Judge: Serena R. Murillo, Case: 21STCV23784, Date: 2023-05-22 Tentative Ruling

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**Tentative rulings on Motions for Summary Judgment will only be available for review in the courtroom on the day of the hearing.

Case Number: 21STCV23784    Hearing Date: October 23, 2023    Dept: 31

TENTATIVE

Defendants’ Unopposed Motion to Seal Plaintiff’s Opposition, and Appendix of Evidence filed in opposition to Defendants’ Motion to Quash is DENIED.  

Legal Standard

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To seal a record, the following requirements are imposed: (1) the party must file a motion or application for an order sealing the record, which must be accompanied by a memorandum and a declaration containing facts sufficient to justify the sealing; (2) the party must serve a copy of the motion on all parties who have appeared in the case; and (3) the party requesting that a record be filed under seal must lodge it with the court when the motion or application is made unless the record has previously been lodged. (Cal. Rules of Court, rule 2.551(b).)¿¿¿ 

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The Court must make the following express factual findings in order to seal records: (1) an overriding interest exists that overcomes the right of public access to the record; (2) the overriding interest supports sealing the records; (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).)¿¿¿ 

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An order sealing the record must specifically state the facts that support the findings and direct the sealing of only those pages and documents or, if reasonably practicable, portions of those documents and pages, that contain the material that needs to be placed under seal, and all other portions must be included in the public file. (Cal. Rules of Court, rule 2.550(e).)¿¿ 

“[A]t a minimum that the party seeking to seal documents, or maintain them under seal, must come forward with a specific enumeration of the facts sought to be withheld and specific reasons for withholding them.”  (H.B. Fuller Co. v. Doe (2007) 151 Cal.App.4th 879, 894.)  

Discussion

Defendants assert that contrary to the Parties’ protective order, Plaintiff failed to file its Opposition and Appendix of Evidence to the Motion to Quash conditionally under seal. To fix the error, the Parties entered into a Stipulated Application to Seal, which the Court denied because the party seeking to have the record sealed must file a noticed Motion to Seal. The parties cannot just stipulate to having the record sealed. “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.”

Defendants overriding interest in sealing Plaintiff’s Opposition and Appendix of Evidence is that the documents refer to Defendants’ trade secrets. (See LG Chem, Ltd. v. Superior Court of San Diego County (2022) 80 Cal.App.5th 348, 356, fn. 2 [supporting the sealing of information pertaining to a company’s trade secrets such as sale records].) “Courts have [routinely] found that the protection of trade secrets is an interest that can support sealing records in a civil proceeding.” (McGuan v. Endovascular Technologies, Inc. (2010) 182 Cal.App.4thh 974, 988, citing In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 298–299.)

“‘Trade secret’ means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: [¶] (1) Derives independent economic value, actual or potential from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and [¶] (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.’ (Civ.Code, § 3426.1, subd. (d).)” (McGuan, supra, 182 Cal.App.4th at 988.)

While Defendants maintain that Plaintiffs’ Opposition and Appendix of Evidence violates the Parties’ protective order, the fact that information is considered confidential does not necessarily mean the information pertains to a trade secret. “While labeling information ‘trade secret’ or ‘confidential information’ does not conclusively establish that the information fits this description [Citations], it is nonetheless an important factor in establishing the value which was placed on the information and that it could not be readily derived from publicly-available sources.” (Morlife, Inc. v. Perry (1997) 56 Cal.App.4th 1514, 1522.)

On July 3, 2023, this Court continued Defendant’s motion to seal Plaintiff’s opposition, and appendix of evidence filed in opposition to Defendants’ motion to quash because Defendants’ Motion to Seal fails to state how the information they seek to seal is a trade secret. For example, Defendants seek to seal a chart diagraming their corporate structure showing which company is the holding company and which are subsidiaries and limited partners on the basis that the chart is confidential. However, Defendants fail to explain how that chart qualifies as a trade secret that should be protected from public disclosure. In other words, Defendants fail to show how it or a competitor could derive an economic/competitive advantage if the chart became public knowledge. In another example, Defendants seek to seal its application to IAMPO on the basis that it pertains to research and development, but Defendants fail to explain how the IAMPO application divulges proprietary information when the two-page application only contains basic information about Aquatherm GMBH and does not contain any “closely-held financial information related to the operations of AQ Gmbh.” (Hsu Decl. Ex. 5.) Lastly, Defendants fails to explain or state facts showing how the proposed redactions are “narrowly tailored” and that “no less restrictive means exists to achieve the overriding interest.” (Cal. Rules of Court, rule 2.550(d).) 

Therefore, the Court stated it did not have sufficient information to find that Plaintiff’s Opposition and Appendix of Evidence should be sealed.  

Rather than denying Defendants’ Motion, the Court ordered the Defendants to submit a declaration that specifically states facts to support the sealing of Plaintiff’s Opposition and Appendix of Evidence. The Court ordered that the Declaration must specifically state what “portions of those documents and pages” Defendants seek to redact and file under seal and articulate facts specific to each proposed redaction showing why the redaction is necessary pursuant to California Rules of Court, rule 2.550(b)(1-5).  

Now, a declaration has been filed, and attached there is another matrix detailing the confidentiality designations under the stipulated order, and the reasons for sealing each excerpt and document. However, this matrix appears to be the exact same one this Court has already found failed to show (1) how the information they seek to seal is a trade secret, (2) how the information was narrowly tailored and (3) no less restrictive means exists to achieve the overriding interest. And further, Defendants still have made no effort to explain or state facts showing how the proposed redactions are “narrowly tailored” and that “no less restrictive means exists to achieve the overriding interest.” (Cal. Rules of Court, rule 2.550(d).) 

As a result, based on the reasoning in the Court’s July 3, 2023 ruling, the Court finds that it does not have a factual basis to find that there exists an overriding interest, that the proposed sealing is narrowly tailored, and no less restrictive means exist to achieve the overriding interest the motion to seal. As a result, the Court cannot order sealing these documents. The motion is denied.

Conclusion

Accordingly, Defendants’ Motion to Seal Plaintiff’s Opposition, and Appendix of Evidence filed in opposition to Defendants’ Motion to Quash is DENIED.  

Moving party is ordered to give notice.