Judge: Teresa A. Beaudet, Case: 21STCV23520, Date: 2023-03-24 Tentative Ruling

Case Number: 21STCV23520    Hearing Date: March 24, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiffs C&M Investment Group, Ltd. and Karlin Holdings Limited Partnership (jointly, “Plaintiffs”) filed this action on June 23, 2021 against Defendant Harvey Champlin (“Defendant”), asserting causes of action for (1) intentional interference with contractual relations, and (2) intentional interference with prospective economic benefit.

Plaintiffs now move for an order to seal excerpts of their opposition to Defendant’s motion for summary judgment or, in the alternative, summary adjudication of issues, as well as related documents. Defendant filed a partial opposition to the motion.

Discussion

Generally, court records are presumed to be open unless confidentiality is required by law. (Cal. Rules of Court, rule 2.550, subd. (c).) If the presumption of access applies, the court may order that a record be filed under seal “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. Rules of Court, rule 2.550, subd. (d).)

Plaintiffs seek to seal: (1) excerpts of their opposition to Defendant’s motion for summary judgment or, in the alternative, summary adjudication of issues; (2) excerpts of the Declaration of Dr. Gary Karlin Michelson in support of Plaintiffs’ opposition to Defendant’s motion for summary judgment or, in the alternative, summary adjudication of issues; (3) excerpts of the Declaration of Lauren Schweitzer in support of Plaintiffs’ opposition to Defendant’s motion for summary judgment or, in the alternative, summary adjudication of issues (“Schweitzer Decl.”); and (4) excerpts of Exhibit 60 to the Schweitzer Decl. (collectively, the “Sealed Documents”).

Plaintiffs assert that “[t]he Sealed Documents are quintessentially sensitive, non-public information because they pertain to a settlement agreement, because making this information public could have ramifications for Plaintiffs pertaining to potential future deals, and for the reasons discussed in Plaintiffs’ March 30, 2022 Motion to Support Confidentiality Designations and their November 2, 2022 Consolidated Reply in Support Thereof, as well as declarations thereto.” (Schweitzer Decl., ¶ 5.) Plaintiffs contend that for these reasons, there is an overriding interest that supports sealing the Sealed Documents, and there is a substantial probability that this overriding interest will be prejudiced absent sealing.

Plaintiffs cite to Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781, 793, where the California Supreme Court noted that “[t]he privacy of a settlement is generally understood and accepted in our legal system, which favors settlement and therefore supports attendant needs for confidentiality. Routine public disclosure of private settlement terms would chill the parties’ ability in many cases to settle the action before trial. Such a result runs contrary to the strong public policy of this state favoring settlement of actions.” (Internal quotations and citations omitted.)

In its partial opposition, Defendant indicates that it does not oppose Plaintiff’s motion with respect to Item 4, i.e., excerpts of Exhibit 60 to the Schweitzer Declaration. However, Defendant opposes sealing Items 1-3. 

Defendant asserts that “[w]ith the exception of item #4…Plaintiffs are not attempting to seal information pertaining to the underlying settlement agreement but information from testimony previously given during a 9/24/2021 deposition taken by Plaintiffs in this action.” (Opp’n at p. 2:24-3:1.) Defendant notes that on October 26, 2022[1], a public redacted version of

Defendant’s Consolidated Opposition to Plaintiffs’ (1) Motion to Support Confidentiality Designation and (2) Motion to Seal was filed. Defendant asserts that this redacted opposition “already publicly described (at 3:20-24) and attached (at Exhibit A thereto) deposition testimony regarding the same underlying factual allegations Plaintiffs now seek to seal.” (Opp’n at p. 3:1-4, emphasis omitted.) Defendant states that this information was never designated confidential or objected to by Plaintiffs. (Jenkins Decl., ¶ 2.)

            Defendant also asserts that “Plaintiffs are apparently taking the position that confidentiality and sealing should apply not just to the terms of a settlement and the identity of the parties thereto, but to a witness’s non-confidential factual allegations against Champlin procured as a result, which Plaintiffs purport constitute evidence supporting their claims. None of Plaintiffs’ cases regarding the sealing or discoverability of settlement agreements encompass derivative evidence intended for presentation at trial.” (Opp’n at p. 3:17-22, emphasis omitted.) 

In the reply, Plaintiffs indicate that they are “willing to de-designate the phrase ‘from Campbell’ on page 8, line 7 of their Opposition Memorandum.” (Reply at p. 1:21-22.) Plaintiffs assert that “[t]his is the only piece of information sought to be sealed that even arguably was publicly disclosed in prior testimony,” and that the “remainder of the designated material unequivocally has not been disclosed and risks harm to the involved parties should it be disclosed.” (Reply at p. 1:22-26.)

The Court does not find that all of the information Plaintiffs seek to seal was publicly disclosed in Defendant’s consolidated opposition referenced above. Plaintiffs note that the proposed sealed information refers to and discusses parties to a settlement agreement, and they assert that making the subject information public “could have ramifications for Plaintiffs pertaining to potential future deals.” (Schweitzer Decl., ¶ 5.)

The Court finds that Plaintiffs have demonstrated that they have an overriding interest that supports sealing the Sealed Documents, except for the phrase “from Campbell” on page 8, line 7 of Plaintiffs’ opposition memorandum, and that a substantial probability exists that the overriding interest will be prejudiced absent sealing. In addition, Plaintiffs assert that the proposed sealing is narrowly tailored and is the least restrictive means of protecting Plaintiffs’ overriding interest. The Court agrees. Plaintiffs note that they have redacted the sensitive portions of the Sealed Documents while providing the public access to the remainder.

Conclusion

Based on the foregoing, the Court grants Plaintiffs’ motion to seal, except for the phrase

“from Campbell” on page 8, line 7 of Plaintiffs’ opposition memorandum. 

Pursuant to California Rules of Court, rule 2.551, subdivision (e), the Court directs the clerk to file this order, maintain the records ordered sealed in a secure manner, and clearly identify the records as sealed by this order. The Court further orders that no persons other than the Court and Court staff, as necessary, are authorized to inspect the sealed records.

Plaintiffs are ordered to give notice of this order.

DATED:  March 24, 2023                              ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court