Judge: Stephanie M. Bowick, Case: 21STCV24436, Date: 2023-12-14 Tentative Ruling
DEPARTMENT 19 LAW AND MOTION RULINGS
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Case Number: 21STCV24436 Hearing Date: December 14, 2023 Dept: 19
RULING
After consideration of the briefing filed and oral argument at the hearing, Plaintiff Global Equity Finance, Inc.’s Motion to Seal Records Lodged Conditionally Under Seal In Support Of Motion For Summary Judgment, Or In The Alternative, Summary Adjudication On All Cross-Complaints is GRANTED.
The Court orders the following sealed:
1. Document bates-stamped CONVOY00004 through CONVOY00024;
2. Documents bates-stamped CONVOY02565 (Ex. E);
3. The following from Exhibit G (Defendant/Cross-Complainant’s July 18, 2023 Deposition): pp. 24:13-33:12; 89:19-90:25; 91:8-12;
4. Document bates-stamped CONVOY02714 through CONVOY02716;
5. Document bates-stamped CONVOY03688;
6. Document bates-stamped CONVOY01796 through CONVOY01817;
7. Document bates-stamped CONVOY1854 through CONVOY1871; and
8. Document bates-stamped CONVOY06113 through CONVOY06115.
The Court notes that, subject to California Rules of Court 2.550 and 2.551, the Court is the final and complete authority to redesignate any confidential document as public after compliance with California Rules of Court, rule 2.551, subdivision (h).
Counsel for Plaintiff to give notice.
STATEMENT OF FACTS
This action arises out of alleged breach of contract. Plaintiff Global Equity Finance, Inc. (“Plaintiff”) brings suit against Defendants Dustin Rosenberg, Convoy Home Loans, Inc. (“Convoy”), and Jonathon Yoo (collectively, “Defendants”) alleging the following causes of action in the Second Amended Complaint (“SAC”):
1. Breach of Contract [against Defendant Rosenberg];
2. Breach of Contract [against Defendant Yoo];
3. Conversion [against all Defendants];
4. Breach of the Duty of Loyalty [against Defendants Rosenberg and Yoo];
5. Intentional Interference with Prospective Economic Advantage [against all Defendants];
6. Violation of Penal Code § 502 [against all Defendants];
7. Violation of Business and Professions Code § 17200, et seq. [against all Defendants]; and
8. Negligent Interference with Prospective Business Advantage [against all Defendants].
Defendant Yoo filed a Cross-Complaint against Plaintiff alleging the following causes of action:
1. Declaratory Relief;
V Violation of Business and Professions Code § 17200; and
3. Breach of Contract.
Defendant Convoy filed a First Amended Cross-Complaint against Plaintiff alleging the following causes of action:
1. Intentional Interference with Contractual Relationship;
2. Intentional Interference with Prospective Business Advantage;
3. Violation Of Business & Professions Code § 17200, Et Seq.;
4. Defamation Per Se; and
5. Trade Libel.
Defendant Rosenberg filed a First Amended Cross-Complaint against Plaintiff and Cross-Defendant Morgan Hough alleging the following causes of action:
1. Declaratory Relief;
2. Violation of Business and Professions Code § 17200;
3. Breach of Contract; and
4. Defamation.
On October 30, 2023, Plaintiff filed its “Ex Parte Application To Seal Records Lodged Conditionally Under Seal In Support Of Motion For Summary Judgment, Or In The Alternative, Summary Adjudication On All Cross- Complaints” (the “Ex Parte”).
On October 31, 2023, the Court granted the Ex Parte in part, setting the Hearing on Motion to Seal Records Lodged Conditionally Under Seal In Support Of Motion For Summary Judgment, Or In The Alternative, Summary Adjudication On All Cross-Complaints with the Ex Parte (hereafter, the “Motion”) deemed the opening brief.
On November 21, 2023, the Court continued the hearing and ordered Plaintiff to file a brief supplemental memorandum of points and authorities and supplemental declaration that addressed issues identified by the Court. (See November 21, 2023 Minute Order, pp. 1-2.)
On December 1, 2023, Plaintiff filed a Supplemental Memorandum of Points and Authorities (“Supp. Brief”) that includes a declaration of Jasmina E. Aragon. Plaintiff also filed an “Errata Re: Index Of Exhibits In Support Of Motion For Summary Judgment, Or In The Alternative, Summary Adjudication” (the “Errata”) indicating that Exhibit E refers to document bates-stamped CONVOY02565, not CONVOY02654 as indicated in the Index of Exhibits filed with the motion for summary judgment papers.
GROUNDS FOR MOTION
Pursuant to California Rules of Court, rules 2.550 and 2.551, Plaintiff moves for an order sealing:
9. Document bates-stamped CONVOY00004 through CONVOY00024;
10. Documents bates-stamped CONVOY02565/Exhibit E (see Errata);
11. The following from Exhibit G (Defendant/Cross-Complainant’s July 18, 2023 Deposition): pp. 24:13-33:12; 89:19-90:25; 91:8-12;
12. Document bates-stamped CONVOY02714 through CONVOY02716;
13. Document bates-stamped CONVOY03688;
14. Document bates-stamped CONVOY01796 through CONVOY01817;
15. Document bates-stamped CONVOY1854 through CONVOY1871; and
16. Document bates-stamped CONVOY06113 through CONVOY06115.
DISCUSSION
A. Legal Standards
“Substantive courtroom proceedings in ordinary civil cases, and the transcripts and records pertaining to these proceedings, are presumptively open.” (McNair v. National Collegiate Athletic Association (2015) 234 Cal.App.4th 25, 31; see Cal. R. Ct., 2.500(c) [“Unless confidentiality is required by law, court records are presumed to be open.”].) However, “[o]penness is a presumption; it is not an absolute.” (Id.) In order for the presumption of openness to be overcome, the trial court must hold a hearing and make findings compatible with the constitutional standards set forth by the California Supreme Court in NBC Subsidiary (KNBC-TV), Inc. v. Superior Court (1999) 20 Cal.4th 1178. (Id.)
The procedure for filing records under seal that are not required to be kept confidential under law is governed by California Rules of Court, rules 2.550 and 2.551. (Cal. R. Ct, 2.550(a).) “A party requesting that a record be filed under seal must file a motion or an application for an order sealing the record.” (Cal. R. Ct., 2.551(b)(1).) “The motion or application must be accompanied by a memorandum and a declaration containing facts sufficient to justify the sealing.” (Id.) Further, “[a] request to seal a document must be filed publicly and separately from the object of the request. It must be supported by a factual declaration or affidavit explaining the particular needs of the case.” (In re Marriage of Lechowick (1998) 65 Cal.App.4th 1406, 1416.)
The constitutional standards set forth in NBC Subsidiary, supra, are codified in California Rules of Court rules 2.550, subdivision (d) which provides that:
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.
(Cal. R. Ct., 2.550(d); accord, NBC Subsidiary, supra, 20 Cal.4th at 1215-1219; see McNair, supra, 234 Cal.App.4th at 32-35 [“[NBC Subsidiary’s] constitutionally required findings are embodied in the California Rules of Court…. Documents may be sealed under the Rules of Court only upon a proper showing of NBC Subsidiary's four factors.”].)
Pursuant to California Rules of Court, rule 2.550, subdivision (e)(1):
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.
(Cal. R. Ct., 2.550(e)(1).)
The mere agreement of the parties to seal documents filed in a public courtroom is insufficient to constitute an overriding interest to justify sealing the documents. (Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1281–1282; see Cal. R. Ct., 2.551(a) [“The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.”].) Rather, there must be “a specific showing of serious injury.” (Id. at 1282.) Indeed, “specificity is essential.” (Id. (internal quotations and citation omitted.) “Broad allegations of harm, bereft of specific examples or articulated reasoning, are insufficient.” (Ibid.) "[A]t a minimum… 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.)
B. Analysis
The Court finds that Plaintiff establishes an overriding interest in protecting in sealing the records, namely, to protect “proprietary information, information related to business operations, and non-party private information” including confidential financial information and sensitive private information of non-parties. (Jasmina E. Aragon Decl. at ¶ 11; see Charlotte G. Carne Decl., ¶¶ 5-7.)
The Court finds that Plaintiff’s interest will be prejudiced if the records are not sealed and made publicly available, and that the proposed sealing is narrowly tailored. (Ibid.) The Court finds that there is no less restrictive means to achieve this overriding interest. (See Aragon Decl. at ¶ 12.)
Accordingly, the Motion is GRANTED.