff now moves for an order sealing the following documents: Exhibit 3 to Defendant’s Opposition to Summary Judgment; Exhibit 7 to Defendant’s Opposition to Summary Judgment; Exhibit 11 to Defendant’s Opposition to Summary Judgment; Exhibit 12 to Defendant’s Opposition to Summary Judgment; and Exhibit 18 to Defendant’s Opposition to Summary Judgment.  (Second Supplemental Brief, Pgs. 2-3.) The Second Supplemental Brief lodged by Plaintiff includes redacted versions of each of the exhibits Plaintiff seeks to have sealed.

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.”

Motion to Seal Records

Plaintiff moves to seal on grounds that the right of public access to the record is overcome by the overriding interests of effectuating the terms of the global settlement between the Parties and preventing harm to third-party business entities—including the disclosure of information such as sensitive loan details, the identity of lenders, the ownership interest of various individuals and businesses, bank account numbers and other information.  (Supplemental Brief, pg. 1.)  Plaintiff argues a substantial probability exists that the overriding interest will be prejudiced if the records are not sealed because the third-party business entities will be prejudiced by the disclosure of their confidential/financial information.  (Motion, pg. 5.)  Plaintiff argues there is no less restrictive means to achieve the overriding interest.  (Motion, pg. 6.)  Defendant does not oppose Plaintiff’s motion to seal the records. After reviewing Plaintiff’s proposed redactions, the Court agrees.

Confidential business details are traditionally afforded under-seal status by courts in California. (Flores v. Enterprise Rent-A-Car Co. (2010) 188 Cal. App. 4th 1055, 1061 [documents detailing internal business and trade secrets granted permission for filing under seal]; see also IMAX Corp. v. Cinematech, Inc. (9th Cir. 1998) 152 F.3d 1161, 1168 [noting that confidential and proprietary business information is “to be filed under seal.”].)

Exhibit 3 reveals information from the entities’ operating agreement and percentages necessary to amend the operating agreement.  Exhibit 7 reveals Plaintiff’s home address. Exhibit 11 includes copies of a purchase agreement, which reveals ownership interests of various individuals and businesses in the multiple business entities, loans by third-party Erickson International, and the purchase price for the potential agreement.  Exhibit 11 also includes company bank account information, and assignment of membership interests for multiple entities identifying the ownership interest by the assignor, which reveals the ownership makeup of the different third-party entities. Exhibit 12 includes copies of a stock purchase agreement, which also reveals ownership interests of various individuals and businesses.  Finally, Exhibit 18 reveals internal communication between Erickson International and its members regarding various loans and membership interests.

Plaintiff 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 Plaintiff’s proposed redactions are the least restrictive way of protecting the interests of third-parties to this litigation. Accordingly, the Court orders the following:

Exhibit 3 at SAR_MSJ0013 to SAR_MSJ0023 shall be sealed. The redacted version proposed by Plaintiff shall be publicly filed.

Exhibit 7 at SAR_MSJ0078 to SAR_MSJ0079 shall be sealed. The redacted version proposed by Plaintiff shall be publicly filed.

Exhibit 11 at SAR_MSJ0124 to SAR_MSJ0185 shall be sealed. The redacted version proposed be Plaintiff shall by publicly filed.

Exhibit 12 at SAR_MSJ0187 to SAR_MSJ0209 shall be sealed. The redacted version proposed be Plaintiff shall by publicly filed.

Exhibit 18 at SAR_MSJ0224 shall be sealed. The redacted version proposed by Plaintiff shall be publicly filed.

Based on the foregoing, Plaintiff’s motion to seal is granted.

Dated:  February ____, 2023

Hon. Monica Bachner

Judge of the Superior Court